Case On Point
In this month's case, the Supreme Court interprets the remedies provisions of the Lanham Act.
Romag Fasteners, Inc. v. Fossil, Inc.
(U.S. S. Ct. 2020)
Fossil, Inc. manufactures and sells leather goods such as pocketbooks. It signed an agreement with Romag Fasteners, Inc. to purchase and use its magnetic fasteners in its products. When one of Fossil's outsourced manufacturers used counterfeit Romag fasteners in Fossil products, Romag sued, seeking disgorgement of profits earned by Fossil. Fossil contended that the lost profits remedy was only available in cases of willful infringement.
The United States Supreme Court rejected that contention. While the statute explicitly conditioned treble damages awards and enhanced statutory damages on willfulness, the profits disgorgement section of the law contained no such requirement. To avoid such consequences, companies who outsource design or manufacturing functions should require representations and indemnification as to non-infringement of third party intellectual property rights.