08-4483-cv L Louis Vuitton Malletier S.A v. LY USA, Inc. UNITED STATES COURT OF APPEALS 1 FOR THE SECOND CIRCUIT 2 August Term,…

08-4483-cv(L)
Louis Vuitton Malletier S.A. v. LY USA, Inc.
UNITED STATES COURT OF APPEALS 1
FOR THE SECOND CIRCUIT 2
August Term, 2010 3
(Argued: May 27, 2011 Decided: March 29, 2012) 4
5
Docket Nos. 08-4483-cv, 08-4525-cv, 08-4528-cv, 08-5108-cv, 08- 6
5273-cv, 08-5290-cv 7
------------------------------------- 8
LOUIS VUITTON MALLETIER S.A., 9
Plaintiff-Appellee, 10
- v - 11
LY USA, INC., COCO USA INC., CHONG LAM, MARCO LEATHER GOODS, 12
LTD., JOYCE CHAN, 13
Defendants-Cross Claimants-Cross Defendants-Appellants. 14
------------------------------------- 15
Before: SACK, LIVINGSTON, and LYNCH, Circuit Judges. 16
Appeal from a judgment of the United States District 17
Court for the Southern District of New York, Alvin K. 18
Hellerstein, Judge, granting summary judgment to the plaintiff on 19
its claims of trademark counterfeiting and infringement, and 20
awarding the plaintiff statutory damages in the amount of 21
$3 million, and more than $500,000 in attorney's fees and costs. 22
The defendants base their appeal of the judgment on the 23
counterfeiting and infringement claims primarily on the district 24
court's denial of a stay of the action pending the resolution of 25
a related criminal proceeding. They also appeal from the award 26
of attorney's fees to the plaintiff under 15 U.S.C. § 1117. We 27

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2
conclude that the district court did not abuse its discretion in 1
declining to stay the proceedings; that, as the district court 2
concluded, an award of attorney's fees under 15 U.S.C. § 1117(a) 3
may accompany an award of statutory damages pursuant to 15 U.S.C. 4
§ 1117(c); and that the district court did not abuse its 5
discretion in awarding such fees or in setting their amount. 6
The judgment of the district court is affirmed. 7
8
ANGELO RIOS (Mark N. Antar, on the 9
brief), Cheven, Keely & Hatzis, New 10
York, NY, for Defendants-Cross 11
Claimants-Cross Defendants-Appellants 12
CoCo USA Inc. and Joyce Chan. 13
JOHN K. ZWERLING (Michael G. Dowd, Law 14
Offices of Michael G. Dowd, New York, 15
NY; Kathleen C. Waterman, Thomas Torto, 16
Law Offices of Kathleen C. Waterman, New 17
York, NY, on the brief) Zwerling, Leibig 18
& Moseley, P.C., Alexandria, VA, for 19
Defendants-Cross Claimants-Cross 20
Appellants Chong Lam, LY USA Inc., and 21
Marco Leather Goods, Ltd. 22
MICHAEL J. ALLAN (William G. Pecau, on 23
the brief), Steptoe & Johnson LLP, 24
Washington, DC, for Plaintiff-Appellee 25
Louis Vuitton Malletier. 26
27
SACK, Circuit Judge: 28
The defendants -- LY USA, Inc., CoCo USA Inc., Marco 29
Leather Goods, Ltd., Chong Lam, and Joyce Chan -- appeal from 30
judgments entered September 2, 2008, and October 15, 2008, in the 31
United States District Court for the Southern District of New 32
York (Alvin K. Hellerstein, Judge) granting summary judgment to 33
the plaintiff Louis Vuitton Malletier S.A. ("Louis Vuitton" or 34
"Vuitton") on its claims of trademark counterfeiting and 35

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1 We refer to such fees throughout this opinion as
"attorney's fees," the term used in 15 U.S.C. § 1117(b), rather
than the less commonly used "attorney fees," the term used in 15
U.S.C. § 1117(a), or the likely more accurate "attorneys' fees,"
see NAACP v. Town of E. Haven, 259 F.3d 113, 115 n.1 (2d Cir.
2001) ("Although the fees sought in this case are for multiple
attorneys, we refer to them in the singular possessive,
'attorney's fees,' because that is the term used by [the statute
in that case] for such awards.").
3
infringement, and awarding Vuitton statutory damages in the 1
amount of $3 million, and more than $500,000 in attorney's fees 1
2
and costs. 3
The defendants appeal from five separate decisions of 4
the district court: (1) the grant of summary judgment on the 5
trademark counterfeiting and infringement claims; (2) the award 6
of statutory damages; (3) the denial of the defendants' motion to 7
adjourn oral argument to permit the defendants to examine 8
purportedly new evidence; (4) the denial of the defendants' 9
motion to stay the proceeding pending the outcome of a related 10
criminal proceeding; and (5) the grant of attorney's fees in 11
addition to statutory damages. We affirm the judgment of the 12
district court on the first three of these issues by a summary 13
order filed today. This opinion addresses only the denial of the 14
motion for a stay and the award of attorney's fees. 15
The defendants argue that the district court erred in 16
denying the requested stay because the court did not give 17
sufficient weight to the consequent impairment of the indicted 18
defendants' Fifth Amendment privilege against self-incrimination, 19
and because it failed to consider the practical difficulties 20

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4
attendant on defending simultaneous criminal and civil 1
proceedings. The defendants also contend that the district court 2
lacked a statutory basis for awarding attorney's fees because 3
Louis Vuitton had elected to recover statutory damages, rather 4
than actual damages, under the Lanham Act, and that in any event 5
the attorney's fees were excessive. 6
We disagree with the contentions of the defendants. We 7
conclude that the district court did not abuse its discretion in 8
denying the stay. We also conclude that a plaintiff electing 9
statutory damages pursuant to 15 U.S.C. § 1117(c) may recover 10
attorney's fees pursuant to 15 U.S.C. § 1117(a), and that the 11
district court did not abuse its discretion either in awarding 12
attorney's fees and costs in this case or in determining their 13
amount. 14
BACKGROUND 15
This case is about an alleged large-scale trademark 16
counterfeiting operation conducted by the defendants Lam and Chan 17
and several companies that they either controlled or were 18
otherwise associated with. It involved the importation and sale 19
of counterfeit luxury goods bearing trademarks owned by Louis 20
Vuitton and others. After the conclusion of this civil case, the 21
defendants were convicted in the United States District Court for 22
the Eastern District of Virginia for their importation into the 23
United States and sale of more than 300,000 handbags, wallets, 24
and other products that resembled goods produced by Louis 25

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2 The details of the related criminal proceeding are
rehearsed here for background purposes only. This Court may take
judicial notice of any fact that "can be accurately and readily
determined from sources whose accuracy cannot reasonably be
questioned." Fed. R. Evid. 201(b)(2).
5
Vuitton, Burberry, Coach, and other luxury goods manufacturers. 2
1
Lam and Chan used a variety of companies, including defendants- 2
appellants LY USA. Inc., CoCo USA Inc., and Marco Leather Goods, 3
Ltd., to facilitate their operation. "Whenever [Customs and 4
Border Patrol ("CBP")] agents would identify one corporation as 5
an importer of counterfeit goods, Defendants would continue to 6
import goods into the same port, but under a different corporate 7
name. If Defendants believed CBP agents could identify them as 8
responsible for importing counterfeit goods into a port, they 9
would ship the goods to a different port." United States v. Lam, 10
No. 3:07-CR-374, 2010 WL 5178839, at *1, 2010 U.S. Dist. LEXIS 11
132126, at *3 (E.D. Va. Dec. 14, 2010). Goods allegedly imported 12
by the defendants were seized between August 2002 and January 13
2008 in Houston, Los Angeles, Newark, New York, Norfolk, and 14
elsewhere. 15
This civil case comprises claims by Louis Vuitton 16
against the defendants for the related counterfeiting and 17
infringement of their trademarks. The district court determined 18
that three of the defendants' collections infringed or were 19
counterfeit copies of five separate Louis Vuitton trademarks. 20
The court based its conclusion on testimony, adverse inferences 21
drawn from the failure of the corporate defendants to offer 22

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6
testimony, records of numerous customs seizures, and visual 1
evidence. Tr. of Oral Arg. on Summ. J. Mot. at 53, Louis Vuitton 2
Malletier S.A. v. LY USA Inc., et al., No. 06-cv-13463 (S.D.N.Y. 3
August 7, 2008)("Summ. J. Hr'g Tr."). 4
The Parties 5
Louis Vuitton is a French fashion house founded in 6
1854. It began selling its products in the United States in 1893. 7
Since 1987, it has been a part of LVMH Moët Hennessy, a publicly 8
traded corporation. Louis Vuitton manufactures and distributes 9
luxury consumer goods, including leather goods, designer luggage, 10
purses, handbags, leather travel accessories, jewelry, shoes, and 11
other high-end fashion apparel. Vuitton has registered with the 12
U.S. Patent and Trademark Office many trademarks, including its 13
well-known monogram logo, which consists of a stylized, 14
overlapping "L" and "V" (the "LV Logo Mark"). The company spends 15
millions of dollars each year to advertise and market its 16
trademarked goods in magazines, newspapers, catalogs, targeted 17
mailings, and on the Internet. See Louis Vuitton Malletier v. 18
Dooney & Bourke, Inc., 454 F.3d 108, 112 (2d Cir. 2006) 19
(describing Louis Vuitton's business model, trademarks, and 20
marketing expenditures); Louis Vuitton Malletier v. Burlington 21
Coat Factory Warehouse Corp., 426 F.3d 532, 534-35 (2d Cir. 2005) 22
(same); see also Louis Vuitton Malletier S.A. v. Haute Diggity 23
Dog, LLC, 507 F.3d 252, 257-58 (4th Cir. 2007) (same); Steven 24
Greenhouse, The Champagne of Mergers, N EW YORK TIMES D1 (June 4, 25
1987) (describing the merger of Moët-Hennessy and Louis Vuitton). 26

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7
The defendants are LY USA, Inc., ("LY Inc.") a New York 1
corporation formed in 2003, which primarily produces and markets 2
"LY"-branded handbags and wallets; Marco Leather Goods, Ltd., 3
("Marco Ltd.") a New York corporation formed in 1999, which 4
imports "Marco"-branded handbags and wallets and sells them to 5
wholesale customers throughout the United States; and CoCo USA 6
Inc., ("CoCo Inc.") a New York corporation formed in 2003, which 7
is a wholesaler and distributor of handbags and leather goods. 8
LY Inc., Marco Ltd., and CoCo Inc. all operate out of the same 9
business address at 135 West 30th Street in Manhattan. The 10
defendant Lam is the president and owner of Marco Ltd.; the 11
defendant Chan is a manager and director of that company. Lam 12
and Chan are not married, but have two children together. CoCo 13
principally distributes goods imported by Marco, and sells them 14
through venues including a storefront location at 135 West 30th 15
Street. CoCo is owned by a member of Lam's family, and both Lam 16
and Chan are associated with the company. Lam is also a 17
shareholder, officer, and director of LY Inc. The goods imported 18
and sold by the defendants were manufactured at a factory in 19
China owned by Lam's family. 20

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3 15 U.S.C. § 1114(1)(a) makes civilly liable any person who
uses a "reproduction, counterfeit, copy, or colorable imitation
of a registered mark" without the consent of the registrant if
"such use is likely to cause confusion, or to cause mistake, or
to deceive." 15 U.S.C. § 1125(a) authorizes a civil action
8
Louis Vuitton's Trademarks 1
Louis Vuitton owns many trademarks, some of which are 2
widely recognized. Five are at issue in this litigation: the LV 3
Logo Mark, three different geometric floral motifs (the "Flower 4
Design Marks"), and a composite pattern consisting of repetitions 5
of the LV Logo Mark centered inside the three Flower Design 6
Marks. Louis Vuitton has registered each of these marks with the 7
U.S. Patent and Trademark Office on the principal register, and 8
each has become "incontestable" as a result of its continuous use 9
in commerce for more than five years. See 15 U.S.C. § 1065 10
(governing incontestability); Dooney & Bourke, 454 F.3d at 112 11
(noting that these marks are incontestable). 12
The Civil Lawsuit 13
On November 22, 2006, Louis Vuitton filed this lawsuit 14
in the United States District Court for the Southern District of 15
New York alleging that the defendants sold counterfeit handbags 16
and travel apparel bearing infringing versions of Louis Vuitton's 17
marks to retail kiosks and specialty stores, and on the Internet 18
to both wholesale and retail customers. In its complaint, 19
Vuitton asserted claims for trademark counterfeiting, trademark 20
and service mark infringement, trademark dilution, and false 21
designation of origin forbidden by Sections 32 and 43 of the 22
Lanham Act, 15 U.S.C. §§ 1114, 1125(a), 1125(c); 3 trademark 23

