National Presto Industries, Inc. v. U.S. Merchants Financial Group, Inc.

Background

National Presto Industries, Inc. (Presto) brought eleven claims against U.S. Merchants Financial Group, Inc., doing business as Greenmade. Presto sought declaratory and injunctive relief on all claims. For its copyright-infringement claim, Presto also sought statutory damages. For its other claims, Presto sought disgorgement of U.S. Merchants’ profits. The opinion states that Presto had not presented evidence of actual damages caused by the alleged infringement.

A June 18, 2021 summary-judgment order eliminated several claims. The surviving claims were: trade dress infringement under the Lanham Act (Count I); copyright infringement involving Presto’s instruction manuals (Count VI); tortious interference with prospective business relations (Count VII); and state-law unfair-trade-practices claims (Counts IX, X, and XI). The court then asked the parties to brief whether Presto had a right to a jury trial on those claims.

Presto argued that it had a jury-trial right on every surviving claim. It relied on its request for U.S. Merchants’ profits as a measure of damages and argued alternatively that common factual issues connected the claims. U.S. Merchants agreed that the copyright claim could be tried to a jury but argued that the other claims sought only equitable remedies—remedies decided by the court rather than a jury.

Legal standard

The court explained that a jury-trial right may come from a statute or the Seventh Amendment. Because neither party claimed that the Copyright Act, Lanham Act, or state statutes independently created a jury-trial right, the court applied the Seventh Amendment. It used a two-part test: compare the claim to historical legal actions from eighteenth-century England, then examine whether the requested remedy is legal or equitable. The court stated that the remedy inquiry is more important.

Copyright claim

The court held that Presto has a right to a jury trial on Count VI, its copyright-infringement claim. Presto seeks statutory damages under Section 504(c) of the Copyright Act, and the court relied on Supreme Court precedent holding that the Seventh Amendment provides a jury right on issues related to those statutory damages, including their amount. Neither party disputed this conclusion.

Trade dress claim

The court held that Presto does not have a jury-trial right on Count I. Presto sought disgorgement of U.S. Merchants’ profits under the Lanham Act, and the court treated that remedy as equitable. The court rejected Presto’s argument that U.S. Merchants’ profits were a proxy for Presto’s damages. Although some evidence suggested that U.S. Merchants’ sales roughly indicated sales Presto might have made, the companies’ products had different prices and profit margins. The court also noted that Presto had not offered evidence quantifying lost profits. It therefore concluded that the requested disgorgement was restitutionary and equitable rather than compensation for actual damages.

State-law claims and shared evidence

The court likewise held that Presto does not have a jury-trial right on Counts VII, IX, X, and XI. Presto had tied those claims to the trade dress claim, and the court found that Presto sought only equitable remedies on them. The court separately noted that Count XI provides only equitable relief.

The court rejected Presto’s argument that overlapping evidence required all claims to go to the jury. It found that whether U.S. Merchants deliberately copied Presto’s instruction manuals was different from whether it deliberately copied Presto’s product trade dress. Some evidence might relate to both issues, but much of the evidence was distinct. The court also found that presenting the evidence in separate proceedings would be more efficient and avoid burdening the jury with irrelevant evidence.

Order

The court ordered that Count VI, copyright infringement under 17 U.S.C. § 501, be submitted to a jury. It ordered that Counts I, VII, IX, X, and XI be submitted to the court in a bench trial after the jury hears the copyright claim. The opinion does not decide the ultimate merits of those surviving claims in this order.