On April 23, 2020, the Supreme Court ruled that willfulness is not required for there to be an award of a trademark infringer’s profits. Romag Fasteners Inc. v. Fossil Grp., Inc., No.18-1233 (April 23, 2020).
Petitioner Romag Fasteners, Inc. (“Romag”) had a signed contract with Respondent Fossil, Inc. (“Fossil”) where Fossil is allowed to use Romag’s magnetic snap fasteners with the ROMAG trademark on Fossil’s handbags and other products. After discovering that factories Fossil was using in China were using counterfeit ROMAG fasteners, Romag sued Fossil for patent and trademark infringement. With respect to the trademark infringement, the jury found Fossil liable and awarded Fossil’s profits, but also found Fossil’s infringement was not willful. Therefore, since the jury found the infringement was not willful, the district court held that Romag was not entitled to the award of Fossil’s profits.
Eventually this issue regarding whether willful infringement is a prerequisite for an award of an infringer’s profits under a violation of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), reached the Supreme Court. Given that the circuits were split in how they handle this issue, the outcome of this case was closely watched.
In analyzing this issue, the Court focused on the language of the statute. First, the Court reviewed 15 U.S.C. § 1117(a), which states that defendants profits may be recovered where there is “a violation under section 1125(a) or (d) of this title or a willful violation under section 1125(c) of this title.” The Court read the statute to not require willfulness under § 1125(a) since there was no specific reference to willfulness as there was for a violation under § 1125(c). Then, the Court reviewed the Lanham Act more broadly and noted that the Lanham Act would specifically note if certain damages are awarded for intentional or willful violations, further supporting the position that if willfulness was a requirement for an award of profits for a violation under § 1125(a), it would have specifically stated so. As a result, while the Court acknowledges that willfulness is an important consideration in awarding profits, it declined to find that it is a requirement.
Since willfulness is difficult to prove in trademark infringement cases, this decision will be beneficial to trademark owners receiving just compensation for damages caused by trademark infringers.
Author: Darlene Tzou