SCOTUS: It’s not the intent that counts
News: “Trademark owners don’t have to show infringers’ willfulness in order to win an award from their profits, a unanimous Supreme Court said.”
The case is Romag Fasteners, Inc. v. Fossil, Inc., and here is the opinion, written by Justice Gorsuch.
What the heck, we’re grownups! Here’s the official syllabus, which seems to have been pulled from pages 2 – 7 of the opinion:
A plaintiff in a trademark infringement suit is not required to show that a defendant willfully infringed the plaintiff’s trademark as a precondition to a profits award. The Lanham Act provision governing remedies for trademark violations, §1117(a), makes a showing of willfulness a precondition to a profits award in a suit under §1125(c) for trademark dilution, but §1125(a) has never required such a showing. Reading words into a statute should be avoided, especially when they are included elsewhere in the very same statute. That absence seems all the more telling here, where the Act speaks often, expressly, and with considerable care about mental states. See, e.g., §§1117(b), (c), 1118. Pointing to §1117(a)’s language indicating that a violation under §1125(a) can trigger an award of the defendant’s profits “subject to the principles of equity,” Fossil argues that equity courts historically required a showing of willfulness before authorizing a profits remedy in trademark disputes. But this suggestion relies on the curious assumption that Congress intended to incorporate a willfulness requirement here obliquely while it prescribed mens rea conditions expressly elsewhere throughout the Act.
Nor is it likely that Congress meant to direct “principles of equity”—a term more naturally suggesting fundamental rules that apply more systematically across claims and practice
areas—to a narrow rule about a profits remedy within trademark law. Even crediting Fossil’s assumption, all that can be said with certainty is that [p]re-Lanham Act case law supports the ordinary principle that a defendant’s mental state is relevant to assigning an appropriate remedy. The place for reconciling the competing and incommensurable policy goals advanced by the parties is before policymakers.
Well, yeah. Here’s more, from the opinion:
From the record the parties have put before us, it’s far from clear
whether trademark law historically required a showing of
willfulness before allowing a profits remedy. . . .
Given these traditional principles, we do not doubt that a trademark defendant’s mental state is a highly important consideration in determining whether an award of profits is appropriate. But acknowledging that much is a far cry from insisting on the inflexible precondition to recovery Fossil advances.
There’s an odd concurrence by Alito, Breyer and Kagan that goes like this — and this is the entire thing:
We took this case to decide whether willful infringement is a prerequisite to an award of profits under 15 U. S. C. §1117(a). The decision below held that willfulness is such a prerequisite. App. to Pet. for Cert. 32a. That is incorrect. The relevant authorities, particularly pre-Lanham Act case law, show that willfulness is a highly important consideration in awarding profits under §1117(a), but not an absolute precondition. I would so hold and concur on that ground.
This just reads like a shorter version of the Gorsuch opinion, but what do I know?
More interesting is this concurrence by Sotomayor:
The majority suggests that courts of equity were just as likely to award profits for such “willful” infringement as they were for “innocent” infringement. But that does not reflect the weight of authority, which indicates that profits were hardly, if ever, awarded for innocent infringement. . . . Nor would doing so seem to be consistent with longstanding equitable principles which, after all, seek to deprive only wrongdoers of their gains from misconduct.
I am not sure how being an innocent infringer (yes, let’s say you could really prove that) makes someone not a “wrongdoer,” considering that infringing is wrong no matter what is in your heart. Nor do I see the equitable argument for allowing an innocent infringer to keep the profits of his innocent infringement, regardless of how we color his soul.
In any event, there we are. Disgorge, infringers! Disgorge!