Leatherman Tool Group, Inc., an Oregon Corporation v. Cooper Industries, Inc., an Ohio Corporation

We held previously that Appellee Leatherman Tool Group, Inc. (“Leatherman”) had no protectable trade dress in the configuration of a multipurpose pocket tool where that configuration was wholly functional. We concluded, therefore, that Appellant Cooper Industries, Inc. (“Cooper”) was entitled to copy that product closely in producing a competing product. See Leatherman Tool Group v. Cooper Industries, 199 F.3d 1009 (9th Cir.1999) (“Leatherman I” ). However, in an unpublished memorandum disposition accompanying our prior opinion, we upheld an award of $4.5 million in punitive damages against Cooper, based upon the fact that it passed off photographs and drawings of Leather-man’s product as its own when it first attempted to enter the market.

Language in our memorandum disposition suggested that we had reviewed for abuse of discretion the trial court’s determination that the punitive award was not excessive. The Supreme Court has now clarified that appellate courts must review independently the constitutionality of punitive damage awards. Undertaking such a review, we conclude that the maximum award consistent with constitutional principles and the facts here is $500,000. We…