Lack of evidence on lost goodwill leads to remittitur (but also proposed doubling of lost profits)

Sterilite Corp. v. Olivet International, Inc., No. 1:22-cv-10327-JEK, 2025 WL 3460553 (D. Mass. Dec. 2, 2025)

A jury awarded Sterilite $11 million in damages for Olivet’s willful infringement of the trade dress in Sterilite’s storage cabinets and drawers: $2,656,711 in lost profit damages and an additional $8,343,289 in damages for loss of goodwill. The jury also found that Olivet tortiously interfered with Sterilite’s business relationship with Walmart and awarded Sterilite an additional $5.2 million in lost profits for its wastebasket lids.

The court granted Olivet’s motion for remittitur with respect to the loss of goodwill damages but denied as to the lost profits for Sterilite’s cabinets and drawers. The Court reserved judgment on Sterilite’s motion for enhanced damages: If Sterilite opted for a new trial, its motion for enhanced damages would be denied without prejudice. But if Sterilite accepted remittitur, Sterilite’s motion for enhanced damages would be granted and Sterilite’s damage award in lost profits for its cabinets and drawers would be doubled to account for the difficult-to-quantify reputational harms caused by Olivet’s trade dress infringement.

The standard: The court must view the evidence in the light most favorable to the verdict, and it may not upset the jury’s assessment of damages unless that assessment “is ‘grossly excessive, inordinate, shocking to the conscience of the court, or so high that it would be a denial of justice to permit it to stand.’ ”

Lost profits: To demonstrate causation under the Lanham Act, Sterilite “must demonstrate that the [infringement] actually harmed its business.” While Sterilite “must prove the profits [it] would have made but for [Olivet’s] infringement,” it need not “ ‘negate every conceivable intervening factor which might have caused a decline in sales.’ ” Olivet argued that, during the COVID-19 pandemic, Sterilite was unable to fulfill its customers’ orders and therefore decided to allocate its stock of cabinets and drawers among different customers. It thus supplied only 63% of the cabinets and drawers that Walmart demanded, and Walmart decided to look to other suppliers of cabinets and drawers. An email from Walmart stated that it had decided “to exit the Sterilite business in plastic shelving” “[a]s a result of [Sterilite’s] inability to keep pace with customer demand,” “poor instock, not accepting [fines] due to loss sales, and poor communications as a business partner.” But the jury heard this evidence and rejected Olivet’s theory of causation. There was evidence that Olivet sought “to follow [Sterilite’s] spec detail exactly” in order “to replace Sterilite” at Walmart, and Olivet replaced Sterilite only three months after that notification; a Sterilite witness wrote that, “in [his] 30 years’ experience it takes longer than 60 days to design, engineer, build molds, prepare with inventory, to put yourself into position to serve Walmart well for a program of this magnitude.” The jury could have accepted that “had Olivet not agreed to replicate Sterilite’s products for Walmart (and at a lower price), Walmart would not have terminated Sterilite’s business on those products and Sterilite would not have lost the associated profits.”

But awarding over $8.3 million for lost goodwill was “sheer speculation,” given that “no witness or evidence attempted to quantify the value of Sterilite’s reputation before and after Olivet’s trade dress infringement.” Because “[r]eputational damages are often difficult to quantify,” plaintiffs “need not prove such damages with exacting precision.” Still, while “ ‘mathematical precision’ ” is not required, plaintiffs “ ‘must provide sufficient evidence to take the amount of damages out of the realm of speculation and conjecture.’ ”

“The evidence at trial supported, and Olivet does not contest, that Olivet’s trade dress infringement harmed Sterilite’s reputation. Customer complaints and witness testimony demonstrated that Sterilite’s brand suffered from customer confusion over Olivet’s inferior cabinets and drawers.” Product reviews “revealed that customers attributed Olivet’s inferior products to Sterilite. One customer complained, for instance, about ‘how cheaply these ones were made compared to the first set [she] bought.’”

However, not a single witness testified about the approximate dollar amount of Sterilite’s lost goodwill or how that amount could be calculated. “Nor did Sterilite produce any evidence of how much it spent promoting its cabinets and drawers before Olivet’s infringing conduct, or how much it spent or would need to spend on corrective advertising after that infringing conduct.” The award exceeded the $7,863,871 that Sterilite sought in total lost profits for its cabinets, drawers, and wastebasket lids, but the wastebasket lids were not even a part of the trade dress infringement claims presented to the jury. Thus, Olivet met its “substantial” burden to show that, viewing the evidence in the light most favorable to Sterilite, the jury’s loss of goodwill damages award was excessive, speculative, and unsupported by the record.

So Sterilite could go for a new trial—with no new witnesses or evidence, so that doesn’t seem desirable—or accept remittitur and get its motion for enhanced damages granted. The Lanham Act provides that “[i]n assessing damages the court may enter judgment, according to the circumstances of the case” and “subject to the principles of equity,” “for any sum above the amount found as actual damages, not exceeding three times such amount.” That sum “shall constitute compensation and not a penalty.”

The court “is bound by ... the jury’s finding of willfulness, which affect[s]” its determination of the appropriate “equitable remedy.” But willfulness alone is insufficient to justify an enhancement of damages. “The role of deterrence must be carefully weighed in light of the statutory prohibition on the imposition of penalties.” Sterilite argued that Olivet engaged in “egregious” pretrial discovery misconduct that forced it to file multiple motions to compel production. But courts are “reluctant to approve increased damages intended solely as punishment for conduct unrelated to the trademark infringement or to the actual damages caused by it.” “That is particularly so where, as here, Sterilite could have requested other sanctions for the alleged discovery violations at the time those violations occurred.”

“[T]he pertinent inquiry remains whether the jury’s award appropriately compensates Sterilite.” To enhance an award “based on the same conduct that established Olivet’s liability for willful infringement, without any connection to the alleged inadequacy of the award itself, improperly ‘appear[s] to be punitive.’”

Sterilite argued that the award missed some infringement, but “Sterilite repeatedly represented to the jury that [its expert’s] assessment of $2,656,711 in damages was all that it sought in lost profits for its cabinets and drawers.” Any new post-trial theories of damages were waived and too speculative.

What about Olivet’s allegedly improved relationship with Walmart? The Second Circuit affirmed trebling damages “reflect[ing] the intangible benefits that accrued to [the defendant] as a result of its false advertising,” particularly given that the parties were “direct competitors in a two-player market” and the defendant “usurp[ed] ... [the plaintiff’s] market share.” While Sterilite and Olivet are competitors, they are not the only two manufacturers of plastic household products. So Sterilite was already compensated for its losses.

Finally, though, the evidence supported the conclusion that Olivet’s infringement damaged Sterilite’s reputation, and “damages for loss of reputation ... are inherently indeterminate” and thus difficult to quantify. “If Sterilite were to reject remittitur and opt for a new trial, the jury could weigh the value of that loss of goodwill and, if appropriate, award damages. In that case, equity would not justify granting Sterilite’s request for enhanced damages on the basis of that same loss of goodwill.” But if it accepted remittitur, it wouldn’t have been compensated for reputational harm, and the court would double lost profit damages.