ROMAG FASTENERS, INC. v. FOSSIL, INC.
Before the Supreme Court of the United States. On Writ of Certiorari to the United States Court of Appeals for the Federal Circuit.
Summary: Trademark owners are not required to show willfulness as a precondition to an award of infringer’s profits.
Romag Fasteners, Inc. (“Romag”) sued Fossil, Inc. and certain retailers (collectively, “Fossil”) for trademark infringement. A jury found that Fossil infringed but did not act willfully. Romag sought an award of Fossil’s profits under 15 U.S.C. § 1117(a) of the Lanham Act. Relying on Second Circuit precedent requiring willfulness to award profits for trademark infringement, the district court rejected Romag’s request. On appeal, the Federal Circuit applied the same Second Circuit law and affirmed the district court’s decision.
The Supreme Court granted certiorari and reversed, holding willfulness is not a prerequisite to an award of profits for trademark infringement. The Court began its analysis by noting that the text of § 1117(a) requires a showing of willfulness to award profits for trademark dilution, but not for trademark infringement. The Court found this distinction instructive, noting that other sections of the Lanham Act exhibit “considerable care” with standards regarding mental states. The Court then considered the text of § 1117(a) stating an award of defendant’s profits is “subject to the principles of equity.” The Court found it unlikely that Congress intended to obliquely incorporate a mental state through this language, when Congress expressly prescribed mental state conditions elsewhere throughout the Lanham Act. The Court also found it unlikely that Congress directed the phrase “principles of equity,” which suggests fundamental and broadly applicable rules, to a specific rule about trademark remedies. Considering traditional principles, the Court found that a defendant’s mental state is a “highly important consideration” in determining whether to award profits, but that it cannot be a prerequisite to such an award. Accordingly, the Court vacated the Federal Circuit’s judgment and remanded for further proceedings.
Justice Alito concurred, joined by Justice Breyer and Justice Kagan. Justice Alito wrote that pre-Lanham Act case law shows that willfulness is a highly important consideration in awarding profits, but not an absolute precondition.
Justice Sotomayor, concurring in the judgment only, distinguished willful infringement from innocent infringement in the context of profit awards for trademark infringement. Justice Sotomayor wrote that an award of profits for innocent infringement would be inconsistent with “principles of equity” referenced in § 1117(a).
Editor: Paul Stewart
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