Belk, Inc. v. Meyer Corp.

• Decision Date: 09 May 2012
• Docket Number: No. 10–1664.,10–1664.
• Parties: BELK, INCORPORATED; Belk International, Incorporated, Plaintiffs–Appellants, v. MEYER CORPORATION, U.S.; Meyer Intellectual Properties Limited, Defendants–Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

679 F.3d 146

82 Fed.R.Serv.3d 373

102 U.S.P.Q.2d 1805

BELK, INCORPORATED; Belk International, Incorporated, Plaintiffs–Appellants,

v.MEYER CORPORATION, U.S.; Meyer Intellectual Properties Limited, Defendants–Appellees.

No. 10–1664.

United States Court of Appeals, Fourth Circuit.

Argued: Jan. 25, 2012.

Decided: May 8, 2012.

As Amended May 9, 2012.

ARGUED:W. Thad Adams, III, Shumaker, Loop & Kendrick, Charlotte, North Carolina, for Appellants. Dean A. Dickie, Miller, Canfield, Paddock & Stone, PLC, Chicago, Illinois, for Appellees. ON BRIEF:Rodrick J. Enns, Enns & Archer, LLP, Winston–Salem, North Carolina, for Appellants. Andrew S. Chamberlin, Alex J. Hagan, Ellis & Winters LLP, Raleigh, North Carolina, for Appellees.

Before DUNCAN, DAVIS, and KEENAN, Circuit Judges.

Affirmed by published opinion. Judge DAVIS wrote the opinion, in which Judge DUNCAN and Judge KEENAN joined.

OPINION

DAVIS, Circuit Judge:

In May and June 2010, Appellee Meyer Corporation, U.S., (“Meyer”) ¹ and Appellants Belk, Incorporated, and Belk International, Incorporated (collectively, “Belk”), clashed in a nine-day trial with eighteen witnesses who educated the jury at length about the design, creation, marketing and profitability of high-end cookware. At the conclusion of trial, the district court entered judgment in accordance with the jury's verdict in favor of Meyer on its claims of trade dress infringement, see15 U.S.C. § 1125(a), and unfair and deceptive trade practices, seeN.C. Gen.Stat. § 75–1.1.² The court trebled the damages amount found by the jury to $1,260,000 pursuant to N.C. Gen.Stat. § 75–16 and denied Belk's remaining requests for declaratory relief.

Belk failed to file a postverdict motion pursuant to either Federal Rule of Civil Procedure 50(b) or 59 and instead directly appealed, timely to be sure, to this court. On appeal, Belk asserts the district court erred in numerous respects, including its failure to recognize the insufficiency of the evidence to support Meyer's claims and other errors relating to evidentiary and legal rulings. Finding no error on the issues that are properly preserved, we affirm the judgment of the district court.

I.

A.

Meyer is a supplier of cookware products designed, developed and manufactured through Meyer-affiliated companies, including cookware marketed under the brand name “Anolon Advanced.” Belk owns and operates retail department stores in the southeastern United States that sell a variety of items, including kitchen appliances and cookware products. Belk is a former customer of Meyer, having previously sold Meyer's other branded lines of cookware.

In 2007, Belk began selling its own private-label cookware, under license from the Biltmore Company, the entity owning various trademarks, copyrights and other proprietary rights associated with “Biltmore House” and “Biltmore Estate,” the famous private residence in North Carolina (“the Biltmore line”). Meyer discovered that Belk was selling the Biltmore line in its stores, and, through a so-called cease-and-desist letter, notified Belk that it believed the line infringed Meyer's trade dress in the Anolon Advanced line and rights in design patents pertaining to that line, and that Belk was engaged in false advertising, unfair competition and numerous other commercial torts.

Thus, the inevitable race to the courthouse was triggered. Belk subsequently filed a civil action in the United States District Court for the Western District of North Carolina seeking a declaratory judgment that the Biltmore line did not infringe certain Meyer-held patents or Meyer's trade dress, that certain of Meyer's patents were not enforceable, and that Belk did not engage in false advertising, unfair competition, or commit any commercial torts against Meyer by marketing, advertising and selling the Biltmore line. Meyer filed a civil action against Belk in the United States District Court for the Northern District of Georgia, alleging claims of patent infringement, trade dress infringement and unfair and deceptive trade practices under state law. Meyer's action was transferred to the district court below and consolidated with Belk's declaratory judgment action.

