Wolfe

The Court of Appeals for the Ninth Circuit found plaintiffs guilty of trademark infringement and unfair competition, and ordered an accounting of plaintiffs’ profits and a determination of defendant’s damages. National Lead Company v. Wolfe, 1955, 223 F.2d 195 . In accordance with these directions, a hearing has been held and briefs have been filed. I have carefully considered all relevant evidence and the briefs and memoranda submitted by counsel. My findings and conclusions are set forth below.

The Proper Method of Accounting

The most fundamental issue concerns the proper accounting method to use in computing the profits attributable to' Dutch paint. Defendant in the Keenan Report has followed the sales ratio method, whereby the ratio of Dutch paint sales to total sales has been applied to total costs in determining the amount of costs attributable to Dutch paint. Plaintiffs in the Wolfe Study have allocated a greater proportion of costs to Dutch paint than results with use of the sales ratio method.

Defendant argues that the sales ratio method is properly used because plaintiffs’ books do not permit an accurate allocation of costs between Dutch and non-Dutch items.…