## Facts

- Quaker State Oil Refining Corporation marketed motor oil sold in distinctive cans.
- Kooltone, Inc. and related companies sold competing motor oil products using packaging that deliberately imitated key visual features of Quaker State’s cans.
- Quaker State sued for trademark infringement, unfair competition based on simulated trade dress, false description of goods, and dilution.
- The case was tried to a jury in the Eastern District of New York.
- By special verdict, the jury found Kooltone’s infringement and unfair competition were deliberate and willful.
- The jury awarded Quaker State $30,000 representing defendants’ profits, $2 in compensatory damages, and $55,000 in punitive damages.
- After trial, the district court awarded Quaker State $50,000 in attorney’s fees.
- Kooltone asserted counterclaims for antitrust violations, unfair competition, and malicious prosecution; they were dismissed before the case reached the jury.

## Issues

1. Whether a profits award under the Lanham Act must be set aside when the plaintiff did not introduce direct proof quantifying the defendant’s profits.
2. Whether punitive damages were improper or excessive given the jury’s findings of deliberate and willful conduct.
3. Whether the district court abused its discretion by awarding $50,000 in attorney’s fees.
4. Whether any additional alleged trial errors warranted reversal or modification of the judgment.

## Decision

- The Second Circuit affirmed the judgment in full.
- The court upheld the $30,000 profits award, concluding the evidentiary burden was satisfied because the plaintiff need only prove the defendant’s sales, while the defendant must prove costs and deductions.
- The court upheld the $55,000 punitive damages award as supported by the jury’s findings of deliberate and willful infringement and unfair competition.
- The court affirmed the $50,000 attorney’s fee award as a permissible exercise of discretion in an exceptional case.
- The court rejected the remaining appellate arguments as meritless and found no reversible error.

## Legal Principles

- In a Lanham Act accounting for profits, the plaintiff must prove the defendant’s sales; the defendant bears the burden to prove any claimed costs or deductions from those sales.
- Deliberate and willful trademark/trade dress infringement and deceptive imitation may support enhanced monetary remedies, including punitive damages where available under applicable law.
- Attorney’s fees may be awarded in exceptional trademark cases, including those involving willful infringement, and are reviewed for abuse of discretion.
- Close imitation of packaging likely to mislead customers can constitute trademark infringement, trade dress-based unfair competition, and false description under the Lanham Act and related doctrines.

## Conclusion

The Second Circuit upheld a jury verdict and post-judgment fee award for willful trade dress infringement, holding that a plaintiff seeking the defendant’s profits need only prove sales and that willful conduct supported punitive damages and attorney’s fees in an exceptional case.


Quaker State Oil Refining Corp. v. Kooltone, Inc., 649 F.2d 94 (2d Cir. 1981)