Spectrum Assn v. Lifetime HOA
5f4th560
| 5th Cir. | 2021Background
- Spectrum Association Management (Spectrum) owns federally registered trademarks and the domain spectrumam.com for HOA management services in San Antonio.
- Jay Tuttle, formerly Spectrum’s Director of Business Development, left Spectrum (subject to a one-year non-compete) and later helped form Lifetime HOA Management (Lifetime).
- In May 2016 Lifetime registered "spectrumhoamanagement.com" and set it to forward to lifetimehoamanagement.com; Spectrum alleges this was intended to confuse and divert Spectrum customers.
- Spectrum sued under the ACPA (Lanham Act), elected statutory damages under 15 U.S.C. § 1117(d), and sought injunctive relief and attorneys’ fees; the case was tried in Waco after being docketed in the San Antonio Division.
- The district court admitted deposition testimony of Spencer Powell (a San Antonio resident) under Rule 32(a)(4)(B), found willful bad-faith infringement, awarded $100,000 statutory damages, permanently enjoined infringement, and denied attorneys’ fees.
- On appeal, the Fifth Circuit affirmed admission of the deposition and the $100,000 award, reversed the denial of attorneys’ fees, and remanded for a fee determination.
Issues
| Issue | Plaintiff's Argument (Spectrum) | Defendant's Argument (Lifetime) | Held |
|---|---|---|---|
| Admissibility of Powell’s deposition under Fed. R. Civ. P. 32(a)(4)(B) | Powell lived >100 miles from trial courthouse (Waco); deposition admissible as unavailable | "Place of trial" should mean the governing division (San Antonio), so Powell was within 100 miles and deposition was inadmissible | Affirmed: "place of trial" means the courthouse where trial occurs; deposition admissible; no prejudice shown |
| Statutory damages amount under 15 U.S.C. § 1117(d) | $100,000 statutory damages appropriate given willfulness, bad faith, direct competition, and diversion conduct | $100,000 excessive; relied on other district decisions for lower awards | Affirmed: $100,000 within statutory range and supported by findings of willfulness and bad faith |
| Award of attorneys’ fees under 15 U.S.C. § 1117(a) ("exceptional case") | Case is exceptional: clear-and-convincing evidence of willful, bad-faith infringement and unreasonable litigation conduct; fees warranted | District court found willful but not as egregious as other cases; no fees warranted | Reversed: case is exceptional (bad faith, post-trial copying, discovery misconduct); remanded for determination of reasonable fees |
Key Cases Cited
- Tatman v. Collins, 938 F.2d 509 (4th Cir. 1991) ("place of trial" means the courthouse where trial occurs for Rule 32 distance inquiry)
- Jauch v. Nautical Servs., Inc., 470 F.3d 207 (5th Cir. 2006) (damages findings reviewed for clear error)
- Curtis v. M&S Petroleum, Inc., 174 F.3d 661 (5th Cir. 1999) (evidentiary rulings reviewed for abuse of discretion)
- Kiva Kitchen & Bath Inc. v. Cap. Distrib. Inc., [citation="319 F. App'x 316"] (5th Cir. 2009) (factors supporting maximum ACPA statutory damages)
- Procter & Gamble Co. v. Amway Corp., 280 F.3d 519 (5th Cir. 2002) (standard for "exceptional" case and fee awards under Lanham Act)
- All. for Good Gov’t v. Coal. for Better Gov’t, 919 F.3d 291 (5th Cir. 2019) (review of Lanham Act fee determinations and exceptional-case guidance)
- Douglas v. Cunningham, 294 U.S. 207 (1935) (broad judicial discretion in statutory damages within statutory bounds)
- Broad. Music, Inc. v. Xanthas, Inc., 855 F.2d 233 (5th Cir. 1988) (district courts' wide discretion under statutory damages provisions)
- Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014) (fees may be warranted where the non-prevailing party litigated unreasonably or the prevailing party’s position was strong)