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Seventh Circuit: Sanction of no damages for improper witness contact too severe compared to harm

By McKee, Voorhees & Sease, P.L.C.

In a decision Friday, the Seventh Circuit affirmed a jury verdict of trademark infringement, but reversed the district court's ruling holding the plaintiff had forfeited damages because of improper conduct towards a prospective witness. The court dealt with whether the burden of proof for the sanction was by clear and convincing evidence or as the district court concluded, by a mere preponderance of the evidence.

The court ultimately decided that when the appropriate burden of proof is not clear, the issue is resolved within the limits of proportionality.  Specifically, a larger sanction requires a higher degree of harm caused by the misconduct.  Since, there was no harm caused by the misconduct, the district court's imposition of the sanction was revered.  The harm was mitigated in this case because the defendant decided not to call the witness in question, which turned out to be a tactical mistake, as the witness was going to offer testimony on a potentially meritorious defense, namely that the mark at issue was generic.

More detail of Ty Inc. v. Softbelly's, Inc. after the jump.

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Full post as published by FileWrapper on February 25, 2008 (boomark / email).