Introduction. In this age of global unrest, intellectual property disputes are becoming more prevalent. The Supreme Court of the United States (SCOTUS) has now made it clear that the victim of trademark infringement does not have to show that the infringer acted willfully in order to recover a profits award for the false or misleading use of the victim’s trademark. Romag Fasteners, Inc v. Fossil, Inc., 140 S. Ct. 1492, 206 L. Ed. 2d 672 (2020). This should make it easier in the future to hold violators of U.S. trademark laws accountable.
Background and Court’s Analysis. This case arises out of an agreement entered into between Romag Fasteners, Inc., and Fossil, Inc.. The agreement allowed Fossil to use Romag’s fastners in Fossil’s handbags and other products.
Initially, both sides seemed content with the arrangement. But in time Romag discovered that the factories Fossil hired in China to make its products were using counterfeit Romag fasteners—and that Fossil was doing little to guard against the practice. Unable to resolve its concerns amicably, Romag sued. The company alleged that Fossil had infringed its trademark and falsely represented that its fasteners came from Romag. After trial, a jury agreed with Romag, and found that Fossil had acted “in callous disregard” of Romag’s rights. At the same time, however, the jury rejected Romag’s accusation that Fossil had acted willfully, as that term was defined by the district court.
Romag Fasteners, Inc v. Fossil, Inc., supra, *1494.
The jury’s distinction was significant. Since the jury rejected Romag’s accusation that Fossil had acted willfully, the trial court denied Romag’s request for a profits award. On appeal, the Court of Appeals affirmed the district court’s judgment and SCOTUS (the “Court”) granted the Plaintiff’s writ of certiorari.
The Court recognized that, in cases like this, there was a split in appellate court decisions as to whether the Plaintiff must show that a Defendant’s violation was willful in order for the Plaintiff to recover the profits that the Defendant made from the trademark violations. The court then quoted the current version of the Lanham Act governing trademark infringement that states:
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 …, the plaintiff shall be entitled, *1495 subject to the provisions of sections 1111 and 1114 of this title, and subject to the principles of equity, to recover (1) defendant’s profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action.”
Romag Fasteners, Inc v. Fossil, Inc., supra, *1494–95.
Romag alleged and proved a violation under § 1125(a), the provision providing for relief for the false or misleading use of trademarks. “And in cases like that, the statutory language has never required a showing of willfulness to win a defendant’s profits.” Romag Fasteners, Inc v. Fossil, Inc., supra, *1495. Thus, the Court went on to hold that Romag was not required to prove a willful violation to recover a profits award, vacated the judgment of the court of appeals and remanded the case for further proceedings consistent with the opinion.
Conclusion. This decision makes it clear that the victim of trademark infringement seeking to recover a lost profits award for an infringer’s false or misleading use of a trademark does not have to show that the infringer acted willfully under the Lanham Act. In the age of our global economy, this decision should make it easier to hold violators of U.S. trademark laws accountable.