                                PUBLISHED

                   UNITED STATES COURT OF APPEALS
                       FOR THE FOURTH CIRCUIT


                               No. 13-2003


GEORGIA-PACIFIC CONSUMER PRODUCTS LP,

                 Plaintiff - Appellee,

     and

GEORGIA-PACIFIC CORPORATION,

                 Plaintiff,

     v.

VON DREHLE CORPORATION, a North Carolina corporation,

                 Defendant - Appellant,

     and

CAROLINA JANITORIAL & MAINTENANCE SUPPLY, a North Carolina
corporation,

                 Defendant,

MYERS SUPPLY, INCORPORATED,

                 Intervenor/Defendant.



Appeal from the United States District Court for the Eastern
District of North Carolina, at Raleigh.   Terrence W. Boyle,
District Judge. (5:05-cv-00478-BO)


Argued:    December 11, 2014                 Decided:   March 30, 2015

                      Amended:    April 15, 2015
Before NIEMEYER, SHEDD, and KEENAN, Circuit Judges.


Vacated,   reversed  in   part,  and   remanded   in  part,  with
instructions, by published opinion.     Judge Niemeyer wrote the
opinion, in which Judge Shedd concurred as to Parts I, III, IV,
and V and Judge Keenan concurred in full.     Judge Shedd wrote a
separate opinion, concurring in part and dissenting in part.



ARGUED: Carter Glasgow Phillips, SIDLEY AUSTIN LLP, Washington,
D.C., for Appellant. Miguel A. Estrada, GIBSON, DUNN & CRUTCHER
LLP, Washington, D.C., for Appellee.      ON BRIEF: Michael P.
Thomas, PATRICK HARPER & DIXON, LLP, Hickory, North Carolina;
Richard Klingler, Jacqueline G. Cooper, Nicolas W. Thompson,
John Paul Schnapper-Casteras, SIDLEY AUSTIN LLP, Washington,
D.C., for Appellant.   Stephen P. Demm, John Gary Maynard, III,
HUNTON & WILLIAMS LLP, Richmond, Virginia; Jonathan C. Bond,
GIBSON, DUNN & CRUTCHER LLP, Washington, D.C.; W. Kyle
Carpenter, WOOLF, MCCLANE, BRIGHT, ALLEN & CARPENTER, PLLC,
Knoxville, Tennessee, for Appellee.




                                2
NIEMEYER, Circuit Judge:

        This    trademark      infringement       case    presents        several    issues

regarding the appropriate relief that may be granted under the

Lanham      Act,      15     U.S.C.    §§   1051-1141n,         specifically         § 1116

(authorizing injunctive relief) and § 1117 (authorizing monetary

relief).

      Georgia-Pacific           Consumer    Products       LP     owns    the   trademark

“enMotion,” which it uses to brand a paper-towel dispenser that

dispenses paper towels when a motion sensor is triggered by the

user.          Georgia-Pacific         designed     its    enMotion        dispenser      to

dispense only ten-inch paper towels that it manufactured.

      von Drehle Corporation, a North Carolina corporation that

competes       with    Georgia-Pacific       in     the    sale      of   paper     towels,

designed a less expensive paper towel -- the “810-B” paper towel

--   that      it     sold    specifically       for    use     in   Georgia-Pacific’s

enMotion towel dispensers.

      In response to von Drehle’s practice of selling its 810-B

paper    towels       for    “stuffing”     into       enMotion      towel   dispensers,

Georgia-Pacific            commenced    three     separate      actions      against     von

Drehle    or     its       distributors.         Each    action      alleged      that   the

“stuffing”          practice          constituted         contributory          trademark

infringement of Georgia-Pacific’s enMotion mark, in violation of

the Lanham Act, 15 U.S.C. § 1114(1)(a).                       Specifically, in this

action, Georgia-Pacific claimed that von Drehle “knowingly and

                                             3
intentionally” manufactured the 810-B paper towel “specifically

and     solely     for     use”        in    Georgia-Pacific’s           enMotion         towel

dispensers and that the practice of stuffing enMotion dispensers

with the 810-B paper towel was “likely to cause confusion and

. . .    deceive     End-User      Customers.”            In    January     2012,     a    jury

agreed    that      von    Drehle’s          conduct      constituted        contributory

trademark infringement and, as requested at closing argument,

awarded Georgia-Pacific $791,431, which represented all of the

profits that von Drehle earned from the sale of its 810-B paper

towels from 2005 to the date of trial.                         After the jury returned

its verdict, the district court entered a permanent, nationwide

injunction prohibiting von Drehle from directly or indirectly

infringing       Georgia-Pacific’s           trademark         rights.      In    addition,

because      the   court       found    that       von   Drehle’s     infringement         was

“willful and intentional,” it (1) trebled the jury’s award from

$791,431 to        $2,374,293;         (2)   awarded      Georgia-Pacific         attorneys

fees in the amount of $2,225,782; and (3) awarded it prejudgment

interest in the amount of $204,450.                      Finally, the court awarded

Georgia-Pacific $82,758 in court costs.

      In a parallel action that Georgia-Pacific commenced in the

Western      District      of     Arkansas         against      one   of    von     Drehle’s

distributors, the district court had, by the time of the trial

in    this       action,        already       ruled      against         Georgia-Pacific,

concluding       that    the    practice       of    stuffing      von     Drehle’s       810-B

                                               4
paper towel into Georgia-Pacific’s enMotion dispensers “did not

create    a    likelihood      of    confusion,”               Georgia-Pacific       Consumer

Prod.    LP    v.   Myers    Supply,       Inc.,          No.    6:08-cv-6086,       2009     WL

2192721, at *8 (W.D. Ark. July 23, 2009), and the Eighth Circuit

affirmed, 621 F.3d 771, 777 (8th Cir. 2010) (holding that the

district      court   did     not        “clearly         err    in    finding      that     the

trademark on a dispenser does not indicate the source of the

paper towels inside, and concluding that there was no likelihood

of confusion, and thus no trademark infringement”).

     In       the   second     parallel             action,      which     Georgia-Pacific

commenced      against      one     of    von       Drehle’s       distributors       in     the

Northern District of Ohio, the district court had, by the time

of the trial in this action, also ruled against Georgia-Pacific.

The court held that the Arkansas judgment precluded Georgia-

Pacific from relitigating its trademark infringement claim, see

Georgia-Pacific       Consumer       Prods.         LP    v.    Four-U-Packaging,          Inc.,

821 F. Supp. 2d 948 (N.D. Ohio 2011), and the Sixth Circuit

affirmed, 701 F.3d 1093, 1103 (6th Cir. 2012).

     On appeal from the remedies award in this case, von Drehle

challenges      the   geographical           scope         of    the     district     court’s

injunction, arguing that the Eighth and Sixth Circuits’ rulings

against    Georgia-Pacific          render          the   injunction      entered     by     the

district court unduly broad.                    It also challenges the monetary

awards, contending that the district court applied the wrong

                                                5
legal standards for trebling the jury award and for awarding

attorneys fees and prejudgment interest.

       Because we agree with von Drehle, we reverse the district

court’s judgment in part and vacate and remand in part, with

instructions.         As to the injunction, we instruct the district

court to narrow it to cover only the geographical area of the

Fourth Circuit.        As to the monetary awards, (1) we reverse the

treble      damages    award    and     instruct        the     district     court    to

reinstate the jury’s award of $791,431; (2) we vacate the award

of attorneys fees and remand for application of the appropriate

standard; and (3) we reverse the award of prejudgment interest.


                                            I

       In    2005,    after    learning         of    von    Drehle’s    practice     of

“stuffing” or “causing to be stuffed” Georgia-Pacific enMotion

towel dispensers with von Drehle 810-B paper towels, Georgia-

Pacific sent von Drehle a letter “[d]emand[ing] . . . that von

Drehle      immediately    cease      and   desist          marketing,   selling     and

distributing     the     810   towel.”          von    Drehle     rejected    Georgia-

Pacific’s demand, stating that it considered its conduct to be

legitimate competition that did not infringe Georgia-Pacific’s

enMotion trademark.

       Georgia-Pacific thereafter commenced this action, alleging

that   von    Drehle’s    stuffing     practices        constituted      contributory


                                            6
trademark      infringement,          in   violation        of    the     Lanham       Act,

15 U.S.C. § 1114(1)(a).               It alleged that von Drehle “knowingly

and intentionally manufactured -- or directed the manufacture --

and sold -- or directed the sale of -- finished paper towel

rolls    designed   specifically           and    solely    for     use   in    enMotion

dispensers,”      and     that      this   practice        was    “likely      to   cause

confusion and . . . to deceive End-User Customers . . . .”

Georgia-Pacific sought injunctive relief, an accounting of von

Drehle’s profits, and damages.

       The district court granted von Drehle’s motion for summary

judgment, concluding that Georgia-Pacific had “failed to show

that    von    Drehle’s      sale     of   its    810-B     paper    towel      roll    to

distributors     for    use      in    enMotion    dispensers       caused      consumer

confusion.”      Georgia-Pacific Consumer, Prods. LP v. von Drehle

Corp., 645 F. Supp. 2d 532, 536 (E.D.N.C. 2009).                               The court

considered the end-users in this context to be “those business

owners who purchase[d] paper towel rolls from distributors for

the enMotion dispensers installed in their premises,” a class of

consumers who “kn[e]w exactly from which company they [were]

purchasing the paper towel rolls.”                 Id. at 537.          By order dated

August   10,    2010,   we    reversed      and    remanded,      holding      that     the

district court “erred in limiting its likelihood of confusion

inquiry to distributors who purchased 810-B Toweling and their

respective end-user customers,” such as hotels.                      Georgia-Pacific

                                            7
Consumer Prods., LP v. von Drehle Corp., 618 F.3d 441, 453 (4th

Cir. 2010).      We pointed out that “Fourth Circuit case law makes

room for the factfinder to consider confusion among the non-

purchasing public in the likelihood-of-confusion inquiry.”                 Id.