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against any person who uses "any word, term, name, symbol, or
device" in a manner likely to deceive as to the origin of the
product or the affiliation of the supplier. And 15 U.S.C. §
1125(c) permits the owner of a "famous mark" to seek injunctive
relief against another person whose of use of a mark "is likely
to cause dilution by blurring or dilution by tarnishment of the
famous mark."
4 Section 349 generally provides that deceptive acts or
practices in the conduct of business are unlawful. N.Y. Gen.
Bus. Law § 349 (McKinney 2011). Section 360-l provides for
injunctive relief where injury to business reputation or dilution
of a registered mark is likely. Id. § 360-l.
9
infringement and unfair competition in violation of New York 1
State common law; and violations of New York General Business Law 2
§§ 349, 360-l. 4
3
Louis Vuitton alleged that the defendants had supplied 4
tens of thousands of items bearing counterfeits and infringements 5
of the Louis Vuitton trademarks to wholesalers and retail kiosks 6
throughout the United States. Vuitton alleged that U.S. Customs 7
officials had seized tens of thousands of counterfeit handbags, 8
tote bags, cosmetic bags, and wallets imported by LY Inc. and 9
Marco Ltd. because those products infringed Louis Vuitton's 10
marks. Each of the defendants answered the plaintiff's complaint 11
and interposed cross-claims against one another for 12
indemnification and contribution. 13
After fruitless settlement discussions, discovery was 14
begun. Louis Vuitton's efforts were aimed at ascertaining the 15
scope of the defendants' counterfeiting and infringement in order 16
to determine the appropriate amount of damages to seek. The 17

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10
first document production by the defendants in August 2007 1
resulted in the production of fewer than 40 pages. On September 2
25, 2007, Vuitton sent letters to all of the defendants outlining 3
what it said were deficiencies with their production and also 4
with contemporaneous interrogatory answers. Vuitton also asked 5
the district court to order the defendants to produce additional 6
documents and to complete and verify interrogatory answers no 7
later than the time of a status conference scheduled for 8
January 3, 2008. 9
On October 23, 2007, the parties sent a joint letter to 10
the district court noting that Louis Vuitton had noticed six 11
depositions, and had notified the defendants "of deficiencies 12
with their written discovery." Letter from Michael J. Allan, 13
Esq. et al., to Hon. Alvin K. Hellerstein at 1, Louis Vuitton 14
Malletier S.A. v. LY USA Inc., et al., No. 06-cv-13463 (S.D.N.Y. 15
Oct. 23, 2007), ECF No. 25. The parties requested a stay of 16
discovery pending a mediation before a magistrate judge. The 17
letter read, in part: 18
[T]he defendants have agreed to provide Louis 19
Vuitton with certain information sufficiently 20
in advance of mediation to help facilitate an 21
efficient and useful mediation. 22
Specifically, defendants will provide Louis 23
Vuitton with complete sales, inventory and 24
supplier information for all merchandise 25
Louis Vuitton contends is counterfeit and/or 26
infringing of its trademarks as well as any 27
other merchandise defendants may have 28
manufactured, imported or sold that bear 29
marks similar to or substantially 30
indistinguishable from Louis Vuitton's 31
trademarks. 32
Id. at 1. 33

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11
On December 7, 2007, Louis Vuitton's counsel reported 1
to the court that the mediation had not been successful, and that 2
the defendants had not produced "complete 'sales, inventory and 3
supplier' information" in advance of the mediation as promised. 4
Letter from Michael J. Allan, Esq. to Hon. Alvin K. Hellerstein 5
at 1, Louis Vuitton Malletier S.A. v. LY USA Inc., et al., No. 6
06-cv-13463 (S.D.N.Y. Dec. 7, 2007), ECF No. 28 ("December 7 7
Discovery Letter"). Counsel requested an order compelling 8
discovery or a conference to address the outstanding discovery 9
issues. Id. at 2. 10
A status conference was then held on January 3 or 4, 11
2008, to address these disputes. No transcript or other record 12
of this proceeding was created. 13
On February 13, 2008, Lam and Chan jointly wrote to the 14
District Court notifying it that they had been arrested 15
elsewhere. They requested a stay of this lawsuit pending 16
resolution of the federal criminal proceedings because, counsel 17
said, in executing the search warrant at their business 18
headquarters on January 16 in connection with the criminal 19
proceedings, federal law enforcement officials had "remove[d] 20
computers, documents and other records as a well as a significant 21
amount of defendants' merchandise from the premises." Letter 22
from Angelo Rios, Esq., et al. to Hon. Alvin K. Hellerstein at 2, 23
Louis Vuitton Malletier S.A. v. LY USA Inc., et al., No. 06-cv- 24
13463 (S.D.N.Y. Feb. 13, 2008), ECF No. 30 ("February 13 Letter 25
Requesting Stay"). Counsel asserted that as a result, they "no 26

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12
longer ha[d] access to the information, documents and other 1
things necessary to conduct meaningful discovery." Id. Counsel 2
also advised the court that "access to our clients will be 3
severely limited both by the constraints placed upon them by 4
their criminal defense attorneys as well as conditions imposed by 5
the Court with respect to their release from custody." Id. For 6
those reasons, the defendants argued, "it will be impossible . . 7
. to proceed with pretrial discovery in the instant action while 8
the criminal action is pending," and they therefore "request[ed] 9
that all proceedings . . . be stayed until conclusion of the 10
criminal action." Id. 11
Louis Vuitton responded with a letter opposing the 12
stay, arguing that the defendants "are using the criminal case 13
inappropriately as a shield against the civil case." Letter from 14
Michael J. Allan, Esq. to Hon. Alvin K. Hellerstein at 1, Louis 15
Vuitton Malletier S.A. v. LY USA Inc., et al., No. 06-cv-13463 16
(S.D.N.Y. Feb. 22, 2008) ("February 22 Letter Opposing Stay 17
Request"). Vuitton explained that at the early January 18
conference, the defendants had represented that they had "no 19
additional responsive documentation" and they had fully answered 20
the interrogatories. Id. at 3. 21
On March 3, 2008, in a one-page order, the district 22
court denied the defendants' motion for a stay. The court 23
considered the defendants' argument that the parallel criminal 24
proceeding -- as well as the seizure of the defendants' 25
documents, goods, and computers by law enforcement officials -- 26

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13
would "impede[] their ability to mount a defense to the civil 1
action, or to engage in meaningful pre-trial discovery." Order 2
Den. Mot. for Stay at 1, Louis Vuitton Malletier S.A. v. LY USA 3
Inc., et al., No. 06-cv-13463 (S.D.N.Y. March 8, 2008), ECF No. 4
31 ("Order Denying Motion for Stay"). The court noted Vuitton's 5
opposition to the stay on the grounds that the civil case had 6
been pending for more than a year; that any delay would hinder 7
the plaintiff's "need for prompt redress"; and that 8
"[c]onsiderable discovery already has been had." Id. The 9
district court then ruled: 10
Defendants' motion is denied. Plaintiff has 11
an interest in the prompt prosecution of its 12
case. Its trademark is valuable, and 13
counterfeit goods threaten the value of its 14
trademark and cut into sales. If there is 15
imposition involved, the court can deal with 16
such matters as and when there is threat of 17
imposition. 18
Id. at 1. 19
On March 25, 2008, defendants Lam and Marco Ltd. filed 20
a motion for reconsideration of their request for a stay. They 21
then argued for the first time that they and the other defendants 22
intended to assert their Fifth Amendment rights in the course of 23
their depositions. 24
[P]laintiff insists on going forward with 25
defendants' depositions in an attempt . . . 26
to take advantage of defendants' situation so 27
that plaintiff can then move for summary 28
judgment relying on the absence of testimony 29
from defendants as well as the adverse 30
inference which might be raised by 31
defendants' asserting their constitution[al] 32
right not to incriminate themselves. 33
34

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5 Corporations do not have a Fifth Amendment right against
self-incrimination. See, e.g., Braswell v. United States, 487
U.S. 99, 105 (1988) (noting that prior cases had "settled that a
corporation has no Fifth Amendment privilege"); In re Grand Jury
Subpoena Issued June 18, 2009, 593 F.3d 155, 157-58 (2d Cir.
2010) (per curiam) ("[C]orporations cannot avail themselves of
the Fifth Amendment privilege."). In this Circuit, at least,
this rule includes small or solely owned corporations. See In re
Grand Jury Subpoena, 593 F.3d at 158-59. Accordingly, a
14
Not. Of Cross-Motion to Rearg. ¶ 7, Louis Vuitton Malletier S.A. 1
v. LY USA Inc., et al., No. 06-cv-13463 (S.D.N.Y. March 26, 2
2008), ECF No. 54. 3
The district court, noting that it had "previously 4
considered the arguments presented in this motion, evaluated the 5
balance of convenience and prejudices, and came to [its] 6
rulings," denied the motion. Den. of Mot. for Recons., Louis 7
Vuitton Malletier S.A. v. LY USA Inc., et al, No. 06-cv-13463 8
(S.D.N.Y. March 26, 2008), ECF No. 54. 9
Discovery continued. Louis Vuitton gave notices of 10
deposition of the defendants Lam and Chan. They refused to 11
appear, citing their intent to exercise their Fifth Amendment 12
right against self-incrimination. Vuitton then moved to compel 13
their depositions. The district court granted the motion, and 14
Chan and Lam appeared for depositions on April 15 and April 16, 15
respectively. But both asserted their Fifth Amendment privileges 16
and refused to answer nearly every question asked of them. 17
On June 5, 2008, Louis Vuitton moved for summary 18
judgment on all of its federal and state-law claims. The same 19
day, Vuitton also moved pursuant to Rule 37(d) to preclude the 20
three corporate defendants 5 –- LY Inc., Marco Ltd., and CoCo Inc. 21

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corporation may not refuse to submit to a Rule 30(b)(6)
deposition, or to turn over corporate records, on the grounds
that such acts may tend to incriminate it. Id. at 157-58. The
defendant corporations were, of course, free to designate
individuals other than Chan and Lam as 30(b)(6) witnesses. See
Fed. R. Civ. P. 30(b)(6).
6 Rule 30(b)(6) provides:
Notice or Subpoena Directed to an Organization.
In its notice or subpoena, a party may name
as the deponent a public or private
corporation, a partnership, an association, a
governmental agency, or other entity and must
describe with reasonable particularity the
matters for examination. The named
organization must then designate one or more
officers, directors, or managing agents, or
designate other persons who consent to
testify on its behalf; and it may set out the
matters on which each person designated will
testify. A subpoena must advise a nonparty
organization of its duty to make this
designation. The persons designated must
testify about information known or reasonably
available to the organization. This paragraph
(6) does not preclude a deposition by any
other procedure allowed by these rules.
15
-- from submitting further evidence as a sanction for their 1
failure to respond to the plaintiff's demand for Rule 30(b)(6) 2
depositions. 6
3
In responding to that motion, one of the defendants' 4
attorneys declared that "Marco and Lam have . . . responded to 5
plaintiff's requests for admissions, interrogatories, and other 6
discovery requests. Notably, plaintiff does not point to any 7
specific written discovery requests to which defendants Marco and 8
Lam did not fully respond." Decl. of Thomas Torto in Opp'n to 9
Mot. to Preclude Introduction of New Evidence ¶ 3, Louis Vuitton 10

