1. HOLLOW REMEDIES: INSUFFICIENT RELIEF UNDER THE LANHAM ACT
29th Annual Intellectual Property Law Conference
American Bar Association / Intellectual Property Law Section April 3, 2014
Jonathan Hudis
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2. SHOULD THE REMEDIES PROVISIONS OF THE LANHAM ACT BE AMENDED?
Monetary Relief
Injunctive Relief
Attorneys Fees
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3. Lanham Act Section 35, 15 U.S.C. §1117 Recovery for Violation of Rights; Profits, Damages and Costs; Attorney Fees
(a) When a violation of any right of the registrant of a mark registered in the Patent and Trademark Office, a violation under section 43(a) or (d) [§1125(a) or (d)], or a willful violation under section 43(c), shall have been established in any civil action arising under this Act, the plaintiff shall be entitled, subject to the provisions of sections 29 and 32 [§1111, 1114] of this Act, and subject to the principles of equity, to recover (1) defendant’s profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action. The court shall assess such profits and damages or cause the same to be assessed under its direction. In assessing profits the plaintiff shall be required to prove defendant’s sales only; defendant must prove all elements of cost or deduction claimed. In assessing damages the court may enter judgment, according to the circumstances of the case, for any sum above the amount found as actual damages, not exceeding three times such amount. If the court shall find that the amount of the recovery based on profits is either inadequate or excessive the court may in its discretion enter judgment for such sum as the court shall find to be just, according to the circumstances of the case. Such sum in either of the above circumstances shall constitute compensation and not a penalty. The court in exceptional cases may award reasonable attorney fees to the prevailing party.
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4. MONETARY RELIEF
An award of monetary remedies is not automatic, when “an injunction will satisfy the equities of the case.”
Champion Spark Plug v. Sanders, 331 U.S. 125 (1947) (Case involved refurbished replacement parts).
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5. MONETARY RELIEF Disgorgement of Defendant’s Profits
Willfulness Required:
George Basch Co. v. Blue Coral, Inc., 968 F.2d 1532 (2d Cir. 1992).
Willfulness is Only a Factor to Consider:
Banjo Buddies, Inc. v. Renosky, 399 F.3d 168 (3d Cir. 2005).
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6. MONETARY RELIEF Award of Plaintiff’s Damages
Actual Confusion Required:
Getty Petroleum Corp. v. Island Transportation Corp.,
878 F.2d 650 (2d Cir. 1989).
Actual Confusion Not a Prerequisite:
Wynn Oil Co. v. Am. Way Sew. Corp., 943 F.2d 595 (6th Cir 1991).
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7. MONETARY RELIEF • Litigants Need Predictability (Uniform Standard)
What is Fair?
No Requirement of Willfulness (Accounting of Defendant’s Profits). •
No Requirement of Actual Confusion (Plaintiff’s Damages).
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8. Lanham Act Section 34, 15 U.S.C. §1116 Injunctions; Enforcement; Notice to Director
(a) The several courts vested with jurisdiction of civil actions arising under this Act shall have power to grant injunctions, according to the principles of equity and upon such terms as the court may deem reasonable, to prevent the violation of any right of the registrant of a mark registered in the Patent and Trademark Office or to prevent a violation of subsection (a), (c), or (d) of section 43 [§1125(a), (c), or (d)]…Any such injunction granted…shall be operative and may be enforced by proceedings to punish for contempt, or otherwise, by the court by which such injunction was granted, or by any other United States district court in whose jurisdiction the defendant may be found.
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9. INJUNCTIVE RELIEF
The Four-Factor Test Should Be Followed, Without Short-Cut “Presumptions”
- Irreparable Harm
- Monetary Relief Inadequate
- Balance of Hardships as Between the Parties 4 - Public Interest
eBay v. MercExchange, 54 U.S. 388 (2006). (a patent case)
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10. INJUNCTIVE RELIEF
No Presumption of Irreparable Harm in Trademark Cases where Injunctive Relief is Sought:
Herb Reed Enter., LLC v. Florida Entertainment Mgmt., Inc.,
736 F.3d 1239 (9th Cir. 2013) (applying eBay).
What is Irreparable Harm in a Trademark Case?
Gucci America, Inc. v. Daffy’s Inc.,
354 F.3d 228 (3d Cir. 2003) (lack of control over reputation, loss of goodwill).
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11. INJUNCTIVE RELIEF
Requirement of Showing Irreparable Harm in Trademark Injunction Cases is Redundant of the Likelihood of Confusion Analysis to Prove Infringement in the First Instance.
Write into the Lanham Act that a Presumption of Irreparable Harm Exists Upon a Finding of Infringement.
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12. Lanham Act Section 35, 15 U.S.C. §1117 Recovery for Violation of Rights; Profits, Damages and Costs; Attorney Fees
(a) When a violation of any right of the registrant of a mark registered in the Patent and Trademark Office, a violation under section 43(a) or (d) [§1125(a) or (d)], or a willful violation under section 43(c), shall have been established in any civil action arising under this Act, the plaintiff shall be entitled, subject to the provisions of sections 29 and 32 [§1111, 1114] of this Act, and subject to the principles of equity, to recover (1) defendant’s profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action. The court shall assess such profits and damages or cause the same to be assessed under its direction. In assessing profits the plaintiff shall be required to prove defendant’s sales only; defendant must prove all elements of cost or deduction claimed. In assessing damages the court may enter judgment, according to the circumstances of the case, for any sum above the amount found as actual damages, not exceeding three times such amount. If the court shall find that the amount of the recovery based on profits is either inadequate or excessive the court may in its discretion enter judgment for such sum as the court shall find to be just, according to the circumstances of the case. Such sum in either of the above circumstances shall constitute compensation and not a penalty. The court in exceptional cases may award reasonable attorney fees to the prevailing party.
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13. ATTORNEYS’ FEES
What is an “Exceptional Case” Sufficient to Warrant an Award of Attorney’s Fees in a Trademark Case?
The Lanham Act is Silent as to the Definition of an Exceptional Case, Leading to Varied Standards and Results.
Nightingale Home Healthcare, Inc. v. Anodyne Therapy, LLC,
626 F.3d 958 (7th Cir. 2010) (citing differing standards from court opinions).
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14. ATTORNEYS’ FEES
We May Receive Guidance from the Supreme Court this Term.
Octane Fitness, LLC v. Icon Health & Fitness, Inc.,
Docket No (S.Ct., argued February 26, 2014) (patent case).
Absent appropriate guidance from the Supreme Court, perhaps the definition of “Exceptional Case” should be written into the Lanham Act.
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15. THANK YOU CONTACT: Jonathan Hudis 703.412.7047 jhudis@oblon.com
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