Dan DeCarlo Authors Trademark Law Article for Daily Journal on Lanham Act Remedies

Los Angeles, Calif. (March 26, 2020) – Los Angeles Partner Daniel C. DeCarlo recently authored an article for the Daily Journal, titled “High Court to Rule on Lanham Act Remedies,” which discusses the United States Supreme Court case Romag Fasteners v. Fossil, Inc. (18-233), currently before the Court, and the “vexing problem” trademark litigants face when evaluating whether the profits of an infringer are an available remedy under the Lanham Act. The article appeared in the Daily Journal’s 2020 Top IP Lawyers Supplement on March 18, 2020.

In the article, Mr. DeCarlo first explains the distinction between the legal remedy of “damages” and the equitable disgorgement of an infringer’s profits, and the “notoriously” difficult proposition for a trademark litigator of proving that but for the infringement, the trademark holder would have made more money or not suffered some loss. He further notes that “the issue of when those profits are recoverable has confounded the courts and trademark litigants for decades.”

Next, Mr. DeCarlo reviews and analyzes the key language of the Lanham Act and the circuit split on interpreting that language, with one camp holding that a court cannot compel disgorgement of an infringer’s profits unless the plaintiff has proven that the defendant is a “willful infringer,” and the other camp taking a more nuanced analysis, using multi-factored tests that do not include willfulness.

Mr. DeCarlo then turns to the case before the Supreme Court, in which the petitioner, Romag, obtained an infringement finding against Fossil in the district court, but no profits were awarded as the district court had found no willfulness. This holding was affirmed by the federal circuit and then taken up by the Supreme Court “to consider, once and for all, unifying the standard.”

Oral argument in the case took place in January. As Mr. DeCarlo notes in his article, various commentators have not been able to make a solid prediction of what the Court will do in this case. He then reviews some of the key moments from the oral argument, quoting both Justice Sotomayor and Justice Breyer. 

Mr. DeCarlo ends his article by stating that while “everyone does agree… that Congress intended for there to be the potential monetary remedy of disgorgement of an infringers’ profits, ‘subject to the principles of equity’… [w]hat no one can seem to agree upon is when that remedy is appropriate.” He concludes that “the justices on the Supreme Court are as befuddled as many in the trademark community in trying to string together a unified theme… But isn’t that why we have a Supreme Court? Stay tuned for the outcome.”

You can read the full article on the Daily Journal website (subscription required).