Must trademark infringement be willful for profits to be awarded? ROMAG v. FOSSIL

Must trademark infringement be willful for profits to be awarded? ROMAG v. FOSSIL

A trademark is something that a manufacturer uses to identify that they are the source of a product.  Traditionally a trademark was a word, phrase or symbol used to label the product but it is possible to trademark things such as colors or scents.  Trademarks are intended to protect consumers from inferior quality products.  Trademark owners are granted the exclusive right to brand their goods with a trademark to prevent consumer confusion about who manufactured a product.  If someone other than the trademark owner uses a trademark in a way which creates consumer confusion, that can be considered trademark infringement.  A trademark owner can file a lawsuit to stop trademark infringement with an injunction and to get monetary damages for trademark infringement which has already occurred.

Because trademark law in the United States is defined by state law, federal law and various court decisions, it can sometimes be difficult to determine what monetary damages a trademark owner can recover. The Lanham Act is a federal law which defines what is considered trademark infringement and what damages can be awarded to a trademark owner.  There is one Lanham Act, but judges have interpreted the law to mean different things.  A District Court is bound by the case precedent of the Federal Circuit Court in which it sits.  There is an even split between the Circuit Courts on how the law is interpreted.  Specifically there is a difference of opinion in the different circuit courts about whether trademark infringement must be willful for a trademark owner to be awarded a defendant’s profits related to trademark infringement.  Some Circuit Courts impose the requirement that the plaintiff must prove that the infringement was willful, other courts did not impost the willful requirement.

The section of the Lanham Act in question is 15 U.S. Code § 1117. Recovery for violation of rights (a) Profits; damages and costs; attorney fees. When a violation of any right of the registrant of a mark registered in the Patent and Trademark Office, a violation under section 1125(a) or (d) of this title, or a willful violation under section 1125(c) of this title, shall have been established in any civil action arising under this chapter, the plaintiff shall be entitled, subject to the provisions of sections 1111 and 1114 of this title, and subject to the principles of equity, to recover (1) defendant’s profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action.

The United States Supreme Court will take up the question of whether 15 U.S.C. § 1117(a) require willful infringement to be shown for an award of an infringer’s profits for a violation of  15 U.S.C. § 1125(a) in Romag Fasteners Inc. v. Fossil Inc. 18-1233 (US 2019).  This case began in 2014 in Connecticut District Court. In that case, Romag sued Fossil for patent infringement and trademark infringement.  A jury found in favor of the plaintiff and awarded $6.7 million in damages based on the defendants profits related to the trademark infringement.  The district court judge later rescinded the award of profit related damages because the jury did not find that Fossil’s trademark infringement was willful. Second Circuit case law requires willful trademark infringement to be proven for profits to be awarded as damages.  5 years and several appeals later the issue is still not resolved.

Romag petitioned the United States Supreme Court to hear the case and the petition was accepted in June of 2019.  The Supreme Court’s decision should bring harmony to the Circuit Court split on whether willful infringement must be proven to recover a defendant’s profits as damages for trademark infringement.

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