Romag Fasteners V. Fossil: Unfastening = the Circuit=20 Split on Profit Awards for Trademark Infringement
DOWNLOAD PDF =- Fede= r,=20 Michael N. Krieg= er,=20 John L. Green,=20 Caleb =20 =20
-
Industry Alerts =
=20
Romag Fasteners, Inc. v. Fossil Grp., = Inc., No.=20 18-1233 (April 23, 2020)
In a landmark decision issued by the Supreme Court of the United = States of=20 America in the matter of Romag Fasteners, Inc. v. Fossil Grp., = Inc.,=20 No. 18-1233 (April 23, 2020), the Supreme Court unanimously = held that under=20 the Lanham Act, proof of willful trademark infringement is not a = precondition to=20 a mark holder=E2=80=99s recovery of the infringer=E2=80=99s profits, = resolving a significant=20 split between several circuit courts. Prior to the Supreme = Court=E2=80=99s decision, six=20 circuits required a willfulness finding to award profits for a trademark = infringement claim=E2=80=94the First, Second, Eighth, Ninth, Tenth, and = D.C.=20 Circuits=E2=80=94whereas the other six circuits=E2=80=94the Third, = Fourth, Fifth, Sixth,=20 Seventh, and Eleventh Circuits=E2=80=94did not require a showing of=20 willfulness.
BACKGROUND & PROCEDURAL HISTORY
Romag Fasteners, Inc. (=E2=80=9CRomag=E2=80=9D) brought a = trademark infringement claim=20 under the Lanham Act, 15 U.S.C. 1125(a) against Fossil, Inc. = (=E2=80=9CFossil=E2=80=9D) and=20 retailers of Fossil products. Before the lawsuit, Fossil and Romag = entered into=20 an agreement that permitted Fossil to use Romag=E2=80=99s magnetic = fasteners on its=20 handbags and other products. Romag later realized that the Chinese = factories=20 Fossil hired to make its products were using counterfeit Romag = fasteners, and=20 Fossil failed to safeguard against this practice. At the district court = level,=20 the jury agreed with Romag finding that Fossil infringed on = Romag=E2=80=99s trademark=20 and falsely represented its products as being from Romag. However, the = jury=20 found that Fossil only acted with =E2=80=9Ccallous disregard=E2=80=9D[1]=20 for Romag=E2=80=99s trademark rights and concluded that Fossil did not = willfully=20 infringe. As a result, relying on the willfulness requirement adopted = within the=20 circuit for an award of profits, the district court refused to award = Romag the=20 profits Fossil earned. The Federal Circuit affirmed the district = court=E2=80=99s=20 decision on appeal, and Roman appealed the decision to the Supreme=20 Court.
THE SUPREME COURT=E2=80=99S = DECISION
The Supreme Court, in its determination of the proper standard = for an=20 award of profits for trademark infringement, analyzed the plain language = of the=20 Lanham Act. Upon a close reading of the statute, the Supreme Court held = that it=20 is inaccurate to require willfulness as a prerequisite in order to award = profits=20 for a violation of 15 U.S.C. 1125(a). Reluctant to =E2=80=9Cread into = the statute words=20 that aren=E2=80=99t there,=E2=80=9D[2]=20 the Court found that the Lanham Act=E2=80=99s text was clear and = provided that=20 willfulness is only a prerequisite for an award of profits under a = trademark=20 dilution claim under 15 U.S.C. 1125(c).[3]=20 However, willfulness is not a requirement for awarding profits where a=20 registered or unregistered trademark was infringed.[4]=20 The Supreme Court noted that the statute=E2=80=99s structure provides = additional support=20 against a willfulness requirement highlighting Congress=E2=80=99s = deliberate placement=20 of mental states (i.e., mens rea) throughout the Lanham Act.[5]=20 Although the Supreme Court held there is no willfulness requirement for=20 trademark infringement claims under the Lanham Act[6],=20 the Court noted there is no doubt =E2=80=9Cthat a trademark = defendant=E2=80=99s mental=20 state is a highly important consideration in determining whether an = award of=20 profits is appropriate.=E2=80=9D[7]
KEY TAKEAWAYS FROM THE SUPREME COURT DECISION
- Successful trademark infringement claimants seeking damages = for a=20 violation of Lanham Act, 15 U.S.C. =C2=A7 1125(a), may recover profits = without=20 having to demonstrate the infringement was willful.
- Clients should consider obtaining a clearance opinion from a = qualified trademark attorney prior to using a mark since the = user=E2=80=99s mental=20 state remains a =E2=80=9Chighly important consideration in determining = whether an=20 award of profits is appropriate.=E2=80=9D[8]=20 A clearance opinion could help demonstrate a client=E2=80=99s innocent = or good faith=20 use of a trademark.
- The Supreme Court=E2=80=99s decision does not alter the = willfulness=20 requirement to obtain an award of profits in trademark dilution cases = brought=20 under the Lanham Act, 15 U.S.C. =C2=A7 1125(c).
Dickinson Wright=E2=80=99s attorneys have considerable = experience in assisting=20 companies and individuals in litigating legal matters and protecting = their=20 intellectual property. The firm remains committed to helping our = clients=20 navigate this unprecedented time and remains fully available to provide = any=20 assistance that may be required. Trademark owners are encouraged = to=20 consult with one of Dickinson Wright=E2=80=99s attorneys experienced in = trademark=20 matters.
[1]=20
Romag Fasteners, Inc. v. Fossil, Inc., 817 F.3d 782, 784 (Fed. =
Cir.=20
2016).
[2] Romag=20
Fasteners, Inc. v. Fossil Grp., Inc., No.=20
18-1233, slip op. at 3 (April 23, 2020).
[3] Id.
[4] Id.
[5] Id. at 4.
[6] The Supreme Court also rejected =
Fossil=E2=80=99s=20
=E2=80=9Cprinciples of equity=E2=80=9D argument finding that such an =
interpretation would=20
require the Supreme Court to assume Congress intended to apply the =
willfulness=20
requirement inconsistently throughout the statute. Id. Additionally, the Supreme Court =
determined the=20
asserted policy concerns were relevant when before Congress and =
policymakers but=20
not before the Court. Id. at=20
7.
[7] Id. at 7.
[8] Id.
Related Services
Contacts
Recent Insights
- April 28, 2020Industry=20 Alerts = =20 CIPO Pandemic Response: Update April 28, 2020* = =20
- April 27, 2020Industry=20 Alerts = =20 Copyright Office Response to COVID-19 Pandemic = =20
- April 24, 2020Industry=20 Alerts = =20 Maintaining Trade Secrets Amid the COVID-19 Pandemic = =20
- April 23, 2020In=20 the News = =20 Dickinson Wright Receives Top Rankings in 2020 Chambers USA Guide; 43=20 Attorneys Recognized as Leaders in their Fields = =20
- April 22, 2020In=20 the News = =20 Flavia Campbell Joins Dickinson Wright=E2=80=99s Phoenix Office = =20
- April 2020Industry=20 Alerts = =20 CIPO Pandemic Response and Canada=E2=80=99s New Compulsory Patent = Licensing Provisions=20
- April 6, 2020In=20 the News = =20 Cindy Villanueva Joins Dickinson Wright=E2=80=99s Phoenix Office as Of = Counsel =20
- April 2020Industry=20 Alerts = =20 USPTO Pandemic Response
- April 2020Industry=20 Alerts = =20 Religious Institutions v. COVID-19: Why Religious Institutions Should = Think=20 Twice Before Live Streaming =