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Supreme Court Rules Willfulness Not a Precondition to Award of Profits in Trademark Infringement Cases

On April 23, 2020, the U.S. Supreme court unanimously ruled in Romag Fasteners, Inc. v. Fossil Group, Inc., fka Fossil, Inc., et al. (No. 18-1233) that “willfulness” is not a precondition to awarding a defendant’s profits in a trademark infringement case.  This decision may have significant ramifications for trademark infringement cases brought in many jurisdictions.

Prior to this decision, U.S. federal courts had been split as to whether a plaintiff can recover a defendant’s profits without proving that the infringement had been willful.  (The Second Circuit, covering New York, among other territories, for example, had until now required a finding of willful infringement in order to award profits.)  The Court has now resolved this split, ruling that willfulness, while still an important factor to consider in the determination, is not a prerequisite to an award of defendant’s profits.

Romag Fasteners, Inc. had filed the trademark infringement suit against Fossil, Inc., alleging that Fossil had manufactured watches containing counterfeit Romag fasteners, in violation of Romag’s trademark rights.  Although Romag was successful in proving infringement, the lower court declined to award Fossil’s profits to Romag because Romag had been unable to prove that Fossil’s infringement was willful.   This decision as to damages was vacated by the Supreme Court, and the proceeding is now remanded.

Many expect that this decision will lead to an increase in trademark litigation, particularly in jurisdictions where a showing of willfulness was previously required, since accidental or unintentional infringement is now no longer an absolute defense to an award of profits in those jurisdictions.  The fact that defendants’ profits are on the table, even where the willfulness of an infringement cannot be proven, is likely to motivate plaintiffs to bring infringement suits and may make the resolution of trademark disputes more complicated.

For additional information, please feel free to contact Adam Cohen (at 212-519-5146, acohen@kanekessler.com), Brendan McFeely (at 212-519-5188, bmcfeely@kanekessler.com), or Linda Dougherty (at 212-519-5144, ldougherty@kanekessler.com) in our Intellectual Property Department.