Tu Thien The, Inc. v. Tu Thien Telecom, Inc., 668 F. App'x 299

Tu Thien Telecom, Inc. and Lam Nguyen appealed a district court judgment awarding damages and disgorged profits for defendants’ willful trademark-related misconduct.
A jury awarded $500,000 in actual damages and $668,000 in disgorged profits.
The district court enhanced the actual damages from $500,000 to $750,000 under 15 U.S.C. § 1117(a).
The district court declined to reduce the jury’s disgorgement award of $668,000.
Defendants argued enhancement was improper and that disgorged profits should be reduced because they operated at a loss and could prove deductible expenses.
The Ninth Circuit affirmed both the enhancement and the refusal to reduce disgorged profits.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the district court erred by enhancing actual damages under 15 U.S.C. § 1117(a)	Enhancement appropriate to compensate for reputational harm and deter future misconduct	Enhancement was improper or excessive given the jury award	Affirmed — enhancement to $750,000 was within discretion; meant to compensate reputational harm and deter, not penalize
Whether the district court should sua sponte reduce disgorged profits ($668,000)	Disgorgement supported by evidence; defendants failed to prove deductible expenses	Defendants claimed operating losses and sought deductions from profits	Affirmed — defendants bore burden to prove deductions; evidence was insufficient and jury reasonably rejected defendants’ accounting

Skydive Ariz., Inc. v. Quattrocchi, 673 F.3d 1105 (9th Cir. 2012) (district court may consider loss of reputation and goodwill and must assess whether disgorgement is based on reasonable inferences)
Fabergé, Inc. v. Saxony Prods., Inc., 605 F.2d 426 (9th Cir. 1979) (courts may consider deterrent effect when assessing damages)