US Supreme Court holds that profits can be awarded without proof of willful trademark infringement. ROMAG v. FOSSIL

US Supreme Court holds that profits can be awarded without proof of willful trademark infringement. 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.

The Lanham Act is a federal law which defines what is considered trademark infringement and what damages can be awarded to a trademark owner.  Lanham Act defines what damages a trademark infringement can recover in 15 U.S. Code § 1117. Statute reads: 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.

There is one Lanham Act, but different Federal Circuit Courts 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.  Some Circuit Courts imposed the requirement that the plaintiff must prove that the infringement was willful to be awarded a defendant’s profits, other courts did not impose the willful requirement.

The United States Supreme Court settled the question of whether willful trademark infringement must be proven for profits to be awarded 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.  Second Circuit case law requires willful trademark infringement to be proven for profits to be awarded as damages.   The district court judge rescinded the award of profits because the jury did not find that Fossil’s trademark infringement was willful.  5 years and several appeals later the United States Supreme Court reviewed the case.

The Supreme Court held that a plaintiff in a trademark infringement suit is not required to show that a defendant willfully infringed the plaintiff’s trademark as a precondition to a profits award. The Lanham Act provision governing remedies for trademark violations, §1117(a), makes a showing of willfulness a precondition to a profits award in a suit under §1125(c) for trademark dilution, but §1125(a) has never required such a showing.

The Supreme Court cautioned against reading words into a statute.  The Lanham Act required a showing of willfulness in other sections, the absence of a willfulness requirement in §1117(a) indicates that Congress did not intend to impose such a requirement.

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