Trademark Infringement Remedies
Trademark infringement remedies include common awards such as an injunction, damages, willful or punitive damages, and attorney’s fees.
Not all of these remedies, however, are available in every case. Additionally, filing a trademark infringement lawsuit may not be the best option in certain situations. This makes it important to understand every trademark infringement remedy at your disposal.
What is Trademark Infringement?
Any name, phrase, slogan, design or other identifiable attribute that distinguishes one brand from another is known as a trademark. Any misuse of a trademark is punishable under federal law, namely, the Lanham Act.
This doesn’t mean the only remedies for trademark infringement are in federal court. If you have yet to file a trademark application with the USPTO, you may still have common law trademark rights. Unfortunately, these are reduced compared to the protections available to federal registrants. Whatever your specific circumstances, judging whether trademark infringement has occurred will typically depend upon a likelihood of confusion.
The following factors are considered when making this judgment:
- Trademark similarity: Do similarities exist between the two trademarks in question (e.g. sound, appearance, etc.)?
- Goods/services proximity: How close in the market are the goods or services? Are they competing? Is there relatedness but no direct competition?
- Trademark strength: Has strength in the market been established by the senior trademark? Fanciful, arbitrary and suggestive identifiers are the strongest.
- Actual confusion: Can evidence be provided that actual confusion among consumers has already occurred?
- Marketing channels: Are the identifiers being used within similar channels of trade? Even proximity on store shelves may be considered.
- Customer degree of care: What level of care is practiced by consumers of the product or service in question when making a purchase?
- Defendant’s intent: Was the defendant’s intent to cause confusion among consumers?
- Likelihood of expansion: Even if infringement isn’t occurring, is it possible that a brand will expand into other markets where confusion may occur?
These are known as the Sleekcraft factors, and courts in California and other western states use them when deciding whether a likelihood of confusion exists. The Federal Circuit and Trademark Trial and Appeal Board (TTAB) typically utilize the Dupont factors when making a decision, but they are very similar to those discussed here.
Remedies for Trademark Infringement
The following are common trademark infringement remedies:
- Injunctive Relief;
- Destruction or Forfeiture;
- Monetary Damages;
- Reasonable Royalties;
- Actual Damages;
- Corrective Advertising;
- Defendant’s Profits;
- Statutory Damages;
- Treble Damages; and
- Attorneys Fees and Court Costs.
Even if you have federally registered trademark, lawsuits can take months – or even years – to play out in federal courts. During this time, your trademark and reputation could suffer irreparable damage. This is why courts provide preliminary and permanent injunctions as a trademark infringement remedy.
Injunctions are court orders that instruct a party to either engage in or cease a specific behavior. In instances of trademark injunctive relief, this typically means defendants must end all allegedly infringing actions. A preliminary order should be sought immediately upon filing of a lawsuit, but a permanent injunction is only issued once the case has reached its conclusion.
Many factors are considered prior to the issuance of an injunction – one of the most important being the plaintiff’s likelihood of success. Even so, the trademark owner is typically required to post a monetary bond to compensate the defendant in case they’re later found not liable. Plaintiffs can also seek temporary restraining orders (TROs) in order to end infringement prior to a preliminary injunction hearing.
Destruction or Forfeiture
One of the most important trademark infringement remedies provided by the Lanham Act is the right of seizure and destruction of infringing items. A seizure order will be carried out by the U.S. Marshals, and it can involve any product, advertising medium or other item that features a misused trademark. Additionally, the means of producing counterfeit items or trademarks could be seized.
The issuance of such an order involves a lengthy process, and neither the plaintiff nor courts can publicize the seizure of infringing items. The idea behind the seizure and destruction of violating materials is that there are no lawful activities they can be used in. Even if the infringer immediately ends production of infringing items, selling what they’ve already produced is still considered a violation.
Plaintiffs must be very specific when listing the items that should be seized. It’s important that no gray-market goods (items or trademarks not deemed counterfeit) are taken during the process. While this trademark infringement remedy will not offer financial compensation, it can help ensure that no further damage occurs to a brand.
Over a recent 8-year period, courts awarded more than $5 billion to trademark owners whose rights had been violated. Of these awards, over 80 percent were in the form of default judgments due to the other party failing to show up in court or take other court-ordered actions. If a defendant fails to abide by an order or meet certain deadlines, the plaintiff is successful by default.