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16
Malletier S.A. v. LY USA Inc., et al, No. 06-cv-13463 (S.D.N.Y. 1
June 20, 2008), ECF No. 74. 2
The parties briefed both the summary judgment motion 3
and the motion to preclude. At oral argument on August 7, 2008, 4
after hearing from all of the parties, the district court granted 5
summary judgment to Louis Vuitton on the trademark counterfeiting 6
and infringement claims, and granted Louis Vuitton a permanent 7
injunction. The court did not appear explicitly to draw any 8
adverse inference from Lam's and Chan's invocation of the Fifth 9
Amendment. However, it did draw an adverse inference from the 10
corporate defendants' refusal to submit Rule 30(b)(6) witnesses 11
for depositions. See Summ. J. Hr'g Tr. at 46, 53. The district 12
court granted summary judgment on the counterfeiting claims based 13
on the testimony of a person who had been involved in the 14
operation, and "the absence of any opposition testimony by the 15
defendants, and their indifference . . . to the notices of 16
deposition served on them, the goods found among the counterfeit 17
goods seized by [U.S. Government Immigration and Customs 18
Enforcement, or "ICE"], the catalog photographs of the 19
defendants' goods and so much else." Summ. J. Hr'g Tr. at 53. 20
The court also granted summary judgment on the infringement 21
claims, based on three separate product lines designed by the 22
defendants to resemble various handbags produced by Louis 23

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7 Those product lines are known as the M9 collection, the LY
collection, and the Cherry Blossom collection. The district
court explained that the "M9 collection . . . bears substantial
similarity to the [LV Logo Mark, floral motifs, and composite
mark] except that a cursive M replaces the LV logo, and that the
flower design is somewhat modified." Summ. J. Hr'g Tr. at 7.
The Cherry Blossom collection "features bags with a brown canvas
base similar to the canvas of the Louis Vuitton bags, and the LY
logo is in contrasting colors in pink and red cherry blossom
flowers superimposed with pink and red cherry blossoms and
flowers superimposed over the logos." Id. at 7-8. The LY
Collection "replicates all of the Louis Vuitton marks except that
they've replaced an overlapping LV with a LY." Id. at 15.
17
Vuitton, 7 after an analysis of the factors laid out in Polaroid 1
Corp. v. Polarad Elecs. Corp., 287 F.2d 492, 495 (2d Cir. 1961). 2
The district court noted that "when the manufacturer of 3
knockoff goods offers a consumer a cheap knockoff copy of the 4
original manufacturer's more expensive product, allowing the 5
buyer to acquire the prestige of owning what appears to be the 6
more expensive product, there is infringement." Summ. J. Hr'g 7
Tr. at 55. The court reserved decision on the precise amount of 8
damages that would be awarded: 9
I'll give the defendants an opportunity to 10
come forward with proof of their sales and 11
their customers for the accused merchandise. 12
If they refuse, I will take the proper 13
inference and consider the application of the 14
plaintiffs. If they cooperate, and 15
plaintiffs are able to get an idea of where 16
their merchandise is, and thereby able to 17
mitigate their damage, and how much money the 18
defendants made, I will take that into 19
consideration in fixing the appropriate sum. 20
Id. at 58. 21
One of the defendants' attorneys again protested that 22
he would not be able to produce the sales records because they 23
had been seized in connection with the criminal case. The 24

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8 It is unclear to us whether the plaintiff was able to
secure any additional records by consulting with the U.S.
Attorney's office prosecuting the defendants' criminal case, or
whether the defendants were able to do so themselves. The record
does not reflect any additional attempts by the defendants to
secure the records the unavailability of which they initially
argued supported their application for the stay, nor did they
make any specific objections to the civil proceedings on the
basis of their inability to introduce specific documents.
18
district court instructed Louis Vuitton's attorney to assist the 1
defendants in responding by contacting the United States Attorney 2
to try to secure the seized records, and noted that "if any 3
orders or interventions from me would be helpful, I'll be glad 4
to." Id. at 60. 5
The district court entered a summary order formalizing 6
its ruling on August 11, 2008, and entered a permanent injunction 7
barring the defendants from infringing Louis Vuitton's trademarks 8
on September 2, 2008. 9
The district court proceeded to determine the amount of 10
damages and attorney's fees. Louis Vuitton confirmed in a letter 11
to the district court that it was seeking the maximum statutory 12
damages award of eight million dollars, plus attorney's fees, 13
costs, and investigative fees. The parties briefed these issues. 14
Vuitton detailed its efforts to settle the case and 15
avoid litigation, as well as its efforts to secure records 16
detailing the scope of the defendants' copyright infringement. 17
Louis Vuitton argued for "maximum damages" because the defendants 18
had "hid from discovery the documents and other information that 19
would reveal the full nature and extent of their counterfeiting 20
enterprise and activities." 8 Mem. in Supp. of Appl. for 21

-- 18 of 60 --

19
Statutory Damages, Attorney's Fees, Investigative Fees and Costs 1
at 8, Louis Vuitton Malletier S.A. v. LY USA Inc., et al., No. 2
06-cv-13463 (S.D.N.Y. Sept. 8, 2008), ECF No. 114. 3
The defendants argued that Louis Vuitton was precluded 4
by statute from recovering attorney's fees, that the attorney's 5
fees requested were excessive, and that the $8 million in 6
statutory damages Louis Vuitton sought "is not fair compensation 7
but punitive and draconian, grossly in excess of any actual 8
harm." Mem. in Opp. to Appl. for Statutory Damages, Attorney's 9
Fees, Investigative Fees and Costs at 14, Louis Vuitton Malletier 10
S.A. v. LY USA Inc., et al., No. 06-cv-13463 (S.D.N.Y. Sept. 19, 11
2008), ECF No. 128. 12
On October 3, 2008, the district court awarded Louis 13
Vuitton $3 million in statutory damages and $556,934.22 in 14
attorney's fees and costs. The court noted that the 15
"[d]efendants, despite their protestations to the contrary, have 16
produced limited records, accountings, and sales invoices 17
regarding the merchandise at issue. Their failure to do so 18
invites an inference of a massive counterfeiting enterprise." 19
Order Awarding Statutory Damages, Attorney's Fees, and Expenses 20
at 3, Louis Vuitton Malletier S.A. v. LY USA Inc., et al., No. 21
06-cv-13463 (S.D.N.Y. Oct. 3, 2008), ECF No. 133 ("Order Awarding 22
Statutory Damages"). The court concluded that an award of half 23
the $1,000,000 maximum statutory damages -- $500,000 -- was 24
appropriate for each of the LV Logo Mark and the three floral 25
motifs (4 x $500,000 = $2,000,0000); plus $250,000 for the 26

-- 19 of 60 --

20
composite mark, and $250,000 each for the three infringements of 1
other types of goods (4 x $250,000 = $1,000,0000), for a total of 2
$3 million. Id. at 4-5. 3
Each of the defendants filed timely appeals from these 4
judgments, which appeals were, however, withdrawn almost 5
immediately by stipulation of the parties. It was agreed among 6
them that the appeals would be subject to reactivation within 30 7
days after the jury returned a verdict in the criminal 8
prosecutions of Lam and Chan, or by August 2009, whichever came 9
first. Subsequent stipulations extended the alternate deadline 10
date to July 15, 2010. 11
The Criminal Proceedings 12
On October 2, 2007, a sealed indictment of Lam and 13
Chan, and Eric Yuen, one of their employees, was filed in the 14
Eastern District of Virginia. See Sealed Indictment, United 15
States v. Lam, No. 07-cr-374 (E.D. Va.), ECF No. 3. A 16
superseding indictment, filed March 26, 2009, charged the three 17
defendants with one count of conspiracy to traffic in counterfeit 18
goods, in violation of 18 U.S.C. § 371; two counts of smuggling 19
goods into the United States, in violation of 18 U.S.C. § 545; 20
and four counts of trafficking in counterfeit goods, in violation 21
of 18 U.S.C. § 2320(a). The charges arose out of Lam and Chan's 22
alleged conspiracy to import and smuggle counterfeit merchandise 23
into the United States between August 2002 and January 2008. See 24
Superseding Indictment, United States v. Lam, No. 07-cr-374 (E.D. 25
Va. March 26, 2009), ECF No. 60. The defendants allegedly 26

-- 20 of 60 --

9 The jury was apparently unable to decide whether
counterfeit bags were actually seized in Norfolk, Virginia.
Counts Two through Seven of the Superseding Indictment related
only to seizures in Norfolk.
21
counterfeited luxury goods produced and distributed by Louis 1
Vuitton and by others under various other trademarks. The 2
indictment alleged that Lam, Chan, and Yuen acted in concert with 3
seven unindicted corporate coconspirators, including LY Inc., 4
CoCo Inc., and Marco Ltd., to import counterfeit and infringing 5
goods. The defendants allegedly imported these goods through 6
different American ports, including, as noted above, Houston, 7
Newark, New York, Los Angeles, and Norfolk, and used different 8
corporate identities in an attempt to thwart seizures of their 9
goods by customs officials. Despite their attempts to evade 10
Customs, officials seized more than 300,000 items imported by the 11
Lam and Chan. United States v. Lam, 2010 WL 5178839, at *1, 2010 12
U.S. Dist. LEXIS 132126, at *3. 13
On January 16, 2008, Immigration and Customs 14
Enforcement agents arrested defendants Lam and Chan at their home 15
in Queens, New York. In addition, search warrants were executed 16
at the defendants' business headquarters in midtown Manhattan. 17
Lam and Chan were arraigned in federal court in Richmond, 18
Virginia, on February 12, 2008. 19
On January 10, 2010, the defendants' criminal trial 20
began. When the jury deadlocked, a mistrial was declared on 21
January 25, 2010. 9
22

-- 21 of 60 --

10 Allegations related to the importation of counterfeit
Louis Vuitton merchandise were included in Count One of the
Superseding Indictment, conspiracy to traffic in counterfeit
goods, of which Lam and Chan were found guilty. No allegations
relating to Louis Vuitton merchandise were included in the
remaining six counts of the Superseding Indictment.
22
After a subsequent retrial, on June 10, 2010, 1
defendants Lam and Chan were convicted of one count of conspiracy 2
to traffic in counterfeit goods, 18 U.S.C. § 371, two counts of 3
trafficking in counterfeit goods, 18 U.S.C. § 2320(a), and two 4
counts of smuggling goods into the United States, 18 U.S.C. 5
§ 545. Lam and Chan were convicted principally of charges 6
related to a mark registered by Burberry Limited, not Louis 7
Vuitton. 10 The jury acquitted Yuen of all charges. See United 8
States v. Lam, 2010 WL 5178839, at *1, 2010 U.S. Dist. LEXIS 9
132126, at *3-*4. 10
On January 7, 2011, [the court] sentenced Lam 11
to eleven months and twenty-five days on 12
[three of the] counts . . . and eighteen 13
months [on two of the counts], all to be 14
served concurrently. The Court sentenced 15
Chan on the same day to five months 16
imprisonment to be followed by five months of 17
home confinement with electronic monitoring 18
on each of [the five counts of her 19
conviction], all to be served concurrently. 20
United States v. Lam, No. 3:07-CR-374, 2011 WL 1167208, at *2, 21
2011 U.S. Dist. LEXIS 33351, at *4-*5 (E.D. Va. Mar. 28, 2011). 22
Lam and Chan subsequently appealed their criminal 23
convictions; the government cross-appealed as to the sentences. 24
Those appeals remain pending. See United States v. Lam, Nos. 11- 25
4056, 11-4081 (4th Cir.). 26