     On remand, von Drehle filed a motion seeking judgment as a

matter of law, arguing that the decision of the Western District

of   Arkansas,      which    rejected       Georgia-Pacific’s     infringement

claims,    should   preclude    Georgia-Pacific      from    advancing     those

same claims in this case.            The district court, however, denied

von Drehle’s motion and set the matter for trial, explaining

that von Drehle had inordinately delayed raising its preclusion

argument.

     At the three-day trial, Georgia-Pacific presented its case

to   the    jury    for     contributory      trademark     infringement     and

requested   injunctive      relief    and    disgorgement    of   von   Drehle’s

profits.    At closing argument to the jury, counsel for Georgia-

Pacific stated:

     So what we want is for [von Drehle] to quit doing it,
     and we want damages. The damages we want and I think
     from the Judge’s instructions you will find if we
     prevail we are entitled to this -- [is] for them to
     give up the profits that they made selling knock-off
     paper to put into our trademarked dispenser. And the
     only number in the record on that is in Plaintiff’s
     Exhibit 266 [summarizing von Drehle’s annual gross
     profits from the sale of 810-B paper towels from 2004
     through 2011].   They made a profit of $794,000 from
     the time that they put it on the market in 2004
     through 2011.   And that’s what we’re asking you for,
     the profits, give us the profits that you made trading

                                        8
      on our name and our trademark.     So I submit to you
      when you get back there and you go through all these
      packages, get to the verdict form, the first question
      is, have we proven trademark infringement? Yes. The
      second question is, what are the damages? $794,000.

(Emphasis added).              Just as Georgia-Pacific’s counsel requested,

the   jury     returned        a    verdict    answering            “yes”    to    the    question

whether      von    Drehle         infringed       Georgia-Pacific’s              trademark      and

awarding Georgia-Pacific: “$791,431 when the cease [and desist]

letter came out Jan 05.”                 Because Exhibit 266, to which counsel

referred at closing argument, included profit for 2004 in the

amount of $2,569, which was earned before the cease and desist

letter was sent, the jury apparently subtracted that sum from

the     $794,000        amount       requested          to     arrive      at     its    award    of

$791,431.          The jury thus awarded Georgia-Pacific 100% of the

profits      that       it   requested       for       the    period      beginning      with    its

cease-and-desist letter in January 2005 and ending in December

2011.

      Following trial, von Drehle renewed its motion for judgment

as a matter of law based on claim and issue preclusion, and the

district       court         granted    it,     vacating            the    jury     verdict      and

entering      judgment         for     von    Drehle.              Georgia-Pacific        Consumer

Prods.    LP       v.    von    Drehle       Corp.,          856    F.    Supp.    2d    750,    757

(E.D.N.C. 2012).             The court explained:

      The question submitted to the jury in this case was
      whether “plaintiff established by a preponderance of
      the   evidence  that   the  defendant  infringed  on

                                                   9
     plaintiff’s valid trademark.”     The jury responded to
     this question in the affirmative.      However, because
     another   court  had   previously   decided  this  same
     question in the negative, this Court now holds that
     Defendant should be permitted to raise the affirmative
     defense of claim and issue preclusion and that
     judgment as a matter of law is appropriate.

Id. at 753 (citation omitted).               On appeal, we again reversed,

concluding    that     “von    Drehle        [had]       waived      its     preclusion

defenses” and that “the district court abused its discretion by

allowing von Drehle to assert its preclusion defenses 16 months

after the substantive basis for those defenses was known to von

Drehle.”      Georgia-Pacific       Consumer       Prods.,      LP   v.    von   Drehle

Corp., 710 F.3d 527, 536 (4th Cir.), cert. denied, 134 S. Ct.

393 (2013).    We remanded the case with instructions to reinstate

the jury verdict and to consider the other relief that Georgia-

Pacific had requested.        Id.

     On remand, the district court granted Georgia-Pacific the

injunctive    relief    it     requested          and,    finding      von    Drehle’s

infringement to have been willful and intentional, trebled the

jury verdict, awarded attorneys fees, and awarded prejudgment

interest.      Including      court   costs,        the    total     monetary     award

amounted to $4,887,283.51.

     From    the   judgment    entered       on    July   28,     2013,    von   Drehle

filed this appeal, challenging the geographical scope of the

injunction and each monetary award except court costs.




                                        10
                                       II

     As part of the post-verdict relief granted, the district

court entered a permanent, nationwide injunction prohibiting von

Drehle “from interfering directly or indirectly with [Georgia-

Pacific’s] trademark rights,” which, the court stated, included

“the right of [Georgia-Pacific] to enforce the use of only their

paper towel products in their enMotion dispensers.”                       Georgia-

Pacific Consumer Prods. LP v. von Drehle Corp, No. 5:05-cv-478-

BO, 2013 WL 3923984, at *2 (E.D.N.C. July 29, 2013).                    von Drehle

contends   that    the   district      court    should    not    have    issued   a

nationwide injunction that “conflict[s] with the decisions of

other   circuits”    and   that     “undermine[s]        the    prerogatives      of

courts of appeals that have yet to address the relevant legal

issues.”    As noted, both the Eighth and the Sixth Circuits have

concluded that Georgia-Pacific may not enforce its enMotion mark

to prohibit the practice of stuffing von Drehle’s 810-B paper

towels into enMotion towel dispensers.               See Myers Supply, 621

F.3d at 777; Four-U-Packaging, 701 F.3d at 1103.

     We review the scope of a permanent injunction for abuse of

discretion.    See Tuttle v. Arlington Cnty. Sch. Bd., 195 F.3d

698, 703 (4th Cir. 1999).

     Neither party contends that a district court, as a general

matter,    lacks    authority     to    issue    a   nationwide         injunction

prohibiting trademark infringement.              See 15 U.S.C. § 1116(a);

                                       11
see also Va. Soc’y for Human Life, Inc. v. FEC, 263 F.3d 379,

393 (4th Cir. 2001) (“Nationwide injunctions are appropriate if

necessary to afford relief to the prevailing party”), abrogation

on other grounds recognized in Real Truth About Abortion, Inc.

v. FEC, 681 F.3d 544, 550 n.2 (4th Cir. 2012); Richmond Tenants

Org., Inc. v. Kemp, 956 F.2d 1300, 1302, 1309 (4th Cir. 1992)

(holding      that     a    nationwide       injunction        was     “appropriately

tailored    to    prevent         irreparable    injury”       where    the     various

plaintiffs resided in different parts of the country); see also

United States v. AMC Entm’t, Inc., 549 F.3d 760, 770 (9th Cir.

2008) (“[T]he court has the power to enforce the terms of the

injunction outside the territorial jurisdiction of the court,

including      issuing      a     nationwide     injunction”).           Nonetheless,

equity     requires        that     injunctions     be     carefully          tailored,

especially where, as here, questions of inter-circuit comity are

involved.      See Va. Soc’y, 263 F.3d at 393-94; AMC Entm’t, 549

F.3d at 773 (“Principles of comity require that, once a sister

circuit has spoken to an issue, that pronouncement is the law of

that geographical area”); id. at 770 (“Courts ordinarily should

not   award      injunctive        relief    that   would       cause    substantial

interference with another court’s sovereignty”).

      Within     the   11       States   comprising      the    Eighth    and    Sixth

Circuits, courts of appeals have held that Georgia-Pacific may

not enforce its enMotion mark to prohibit the stuffing of von

                                            12
Drehle 810-B paper towels into enMotion towel dispensers.                                   For

us to now countenance an injunction that would give Georgia-

Pacific the right to enforce its mark in those States would

amount to a direct and unseemly affront to those courts.                                    And

such    an       affront   would   only    be    exacerbated      in      light       of    our

earlier ruling, where we refused to recognize their decisions

due    to    von    Drehle’s     tardiness.       In     addition,        upholding         the

nationwide injunction would, as a practical matter, create a

direct       and    perhaps     irreconcilable         conflict      as     to    Georgia-

Pacific’s trademark rights in the Eighth and Sixth Circuits,

leaving litigants and others in those States confused.                                     As a

matter of comity, therefore, we conclude that the district court

abused       its    discretion     in    extending      the   injunction         to    those

jurisdictions,         and     accordingly       we    will    not        authorize         its

enforcement within the Eighth and Sixth Circuits.

