Posts Tagged: "Romag Fasteners v. Fossil"

Circuits have long split over whether willfulness is required before a trademark infringer’s profits may be awarded. Section 1117(a) of the Lanham Act allows an award of profits “subject to principles of equity.” In Romag v. Fossil, the jury awarded Fossil’s $6.7 million in profits to Romag to deter infringement, even though the jury found only 1% of those profits were attributable to the infringement. However, because the jury found Fossil infringed “in callous disregard” but not willfully, the Federal Circuit refused to allow the award of Fossil’s profits. The Supreme Court disagreed, reversing the Federal Circuit in today’s decision. Instead, “mental state” or “mens rea” is only a consideration for an award of the infringer’s profits, albeit an “important” or “highly important” consideration. The Court gave nodding mention to the substantial competing policy-based arguments submitted by both parties and amicus briefing and fleshed out further at oral argument. But ultimately, the decision stuck closely to the statutory language, finding Section 1117(a) could not support the weight of a willfulness prerequisite.

Next week, the Supreme Court will hear the first of six IP cases granted cert last term. On Monday, the Court will hear Peter v. NantKwest, in which the question presented is “Whether the phrase ‘[a]ll the expenses of the proceedings’ in 35 U.S.C. 145 encompasses the personnel expenses the USPTO incurs when its employees, including attorneys, defend the agency in Section 145 litigation.” The Court will heard other IP cases in November and December, while Google v. Oracle, Berkheimer v. HP, and Hikma v. Vanda await a decision on cert, and petitions in Straight Path IP Group, LLC v. Apple Inc., et al. and Athena Diagnostics v. Mayo Collaborative Services have the patent world holding its collective breath.

The Intellectual Property Owners Association and four other associations have filed amicus briefs with the Supreme Court in the case of Romag Fasteners v. Fossil, Inc., Fossil Stores, I. Inc., Macy’s Inc, and Macy’s Retail Holdings, Inc. The case will examine whether lower courts have discretion under the Lanham Act with respect to how to award damages in trademark infringement cases, or whether courts are required to establish that the infringement was willful before awarding profits. While the American Bar Association (ABA), the International Trademark Association (INTA), the American Intellectual Property Law Association (AIPLA) and the Intellectual Property Law Association of Chicago (IPLAC) support adopting a more flexible approach that would not make willfulness a prerequisite to recover profits, IPO argues that the plain language of the statute necessitates such a requirement.

In mag Fasteners, Inc. v. Fossil, Inc., Romag sued Fossil for patent and trademark infringement and a violation of the Connecticut Unfair Trade Practices Act (“CUTPA”) after one batch of Fossil’s handbags appeared to have counterfeit magnetic snaps. The jury found Fossil liable for patent and trademark infringement and for violating the CUTPA. The Federal Circuit affirmed the patent and trademark infringement verdicts. After that appeal, Romag sought attorney’s fees under the Patent Act, Lanham Act, and the CUTPA. The district court awarded attorney’s fees under all but the Lanham Act… The Supreme Court’s “objectively unreasonable” standard for attorney’s fees set forth in Octane applies to infringement cases under the Lanham Act and the Patent Act. In attorney’s fee disputes, courts must consider the totality of the circumstances, including the conduct of both parties.