There are monetary damages and injunctions available as damages in trademark infringement lawsuits.
The monetary remedies available in trademark infringement actions are based on the actual damages suffered by a trademark owner. These damages may include profits lost to the infringing activity and may be trebled where the infringement was intentional. (Treble damages is the tripling of damages.)
Trademark Infringement
- How to Measure Monetary Recovery
There are five ways of measuring monetary recovery in trademark infringement cases. They include the following:
- An award measured by the defendant’s profits, either as a way of measuring the plaintiff’s loss or under an unjust enrichment theory;
To obtain an accounting of profits, the courts usually require that the defendant’s infringement imply “intent” or a knowing act denoting an intent to infringe or reap the harvest of another’s mark and advertising. However, the advice of counsel may sometimes assist the defendant in showing that it acted in good faith. Conversely, the failure to follow the advice of counsel may weigh as evidence of bad faith.
While proof of actual confusion is not needed to obtain an injunction, some courts have said that proof of some actual confusion is required for an accounting of profits. Under the federal Lanham Act, as well as the common law, it is the infringer’s burden to prove any proportion of his or her total profits which may not have been due to use of the infringing mark.
- An award measured by actual business damages and losses caused by the wrong;
In some cases a plaintiff may be awarded damages in addition to the defendant’s profits. But damages and profits cannot be awarded simultaneously if it would result in overcompensation. Courts require that recovery of damages requires proof that some consumers were actually confused or deceived, which may be proven with testimony of buyers or customer surveys.
Monetary relief is denied where an injunction will satisfy the equities of the case and where there has been no showing of fraud or palming off.
- An award measured by the plaintiff’s own loss of profits caused by the wrong;
To obtain an accounting of profits, the courts usually require that the defendant’s infringement imply “intent” or a knowing act denoting an intent to infringe or reap the harvest of another’s mark and advertising. However, the advice of counsel may sometimes assist the defendant in showing that it acted in good faith. Conversely, the failure to follow the advice of counsel may weigh as evidence of bad faith.
While proof of actual confusion is not needed to obtain an injunction, some courts have said that proof of some actual confusion is required for an accounting of profits. Under the federal Lanham Act, as well as the common law, it is the infringer’s burden to prove any proportion of his or her total profits which may not have been due to use of the infringing mark.
- An award of punitive damages for the purpose of punishing the defendant; and
While the Lanham Act does not authorize an additional award of punitive damages for willful infringement of a registered trademark, punitive damages are still available for accompanying state,causes of action for trademark infringement.
In most jurisdictions, punitive damages are awarded only where the defendant’s conduct has been egregious. Evidence of the financial status of the defendant is relevant evidence from which the amount of punitive damages may be set. In most jurisdictions, punitive damages cannot be awarded unless there are some actual damages awarded, no matter how small.
- An award of reasonable attorney’s fees incurred in the prosecution of the action.
The Lanham Act allows for an award of reasonable attorney fees to the prevailing party in exceptional cases. Exceptional cases are infringement cases where acts of infringement can be characterized as malicious, fraudulent, deliberate, or willful. Where there is proof of intentional infringement, as in a counterfeiting case, it is an abuse of discretion not to award attorney fees.
Most state jurisdictions do not generally allow for the recovery of attorney fees. Attorney fees may be awarded to prevailing plaintiff under a state law even in the absence of a finding that the case is “exceptional” under the federal Lanham Act. A state law permitting the recovery of attorney fees is not preempted by the Lanham Act.
- How to Determine the Proper Recovery
In any given case, a court may award one, more, or none of the different types of monetary recovery to the plaintiff. In deciding what type, if any, of monetary damages to award, courts have balanced several factors, such as:
- Whether the defendant was willful, negligent, or innocent;
- Whether the plaintiff suffered losses in any provable amount;
- Whether there is proof of actual confusion of some customers; and
- Whether defendant realized profits from its infringing actions.
- Injunctive Relief
An injunction is a court order that forces the party to stop behaving in a certain way or stop doing something. In general, injunctive relief is generally granted upon a showing of a likelihood of confusion. Courts compare the hardships imposed on the parties by or without an injunction as well as any public interest involved. Injunctions can be temporary or permanent.
- Costs
Costs are for necessary expenses such as filing fees and court reporter fees. Courts must exercise their discretion sparingly in taxing as costs any expenses not specifically allowed in the statute. Other expenses are allowable only in the discretion of the court where there is “aggravated” conduct such as “fraud.”
- Counterfeiting Remedies
The Lanham Act provides for special monetary remedies for counterfeiting cases. Unless the court finds extenuating circumstances, treble damages or profits and a reasonable attorney fee award must be awarded to an infringed trademark owner if the defendant counterfeiter knew that the goods were counterfeit and intended to offer them for sale.
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