       The        question     remains     whether       we    should        nonetheless

authorize the injunction to operate within those circuits that

have not yet had occasion to consider these issues.                              Courts in

circuits other than the Eighth and Sixth now face a significant

split       of    authority    regarding    the       enforceability        of    Georgia-

Pacific’s         enMotion    trademark    in    the    context      of    von    Drehle’s

stuffing practices.            Were Georgia-Pacific to commence identical

litigation against von Drehle or one of its distributors in the

First Circuit, for example, that court would be faced with the

                                            13
question of whether to follow the Fourth Circuit on the one hand

or the Eighth and Sixth Circuits on the other.                                Because the

forum court should be free to resolve this question, comity also

requires      that      we   not    allow   the    injunction       to    extend        to    the

remaining circuits.            Cf. Va. Soc’y, 263 F.3d at 393-94 (refusing

to   issue    an     injunction      that    would    have    “encroache[d]             on    the

ability      of     other     circuits      to    consider”     an       important          legal

question and “impos[ed] our view of the law on all the other

circuits”).

      Georgia-Pacific challenges this conclusion on two grounds.

First, it contends that von Drehle waived any challenge to the

scope   of        the   injunction      because      it   failed         to   present         the

argument to the district court.                      The record, however, belies

this contention.             In response to Georgia-Pacific’s motion for a

permanent injunction, von Drehle argued to the district court

that the judgment against it “has created a significant split

with the Sixth and Eighth Circuits” and that the district court

“cannot and should not enter any injunction which impacts . . .

the Sixth and Eighth Circuit decisions.”                        In addition, at the

hearing      before     the    district     court    on   the      motion,        von   Drehle

pointed out that “the Eighth Circuit and the Sixth Circuit have

found [that] this conduct is not infringement” and accordingly

maintained that, “to the extent [the court] is going to grant an

injunction,        . . .      the   injunction      needs     to    take      .    .    .    into

                                             14
account    [those]     rulings.”           Finally,           it    is     clear   that     the

district    court    was     fully     aware       of   von    Drehle’s         argument,    as

indicated by its remark to Georgia-Pacific’s attorney during the

same    hearing     that    “this      injunction         can’t       go    into   Ohio     and

Tennessee    where     you’ve      lost.       It       can    only      hold   water     where

you’ve won.”

       Second, Georgia-Pacific argues that “there is no basis for

von Drehle’s claim that the injunction . . . interferes with the

Myers or Four-U rulings” because “[n]either decision determined

the rights of von Drehle, which was not a party to either case.”

But such an argument takes a far too technical view of this

case,     especially       when    considering           the       inter-circuit        comity

issues involved.           Even though there was not a precise identity

of parties, the fact remains that Georgia-Pacific has been given

the right to enforce its trademark against von Drehle’s stuffing

practices in the Fourth Circuit and has been denied that right

in the Eighth and Sixth Circuits.

       Accordingly, for the sake of comity, we require, under the

unique    circumstances       of       this    case,        that      the    injunction     be

limited    geographically         to    the        States     in    this     circuit.        We

therefore vacate the injunction granted by the district court

and remand with instructions to modify it in accordance with

this opinion.



                                              15
                                                III

       In        response    to     Georgia-Pacific’s              request      for    treble

damages, the district court observed that an award of treble

damages “is appropriate when there has been a finding of willful

or intentional infringement.”                   Georgia-Pacific, 2013 WL 3923984,

at *2 (citing Larsen v. Terk Techs. Corp., 151 F.3d 140, 150

(4th Cir. 1998)).            After noting that von Drehle’s president had

testified         that     von    Drehle’s       810-B      towels     were     specifically

designed to fit the Georgia-Pacific enMotion dispensers and that

he knew that they would be stuffed into enMotion dispensers, the

court concluded that von Drehle’s infringement was “willful and

intentional.”             Relying on Larsen, it accordingly trebled the

jury’s award of $791,431 to $2,374,293.

       von       Drehle     contends      that       the    district      court    erred     in

applying         the    “willful    and     intentional”           standard     from   Larsen

because      Larsen       applied    to     a   recovery      under       § 1117(b),       which

requires a court to treble damages for a knowing and intentional

use    of    a    counterfeit       mark.        This      case,    however,      involves    a

recovery of profits under § 1117(a), and therefore, von Drehle

argues, the court is authorized to adjust the jury’s award only

if it deems the recovery to be “inadequate or excessive,” and

then    only       to     compensate      the    plaintiff,         not    to     punish    the

defendant.



                                                16
      Georgia-Pacific          argues     that    although      Larsen     interprets

§ 1117(b),    it    is    hardly    irrelevant      in   this    case    because    the

“counterfeiting claims addressed by [§ 1117(b)] provide a close

parallel to the claims at issue here.”                      And it contends that

“whatever the basis of the plaintiff’s proven injury -- profits,

damages, or both -- the statute expressly permits the court to

award a greater sum.”

      We agree with von Drehle that, by relying on Larsen and

awarding      treble          damages      for     willful       and      intentional

infringement, the district court erroneously conflated § 1117(a)

and § 1117(b).

      Monetary relief for trademark infringement is provided for

in   15   U.S.C.     § 1117,      and     each    type   of    monetary     award    is

categorized        with       particularity       and    separately       addressed.

Section 1117(a),          which         applies     generally       to      trademark

infringement cases (and which the parties agree applies in this

case),    authorizes      a    plaintiff     to   recover      (1) the    defendant’s

profits based simply on proof of the defendant’s sales; (2) the

plaintiff’s    damages;         (3) court    costs;      and    (4) in   exceptional

cases, attorneys fees.           The section also sets forth the criteria

and standards for awarding each type of recovery.                           As to a

recovery based on the defendant’s profits, § 1117(a) provides:

      In assessing profits the plaintiff shall be required
      to prove defendant’s sales only; defendant must prove
      all elements of cost or deduction claimed. . . .   If

                                           17
       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
       such sum as the court shall find to be just, according
       to the circumstances of the case.       Such sum . . .
       shall constitute compensation and not a penalty.

And as to a recovery based on the plaintiff’s damages, which the

statute distinguishes from an award based on the defendant’s

profits, § 1117(a) provides:

       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. . . . Such
       sum . . . shall constitute compensation and not a
       penalty.

       Section 1117(b), on the other hand, mandates the award of

treble profits or treble damages for a defendant’s “use of [a]

counterfeit     mark”    if      the    infringement         consists    of     (1)

“intentionally using a mark or designation, knowing such mark or

designation is a counterfeit mark,” or (2) “providing goods or

services [using such mark], with the intent that the recipient

of the goods or services would put the goods or services to use

in committing the violation.”                15 U.S.C. § 1117(b) (emphasis

added).       This   section     also       authorizes   a    court     to    award

prejudgment interest for such a violation.               Thus, § 1117(b), by

providing for heightened monetary awards, reflects the fact that

use of a counterfeit mark is “the most blatant and egregious

form   of   ‘passing    off.’”         J.    Thomas   McCarthy,    McCarthy     on

Trademarks and Unfair Competition § 25:10 (4th ed. 2012).

                                        18
      Section      1117       provides    vastly       different     legal    standards,

based on the egregiousness of the offense, for determining when

a district court can modify an award -- distinguishing an award

for knowingly and intentionally using a counterfeit mark from an

award   for   using       a     noncounterfeit     mark.           The   district     court

therefore     erred       in    relying    on     Larsen,      a    case    involving      a

counterfeit mark, to award treble damages here.

      Nor can Georgia-Pacific seek to justify the award of treble

damages    under    the        plain   language    of    §    1117(a).        Under      that

section, when a plaintiff seeks recovery based on a defendant’s

profits, the court may adjust the jury’s verdict up or down, but

only if it finds the amount of recovery to be either “inadequate

or   excessive,”      and       then   only     insofar       as   the     adjustment     is

determined to be just and compensatory, not punitive.                               Accord

Thompson v. Haynes, 305 F.3d 1369, 1380 (Fed. Cir. 2002) (“By

the terms of the statute, ‘damages’ are to be treated separately

from ‘profits.’       As for damages, the court may award up to three

times   actual     damages,        depending      on    the    circumstances        of   the

case.     As for profits, however, the court is not authorized to

award up to three times the amount proved.                           For profits, the

court is constrained to award the amount proved, subject only to

an adjustment, up or down, where the recovery would be otherwise

unjust”); Badger Meter, Inc. v. Grinnell Corp., 13 F.3d 1145,

1157 (7th Cir. 1994) (“[S]ection 1117(a) provides two methods

                                            19
which       the    district        court      can     utilize       separately       or     in

combination to approximate a fair recovery for the plaintiff.

The first discretionary method is to award up to three times the

damages        plaintiff         can    actually          prove. . . .       The     second

discretionary method allows the court to award the plaintiff

‘such sum as the court shall find to be just, according to the

circumstances of the case,’ and is premised on the finding that

‘recovery based on [defendant’s] profits is either inadequate or

excessive’”            (alteration      in     original)        (quoting       15    U.S.C.

§ 1117(a))).

       In     this       case,     Georgia-Pacific           requested       a      recovery

consisting only of von Drehle’s profits, and the jury granted

that request.            As counsel for Georgia-Pacific told the jury,

“[t]he damages we want . . . is for them to give up the profits

that    they      made        selling   knock       off    paper    to   put     into     our

trademarked        dispenser. . . .            [T]hat’s      what    we’re     asking     you

for, the profits, give us the profits that you made trading on

our name and our trademarks.”                 Indeed, it is uncontroverted that

Georgia-Pacific’s only claim for monetary relief in this case

was    based      on    von    Drehle’s      profits.       And,    as   noted,      when    a

recovery is based on the defendant’s profits, § 1117(a) gives

the district court the limited discretion to increase the award

only when and to the extent it deems the award to be inadequate

to compensate the plaintiff for the defendant’s profits.                                Here,

                                              20
there would be no basis for the district court to conclude that

the jury’s award was inadequate to compensate Georgia-Pacific

because    the    jury     gave   Georgia-Pacific       virtually       all    that    it

sought.      Moreover, Georgia-Pacific has never argued that the

jury’s award of profits was inadequate.                  Since enhancement of a

profits    recovery      is    the   only     avenue    through    which       Georgia-

Pacific    could    have      obtained    additional     monetary       relief       under

§ 1117(a), the district court erred in awarding treble damages,

which are punitive and are not authorized by § 1117(a) for a

recovery based on profits.

