July 2, 2019
On June 28, the U.S. Supreme Court granted certiorari in Romag Fasteners, Inc. v. Fossil, Inc., et al., a trademark infringement case involving the award of profits to the trademark holder. The Court will consider “Whether, under section 35 of the Lanham Act, 15 U.S.C. § 1117(a), willful infringement is a prerequisite for an award of an infringer’s profits for a violation of section 43(a), 15 U.S.C. § 1125(a).”
Federal appeals courts are evenly split on opposite sides of an important issue determining whether a prevailing trademark owner is entitled to the infringer’s profits. In a 2014 district court trial within the Second Circuit, the jury awarded Romag Fasteners profits arising from Fossil’s infringement of trademarked fasteners. However, the $6.8 million award was struck because Romag Fasteners was unable to establish that Fossil’s infringement was willful. Without the award of profits, Romag’s successful litigation resulted in a relatively minimal pecuniary recovery. Romag appealed the case to the Supreme Court in March 2019, asking that the award be reinstated.
The Court will have an opportunity to review the circuits’ conflicting interpretation of the section of the Lanham Act that pertains to recovery of profits, damages, and costs. Contrary to the First, Second, Eighth, Ninth, Tenth, and D.C. Circuits, the remaining six circuits do not require willfulness as a prerequisite to award the infringer’s profits to the trademark owner. Rather, the Third, Fourth, Fifth, Sixth, Seventh, and Eleventh Circuits consider willfulness as just one factor among several used to shape an equitable remedy. Other factors such as preventing unjust enrichment or deterring future infringement can be sufficient findings to support the profits award.
Fitch Even attorneys will monitor this case, scheduled for the October 2019 term, and will report once a decision has been released. For more information, please contact Fitch Even partner John E. Lyhus, author of this alert.
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