US Supreme Court holds that wilful infringement is not a pre-condition to award profits.
In the landmark decision pronounced by the Supreme Court of United States in the case of Romag Fasteners, INC. Vs. Fossil Group, INC., the US Supreme Court while deciding Trademark infringement suit came to the conclusion that it is not required to show that the defendant wilful infringe the trademark of Plaintiff so as to award profits earned by the defendant to the plaintiff.
The brief facts of the said case were that Romag Fasteners, INC and Fossil Group, INC., signed an agreement to use Romag’s Fasteners in Fossils leather goods and eventually it was discovered by Romag that factories in China making Fossil products were using counterfeit Romack fasteners. Romag sued Fossil and certain retailers of forcing for trademark infringement under the provisions of 15 U.S.C. §1125(a) that deal with civil action against any person who creates false designation of origin, false or misleading description of fact, or false or misleading representation of fact by virtue of using any word, term, name, symbol, device or combination thereof in connection with his/her goods so as to create confusion.
Romag pressed for claiming profits earned by Fossil in the act of infringement on the grounds that Fossil had wilfully infringed the trademark of Romag. The District Court rejected the said plea of Romag on the grounds that Fossil had not acted wilfully while infringing the trademark of Romag.
Aggrieved by the said decision, Romag filed an appeal before the Supreme Court of United States and the US Supreme Court observed that the provisions governing remedies for trademark violation i.e. section 1117(a) of the Lanham Act never required showing of wilfulness as a precondition for awarding profits in a civil action under section 1125(a) rather wilfulness was only a pre condition under Section 1117(a) only qua claiming profits in case of dilution by blurring or dilution by tarnishment i.e. a violation prescribed under section 1125(c). It was further observed that the word wilfulness was absent to award profits in case of violation under Section 1125(a) clearly established that violation under section 1125(a) could trigger an award of defendant’s profit subject to the principles of equity.
The said judgment was delivered by Gorsuch, J., in which Roberts, C. J., and Thomas, Ginsburg, Breyer, Alito, Kagan, and Kavanaugh, JJ., joined. Alito, J., filed a concurring opinion, in which Breyer and Kagan, JJ., joined. Sotomayor, J., filed an opinion concurring in the judgment.
Very interestingly one of the Hon’ble Judge who filed a concurring opinion held that the courts of equity were just as likely to award profits for such “wilful” infringement as they were for “innocent” infringement.
Lastly the US Supreme Court made a disclaimer that there is no doubt in the fact that defendant’s mental state is a highly important consideration in determining whether an award of profits is appropriate or not.