United States Court of Appeals For the First Circuit

Nos. 21-1645, 21-1691

D'PERGO CUSTOM GUITARS, INC.,

Plaintiff, Appellant, Cross-Appellee,

v.

SWEETWATER SOUND, INC.,

Defendant, Appellee, Cross-Appellant.

APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

[Hon. Landya B. McCafferty, U.S. District Judge]

Before

Kayatta and Howard, Circuit Judges, and Walker, District Judge.*

Robert E. Allen, with whom Lawrence M. Hadley, Thomas P. Burke Jr., and Glaser Weil Fink Howard Avchen & Shapiro, LLP were on brief, for appellant/cross-appellee. Edward J. Sackman, with whom Richard C. Gagliuso, Lauren M. Pritchard, and Bernstein, Shur, Sawyer & Nelson, P.A. were on brief, for appellee/cross-appellant.

July 30, 2024

* Of the District of Maine, sitting by designation. HOWARD, Circuit Judge. This appeal stems from a lawsuit

brought by D'Pergo Custom Guitars, Inc., against Sweetwater Sound,

Inc., over a photo that Sweetwater used on its website. D'Pergo

brought claims alleging, in relevant part, copyright infringement

under the Copyright Act, trademark infringement under the Lanham

Act, and a violation of the New Hampshire Consumer Protection Act

("CPA"). On cross-motions for summary judgment, the district court

granted summary judgment to Sweetwater on the trademark claim and

to D'Pergo on the copyright claim. The district court then held

a simultaneous bench and jury trial, where the court found in favor

of Sweetwater on the CPA claim and a jury determined that, on the

copyright claim, D'Pergo was entitled to approximately $75,000 in

compensatory damages. The jury based its damages award on findings

that D'Pergo could recover the actual damages it suffered but could

not recover the portion of Sweetwater's profits that D'Pergo

claimed were earned by virtue of the infringement.

The parties now bring a medley of challenges to the

proceedings below. D'Pergo appeals the district court's grant of

summary judgment to Sweetwater on the trademark claim and the

district court's bench trial ruling in favor of Sweetwater on the

CPA claim. Further, D'Pergo contends that erroneous jury

instructions warrant the reversal of the jury's finding that

D'Pergo was not entitled to recover any of Sweetwater's profits.

According to D'Pergo, the district court's instructions

- 2 - (1) misstated D'Pergo's burden of proof and (2) should have

included a "commingling" instruction. Sweetwater's cross-appeal

also takes issue with the copyright damages, which, in Sweetwater's

view, rest on inadmissible expert testimony.1

We affirm in part, reverse in part, and remand in part.

Specifically, we affirm the district court's ruling in favor of

Sweetwater on D'Pergo's CPA claim. But we reverse its grant of

summary judgment to Sweetwater on D'Pergo's trademark claim.

Furthermore, we remand for a new jury trial on the issue of

infringing profits for the copyright claim; although the district

court correctly denied D'Pergo's requested "commingling"

instruction and did not err in admitting the testimony of D'Pergo's

expert witness, we think its instruction did not accurately state

D'Pergo's burden of proof. Our reasoning follows.

I. BACKGROUND

Because the district court's orders in this case set

forth a clear and comprehensive background of the relevant facts,

we present only a summary here. See D'Pergo Custom Guitars, Inc.

v. Sweetwater Sound, Inc.,

, 230 (D.N.H. 2020)

1 In its opening brief, Sweetwater also challenged the district court's denial of Sweetwater's motion in limine seeking to limit D'Pergo's recoverable profits to the three-year period preceding the filing of this lawsuit. But after the Supreme Court's decision in Warner Chappell Music, Inc. v. Nealy,

,

(2024), Sweetwater notified the court that it "withdraws the portion of its cross-appeal seeking to limit the infringing profits period in the event of a new trial."

- 3 - ("D'Pergo I"); D'Pergo Custom Guitars, Inc. v. Sweetwater Sound,

Inc.,

, 117-20 (D.N.H. 2021) ("D'Pergo II").

D'Pergo makes and sells customized electric guitars. In

2003, Stephan Dapergolas, D'Pergo's owner, posted a photograph,

which he took, of D'Pergo's guitar necks and headstocks to

D'Pergo's website.2 The website displayed Dapergolas's photo from

2003 until 2007, when D'Pergo uploaded a professional photo in its

place.

Sweetwater sells guitars on its website. Although

Sweetwater does not sell D'Pergo guitars, Dapergolas's photo of

the D'Pergo guitar necks and headstocks was uploaded to

Sweetwater's website in 2004. The photograph appeared on a page

of Sweetwater's website titled "Electric Guitar Buying Guide" in

a section titled "Guitar necks explained." At the end of the

guide, a heading titled "Shop for Electric Guitars" links back to

Sweetwater's main website, and a section titled "Check Out These

Great Products" advertises certain guitars for sale.

In January 2015, Dapergolas discovered that Sweetwater's

guide used his photo. He then applied for and received a copyright

registration for the photo. In January 2016, he told Sweetwater

that the photo on its website was his, and Sweetwater immediately

2A guitar's "headstock" is located at the top of the guitar's neck and connects the guitar's tuning keys to its strings.