-- 22 of 60 --

23
Meanwhile, on June 30, 2010, all defendants jointly 1
moved to reactivate these appeals. They were reinstated by order 2
of this Court dated July 12, 2010. 3
DISCUSSION 4
I. Jurisdiction 5
The district court had subject-matter jurisdiction over 6
the plaintiff's claims pursuant to 28 U.S.C. §§ 1331, 1338(a)- 7
(b), and 1367(a). We have subject-matter jurisdiction over the 8
appeal pursuant to 28 U.S.C. § 1291. 9
II. The Defendants' Motion to Stay Proceedings 10
The defendants argue that the district court abused its 11
discretion in denying their request to stay the civil action 12
pending the resolution of the criminal prosecutions of Lam and 13
Chan in the Eastern District of Virginia. They assert that the 14
weight of authority in this Circuit favors a stay where, as here, 15
an indictment has issued against a civil defendant in a 16
substantially related criminal matter. Moreover, they argue that 17
"[t]he prejudice to defendants was severe and clearly outweighed 18
any inconvenience to plaintiff caused by the delay in prosecuting 19
this matter. . . . [Therefore,] Lam and Chan's Fifth Amendment 20
privilege should not have been made subordinate to the commercial 21
interests of Vuitton." Br. of Def.'s-Cross-Cl.'s-Cross-Def.'s- 22
Appellants at 18-19, Louis Vuitton Malletier S.A. v. LY USA, 23
Inc., et al., No. 08-4483 (2d Cir. Nov. 9. 2010). 24
The defendants further contend that when Lam and Chan 25
invoked their Fifth Amendment rights against self incrimination 26
at their depositions, the district court drew adverse inferences 27

-- 23 of 60 --

24
against them -- inferences that supported the grant of summary 1
judgment in Louis Vuitton's favor. The defendants also assert 2
that by denying the stay, the district court deprived the 3
corporate defendants of the opportunity to offer testimony by Lam 4
and Chan in their defense. The district court's denial of the 5
stay, they argue, thereby "effectively doom[ed]" both the 6
individual and corporate defendants' efforts to defend the 7
action. Id. at 11. 8
A. Standard of Review 9
"A district court's decisions regarding the timetable 10
for trial will not be reversed absent an abuse of discretion. To 11
demonstrate an abuse of this discretion, a defendant must 12
demonstrate arbitrary action that substantially impaired the 13
defense." United States v. Beverly, 5 F.3d 633, 641 (2d Cir. 14
1993) (citation omitted) (concluding that refusal of district 15
court to grant continuance to permit two of criminal defendant's 16
witnesses to appear at trial was within court's discretion); 17
accord Microfinancial, Inc. v. Premier Holidays Int'l, Inc., 385 18
F.3d 72, 77-79 (1st Cir. 2004) (deciding district court's refusal 19
to stay civil case in light of criminal investigation not abuse 20
of discretion). 21
B. Governing Law 22
"[T]he power to stay proceedings is incidental to the 23
power inherent in every court to control the disposition of the 24
causes on its docket with economy of time and effort for itself, 25
for counsel, and for litigants." Landis v. N. Am. Co., 299 U.S. 26
248, 254 (1936); accord Clinton v. Jones, 520 U.S. 681, 706-08 27

-- 24 of 60 --

25
(1997); see also United States v. Kordel, 397 U.S. 1, 12 n.27 1
(1970) (noting that courts may "defer[] civil proceedings pending 2
the completion of parallel criminal prosecutions when the 3
interests of justice seem[] to require such action"); Kashi v. 4
Gratsos, 790 F.2d 1050, 1057 (2d Cir. 1986) ("'[A] court may 5
decide in its discretion to stay civil proceedings when the 6
interests of justice seem to require such action.'" (quoting SEC 7
v. Dresser Indus., 628 F.2d 1368, 1372 (D.C. Cir. 1980) (en 8
banc)) (ellipses and internal quotation marks omitted; emphasis 9
added)); Nosik v. Singe, 40 F.3d 592, 596 (2d Cir. 1994) 10
("Although civil and criminal proceedings covering the same 11
ground may sometimes justify deferring civil proceedings until 12
the criminal proceedings are completed, a court may instead enter 13
an appropriate protective order."). "How this can best be done 14
calls for the exercise of judgment, which must weigh competing 15
interests and maintain an even balance." Landis, 299 U.S. at 16
254-55; see also Ofosu v. McElroy, 98 F.3d 694, 699 (2d Cir. 17
1996) ("A request for a stay is an appeal to equity."). 18
The person seeking a stay "bears the burden of 19
establishing its need." Clinton, 520 U.S. at 708. "[A]bsent a 20
showing of undue prejudice upon defendant or interference with 21
his constitutional rights, there is no reason why plaintiff 22
should be delayed in its efforts to diligently proceed to sustain 23
its claim." Hicks v. City of N.Y., 268 F. Supp. 2d 238, 241 24
(E.D.N.Y. 2003) (internal quotation marks omitted). 25

-- 25 of 60 --

11 There are other possible justifications for a stay. For
example, a district court may issue one in a civil proceeding in
deference to a parallel criminal proceeding in order to "prevent
either party from taking advantage of broader civil discovery
rights" or to "prevent the exposure of the criminal defense
strategy to the prosecution." Kreisler, 563 F.3d at 1080.
26
In evaluating whether the "interests of justice" favor 1
such a stay, courts have generally been concerned about the 2
extent to which continuing the civil proceeding would unduly 3
burden a defendant's exercise of his rights under the Fifth 4
Amendment, which provides that "[n]o person . . . shall be 5
compelled in any criminal case to be a witness against himself," 6
U.S. Const. amend. V. 11 Creative Consumer Concepts, Inc. v. 7
Kreisler, 563 F.3d 1070, 1080 (10th Cir. 2009); see also United 8
States v. All Assets of Statewide Auto Parts, Inc., 971 F.2d 896, 9
905 (2d Cir. 1992) (same when considering stay of civil 10
forfeiture proceeding). A stay can protect a civil defendant 11
from facing the difficult choice between being prejudiced in the 12
civil litigation, if the defendant asserts his or her Fifth 13
Amendment privilege, or from being prejudiced in the criminal 14
litigation if he or she waives that privilege in the civil 15
litigation. See United States v. 4003-4005 5th Ave., 55 F.3d 78, 16
83 (2d Cir. 1995) (discussing the "dilemma" faced by criminal 17
defendants forced to testify in a parallel civil forfeiture 18
proceeding). As Judge Hellerstein, who presided in the district 19
court in this case, has observed in his extrajudicial writing, 20
"[t]he greatest risk posed by parallel [civil and criminal 21
proceedings] . . . is that parallel proceedings may place 22

-- 26 of 60 --

27
significant burdens upon the Fifth Amendment privilege against 1
self-incrimination." Alvin Hellerstein & Gary Naftalis, Private 2
Civil Actions and Concurrent or Subsequent Regulatory or Criminal 3
Proceedings, SG046 ALI-ABA 903, 905 (2001). 4
A defendant in a civil proceeding who invokes the Fifth 5
Amendment as a result of an overlapping criminal investigation or 6
proceeding "risk[s] the adverse inference arising from [his or 7
her] assertion of the privilege." Id. at 951. The Supreme Court 8
has explained "that the Fifth Amendment does not forbid adverse 9
inferences against parties to civil actions when they refuse to 10
testify in response to probative evidence offered against them." 11
Baxter v. Palmigiano, 425 U.S. 308, 318 (1976); see also Keating 12
v. Office of Thrift Supervision, 45 F.3d 322, 326 (9th Cir. 1995) 13
(observing that it is "permissible" for the trier of fact to draw 14
such adverse inferences). "[A] party who asserts the privilege 15
against self-incrimination must bear the consequence of lack of 16
evidence, and the claim of privilege will not prevent an adverse 17
finding or even summary judgment if the litigant does not present 18
sufficient evidence to satisfy the usual evidentiary burdens in 19
the litigation." 4003-4005 5th Ave., 55 F.3d at 83 (citation and 20
internal quotation marks omitted); see also LiButti v. United 21
States, 178 F.3d 114, 120 (2d Cir. 1999) (noting that it is 22
permissible to give an adverse inference "significant weight," as 23
"silence when one would be expected to speak is a powerful 24
persuader"). 25

-- 27 of 60 --

12 Fed. R. Evid. Rule 404 reads in pertinent part:
Character Evidence; Crimes or Other Acts
***
(b) Crimes, Wrongs, or Other Acts.
(1) Prohibited Uses. Evidence of a crime,
wrong, or other act is not admissible to
prove a person's character in order to show
that on a particular occasion the person
acted in accordance with the character.
(2) Permitted Uses; Notice in a Criminal
Case. This evidence may be admissible for
another purpose, such as proving motive,
opportunity, intent, preparation, plan,
knowledge, identity, absence of mistake, or
lack of accident.
28
But if civil defendants do not elect to assert their 1
Fifth Amendment privilege, and instead fully cooperate with 2
discovery, their "testimony . . . in their defense in the civil 3
action is likely to constitute admissions of criminal conduct in 4
their criminal prosecution." SEC v. Boock, No. 09 Civ. 8261 5
(DLC), 2010 WL 2398918, at *2, 2010 U.S. Dist. LEXIS 59498, at *5 6
(S.D.N.Y. June 15, 2010). Indeed, "[e]ven where it would not be 7
direct evidence of wrongdoing with respect to the scheme charged 8
in the criminal case, such testimony may be admissible as Fed. R. 9
Evid. 404(b)[ 12 ] evidence in any criminal trial." Id.; see also 10
Milton Pollack, Parallel Civil and Criminal Proceedings, 129 11
F.R.D. 201, 205-06 (1990) (hereinafter "Pollack, Parallel 12
Proceedings") (explaining how a party's participation in civil 13
proceedings may prejudice his defense in parallel criminal 14
proceedings). 15

-- 28 of 60 --

29
Despite these factors, such "[a] stay of [a] civil 1
case" to permit conclusion of a related criminal prosecution has 2
been characterized as "an extraordinary remedy." Trs. of 3
Plumbers & Pipefitters Nat'l Pension Fund v. Transworld Mech., 4
Inc., 886 F. Supp. 1134, 1139 (S.D.N.Y. 1995). A district court 5
may stay civil proceedings when related criminal proceedings are 6
imminent or pending, and it will sometimes be prudential to do 7
so. Id. at 1138 n.4 ("Even if a court may constitutionally deny 8
a request for a stay, . . . a stay of a civil action may still be 9
warranted in some instances."). But the Constitution rarely, if 10
ever, requires such a stay. Kashi, 790 F.2d at 1057 ("'[T]he 11
Constitution does not ordinarily require a stay of civil 12
proceedings pending the outcome of criminal proceedings.'" 13
(quoting Dresser Indus., 628 F.2d at 1372)) (ellipses omitted)); 14
accord United States v. Int'l Bhd. of Teamsters, 247 F.3d 370, 15
388 (2d Cir. 2001); Nosik, 40 F.3d at 596. "A defendant has no 16
absolute right not to be forced to choose between testifying in a 17
civil matter and asserting his Fifth Amendment privilege." 18
Keating, 45 F.3d at 326. The existence of a civil defendant's 19
Fifth Amendment right arising out of a related criminal 20
proceeding thus does not strip the court in the civil action of 21
its broad discretion to manage its docket. 22
District courts have formulated multi-factor tests to 23
apply in deciding whether, in light of these hazards to the 24
defendants in the civil proceedings against them, to grant a stay 25
of those proceedings. The district courts of this Circuit, for 26