      Georgia-Pacific         argues      that    von   Drehle    has    waived       any

argument that treble damages were illegally awarded, contending

that von Drehle did not present the issue to the district court.

Again,     the    record    belies     this      contention.      In    response       to

Georgia-Pacific’s request for treble damages, von Drehle pointed

out   to    the    district       court   that     enhanced    damages        were    not

appropriate because “[t]his case was submitted to the jury on

Georgia-Pacific’s request for an award of von Drehle’s profits”

and Georgia-Pacific had presented no evidence that “the verdict

amount [was] insufficient to compensate [it],” and it referred

the court directly to § 1117(a).                 While von Drehle may not have

presented this argument in as detailed a fashion as it has to us

on appeal, it nonetheless preserved its point for appeal.



                                            21
     Accordingly, we reverse the district court’s order awarding

treble damages and direct the court to enter judgment in the

amount   awarded    by    the    jury,   $791,431,        which    constitutes        von

Drehle’s profits from the sale of its 810-B paper towels from

January 7, 2005, through the end of 2011.


                                         IV

     The district court also awarded Georgia-Pacific attorneys

fees of $2,225,782.35, finding that von Drehle’s “willful and

intentional” infringement rendered this case “exceptional,” as

that term is used in 15 U.S.C. § 1117(a).                   Georgia-Pacific, 2013

WL 3923984, at *2.              Section 1117(a) provides, “The court in

exceptional     cases     may    award   reasonable        attorney       fees   to   the

prevailing    party.”       (Emphasis      added).          The    court    based     its

willful-and-intentional          finding      on   the    fact     that    von   Drehle

specifically designed its 810-B paper towels for use in Georgia-

Pacific’s enMotion dispenser and knew that they would be stuffed

in those dispensers.

     von Drehle contends that this case is not “exceptional,” as

that term is used in § 1117(a), and that the district court

erroneously     relied    on     its   purposeful        conduct    in    distributing

towels    for     use      in     Georgia-Pacific’s          enMotion        machines,

conflating      willful    and    intentional      conduct        with    willful     and




                                         22
intentional infringement.                  We agree, especially since von Drehle

reasonably believed that its conduct was lawful.

       We    have    defined       the      “exceptional”         case   for    purposes         of

§ 1117(a)      “as     one       in     which     ‘the      defendant’s         conduct         was

malicious,        fraudulent,           willful      or    deliberate          in     nature.’”

Retail Servs., Inc. v. Freebies Publ’g, 364 F.3d 535, 550 (4th

Cir. 2004) (quoting PETA v. Doughney, 263 F.3d 359, 370 (4th

Cir. 2001)).         But, in this context, the word “willful” does not

mean that the defendant’s actions were merely volitional, but

rather that the defendant acted with the intent to infringe the

plaintiff’s protected mark.                    See, e.g., In re Outsidewall Tire

Litig.,       748      F.       Supp. 2d         557,       562     (E.D.           Va.     2010)

(“‘[W]illfulness’           means       more    than       simply    that       the       act   of

infringement        was     done      voluntarily         and    intentionally            and   not

because      of     accident          or     other    innocent       reason”          (internal

quotation      marks      and    citation       omitted));        Vanwyk      Textile       Sys.,

B.V. v. Zimmer Mach. Am., Inc., 994 F. Supp. 350, 381 (W.D.N.C.

1997)       (“Willfulness          in      performing       the     act . . . does              not

necessarily mean willfulness in violating the law.                                  Willfulness

in   violating       the     law      may    qualify      the     case   as     exceptional”

(citation omitted)); accord Badger Meter, 13 F.3d at 1159 (“We

do not agree that intentionally copying a competitor’s product,

even    if    this     is       later       determined      to     involve      trade       dress

infringement,        by      itself         constitutes         ‘willful’       infringement

                                                23
. . .”); Tex. Pig Stands, Inc. v. Hard Rock Cafe Int’l, Inc.,

951 F.2d 684, 696-97 (5th Cir. 1992) (noting that the attorneys

fees provision in § 1117(a) “has been interpreted by courts to

require a showing of a high degree of culpability on the part of

the infringer”).         To affirm the district court’s application of

its volitional standard would mean that every Lanham Act case

would qualify as “exceptional” unless the defendant could show

that   it     unintentionally    or   mistakenly   performed    the   actions

later found to be a violation of the Act.

       More importantly, after the court had received the parties’

briefs in this case, the Supreme Court handed down its decision

in Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S.

Ct.    1749    (2014).       While    Octane   Fitness   did   not    construe

§ 1117(a), it did construe a parallel and identical provision in

the Patent Act, which provides, “The court in exceptional cases

may award reasonable attorney fees to the prevailing party.”

35 U.S.C. § 285.         The Federal Circuit had previously given § 285

a narrow interpretation, concluding:

       A case may be deemed exceptional when there has been
       some material inappropriate conduct related to the
       matter in litigation, such as willful infringement,
       fraud or inequitable conduct in procuring the patent,
       misconduct during litigation, vexatious or unjustified
       litigation, conduct that violates Fed. R. Civ. P. 11,
       or like infractions. Absent misconduct in conduct of
       the litigation or in securing the patent, sanctions
       may be imposed against the patentee only if both
       (1) the litigation is brought in subjective bad faith,
       and (2) the litigation is objectively baseless.

                                       24
Brooks Furniture Mfg., Inc. v. Dutailier Int’l, Inc., 393 F.3d

1378, 1381 (Fed. Cir. 2005) (citation omitted).                        But the Supreme

Court     rejected      the     Federal          Circuit’s      interpretation        of

“exceptional,” describing the Federal Circuit’s test as “unduly

rigid.”     Octane Fitness, 134 S. Ct. at 1755.                        Relying on the

statute’s      simple         text        and     dictionary          definitions     of

“exceptional,” the Court concluded:

       [A]n ‘exceptional’ case is simply one that stands out
       from others with respect to the substantive strength
       of a party’s litigating position (considering both the
       governing law and the facts of the case) or the
       unreasonable manner in which the case was litigated.
       District courts may determine whether a case is
       ‘exceptional’ in the case-by-case exercise of their
       discretion,    considering  the   totality    of   the
       circumstances.

Id. at 1756.     The Court then pointed the district courts to the

same    nonexclusive     list        of    factors      that    it     had    previously

identified as relevant for use in determining whether to award

attorneys fees under a similar provision of the Copyright Act, a

list    that    included        “frivolousness,           motivation,          objective

unreasonableness (both in the factual and legal components of

the case) and the need in particular circumstances to advance

considerations of compensation and deterrence.”                        Id. at 1756 n.6

(quoting    Fogerty     v.    Fantasy,          Inc.,   510    U.S.    517,    534   n.19

(1994)) (internal quotation marks omitted).

       To be sure, the Octane Fitness Court did not interpret the

attorneys fees provision of § 1117(a).                         But the language of

                                            25
§ 1117(a) and § 285 is identical, and we conclude that there is

no    reason     not      to     apply    the        Octane      Fitness       standard          when

considering the award of attorneys fees under § 1117(a).                                          See

Fair Wind Sailing, Inc. v. Dempster, 764 F.3d 303, 314-15 (3d

Cir. 2014) (“While Octane Fitness directly concerns the scope of

a     district       court’s       discretion             to     award     fees       for        [an]

‘exceptional’        case       under    § 285       of    the    Patent       Act,    the       case

controls our interpretation of [§ 1117(a)].                              Not only is § 285

identical      to     [§ 1117(a)],         but       Congress      referenced          § 285       in

passing [§ 1117(a)]”).

       Thus, we conclude that a district court may find a case

“exceptional”            and    therefore        award         attorneys       fees     to        the

prevailing party under § 1117(a) when it determines, in light of

the totality of the circumstances, that (1) “there is an unusual

discrepancy         in    the    merits        of    the       positions       taken    by        the

parties,” Fair Wind Sailing, 764 F.3d at 315, based on the non-

prevailing party’s position as either frivolous or objectively

unreasonable, see Octane Fitness, 134 S. Ct. at 1756 n.6; (2)

the    non-prevailing            party     “has       litigated          the    case        in    an

‘unreasonable        manner,’”          Fair    Wind       Sailing,      764    F.3d     at      315

(quoting Octane Fitness, 134 S. Ct. at 1756); or (3) there is

otherwise      “the       need    in     particular            circumstances      to     advance

considerations of compensation and deterrence,” Octane Fitness,



                                                26
134 S. Ct. at 1756 n.6 (quoting Fogerty, 510 U.S. at 534 n.19)

(internal quotation marks omitted).

        Because the district court did not have the benefit of the

Octane Fitness standard when considering whether Georgia-Pacific

was entitled to attorneys fees under § 1117(a), we vacate the

court’s       award    of     attorneys    fees       and    remand    the    question     for

further consideration in light of this standard.