- 4 - removed it from its website.3 D'Pergo also trademarked its

headstock design depicted in the photo later that year.

In December 2017, D'Pergo brought this lawsuit. Ruling

on the parties' cross-motions for summary judgment, the district

court granted summary judgment to Sweetwater on the trademark claim

and to D'Pergo on the copyright claim. D'Pergo I, 433 F. Supp. 3d

at 235, 237. The court then held a jury trial on the copyright

damages and, simultaneously, a bench trial on D'Pergo's CPA claim.

The jury awarded $74,360 in actual damages to D'Pergo but did not

award any infringing profits, and the district court found in favor

of Sweetwater on the CPA claim. D'Pergo II, 561 F. Supp. 3d at

116-17 & n.1.

These appeals followed.

II. D'PERGO'S APPEAL

A. CPA Claim

D'Pergo first appeals the district court's judgment in

favor of Sweetwater on D'Pergo's CPA claim following the conclusion

of a bench trial. "Where a district court conducts a bench trial

and serves as the factfinder, we review its factual findings for

clear error." Sawyer Bros., Inc. v. Island Transporter, LLC,

(1st Cir. 2018). We review its legal determinations

3 Upon investigation, Sweetwater discovered that a former employee had put the photo into the guide, but it was unable to determine the identity of that employee or why the employee had used the photo in the guide.

- 5 - de novo. N. Ins. Co. of N.Y. v. Point Judith Marina, LLC,

(1st Cir. 2009).

The CPA provides that it is "unlawful" to use "any unfair

method of competition or any unfair or deceptive act or practice

in the conduct of any trade or commerce within" New Hampshire.

-A:2. The statute sets forth a

non-exclusive list of such methods, acts, and practices. See

In addition, a plaintiff making a CPA claim must show that the

defendant's conduct involved "a degree of knowledge or intent."

Kelton v. Hollis Ranch, LLC,

(N.H. 2007).

D'Pergo alleged that Sweetwater violated section

358-A:2, V. See D'Pergo II, 561 F. Supp. 3d at 121. That

subsection provides that an unfair method of competition or

deceptive act or practice can include "[r]epresenting that goods

or services have sponsorship, [or] approval . . . that they do not

have" or that "a person has a sponsorship, approval . . . or

connection that such person does not have." § 358-A:2, V; see

also § 358-A:1, I (defining "[p]erson" to include "corporations").

Here, D'Pergo alleged that Sweetwater's use of the photo

misrepresented that Sweetwater was affiliated with D'Pergo.

D'Pergo II, 561 F. Supp. 3d at 121.

The district court found that D'Pergo had not proved its

CPA claim because (1) reasonable consumers would not understand

Sweetwater's use of the photo to indicate an affiliation with

- 6 - D'Pergo; and (2) even if they would, Sweetwater had not acted with

the intent required by the CPA. Id. at 122. Because we conclude

that the second finding was supported by the evidence and not based

on any mistake of law, we do not examine the district court's first

finding.

A plaintiff can meet the section 358-A:2, V intent

requirement by showing that the defendant made the representation

at issue with "actual knowledge of its falsity or reckless

disregard for its truth, with the intent to induce [consumers]" to

enter into a transaction. Brace v. Rite Aid Corp., No. 10-cv-290,

, at *3 (D.N.H. Feb. 14, 2011). By contrast,

defendants who made a "good faith mistake" are not liable under

the CPA. Kelton,

.

The district court found that Sweetwater did not intend

to mislead consumers with the photograph; rather, its use of the

photo was "largely inadvertent." D'Pergo II, 561 F. Supp. 3d at

122. The employee who posted the photo, the court determined,

merely "wanted a photograph of guitar necks for the Guide." Id.

at 123. And no one else at Sweetwater had realized the photo was

D'Pergo's until D'Pergo contacted Sweetwater in January 2016, at

which point Sweetwater immediately removed the photo. Id. at

122-23.

D'Pergo asserts that the district court "overstated"

the CPA's intent requirement when it held that D'Pergo failed to

- 7 - prove that Sweetwater acted with the intent required for a CPA

violation. But the court made no such mistake. It concluded that

Sweetwater's use of the photo was "largely inadvertent," id. at

122, and thus D'Pergo did not show that Sweetwater acted with

"reckless disregard" for the truth, id. (citation omitted). The

only countervailing evidence to which D'Pergo points is the

testimony from its photography expert, Jeffrey Sedlik, that

Sweetwater "made numerous changes to the [photo] and failed to

provide proper attribution, which in [Sedlik's] professional

opinion confirmed that Sweetwater['s] copying . . . was

intentional." Sedlik's testimony, however, concerned the unknown

employee's actions and does not contradict the district court's

conclusions. The court reasonably concluded that the employee

simply wanted a photo of guitar necks and that, other than a lone

employee, no one at Sweetwater was aware of the photograph's true

origin until D'Pergo alerted Sweetwater. Id. at 122-23. We thus

affirm the district court's judgment in favor of Sweetwater on

D'Pergo's CPA claim.

B. Trademark Claim

D'Pergo next challenges the district court's grant of

summary judgment to Sweetwater on D'Pergo's trademark claim. We

review a district court's grant of summary judgment de novo.

Murray v. Kendred Nursing Ctrs. W. LLC,

(1st Cir.