-- 29 of 60 --

13 For cases applying substantially this standard, see
also, e.g., Hicks, 268 F. Supp. 2d at 241; Boock, 2010 WL
2398918, at *1-*2, 2010 U.S. Dist. LEXIS 59481, at *4-*5 (quoting
Trs. of Plumbers & Pipefitters Nat'l Pension Fund, 886 F. Supp.
at 1139); Motorola, Inc. v. Abeckaser, No. 07-CV-3963 (CPS)(SMG),
2009 WL 816343, at *1-*2, 2009 U.S. Dist. LEXIS 24855, at *4
(E.D.N.Y. Mar. 26, 2009); Parker v. Dawson, Nos. 06-CV-6191
(JFB)(WDW), 06-CV-6627 (JFB)(WDW), 07-CV-1268 (JFB)(WDW), 2007 WL
2462677, at *3, 2007 U.S. Dist. LEXIS 63068, at * 10 (E.D.N.Y.
Aug. 27, 2007); JHW Greentree Capital, L.P. v. Whittier Trust
Co., No. 05 Civ. 2985(HB), 2005 WL 1705244, at *1, 2005 U.S.
Dist. LEXIS 14687, at *2 (S.D.N.Y. July 22, 2005). Some district
courts have instead applied a similar five-factor test under
which the court considers:
(1) the private interests of the plaintiffs
in proceeding expeditiously with the civil
litigation as balanced against the prejudice
to the plaintiffs if delayed; (2) the private
interests of and burden on the defendants;
(3) the interests of the courts; (4) the
interests of persons not parties to the civil
litigation; and (5) the public interest.
Catskill Mountains Chapter of Trout Unlimited, Inc. v. EPA, 630
F. Supp. 2d 295, 304 (S.D.N.Y. 2009)(listing five-factor test and
collecting cases); see also Golden Quality Ice Cream Co., Inc. v.
Deerfield Specialty Papers, Inc., 87 F.R.D. 53, 56-58 (E.D. Pa.
1980) (Pollak, J.) (originally setting out this test).
30
example, have often utilized a six-factor balancing test first 1
set forth by then-district court judge Chin: 2
1) the extent to which the issues in the 3
criminal case overlap with those presented in 4
the civil case; 2) the status of the case, 5
including whether the defendants have been 6
indicted; 3) the private interests of the 7
plaintiffs in proceeding expeditiously 8
weighed against the prejudice to plaintiffs 9
caused by the delay; 4) the private interests 10
of and burden on the defendants; 5) the 11
interests of the courts; and 6) the public 12
interest. 13
Trs. of Plumbers & Pipefitters Nat'l Pension Fund, 886 F. Supp. 14
at 1139 (footnotes omitted). 13 And several of our sister 15
circuits have adopted similar multi-factor tests. See, e.g., 16

-- 30 of 60 --

31
Microfinancial, 385 F.3d at 78 (1st Cir. 2004) (applying a five- 1
factor test but also considering "the status of the cases" and 2
"the good faith of the litigants (or the absence of it)"); 3
Keating, 45 F.3d at 324-25 (9th Cir. 1995) (applying a five- 4
factor test). 5
These tests, however, no matter how carefully refined, 6
can do no more than act as a rough guide for the district court 7
as it exercises its discretion. They are not mechanical devices 8
for churning out correct results in overlapping civil and federal 9
proceedings, replacing the district court's studied judgment as 10
to whether the civil action should be stayed based on the 11
particular facts before it and the extent to which such a stay 12
would work a hardship, inequity, or injustice to a party, the 13
public or the court. 14
We think the tests do little more than serve as 15
something of a check list of factors we ought to consider as we 16
review the district court's action for abuse of its discretion. 17
Even if we were to choose or formulate a test and apply it, we 18
would not be able to reverse the district court solely because we 19
disagreed with its application of the test. The district court's 20
decision ultimately requires and must rest upon "a particularized 21
inquiry into the circumstances of, and the competing interests 22
in, the case." Banks v. Yokemick, 144 F. Supp. 2d 272, 275 23
(S.D.N.Y. 2001) (citing Keating, 45 F.3d at 325); see also 4003- 24
4005 5th Ave., 55 F.3d at 85 ("[H]ow a trial court should . . . 25

-- 31 of 60 --

14 Were we forced to choose between the two tests, we would
likely prefer Judge Chin's six-part formulation because it
explicitly considers the degree to which the issues in the civil
and criminal proceedings overlap. See Trs. of Plumbers &
Pipefitters Nat'l Pension Fund, 886 F. Supp. at 1139 ("If there
is no overlap, there would be no danger of self-incrimination and
accordingly no need for a stay."). The six-factor test also has
the advantage of taking into account the status of the criminal
proceeding, including whether the civil defendant has been
indicted, a factor that speaks to whether a prosecution is likely
and imminent as opposed to a remote or purely hypothetical
possibility. But in reviewing district court judgments on appeal,
the question for us is whether at the end of the day the trial
court abused its discretion, not whether the court employed a
superior check list in arriving at its decision.
32
react to any motion precipitated by a litigant's assertion of the 1
Fifth Amendment in a civil proceeding . . . necessarily depends 2
on the precise facts and circumstances of each case."); Volmar 3
Dist., Inc. v. New York Post Co., 152 F.R.D. 36, 39 (S.D.N.Y. 4
1993) ("Balancing these factors is a case-by-case determination, 5
with the basic goal being to avoid prejudice."). 14 And our role 6
is only to assure that the district court's exercise of 7
discretion was reasonable and in accordance with the law. A 8
decision so firmly within the discretion of the district court 9
will not be disturbed by us absent demonstrated prejudice so 10
great that, as a matter of law, it vitiates a defendant's 11
constitutional rights or otherwise gravely and unnecessarily 12
prejudices the defendant’s ability to defend his or her rights. 13
There may well be cases where the Constitution requires a stay. 14
But a plausible constitutional argument would be presented only 15
if, at a minimum, denying a stay would cause "substantial 16
prejudice" to the defendant. Keating, 45 F.3d at 325 (internal 17

-- 32 of 60 --

15 Because the denial of a stay here plainly does not
violate Lam's and Chan's constitutional rights, we need not
speculate further about the circumstances under which a more
compelling constitutional argument would be presented. Cases
where courts have found a stay constitutionally required are few
and far between –- likely because district courts stay
proceedings out of an abundance of caution when there is a
serious question as to whether a denial would violate the Fifth
Amendment. The Eleventh Circuit appears to be the only Circuit
that has outlined a specific test for determining whether a stay
is constitutionally required. See United States v. Premises
Located at Route 13, 946 F.2d 749, 756 (11th Cir. 1991) (stay
required when "the invocation of the [Fifth Amendment] privilege
must result in an adverse judgment, not merely the loss of [the
defendant's] most effective defense. Stated plainly, the rule
applies when the invocation of the privilege would result in
automatic entry of summary judgment." (citations and internal
quotation marks omitted)).
16 See Wehling v. CBS, 608 F.2d 1084 (5th Cir. 1979), in
which the plaintiff in a libel action had requested a stay in
lieu of dismissal pending the outcome of a related criminal
proceeding against him. The court faulted the district court for
failing to "measure[] the relative weights of the parties'
competing interests with a view toward accommodating those
interests, if possible." Id. at 1088.
33
quotation marks omitted). In the more common case, the Fifth 1
Amendment privilege is implicated by the denial of a stay, but 2
not abrogated by it. 15
3
Indeed, so heavy is the defendant's burden in 4
overcoming a district court's decision to refrain from entering a 5
stay that the defendants have pointed to only one case in which a 6
district court's decision to deny a stay was reversed on appeal, 7
and that case was decided more than thirty years ago. 16
8
C. Application 9
We conclude that the district court did not abuse its 10
discretion in this case. 11

-- 33 of 60 --

17 District courts have not, however, treated the fact that
an indictment of the defendants has been handed up at the time of
their making a motion for a stay of the civil proceedings as
requiring that the stay be entered. In addition to the decision
of the district court in this case, see, e.g., Abeckaser, 2009 WL
816343, at *3, 2009 U.S. Dist. LEXIS 24855, at *6 (denying stay
in trademark-infringement action where defendants requested a
stay on the "eve of summary judgment," eighteen months after a
related indictment and when discovery in the civil case had been
completed); Fendi Adele S.R.L. v. Ashley Reed Trading, Inc., No.
06 Civ. 0243 (JES)(MHD), 2006 WL 2585612, at *3, 2006 U.S. Dist.
LEXIS 64245, at *9 (S.D.N.Y. Sept. 8, 2006) (denying stay in
trademark-infringement and counterfeiting action where defendant
waited until six months after indictment to request stay);
Travelers Cas. & Sur. Co. v. Vanderbilt Grp., LLC, No. 01 Civ.
7927 (DLC), 2002 WL 844345, at *2-3, 2002 U.S. Dist. LEXIS 7939,
at *9-11 (S.D.N.Y. May 2, 2002) (declining to stay civil
proceedings where "it is clear that many of the issues in this
litigation have a life independent from the willingness of the
[indicted defendants] to testify or the substance of any
testimony they might give").
34
There were factors present here that would have 1
supported the entry of a stay. For example, Lam and Chan had 2
been indicted in the parallel criminal proceeding when they 3
sought the stay. The criminal trial was therefore reasonably 4
imminent. See Trs. of Plumbers & Pipefitters Nat'l Pension Fund, 5
886 F. Supp. at 1140 (observing that a court need not "rely upon 6
fortuitous events to manage its dockets"). There is considerable 7
authority for the principle that a stay is most justified where a 8
movant, like the defendants here, is already under indictment for 9
a serious criminal offense and is required at the same time to 10
defend a civil action involving the same subject matter. 17
11
And the individual defendants did face the prospect 12
that any testimony they offered in the civil proceeding would be 13
used against them in the course of the criminal prosecution. The 14

-- 34 of 60 --

35
criminal proceeding involved the same subject matter as the civil 1
action: the trafficking in counterfeit handbags and wallets, 2
including those bearing the counterfeit Louis Vuitton marks. The 3
defendants' ability to make use of their Fifth Amendment 4
privileges would therefore have been implicated by a decision to 5
testify in the civil matter. See Trs. of Plumbers & Pipefitters 6
Nat'l Pension Fund, 886 F. Supp. at 1139. And while the 7
corporate defendants could not avail themselves of the privilege, 8
a stay would arguably have served their interests too because of 9
the adverse inferences that the court might have drawn (but 10
apparently did not draw) from the individual defendants' silence, 11
and because those defendants would have been the most appropriate 12
Rule 30(b)(6) witnesses on their behalf. 13
Also, even in the absence of this civil case, the 14
criminal prosecution would have likely served to protect the 15
interests of consumers and manufacturers –- interests that 16
ordinarily favor prompt resolution of civil counterfeiting and 17
infringement claims. See Brock v. Tolkow, 109 F.R.D. 116, 121 18
(E.D.N.Y. 1985) ("[W]hile criminal investigations and 19
prosecutions can take a woefully long time, a stay of discovery 20
does not mean that enforcement of the public interests at stake 21
in the civil case will be indefinitely deferred. For one thing, 22
a criminal prosecution serves to enforce those same interests."); 23
Volmar Dist., 152 F.R.D. at 40 (noting, in an antitrust case, 24
that "[t]he public certainly has an interest in the preservation 25

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18 These considerations are related. The "compulsory
production of books and papers" does implicate the Fifth
Amendment privilege. See Spevack v. Klein, 385 U.S. 511, 515
(1967). The defendants here do not argue, however, that they
resisted document production because of the possibility of self-
incrimination. Rather, their argument is a purely practical one
–- that the unavailability of these documents due to the parallel
criminal proceeding was unduly prejudicial.
36
of the integrity of competitive markets," and that "the pending 1
criminal prosecution serves to advance those same interests"). 2
The defendants also urge that their inability to 3
produce documents establishing records of sale, and the 4
implication of their Fifth Amendment privilege, required a 5
stay. 18 The burden placed on them by the January 16, 2008, 6
seizure of documents and computers from their headquarters by 7
customs officials, they say, favored a stay. They assert that 8
the district court erred in not considering that burden. 9
Parts of the defendants' argument, however, ring hollow 10
in light of the defendants' plainly dilatory tactics in tendering 11
discovery even prior to their indictments. And afterwards, the 12
district court did not leave the defendants without remedy for 13
the potential implications of the parallel criminal proceeding. 14
The court explained that "[i]f there is imposition involved, the 15
court can deal with such matters as and when there is threat of 16
imposition." Order Denying Motion for Stay at 1. The court 17
presumably meant that it was open to considering further requests 18
from the defendants for alternative forms of relief, such as 19
tailored stays, protective orders, quashing or modifying 20
subpoenas, sealing confidential material, or even a renewed 21

