Remedies for Trademark Infringement

1
Remedies for Trademark Infringement

• Equitable Relief, Actual Damages, Punitive
  Damages, and Accounting for Profits

2
Equitable Relief

• Injunctive relief is a crucial remedy for
  infringement of intellectual property rights,
  because this remedy protects the exclusivity of
  these rights, which no amount of money, by
  itself, can protect
• Equitable relief is always subject to the trial
  courts discretion
• In trademark cases, equitable relief is more
  readily available than damages and provides for a
  lower burden of proof, a shift in traditional
  rules of equity, because actual damages in
  trademark cases have a tendency to be too
  speculative
• Because of the presumption of irreparable injury
  in trademark cases flowing from a showing of
  infringement, courts have been receptive to
  changing the traditional preliminary injunction
  four-part test to a two-prong alternative test

3
Traditional PI Test versus Alternative PI Test

• Alternative Test
• Likelihood of success
• Does the applicant have a specified minimum level
  of likelihood in the merits?
• Balance of harms on a sliding scale
• Does the applicant have a minimally favorable
  balance of harm?

• Traditional Test
• Will the ? have an adequate remedy at law or
  will s/he be irreparably harmed w/o the
  injunction?
• Does the threatened injury to the ? outweigh the
  threatened harm the injunction may inflict on the
  ??
• What is the ?s reasonable likelihood of success
  on the merits?
• Will the PI disserve the public interest?

4
Actual Damages

• Every form of IP protection provides a damage
  remedy for past infringement or misappropriation
• Generally, recovery is based upon principles of
  causation and compensatory purpose, which both
  require that the wrongfully injured IP owner be
  restored back to his rightful position that s/he
  would have occupied had the wrong not been
  committed
• Causation ? must show s/he likely would have
  made the claimed sales, likely would have earned
  the claimed profit, but for the ?s infringement,
  and, to recover actual damages (as opposed to an
  accounting) in trademark cases, ? must prove
  actual consumer confusion resulting in the
  diversion of sales
• Compensation all remedies in trademark cases are
  subject to principles of equity and broad
  discretion of the trial judge

5
Punitive Damages

• Punitive damages in trademark cases is best
  described as an award above that which is
  allotted to the ? under actual damages or an
  accounting for profit
• The trial court is given the discretion either
  (1) to award punitive damages above actual
  damages, or (2) award above or below recovery
  based on an accounting, when such amount is
  either excessive or inadequate
• The Lanham Act, 1117(a) provides
• 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 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

6
Accounting for Profits

• The actual damages remedy allows an aggrieved IP
  owner to recover her own losses, including lost
  profits, to the extent she can prove their amount
  and causation but this is not always sufficient,
  if an infringer still comes out ahead despite
  infringement
• Often the commercial reality requires taking the
  profit out of infringement by means of deterrence
  by depriving the infringer of ill-gotten gains
  through an accounting for profits
• An accounting for profits involves three steps
• determining the infringers gross revenue (?s
  burden)
• apportioning the gross revenue between infringing
  and non-infringing activities (?s burden)
• making the proper deductions from gross revenues
  (?s burden)

7
Distinguishing an Accounting for ?s Profits
with??s lost profits

• The Lanham Act allows a ? to recover ?s profits,
  but the trial court has great discretion in
  making this award. The trial court can do the
  following
• augment or decrease the measure of damages
• the award can be made w/o statutory limit
• discretion to augment or decrease applies only to
  an accounting for profits
• The Lanham Act allows for this remedy without
  requiring the ? to demonstrate the following
• actual diversion of sales or other loss (unlike
  actual damages)
• a higher level of culpability on the part of the
  ? (Cf. George Basch)
• meeting the burden of proof for apportionment and
  deductions
• The purpose behind this remedy is deterrence, not
  compensation