2015).

- 8 - In granting Sweetwater's summary-judgment motion, the

district court reasoned that, because the D’Pergo headstocks were

protectable as trade dress, they were not protectable as a

trademark and that D'Pergo had waived any trade-dress claim. See

D'Pergo I, 433 F. Supp. 3d at 234-35. On appeal, D'Pergo does not

dispute that it waived any trade-dress claim but contends that the

court erred in holding that D'Pergo's registered headstock shape

was only protectable as trade dress -- in other words, that the

court erred in holding that a viable claim of trade dress precludes

a claim of trademark.

Notably, Sweetwater does not defend the district court's

rationale on appeal.4 And, indeed, there is at least some overlap

between trade-dress and trademark protections. Generally

speaking, "trade dress" refers to the packaging of a product or to

any combination of elements by which "a product or service is

presented to the buyer." J. Thomas McCarthy, McCarthy on

Trademarks and Unfair Competition § 8.1 (5th ed. 2024). But an

item can be protectable as a trademark even if it is also

protectable as trade dress. See In re Forney Indus., Inc.,

, 945 (Fed. Cir. 2020) ("Trade dress is registrable as a

trademark if it serves the same source-identifying function as a

That is not to say, however, that Sweetwater waived this 4

argument. Because Sweetwater is the appellee, it need not raise all possible grounds for affirmance in its briefs. See Ms. S. v. Reg'l Sch. Unit 72,

(1st Cir. 2019).

- 9 - trademark."); McCarthy, supra, § 8.7, n.1. Thus, the district

court was wrong to rely on that ground to reject D'Pergo's

trademark claim.

Nevertheless, Sweetwater contends that the district

court was correct to reject D'Pergo's trademark claim because

D'Pergo itself "invited" the error. See Orenstein v. United

States,

(1st Cir. 1951) ("An appellant will not

ordinarily be permitted to complain of an error which he himself

invited . . . ."). But D'Pergo did not invite any such error.

Sweetwater points to only one discovery response, in which D'Pergo

resisted Sweetwater's requests for evidence of the headstock's

"secondary meaning" by stating that the trademark claims were "not

trade dress claims." That statement is not an assertion that

whatever is protectable as trade dress is not protectable as

trademark. For example, a plaintiff might explain that it is

asserting a due process claim under the U.S. Constitution and not

under the relevant state constitution. By doing so, the plaintiff

does not invite the defendant to argue that, because the plaintiff

makes out a viable state due process claim, the federal due process

claim fails.

Sweetwater also advances an alternative ground for

affirmance. Even if the district court's analysis was faulty,

Sweetwater argues, a reasonable jury still could not have ruled

- 10 - for D'Pergo on the trademark claim.5 To prevail on a trademark

claim, a plaintiff must show that (1) "its mark is entitled to

trademark protection"; and (2) "the allegedly infringing use is

likely to cause consumer confusion." Bos. Duck Tours, LP v. Super

Duck Tours, LLC,

(1st Cir. 2008). And, according

to Sweetwater, D'Pergo did not establish a genuine issue of fact

on either element. We disagree.

Because it presents a more straightforward question, we

begin with the second element. "Likely confusion" is "more than

the theoretical possibility of confusion."

(quoting Int'l

Ass'n of Machinists & Aerospace Workers v. Winship Green Nursing

Ctr.,

(1st Cir. 1996)). To determine if that

standard is met, courts examine "the similarity of the marks; the

similarity of the goods; the relationship between the parties'

channels of trade; the relationship between the parties'

advertising; the classes of prospective purchasers; evidence of

actual confusion; the defendant['s] intent in adopting its mark;

and the strength of the plaintiff's mark." Pignons S.A. de

5 Although Sweetwater purports to root this argument in the harmless-error doctrine, we think it is most persuasively understood as a request to exercise our discretion to "affirm . . . on any independently sufficient ground supported by the record." Ward v. Schaefer,

, 544 n.3 (1st Cir. 2024) (quoting United States v. Nivica,

(1st Cir. 1996)). But the framing of Sweetwater's argument is ultimately immaterial because, for the following reasons, a reasonable jury could find for D'Pergo on the trademark claim.

- 11 - Mecanique de Precision v. Polaroid Corp.,

(1st

Cir. 1981). Of those factors, "evidence of actual confusion is

'often deemed the best evidence of possible future confusion.'"

Borinquen Biscuit Corp. v. M.V. Trading Corp.,

(1st Cir. 2006) (quoting Attrezzi, LLC v. Maytag Corp.,

, 40 (1st Cir. 2006)).

Here, there was testimony at trial that at least three

people -- Kamran Khan, Jesse Lee Guanyu, and an audience member at

Julien Kasper's concert -- were confused when they saw D'Pergo's

photograph on Sweetwater's website. D'Pergo II, 561 F. Supp. 3d

at 118-19 & n.4. The district court discredited such

testimony -- either explicitly or implicitly -- for valid reasons

when ruling on D'Pergo's CPA claim. See id. at 118-19, 121. But

a reasonable jury may not have done the same. Thus, D'Pergo's

evidence creates a genuine issue on the first element.

