By Pierre Barthélemy, LL.M. Candidate, 2021
In Romag Fasteners, Incorporated v. Fossil Group, Incorporated, the U.S. Supreme Court held that a plaintiff does not need to demonstrate a defendant’s willfulness as a prerequisite to obtain a profits award for a trademark infringement claim.1 Romag Fasteners, Inc., (“Romag”) brought an action against Fossil Group, Inc., (“Fossil”) for trademark infringement under the Lanham Act.2 Previously, the parties had entered into an agreement allowing Fossil, a fashion accessories manufacturer, to use Romag’s fasteners on Fossil leather products.3 Romag later discovered that the Chinese factories hired by Fossil to manufacture its products were using counterfeit Romag fasteners, and that Fossil had done little to prevent this from happening.4
While the jury recognized that Fossil infringed Romag’s trademark by acting in “callous disregard” of its rights, it rejected the accusation that Fossil acted willfully.5 Under Second Circuit precedent, which conditioned an award of the defendant’s profits on proof that the violation was willful, the district court refused to award Fossil’s profits to Romag.6 The Supreme Court, recognizing a circuit split, granted certiorari to resolve the issue and set a clear standard for district and circuit courts.7
Although there is no explicit willfulness requirement for awarding a defendant’s profits as a remedy for trademark infringement, Fossil argued that it should be deduced from “principles of equity.”8 Under 15 U.S.C. § 1117(a), which concerns remedies for trademark violations, when a defendant is found liable for trademark infringement under § 1125(a), the plaintiff is entitled to recover defendant’s profits subject only to “principles of equity.”9 Here, the lack of a mens rea requirement is in stark contrast with the rest of § 1117(a), which explicitly requires willfulness as a precondition for awarding profits when a defendant is found liable for mark dilution under § 1125(c).10 Fossil, nevertheless, argued that willfulness is an implicit prerequisite for awarding defendant’s profits in a trademark infringement case.11 It offered several historical cases and treatises in support of the assertion that the Court should deduce from “the principles of equity” that an award of profits is only possible when the defendant acted willfully in trademark infringement cases.12
The Court held that because Congress considered mens rea when constructing the Lanham Act, where it does not explicitly indicate any mental state requirement, such a requirement is not implied.13 In reviewing Fossil’s arguments, the Court noted that the Lanham Act contains many provisions regarding the mental state of the defendant.14 For instance, under § 1117(b), a plaintiff may be awarded enhanced damages and attorney’s fees when the defendant intentionally uses a mark he knows is counterfeited.15 Similarly, under § 1117(c), the statutory damages for the use of a counterfeit mark increases from $200,000 to $2,000,000 for certain willful violations.16 In contrast, because no explicit willfulness requirement exists with regard to profits awards as a remedy for trademark infringement in § 1117(a), it is not implied.17
Since no willfulness requirement is explicitly attached to profits awards in trademark infringement cases, the Court expressed that the deduction of such a requirement from “the principles of equity” would not be an “obvious construction of the statute.”18 As treatises and handbooks on principles of equity “generally contain transsubstantive guidance on broad and fundamental questions about matters like parties, modes of proof, defenses and remedies,” it is very unlikely that Congress intended those principles to support “a narrow rule about a profits remedy within trademark law,” specifically.19
Even though some courts have historically found that willfulness is a prerequisite for the award of the defendant’s profits, Romag presented evidence that other courts had rejected such a rule.20 As the Court noted, “[t]he confusion doesn’t end there”; other authorities have also historically adopted conflicting points of view on this question.21 Those conflicting interpretations allowed the Court to conclude that mental state was merely “an important consideration in awarding profits in pre-Lanham Act cases.”22 The Court thus ruled that a plaintiff does not need to demonstrate the defendant’s willfulness as an “inflexible precondition” to obtain defendant’s profits in an action for trademark infringement under § 1125(a).23
The Court further dismissed Fossil’s policy arguments.24 Fossil argued that trademark law policy requires a willfulness requirement in order to avoid “baseless trademark suits.”25 Romag countered that a lack of such requirement would “promote greater respect for trademarks in the ‘modern global economy.’”26 The Court declined to opine on these arguments, stating instead that this issue should be resolved by policymakers.27
