Romag Fasteners, Inc. v. Fossil, Inc., et al., No. 18-1233 (Supreme Court 2019).
The Supreme Court has granted writ of certiorari in the trademark case of Romag Fasteners involving profit disgorgement under 15
U.S.C. § 1117(a).
The statute appears to provide profit disgorgment (i.e., awarding the defendant’s profits) as a regular remedy for trademark infringement although “subject to the principles of equity.” In its decision, the Federal Circuit (following 2nd Circuit law) held that profit disgorgment must be associated with a more-egregious activity – such as willful infringement – before being awarded. Here, the jury found no willful infringement and so that foreclosed the award of the defendant’s profits. We are now set-up for the Supreme Court to decide the following question presented:
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), id. § 1125(a).
Question presented in petition. The adjudged infringer Fossil provided its alternative question as follows:
Whether the Court should address the standard for an accounting of a defendant’s profits even though (a) regardless of the different formulations of “principles of equity” invoked by lower courts, their application in the overwhelming majority of cases results in an accounting being ordered when the infringement was willful and denied when it was not; and (b) the trial court’s findings in this case bar petitioner from recovering respondents’ profits under either standard applied by the courts of appeals.
The relevant statute itself reads as follows:
When a violation of any right of the registrant of a mark registered in the [PTO], 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.
My reading of the statute itself suggests that non-willful infringement can support an award of defendant’s profits, so long as that award is in accord with “the principles of equity.” And, those principles are not fully defined for this particular question. There is also a question of timing — principles of equity as of when? Are these 18th; 19th; 20th; or 21st century equity principles?
In the patent world, profit disgorgment is permitted as a remedy for design patent infringement. That remedy is not expressly limited to willful infringement or limited by the principles of equity. However, the remedy does require on-its-face an “imitation,” which in my mind should be read to require some amount of copying.
In the other thread Paul and other make a point about the claims. Essentially saying if what I said were true, then the claims themselves may be enough for an invention.
And of course the claims may be enough for an invention. And —guess what–even a pioneering invention. A claim to a fiber optic cable was enough for anyone skilled in the art to build it. A pioneering invention enabled by the claim.
The anti-patent propaganda never ends.
Consider the source: Paul has long ago left the ranks of those that actually care to work to protect innovation, and has long been on the side of those seeking to minimize the protective aspects that the patent system was intended to provide.
Of course, one could write a “picture claim” for some inventions that contains enough enablement detail to comply with 112 if originally filed with the application. Of course, that is not a normal claim, and definitely not the kind of claim anyone has has been talking about here, which is functional result claims.
How many “picture claims” of the sort that you indicate are actually pursued by ANY patent practitioners?
On a percentage basis?
Would that compete with the UNDER 2% (way under) of Jepson Claim usage?
Paul, offering up such a counter point – while ignoring the rather high degree of limited use of the counter point is more than a bit disingenuous.
The problem here appears to be the second circuit law that mandates an action in which the Federal law clearly provides that action need not follow that mandate.
The Federal Law is clearly written such that the act of willfulness only covers half the situations in which disgorgement is permitted.
Had Congress wanted willfulness to be a requirement for disgorgement, the law would have been written differently (there is too much attempted bootstrapping through the notion of “principles of equity” to “scriven out” the plain words of the statute.
I basically agree with you, but the problem is that the statute was cobbled together over decades to cover different forms of infringement and dilution. So you cannot read it as a coherent whole.
The real issue is whether the “prinicples of equity” when the original statute was enacted in 1946 allowed for disgorgement of profits without a showing of willfulness. The short answer, I think, is yes, because the closest case on point in time and on the legal issues is Champion Spark Plug Co. v. Sanders, 331 U.S. 125 (1947). Some courts read that to require willfulness. I think they are wrong.
I also hope they address what does need to be shown to order disgorgement, even if willfulness is not required. There are different views on that too.
Thanks BL – was this particular section one that was cobbled together?
Yes, 15 U.S.C. 1117(a).
Thanks again, BL.
I took a look at the Cornell Law website listing for this section of law, and sure enough, the historical pedigree here is rather detailed:
July 5, 1946, ch. 540, title VI, § 35, 60 Stat. 439; Pub. L. 87–772, § 19,
Oct. 9, 1962, 76 Stat. 774; Pub. L. 93–596, § 1,
Jan. 2, 1975, 88 Stat. 1949; Pub. L. 93–600, § 3,
Jan. 2, 1975, 88 Stat. 1955; Pub. L. 98–473, title II, § 1503(2),
Oct. 12, 1984, 98 Stat. 2182; Pub. L. 99–514, § 2,
Oct. 22, 1986, 100 Stat. 2095; Pub. L. 100–667, title I, § 129,
Nov. 16, 1988, 102 Stat. 3945; Pub. L. 104–153, § 7,
July 2, 1996, 110 Stat. 1388; Pub. L. 106–43, § 3(b),
Aug. 5, 1999, 113 Stat. 219; Pub. L. 106–113, div. B, § 1000(a)(9) [title III, § 3003(a)(2), (b)],
Nov. 29, 1999, 113 Stat. 1536, 1501A–549; Pub. L. 107–273, div. C, title III, § 13207(a), (b)(11),
Nov. 2, 2002, 116 Stat. 1906, 1908; Pub. L. 108–482, title II, § 202,
Dec. 23, 2004, 118 Stat. 3916; Pub. L. 110–403, title I, §§ 103, 104,
Oct. 13, 2008, 122 Stat. 4259.)
I should also add:
link to law.cornell.edu
which does go into some more detail tracking the changes…
The other reason I think that courts requiring willfulness are wrong is that their statutory basis is the phrase “subject to the principles of equity.” That is a strange basis to impose an inflexible willfulness requirement.
Hecht Co. v. Bowles, 321 U.S. 321, 329 (1944).
Good point on the “flexibility” of applying equity in and of itself.
Compliments the point that I was presenting on the “required flexibility” of the statute as written (the sentence structure itself cannot be properly read in terms of the grammatical structure as requiring the optional second condition)
35 USC 289 entitled “Additional remedy for infringement of design patent,” states in its entirety:
“Whoever during the term of a patent for a design, without license of the owner, (1) applies the patented design, or any colorable imitation thereof, to any article of manufacture for the purpose of sale, or (2) sells or exposes for sale any article of manufacture to which such design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit, but not less than $250, recoverable in any United States district court having jurisdiction of the parties.
Nothing in this section shall prevent, lessen, or impeach any other remedy which an owner of an infringed patent has under the provisions of this title, but he shall not twice recover the profit made from the infringement.”
[No “equity” provision and alternative part (2) above seems to literally award the design patent owner the sellers total profits even though the seller did not apply the design or have knowledge of infringement?]
How does the Federal Circuit still screw up equity. You’d think they’d opt to be more deferential after eBay, Nautilus (implicitly invalidating Spansion v, ITC), SCA Hygeiene, and Octane Fitness
When one remembers that the Simians in the CAFC cage are fire-hose trained by the Supreme Court to be anti-patent, a lot of things can be more easily “understood” (understood in quotes, as such does not denote any sense of what one should accept).
Re: “How does the Federal Circuit still screw up equity.. after eBay, Nautilus .. SCA Hygeiene, and Octane Fitness.”
I am not sure if Judge Newman favors any equity principles in patent liltigation, noting her opposition to any length of deliberate application delays triggering prosecution laches [not to be confused with suit delay] as a defense even in the most extreme Lemelson cases. Also note that some judges and PTO attorneys never understood that the Metalizing Engineering Doctrine is equitable, not statutory, and confused it with on sale cases.
Comments are closed.