Willfulness Not an “Inflexible Precondition” to Obtaining a Trademark Infringer’s Profits
Romag Fasteners, Inc. v. Fossil Grp., __ U.S. __, 2020 WL 1942012 (Apr. 23, 2020) (Opinion by GORSUCH, J.; concurring opinion by Alito, J.; opinion concurring in the judgment by Sotomayor, J.) (Fed. Cir.: DYK, Wallach, Hughes) (D. Conn.: Arterton) (5 of 5 stars)
Supreme Court vacates Fed Cir’s treatment of Romag’s appeal concerning recovery of profits from trademark infringement (principally in 817 F.3d 782 (Fed. Cir. 2016)). The Second Circuit authority applied by the Federal Circuit was erroneous because it made willfulness a requirement for Romag recovering the profits Fossil had made by infringing Romag’s trademark. Willfulness is not a requirement for recovering profits based on false or misleading use of trademarks under § 1125(a) of the Lanham Act. The opinion describes how the willfulness requirement recited in § 1117(a) addresses only recovery of profits for § 1125(c) violations (i.e., trademark dilution). It does not apply to actions under § 1125(a). Neither does § 1117(a)’s reference to awarding profits “subject to principles of equity” impose a willfulness requirement. The opinion discusses how “principles of equity” does not import a mens rea requirement, but “more naturally suggests fundamental rules that apply more systematically across claims and practice areas.” Op. at 4. Further it is “far from clear whether trademark law historically required a showing of willfulness before allowing a profits remedy,” id. at 5, and the opinion cites some cases treating willfulness as a prerequisite, others not. The opinion concludes that although “a trademark defendant’s mental state is a highly important consideration in determining whether an award of profits is appropriate,” such is a “far cry from insisting on the inflexible precondition to recovery Fossil advances.” Id. at 7. Ultimately it characterizes Fossil’s position as based on policy considerations, rather than the statute, but points to “policymakers” as the place for “reconciling competing and incommensurable policy goals like these.” Id.
Justice Gorsuch’s opinion is joined by Chief Justice Roberts and Justices Thomas, Ginsburg, Breyer, Alito, Kagan, and Kavanaugh.
Alito, J., concurring: Justice Alito writes that willfulness is not a “prerequisite” to an award of profits, though it is a “highly important consideration[.]” Op. at 1. He concurs on that ground.
Justice Alito’s opinion is joined by Justices Breyer and Kagan.
Sotomayor, J.. concurring in the judgment: Justice Sotomayor criticizes the majority’s assessment of the role of willfulness to courts of equity, noting that “profits were hardly, if ever, awarded for innocent infringement.” Op. at 1. A district court awarding profits in cases of “innocent or good-faith trademark infringement” would be inconsistent with both § 1117(a)’s reference to “principles of equity” and the authority cited by the majority. “Because the majority is agnostic about awarding profits for both ‘willful’ and innocent infringement as those terms have been understood, I concur in the judgment only.” Id. at 2.
KEYWORDS: LANHAM ACT; TRADEMARK INFRINGEMENT; WILLFULNESS; PROFITS