                                                 V

        Finally,       the      district         court       awarded       Georgia-Pacific

prejudgment interest in the amount of $204,450, based on its

conclusion        that      this    was    an    “exceptional”         case.        Georgia-

Pacific, 2013 WL 3923984, at *3.

        von    Drehle       contends      that       the    district    court      erred   in

awarding prejudgment interest because (1) prejudgment interest

is not an available remedy under 15 U.S.C. § 1117(a), and (2) in

any event, this is not an “exceptional” case.

        Section       1117,    authorizing           monetary    relief      for   trademark

infringement, particularizes in considerable detail the types of

monetary relief available for trademark infringement and defines

the criteria for awarding each type.                            It thus authorizes, in

specified circumstances, awards of (1) the defendant’s profits;

(2) the       plaintiff’s          damages;      (3) court        costs;     (4) attorneys

fees;    (5) treble           profits     or    treble      damages;       (6) prejudgment


                                                27
interest;       and    (7) statutory             damages.             Because         Congress

legislated      with        great       precision       in     providing        when        each

particular      type    of        monetary       relief      is    available,          it    is

appropriate to conclude that if Congress provided for a certain

type of monetary relief only in a given specified circumstance,

that type of relief is not available in other circumstances.

For   example,    in    § 1117(a),           a   plaintiff        may   be    awarded       the

defendant’s      profits      based      only     on    proof     of    the   defendant’s

sales,    subject      to    a     specific       adjustment       when      necessary        to

compensate for an inadequate or an excessive award of profits.

Yet in § 1117(b), a plaintiff may be awarded three times the

defendant’s profits when the specific criteria of § 1117(b) are

satisfied.      Similarly, as relevant here, § 1117(b) authorizes an

award of prejudgment interest in cases involving the knowing and

intentional     use    of     a     counterfeit        mark,    but     § 1117    makes       no

express      provision            for     prejudgment          interest          in      other

circumstances.

      To be sure, as a general matter, prejudgment interest may

be    awarded    at    the        district       court’s     discretion       unless        the

applicable statute provides otherwise.                       See Quesinberry v. Life

Ins. Co. of N. Am., 987 F.2d 1017, 1030 (4th Cir. 1993) (en

banc).      But when, as here, a statute provides particularized

forms of monetary relief and explicitly authorizes prejudgment

interest in some circumstances but not others, we conclude that

                                             28
prejudgment interest is not intended to be awarded except as

provided    in    the     statute.        See       Moscow      Distillery      Cristall       v.

Pepsico,     Inc.,      Nos.   96-36217,            96-36249,       96-36250,         1998     WL

101696, at *3 (9th Cir. Mar. 9, 1998) (“Prejudgment interest is

available under the Lanham Act only for counterfeiting . . .”

(citing 15        U.S.C.    § 1117(b))).             As    relevant      here,    §    1117(a)

makes no specific provision for prejudgment interest in cases

involving     a     recovery       of     a    defendant’s         profits,       nor        does

prejudgment interest itself constitute a profit, as that term is

generally used.

     We     recognize       that     at       least       one    court    has    authorized

prejudgment interest under § 1117(a) in an “exceptional” case.

See Am. Honda Motor Co. v. Two Wheel Corp., 918 F.2d 1060, 1064

(2d Cir. 1990).           But we can find no support for its conclusion

in the text of the statute.                      Indeed, § 1117(a) employs the

“exceptional case” standard only for an award of attorneys fees,

not prejudgment interest.

     That said, we do not categorically foreclose an award of

prejudgment interest under § 1117(a) as an element of a damages

award in a trademark infringement case.                         To be sure, one’s loss

of the use of a particular sum of money over a period of time

causes damage, for which the law generally allows an award of

prejudgment interest.              See generally Monessen Sw. Ry. Co. v.

Morgan,    486     U.S.    330,    335        (1988)      (“Prejudgment         interest       is

                                               29
normally designed to make the plaintiff whole and is part of the

actual    damages      sought      to    be     recovered”);       Johnson    v.    Cont’l

Airlines      Corp.,     964       F.2d       1059,      1063     (10th      Cir.    1992)

(“[P]rejudgment interest is an integral element of compensatory

damages . . .”).           But, in this case, Georgia-Pacific did not

undertake     to   prove     its    own    damages,         claiming    instead     only a

disgorgement of von Drehle’s gross profits.

     For these reasons, we reverse the district court’s award of

prejudgment interest to Georgia-Pacific.


                                              VI

     In sum, we vacate the district court’s injunction and its

award    of   attorneys      fees       and     remand      for   further    proceedings

consistent with this opinion.                   We reverse its awards of treble

damages    (leaving     in     place      the      jury’s    award     of   profits)   and

prejudgment interest.

                                                                       IT IS SO ORDERED.




                                              30
SHEDD, Circuit Judge, concurring in part and dissenting in part:

      I   agree       with   the     majority        except     for   its    unnecessary

restriction of the nationwide injunction entered by the district

court in response to von Drehle Corporation’s unlawful actions. 1

In 2013, we affirmed a jury verdict in favor of Georgia-Pacific

Consumer    Products,        LP    on   its    contributory        infringement     claim

against     von   Drehle,         and    we    remanded    the      case    for   further

proceedings,          including         consideration         of      Georgia-Pacific’s

request for injunctive relief. Despite the fact that Georgia-

Pacific had by that time lost similar litigation in the Eighth

and Sixth Circuits, we rejected von Drehle’s belated attempt to

assert claim and issue preclusion as affirmative defenses, and

we   also    found      that      there       were   no   “special      circumstances”

(including comity) permitting the district court to raise the

preclusion defenses sua sponte. On remand, the district court

permanently enjoined von Drehle from interfering with Georgia-

Pacific’s trademark rights. The parties agree that the scope of

the injunction is nationwide.

      Viewing this appeal under our normal standard of review,

the district court did not abuse its broad equitable discretion

by   entering     a    nationwide       injunction.       The      majority’s     contrary


      1
      Despite my partial concurrence, I do not agree with the
majority’s assertion that “von Drehle reasonably believed that
its [infringing] conduct was lawful.” Majority Op., at 23.


                                              31
decision, limiting the scope of the injunction to the states

within    this     circuit,     is     based       on     misapplication          of    the

discretionary doctrine of comity; fails to accord proper respect

to our 2013 opinion; and runs counter to a fundamental purpose

of the Lanham Act, which is “to provide national protection for

trademarks used in interstate and foreign commerce.” Park ’N

Fly,   Inc.   v.   Dollar     Park    and       Fly,    Inc.,    469     U.S.    189,    193

(1985). The result of the majority’s opinion is that Georgia-

Pacific will be deprived of the complete and effective relief to

which it is entitled, and von Drehle, relying on that opinion,

will believe that it is permitted to continue interfering with

Georgia-Pacific’s       trademarks      in        45    states.     The     Lanham       Act

authorizes federal courts to issue injunctive relief “according

to the principles of equity and upon such terms as the court may

deem   reasonable,”     15    U.S.C.    § 1116(a),         but     there    is     nothing

equitable or reasonable about this result, and its peculiarity

is     self-evident,     see,        e.g.,        United        States     Jaycees        v.

Philadelphia       Jaycees,    639     F.2d       134,     142     (3rd     Cir.       1981)

(“Protection of infringers is not a purpose of the Lanham Act.

On the contrary, the Act’s objective is the protection of the

trademark and the public.”).

                                            I

       We have previously detailed the history of this and related

litigation.      See   Georgia-Pacific           Consumer       Prods.,     LP     v.   von

                                         32
Drehle Corp., 618 F.3d 441 (4th Cir. 2010) (“Georgia-Pacific

I”); Georgia-Pacific Consumer Prods., LP v. von Drehle Corp.,

710 F.3d 527 (4th Cir.) (“Georgia-Pacific II”), cert. denied,

134 S.Ct. 393 (2013). I will highlight certain aspects of this

litigation history to better explain my disagreement with the

majority’s decision.

       Since the early 2000s, Georgia–Pacific has manufactured and

marketed    throughout        the     country     a      touchless        paper    towel

dispenser under the “enMotion” product line. The dispenser is

designed for use in the “away-from-home” restroom market, and

Georgia-Pacific       owns     several    federally         registered      trademarks

associated with the enMotion line. The Georgia-Pacific dispenser

was different in size and dimensions from competing dispensers,

and    Georgia–Pacific       developed     high-quality           paper   towels    that

were    designed    specifically         for    use    in     the    Georgia-Pacific

dispensers.        Georgia-Pacific         leased           its      dispensers       to

distributors.       The      leases     between       Georgia–Pacific        and     its

distributors,      and     the   subleases      that     the      distributors      were

required to enter into with end-user customers such as hotels

and    restaurants,       stipulated     that     only      Georgia-Pacific        paper

towels were to be used in the dispensers.

       In July 2005, Georgia-Pacific filed this lawsuit against

von Drehle in the Eastern District of North Carolina asserting

several    claims     for     relief,     including       one      for    contributory

                                          33
trademark infringement in violation of 15 U.S.C. § 1114(1). 2 The

gist of the contributory infringement claim is that von Drehle,

a     North    Carolina      corporation      with   its    principal        place   of

business in Hickory, North Carolina, manufactured and marketed

nationally a line of paper towels (sometimes referred to as “the

810-B       paper   towels”)    that   were     designed   for   use    in    Georgia-

Pacific’s paper towel dispensers. “The von Drehle paper towels

were inferior in quality to the [Georgia-Pacific] paper towels,

but    von    Drehle   and     its   distributors    marketed     the    von    Drehle

paper towels as a cheaper alternative for use in the [Georgia-

Pacific]       dispensers,      a    practice     known    in    the    industry     as

‘stuffing.’” Georgia-Pacific II, 710 F.3d at 529.

        Partially due to an erroneous summary judgment ruling in

von Drehle’s favor, which we vacated in our 2010 Georgia-Pacific

I decision, over six years elapsed before Georgia-Pacific was

able to present its contributory trademark infringement claim to

a jury. During a January 2012 trial, the jury found in Georgia–

Pacific’s favor and awarded damages in the amount of $791,431,

which represent “all of the profits that von Drehle earned from

        2
      See Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844,
854 (1982) (“[I]f a manufacturer or distributor intentionally
induces another to infringe a trademark, or if it continues to
supply its product to one whom it knows or has reason to know is
engaging   in  trademark   infringement,   the  manufacturer  or
distributor is [contributorily] responsible for any harm done as
a result of the deceit.” (emphasis added)).



                                           34
the sale of its 810-B paper towels from 2005 to the date of

trial.” Majority Op., at 4. In the damages award, no distinction

has ever been made between the profits earned from von Drehle’s

sales within or outside the Fourth Circuit.

     Initially, Georgia-Pacific’s victory was short-lived. Two

months after trial, the North Carolina district court (acting on

von Drehle’s motion and sua sponte) set aside the jury verdict

and granted judgment as a matter of law to von Drehle based on

grounds    of   claim    and      issue     preclusion.      See    Georgia-Pacific

Consumer   Prods.,      LP   v.    von     Drehle   Corp.,    856    F.Supp.2d   750

(E.D.N.C. 2012). The court’s decision stemmed from the judgments

in two related cases filed by Georgia-Pacific against von Drehle

distributors.    In     both      cases,    Georgia-Pacific        asserted,   among

other things, a claim for contributory trademark infringement

based on these distributors’ marketing of the von Drehle paper

towels for use in Georgia-Pacific’s dispensers. 3




     3
      Von Drehle has criticized Georgia-Pacific’s “multi-front
litigation” strategy, but “[e]ffective enforcement of trademark
rights is left to the trademark owners and they should, in the
interest of preventing purchaser confusion, be encouraged to
enforce trademark rights.” Scotch Whisky Ass’n v. Majestic
Distilling Co., 958 F.2d 594, 599 (4th Cir. 1992) (internal
punctuation   and   citation   omitted).  Moreover,   under  the
majority’s view that the nationwide injunction is inappropriate,
Georgia-Pacific will be required to engage in a multi-front
strategy in the future to protect its trademark rights.



                                           35
       Georgia-Pacific filed the first of these cases in September

2008 - more than three years after it filed this action - in the

Western District of Arkansas against Myers Supply, Inc. In July

2009, while the original case against von Drehle was pending in

the North Carolina district court, the Arkansas district court

conducted       a    bench     trial      and    ruled       against     Georgia-Pacific.

Applying a different legal analysis than the one we set forth in

Georgia-Pacific I, see Georgia-Pacific II, 710 F.3d at 531 n.5,

the Arkansas district court determined that Myers Supply was

aware that its customers were “stuffing” von Drehle paper towels

into    Georgia-Pacific’s            dispensers,        but    the     stuffing    did    not

create a likelihood of confusion as to the origin of the paper

towels      and,       therefore,            did       not     constitute         trademark

infringement.         The     Eighth        Circuit     subsequently       affirmed       the

Arkansas district court decision. See Georgia-Pacific Consumer

Prods. LP v. Myers Supply, Inc., 621 F.3d 771 (8th Cir. 2010).

       Georgia-Pacific filed the second action in May 2009 against

Four-U-Packaging,            Inc.    in   the    Northern      District     of    Ohio.    In

November    2011,          shortly    before         trial    in   the   North    Carolina

district court, the Ohio district court granted summary judgment

against Georgia-Pacific, holding that the action was barred by

the    judgment       in    the     Myers    Supply      case.     See    Georgia-Pacific

Consumer Prods. LP v. Four-U-Packaging, Inc., 821 F.Supp.2d 948

(N.D.    Ohio       2011).    In     December        2012,    while    Georgia-Pacific’s

                                                36
appeal of the North Carolina district court’s decision to grant

judgment as a matter of law to von Drehle was pending in this

Court,      the     Sixth    Circuit       affirmed      the     Ohio       district      court

decision.      See    Georgia-Pacific            Consumer       Prods.      LP     v.   Four-U-

Packaging,         Inc.,    701    F.3d    1093      (6th   Cir.      2012).       The    Sixth

Circuit based its ruling in part on the fact that the North

Carolina district court had set aside the jury verdict against

von Drehle and dismissed the case. The Sixth Circuit explained

that    a    primary       goal    of     issue      preclusion       “is     to      ‘foster[]

reliance on judicial action by minimizing the possibility of

inconsistent         decisions,’”         and     it    concluded        that      “[b]ecause

judgment in Georgia–Pacific’s favor was set aside, application

of   issue    preclusion          in   this     case    poses    no    risk      of     creating

inconsistent rulings.” Id. at 1103 (quoting Montana v. United

States, 440 U.S. 147, 153–54 (1979)).

       At    the    time,    the       Sixth    Circuit’s       observation         about   the

status of the North Carolina district court case was accurate.

However, four months after the Sixth Circuit’s decision, we held

in Georgia-Pacific II that the North Carolina district court

erred in setting aside the jury verdict and awarding judgment in

favor of von Drehle. We first concluded that von Drehle waived

the preclusion defenses by not asserting them in a timely manner

and,   therefore,          the    district      court    abused       its    discretion      by

considering them. As we explained, von Drehle’s counsel had been

                                                37
immediately       notified       of     the        2009    Arkansas     district        court

decision in Myers Supply, but von Drehle waited approximately

480   days      before    attempting          to    amend     its    answer      to     assert

preclusion as an affirmative defense.

      More pertinent to the comity issue on which the majority

relies,    we    also    held    that       the    North    Carolina       district      court

erred     by    considering          the     preclusion       defenses       sua       sponte.

Notably, von Drehle specifically argued to us that the district

court   was     empowered       to    act    sua     sponte    “where,      as    here,    all

relevant data and legal records are before the court and the

demands of comity, continuity in the law, and essential justice

mandate judicial invocation of the principles of res judicata.”

Brief of Appellee, No. 12-1444, at 30 (4th Cir. Sept. 6, 2012)

(emphasis      added)    (internal          punctuation       and   citation       omitted).

Further, von Drehle argued that “[i]n raising preclusion on its

own motion as an independent ground for dismissal, the trial

court   was     protecting       not       just     itself,    but    also       the    entire

judiciary. . . .” Id. at 31.

      We recognized that sua sponte consideration of a preclusion

defense may be appropriate in “‘special circumstances,’” such as

when a court is on notice that it has previously decided the

issue     in    another     case       and        raises    the      defense      to     avoid

“‘unnecessary judicial waste.’” Georgia-Pacific II, 710 F.3d at

535   (quoting      Ariz.    v.       Calif.,       530    U.S.     392,    412    (2000)).

                                              38
However,     despite        von     Drehle’s     invocation      of    the    doctrine      of

comity and the need to protect “the entire judiciary,” we found

that    “von      Drehle          [had]       not     identified        [any]       ‘special

circumstance’ justifying the district court’s unusual action.”

Georgia-Pacific II, 710 F.3d at 535. We explained that “this

case was particularly ill-suited for sua sponte consideration of

preclusion defenses that were known long before trial, given

that   the      issue       of    trademark      infringement         already      had    been

decided    by    the    jury.       Thus,      the    district      court’s     sua     sponte

consideration          of     the      preclusion       defenses       actually          wasted

judicial resources, rather than sparing them.” Id.

       Finally, we also observed that by relying on Myers Supply

as   grounds     for    setting        aside    the    jury   verdict,       the    district

court violated the mandate rule because it failed to “implement

both the letter and spirit” of the mandate of Georgia-Pacific I.

Georgia-Pacific         II,      710   F.3d    at     536   n.13.     For    all   of     these

reasons, we remanded this case “with the specific instruction

that the district court reinstate the jury verdict in favor of

Georgia–Pacific         and       consider      Georgia–Pacific’s            requests      for

injunctive and other appropriate relief.” Id. at 536.

       Von Drehle petitioned for panel rehearing or rehearing en

banc arguing, among other things, that “[a]voiding conflict with

sister circuits is especially important,” and the panel’s waiver

analysis “violates principles of comity, fairness, and justice.”

                                               39
Pet. for Reh’g or Reh’g En Banc, No. 12-1444, at 10 (4th Cir.

Mar.   28,    2013)        (emphasis    added).     Further,         von   Drehle      again

invoked      “the    demands       of   comity”    in    seeking      to   justify       the

district     court’s        sua    sponte   consideration        of    the      preclusion

defenses, and it noted that “[u]nder the panel’s holding, there

will now be years of litigation as [Georgia-Pacific] invokes the

result here and seeks to apply it to new and pending cases,

seeking to undo the decisions in Myers, Four-U, and the two

Courts of Appeals that have affirmed those decisions.” Id. at

15. Von Drehle concluded that it “is difficult to imagine a

result less conducive to judicial efficiency or less respectful

of   the   decisions         of    coordinate     courts      that    have      previously

addressed the identical dispute.” Id. The rehearing petition was

denied.    Von      Drehle    subsequently        asserted     comity      as    a   ground

warranting review in its unsuccessful petition for certiorari

review of the Georgia-Pacific II decision. See Pet. for Writ of

Cert., No. 13-41, at 22-25 (U.S. July 8, 2013).

