The Supreme Court has definitively answered the question of whether a plaintiff in a trademark infringement suit is required to show, as a precondition to a profits award, that a defendant willfully infringed the plaintiff’s trademark. By a unanimous vote, the Supreme Court said NO.
In Romag Fasteners, Inc. v. Fossil Group, Inc., Romag, a manufacturer of magnetic snap fasteners for use in leather goods, brought suit against Fossil, alleging that Fossil was infringing Romag’s trademark by using counterfeit Romag fasteners on some of Fossil’s products. After a jury trial in which the jury agreed that Fossil had acted “in callous disregard” of Romag’s rights but had not acted “willfully,” the district court refused Romag’s request for Fossil’s profits. In doing so, the district court was relying on the then Second Circuit precedent that required a plaintiff seeking a profits award to prove the defendant’s violation was willful. Because not all circuits agreed with the Second Circuit’s precedent, the Supreme Court took the case to resolve the dispute.
The relevant section of the Lanham Act governing remedies for trademark violations is 15 U.S.C. §1117(a), which states in relevant part:
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 …, the plaintiff shall be entitled, … subject to the principles of equity, to recover (1) defendant’s profits, (2) any damages sustained by the plaintiff, and (3) the costs of this action. [emphasis added]
Notably, Romag brought suit under Section 1125(a), which does not require “willfulness,” whereas a claim under Section 1125(c) does. Fossil attempted to overcome this distinction by suggesting that an award of profits under Section 1125(a) is “subject to the principles of equity” and that equity courts historically required a showing of willfulness before authorizing a profits remedy in trademark disputes. The Supreme Court did not agree, noting that “it’s far from clear whether trademark law historically required a showing of willfulness before allowing a profits remedy.” Accordingly, the Supreme Court was unwilling to read words into the statute that aren’t there.
The Supreme Court did recognize, however, 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 Fossil advances.”
Finally, the Supreme Court noted that policymakers, not the courts, are best suited to resolve the competing policy issues: “[S]touter restraints on profits awards are needed to deter ‘baseless’ trademark suits” against promoting “great respect for trademarks in the ‘modern global economy.’”