That leaves us with the more difficult question of

whether a reasonable jury could find that D'Pergo's mark was

entitled to trademark protection. "A mark is entitled to trademark

protection if it is capable of functioning as a source-identifier

of goods." Bos. Duck Tours,

. Trademark law has

traditionally grouped marks into one of five categories based on

their degree of capability in that regard.

Those categories

are, from least to most distinctive: (1) generic marks, (2)

descriptive marks, (3) suggestive marks, (4) arbitrary marks, and

- 12 - (5) fanciful marks.

Generic marks never receive trademark

protection.

. Descriptive marks are entitled to

trademark protection when a plaintiff shows that they have some

"secondary meaning" -- that is, when "a substantial portion of the

consuming public associates [the trademark] specifically with [the

plaintiff's] business." Flynn v. AK Peters, Ltd.,

(1st Cir. 2004) (quoting Bos. Beer Co. v. Slesar Bros. Brewing

Co.,

(1st Cir. 1993)). Suggestive, arbitrary, and

fanciful marks are "inherently distinctive," and a plaintiff does

not need to prove that those marks have some secondary meaning.

Bos. Duck Tours,

.

Nevertheless, several courts have observed that the five

categories of distinctiveness are not particularly useful for

non-word designations, like D'Pergo's headstock design. See

McCarthy, supra, § 11:2, n.19 (collecting cases). And the parties

dispute whether D'Pergo's trademark is inherently distinctive or

is instead a product design that always requires proof of secondary

meaning. See Wal-Mart Stores, Inc. v. Samara Bros.,

(2000).

For present purposes, we can assume, without deciding,

that D'Pergo was required to prove secondary meaning because its

proof narrowly creates a genuine issue on that score. D'Pergo

correctly points out that actual confusion is evidence of secondary

meaning. See Am. Sci. Chem., Inc. v. Am. Hosp. Supply Corp., 690

- 13 - F.2d 791, 793 (9th Cir. 1982). And, as mentioned above, D'Pergo

introduced testimony from at least three people who were confused

by Sweetwater's use of D'Pergo's headstock design. See D'Pergo

II, 561 F. Supp. 3d at 118-19 & n.4. Further, although the district

court concluded that non-D'Pergo guitars and D'Pergo guitars had

"substantially similar shapes, curvatures, and size, among other

characteristics," it noted that "several of D'Pergo's witnesses

testified that a person with knowledge of guitars can discern a

guitar's brand merely by the shape of its headstock." Id. 121-22.

Sweetwater urges us to follow our 2004 decision in Flynn

v. AK Peters, Ltd., which it claims establishes that evidence of

a few people in a field recognizing a mark is not enough to create

a material issue about a mark's secondary meaning. See

. In Flynn, an author asserted a trademark claim based on

the use of her name on a book without her consent.

. At

summary judgment, she had submitted a curriculum vitae and an

affidavit in which she stated that she had worked in the robotics

field since 1985, had given 70 invited talks, had written 29 papers

in the field, and had founded a company designing micro robots.

. But we discounted such evidence, noting that

testimony by a party is self-serving and does not speak to whether

an average consumer of the book at issue would be aware of her

name.

. She had also stated in her affidavit that "a

handful of strangers" had approached her and told her that they

- 14 - recognized her from a talk or that they had read her book; and her

nephew in an affidavit said that a robotics graduate student told

to him that his aunt was "famous."

But we concluded that

"such limited anecdotal evidence" at most showed that "a handful

of individuals in the [robotics] field have recognized her name

and face," but not that "the relevant consumers have associated

her name with a product."

.

Here, although we agree with Sweetwater that D'Pergo's

showing of secondary meaning was minimal, D'Pergo's evidence was

more relevant than the author's in Flynn. D'Pergo put forth the

testimony of three consumers from the relevant market, who had

been on Sweetwater's website and seen the photo containing the

headstock design. That was enough (if barely) to create a genuine

issue as to whether D'Pergo's mark was entitled to trademark

protection. Accordingly, we reverse the court's grant of summary

judgment to Sweetwater on D'Pergo's trademark claim, albeit with

some reluctance given the wispiness of the evidence that D'Pergo

advanced in the district court.

C. Infringing Profits: Burden of Proof

D'Pergo next challenges the substantive content of the

district court's jury instruction concerning D'Pergo's burden of

proof to recover infringing profits for Sweetwater's copyright

infringement.

In reviewing a challenge to a jury instruction, we

- 15 - "consider[] the big picture, asking whether the charge in its

entirety -- and in the context of the evidence -- presented the

relevant issues to the jury fairly and adequately." Goodman v.

Bowdoin Coll.,

(1st Cir. 2004). We generally

review the instruction de novo, with certain exceptions not

relevant here. See

"An erroneous jury instruction warrants

a new trial if 'the preserved error . . . can fairly be said to

have prejudiced the objecting party.'"

(quoting Levinsky's,

Inc. v. Wal–Mart Stores, Inc.,

(1st Cir. 1997)).