       On remand to the North Carolina district court, the parties

briefed      and    argued        whether   Georgia-Pacific           is   entitled       to

injunctive relief and, if so, what the scope of that relief

should be. Regarding the scope, von Drehle argued (among other

things)    that      any    injunction      “should      be   narrowly       tailored     to

protect      the      legitimate        rights      of     von       Drehle      and     its

distributors” and “must account for the rulings of the Eighth

                                            40
and    Sixth    Circuits     and   for    [Georgia-Pacific’s]     position         that

each       distributor     and   each    state   are    different.”     von   Drehle

Corp.’s Response in Opp. to Georgia-Pacific’s Renewed Mot. for

Perm. Inj., No. 5:05cv478-BO(1), at 16 (E.D.N.C. May 24, 2013).

However, despite specifically arguing in the Georgia-Pacific II

appeal and petition for certiorari review that the doctrine of

comity factors in this case, von Drehle does not appear to have

specifically invoked comity as a basis for denying or limiting

injunctive relief. 4

       Following full briefing and a hearing, the North Carolina

district court granted Georgia-Pacific’s motion for injunctive

relief. Applying the proper legal test, which it gleaned from

eBay, Inc. v. MercExchange, LLC, 547 U.S. 388 (2006), the court

found: (1) Georgia-Pacific “suffered irreparable injury to its

trademark      and   the    reputation     of    its   enMotion   brand”      by   von

Drehle’s infringing activities, which prevented Georgia-Pacific

“from controlling the quality of paper towels dispensed from its

enMotion        dispensers       and     further       confused   and      deceived

customers;” (2) the jury award is inadequate as it would not

       4
      In addition to not arguing comity per se before the North
Carolina district court, von Drehle did not cite to any
authority holding that comity warranted denial or limitation of
injunctive relief. This fact stands in contrast to von Drehle’s
argument to us. See Appellant’s Opening Brief, at 50-56 (citing
Va. Soc’y for Human Life, Inc. v. FEC, 263 F.3d 379 (4th Cir.
2001), and arguing that the injunction “violates this Court’s
precedent and basic principles of comity”).


                                           41
prevent von Drehle “from continu[ing] to infringe in the future,

policing    [von       Drehle’s]      sales       of       its    paper   towels       would    be

onerous,    and    [von          Drehle]    has    asserted          throughout        that    its

actions    did    not       constitute       trademark            infringement;”        (3)    the

balance    of     hardship         favors    Georgia-Pacific              as    von    Drehle’s

“activities       have       been     found        to       have     infringed        [Georgia-

Pacific’s] trademarks and [von Drehle] has no equitable interest

in    perpetrating      trademark          infringement;”           and   (4)    “the     public

interest is best served by a permanent injunction that would

prevent    further          trademark      infringement.”             J.A.     854    (internal

punctuation and citations omitted). Based on these findings, the

court     enjoined       von       Drehle     “from          interfering        directly        or

indirectly”        with          Georgia-Pacific’s                trademark      rights        and

specified that “any deliberate or purposeful placement” of von

Drehle’s paper towels in Georgia-Pacific’s enMotion dispensers

“shall    constitute         a    violation       of       this    permanent     injunction.”

J.A. 855.

                                              II

       “A federal court has broad power to restrain acts which are

of the same type or class as unlawful acts which the court has

found to have been committed or whose commission in the future

unless enjoined, may fairly be anticipated from the defendant’s

conduct in the past.” NLRB v. Express Pub. Co., 312 U.S. 426,

435   (1941).     As    a    general       rule,       a    federal    court’s        injunctive

                                              42
order “operate[s] continuously and perpetually upon the [party]

in   relation   to        the    prohibited     conduct,”     and       it   extends

“throughout the United States.” Leman v. Krentler-Arnold Hinge

Last Co., 284 U.S. 448, 451 (1932).

     The    Lanham    Act       reflects    this   broad    power,      authorizing

federal    courts    to     issue    injunctive     relief    to    a    prevailing

plaintiff “according to the principles of equity and upon such

terms as the court may deem reasonable.” 15 U.S.C. § 1116(a).

When trademark infringement has been proven, “an injunction is

the preferred remedy to insure that future violations will not

occur,” Lone Star Steakhouse & Saloon, Inc. v. Alpha of Va.,

Inc., 43 F.3d 922, 939 (4th Cir. 1995) (internal punctuation and

citation omitted), and it should be crafted to provide complete

relief to the plaintiff, PBM Prods, LLC v. Mead Johnson & Co.,

639 F.3d 111, 128 (4th Cir. 2011). The “scope of injunctive

relief is dictated by the extent of the violation established,”

Califano v. Yamasaki, 442 U.S. 682, 702 (1979), and the Lanham

Act authorizes a district court to enter a nationwide injunction

prohibiting trademark infringement, see Majority Op., at 11.

     A trademark plaintiff who is entitled to injunctive relief

“is entitled to effective relief; and any doubt in respect of

the extent thereof must be resolved in its favor as the innocent

producer and against the [defendant], which has shown by its

conduct that it is not to be trusted.” William R. Warner & Co.

                                           43
v. Eli Lilly & Co., 265 U.S. 526, 532 (1924). “The decision to

grant or deny permanent injunctive relief is an act of equitable

discretion by the district court, reviewable on appeal for abuse

of    discretion.”       eBay,   Inc.,     547    U.S.    at   391.      Under        this

standard, we are not at liberty to disturb an injunction simply

because    we    would   have    decided    the    matter    differently         in    the

first instance. Centro Tepeyac v. Montgomery County, 722 F.3d

184, 188 (4th Cir. 2013) (en banc). Instead, we may find an

abuse    of   discretion     only    if    the    court   applied     an   incorrect

injunction standard, rested its decision on a clearly erroneous

finding    of    a   material    fact,     or    misapprehended     the        law    with

respect to underlying issues in litigation. Id.

      Viewing this appeal properly and under this standard, the

district court did not abuse its discretion. The court applied

the   correct     injunction     standard,       did   not   rely   on     a    clearly

erroneous finding of material fact, and did not misapprehend the

law with respect to the underlying issues of this case. Notably,

the majority does not challenge the court’s determination that

injunctive relief is necessary to provide complete relief to

Georgia-Pacific for von Drehle’s infringing activities; does not

quarrel with the language of the injunction order prohibiting

von     Drehle   “from     interfering         directly   or   indirectly”            with

Georgia-Pacific’s        trademark    rights       and    specifying       that       “any

deliberate or purposeful placement” of von Drehle’s paper towels

                                          44
in    Georgia-Pacific’s      enMotion      dispensers       “shall      constitute   a

violation of this permanent injunction;” and does not assert

that the evidence presented below fails to support the court’s

determination that a nationwide injunction is warranted.

       Instead, relying on the doctrine of comity, the majority

holds that the nationwide scope of the injunction is overbroad

under the circumstances of this case. In the majority’s view,

the    injunction      should     not    extend    to     the    Eighth    and   Sixth

Circuits, which (respectively) decided Myers Supply and Four-U-

Packaging, because that “would amount to a direct and unseemly

affront to those courts” and would “create a direct and perhaps

irreconcilable conflict as to Georgia-Pacific’s trademark rights

[in    those    circuits],       leaving   litigants       and    others    in   those

States confused.” Majority Op., at 13. The majority extends its

limitation on the injunction to the remainder of the federal

circuits (other than the Fourth Circuit) because courts in those

circuits    –   when    presented       with    litigation      involving    Georgia-

Pacific’s      trademarks    –    “would    be    faced    with   the     question   of

whether to follow the Fourth Circuit on the one hand or the

Eighth and Sixth Circuits on the other.” Id. at 13-14.

       The doctrine of comity is “not a rule of law, but one of

practice, convenience, and expediency.” Mast, Foos, & Co. v.

Stover Mfg. Co., 177 U.S. 485, 488 (1900). “It is something more

than mere courtesy, which implies only deference to the opinion

                                           45
of     others,      since        it   has    a     substantial         value    in      securing

uniformity of decision, and discouraging repeated litigation of

the same question. But its obligation is not imperative.” Id.

(emphasis       added).      Although        “comity         governs    relations       between

courts of the same sovereign,” Ulmet v. United States, 888 F.2d

1028, 1031 (4th Cir. 1989), the rule is rarely applied in this

context, and only when it is essential to avoid “an unnecessary

burden     on       the     federal         judiciary”         and     to      prevent     “the

embarrassment of conflicting judgments.” In re Naranjo, 768 F.3d

332,    348   (4th        Cir.    2014)     (internal         punctuation      and      citation

omitted).

