Hard Candy, LLC v. Anastasia Beverly Hills, Inc.
921 F.3d 1343
11th Cir.2019Background
- Hard Candy, LLC owns federal trademarks for HARD CANDY and licenses cosmetics sold through retailers (notably Walmart); Anastasia Beverly Hills released a limited-edition "Gleam Glow Kit" that named one shade "hard candy."
- Hard Candy sent a cease-and-desist; Anastasia sold the product in retail and online, generating >$5 million in revenue for the kit before discontinuation after ~8 months.
- Hard Candy sued in the Southern District of Florida under the Lanham Act and common law for trademark infringement and unfair competition, seeking injunctive relief, declaratory relief, attorneys’ fees, an accounting and disgorgement of Anastasia’s profits, and (initially) actual damages.
- Hard Candy withdrew its claim for actual damages pre-trial but maintained its demand for a jury trial; the district court struck the jury demand as to the remaining equitable remedies and held a three-day bench trial.
- The district court found no likelihood of confusion and that Anastasia established the fair use defense (use other than as a mark, descriptive, in good faith). Hard Candy appealed both the Seventh Amendment jury-trial issue and the merits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a Lanham Act claim seeking an accounting and disgorgement of defendant's profits entitles plaintiff to a jury trial under the Seventh Amendment | Hard Candy: disgorgement functions as a "proxy" for actual damages (legal relief), so a jury trial is required | Anastasia: disgorgement/accounting is equitable relief historically and under the Lanham Act, so no jury right | Court: Disgorgement/accounting is equitable in nature; no Seventh Amendment right to a jury when plaintiff waives actual damages and seeks only equitable relief (affirmed) |
| Whether Anastasia's use of "hard candy" created a likelihood of consumer confusion | Hard Candy: identical words on product/marketing create likelihood of confusion favoring plaintiff | Anastasia: use was descriptive of a shade, not a source identifier; overall presentation differed; no actual confusion | Court: No likelihood of confusion; district court’s weighing of the seven factors (including mark similarity, intent, and actual confusion) was not clearly erroneous (affirmed) |
| Whether Anastasia established the fair use defense to trademark infringement | Hard Candy: consumer perception must determine descriptiveness; court erred in not relying on consumer-perception evidence | Anastasia: used the term descriptively to name a shade in good faith; evidence of customary cosmetic naming practices supports descriptiveness | Court: Anastasia proved fair use (use not as a mark, descriptive, in good faith); district court reasonably assessed context and consumer perception without requiring actual-survey evidence (affirmed) |
Key Cases Cited
- Tull v. United States, 481 U.S. 412 (1987) (Seventh Amendment analysis requires comparison to 18th-century law/equity distinctions)
- SCA Hygiene Prod. Aktiebolag v. First Quality Baby Prods., LLC, 137 S. Ct. 954 (2017) (distinguishing compensatory damages from equitable disgorgement)
- Hamilton-Brown Shoe Co. v. Wolf Bros. & Co., 240 U.S. 251 (1916) (describing profits award as an equitable remedy on trust ex maleficio theory)
- Dairy Queen, Inc. v. Wood, 369 U.S. 469 (1962) (jury trial required where complaint sought a money judgment for damages/contract claims; pleadings' labels cannot determine nature of remedy)
- Trade-Mark Cases, 100 U.S. 82 (1879) (historical discussion of trademark remedies at law and in equity)
- Feltner v. Columbia Pictures Television, Inc., 523 U.S. 340 (1998) (discussing legal remedy characterization in Lanham Act context)
- Levi Strauss & Co. v. Sunrise Int’l Trading Inc., 51 F.3d 982 (11th Cir. 1995) (Lanham Act disgorgement characterized as equitable relief)