D'Pergo proposed an instruction reading: "Once D'Pergo

presents evidence of Sweetwater's gross revenues, there is a

rebuttable presumption that all of those gross revenues are

entirely attributable to the infringement, and the burden shifts

to Sweetwater to establish what portion of its gross revenues were

attributable to factors other than the photograph." The district

court rejected that instruction, and instructed the jury instead

as follows:

You may make an award of the defendant's profits only if you find that the plaintiff showed a causal relationship between the defendant's infringement and the defendant's revenues that are attributable to the infringement. If you conclude that the plaintiff has not shown a causal relationship between the defendant's infringement and the defendant's revenues, you may not award any of the defendant's profits to the plaintiff.

The plaintiff can establish the required causal relationship by showing that the

- 16 - defendant profited from the use of the photograph. In other words, the plaintiff can seek to establish that the photograph helped the defendant sell its products, and that the defendant did sell its products as a result of the photograph. The plaintiff need not establish that any particular consumer bought a guitar because of the infringing photograph.

D'Pergo contends that requiring it to demonstrate a

"causal relationship" overstated its burden and is inconsistent

with our precedent. We agree.

The Copyright Act provides that

[t]he copyright owner is entitled to recover the actual damages suffered by him or her as a result of the infringement, and any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages. In establishing the infringer's profits, the copyright owner is required to present proof only of the infringer's gross revenue, and the infringer is required to prove his or her deductible expenses and the elements of profit attributable to factors other than the copyrighted work.

(b). Courts have rejected a "highly literal

interpretation" of § 504(b), On Davis v. The Gap, Inc.,

(2d Cir. 2001), because, read literally, "[a] plaintiff

in a copyright action against a multi[-]division, multi-product

company such as General Mills, would need to do nothing more than

offer an overall gross revenue number -- like $11.5 billion -- and

sit back," Polar Bear Prods., Inc. v. Timex Corp.,

,

711 (9th Cir. 2004). Thus, many circuits have concluded that a

- 17 - plaintiff must show some relationship between the infringement and

the revenue figure presented but have described that relationship

using different terminology. See On Davis,

("reasonably related"); William A. Graham Co. v. Haughey,

(3d Cir. 2011) ("causal nexus"); Bonner v. Dawson,

(4th Cir. 2005) ("reasonably related"); Powell v.

Penhollow,

(5th Cir. 2007) ("As the copyright

owner, Powell bears the burden of putting on evidence of

Defendants' gross revenue attributable to the infringement.");

Thoroughbred Software Int'l, Inc. v. Dice Corp.,

(6th Cir. 2007) (same); Andreas v. Volkswagen of Am., Inc.,

(8th Cir. 2003) ("nexus"); Polar Bear, 384 F.3d at

711 ("legally significant relationship"); Univ. of Colo. Found.,

Inc. v. Am. Cyanamid Co.,

, 1375 (Fed. Cir.

1999) ("connection").

Sweetwater contends that these different standards are,

in essence, the same. That may be true as to some. But we discern

a real difference between requiring a "causal relationship," as

the district court did here, and requiring, for example, a

"reasonable relationship."

We are not starting from scratch in determining what

standard we should apply. In Data General Corp. v. Grumman Systems

- 18 - Support Corp.,

(1st Cir. 1994),6 we explained that

"the plaintiff must meet only a minimal burden of proof in order

to trigger a rebuttable presumption that the defendant's revenues

are entirely attributable to the infringement" and that "the burden

then shifts to the defendant to demonstrate what portion of its

revenues represent profits, and what portion of its profits are

not traceable to the infringement."

(emphasis added).

Thus, we noted that the plaintiff there had met its burden by

demonstrating "that, of [the defendant's] gross revenue" from the

relevant time period, "$5.4 million consisted of business

eliminated from the calculation of [plaintiff's] lost profits."

. And we further stated that the

"rebuttable presumption of causation" is a presumption as to

"cause-in-fact and proximate cause" and that "[t]he defendant's

burden under the apportionment provision of Section 504(b) is

primarily to demonstrate the absence of a causal link between the

infringement and all or part of the profits claimed by the

plaintiff."

.

It would be odd to describe the plaintiff's burden as

"minimal" and the defendant's burden as one of disproving a

presumption of causation if in fact that minimal burden was to

demonstrate a causal relationship between gross revenues and the

6Data General was abrogated on other grounds by Reed Elsevier, Inc. v. Muchnick,

(2010).

- 19 - infringement. Instead, we hold that "the minimal burden" described

in Data General is akin to proof of a "reasonable relationship."

That standard is more consistent with § 504(b), which, as noted,

read literally, only requires that the profits be attributable to

the infringement.7

Accordingly, the district court's jury instruction

conflicted with our precedent. We must remand, then, if the

instructional error "may have unfairly affected the jury's

7 Nor do we agree with Sweetwater that we implicitly overruled Data General in Jane Doe No. 1 v. Backpage.com, LLC,

(1st Cir. 2016). There, a sex-trafficking victim sued an owner of a website selling online classified advertisements for infringement of her photograph, which had been posted on the website by her trafficker.

. We affirmed the dismissal of her complaint, noting that "a generalized assertion that a publisher/infringer profits from providing customers with the option to display photographs in advertisements, standing alone, [could not] plausibly be said to link the display of a particular image to some discrete portion of the publisher/infringer's profits."

