Judge balks at AARP’s $2 million award request against infringer

A federal judge has granted AARP a default judgment against an insurance broker accused of trademark infringement but denied the organization’s demand for $2 million in statutory damages.

The nonprofit AARP, which promotes the interests of people aged 50 and over, failed to establish that it was entitled to the maximum statutory damages award for willful infringement under the Lanham Act, 15 U.S.C. § 1117(c), U.S. District Judge Colleen Kollar-Kotelly of the District of Columbia said.

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According to the opinion, AARP sued Michael Sycle April 13, accusing him of using the “AARP” registered trademark to promote his insurance business without permission.

The company said Sycle falsely offered to sell AARP life insurance using Internet ads and YouTube videos that directed visitors to his website and telephone number.

AARP initiated the suit after Sycle ignored the organization’s demands to stop using the organization’s marks to sell insurance to create the false impression that his company sells AARP-branded insurance, the opinion says.

When Sycle did not respond to the complaint, AARP moved for default judgment, which the clerk of the court entered July 19.  The organization then moved for entry of default judgment by the court.

In her opinion, Judge Kollar-Kotelly said Sycle had admitted liability by default for willful trademark infringement and false advertising.

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Given AARP’s success on the merits of its complaint signaled by Sycle’s default and its assertion of his continuing disregard for the organization’s trademark rights, she concluded AARP was entitled to a permanent injunction against Sycle’s infringement.

While Judge Kollar-Kotelly acknowledged that the maximum $2 million statutory damages award was applicable because AARP established that Sycle’s infringement was willful, she said the group provided little information in support of its award request.

AARP’s motion for damages lacked an affidavit or documentary evidence to support the large award, the opinion says.

Judge Kollar-Kotelly acknowledged that useful information, such as the number of new customers who signed up for insurance with companies connected with Sycle since his infringing conduct began, was unavailable because it was within Sycle’s control.

She said, however, that other significant information within AARP’s control, such as the amount in revenue lost by the organization and its licensees, could be useful in setting the amount of statutory damages.

In other cases where judges have awarded the maximum penalty, there was evidence that the defendant’s sales and/or profits were substantial, the judge explained.

Although AARP need not prove actual damages, Judge Kollar-Kotelly said, the court lacked information to estimate an appropriate amount of statutory damages.

She held AARP’s award request in abeyance pending submission of further supporting evidence.

The judge also said Sycle’s willful infringement entitled AARP to an award of attorney fees and costs, and she directed the group to submit all the appropriate documentation by Dec. 20.

AARP v. Sycle, No. 13-0608, 2013 WL 6184949 (D.D.C. Nov. 27, 2013).