There are a variety of trademark infringement remedies that qualify as monetary compensation. Not all trademark owners will be entitled to every type of damage, and the eventual award can vary significantly based on a multitude of factors (e.g. defendant willfulness, proof of economic harm). The following are the most frequently granted forms of financial awards issued by courts.
Although injunctions are the most common trademark infringement remedy issued, reasonable royalties are also a regular occurrence. Courts will calculate a value that’s seen as reasonable for a trademark license. In many cases, the calculation is based on a hypothetical negotiation between the two involved parties before infringement began.
There are a variety of considerations accounted for when calculating this amount. This includes prior licensing agreements, expert opinions, special value to the infringer and more. This is the most common form of monetary damages awarded. Unfortunately, reasonable royalties can also result in the lowest possible compensation.
Plaintiffs who are awarded compensation based on actual damages typically receive more than reasonable royalties. To do so, however, they must meet a higher evidentiary standard. Evidence must show a direct causal relationship between infringement and actual harm. Proof may include public testimony, diversion of sales, consumer surveys and more.
Actual damages can be particularly hard to determine when a brand’s reputation is accounted for. Loss of reputability can create harms that last even in the absence of continued infringement. This often makes proving actual damages a difficult endeavor.
Courts may also grant additional monetary awards to cover corrective advertising as a trademark infringement remedy. This has occurred in a variety of cases. The point behind this remedy is to help plaintiffs dispel any confusion and correct damage caused by the infringement.
Courts may also base their awards on the defendant’s actual profits. The plaintiff needs to only show evidence of the revenue acquired by the infringer through the infringing activities. It is then the defendant’s burden to prove the amount that should not be awarded due to its costs associated with selling the goods.
Plaintiffs may opt for statutory damages when willfulness exists. This can range from $1,000 to $200,000 for every type of good or service that’s been sold, distributed or listed for sale.
Attorneys’ Fees and Court Costs
Generally attorneys fees are only available in exceptional cases. An infringement that was willful may qualify.
Regardless of the financial trademark infringement remedy utilized, courts have the option of increasing the award. Treble damages allow base awards to be increased by up to three times. This will usually only occur when willful infringement has been proven or the acts of the defendant were particularly egregious.
Cease and Desist Letter
Of the countless trademark disputes that occur every year in America, less than 3 percent actually end up in a courtroom. This has long been at least partially credited to the use of cease and desist letters. These legal notices alert infringers of their unlawful activities, and this gives them the opportunity to correct their behavior without facing additional legal issues.
Sending a trademark cease and desist letter has a variety of benefits. One of the most important, though, is the establishment of an evidentiary trail. If the infringer continues their misuse, it becomes difficult for them to later claim they were unaware their actions infringed upon your rights.
While it is possible that an infringer may seek a declaratory judgment after receiving a cease and desist letter, this is exceedingly rare. If you believe the infringer may file a lawsuit upon receipt of a cease and desist letter, then we recommend filing a trademark lawsuit prior to sending such a notice.
Unfair Competition Law
There are fewer trademark infringement remedies available to common law trademark owners, but thanks to state and federal unfair competition laws, the possibility for financial compensation still exists. Under California law, any act that (1) causes harm to consumers or (2) provides an unfair competitive advantage to a company could be considered unfair competition.
Even if your trademark isn’t federally registered, the following remedies still exist:
- Issuance of injunctions.
- Compensation based on actual damages.
- Daily penalties not exceeding $6,000 for continued violations.
- Forfeiture of all profits related to violations.
While rarer in the legal world, findings of infringement may also be reached even when no confusion is likely. This happens when trademark dilution exists. It typically only involves famous brand identifiers that could be damaged via misuse of their trademark. This could occur through either blurring or tarnishment.
- Blurring: If a brand identifier’s connection to certain products or services is weakened through another company’s use of a similar trademark, blurring may occur. Some source indicators – such as Starbucks, KODAK and Pepsi – are indelibly linked to specific products in consumers’ minds. Using these names on different products could weaken connections the brands have spent decades building.
- Tarnishment: Even if blurring or confusion is unlikely to occur, tarnishment may still damage a brand’s reputation. This occurs when a similar trademark is utilized in an unsavory way or on low-quality products. The more famous trademark could suffer in their own market due to consumers inaccurately equating the two.
Regardless of the type of misuse at hand, there are severalmany trademark infringement remedies available. In many cases, though, seeking these remedies shouldn’t start in the courtroom. A cease and desist letter will often be the most powerful tool at your disposal.
For questions related to trademark infringement remedies, please contact us today.