Collecting Profits for Trademark Infringement Just Got Easier— what this means for small business owners

May 20, 2020 | Written By Nicole Gaither

trademark law

The U.S. Supreme Court recently issued its decision in Romag Fasteners, Inc. v. Fossil, Inc., effectively making collecting profits as damages for trademark infringement a lot easier. This decision paves the way for trademark owners to go after profits as a remedy in the absence of any evidence that an infringer’s conduct was willful.  Prior to this case, some courts required willfulness for a plaintiff to recover profits from an infringing defendant. This is significant because some lawsuits that previously might not have made sense to pursue, may now be considered under this new ruling.

For example, consider a case where a plaintiff suffered minimal lost sales, with limited evidence that the infringement was willful. If the defendant profited from the infringement, the case might still go forward. Plaintiffs may even be entitled to greater monetary damages in certain cases. They may have greater leverage to challenge infringing conduct through pre-litigation enforcement efforts, such as cease and desist letters.

On the flip side, defendants need to be aware that they may face higher damage payouts for infringing conduct even if they did not act in bad faith.

Small businesses need to consider this when adopting new marks. Now that non-willful infringement can result in an award of profits, it is more important than ever to avoid infringement and infringing conduct. Business owners need to perform comprehensive clearance searches (versus less complete searches, such as “knockout” searches), and have an attorney analyze the results of those searches and provide an opinion as to the availability of a trademark before they start using it.

– Written by Nicole Gaither

References:

Romag v Fossil: no intent required in trademark disputes to secure profits awards, US Supreme Court rules

Supreme Court rules a plaintiff does not have to prove willful infringement to receive damages in trademark case.

 

share this story: