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When must a trademark infringer disgorge its profits?

News and Notes Focused on the 3 Public Faces of IP Law

  • Brand Image Protection - Trademark Law
  • Visual Image Protection - Copyright Law
  • Personal Image Protection - Right of Publicity Law

The Image Protection Law blog has been created in order to share stories and information on the legal aspects of: 1) the marketplace reputation of a company or product captured in its trademark, 2) published or publicly-displayed artwork, photography, and any created visual design, and 3) use of a person's photograph or likeness for product promotion or other commercial purposes.

The "IP3" share at least one thing in common: Image is everything. In these posts let's look at what that means in the realm of intellectual property in the news, but let's also be prepared to explore if there's something more beyond "everything." Don't forget, the intellectual in "intellectual property" doesn't mean smart or brainy, although by nature true creators often are. The word is used to refer to any creation, i.e., a "product of the mind." While this blog will be regularly updated, you are encouraged to share your thoughts on these posts.

The U.S. Supreme Court released its January 2020 oral argument calendar and it schedules argument in an important trademark infringement case. On Jan. 14, the fourth case heard in the new year will be Romag Fasteners v. Fossil Inc., requiring the justices to decide whether the trademark owner must show the infringement was willful under the Lanham Act to be awarded the infringer's profits.

Do federal courts have flexibility to award profits or must they first find willful infringement?

Infringement of a trademark occurs when a nonowner uses the mark or one confusingly similar for the same or related goods or services associated with the trademark such that the public would be confused about the source of the goods or services. The issue in Romag Fasteners is following a finding of infringement, under what circumstances may an infringer be required to disgorge its profits, and whether it is necessary to establish the infringement was "willful."

Professionals and courts split down the middle on the issue

As explained in an IP Watchdog article, several professional organizations have taken stands in the case, most urging for a flexible approach that would allow the trial court to fashion an appropriate remedy for infringement without first establishing willfulness. For example, the American Bar Association argues that the Supreme Court has supported lower courts having "flexibility and discretion" in Lanham Act infringement cases. The ABA asserts that willfulness in infringement (as opposed to negligent or accidental infringement) should be a factor to consider in awarding profits, but not a prerequisite.

By contrast, the Intellectual Property Owners Association or IPO takes the opposite approach, pushing for a willfulness requirement to be awarded profits. IPO believes the Lanham Act's "plain language and legislative history" require willfulness (quoting IPO's amicus brief).

In addition, the circuits (of the U.S. Courts of Appeal) are split six-six on the issue, with the 9th Circuit (which includes California) agreeing with the IPO.

We will report back in this space on this important trademark case.






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