Quattrocchi

concurring and dissenting:

I concur in the opinion of the court except as to some damages. On this appeal, we review a record on which the district court looked at actual damages using primarily a standard intended to measure injury to the reputation of persons rather than injury to the goodwill of a business. Goodwill is difficult to quantify *1117 but is regularly assessed by accountants in the course of the purchase of a business. It is neither as nebulous nor as fragile as personal reputation. In reviewing the damages under section 912 of the Restatement of Torts, Second, the district court erred as a matter of law.

For accounting purposes, goodwill is typically the difference between the fair market value of the company and its underlying assets and liabilities. See, e.g., Memorial, Inc. v. Harris, 655 F.2d 905, 910 (9th Cir.1980) (East, J.). This accounting calculation is difficult since Skydive Arizona is not a publicly traded company. Nonetheless, there are a variety of methods that might be employed in calculating goodwill and the harm to that asset caused by the Defendants. See Robert F. Reilly, SFAS Nos. 141 and 142 Implications for Goodwill Acquired by M & A 25-FEB…

Opinion by Judge MILAN D. SMITH, JR.; Partial Concurrence and Partial Dissent by Judge NOONAN.

OPINION

Skydive Arizona owns and operates one of the largest skydiving centers in the world. Defendants Butler, Quattrocchi, Atlanta SC, Inc., CASC, Inc., and IGOVincent, Inc. (collectively, SKYRIDE) operate an Internet and telephone-based advertising service, making skydiving arrangements for customers, and issuing certificates that can be redeemed at various drop zones around the country. Skydive Arizona sued SKYRIDE for false advertising, trademark infringement and cybersquatting. Following partial summary judgment and a trial, a jury awarded Skydive Arizona $1 million in actual damages for false advertising, $2.5 million in actual damages for trademark infringement, $2,500,004 in profits resulting from the trademark infringement, and $600,000 for statutory cybersquatting damages. The district court denied SKYRIDE’s motions to reduce the jury verdict, for judgment notwithstanding the verdict, for remittitur, and for a new trial, and instead doubled Skydive Arizona’s $1 million actual damages award for false advertising and $2.5 million award for trademark infringement. The final…

Daniel H. Brombert (argued) and Timothy A. Butler, Quinn Emanuel Urquhart & Sullivan, LLP, Redwood Shores, CA, for the defendants-appellants.

Sid Leach (argued), Martha E. Gibbs, and Monica A. Limon-Wynn, Snell & Wilmer, LLP, Phoenix, AZ, for the plaintiff-appellee.

Before: JOHN T. NOONAN, JR., and MILAN D. SMITH, JR., Circuit Judges, and JED S. RAKOFF, Senior District Judge. [*]

Opinion by Judge MILAN D. SMITH, JR.; Partial Concurrence and Partial Dissent by Judge NOONAN.

M. SMITH, Circuit Judge:

Skydive Arizona owns and operates one of the largest skydiving centers in the world. Defendants Butler, Quattrocchi, Atlanta SC, Inc., CASC, Inc., and IGOVincent, Inc. (collectively, SKYRIDE) operate an Internet and telephone-based advertising service, making skydiving arrangements for customers, and issuing certificates that can be redeemed at various drop zones around the country. Skydive Arizona sued SKYRIDE for false advertising, trademark infringement and cybersquatting. Following partial summary judgment and a trial, a jury awarded Skydive Arizona $1 million in actual damages for false advertising, $2.5 million in actual damages for trademark infringement, $2,500,004 in…