Case No. 18-1233 | Fed. Cir.
Preview by Sean Lowry, Online Editor*
The question presented in Romag is whether a showing of willful infringement is an element of proof necessary to support an award of a trademark infringer’s profits under section 35 of the Lanham Act, 15 U.S.C. § 1117(a).
Section 43(a) of the Lanham Act prohibits trademark infringement, or false representations of another’s distinctive mark. Section 35 of the Act provides that a plaintiff is entitled to recover an infringer’s profits, “subject to the principles of equity,” if it establishes “a violation under section 1125(a).” 15 U.S.C. § 1117(a) (2018). Federal circuits are split six to six on whether willful infringement is necessary to recover in a trademark infringement suit. The circuits that do not require willful infringement use evidence of infringement as one factor among many in providing equitable relief to the plaintiff.
At trial, a jury found that Fossil infringed on Romag’s trademark rights for a magnetic fastener used in wallets, purses, handbags, etc., but the infringement was not willful. On appeal, the Federal Circuit Court of Appeals applied Second Circuit law (because the trial was heard in the District of Connecticut), which requires willful infringement to recover under the Act. Thus, Romag was not able to recover any profits from Fossil.
Petitioner makes two main arguments why the Court should hold that willful infringement is not necessary for a plaintiff to recover in a trademark infringement suit. First, statutory interpretation and recent legislative history of the Lanham Act indicate that Congress did not intend to include a willful infringement requirement. Second, a willful infringement requirement sets the bar too high for plaintiffs, thereby reducing the ability for federal law to deter potential infringers.
Respondents argue that the circuit split is not meaningful because plaintiffs are often denied an accounting of defendants’ profits when willfulness is not proven in cases heard by courts that do not explicitly require it. Respondents also argue that Congress, when it enacted the Lanham Act in 1946, intended to codify a long list of common-law cases that allowed a plaintiff to recover a portion of the defendant’s profits only if willful infringement was shown.
Among the amici briefs, the Intellectual Property Owners (“IPO”) Association, which represents companies and individuals in all industries and fields of technology who own or are interested in intellectual property rights, argues that willfulness should be required to recover defendant’s profits in a trademark infringement case. The IPO Association agrees with the two main points in the Respondents’ brief, arguing that the ability to recover a portion or all of defendant’s profits could actually provide compensation in excess of the actual damages suffered by the plaintiff. If that bar was lowered, then plaintiffs would have even more incentive and leverage to extract settlements from defendants. In contrast, the American Bar Association and the American Intellectual Property Law Association argue that reading the willfulness requirement into the law reduces flexibility in crafting equitable remedies and is inconsistent with the statutory scheme of trademark protections.
*Sean Lowry is a 3LE (Class of 2021) and Analyst in Public Finance at the Congressional Research Service (CRS). The views expressed are those of the author and are not necessarily those of the Library of Congress or CRS.