## Facts

- Nintendo marketed hardware and game cartridges for the Nintendo Entertainment System.
- George Sheng, operating as Dragon Pacific International, imported and sold multi-game cartridges compatible with Nintendo’s system.
- Sheng sold cartridges containing 31, 42, or 52 games per cartridge; each version included multiple Nintendo copyrighted games.
- The cartridges infringed 13 Nintendo copyrights and were marketed as Nintendo products, violating Nintendo’s trademark rights.
- The district court found Sheng acted intentionally and willfully, with actual knowledge of infringement.
- After summary judgment on liability, the district court held a bench trial on damages and awarded:
  - $65,000 in statutory copyright damages ($5,000 per infringed work), and
  - $62,000 in Lanham Act profits (3,100 cartridges × $20 profit), trebled for willfulness to $186,000.
- Sheng appealed only the damages award.

## Issues

1. Whether awarding statutory damages for copyright infringement and disgorgement of profits (trebled) for trademark infringement for the same product sales constitutes impermissible double recovery.
2. Whether Lanham Act profits must be apportioned between infringing and non-infringing aspects of the cartridges.

## Decision

- The Ninth Circuit affirmed the judgment.
- The court held there was no double recovery because the awards addressed separate violations and distinct harms under the Copyright Act and the Lanham Act.
- The court held apportionment was not required where Sheng failed to present evidence supporting any allocation and where a workable distinction between infringing and non-infringing aspects was not shown.
- The court upheld trebling of trademark profits based on willfulness.

## Legal Principles

- Separate remedies may be awarded for separate statutory violations arising from the same course of conduct when the remedies compensate different injuries.
- Under the Lanham Act, once the plaintiff establishes the defendant’s sales (and resulting profits framework), the defendant bears the burden to prove deductions or an evidentiary basis for apportionment.
- A defendant’s failure to produce competent apportionment evidence permits an award of profits without allocation between infringing and non-infringing elements.
- Willful trademark infringement supports enhanced monetary relief, including trebling of profits.

## Conclusion

The Ninth Circuit permitted cumulative monetary relief for counterfeit game cartridges because copyright and trademark laws protect different interests, and it placed the apportionment burden on the infringer, affirming full profits (trebled for willfulness) where the infringer offered no workable proof of allocation.


Nintendo of Am., Inc. v. Dragon Pac. Int’l, 40 F.3d 1007 (9th Cir. 1994)