Trademark Infringement Damages
Victims of trademark infringement can potentially recover monetary damages as the result of a lawsuit. Damages are far from a guarantee, and trademark owners are wise to consider the cost of litigation before bringing a lawsuit forward. But if a lawsuit is the best path—and it’s successful—there are several types of damages that could come your way.
In this article, we'll cover:
What Damages Are Available for Trademark Infringement?
As discussed in the Lanham Act under 15 U.S. Code § 1117, there are several types of damages a trademark owner could receive as the result of an infringement lawsuit. These include infringer’s profits, actual damages, recovery of costs, and attorney’s fees. Note that these are the damages available at the federal level. States set their own rules for infringement damages.
Stick with us as we go over each of these in more detail.
Infringer’s Profits
Trademark owners may be awarded any profit the infringer earned as a result of the infringement. This is referred to as “disgorgement of infringer’s profits.”
To figure out this number, the trademark owner needs to prove the alleged infringer’s sales. The alleged infringer needs to calculate what costs should be deducted, such as overhead and manufacturing. The difference between these numbers is the recoverable profit.
Actual Damages
In a trademark infringement case, actual damages include the money a trademark owner would have earned if the infringement hadn’t occurred. These are considered “losses,” and the goal of this award is to return a trademark owner to the financial position they were in pre-infringement.
To be awarded actual damages, real customer confusion needs to be proven. The trademark owner needs to provide evidence of customers who purchased goods/services from the infringer under the belief that they were purchasing from the trademark owner.
Recovery of Costs
A trademark owner may be awarded money they spent on court-related fees such as those for filing, witnesses, and document printing.
Attorneys’ Fees
The Lanham Act provides a narrow framework through which attorney fees can be recovered for the winning party. The situation must be “exceptional” and the fees must be “reasonable.” The Act does not provide additional discussion as to exactly what these terms mean, and recovering of attorney’s fees is rare.
WM. Wrigley Jr. Company v. Roberto Conde, et al., is one such case found to be exceptional. Wrigley, which owns Skittles and Starburst trademarks, filed a long list of complaints against a group of cannabis product manufacturers (though ultimately only one was found liable). Among these were counterfeiting, infringement, and dilution.
Why? Wrigley claimed the cannabis businesses used their Skittles and Starburst trademarks to earn goodwill among consumers, and therefore boost sales. The court agreed. Wrigley was awarded attorney’s fees (and millions in statutory damages—more on that later.)
What trademarks are eligible for damages?
Trademarks with common law rights, state registration, or federal registration may be eligible to receive monetary damages in an infringement case.
At the state level, trademarks with any registration status can sue for infringement. And, if victorious, may win monetary damages as long as the state in question allows for them.
Only federally registered trademarks can sue for infringement in federal court. Thus, only federal trademarks can receive monetary damages at the federal level.
Who decides what damages a trademark owner receives?
Trademark owners, in the initial complaint they file with the court, typically say what type(s) of damages they’re seeking, with the amount to be determined at trial. This means that, not only must they prove infringement throughout the case, they must also prove what they’re owed as a result of that infringement.
Assuming the trademark owner is successful, the court will approve, deny, or amend the requested damages to an amount they feel is just.
If a trademark owner seeks remedies other than or in addition to monetary relief, they will detail those in the complaint, as well.
Want to ensure you can sue for trademark infringement in federal court? Our Trademark Service helps you apply for the federal registration you need to gain this right.
What Are Statutory Damages?
Statutory damages for trademark infringement include monetary thresholds detailed in the Lanham Act. They are available only for victims of counterfeiting and cyberpiracy (aka cybersquatting). At the state level, statutory damages may be available to a wider range of infringement victims.
Statutory damages are an alternative to the recovery of actual damages and infringer’s profits. A trademark owner can select this option any time before the court issues its final judgment on the case.
What are the statutory damages for trademark counterfeiting?
For cases involving counterfeit marks, trademark owners may be awarded statutory damages between $1,000 and $200,000 per counterfeit mark and type of goods/services sold, offered, or distributed.
If the court finds the counterfeit mark was used willfully, the damage potential drastically increases. Trademark owners can recover up to $2 million per counterfeit mark, per type of goods/services sold, offered, or distributed.
The Wrigley vs. Conde et al. case discussed previously applies here. The court found Conde et al.’s conduct to be “willful and malicious,” and awarded the full amount: $2 million per counterfeit mark, per type of good.
What are the statutory damages for cyberpiracy?
Cyberpiracy occurs when someone registers a domain with the malicious intent to make money off another’s trademark. Statutory damages for cyberpiracy are $1,000 to $100,000 per domain name.
What Remedies Are Available for Trademark Infringement?
While damages are a desirable outcome of an infringement lawsuit, trademark owners are frequently awarded other remedies to resolve trademark violations. These may occur on their own or in conjunction with monetary relief.
Common non-monetary remedies include:
- Injunctive relief
In trademark infringement cases, an injunction is a court order to cease infringing activity. Preliminary orders may be requested by trademark owners shortly after the lawsuit is filed, and if granted, the allegedly infringing act will be ordered to stop for the duration of the case. If infringement is ultimately proven, an injunction halts the infringement permanently. - Seizure of materials
The seizure and destruction of infringing materials is a commonly sought remedy, especially in cases involving counterfeits. Advertising materials, packaging, and products themselves are all examples of materials that can be seized. Digital renderings of materials can be ordered to be destroyed, as well.
