Willfulness Is Not Required for an Award of  Profits for Trademark Infringement
Lerner David Littenberg Krumholz & Mentlik LLP, 20 Commerce Drive, Cranford, NJ 07016

The U.S. Supreme Court held that 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 an award of the infringer's profits. Romag Fasteners, Inc. v. Fossil, Inc. et al., No. 18-1233 (April 23, 2020).

Romag appealed to restore a $6.7 million jury award of Fossil's profits after Fossil was found to have infringed Romag's trademark-protected magnetic fasters. A district court judge vacated the award, citing Second Circuit precedent that a finding of willfulness was required to award profits. The Federal Circuit affirmed the decision, and Romag appealed to the Supreme Court.

The Supreme Court ruled that willfulness is not a necessary prerequisite to the award of an infringer's profits but only a factor to be considered. Justice Gorsuch wrote, “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.” For that reason, the Federal Circuit judgment was vacated, meaning that U.S. courts can now award profits from infringers to rights holders even if willful infringement is not found.

In view of this ruling, trademark owners should be more confident in asserting their marks, as an infringer's profits will still be in play, whether or not willfulness can be shown. Moreover, clients should consult with their IP counsel about trademark search clearances before adopting brands to permit a careful weighing of risks of moving forward.

The Court's opinion may be found at https://www.supremecourt.gov/opinions/19pdf/18-1233_5he6.pdf.