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37
motion for a stay if specific impositions presented themselves. 1
Cf. Pollack, Parallel Proceedings, 129 F.R.D. at 211-12 2
(describing alternatives to a complete stay of the civil 3
proceedings). The district court also offered assistance in 4
securing the documents that had supposedly been seized by the 5
government in the criminal prosecution. 6
We see nothing in the record to indicate that the 7
defendants ever pursued such alternative relief. The defendants 8
might have submitted 30(b)(6) witnesses, other than the indicted 9
defendants, who could have offered testimony to fill in the gaps 10
assertedly left by the seizure of these documents. They did not. 11
They might have sought the district court's proffered help in 12
obtaining records or copies of records gathered in the criminal 13
prosecution for production in the civil proceedings. They did 14
not. And we are unaware of any explanation, persuasive or 15
otherwise, that the defendants have given as to the manner in 16
which the unavailability of these documents, computers, or 17
merchandise actually prejudiced them. 18
We think the defendants' failure to make use of the 19
ability they had, and the additional assistance the district 20
court offered, to make meaningful disclosure is significant. It 21
paints their insistence that the civil proceedings be stayed as 22
part of a larger pattern of overall delay and obfuscation. 23
The district court noted that the failure of the 24
defendants to produce records invited the inference of a "massive 25
counterfeiting enterprise." Order Awarding Statutory Damages at 26

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38
3. And if the defendants' sales records would have revealed, in 1
full, a counterfeiting operation that netted more than the $8 2
million in potential statutory damages, they had every incentive 3
to keep those records from the plaintiffs. If those records 4
would have revealed a lesser amount of damages, they had the 5
incentive to pursue those records with every tool at their 6
disposal. The apparent indifference on the part of the 7
defendants to the aid offered them suggests that tendering 8
complete documentation to the plaintiff was not in their 9
interest. To be sure, the challenge of acquiring documentation 10
may have been exacerbated by the criminal proceedings, but the 11
defendants' general failure, with the help of the district court, 12
to work around that set of problems so as to produce substantial 13
information in defense of the civil claims undercuts their claim 14
that the criminal proceedings completely impeded their ability to 15
mount a defense. 16
Finally, the defendants argue that Lam's and Chan's 17
reliance on their Fifth Amendment privilege favored a stay. 18
Indeed it did, insofar as it limited their ability to assist in 19
defending against the civil claims. But we see nothing in the 20
record to indicate that their invocation of the privilege alone 21
resulted in one or more adverse inferences being drawn against 22
them. The district court explained in its oral summary judgment 23
ruling that if the defendants "come forward with proofs of their 24
sales and their customers for the accused merchandise" the court 25

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19 In their initial letter seeking a stay, the defendants
did not raise the Fifth Amendment issue. They asserted instead
that discovery would have been more difficult for them to comply
with because some relevant documents had been seized by the
government. It is only now, on appeal, that the parties have
extensively briefed the Fifth Amendment issue. The defendants'
failure to squarely present their Fifth Amendment argument to the
district court in the first instance also calls into question the
degree to which they actually feared prejudice in the civil
proceeding.
39
would "take that into consideration in fixing the appropriate sum 1
[of damages]." Summ. J. Hr'g Tr. at 58. The court explained 2
that the counterfeiting charges were proved, in part, by "the 3
absence of any opposition testimony by the defendants, and their 4
indifference, I would say, to the notices of deposition served on 5
them." Id. at 53. But during oral argument the court referred 6
only to the failure of the corporate defendants to offer 7
witnesses under Rule 30(b)(6), and suggested that it was that 8
failure alone -- having little to do with the defendants' Fifth 9
Amendment privilege, assuming that other such witnesses were 10
available –- that supported the adverse inferences. 19
11
Even if the district court drew adverse inferences from 12
Lam and Chan invoking their Fifth Amendment rights, such 13
inferences were not necessarily material because there was 14
sufficient evidence without them to adequately support the 15
district court's grant of summary judgment. "If defendants 16
choose to remain silent, the adverse inference that may be drawn 17
will be only one of a number of factors the factfinder will 18
consider and will be given no more evidentiary value than the 19
facts of the case warrant." United States v. Dist. Council of 20

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40
New York City, 782 F. Supp 920, 925-26 (S.D.N.Y. 1992) (internal 1
quotation marks and alteration omitted). The record included 2
visual evidence that enabled the district court to conduct its 3
own comparison of the authentic and accused products, the records 4
of customs seizures, and the defendants' own scant document 5
production. Indeed, that is the evidence on which the district 6
court explained it was largely basing its decision. 7
Also weighing against the stay was the public's 8
interest in prompt further protection of the plaintiff and the 9
public through the civil action from what the evidence before the 10
district court suggested likely was a counterfeiting enterprise. 11
See Landscape Forms, Inc. v. Columbia Cascade Co., 113 F.3d 373, 12
375 (2d Cir. 1997) (reminding courts that the "underlying purpose 13
of the Lanham Act . . . is protecting consumers and manufacturers 14
from deceptive representations of affiliation and origin"); 15
Dresser Indus., 628 F.2d at 1377 (denying a stay in order to 16
avoid the continued dissemination of false or misleading 17
information by companies to members of the investing public). 18
And, as the district court found, Louis Vuitton plainly 19
had a compelling interest in prompt resolution of the civil case, 20
in part because of the apparent scale of the counterfeiting 21
operation and the potential for lost sales and consumer 22
confusion. See Order Denying Motion for Stay at 1 (noting that 23
"[p]laintiff has an interest in the prompt prosecution of its 24
case. Its trademark is valuable, and counterfeit goods threaten 25

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20 The defendants argue that Louis Vuitton's commercial
interests must not have been in grave jeopardy because Louis
Vuitton did not seek a temporary restraining order or preliminary
injunction. But the plaintiff's decision to try to bring a
speedy resolution to the entire matter rather than expend its
resources on temporary relief does not mean the plaintiff had no
interest in a speedy resolution of its claims against the
defendants. Vuitton was plainly aware that customs officials had
been active in seizing the infringing and counterfeit goods, and
could have believed a temporary court order would not have
dissuaded the defendants any more than those seizures already
had, whereas a hefty damages award would effect a more permanent
change in the defendants' operational calculus. Indeed, the
failure to seek a preliminary injunction in a case of
infringement is not generally considered a factor that weighs
against a plaintiff seeking permanent injunctive relief. See,
e.g., Mytee Prods., Inc. v. Harris Research, Inc., 439 F. App'x
882, 888 (Fed. Cir. 2011); see also Lermer Germany GmbH v. Lermer
Corp., 94 F.3d 1575, 1577 (Fed. Cir. 1996) (noting that a
preliminary injunction and a permanent injunction "are distinct
forms of equitable relief that have different prerequisites and
serve entirely different purposes").
41
the value of its trademark and cut into sales."). 20 Moreover, 1
Vuitton acted expeditiously to advance its interests, filing the 2
present lawsuit more than a year before Lam and Chan were 3
indicted. In light of the length of time that the lawsuit had 4
progressed by the time the indictments issued, and defendants' 5
dilatory tactics during discovery, granting a stay posed a 6
particular risk to Vuitton's interest in the prompt resolution of 7
its claims. 8
Lastly, the court had reason to proceed forthwith based 9
on its own well-recognized interest in disposing "of the causes 10
on its docket with economy of time and effort for itself . . . ." 11
Landis, 299 U.S. at 254. 12
While we thus find substantial arguments arrayed both 13
for and against the district court's grant of a stay, we conclude 14

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42
that the defendants were not as a matter of law deprived of their 1
constitutional rights, or otherwise gravely and unnecessarily 2
prejudiced, by the court's decision. The court thus did not 3
abuse its discretion in denying the stay. 4
III. Award of Attorney's Fees 5
The defendants argue that the district court erred in 6
awarding attorney's fees and costs. They contend that because 7
Louis Vuitton opted to receive statutory damages pursuant to 15 8
U.S.C. § 1117(c), it waived the ability to receive an award of 9
attorney's fees. The defendants point out that unlike 10
subsections (a) and (b) of section 1117, which explicitly provide 11
for such an award, subsection (c) does not. 12
The district court, acknowledging the absence of 13
binding precedent on this issue in this Circuit, ruled that 14
"[a]lthough attorney's fees are frequently awarded in conjunction 15
with actual damages, and often not awarded in conjunction with 16
statutory damages, in [its] discretion they are appropriate here, 17
and Plaintiff should be awarded its expenses of suit." Order 18
Awarding Statutory Damages at 5. The district court imposed an 19
attorney's fee award of $556,034.22, which was 100 percent of the 20
attorney's fees, expenses, and investigative costs that Louis 21
Vuitton had sought. Id. 22
On appeal, the defendants argue that in making the 23
award the district court abused its discretion by exercising a 24
power that it did not have. They rely heavily on a line of 25

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43
district court decisions concluding that attorney's fees are 1
unavailable under section 1117(a) for plaintiffs receiving 2
statutory damages under section 1117(c), as well as on a Ninth 3
Circuit decision, K & N Eng'g, Inc. v. Bulat, 510 F.3d 1079 (9th 4
Cir. 2007). 5
In the alternative, the defendants argue that the 6
attorney's fees awards were excessive and that reimbursement for 7
some expenses awarded was not supported by the required 8
documentation. 9
A. Standard of Review 10
It is of course a longstanding principle of American 11
law that each party must pay his or her own attorney's fees 12
irrespective of who prevails in the litigation. Reimbursement of 13
the winning party by the losing party is not available unless 14
there is an express statutory basis for permitting or requiring 15
it. See, e.g., Arbor Hill Concerned Citizens Neighborhood Ass'n 16
v. Cnty. of Albany, 522 F.3d 182, 186 (2d Cir. 2008) (describing 17
statutory exceptions to the "American Rule"). 18
Whether attorney's fees are available pursuant to 19
section 1117(c) is a question of statutory interpretation. We 20
therefore review the district court's conclusions de novo. DSI 21
Assocs. LLC v. United States, 496 F.3d 175, 183 (2d Cir. 2007); 22
Ehrenfeld v. Mahfouz, 489 F.3d 542, 547 (2d Cir. 2007). But we 23
review the district court's decision regarding the amount of any 24
such award for abuse of discretion. Scott v. City of N.Y., 626 25
F.3d 130, 132 (2d Cir. 2010) (per curiam); accord Banff, Ltd. v. 26

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21 Section 1117(a) states, in pertinent part:
Profits; damages and costs; attorney fees.
When a violation of any right of the
registrant of a mark registered in the Patent
and Trademark Office . . . shall have been
established in any civil action arising under
this chapter, the plaintiff shall be entitled,
subject to the provisions of sections 29 and
32 [15 U.S.C. §§ 1111, 1114], and subject to
the principles of equity, to recover
(1) defendant's profits, (2) any damages
sustained by the plaintiff, and (3) the costs
of the action. The court shall assess such
profits and damages or cause the same to be
assessed under its direction. In assessing
profits the plaintiff shall be required to
prove defendant's sales only; defendant must
prove all elements of cost or deduction
claimed. In assessing damages the court may
enter judgment, according to the circumstances
of the case, for any sum above the amount
found as actual damages, not exceeding three
times such amount. If the court shall find
that the amount of the recovery based on
profits is either inadequate or excessive the
court may in its discretion enter judgment for
44
Colberts, Inc., 996 F.2d 33, 36 (2d Cir. 1993) (considering an 1
award of attorney's fees under section 35 of the Lanham Act). A 2
court abuses its discretion if it rests its decision on an 3
erroneous determination of law or a clearly erroneous factual 4
finding. Scott, 626 F.3d at 132. 5
B. Governing Law 6
Under Section 35 of the Lanham Act, a plaintiff seeking 7
damages for counterfeiting and infringement has the option of 8
seeking either actual or statutory damages, but not both. A 9
plaintiff may recover actual damages equal to "(1) defendant's 10
profits, (2) any damages sustained by the plaintiff, and (3) the 11
costs of the action." 15 U.S.C. § 1117(a). 21 A plaintiff may 12