. Sweetwater points to language in Backpage describing the plaintiff's burden as a burden to demonstrate a "link," and to our citation to Mackie v. Rieser, a case decided by the Ninth Circuit, which requires a "causal link" between the revenues and the infringement element. Backpage,

-29 (citing Mackie v. Rieser,

(9th Cir. 2002)). But the plaintiff in Backpage would not have satisfied any of the standards at issue -- whether the "reasonable relationship" or "causal relationship" standard, or another -- and thus the precise version of that test was not relevant to the disposition of the case. Moreover, although we used the word "link," we did not use the phrase "causal link," and we cited parenthetically to Mackie because of its analogous facts; it, too, had involved an infringing photograph in an advertising brochure. See id. at 28-29 (describing parenthetically Mackie's analogous facts and disposition). Thus, Backpage did not implicitly overrule Data General.

- 20 - conclusion[]." Allen v. Chance Mfg. Co.,

(1st

Cir. 1989) (emphasis added).

Although we suspect that the instruction would not have

made a difference in this case, we cannot be sure. Some customers

testified that they purchased guitars from Sweetwater after first

viewing the guide containing the photo. A reasonable juror, then,

could have viewed revenue from Sweetwater's online sales of

electric guitars and guitar accessories (which D'Pergo's expert

purported to further narrow to represent only those sales made to

customers who had viewed the guide before making their purchases)

as reasonably related to the infringing use of D'Pergo's photo.

And, on this record, it is not clear whether the jury awarded

D'Pergo zero infringing profits because it concluded that D'Pergo

had not proved a causal relationship -- which, for the reasons

explained above, would be problematic -- or because it concluded

that Sweetwater's net profits discussed at trial were attributable

to factors other than the infringement. Therefore, despite our

doubts that the jury will reach a different result, we remand for

a new trial as to infringing profits with an instruction reflecting

Data General's reasonable-relationship requirement.8

8 We note, for purposes of remand, that we nevertheless believe that the district court was correct to refuse to give the jury instruction that D'Pergo had proposed, which erroneously suggested that the plaintiff need not show any relationship at all between revenues and the infringement and is therefore also inconsistent with our caselaw.

- 21 - D. Infringing Profits: Commingling

D'Pergo also contends that the district court erred in

refusing to give its requested instruction on "commingling." That

instruction read as follows:

To recover defendant's profits when the defendant has combined infringing and noninfringing elements into one work, the plaintiff need demonstrate only a reasonable relationship between the work as a whole and defendant's profit, not between the specific infringed element and defendant's profit.

Where the district court refuses to give an instruction,

"we review that issue de novo . . . reversing only if the rejected

instruction was [1] substantively correct, [2] essential to an

important issue in the case, and [3] not substantially covered in

the charge given." Rodríguez v. Señor Frog's de la Isla, Inc.,

(1st Cir. 2011) (citations omitted).

Because we conclude that D'Pergo's requested instruction

was not substantively correct and that, in any event, the correct

law was substantially covered in the charge given, we affirm the

district court's refusal to give the requested instruction.

In Sheldon v. Metro-Goldwyn Pictures Corp.,

(1940), the Supreme Court clarified that "[w]here there is a

commingling of gains" -- that is, where some but not all of the

profits were due to the infringement -- "[the infringer] must abide

the consequences, unless [it] can make a separation of the profits

so as to assure . . . the injured party all that justly belongs to

- 22 - him."

(emphasis added). D'Pergo claims that, under

Sheldon, it needed only to show a relationship between the guide

and the revenues, rather than between the infringing photo and the

revenues. Thus, it argues, the district court's instruction that

the jury needed to find a relationship between the photograph and

the revenues was not sufficient. But that argument misconstrues

Sheldon. The commingling referred to in Sheldon was the

commingling of infringing and non-infringing profits -- not

infringing and non-infringing elements of the offending work --

and refers to the defendant's burden to apportion such profits.

Sheldon referred to a "commingling of gains,"

and Data General

likewise explained that the burden-shifting rule is "an equitable

response to an infringer who has frustrated the task of

apportionment by co-mingling profits,"

.

The plaintiff's burden, on the other hand, is to

establish a relationship between the infringing element (here, the

photograph) and the gross revenue figure it offers. Thus,

D'Pergo's instruction, which stated that it only needed to

demonstrate a relationship between the guide and the defendant's

profits, is substantively incorrect.

And in any event, the charge given sufficiently covered

Sweetwater's burden. Specifically, the district court addressed

Sweetwater's burden by instructing the jury that "[t]he defendant

has the burden of proving its non-infringing revenue by a

- 23 - preponderance of the evidence"; that the defendant has "the burden

of proving its expenses by a preponderance of the evidence"; and

that the jury should "subtract non-infringing revenue[s]" which

the court defined as "all the revenue defendant made from factors

other than the infringement," and should "deduct expenses from the

defendant's gross revenue that have a connection to the sale of

products associated with the infringement." Those instructions

accurately conveyed the concept of commingling gains to the jury.

The cases D'Pergo cites do not support its requested

instruction. In Andreas v. Volkswagen of America, Inc.,

(8th Cir. 2003), the Eighth Circuit concluded that the jury

had "enough circumstantial evidence to find that [a] commercial

[for the TT coupe]" -- in which the copyrighted phrase of the

plaintiff appeared -- "contributed to the profitable introduction

of the TT coupe," and that the burden had then shifted to Audi to

show "what effect other factors had on its profits."

