United States District Court, D. Massachusetts
MEMORANDUM AND ORDER
ALLISON D. BURROUGHS DISTRICT JUDGE
parties, SharkNinja Operating LLC (“SharkNinja”),
and Dyson Inc. and Dyson LTD (together, “Dyson”),
are competitors in the household vacuum market. In this
action, each accuses the other of disseminating false and
misleading advertising about their respective vacuum
products, in violation of the federal Lanham Act, 15 U.S.C.
§ 1125(a), and Massachusetts state law. Dyson has moved
to strike SharkNinja's jury demand [ECF No. 432], and
SharkNinja has opposed it [ECF No. 435]. For the reasons set
forth in this Memorandum and Order, Dyson's Motion to
Strike SharkNinja's Jury Demand [ECF No. 432] is
DENIED without prejudice.
9, 2016, SharkNinja filed a covenant not to sue Dyson for
impliedly false advertising with regard to Dyson's
“Twice the suction of any other vacuum”
(“TTS”) advertising claim. [ECF No. 328 at 3]. On
August 3, 2016, this Court held that Dyson was liable under
the Lanham Act because its TTS advertising claim was
literally false as of July 8, 2014. [ECF No. 396]. The
parties have each filed pre-trial memoranda [ECF Nos. 353,
356], proposed jury instructions [ECF Nos. 421, 426-2,
426-3], proposed voir dire questions, [ECF No. 423, 426-1],
and proposed jury verdict forms [ECF Nos. 422, 426-4].
eve of trial, Dyson has moved to strike SharkNinja's jury
demand, arguing that all issues remaining in the case are
equitable, and that there are therefore no issues remaining
that carry a right to a jury trial. [ECF No. 432].
SharkNinja, in opposition, argues that it is seeking an
accounting of Dyson's profits as a proxy for harm it has
suffered, and that it is entitled to a jury trial on that
issue. [ECF No. 435]. Specifically, SharkNinja argues that
“[b]ecause SharkNinja and Dyson are direct competitors,
and Dyson engaged in false comparative advertising of
directly competing products, SharkNinja's request for an
accounting is justified as a rough measure of harm suffered
by SharkNinja as a result of Dyson's unlawful
conduct.” [ECF No. 435 at 1]. In its brief opposing
Dyson's motion to strike, SharkNinja lists several cases,
including four First Circuit cases, in support of the
proposition that “[i]n circumstances such as those
presented in this case, in which the plaintiff and the
defendant are direct competitors, the First Circuit and other
courts recognize that a plaintiff seeking an accounting of
the profits pursuant to 15 U.S.C. § 1117(a) is pursuing
a claim under” the proxy rationale. [ECF No. 435 at
in a civil case have a right to a jury trial for a federal
claim or defense only under the Seventh Amendment or as
provided by statute. See Feltner v. Columbia Pictures
Television, Inc., 523 U.S. 340, 347 (1998). The First
Circuit has recognized that the Lanham Act itself does not
create a statutory right to a jury trial whenever a party
requests an accounting of profits. See Visible Sys. Corp.
v. Unisys Corp., 551 F.3d 65, 78 (1st Cir. 2008)
(“it seems clear that the Lanham Act itself does not
create a right to a jury trial whenever the remedy of an
accounting of defendant's profits is sought”).
Neither the Supreme Court nor the First Circuit has resolved
the question of whether a party seeking an accounting of
profits under the Lanham Act has a Seventh Amendment jury
trial right. See id. at 80 & n.11. Other courts
have disagreed on the issue. See Black & Decker Corp.
v. Positec USA Inc., 118 F.Supp.3d 1056, 1062 (N.D. Ill.
2015) (discussing disagreement among courts). In cases where
the remedy sought is solely equitable, it is well recognized
that parties generally do not have a jury trial right. 9
Wright & Miller, Fed. Prac. & Proc. Civ. § 2302
(3d ed. 2016). Whether a Seventh Amendment jury trial right
exists is a two-part test that involves, first,
“compar[ing] the statutory action to 18th-century
actions brought in the courts of England prior to the merger
of the courts of law and equity;” and, second,
determining “whether [the remedy sought] is legal or
equitable in nature.” Frappier v. Countrywide Home
Loans, Inc., 750 F.3d 91, 98 (1st Cir. 2014) (quoting
Chauffeurs, Teamsters & Helpers, Local No. 391 v.
