Ocean Tomo director Alexander Clemons along with Ocean Tomo Managing Director Cate Elsten, recently authored an article that was published in Landslide, the bi-monthly magazine of the American Bar Association, Intellectual Property Law (ABA-IPL) section. Their article “Uncertainty in Awarding Defendant’s Profits in Langham Act Cases after Romag”, appeared in the May/June issue and is summarized below.
The U.S. Supreme Court’s April 23, 2020, decision in Romag Fasteners, Inc. v. Fossil, Inc. found that willfulness should not be an “inflexible precondition” for awarding disgorgement of an infringer’s profits in a trademark case. The decision has become one of a very few from the Supreme Court providing guidance for monetary awards in trademark cases, whether before or after passage of the Lanham Act. What will—or should—the impact of this decision be on parties, attorneys, and damages experts approaching such cases?
Obviously, for federal circuits that have tended to support Romag’s position, little or nothing will change. But what will change for U.S. district courts that have heretofore imposed willfulness as a necessary predicate to a disgorgement award? In many cases, we suspect the answer may still be “little or nothing.”
Nor does Romag much improve consistency between federal circuits with respect to standards for disgorgement in trademark cases, as many other relevant issues remain unaddressed by the highest court, such as deductions from sales and apportionment of profits. Although disgorgement will remain an issue for the court’s discretion, resolution of these and other issues would greatly reduce the uncertainty to parties evaluating claims and exposure in Lanham Act cases.
Alexander Clemons is a Director in Ocean Tomo’s Expert Testimony practice, out of the firm’s Chicago headquarters. The practice area quantifies economic damages arising from intellectual property disputes and provides general litigation support.
Cate Elsten is an accounting, marketing and finance professional. With over 35 years of professional experience, Ms. Elsten is the senior testifying and consulting expert in Ocean Tomo’s west coast practice.