. But the court in Andreas specifically found that the

plaintiff had "met his burden of establishing a nexus between the

infringement and Audi's sale of TT coupes."

(emphasis

added). Thus, it is not true that the Eighth Circuit in Andreas

only required the plaintiff to prove that the commercial, rather

than the copyrighted phrase, contributed to the profitable

introduction of the TT coupe.

The same is true of Frank Music Corp. v. Metro-Goldwyn-

- 24 - Mayer, Inc.,

(9th Cir. 1985). D'Pergo contends that,

in Frank, the Ninth Circuit discussed the "promotional value of

the musical" -- which included five infringing songs of the

plaintiff -- on hotel and gaming revenues, not "the promotional

value of the songs to those revenues." But, in fact, it discussed

at length why the songs themselves "contributed" to such revenues.

See

.

In summary, we conclude that D'Pergo's proposed

instruction was incorrect and that "commingling" properly

understood was already covered by the other instructions.

Accordingly, we affirm the district court's refusal to give the

instruction.9

III. SWEETWATER'S CROSS-APPEAL

We turn now to Sweetwater's cross-appeal on damages.

Sweetwater asks us to vacate the actual damages awarded to D'Pergo

for Sweetwater's copyright infringement because, in its view, that

award rested on testimony of D'Pergo's photography expert, Sedlik,

9 In response to a question from the jury as to whether they could substitute the word "[g]uide" for the word "photograph" in the "causal relationship" instruction, the district court told the jury that it must follow the instructions as given. D'Pergo, however, does not allege error on that basis alone; it points to the question as evidence that the commingling instruction was not covered by the other instructions. But because the district court was not obligated to provide the proposed commingling instruction here, we conclude that the court's response to the jury's question was substantively correct.

- 25 - that the district court erroneously admitted.10

We review a district court's decision to admit expert

testimony for abuse of discretion. First Marblehead Corp. v.

House,

(1st Cir. 2008). The admissibility of such

testimony is governed by Federal Rule of Evidence 702, which states

that:

A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if: (a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue; (b) the testimony is based on sufficient facts or data; (c) the testimony is the product of reliable principles and methods; and (d) the expert has reliably applied the principles and methods to the facts of the case.

Fed. R. Evid. 702 (2011) (amended 2023).11 In applying Rule 702,

10Although Sweetwater challenges the damages award, it asks that we do not order a new trial on damages because such a proceeding is "unnecessary." This request implicates weighty Seventh Amendment concerns. See Bisbal-Ramos v. City of Mayaguez,

(1st Cir. 2006) ("With regard to compensatory damages, an order entering 'judgment for a lesser amount than that determined by the jury without allowing petitioner the option of a new trial, cannot be squared with the Seventh Amendment.'" (quoting Hetzel v. Prince William Cnty.,

, (1998) (per curiam))). Yet, we do not address those concerns today because, for the following reasons, Sweetwater's cross-appeal fails on its merits. 11In December 2023, two years after the trial, Rule 702 was amended. In evaluating Sweetwater's claim of error, we apply the version of Rule 702 in effect at the time of the bench trial. See

- 26 - a district court must principally determine whether the "expert's

proffered testimony both rests on a reliable foundation and is

relevant to the task at hand." Carrozza v. CVS Pharm., Inc.,

(1st Cir. 2021) (cleaned up) (quoting Samaan v. St.

Joseph Hosp.,

(1st Cir. 2012)).

As summarized by Sweetwater, Sedlik testified that,

based on his survey of images from stock photography licensing

websites, an appropriate base license fee for the uses that

Sweetwater made of the photo amounted to $31,669. However, he

testified that that fee should be multiplied three to five times

to account for the "scarcity" of the photograph, and then by five

to ten times to account for the "competitive use" of the

photograph.12 When asked about his calculations, he at one point

testified that he determined that the photo was scarce because

"Sweetwater or its employee or contractor selected this photo for

In re Onglyza (Saxagliptin) & Kombiglyze (Saxagliptin & Metformin) Prods. Liab. Litig.,

, 345 n.4 (6th Cir. 2024); In re Cooper Tire & Rubber Co.,

, 1186 n.4 (10th Cir. 2009). But we note that the 2023 amendments do not meaningfully affect our analysis. See Fed. R. Evid. 702 advisory committee's note to 2023 amendment. While we understand that Sedlik’s multipliers for scarcity 12

and competitive use are intended to calculate the fair market value of a hypothetical license fee, we question whether Sedlik offered an adequate basis to substantiate the multipliers. For example, Sedlik offered no explanation -- beyond his own experience -- as to why the licensing fee of a scarce image should be multiplied three to five times, as opposed to some other numerical range. But because Sweetwater has not advanced this challenge to Sedlik’s testimony, we do not address it.

- 27 - a reason." He also testified as to scarcity that "Sweetwater's

own selection and use of the photograph demonstrates the quality

of the photograph." As to the competitive-use multiplier, he

explained that he asked whether "[w]hen Mr. Dapergolas and

Sweetwater are sitting at that negotiating table, [it would] be

reasonable for Mr. Dapergolas to expect that he would be paid more

because it's a competitive use than he would if it was a

noncompetitive use." And he concluded that "in [his] opinion and

in all of [his] experience, the answer is yes and that's entirely

reasonable."

