Romag Fasteners, Inc. v. Fossil, Inc. et al.


Docket No. 2014-1856, 2014-1857

DYK, WALLACH, HUGHES
March 31, 2016

Brief Summary: DC decision that “Romag is not entitled to recover Fossil’s profits” for trademark infringement “as Romag did not prove that Fossil infringed willfully” affirmed under Second Circuit precedent (“[T]he 1999 amendment to the Lanham Act left the law where it existed before 1999-namely, it left a conflict amoung the courts of appeals as to whether willfulness was required for recovery of profits.”)

Summary: Romag appealed DC decision reducing “patent damages because of Romag’s laches and held as a matter of law that Romag could not recover Fossil’s profits for trademark infringement because the jury had found that Fossil’s trademark infringement was not willful.” Romag sells magnetic strap fasteners for purses, etc. under its registered trademark ROMAG and the fasteners are also covered by Romag’s US 5,777,126. Romag and Fossil had a 2002 supply agreement but in 2010 Romag discovered Fossil handbags contained counterfeit fasteners, about which Romag filed suit. Romag was awarded over $50,000 as a reasonable royalty, over $90,000 of Fossil’s profits under an unjust unrichment theory, and over $6.7 million of Fossil’s profits under a deterrence theory. But the DC found the trademark infringement not to be willful and, therefore, “Romag was not entitled to an award of Fossil’s profits.” The FC panel first explained that Fossil could bring a laches defense to the patent infringement claim (SCA Hygeine, FC 2015 (en banc)), which reduced Romag’s patent damages. On the trademark damages / willfulness issue, the FC panel explained that SCOTUS “has never addressed whether proof of willfulness is required to recover the infringer’s profits either as a matter of traditional equitable principles or under the pre-1999 version of § 1117(a)” (Lanham Act). Romag argued the 1999 Lanham Act amendment “made clear that ‘Congress chose to make willful infringement a prerequisite to recovery of monetary relief for trademark dilution” but that it did not intend to require willfulness for “recovery of monetary relief for the other types of infringement covered by that section, including the sale of counterfeits.” But the FC panel disagreed, seeing “nothing in the 1999 amendment that allows us to depart from Second Circuit precedent requiring willfulness for the recovery of profits in infringement cases” and concluding “that the 1999 amendment to the Lanham Act left the law where it existed before 1999-namely, it left a conflict amoung the courts of appeals as to whether willfulness was required for recovery of profits.” And, “[u]nder that standard…Romag is not entitled to recover Fossil’s profits, as Romag did not prove that Fossil infringed willfully.”

This entry was posted in Damages, Laches, Trademarks. Bookmark the permalink.

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