Trademark Infringement. What Damages are Available? [Brian’s TM Watch]

Hey it’s attorney Brian Russ coming at you with another episode of Brian’s trademark watch. So today’s episode really talks about trademark infringement and understanding what the damages are in a trademark infringement setting. Because one of the most common questions I get, one of the most common things that I talk to you about is: what is the likelihood or what is the potential harm that can come to someone if they are infringing on another party’s trademark. A lot of times, what I find is that people will get cease and desist letters, they’ll get demand letter saying “you need to stop.” And a lot of times, people get scared, they want to know really what they’re in for, or if they have a brand name that is kind of similar to another brand name, maybe it’s not a one for one match, you know, but it’s similar enough where they’re scared. They want to know what the risk is that they’re running. And so I’d have some people ask me to do trademark infringement damages analysis and do highs, lows and what my thoughts are. So I think the best way to approach this is there are really three types of relief that are available if you are infringing, or if you believe somebody is infringing your mark. So the first type of relief that I like talk about is injunctive relief. Injunctive relief is a type of equitable damage or equitable relief, basically it’s a court telling someone they can or cannot do something. So injunctive relief is basically stopping the other party from infringing. So let’s say that you have a company called Acme Widgets inc, and you have a trademark for Acme Widgetiser. And if somebody else comes out with a trademark called Acmey Widgetiser, you can go to court and you can file suit against this other company and get them to stop using the mark Acmey because it is very similar to Acme which is your trademark, your registered mark. And so injunctive relief again, it’s to stop the other party from using your mark or stop them using the wording or the market they’re using that is similar to yours. So that’s injunctive relief is getting somebody to stop doing what they’re doing. The other type of relief that’s available is what’s called affirmative relief. And affirmative relief is more about making the other party do something rather than stopping what they’re doing. So injunctive relief is getting them to stop what they’re doing. Affirmative relief is getting them to do some extra something in response to their infringement. So affirmative relief can be product recalls, it can be adding disclaimers to packaging, it can be maybe running an advertising campaign. So a lot of times I think about affirmative relief. I think there was this great example recently, where there was a Nike shoe, where Lil NAS X put out with somebody else, it had like a drop of blood, it was like a devil shoe. And Nike was really upset because basically they were like, Hey, you’re using our product and you’re calling it a Nike shoe, you’re saying it’s a Nike shoe. You got to stop this and they did recall and they they stopped production and I’m sure money changed hands. But again, that’s what I’m thinking about when I think about affirmative relief. It’s not just that you’re stopping using the mark, it’s that you have to take extra steps to basically take that stuff off the market. So injunctive relief is stopping somebody from doing something, we have affirmative relief, which is getting somebody to do something else and really the big one most people are worried about is monetary relief, monetary damages. So that’s really the big category here. The biggest one that I think a lot people don’t recognize and don’t understand and are concerned about is the defendants profits, so the infringers profits aren’t available. Damage in a trademark infringement case. And I see this happen a lot of times where people think well, I’m just going to go ahead and infringe and you know, what’s the worst that can come to me? Well, the worst is that any profits you make are available to the other party, and they can recover those profits. And so, I think what can happen is they can they can demand an accounting, they can go through your books, they’re going to find out exactly what your profits are. And I think a lot of people will say, Well, I didn’t realize that I was infringing. There is no mens rea requirement. That means there is no intentionality requirement for finding of damages of your of the defendants profit, of the infringers, profits. This was a major change in the law or a clarification that came down from the Supreme Court just recently a few years ago. Some circuits require there to be some intentionality before damages of profits were awarded. So they basically said hey, you have to use intentionality or awareness that somebody else’s trait you are infringing on somebody else’s trademarks. And then there was the other circuit said, no, there is no requirement for intentionality. It can be completely innocent. It can be completely unaware. And so the Supreme Court did an analysis of the trademark act of the Lanham Act and said no, there is no mens rea requirement. There’s no intentionality requirement. So there’s what I call innocent infringement is that like, I mean, there’s so many people I see this a lot in the food space. I see this a lot in the clothing space. I see this a lot in professional services space, especially if your name is rather plain, I guess you could say because it just gives this opportunity for infringement to occur without you knowing about it, you know, your five or six years and you’ve been using this name, you have a good brand identity you’re making some good money, and then all of a sudden, they can hit you with an infringement suit and they can go after all your profits since you’ve used that, and so that’s that’s one of the major ones is that you lose your profits. The second major part of the monetary relief is that any losses that the plaintiff suffered because of your infringement is that can be quantified. That’s available as damages as well. I see that really more with the counterfeit cases, or where you’re operating in the same market space. So if you are a doctor, a general practitioner in Everett Washington, and you call your practice Steve’s Bone Fixing 101 and then there’s, you know, Steve’s bone fixing 101 in Miami, Florida, most likely, if one of them is infringing on the other is not causing the plaintiff any losses, it’s not causing the mark holder any losses because they’re just completely separate geographical areas where one person is not going to go to the other but if it’s something in retail, e-commerce, that’s going to be pretty easily calculated, especially if it’s in the same market too, same geographical area it can be significant very quickly. The other thing you can also get his attorneys fees. So attorneys fees is probably one of the scariest to me. Because they can be really big really quick. My understanding is there is an intentionality requirement prior to an award of attorneys fees. So essentially, that you have to know that you’re infringing on somebody else’s trademark, you have to be told to stop. You have to ignore it, you have to keep going, I mean, and then if that happens, a court can award attorneys fees. So a lot of times I think these trademark cases don’t really go forward. These trademark infringement cases don’t go forward unless there’s reason to because if again, I’m talking about these innocent infringement cases, if it’s innocent infringement, and you don’t realize that you’re infringing on the other party, maybe all he can get all your profits, but you’ve only had $10,000 in profits. The other party is not gonna spend $25,000 and attorneys fees to get your $10,000 profits. Maybe they’ll spend some money and attorneys fees to really get the injunctive relief. That’s really what they want. They want you to stop. And maybe then they’ll go after you for your profits if you’ve been recalcitrant and difficult to work with. But really, attorneys fees can become a big problem for you if you’ve been doing this intentionally. So if you’ve only made $10,000, but you’ve been willfully infringing on another party’s mark, all of a sudden, the other party is going to go after you for your $10,000 because they know that there’s a good chance you have to pay their $25,000-$50,000 attorneys fees. The other thing I wanted to mention too, is that trademark infringement really goes to the mark itself. It doesn’t go to counterfeit. I mean if you counterfeit that is trademark infringement. But counterfeit is really those copies of goods and counterfeit damages are incredible. You know, obviously, we want our commerce to be protected. We want people to not be suffering from from counterfeit. If you’re going to put in the capital investment to create a product, right? I think as a policy matter, we don’t want you to suffer from counterfeit damages. And so a lot of times counterfeit damages are incredibly great. It can be up to $2 million in statutory damages, rather than just like lost profits and such so I’ll do another video on counterfeit damages. But that’s it for today. I think the key is, if you’re starting a brand, if you’re starting something, you need to make sure that you do a clearance search, make sure your name is available as a trademark matter. Make sure it’s available and that you’re not stepping on somebody else’s toes because I think one of the keys is is that innocent infringement or innocence on awareness. Ignorance is not a defense to trademark infringement. Alright, hey, that’s it for today. If you have any questions, feel free to reach out!

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