On April 23, 2020, the United States Supreme Court ruled that a trademark holder need not prove that the infringement of its trademark was willful in order to recover an award of the infringer’s profits. The Court’s decision in Romag Fasteners, Inc. v. Fossil, Inc. resolves a longstanding circuit split and may make it easier for trademark holders in many jurisdictions, including the Ninth Circuit, to recover damages in trademark infringement cases.
The Lanham Act authorizes a district court to award a successful plaintiff in an action for trademark infringement injunctive relief, actual damages, or an award of the defendant’s profits. Prior to the Supreme Court’s new ruling, however, the Ninth Circuit and five other circuits required the plaintiff in a trademark infringement action to prove that the infringer’s act of infringement was willful in order to recover the defendant’s profits, while other federal circuit courts considered willfulness a factor but not a requirement for an award of infringer’s profits.
Writing for the majority, Justice Gorsuch recognized that, “[w]ithout question, a defendant’s state of mind may have a bearing on what relief a plaintiff should receive,” but held that willfulness is not a precondition or requirement for an award of infringer’s profit’s under the Lanham Act. As the majority ruled, “we do not doubt that a trademark defendant’s mental state is a highly important consideration in determining whether an award of profits is appropriate. But acknowledging that much is a far cry from insisting on the inflexible precondition to recovery. . . .”
Thus, while acknowledging that “[a]n innocent trademark violator often stands in very different shoes than an intentional one,” the Court held that the text of the Lanham Act was clear that willfulness is not a precondition to the court’s discretion to award a trademark plaintiff the defendant’s profits or ill-gotten gains.
This ruling is significant in jurisdictions that previously required proof of willfulness to recover infringer’s profits because of the relative ease in proving defendant’s profits under the Lanham Act as compared to proving the plaintiff’s actual damages. It is often difficult for a plaintiff in a trademark action to quantify actual damages for infringement of its trademark. But to quantity an amount for an award of defendant’s profits, the Lanham Act requires the plaintiff to prove only the defendant’s sales and the defendant must then prove all elements of cost or deductions to arrive at the amount of the infringer’s profits.
AALRR has a dedicated group of attorneys on its Intellectual Property Team with the experience and expertise to vigorously enforce your trademarks and defend you against claims of trademark infringement. Attorneys on the Firm’s Intellectual Property Team can also assist you with registration of your trademarks with the United States Patent and Trademark Office.
This AALRR post is intended for informational purposes only and should not be relied upon in reaching a conclusion in a particular area of law. Applicability of the legal principles discussed may differ substantially in individual situations. Receipt of this or any other AALRR publication does not create an attorney-client relationship. The Firm is not responsible for inadvertent errors that may occur in the publishing process.
© 2020 Atkinson, Andelson, Loya, Ruud & Romo
Brian Wheeler leads the firm’s Intellectual Property and Data Security & Privacy team. His practice focuses on intellectual property, data security and privacy, and high-stakes complex commercial litigation and white collar ...
Joseph K. Lee is a member of the Commercial and Complex Litigation Practice Group and the firm’s Intellectual Property Team. Mr. Lee represents private companies in contract and business tort litigation, intellectual property ...
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