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.