The problem with interpreting words
by Intellectual Property Attorney Bill Honaker, the IP Guy
Well that’s a little harsh. And yes, it is misinterpreted. It’s actually a line from William Shakespeare’s “Henry VI.” The full quote is, “The first thing we do, let’s kill all the lawyers.”
In a 1990 article, The New York Times said the line was misinterpreted. “Dick the Butcher was a follower of the rebel Jack Cade, who thought that if he disturbed law and order, he could become king. Shakespeare meant it as a compliment to attorneys and judges who instill justice in society.”
Whew! As a lawyer, I appreciate that interpretation.
Interpreting the Law of Trademark Damages
The law can be frustrating, confusing, and hard to interpret. The damages provision of the Federal Trademark Act is an example. Half the regional Circuit Courts of Appeal interpret damages one way, while the other half interpret it another way. Because of this split, on June 28, 2019, the Supreme Court agreed to take on the challenge of interpreting the damages provision of Federal Trademark Law in Romag Fasteners v. Fossil Inc. The question involves what a trademark owner must prove in order to recover an infringer’s profits. Is the trademark owner required to prove willful infringement to get profits? It all comes down to one word: “or.”
Trademark Damages
The following provision covers the damages a trademark owner can recover:
“When a violation of any right of the registrant of a mark registered in the Patent and Trademark Office, a violation under section 1125(a) or (d) of this title, or a willful violation under section 1125(c) of this title… the plaintiff shall be entitled… 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.”
Does this statute require a trademark owner to prove willful infringement in order to recover profits? The answer comes down to that pesky or in the statute. Does it mean that willful infringement must be proven with respect to 1125 (a) which involves trade mark infringement, and 1125 (c) which involves domain names, or only 1125(c) which involves dilution of a famous mark.
If profits are only available for willful infringement, then a trademark owner can only recover actual damages. These are hard to prove, particularly if the infringer isn’t a competitor. Many courts require actual consumer confusion or deception to recover actual damages.
The Romag Case
This was the result in Romag. They sell magnetic fasteners under the trademark Romag. They licensed the trademark to Fossil for bags. Under the license, Fossil was required to use Romag’s manufacturer. Romag later learned that Fossil was using another manufacturer, and sued for infringement. The jury found that Fossil infringed the trademark, but did not find willful infringement. Romag couldn’t prove actual damages, so they got nothing for the infringement.
The Court of Appeals for the Second Circuit held that willfulness is required to claim profits. But the statute seems to indicate that willfulness is only required for dilution cases. The statute provides that profits are at the discretion of the court for trademark infringement or willful trademark dilution. The Second Circuit is not alone in its interpretation. Five other Circuits agree with the Second Circuit. But six other Circuits don’t. In those Circuits, profits are available without showing willful infringement.
Due to the six-to-six, the Supreme Court has agreed to resolve the issue. So sometime in the near future the world will finally know if profits are available for trademark infringement or if it has to be willful.
The Takeaway
The English language can be challenging. Words can have different meanings for different readers. In this case, Congress clearly intended a certain meaning for the statute. But six courts of appeals are wrong in their interpretation, while six are right. Keep this in mind the next time you wonder why lawyers take so much care in drafting your agreements. Even with great care, words that seem clear can be interpreted in different ways.
Let’s not kill all the lawyers. Just understand that language is tough to interpret.
About the Author:
Bill Honaker, “The IP Guy” is a former USPTO Examiner, a partner with Dickinson-Wright, and author of the forthcoming book, Invisible Assets – How to Maximize the Hidden Value in Your Business. To download a sample chapter, click here.
To get answers to your questions click here to schedule a time to talk, email Bill@IPGuy.com, or give him a call at 248-318-7015.