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such sum as the court shall find to be just,
according to the circumstances of the case.
Such sum in either of the above circumstances
shall constitute compensation and not a
penalty. The court in exceptional cases may
award reasonable attorney fees to the
prevailing party.
15 U.S.C. § 1117(a) (emphasis added).
22 Section 1117(c) states, in pertinent part:
Statutory damages for use of counterfeit
marks. In a case involving the use of a
counterfeit mark [as defined in 15 U.S.C. §
1116(d)] in connection with the sale, offering
for sale, or distribution of goods or
services, the plaintiff may elect, at any time
before final judgment is rendered by the trial
court, to recover, instead of actual damages
and profits under subsection (a) of this
section, an award of statutory damages for any
such use in connection with the sale, offering
for sale, or distribution of goods or services
in the amount of–
(1) not less than $1,000 or more than
$200,000 per counterfeit mark per type of
goods or services sold, offered for sale, or
distributed, as the court considers just; or
(2) if the court finds that the use of the
counterfeit mark was willful, not more than
$ 2,000,000 per counterfeit mark per type of
goods or services sold, offered for sale, or
distributed, as the court considers just.
15 U.S.C. § 1117(c). At the time this suit was initiated,
statutory awards ranged from not less than $500 to not more than
$100,000 per counterfeit mark per type of goods sold if the use
of the mark was not willful, or up to $1,000,000 per mark if the
use was willful. 15 U.S.C. § 1117(c)(2004). These amounts were
doubled effective October 13, 2008. See Prioritizing Resources
45
elect instead to recover statutory damages for the use of a 1
counterfeit mark that are computed "per counterfeit mark per type 2
of goods or services sold, offered for sale, or distributed." 15 3
U.S.C. § 1117(c). 22 The issue is plain: Does the election by a 4

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and Organization for Intellectual Property Act of 2008, Pub. L.
No. 110-403, § 104, 122 Stat. 4256.
46
plaintiff to seek statutory damages under section 1117(c) instead 1
of actual damages and profits under section 1117(a), (1) supplant 2
only that part of section 1117(a) that provides the method for 3
ascertaining the amount of damages with the method set forth for 4
ascertaining damages in section 1117(c), while leaving unaffected 5
the last sentence of the subsection -- "[t]he court in 6
exceptional cases may award reasonable attorney fees to the 7
prevailing party"? Or does it (2) supplant the entirety of 8
subsection (a) including the provision for attorney's fees in 9
"exceptional cases"? If the former, then the plaintiff may make 10
such an election, as Louis Vuitton did in this case, and retain 11
the ability to seek attorney's fees if the case is deemed by the 12
court to be sufficiently "exceptional." If the latter, by making 13
the election to seek damages under subsection (c), Louis Vuitton 14
lost the ability to obtain any attorney's fees award at all, 15
under subsection (a) or otherwise. 16
Some district courts have concluded that a plaintiff 17
who opts to receive statutory damages under section 1117(c) is 18
indeed foreclosed from receiving attorney's fees under section 19
1117(a), even in an "exceptional" case. See, e.g., Global Van 20
Lines, Inc. v. Global Moving Express, Inc., No. 06 Civ. 3776 21
(RJH)(KNF), 2007 U.S. Dist. LEXIS 60794, at *12-*13 (S.D.N.Y. 22
Aug. 20, 2007); John Wiley & Sons, Inc. v. Kauzin Rukiz Entm't & 23
Promotions, No. 06 Civ. 12949 (SAS)(GWG), 2007 WL 1695124, at *4, 24

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47
2007 U.S. Dist. LEXIS 42095, at *9-10 (S.D.N.Y. June 12, 2007); 1
Gucci Am., Inc. v. Duty Free Apparel, Ltd., 315 F. Supp. 2d 511, 2
522-23 (S.D.N.Y. 2004). 3
Other district courts -- including the court in this 4
case -- have taken the contrary position and held that the Lanham 5
Act does not prohibit simultaneous awards of relief under 6
section 1117(a) and section 1117(c) so long as a plaintiff does 7
not obtain a recovery of both actual and statutory damages. See, 8
e.g., Louis Vuitton Malletier S.A. v. LY USA, 2008 WL 5637161, at 9
*3, 2008 U.S. Dist LEXIS 107592, at *7-8 (S.D.N.Y. Oct. 3, 2008) 10
("Although attorneys' fees are frequently awarded in conjunction 11
with actual damages, and often not awarded in conjunction with 12
statutory damages, in my discretion they are appropriate here . . 13
. ." (citations omitted)); Nike, Inc. v. Top Brand Co., No. 00 14
Civ. 819 (KMW)(RLE), 2006 WL 2946472, at *3, 2006 U.S. Dist. 15
LEXIS 76543, at *9 (S.D.N.Y. Feb. 27, 2006) ("While there has 16
been some question about the availability of an award of 17
attorney's fees where statutory damages are given, courts have 18
found both appropriate in such 'exceptional cases' of willful 19
infringement."). 20
Other district courts have acknowledged this as an 21
unsettled question without proffering an answer to it. Most 22
frequently, courts avoid confronting the issue by implicitly or 23
explicitly accounting for the cost of attorney's fees in setting 24
the amount of the statutory-damages award. See, e.g., Cartier v. 25
Symbolix Inc., 544 F. Supp. 2d 316, 320 (S.D.N.Y. 2008) ("The 26

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48
Court finds it unnecessary to resolve this interesting question 1
of statutory interpretation since it concludes that a modest 2
award of [attorney's] fees . . . is appropriate either as a 3
separate award, or as a part of an award of statutory damages."); 4
Louis Vuitton Malletier v. WhenU.Com, Inc., No. 05 Civ. 1325 5
(LAK)(DFE), 2007 WL 257717, at *6, 2006 U.S. Dist. LEXIS 97550, 6
at *17 (S.D.N.Y. Jan. 26, 2007) (award of statutory damages 7
suffices to make plaintiff whole); Rodgers v. Anderson, No. 04 8
Civ. 1149 (RJH)(AJP), 2005 WL 950021, at *3-*4, 2005 U.S. Dist. 9
LEXIS 7054, at *10-*11 (S.D.N.Y. Apr. 26, 2005) (same). 10
Still other district courts in this Circuit have 11
awarded attorney's fees under section 1117(a) and statutory 12
damages under section 1117(c) simultaneously, but without 13
acknowledging the potential statutory hurdle they had to clear in 14
doing so. See, e.g., Union of Orthodox Jewish Congregations of 15
Am. v. Am. Food & Beverage Inc., 704 F. Supp. 2d 288, 293 16
(S.D.N.Y. 2010); Louis Vuitton Malletier v. Artex Creative Int'l 17
Corp., 687 F. Supp. 2d 347, 358-59 (S.D.N.Y. 2010); Louis Vuitton 18
Malletier v. Carducci Leather Fashions, Inc., 648 F. Supp. 2d 19
501, 505-06 (S.D.N.Y. 2009); Tiffany (NJ) Inc. v. Luban, 282 F. 20
Supp. 2d 123, 125 (S.D.N.Y. 2003). 21
The Ninth Circuit appears to be the only circuit court 22
to have explicitly recognized this issue, although the court did 23
not resolve it. In K & N Engineering, the district court awarded 24

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23 Subsection 1117(b) states, in pertinent part:
In assessing damages under [§ 1117(a) for any
violation of 15 U.S.C. § 1114(1)(a)] . . . the
court shall, unless the court finds
extenuating circumstances, enter judgment for
three times such profits or damages, whichever
amount is greater, together with a reasonable
attorney's fee, if the violation consists of
(1) intentionally using a mark or designation,
knowing such mark or designation is a
counterfeit mark (as defined in section 34(d)
of this Act [15 U.S.C § 1116(d)]), in
connection with the sale, offering for sale,
or distribution of goods or services. . . .
15 U.S.C. § 1117(b)(emphasis added).
49
attorney's fees under section 1117(b) 23 –- not, as in the present 1
case, under the last sentence of section 1117(a) -– to a 2
plaintiff who, like Louis Vuitton here, opted to receive 3
statutory damages under section 1117(c). 510 F.3d at 1081. On 4
appeal, the Ninth Circuit explained that "Section 1117(c) makes 5
no provision for attorney's fees." Id. at 1082. It ruled that 6
because the plaintiff had elected to receive statutory damages 7
under section 1117(c), there was "no statutory basis to award 8
[the plaintiff] attorney's fees under § 1117(b)." Id. 9
K & N Engineering is, however, critically different 10
from the case at bar. There, as here, statutory damages were 11
awarded under section 1117(c). But there, unlike here, 12
attorney's fees had been awarded by the district court under 13
section 1117(b), rather than 1117(a). As the court of appeals 14
explained, "Section 1117(b)'s attorney's fees provision applies 15
only in cases with actual damages under § 1117(a)," and the 16
district court had assessed no such damages as a result of the 17

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24 The plaintiffs in K & N Engineering may have sought
attorney's fees under section 1117(b) rather than section 1117(a)
because the former provides for an automatic grant of attorney's
fees together with damages, while the latter only provides for
attorney's fees in "exceptional cases," as discussed previously.
50
plaintiff's election to receive statutory damages instead. Id. 1
The Ninth Circuit explicitly reserved the question at issue here: 2
"Because the fee award in this case was made pursuant to 3
§ 1117(b), we do not reach the issue whether an election to 4
receive statutory damages under § 1117(c) precludes an award of 5
attorney's fees for exceptional cases under the final sentence of 6
§ 1117(a)." Id. at 1082 n.5. 24
7
K & N Engineering thus left the present question 8
undecided. Commentators remain divided. Compare 4 Callmann on 9
Unfair Competition, Trademarks and Monopolies § 23:67 (4th ed. 10
2011) ("[A] prevailing plaintiff who elects statutory damages 11
under the Lanham Act in a counterfeiting case is not entitled to 12
attorney's fees.") with 5 McCarthy on Trademarks and Unfair 13
Competition § 30:95 n.9 (4th ed. 2012) (describing the Ninth 14
Circuit's K & N Engineering decision in the subsection (b) 15
context as "a hyper-technical reading of the statute" and 16
lamenting that it fails "to read Lanham Act § 35 as an integrated 17
whole"). 18
C. Statutory Interpretation 19
As with any question of statutory interpretation, we 20
begin with the text of the statute to determine whether the 21
language at issue has a plain and unambiguous meaning. Robinson 22

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51
v. Shell Oil Co., 519 U.S. 337, 340 (1997); see also United 1
States v. Am. Soc. Of Composers, Authors, and Publishers, 627 2
F.3d 64, 72 (2d Cir. 2010). A particular statute's "plain 3
meaning can best be understood by looking to the statutory scheme 4
as a whole and placing the particular provision within the 5
context of that statute." Saks v. Franklin Covey Co., 316 F.3d 6
337, 345 (2d Cir. 2003). "[W]e attempt to ascertain how a 7
reasonable reader would understand the statutory text, considered 8
as a whole." Pettus v. Morgenthau, 554 F.3d 293, 297 (2d Cir. 9
2009). If we can ascertain the plain meaning of the statutory 10
text by examining it in the context of the statute as a whole, we 11
need proceed no further. If, however, the plain meaning is 12
ambiguous, we may consult other sources. "Extrinsic materials 13
have a role in statutory interpretation . . . to the extent they 14
shed a reliable light on the enacting Legislature's understanding 15
of otherwise ambiguous terms." Exxon Mobil Corp. v. Allapattah 16
Servs., Inc., 545 U.S. 546, 568 (2005). "We turn to the 17
legislative history only when the plain statutory language is 18
ambiguous or would lead to an absurd result." In re Ames Dep't 19
Stores, Inc., 582 F.3d 422, 427 (2d Cir. 2009) (per curiam) 20
(internal quotation marks omitted). 21
1. Textual Analysis. Section 1117(a) distinguishes 22
between a plaintiff's recovery and a court's discretionary award 23
of attorney's fees in exceptional circumstances. Recovery of 24

