## Facts

- International Star Class Yacht Racing Association (ISCYRA) is a nonprofit that governs Star Class yacht racing, oversees boat design and certification, and requires a solid five-point star on Star Class mainsails.
- ISCYRA used “Star Class” and a solid five-point star insignia on merchandise (e.g., hats and clothing) and licensed yacht clubs to use them for regatta promotions; the “STAR CLASS” mark was unregistered.
- Tommy Hilfiger U.S.A., Inc. launched a nautical-themed menswear line intended to draw from competitive sailing, using the words “STAR CLASS” and a star design on garments and in marketing.
- Before adopting “STAR CLASS,” Hilfiger ordered only a limited federal registration search in a clothing classification and did not tell counsel the line was tied to competitive sailing; counsel recommended a comprehensive search, which Hilfiger did not initially obtain.
- After ISCYRA sued, Hilfiger obtained a comprehensive search that revealed ISCYRA’s usage, but Hilfiger continued selling the “STAR CLASS” garments and did not recall merchandise; sales exceeded $3 million.
- After a bench trial, the district court permanently enjoined Hilfiger’s use of “STAR CLASS” on clothing, denied protection and injunctive relief for the star insignia, and denied profits, damages, and attorney’s fees based on a finding of no bad faith.
- ISCYRA appealed the denial of profits, actual damages, attorney’s fees, and trademark protection for the star insignia.

## Issues

1. Whether the district court erred in finding no bad faith or willfulness, thereby denying an accounting of profits and attorney’s fees under Lanham Act § 43(a).
2. Whether ISCYRA proved entitlement to actual damages under Lanham Act § 43(a).
3. Whether ISCYRA’s solid five-point star insignia was protectable as a trademark.

## Decision

- The Second Circuit affirmed the denial of actual damages.
- The Second Circuit affirmed the ruling that ISCYRA’s solid five-point star insignia was not entitled to trademark protection.
- The Second Circuit vacated the denial of an accounting of profits and attorney’s fees and remanded because the district court’s findings on bad faith were erroneous and incomplete.
- The judgment was affirmed in part, vacated in part, and remanded.

## Legal Principles

- In Lanham Act § 43(a) cases, an accounting of profits and an award of attorney’s fees are equitable remedies for which a defendant’s willfulness or bad faith is a central consideration.
- Bad faith may be proven by circumstantial evidence evaluated under the totality of the circumstances, including the adequacy and scope of the defendant’s pre-adoption trademark search and continued use after notice of the plaintiff’s rights.
- A deliberately limited trademark search, especially where relevant context is withheld from counsel, can support an inference of bad faith.
- Continued sales after learning of the plaintiff’s mark and after litigation begins may support a finding of willful infringement (including reckless disregard) relevant to profits and fee shifting.
- Common, simple geometric symbols (such as a basic five-point star) are inherently weak as marks and generally require strong proof of secondary meaning to receive protection; absent such proof, trademark rights may be denied.

## Conclusion

The Second Circuit upheld the denial of actual damages and refused trademark protection for a plain five-point star, but required reconsideration of profits and attorney’s fees because the district court did not adequately address evidence that Hilfiger’s restricted search and continued sales after notice could show bad faith.


International Star Class Yacht Racing Ass’n v. Tommy Hilfiger U.S.A., Inc., 80 F.3d 749 (2d Cir. 1996)