Terry, 494 U.S. 558, 565 (1990)), cert. denied,
135 S.Ct. 179 (2014). An accounting of profits is generally
described as an equitable remedy. Visible Sys., 551
F.3d at 78.
are, however, certain situations where such an accounting can
implicate legal issues which require a jury trial. See
Dairy Queen, Inc. v. Wood, 369 U.S. 469, 477 (1962)
(right to jury trial where request for accounting was
“wholly legal in its nature”); see also
Visible Sys., 551 F.3d at 78. One such situation is when
a request for an accounting of profits is actually a proxy
for legal damages. See Visible Sys., 551 F.3d at 80.
While the First Circuit has not definitively held that an
accounting of profits, when it is a proxy for legal damages,
creates a right to a jury trial, it has recognized that
“this proxy rationale may well present the strongest
argument under the Seventh Amendment.” See id.
at n.11. Other courts have determined that the proxy
rationale creates a jury trial right. See, e.g.,
Black & Decker, 118 F.Supp.3d at 1062, 1064
(finding jury trial right and discussing cases on the issue).
Apart from the proxy rationale, SharkNinja has not provided
any other theory under which an accounting of profits would
be a legal, rather than equitable, issue or otherwise require
a jury determination.
First Circuit has warned “that a plaintiff's
characterization of why it is seeking an accounting”
does not necessarily control in determining whether the claim
for accounting of profits creates a jury trial right.
Visible Sys., 551 F.3d at n.11 (citing cases
discussing manipulation of jury trial right). A plaintiff may
receive an award for damages based on the defendant's
profits only if the plaintiff shows “that the products
directly compete, such that defendant's profits would
have gone to plaintiff if there was no violation.”
See Bern Unlimited, Inc. v. Burton Corp.,
95 F.Supp.3d 184, 217-18 (D. Mass. 2015) (quoting
HipSaver Co., Inc. v. J.T. Posey Co., 497 F.Supp.2d
96, 106 (D. Mass. 2007)). In Fishman Transducers, Inc. v.
Paul, the First Circuit explained that
[u]nder th[e] direct competition theory [for damages based on
defendant's profits], the plaintiff and defendant
products may be such complete substitutes that a sale by the
infringer under the infringed party's mark is almost
automatically a lost sale by the plaintiff, so the issue of
causation almost vanishes from the case.
And, if the two companies are in the same line of
business, defendant's profits may be presumptively
similar to what plaintiff would have earned on the sale.
Congress has further provided that where profits are the
measure of recovery, the plaintiff need only prove the
defendant's sales and the defendant must prove costs and
684 F.3d 187, 196 (1st Cir. 2012) (citing 15 U.S.C. §
1117(a) and Tamko Roofing Products, Inc. v. Ideal Roofing
Co., Ltd., 282 F.3d 23, 37 (1st Cir. 2002)) (emphasis
added). The Fishman Court further added that direct
competition, as a justification for accounting, requires
“a substantial degree of equivalence and
substitutability” of the products such that a
“plausible one-to-one equivalent exists”
regarding “the number of sales diverted or the profits
transferred.” See id. While it is sound logic
that direct competition can support the inferences described
in Fishman in a two-person market, as the
Bern Court explained, “[t]he presumption of
causation and injury” is “substantially
undermined, if not negated altogether” in a multiple
competitor market. See Bern Unlimited, Inc. v. Burton
Corp., 95 F.Supp.3d 184, 218 (D. Mass. 2015).
the proxy rationale for a defendant's profits is not
available where there is an adequate remedy at law. The First
Circuit in Visible Systems rejected the proxy
rationale for an accounting in part because a jury could and
did measure the harm to the plaintiff as a result of the
infringement, and the court noted that “[t]he necessary
prerequisite to the right to maintain a suit for an equitable
accounting . . . [is] the absence of an adequate remedy at
law.” Visible Sys., 551 F.3d at 80 (quoting
Dairy Queen, 369 U.S. at 478).