Associated Press

HELENA (AP) - The U.S. 9th Circuit Court of Appeals has overturned all but a fraction of a jury verdict requiring watch-making giant Timex Corp. to pay $2.4 million to a Missoula video company.

The three-judge panel said jurors did not have enough evidence to support that size damage award for Polar Bear Productions Inc. in its lawsuit accusing Timex of copyright infringement.

But the legal dispute is not over.

The court sent the case back to federal court in Missoula for a new calculation of how much Timex owes the company for profits lost because of Timex's actions. It also revived Polar Bear's claim that Timex violated Montana trademark laws.

"Timex is pleased with the opinion and it just shows that a large amount of Polar Bear's damages were overexaggerated and they have no basis in fact or law," Ronald Bender of Missoula, a Timex attorney, said Tuesday.

He declined to comment on the court's decision to allow Polar Bear's trademark claim to proceed.

Robert Lukes, Polar Bear's lawyer, did not immediately return a phone call left at his Missoula office Tuesday.

The circuit court's ruling came in an appeal from a jury award in November 2002. Timex was found guilty, for a second time, of using the Polar Bear's 1995 whitewater kayaking film "PaddleQuest" without permission. The jury awarded $315,000 in actual losses and $2.1 million for unlawful profits earned by Timex as a result of the copyright violation.

The first trial resulted in damages of $2.1 million, but the judge dismissed one claim and allowed a new trial.

The suit claimed that Timex used the film in its promotional materials beyond the one-year limit spelled out in an agreement with Polar Bear.

The appeals court upheld only part of the actual damages award that represented what Polar Bear would have made from licensing fees for Timex's use of the footage. But it said the portion related to Polar Bear's lost profits was too speculative.

Polar Bear was unable to prove that Timex's failure to pay the license fee prevented the video company from having enough money to market and sell copies of "Paddlequest," the court said.

"Polar Bear's financial losses were not of Timex's making, and mere speculation does not suffice to link the losses to the infringement," Judge Margaret McKeown wrote for the court.

It reached the same conclusion regarding the $2.1 million awarded for unlawful profits Timex gained from using the film or clips from the film without permission.

While Polar Bear could have claimed about $333,000 in Timex profits were the result of the illegal use of film footage, the jury had no basis for the remaining award of $1.8 million in unlawful profits, the court said.

Since the jury did not explain how it came up with the $2.1 million in damages, the court said it had no option but to reject the entire amount.

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