Hamil America, Inc. v. Gfi.

193 F.3d 92 (2d Cir. 1999)

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Nature of the Case

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Facts

Hamil America (P) and GFI (D) are companies doing business in the garment industry. Each sells printed fabric to manufacturers that, in turn, create garments for sale to wholesalers or retailers. Tabitha Kim created an original floral design for P. Kim transferred her copyright rights in the design to P and P produced and sold fabric printed with the pattern in various color combinations, or 'colorways.' One of the color combinations, designated colorway 575, featured clusters of small white and yellow flowers with blue centers on a red background. SGS (D1) is a garment manufacturer. J.C. Penney (D2) is a retailer that sells, among other things, garments made by D1. In June 1994, D1 purchased fabric samples of P’s pattern in four colorways, including colorway 575. D2 selected P’s America Pattern No. 96 in colorway. D1 delivered samples to D2 and D2 used them for marketing and outside advertising. It was more expensive for D1 to use Hamil America fabric than D fabric: D hired Jae Wang, a freelance artist frequently employed by D, to create a fabric pattern that D would sell to D1. D1 also ordered two yards of Pattern No. 96 in colorway 575 from P to be shipped to D on a rush basis. P claims that Wang copied, or 'knocked-off,' Hamil America Pattern No. 96. P learned of the infringement from Beaver Raymond, one of its Texas manufacturing customers. P then registered Pattern No. 96 with the United States Copyright Office and was granted a registration number, VA 642-546. P sued D for copyright infringement, claiming Hamil America Pattern No. 96 was infringed by D Pattern No. 330. P also sued D1 and D2. because they each sold garments manufactured with D's infringing fabric. After a non-jury trial, the district court found that Ds willfully infringed P’s copyright. The court entered judgment in favor of P against all defendants, and awarded damages in the amount of $201,049 from D, $28,836 from D1, and $67,106 from D2. Ds appealed. P cross-appealed the district court's calculation of damages, arguing that the district court should have awarded damages for profits that P presumably would have earned had other customers not purchased D's infringing pattern.