April 23, 2020

Supreme Court Decides Romag Fasteners, Inc. v. Fossil Group, Inc.

On April 23, 2020, the U.S. Supreme Court decided Romag Fasteners, Inc. v. Fossil Group, Inc., holding that a plaintiff alleging trademark infringement under § 1125(a) of the Lanham Act is not required to prove willful infringement as a precondition to recovering lost profits.

Romag sued Fossil under the Lanham Act for infringing on Romag’s trademarks by allowing factories in China to use counterfeit Romag fasteners on handbags. A jury found for Romag but concluded that the infringement had not been willful. The district court then refused to award lost profits because U.S. Court of Appeals for the Second Circuit precedent required a finding of willful infringement as a prerequisite to a lost-profits award. On appeal, the Second Circuit affirmed.

The Supreme Court granted review and unanimously reversed. The clear language of the Lanham Act’s remedies provision, the Court noted, makes willfulness a precondition to awarding profits for trademark dilution under § 1125(c) but not trademark infringement under § 1125(a). And the Court does not “usually read into statutes words that aren’t there.” That is especially so “when Congress has (as here) included the term in question elsewhere in the very same statutory provision.” Fossil argued that the remedies provision allows profits to be awarded only “subject to the principles of equity.” But the Court held that while that phrase makes a defendant’s mental state “a highly important consideration in determining whether an award of profits is appropriate,” it does not make willfulness an “inflexible precondition” to such an award.

Justice Gorsuch delivered the opinion of the Court, in which Chief Justice Roberts and Justices Thomas, Ginsburg, Breyer, Alito, Kagan, and Kavanaugh joined. Justice Alito filed a concurring opinion, in which Justices Breyer and Kagan joined. Justice Sotomayor filed an opinion concurring in the judgment.

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