“Infinity Dollars” — IP damages and the jury, Part 2

(Part 1 is here.)

So.  In light of the decision in the Thomas-Rasset case, which I first rounded up in part 1 of this first-ever two-part LIKELIHOOD OF CONFUSION® odyssey, now I ask:  How does a jury of supposedly ordinary and sensible people becomes twelve angry persons and so profoundly abandon common sense in IP cases (even if it the whole thing looks really hilarious to some folks)?  How do they allow themselves to buy into these never-never-land valuations of damages, whether statutory or otherwise?

I don’t know.  But as what was a grueling week melts away, it is time to relax a little, and do what litigators love to do best:  Tell “war stories.”

Now, I’ve picked juries in many kinds of cases, from wrongful termination and commercial to copyright and trademark cases.  I may not have always chosen wisely, but my record is not too shabby, overall.  Frankly I believe my jurors were pretty darned reasonable and intelligent people, quite to the contrary of all the cynicism, and not just because of the outcomes I’ve gotten — mostly.   I never demonstrate a lack of respect to jurors such as by praising their patriotism or, more to the point, lying to them, regarding which so many of my colleagues have no such scruples.  And that is because, besides the fact that I aspire to practice in an ethical manner, I do respect the jury.

This includes the one jury I truly “lost,” namely the one I had in Central Islip, New York, last January, which I discuss in greater detail below.  They seemed to me, when we completed voir dire, to be a perfectly fine bunch, and maybe even a little better for my side than my adversary’s.  What happened to them along the way I still don’t understand.  But in the succeeding months I have had to admit that jurors’ willingness to treat other peoples’ lives with what can only be described as disdain, and other peoples’ life’s savings as Monopoly money, raises serious questions about the jury system.

Noodling about juries is certainly common, but usually focuses on areas such as personal injury and productsliability law, where big, bad corporate America is footing the bill for arbitrary impositions of an ugly form of wealth expropriation via class warfare and political expediency.  In fact, a very similar thing may be happening in intellectual property law.  Except that here, as a general rule, the class warfare aspect of the game is trending in favor of the Haves, which are finding trademark and copyright to be usually very decent substitutes for the laborious and expensive effort of reconsidering obsolete business models.  Both trends are bad news for free enterprise and economic growth.

Now, on the one hand, I was very impressed when we spoke with the jury in Phoenix after the Designer Skin v. S & L Vitamins case. This bit of denouement is a practice that varies from court to court; some resolutely forbid this debriefing, but lawyers love them. The District of Arizona jury returned a verdict of copyright infringement for my client’s use of what were claimed to be original images of the Designer Skin tanning lotion company on my client’s “unauthorized” tanning lotion reseller website. This verdict appeared eminently reasonable to me notwithstanding my advocacy to the contrary, given the evidence and the rulings.

Because Designer Skin had not timely registered its copyright , this jury was not permitted to consider statutory damages, and the court had earlier dismissed all the testimony as to damages and removed compensation from the jury’s purview because of the preposterous nature of Designer Skin damages “evidence.” But the jurors made it very clear to me that we would have had nothing to fear if they had been allowed to make an award for a claim essentially sounding in “unauthorized reselling,” which is not against the law at all. As one of them put it, “Oh, we would have given them maybe five bucks. They sold the merchandise once; they don’t get to get paid for it again.”

On the other hand, in the factually identical Australian Gold case, the exact same compensatory damages testimony on the trademark claim against S & L Vitamins (the copyright claim having been dismissed on fair use grounds), in contrast to the Phoenix case, was permitted to go to the jury by the Eastern District of New York. There were no statutory damages there, because it was not a trademark counterfeiting case, which is the only kind of trademark claim that has statutory damages.

But the conceptual and psychic framework was, I believe, the same:   There was no real evidence of trademark-based losses (at all, but especially) arising from infringement, but rather a blank check, much like statutory damages, signed by the court for the jury to fill in and “right” whatever “wrong” it perceived. But the words of that juror in Phoenix were ringing in my ears the whole time the jury deliberated, and it was those words that caused my team and my clients to believe that we could and should trust the jury.

The actual result?   An astounding $3 million trademark infringement award, plus a $3 million for “tortious interference with contract,” numbers that everyone in the room knew bore no relation whatsoever to any integers placed into evidence. That money judgment was ultimately vacated (though, to be clear, not on substantive legal grounds), but the damage was done.  More than one business and more than one family was ruined by the law despite having done nothing that violated it.

What was shocking to me was not the arbitrariness of the number; that was actually consistent with the arbitrariness of the legal guidance given the jury. No, I was astonished that a panel of working people with homes, mortgages, dental bills and in some cases their own small businesses would, in the absence of any evidence of actual losses arising from trademark infringement, take a seven-figure damages number out of the fantasies of the worst IP-abusing plaintiffs and actually vote for such an award.

Though the jurors had no way of knowing that the very same acts they had punished so profoundly had been ruled permissible as a legal matter in another federal court a few months earlier, they cannot have been but fully aware that they were ruining one business and two families.

We did not get to speak to this jury, and frankly I had no interest in it. This was the first jury I had ever meaningfully “lost” and, in light of my clients’ imminent ruin, I had no interest in chatting its members up.  I am always prepared to lose on the facts, because that is the nature of the endeavor.  But I could not forgive their damage awards, which were utterly unjustifiable.  The fact that, in other cases, a range for statutory damages is also given doesn’t make any old number within that range justifiable, either, if justice means anything.

It was frigid in Long Island when we tried that case and, of course, hellish in Phoenix when we did the other one, but no, it can’t be the weather. This level of irrationality suggests nothing so much as the obedience to authority phenomenon, but why is a plaintiff’s lawyer, in pinstripes and wing-tips, any more “authoritative” than a defense lawyer similarly decked out? Is it because the IP plaintiff is able to tell the jury that The Law has already decreed that this range of punishment is available to infringers, because the judge instructs them as to the range of possible statutory damages?  That applies, of course, in the Thomas-Rasset case; in my non-statutory damages case, all kinds of unsupported and unsupportable numbers were allowed to be invented and declared before the jury, and they were also allowed basically to do what they wanted.

Maybe.   I will always want to know what it is culturally, psychologically or, perhaps, cosmologically that makes it possible for presumably normal people to be parties to such travesties in civil law (let’s not even think about criminal law).   And I would never, God forbid, promote the much-maligned quality of empathy as a basis for jurors to render a verdict.

But still, what do the jury box — and the wood paneling, the averted eyes, the box lunches — do to people to so alienate them from the effects of their decisions on their neighbors?

How do they find it within themselves, in choosing how to sanction a breach of such obviously arbitrary rules, to wreak so much destruction?

UPDATE:  I expanded more on this topic, and its implications for the “soft IP” enforcement system, in the article I link to here.  Also see this post concerning a roundtable discussion in which I participated in Cambridge in 2014.