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The U.S. Supreme Court issued numerous landmark decisions in 2020, among those—for trademark scholars and practitioners—Romag Fasteners, Inc. v. Fossil, Inc.1 The Court, with Justice Gorsuch delivering the majority opinion, held that a plaintiff in a trademark infringement suit is not required to show that a defendant willfully infringed the plaintiff’s trademark as a precondition to a profits award. But Justice Gorsuch’s opinion and Justice Alito’s and Justice Sotomayor’s concurrences were clear that mental state is still a highly important consideration in determining whether to award profits. To that end, even with the Romag decision clarifying that willfulness is not a precondition for a profits award in a trademark infringement suit, the lower courts are likely to still require plaintiffs to prove that defendants had high levels of culpability before awarding profits for trademark infringement. Practitioners should expect that juries will find that defendants who knew of infringement or were reckless concerning the possibility of such conduct deserve to lose their profits.

Romag solidifies the threat posed to companies that rely on third-party manufacturers. By allowing a profits award when infringement is perpetrated with a mental state less than willfulness, this decision incentivizes companies using Chinese and other foreign manufacturers to innovate in order to mitigate these risks, either by strengthening supply chain oversight or (more likely) by writing contracts to control the risk as much as possible. Considering the importance of Chinese manufacturing to global trade, the Chinese legal system and its evolving trademark enforcement system will likely cause companies to get creative.
Continue Reading Meeting of the Minds: The Price of Recklessness: Disgorgement of Profits in a Post-Romag World

The Supreme Court recently denied petitions for certiorari in two of the most highly watched intellectual property cases before the Court. Those cases were Jack Daniel’s Properties Inc. v. VIP Products LLC and The Moodsters Company v. Walt Disney Company. Both cases were on petition from the Ninth Circuit and are summarized below for your convenience.

I.          Jack Daniel’s Properties, Inc. v. VIP Products LLC

In Jack Daniel’s Properties, Jack Daniel’s sued the maker of a dog toy, known as the Bad Spaniels Silly Squeaker, that was comedically modeled after the Jack Daniel’s Old. No. 7 bottle. The toy was a clear parody, but Jack Daniel’s alleged that the toy infringed its intellectual-property rights. VIP Products argued that their use wasn’t infringement because the toy was an expressive work entitled to First Amendment protection under Rogers v. Grimaldi. The district court rejected the argument and found VIP Products had infringed Jack Daniel’s trademark/trade dress.
Continue Reading Supreme Court Update: SCOTUS Denies Review of Two Highly Watched IP Cases

For some time there has been a split among the Federal circuits as to whether evidence of willfulness is required in order to award disgorgement of profits for trademark infringement under Section 1125(a) of the Lanham Act.  The split stems from how each Federal circuit interprets Section 1117(a) of the Lanham Act which was amended in 1999.  The section reads as follows:

When a violation of any right of the registrant of a mark registered in the Patent and Trademark Office, 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 principles of equity, to recover (1) defendant’s profits . . .

A number of Federal Circuits, including the Second and the Ninth, have interpreted the above to require a showing of willfulness for disgorgement in Section 1125(a) cases.  Six Federal Circuits do not.  On April 23, 2020 the United States Supreme Court made clear where it stands.
Continue Reading Trademark Infringers Beware – Willfulness Not Required for Disgorgement