After a nine-day trial, the jury found that Belk infringed Meyer's trade dress in the Anolon Advanced line and determined that Meyer suffered $420,000 in damages as a result of Belk's trade dress infringement. With respect to Meyer's claim under North Carolina law for unfair and deceptive trade practices, the jury rendereda verdict in favor of Meyer, finding that

• Belk distributed, marketed and sold a private-label cookware line, the Biltmore line, that was “deceptively similar” to Meyer's Anolon Advanced cookware line;

• Belk did so after receiving product, sales and market information, as well as images and samples of products of the Anolon Advanced line;

• Belk purchased a cookware design from a third party that was “deceptively similar” to the Anolon Advanced line, even after learning that proposed designs provided by the third party were being sold by Meyer;

• Belk's conduct was in commerce or affected interstate commerce; and

• Belk's conduct was the proximate cause of Meyer's injury.³

After the jury rendered its verdict, the district court observed that the jury had made its findings regarding Meyer's claim for unfair and deceptive trade practices and invited argument from the parties as to whether those findings were sufficient as a matter of law to establish that Belk had engaged in unfair and deceptive trade practices under North Carolina law. After argument, which we discuss below in detail, the district court determined that, based on the jury's findings, Belk engaged in unfair and deceptive trade practices as a matter of law and that Meyer was entitled to treble damages.

On June 8, 2010, the court entered judgment in accordance with the jury's verdict; it denied the remainder of Belk's requests for declaratory relief and trebled the award of damages found by the jury, $420,000, to $1,260,000.

In the twenty-eight day period following the entry of judgment, which is the time limit for filing a renewed motion for judgment under Rule 50(b), Belk filed only one motion in the district court, namely, a motion seeking the grant of a supersedeas bond and stay of judgment pending appeal. Belk did not file a motion under Rule 50(b) during that period.

B.

Given the centrality of issue preservation in this appeal, we lay out clearly the challenges Belk raises on appeal. First, Belk contends that the district court erred in denying its motion for judgment as a matter of law because the evidence is insufficient to show trade dress infringement (“sufficiency of the evidence challenge”). In the course of discussing the insufficiency of the evidence, particularly on whether the trade dress had acquired secondary meaning, Belk raises a second contention, namely, that Meyer's expert was not properly qualified to testify with respect to trade dress consumer surveys and that his testimony and survey were scientifically unreliable (“evidentiary challenges”).

Third, Belk contends that the district court erred with regard to the state unfair and deceptive trade practices claim (“UDTPA challenges”). In particular, Belk contends that the district court erred in two respects: (1) tendering unfair competition issues to the jury that as a matter of law are not unfair and deceptive trade practices; ⁴ and (2) denying its motions for judgment as a matter of law because Meyer failed to prove that Belk intentionally infringed Meyer's trade dress; Belk argues that, as a matter of law, N.C. Gen.Stat. §§ 75–1.1 and 75–16 do not apply where there has been an “unintentional” infringement of an unregistered trademark, i.e., no finding of intent.

Fourth, Belk attacks the award of damages (“damages challenges”). In particular, Belk argues that the district court erred in two respects: (1) allowing recovery of Belk's profits without considering certain equitable factors required under 15 U.S.C. § 1117(a) and Synergistic International, LLC v. Korman, 470 F.3d 162 (4th Cir.2006); and (2) treating Belk's profits as damages subject to trebling under N.C. Gen.Stat. § 75–16 in the absence of any pleading ⁵ of actual damage to Meyer.⁶Belk seeks only the reversal of the district court's judgment.

Meyer moves to dismiss the appeal, arguing that Belk's failure to move postverdict for judgment as a matter of law under Rule 50(b) or for a new trial under Rule 59 deprives us of “jurisdiction” ⁷ to hear Belk's appeal, or, in the alternative, the power to grant Belk the relief it seeks. Appellee's Motion to Dismiss 2. In its response brief, filed the same day as its motion to dismiss the appeal, Meyer argues in the alternative that the evidence is sufficient to support the judgment, as well as responds to Belk's other arguments.

In response to Meyer's motion to dismiss, Belk asserts that it was not required to make any postverdict motion and that, in the alternative, it substantially complied with Rule 50(b) in its postverdict oral argument. Belk further asserts that we have rejected the proposition that a party's failure to make a postverdict motion under Rule 50(b) prevents us from reviewing properly preserved assertions of error that do not challenge the sufficiency of the evidence. We address these issues in turn.

II.

We first examine Belk's sufficiency of the evidence challenge and hold that Belk's failure to move pursuant to Rule 50(b) forfeits this challenge on appeal. In reaching our conclusion, we consider and reject Belk's contentions that Unitherm Food Systems, Inc. v. Swift–Eckrich, Inc., 546 U.S. 394, 126 S.Ct. 980, 163 L.Ed.2d 974 (2006), does not apply to an award of profits under the Lanham Act and N.C. Gen.Stat. § 75–1.1 and that Belk “substantially complied” with Rule 50(b) during the postverdict oral colloquy with the judge. Appellant's Response to Motion to Dismiss (“Belk's Response to MTD”) 10.

To challenge the...