Remedies for Trademark Infringement

Remedies for trademark infringement can include a number of things including lost profits, damages and even attorneys’ fees.

Injunctive Relief

Injunctions are usually seen as a standard remedy in trademark infringement case and are regularly granted. A court’s injunctive relief could include an injunction against use of the mark, field of use restrictions (the defendant is prohibited from use of a mark for some goods, but not others), channels of trade constraints, geographic constraints, and manner of use restraints.

Taking into account that there is some variation, factors that are weighed when evaluating the need for an injunction are usually the following: (1) plaintiff’s likelihood of success on the merits, (2) the existence of irreparable injury to the plaintiff, (3) the respective hardship that the courts grant or denial will happen each party, and (4) public interest.

Another variation of injunctive relief is when a court demands that a defendant use a disclaimer of association when it uses the infringing mark. In Oracle Corp. v. Light Reading, Inc., the court stated,

The court concludes that a complete ban on defendant’s use of “OpticalOracle” or “Wireless Oracle” is neither justified no necessary to avoid confusion pending trial. Defendant has put forward evidence that a complete ban might put the 2 newsletters marketed under these marks out of business, and would result in employee layoffs. The consequences could well be irreversible, even though it is quite possible that defendant will prevail at trial. A more tailored injunction requiring defendant to make clear that the websites and associated advertising are Light Reading products that are not affiliated with Oracle, will minimize any likelihood of confusion pending trial, without such extreme consequences to defendant.

233 F.Supp. 2d 1228, 1232 (N.D. Cal. 2002). While disclaimers are a remedy that is available they do not always alleviate the likelihood of confusion and can be difficult to implement.

Monetary Recovery

Courts also have the ability to award damages, profits, and costs. This ability comes from Section 35(a) of the Lanham Act, 15 U.S.C. § 1117(a).

Actual Damages: it is possible that due to a trademark infringement a plaintiff has reduced sales or an injury to its business reputation. There is an ability to recover these types of damages, however they are usually hard to prove especially when you are talking about the reputation of the business. Many courts require that to recover actual damages there must be a showing of actual harm, for example actual consumer confusion or deception. Take the case of Brunswick Corp. v. Spinit Reel Co., where the court opined that Brunswick Corporation had legally established a basis for damages, but failed to establish clear proof of damages. 832 F.2d 513, 525 (10th Cir. 1987). The court held,

Although damages may be awarded for a violation of Section 43(a) [of the Lanham Act], the award is distinguishable from injunctive relief, because plaintiff bears a greater burden of proof of entitlement. Likelihood of confusion is insufficient; to recover damages plaintiff must prove that has been damaged by actual consumer confusion or deception resulting from the violation. Actual consumer confusion may be shown by direct evidence, the diversion of sales or direct testimony from the public, or by circumstantial evidence such as consumer surveys.

Id. at 525.

Defendant’s Profits: a plaintiff can recover an award in the amount of defendant’s profits. In determining the amount of defendant’s profits plaintiff only has to show evidence of the amount of the defendant’s gross sales that are connected to the infringing Mark. Then, the defendant must show that there are amounts that should be deducted from the award such as cost of production and any other amounts that have nothing to do with the infringement. The Second Circuit has said, “[b]y awarding the profits of the bad faith infringer to the rightful owner of the Mark, we promote the secondary effects of deterring public fraud regarding the source and quality of consumer goods and services.” George Basch Co., Inc. v. Blue Coral, 968 F.2d 1532, 1539 (2nd Cir. 1992).

Attorneys’ Fees: the Lanham Act allows for the recovery of attorney fees only in “exceptional cases.” The courts are split to what is considered an exceptional case and what a plaintiff needs to do to satisfy the standard.

In the Eighth Circuit an exceptional case is defined as “one in which a plaintiff brought an action that was groundless, unreasonable, vexatious, or was pursued and bad faith.” Hartman v. Hallmark Cards, Inc. 833 F.2d 117, 123 (8th Cir. 1987). But, the Eighth Circuit also held that absence of bad faith is not alone determinative on the Lanham Act attorney fee issue. Id.

Punitive Damages: punitive damages are not allowed under the Lanham Act. But, a plaintiff can recover punitive damages and trademark case under state law. In Minnesota, statute §333.29, states

An owner of a mark registered under sections 333.18 to 333.31 may bring an action to enjoin the manufacture, use, display, or sale of any counterfeits or imitations of the mark, in a court of competent jurisdiction may grant injunctions to restrain the manufacture, use, display, or sale as the court considers just and reasonable. The court may require the defendants to pay to the owner either or both of the following: (1) all profits derived from the wrongful manufacture, use, display, or sale; or (2) all damages suffered by reason of the wrongful manufacture, use, display, or sale. The court may also order that counterfeits or imitations in the possession or under the control of the defendant be delivered to an officer of the court, or to the complainant, to be destroyed. The court, in its discretion, may enter judgment for an amount not to exceed three times the profits and damages and reasonable attorneys’ fees of the prevailing party if the court finds the other party committed the wrongful acts with knowledge or in bad faith or otherwise is according to the circumstances of the case.

Emphasis added.

Counterfeit Mark Special Remedies: the Lanham Act defines a counterfeit mark as a spurious mark that is identical to or substantially indistinguishable from a registered mark. § 45, 15 U.S.C. § 1127. Also according to the Lanham Act, when the counterfeit mark is created with the intent in knowing use “the court shall, unless the court finds extenuating circumstances, enter judgment for 3 times such profits or damages, whichever is greater, together with a reasonable attorney’s fee….” Lanham Act § 35(b), 15 U.S.C. § 1117(b).

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