## Facts

- Harolds Stores, Inc. operated specialty women’s clothing stores and relied heavily on original, copyrighted print fabrics used in private-label garments marketed as exclusive.
- CMT Enterprises, Inc. helped design and manufacture Harolds’s garments using those original prints.
- Dillard Department Stores, Inc. sold women’s skirts in 1993 that appeared identical to Harolds’s copyrighted skirt designs from the 1991–1992 season, pricing them far below Harolds’s price and later marking them down to amounts characterized as below cost.
- Evidence showed Dillard personnel purchased Harolds’s skirts and directed suppliers to copy the print designs and styles.
- Before trial, Dillard stipulated it infringed 19 copyrighted print fabrics and offered about 22,000 infringing garments for sale, with advance orders bringing the total to roughly 37,000.
- The parties stipulated the infringement did not cause lost sales of the specific 1991–1992 skirts; Harolds instead sought damages for harm to reputation, goodwill, and future customer relations.
- Harolds presented expert and survey evidence (Dr. Daniel Howard) based on a survey of 1,231 college-aged women who shopped at Dillard during the relevant period and had prior exposure to Harolds; the survey indicated reduced intention to shop at Harolds among those who saw the infringing skirts.
- A jury found for Harolds on copyright damages and on claims under the Oklahoma Antitrust Act and the Oklahoma Unfair Sales Act; the district court awarded limited attorney’s fees and denied a permanent injunction.

## Issues

1. Whether the Oklahoma Antitrust Act claim was preempted by federal copyright law because it arose from the same copying-related conduct.
2. Whether the district court abused its discretion by admitting the consumer survey and expert testimony to prove goodwill and reputational damages.
3. Whether the evidence was insufficient to support the damages award, requiring judgment as a matter of law for Dillard.
4. Whether Harolds was entitled to a permanent injunction despite Dillard’s cessation of sales and stipulation to infringement.
5. Whether the district court erred in limiting attorney’s fees, including reductions based on failure to segregate compensable from non-compensable work.

## Decision

- The court affirmed the judgment largely in full.
- It held the Oklahoma Antitrust Act claim was not preempted because it required proof of an additional element—anticompetitive conduct, including below-cost pricing intended to harm a competitor—beyond the rights protected by copyright.
- It held admission of the survey and expert testimony was not an abuse of discretion; objections to the survey universe and methodology went to weight, not admissibility, given Harolds’s targeted customer base.
- It held the record contained sufficient evidence—expert testimony, survey results, and business evidence—to support the jury’s damages award for harm to goodwill and reputation, and thus denial of judgment as a matter of law was proper.
- It upheld denial of a permanent injunction because Harolds did not show a real and immediate threat of future infringement and damages were an adequate legal remedy on the record presented.
- It upheld the limited attorney’s fees award, including reductions where billing did not allow segregation between compensable and non-compensable work.

## Legal Principles

- A state-law claim is preempted by the Copyright Act only if it falls within copyright’s subject matter and asserts rights equivalent to exclusive federal copyright rights; an “extra element” (such as anticompetitive intent and below-cost pricing) can defeat preemption.
- Consumer surveys and expert opinion may support proof and quantification of goodwill and reputational harm from infringement; methodological criticisms commonly affect the weight of the evidence rather than admissibility when the survey targets an adequate universe and uses reasonable methods.
- Copyright damages are not limited to lost sales of the specific infringed goods where other reasonably foreseeable injury (including harm to goodwill) is supported by competent evidence.
- A permanent injunction requires a showing of likely future harm; cessation of infringing conduct and lack of evidence of recurrence can justify denial.
- Fee-shifting awards may be reduced or denied where time entries are not adequately documented or where work is not segregated between compensable and non-compensable claims.

## Conclusion

The Tenth Circuit upheld jury awards for copyright-related damages and state antitrust and unfair-sales liability based on copying coupled with alleged predatory pricing, approved survey-based proof of goodwill harm, and affirmed the district court’s refusal to issue a permanent injunction and its limitation of attorney’s fees where billing records were not properly segregated.


Harolds Stores, Inc. v. Dillard Dep't Stores, Inc., 82 F.3d 1533 (10th Cir. 1996)