Today, a unanimous Supreme Court ruled that plaintiffs asserting Lanham Act claims can recover an infringer’s or false advertiser’s profits without proving that the defendant acted willfully. The opinion, authored by Justice Gorsuch, resolved a long-standing circuit split on the question of whether proof of willfulness is a precondition to such relief.
Background of the Romag Case
In 2010, Romag Fasteners, a manufacturer of patented magnetic snap fasteners, sued Fossil and its distributors in the District of Connecticut for patent and trademark infringement under the Lanham Act after discovering Fossil products were using counterfeit snaps bearing the Romag mark. A jury awarded Romag nearly $6.8 million in profits, but during a bench trial on equitable defenses and remedies, the district court set aside the jury’s profits award, holding that “willfulness remains a requirement for an award of defendants’ profits in this Circuit” and that plaintiff had not proved willfulness. The Federal Circuit Court of Appeals affirmed, and the Supreme Court granted certiorari to resolve a split in authority over whether, under the statutory language of the Lanham Act, willfulness is a precondition to recovering profits for trademark infringement.
The Supreme Court’s Decision
In an opinion highlighting Justice Gorsuch’s textualist approach, the Court analyzed whether some circuits’ categorical requirement of willfulness in order to award profits was consistent with the plain language of Section 1117(a) of the Lanham Act — the provision governing remedies in trademark infringement and false advertising cases. The Court began by noting that the Lanham Act speaks “often and expressly about mental states,” including in Sections 1117(b) (requiring treble damages and attorneys’ fees for intentional acts), 1117(c) (permitting higher statutory damages for willful violations), 1118 (allowing for destruction of infringing items in the case of a willful violation) and 1114 (innocent infringers subject only to injunctions). But conspicuously absent from Section 1117(a) is any reference to willfulness, aside from the requirement that trademark dilution under Section 1125(c) be willful in order for the claimant to recover profits.
To overcome the textual hurdle presented by this omission, Fossil argued that Section 1117(a)’s reference to profits being available “subject to the principles of equity” referred to the fact that courts sitting in equity historically required a showing of willfulness before awarding profits in trademark disputes. Following a comprehensive search of treatises on the meaning of the phrase “principles of equity,” the Court was not convinced that Congress intended this phrase as a reference to historical profit remedies within trademark law. Nor did a historical survey of trademark infringement decisions from the 19th and 20th centuries provide any clarity, as courts were split in their approach to willfulness, despite the fact that statutory precursors to the Lanham Act also did not reference a willfulness requirement.
The opinion notes that there is no dispute that mens rea is important in a variety of legal contexts, including under the Lanham Act, “which permits greater statutory damages for certain willful violations than for other violations.” The Court concluded that while it had “no doubt that a trademark defendant’s mental state is a highly important consideration in determining whether an award of profits is appropriate,” it was not empowered to make willfulness an "inflexible precondition" to recovery of profits under the plain meaning of the statutory language. Thus, while willfulness is no longer a precondition for an award of profits in trademark infringement and false advertising cases, the Court has signaled that willfulness remains an important consideration with respect to the availability of such an award.