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U.S. Supreme Court Rules Willful Trademark Infringement Not Required to Recover Defendant’s Profits

April 27, 2020

On April 27, 2020 the U.S. Supreme Court ruled that a trademark owner does not have to show willful infringement as a precondition to a profits award. Romag Fasteners, Inc., who sells magnetic snap fasteners for leather goods under its registered trademark ROMAG, sued Fossil Inc. and its retailers for trademark infringement, alleging that Fossil’s authorized factories in China had used counterfeit Romag fasteners to make Fossil products. The trial jury agreed, making an advisory award of $6.7M in Fossil’s profits to deter future infringement, but declining to find willfulness. The district court rejected the jury award, holding that, without willful infringement, Romag was not entitled to recover any profits. Romag appealed, and the Federal Circuit affirmed.

The Supreme Court found that requiring willfulness as “an inflexible precondition to recovery”—a position followed by the Second Circuit and championed by Fossil—lacked support under the language of the Lanham Act. The Supreme Court, therefore, vacated the Federal Circuit’s judgment and remanded the case for further proceedings consistent with the Court’s opinion.

This decision changes the damages model in trademark infringement cases and should be taken into account immediately by plaintiffs and defendants alike.