Posts Tagged: "trademark damages"

Looking at the types of damages being awarded in trademark cases and how they’re being awarded, it’s highly likely that most damages awarded in these cases might never be recovered. “You can see it as two separate worlds of trademark cases,” Howard said. “There are cases in which a defendant doesn’t show up and it goes straight to default judgment, and then there’s everything else.” $4.6 billion dollars, or 84.6 percent of all damages awarded in district court trademark cases going back to 2009, have been awarded on default judgment.

On Tuesday, September 19th, Victorinox AG, the manufacturer of the well-known Swiss army knife, saw a successful outcome of an appeal decided by the U.S. Court of Appeals for the 2nd Circuit, which affirmed in part a judgment in a trademark case filed in the Southern District of New York. The 2nd Circuit’s decision upholds a $1.75 million judgment entered in district court against Dallas, TX-based e-commerce company B&F System over the sale of red-handled, multi-functional pocket knives that infringed upon Victorinox’s registered trademark.

As Stone Creek deepens the divide among circuits, the issue of whether willfulness is required for disgorgement of a defendant’s profits in trademark cases is ripe for Supreme Court review… The Stone Creek decision solidifies the Ninth Circuit’s position that willfulness is required for a recovery of profits in trademark cases. This approach is consistent with equitable principles because disgorgement is generally used to deter culpable behavior and deterrence would not be necessary, and would not work, for an innocent infringer. Depending on the facts of a case, trademark law provides sufficient remedies to prevent a likelihood of confusion and compensate a plaintiff for its losses—beyond a defendant’s profits—like an injunction, actual damages and/or corrective advertising. An award of profits can be reserved for willful infringers, without depriving a plaintiff of remedies for non-willful infringement.

On October 5, 2016, a jury in Tiffany and Co. v. Costco Wholesale Corp. – litigated before Judge Swain of the Southern District Court of New York – awarded Tiffany & Co. (Tiffany) $8.25 million in punitive damages for willful and bad faith infringement of their trademark by defendant Costco Wholesale Corp. (Costco). This award, in combination with an earlier award of $5.5 million in profits and statutory damages, brings the total damages owed by Costco to $13.75 million. The case is particularly notable for several reasons, but specifically because punitive damages were awarded.

When looking at damages awarded in trademark infringement cases filed since 2005 and terminating between 2009 and 2016, fashion brands have taken in the highest award totals. The top spot here belongs to Parisian fashion brand Chanel, which has been awarded nearly $1 billion dollars from 160 infringement cases resulting in awards out of the 330 cases filed by Chanel. That’s almost double the $523 million awarded to Burberry Limited but its sibling Burberry Limited UK was awarded $416.6 million and those totals were awarded over the course of a combined 12 infringement cases. In terms of damage totals, there’s another steep drop to Gucci of Florence, Italy, which was awarded $207.7 million over the course of 26 cases.

Addressing the issue of whether a famous mark can be diluted by the identical mark of a much smaller company, the US Court of Appeals for the Seventh Circuit decided that the district court rightly dismissed trademark infringement claims and cross-claims where neither party had been, or was likely to be, harmed by the other. Hugunin, et al. v. Land O’ Lakes, Inc., Case No. 15-2815 (7th Cir., Mar. 1, 2016) (Posner, J).

The Federal Circuit affirmed. Undertaking an extensive analysis of the legislative history of Lanham Act damages, the Court attempted to explain a 1999 amendment inserting language regarding willfulness. Because the “willful violation” language appears to modify violations of § 1125(c) regarding dilution, Romag argued that the amendment negated any preexisting willfulness requirement for causes of action other than dilution. Relying heavily on Second Circuit precedent, which governed the district court decision, the Court disagreed.