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Under what circumstances can a trademark plaintiff recover profits from an infringer? The answer, it seems, is not so straightforward. Federal circuits are split on whether it is appropriate to require a showing of willful infringement to award profits – to the point that the issue is headed for the Supreme Court. In an amicus brief filed last week, the American Bar Association asked the Supreme Court to consider a more flexible rule for awarding profits in trademark infringement cases.
In the case at issue, Romag Fasteners v. Fossil, Inc., the jury awarded the manufacturer of magnetic clips used in handbags $6.7 million of Fossil’s profits in addition to $140,000 in damages for trademark and patent infringement. However, the judge tossed the profits award based on the finding that there was no willful infringement. Romag Fasteners filed its writ for review by the Supreme Court in March 2019, and the writ was granted in June.
The ABA argues that because the text of the Lanham Act doesn’t include a willfulness requirement for awarding profits or damages, the circuits should not impose such a condition. Instead, Section 1117 simply states a plaintiff may recover profits “subject to the principles of equity.” Since 2017, the ABA has advocated for a reading of the statute that includes the infringer’s intent as a factor in determining equity, rather than an outright prerequisite.
Three other briefs employing similar arguments have been filed by the American Intellectual Property Law Association, the International Trademark Association, and the Intellectual Property Law Association of Chicago. However, it seems there are at least some who disagree.
An amicus brief filed by the Intellectual Property Owners Association argues that requiring willfulness is consistent with the legislative history of Section 1117(a). Before amendments made in 1999, Section 1117(a) contained no mention of willfulness, leading to the different approaches amongst the circuits in determining what was required to award profits. The amendments, the IPO argues, were meant to clear up confusion and remedy the omission a willfulness requirement.
The case is set for review by the Supreme Court in the October 2019 term, but oral arguments have not been scheduled.