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52
damages is both something to which a successful plaintiff "shall 1
be entitled" and represents "compensation and not a penalty" in 2
the form of "(1) defendant's profits, (2) any damages sustained 3
by the plaintiff, and (3) the costs of the action." 15 U.S.C. 4
§ 1117(a). The award of attorney's fees, by contrast, is 5
reserved for "exceptional cases." We have held, moreover, that 6
the prerequisite to a finding that a case is sufficiently 7
"exceptional" to warrant an award of fees is that the 8
infringement was "willful" or in "bad faith." See, e.g., Patsy's 9
Brand, Inc. v. I.O.B. Realty, Inc., 317 F.3d 209, 221 (2d Cir. 10
2003). 11
Section 1117(c) characterizes the plaintiff's recovery 12
of statutory damages as being "instead of actual damages and 13
profits under subsection (a) of this section." 15 U.S.C. 14
§ 1117(c). To the extent that subsection (a) distinguishes 15
between actual profits and damages on the one hand, and an award 16
of attorney's fees on the other, then, the alternative recovery 17
is instead of damages and profits under subsection (a), not 18
instead of damages, profits and (in some "exceptional cases") 19
attorney's fees under subsection (a). An award of attorney's 20
fees in an exceptional case is thus not foreclosed. Under this 21
reading, section 1117(a) is the primary or default source of 22
trademark infringement remedies available to a victorious 23
plaintiff, and section 1117(c) represents a special exception or 24

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25 It may be helpful to compare section 1117(c) to section
1117(b). Section 1117(b) functions as an independent and free-
standing provision separate and apart from section 1117(a) in
that it has its own damages calculation and provision for
attorney's fees. The fact that section 1117(b) expressly
provides for attorney's fees arguably indicates that section
1117(c)'s lack of an attorney's fee provision reflects an intent
not to allow the award of fees in statutory-damages cases. But
the fact that both sections 1117(a) and 1117(b) specifically
allow for attorney's fees suggests that section 1117(c) also
allows for them, especially in light of the purpose of that
subsection, and that it does so by retaining the "exceptional
case" provision of section 1117(a).
The attorney's fee provisions of sections 1117(a) and (b)
differ in an important respect: the former is subject to the
"exceptional case" requirement, and is therefore discretionary,
while the latter is mandatory. See, e.g., Lorillard Tobacco Co.,
Inc. v. A & E Oil, Inc., 503 F.3d 588, 595 (7th Cir. 2007)
(upholding a "mandatory award for attorneys' fees" pursuant to
section 1117(b) because plaintiff sought relief under section
1117(a) for a violation of one of the Lanham Act provisions
entitling the plaintiff to relief under subsection (b)). The
automatic award of attorney's fees under section 1117(b) reflects
the punitive nature of that subsection, which provides for treble
damages when the use of a counterfeit mark is intentional.
53
carveout for part of the remedy otherwise available under section 1
1117(a): "actual damages and profits." 25
2
We find this argument compelling, because it best 3
comports with the statutory text. The phrase "elect[ing] . . . 4
instead of actual damages and profits under subsection (a)" ought 5
not be read to mean: "elect[ing] . . . instead of all remedies 6
provided under subsection (a)." In our view, so long as the 7
"exceptional case" requirement of section 1117(a) is met, the 8
text of sections 1117(a) and 1117(c) leaves an award of 9
attorney's fees within the discretion of the district court. 10

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26 Judge Livingston disagrees that the text is ambiguous
and so does not join in the subsection that follows. See Exxon
Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 568 (2005)
(noting that legislative history and other extrinsic materials
should be relied on "only to the extent they shed a reliable
light on the enacting Legislature's understanding of otherwise
ambiguous terms"). She otherwise fully joins in the analysis
here.
54
Nonetheless, because we recognize that the text demonstrates at 1
least some ambiguity, we turn to an examination of the purpose of 2
section 1117(c). 26
3
2. Purpose/Intent-Based Analysis. Our consideration 4
of the history of the statute and Congress's purpose in enacting 5
section 1117(c), reinforces our view that the election of a 6
remedy under section 1117(c) by a plaintiff such as Louis Vuitton 7
here does not foreclose the possibility of a recovery of 8
attorney's fees under section 1117(a). 9
Before 1996, trademark remedies were governed by 10
sections 1117(a) and (b) alone. Section 1117(a) provided as 11
remedies -- then as now -- profits, actual damages, and costs, 12
plus attorney's fees in an "exceptional" case. Section 1117(b) 13
provided -- in cases of willful counterfeiting -- for treble 14
damages, a "reasonable attorney's fee," and prejudgment interest. 15
In 1996, Congress passed the Anticounterfeiting 16
Consumer Protection Act (the "Act"), which amended section 1117 17
to add subsection (c), providing for the alternative of statutory 18
damages. Anticounterfeiting Consumer Protection Act of 1996, 19

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27 The Senate Report provides, with respect to section 7 of
the Act:
This section amends section 35 of the Lanham
Act, allowing civil litigants the option of
obtaining discretionary, judicially imposed
damages in trademark counterfeiting cases,
instead of actual damages. The committee
recognizes that under current law, a civil
litigant may not be able to prove actual
damages if a sophisticated, large-scale
counterfeiter has hidden or destroyed
information about his counterfeiting.
Moreover, counterfeiters' records are
frequently nonexistent, inadequate or
deceptively kept in order to willfully
deflate the level of counterfeiting activity
actually engaged in, making proving actual
damages in these cases extremely difficult if
not impossible. Enabling trademark owners to
elect statutory damages is both necessary and
appropriate in light of the deception
routinely practiced by counterfeiters. The
amounts are appropriate given the extent of
damage done to business goodwill by
infringement of trademarks.
S. Rep. 104-177, at 10.
55
§ 7, Pub. L. No. 104-153, 110 Stat. 1386 (codified at 15 U.S.C. 1
§ 1117(c)). Congress appears to have been motivated by a gap in 2
the law: Plaintiffs who were victorious on their civil 3
counterfeiting claims were often unable to obtain an adequate 4
recovery in actual damages because counterfeiters often maintain 5
sparse business records, if any at all. See S. Rep. 104-177, at 6
10 (1995). 27 In passing the Act, which allows trademark 7
plaintiffs to elect to recover statutory damages in counterfeit 8

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56
cases in lieu of actual damages, Congress apparently sought to 1
ensure that plaintiffs would receive more than de minimis 2
compensation for the injury caused by counterfeiting as a result 3
of the unprovability of actual damages despite the plain 4
inference of damages to the plaintiff from the defendant's 5
unlawful behavior. The Act was thus apparently designed to 6
provide an alternative to the type of recovery provided in 7
section 1117(a); not to all of the remedies provided for in that 8
section. The Act was meant to expand the range of remedies 9
available to a trademark plaintiff, not restrict them. 10
In light of that history, it seems to us unlikely that 11
Congress intended to prevent a plaintiff who opts to recover 12
statutory damages from also receiving attorney's fees. If 13
Congress's purpose in enacting section 1117(c) was to address the 14
problem facing a plaintiff unable to prove actual damages, 15
denying an attorney's fee award to those plaintiffs making use of 16
the new statutory-damages election would be inconsistent with 17
that remedial purpose. The key legislative-history sources -- 18
the House and Senate Reports -- do not indicate that Congress 19
intended a tradeoff between statutory damages and both actual 20
damages and attorney's fees. See H.R. Rep. 104-556 (2005); S. 21
Rep. 104-177. 22
This case is illustrative. The district court 23
concluded that the defendants were responsible for a "massive 24

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57
counterfeiting enterprise" based at least in part on plaintiff's 1
allegations and the unavailability of records suggesting 2
otherwise. As we have explained, a defendant facing a statutory 3
damage award less than the actual amount of the damages he or she 4
caused has the incentive to frustrate ascertainment of the actual 5
amount of the damages. It makes little sense, we think, to 6
further reward a defendant successful in defeating the 7
plaintiff's and the court's attempts to fix the actual amount of 8
damages by allowing him or her to avoid an award of attorney's 9
fees. Such a scheme would only further incentivize the defendant 10
to avoid making, keeping, or producing sales records. 11
We therefore conclude that an award of attorney's fees 12
is available under section 1117(a) in "exceptional" cases even 13
for those plaintiffs who opt to receive statutory damages under 14
section 1117(c). 15
D. Application 16
Under the last sentence of section 1117(a), "in 17
exceptional cases [the court] may award reasonable attorney fees 18
to the prevailing party." 15 U.S.C. § 1117(a). We have said 19
that "'[the Lanham Act] allows recovery of a reasonable 20
attorney's fee only . . . on evidence of fraud or bad faith.'" 21
Conopco, Inc. v. Campbell Soup Co., 95 F.3d 187, 194 (2d Cir. 22
1996) (quoting Twin Peaks Prods., Inc. v. Publications Int'l, 23
Ltd., 996 F.2d 1366, 1383 (2d Cir. 1993)); see also, e.g., 24

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28 Many district courts have looked to the "'good faith'
prong of the Polaroid test" for guidance "[i]n determining
whether a defendant's infringing . . . conduct was carried out in
bad faith" for purposes of determining whether to award
attorney's fees. Pfizer Inc. v. Sachs, 652 F. Supp. 2d 512, 527
(S.D.N.Y. 2009)(internal quotation marks omitted); see also
Polaroid, 287 F.2d at 495 (considering whether a defendant
demonstrated good faith in registering its own mark or the
"reciprocal" of good faith in trying to claim a close variation
of a mark already registered).
58
Patsy's Brand, Inc., 317 F.3d at 221 ("exceptional cases" include 1
"instances of 'fraud or bad faith' or 'willful infringement'" 2
(citations omitted)); Gordon & Breach Sci. Publishers S.A. v. Am. 3
Inst. of Physics, 166 F.3d 438, 439 (2d Cir. 1999)(per 4
curiam)(same). 28 In other words, we have concluded that the key 5
is willfulness on the part of the defendants: "The finding of 6
willfulness determines the right to attorney's fees." Bambu 7
Sales, Inc. v. Ozak Trading Inc., 58 F.3d 849, 854 (2d Cir. 8
1995). We have no trouble agreeing with the district court on 9
the facts as we have described them that the infringement here 10
was willful, involving instances of fraud and bad faith. The 11
award of attorney's fees was therefore justified. 12
The defendants argue that even so, Louis Vuitton's 13
counsel's time and billing records were "scant" and "incomplete," 14
thereby frustrating the inquiry into whether any of the hours 15
charged were duplicative or unnecessary. They argue that some of 16
the hours were for unnecessary work, because once the district 17
court denied the defendants' motion for a stay, the case became 18

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59
"hopeless" and the plaintiff was "assured of a judgment in its 1
favor." The defendants also assert that Louis Vuitton failed to 2
provide appropriate documentation for the fees of its private 3
investigator and that the district court therefore should not 4
have awarded those fees as costs. 5
These arguments are unsupported by the record. In 6
assessing the reasonableness of attorney's fees, a court looks to 7
the amount of time spent as reflected in contemporaneous time 8
records, and then decides how much of that time was "reasonably 9
expended." Clarke v. Frank, 960 F.2d 1146, 1153 (2d Cir. 1992). 10
If the district court finds that some of the time was not 11
reasonably necessary to the outcome of the litigation, it should 12
reduce the time for which compensation is awarded accordingly. 13
See, e.g., Hensley v. Eckerhart, 461 U.S. 424, 434-35 (1983). 14
In the present case, Louis Vuitton produced more than 15
one hundred pages of complete billing records. Some of the 16
allegedly unnecessary work in fact resulted from the defendants' 17
own dilatory treatment of Louis Vuitton's discovery requests. 18
Moreover, Lam's and Chan's decision to invoke their Fifth 19
Amendment privilege did not render legal work already completed 20
unnecessary. We see no error on the part of the district court 21
in making these findings. 22

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60
CONCLUSION 1
For the reasons set forth above, we conclude that the 2
district court did not abuse its discretion when it denied the 3
defendants' motion to stay this case pending the conclusion of 4
the related criminal proceeding. We also conclude that the award 5
of attorney's fees was within the discretion of the district 6
court and that the court properly awarded attorney's fees based 7
on the court's finding of willful infringement. 8
The judgments of the district court are therefore 9
affirmed. 10

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