April 23, 2020 – Today in Romag Fasteners, Inc. v. Fossil Group, Inc. the Supreme Court issued a unanimous decision holding willfulness is not a threshold requirement before a plaintiff can obtain an award of profits in a trademark infringement action.
Romag had sued Fossil for using counterfeit ROMAG branded fasteners in its handbags. A jury found Fossil infringed Romag’s trademark rights and awarded Romag about $6.8M of Fossil’s profits. The lower courts held Romag was not entitled to profits because Fossil’s infringement was not willful. Circuit courts had been split on this issue. The Third, Fourth, Fifth, Sixth, Seventh, and Eleventh Circuits do not require willfulness to award profits. The DC, First, Second, Eighth Ninth and Tenth Circuits did require willfulness before awarding profits (although the First Circuit only required willfulness where the parties are not direct competitors).
The Supreme Court resolved the split among the circuits by holding that willfulness is not a threshold requirement for recovering profits from a trademark infringer. Although willfulness is a precondition to a profits award when the plaintiff proceeds under §1125(c) (trademark dilution), there is no such requirement in the statute for Fossil’s violation of §1125(a) (false or misleading use a trademark). Furthermore, other sections of the Trademark Statute expressly provide a mens rea requirement (e.g., §§ 1117(b), 1117(c), 1118, 1114). The glaring absence of an express willfulness requirement in §1125(a) indicates there is no such requirement.
This decision means that companies will now have to be more careful when launching new products to ensure that there is no violation of trademark rights. Now, it does not matter whether the infringement was willful or not to be awarded profits. Practically, companies should invest in searching and clearance opinions before investing resources in a new product/brand. Such an investment may help to avoid unwittingly infringing prior trademark rights. Non-willfulness will not immunize an infringer against liability for an award of profits.