       In this context, comity is closely akin to the doctrines of

issue and claim preclusion, see Allen v. McCurry, 449 U.S. 90,

95-96    (1980)      (explaining            that      “res    judicata      and      collateral

estoppel      not    only        reduce      unnecessary        litigation        and    foster

reliance on adjudication, but also promote the comity between

state and federal courts that has been recognized as a bulwark

of the federal system”). Like those doctrines, “[c]omity works

most efficiently where previously filed litigation is brought

promptly to the attention of the district court, and the court

defers,” Church of Scientology of Cal. v. U.S. Dept. of Army,

611 F.2d 738, 750 (9th Cir. 1980).




                                                 46
                                       III

     The majority’s limitation of the scope of the injunction to

the five states within this circuit deprives Georgia-Pacific of

the complete and effective relief to which it is entitled. I

have concerns generally about utilizing the doctrine of comity

in this manner. See United States v. Gillock, 445 U.S. 360, 373

(1980) (noting that “where important federal interests are at

stake, . . . comity yields”); Nelson v. Berry, 59 F.2d 351, 353

(Ct. Cust. and Pat. App. 1932) (noting that when applying the

doctrine   of   comity,   “courts     are    not   at   liberty     to    disregard

rights which the law assures to litigants”). However, I will

limit my discussion to two specific reasons why I believe the

majority has erred.

     First, in Georgia-Pacific II, we rejected application of

the comity doctrine in this litigation. As noted, by the time we

decided Georgia-Pacific II, both the Eighth and Sixth Circuits

had resolved the Myers Supply and Four-U-Packaging cases, and we

were presented squarely with the question of whether “special

circumstances”    existed      to    warrant     the    district       court’s    sua

sponte consideration of von Drehle’s preclusion defenses based

on those cases. Despite von Drehle’s invocation of the comity

doctrine, we held that no “special circumstances” justified the

district   court’s     action.   In   other    words,     in    what    some     could

consider   to   have    been   the    creation     of   an     “embarrassment      of

                                       47
conflicting judgments,” see In re Naranjo, 768 F.3d at 348, and

“a   direct     and   unseemly         affront”         to    the    Sixth    and     Eighth

Circuits,     Majority     Op.,    at    13,       we     rejected    “the    demands       of

comity,” Brief of Appellee, No. 12-1444, at 30 (4th Cir. Sept.

6, 2012), allowed the jury verdict in favor of Georgia-Pacific

to   stand,    and    remanded     the    case       for      the   district       court   to

consider      Georgia-Pacific’s         request         for    injunctive      and     other

relief.

      Of course, the injunction per se was not then before us,

but the same comity concerns now raised by von Drehle and the

majority      were.   Given      that    we    had      previously      admonished         the

district court of its obligation to “implement both the letter

and spirit” of our mandate, Georgia-Pacific II, 710 F.3d at 536

n.13, it is hardly surprising that the court determined that the

comity doctrine had no bearing on the scope of injunctive relief

to which Georgia-Pacific is entitled. Indeed, our rejection of

the comity doctrine arguably had become – and remains - the law

of the case. See Winston v. Pearson, 683 F.3d 489, 498 (4th Cir.

2012)     (explaining      law    of     the       case      doctrine).      Under    these

circumstances, where von Drehle barely argued (if at all) comity

in   opposition       to   the     injunction           request      and     the     court’s

injunction order is entirely consistent with our mandate, the

court did not abuse its discretion.



                                              48
       Second, and in any event, the comity doctrine applied by

the majority simply has no bearing in this case. Georgia-Pacific

proved      at    trial    that   von   Drehle    infringed     on    its   trademark

rights       on   a   national    scale,     we    affirmed    that    judgment      in

Georgia-Pacific II, and the nationwide injunction prohibits von

Drehle – and no one else – from further infringement. Like all

injunction        cases,    the   district       court    retains    the    power   to

enforce       its     injunction        against    von      Drehle     by    contempt

proceedings, but it has no authority under the injunction to

command any other party (or any court) with respect to Georgia-

Pacific’s trademarks. 5

       Nothing about this rather ordinary process undermines the

law in any other circuit, where any party other than von Drehle

is currently permitted (at their own risk) to “stuff” Georgia-

Pacific’s dispensers. If Georgia-Pacific chooses to litigate its

trademark rights against other parties in other circuits, the

nationwide injunction will not preclude courts in those circuits

from       deciding   all    pertinent     issues,       including    trademark     and




       5
      Under the majority’s rationale, I cannot help but wonder
when my colleagues would ever uphold a nationwide injunction.
Anytime such an injunction is entered, the argument could be
made that the injunction interferes with other courts’ ability
to decide the matter at issue.



                                           49
preclusion issues. 6 Of course, those courts will be presented

with the so-called “embarrassment” of the conflicting circuit

court     judgments,    but    that    circumstance     arose   when    we   filed

Georgia-Pacific II, not when the district court enjoined von

Drehle, and it remains in existence regardless of whether the

injunction is limited or not. 7

      The    facts     and    circumstances     of   this   case    differ   from

Virginia Society for Human Life, a case in which we vacated a

nationwide injunction based on the comity doctrine. There, an

issue     advocacy     group    sued    the   Federal    Election      Commission

(“FEC”) seeking a declaration that a particular regulation was

unconstitutional. The district court held that the regulation

was     unconstitutional        and    issued    a    nationwide       injunction

preventing the FEC from enforcing the regulation. We found the

injunction to be overbroad for two reasons. First, we concluded

      6
      In that event, under the generally prevailing “last in
time” rule, the later judgment – i.e., Georgia-Pacific II -
would likely be accorded preclusive effect. See, e.g., Fresenius
USA, Inc. v. Baxter Int’l, Inc., 721 F.3d 1330, 1347 n.14 (Fed.
Cir. 2013) (noting that where final judgments conflict, “the
settled rule is that the later judgment, not the earlier, has
preclusive force going forward”).
      7
      Contrary to the majority’s concern, the “conflict” between
the various judgments is not necessarily unseemly. As the
Supreme Court has explained: “Although the application of a
federal statute such as the Lanham Act by judges and juries in
courts throughout the country may give rise to some variation in
outcome, this is the means Congress chose to enforce a national
policy to ensure fair competition.” POM Wonderful, LLC v. Coca-
Cola Co., 134 S.Ct. 2228, 2239 (2014).


                                         50
that the injunction was “broader than necessary to afford full

relief”       to     the    advocacy      group       because      a    limited       injunction

adequately         protected       the    group.      263     F.3d     at   393.     Second,    we

concluded          that    the    injunction         had    “the     effect    of     precluding

other    circuits          from   ruling       on     the    constitutionality”          of    the

regulation          because      it   prohibited        the    FEC     from    attempting       to

enforce       it.    Id.    Unlike       Virginia      Society       for    Human     Life,    the

nationwide injunction before us is necessary to provide complete

relief        to    Georgia-Pacific,            and     as    I      have     explained,       the

injunction does not preclude other courts from ruling on the

propriety of the “stuffing” practice of parties other than von

Drehle in relation to Georgia-Pacific’s trademarks.

                                                IV

        One final observation is in order. Even though I believe

that     it    is     unfair       to    deny       Georgia-Pacific           the    nationwide

injunctive relief to which it is entitled, I question whether

the limitation of injunctive relief to the states within this

circuit ultimately will protect von Drehle from liability in

future litigation.

        As noted, von Drehle is a North Carolina corporation that

operates       out    of    Hickory,         North    Carolina.        Georgia-Pacific         has

proven        in    this      case      that    von        Drehle’s     manufacturing          and

marketing          activities,        that     emanated       from     North    Carolina       but

caused         infringement             nationally,           constitute            contributory

                                                51
trademark infringement. Presumably, if von Drehle is freed from

the nationwide constraints of the injunction, it will resume its

North    Carolina-based        activities          of    manufacturing           paper      towels

and    marketing     them      to    distributors             with    knowledge        that   the

towels     will     be    stuffed          into     Georgia-Pacific’s                dispensers.

Although von Drehle may limit its distribution of paper towels

to entities outside of the Fourth Circuit in an effort to comply

with a limited injunction, it will nonetheless be engaging in

the very conduct (i.e., manufacturing and marketing) that gave

rise to its liability in this case, and it will be doing so

within the Fourth Circuit, where such conduct is prohibited.

       Therefore,    unless         von    Drehle       relocates          its   manufacturing

and    marketing     activities           outside       of     this       circuit,     it    seems

reasonable     to   believe         that    any     future       distribution          of    paper

towels for the purpose of stuffing Georgia-Pacific’s dispensers

anywhere would violate even the limited injunction called for by

the    majority,    and     Georgia-Pacific             would        be    entitled     to    seek

contempt relief. Moreover, even assuming that such conduct would

not violate a limited injunction, there seems to be no reason

that Georgia-Pacific could not file another lawsuit similar to

this     one   seeking      damages,         and        the    lack        of    a    nationwide

injunction     would     not    preclude          Georgia-Pacific            from    recovering

all of the profits von Drehle earned anywhere in the nation as a

result of its infringing activities.

                                              52
                                             V

      Georgia-Pacific         is    entitled       to    complete       and    effective

injunctive     relief    to    prevent       von    Drehle       from     continuing    to

infringe on its trademarks. The district court considered the

proper factors and concluded that a nationwide injunction is

necessary to provide this relief. Because the district court did

not   abuse    its   discretion         in    reaching       this    conclusion,       and

because   we   should     accord        proper     respect    to    our     decision   in

Georgia-Pacific         II,        we    should         affirm      the       injunction.

Accordingly, I concur in part and dissent in part.




                                             53