Sweetwater contends that Sedlik's testimony should have

been excluded for two reasons. First, Sweetwater argues that

Sedlik based his determination that the photo was scarce and used

competitively on his "subjective belief or unsupported

speculation." Daubert v. Merrell Dow Pharms., Inc.,

(1993). Second, Sweetwater argues that the testimony

impermissibly relied on the parties' identities. By allowing

testimony based on the parties' identities, Sweetwater claims, the

court misapplied the so-called hypothetical transaction test.

Under that test, damages for copyright infringement are measured

by what a hypothetical, willing buyer and seller would have paid

for a license. See On Davis,

. "The question

is not what the owner would have charged, but rather what . . .

the fair market value [is]."

. Sweetwater also asserts

- 28 - that these erroneous identity references must have prejudiced the

jury because the damages verdict of $74,360 was exactly five times

Sedlik's base license fee of $14,872 for use of the photograph on

a corporate website, meaning that the jury accounted for either

scarcity or competitive use.

But neither the multipliers nor the references to the

parties' identities require us to vacate the damages award. First,

in explaining the methodology underlying the scarcity multiplier,

he testified that he searched for images showing multiple guitar

necks and found "none that showed [] the variety of guitar necks

that are shown in [the photo]." He also found no other images

showing "the variety of woods and designs of necks"; from there,

he concluded that there "was no suitable alternative." Thus, he

determined that the photo was a "rare or scarce image in the

marketplace" and that "[r]are photographs typically demand

somewhere between three and five times what a generic photograph

would command for the exact same usage." In light of such

explanations, the district court did not abuse its discretion in

concluding that Sedlik's testimony was based upon "'sufficient

facts or data' that result[ed] from the application of 'reliable

principles and methods,'" First Marblehead Corp.,

(quoting Fed. R. Evid. 702), and that Sweetwater's contentions to

the contrary went to the weight of the evidence, rather than to

its admissibility.

- 29 - Our conclusion is bolstered by the fact that the Third

Circuit has refused to overturn a jury award of actual damages

under § 504(b) that encompassed Sedlik's multipliers under similar

circumstances, concluding that Sedlik's multipliers were not

punitive, but rather, were used to "calculate fair market value."

See Leonard v. Stemtech Int’l Inc.,

(3d Cir.

2016). Sweetwater attempts to distinguish Leonard on the basis

that, there, the parties did not expressly challenge Sedlik's use

of multipliers. The Third Circuit, however, did not rest its

decision on waiver grounds; it merely noted that "there is a

question" whether they had waived such a challenge.

at 392

n.13. Indeed, the Leonard court reasoned that because neither

party had "asserted waiver," it would nevertheless "address [the]

challenge to [his] use of a multiplier for scarcity and

exclusivity."

Second, the district court acted within its considerable

discretion in determining that Sedlik did not impermissibly rely

on the parties' identities because the hypothetical seller/buyer

test permits some consideration of the relative positions of the

parties. For example, in Jarvis v. K2 Inc.,

(9th

Cir. 2007), the Ninth Circuit noted that "objective considerations

of market value" included the testimony of a senior executive of

the defendant company as to how much he would pay for images for

different uses.

. And in Bruce v. Weekly World News,

- 30 - Inc.,

(1st Cir. 2002), we noted that "proof of industry

practice" is crucial to the estimation of "actual damages," and

credited the testimony of the defendant's expert that "Bruce almost

surely would not have been able to negotiate with World News for

anything other than a single, lump-sum, up-front licensing fee."

.

Moreover, we think that the more reasonable reading of

the testimony to which Sweetwater points is that Sedlik was using

the parties' names as stand-ins for the hypothetical seller and

buyer negotiating from a competitive standpoint. That is

underscored by Sedlik's testimony, in general terms, about why

counterparties might charge more for a license to a competitor, in

which he gave as an analogy two rival shoe stores across the street

from each other where "one shoe company wants to license the shoe

photographs of its competitor." Indeed, Sedlik clarified that he

was "not talking about the [parties'] specific identit[ies]" but

was instead referring to "similarly situated entities."

Having looked at the photo and the seemingly small role

it played on Sweetwater's website, it does seem rather mind

boggling that anyone would pay $31,669 merely to license it, much

less $74,360. Sedlik cites no example of any remotely similar

market transaction, nor does he explain why a purchaser intending

such an inconsequential use as here would consider paying that

much for the photo rather than arranging and photographing on its

- 31 - own a picture of guitar necks. These concerns, however, are not

developed enough on this record to have required the trial court

to exercise its Rule 702 gatekeeping duty by barring the testimony.

Thus, Sweetwater has identified no error in the denial

of its motion to exclude Sedlik's testimony and, subsequently, we

affirm the actual damages awarded to D'Pergo on his copyright

claim.

IV. CONCLUSION

For the foregoing reasons, we affirm in part, reverse in

part, and remand in part. Specifically, we reverse the district

court's grant of summary judgment on trademark infringement, and

reverse and order a new trial on the issue of infringing profits

for Sweetwater's copyright infringement. As to all other issues,

we affirm the district court. The parties shall bear their own

costs of appeal.

- 32 -