Yesterday, the Supreme Court decided a trademark damages
question that has long divided courts across the country.
For decades, a trademark owner's chances of recovering an
infringer's profits in litigation varied depending on where the
case was pending. The Lanham Act allows an award of an
infringer's profits "subject to
the principles of equity" – but what does that
mean? Can an unknowing infringer be on the hook for its
profits, or is willfulness required before that is fair?
Several circuits insisted profits were wholly unavailable absent
willfulness, including the Second Circuit, where this dispute
arose.
The Background
Romag Fasteners makes and
sells magnetic snap fasteners, which it licensed to Fossil for use on handbags
and other products. But Fossil's manufacturers in China
began using counterfeit Romag fasteners, and Fossil did not take
appropriate steps to keep them from doing so. Romag sued, and
a jury found that Fossil had infringed Romag's
