No. 18-1233

In the

Supreme Court of the United States__________________

ROMAG FASTENERS, INC.,Petitioner,

v.

FOSSIL, INC., FOSSIL STORES I, INC., MACY’S, INC., AND

MACY’S RETAIL HOLDINGS, INC.,Respondents.

__________________

On Writ of Certiorari to the United States Court of Appeals

for the Federal Circuit__________________

Brief of the American Intellectual PropertyLaw Association as Amicus Curiae

in Support of Neither Party__________________

SHELDON H. KLEIN

PresidentAmerican IntellectualProperty LawAssociation1400 Crystal Dr. Suite 600Arlington, VA 22202(703) 415-0780

DEAN C. EYLER

KIRSTEN E. DONALDSON

Counsel of RecordGRAY, PLANT, MOOTY,MOOTY & BENNETT, P.A.500 IDS Center80 South Eighth StreetMinneapolis, MN 55402(612) 632-3000dean.eyler@gpmlaw.comkirsten.donaldson@gpmlaw.com

Counsel for Amicus Curiae Becker Gallagher · Cincinnati, OH · Washington, D.C. · 800.890.5001

i

QUESTIONS PRESENTED

Whether, under section 35 of the Lanham Act, 15U.S.C. § 1117(a), willful infringement is a prerequisitefor an award of an infringer’s profits for a violation ofsection 43(a), id. § 1125(a).

ii

TABLE OF CONTENTS

QUESTIONS PRESENTED . . . . . . . . . . . . . . . . . . . i

TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . iii

STATEMENT OF INTEREST. . . . . . . . . . . . . . . . . . 1

SUMMARY OF ARGUMENT . . . . . . . . . . . . . . . . . . 2

ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

I. PROOF OF WILLFULNESS SHOULD NOT BEA PREREQUISITE TO AN ACCOUNTING OFPROFITS UNDER SECTION 35(a) OF THELANHAM ACT . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

A. Adding A Categorical WillfulnessRequirement Is Antithetical to The Statute’sMandate that Principles of Equity are toGovern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

B. The Willfulness Requirement UnnecessarilyHarms the Important Goals of theTrademark Laws . . . . . . . . . . . . . . . . . . . . . . . 9

C. Imposing a Willfulness Requirement IsInconsistent with The Statutory Scheme. . . 12

CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

iii

TABLE OF AUTHORITIES

CASES

Am. Rice, Inc. v. Producers Rice Mill, Inc., 518 F.3d 321 (5th Cir. 2008). . . . . . . . . . . . . . . . 10

Banjo Buddies, Inc. v. Renosky, 399 F.3d 168 (3d Cir. 2005) . . . . . . . 6, 7, 9, 12, 13

Basketball Mktg. Co. v. Upscale Entm’t & Mktg.Grp., 227 Fed. Appx. 492 (6th Cir. 2007) . . . . . . . . . . 10

Brown v. Bd. of Educ. of Topeka, Kan., 349 U.S. 294 (1955). . . . . . . . . . . . . . . . . . . . . . . . 4

Burger King Corp. v. Mason, 855 F.2d 779 (11th Cir. 1988). . . . . . . . . . . . . . 7, 8

Coach House Rest., Inc. v. Coach & Six Rests., Inc., 934 F.2d 1551 (11th Cir. 1991). . . . . . . . . . . . . . 11

Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994). . . . . . . . . . . . . . . . . . . . . . . . 5

George Basch Co. v. Blue Coral, Inc., 968 F.2d 1532 (2d Cir. 1992) . . . . . . . . . . . . . . . . 7

Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923 (2016). . . . . . . . . . . . . . . . . . . . . . 5

Hamilton-Brown Shoe Co. v. Wolf Bros., 240 U.S. 251 (1916). . . . . . . . . . . . . . . . . . . . . . . . 7

Holland v. Florida, 560 U.S. 631 (2010). . . . . . . . . . . . . . . . . . . . . . . . 4

iv

Kirtsaeng v. John Wiley & Sons, Inc.,136 S. Ct. 1979 (2016). . . . . . . . . . . . . . . . . . . . . . 5

Koyo Corp. of U.S.A. v. Comerica Bank, No. 1:10 CV 2557, 2011 WL 4540957 (N.D. Ohio Sept. 29, 2011) . . . . . . . . . . . . . . . . . . 5

Maltina Corp. v. Cawy Bottling Co., 613 F.2d 582 (5th Cir. 1980). . . . . . . . . . . . . . . . . 8

Marshak v. Treadwell, 595 F.3d 478 (3d Cir. 2009) . . . . . . . . . . . . . . 7, 12

Masters v. UHS of Del., Inc., 631 F.3d 464 (8th Cir. 2011). . . . . . . . . . . . . . . . . 7

Minn. Pet Breeders, Inc. v. Schell & Kampeter, Inc., 41 F.3d 1242 (8th Cir. 1994). . . . . . . . . . . . . . . 7, 8

Octane Fitness, LLC v. ICON Health & Fitness, Inc.,572 U.S. 545 (2014). . . . . . . . . . . . . . . . . . . . . . . . 5

Pierce v. Emigrant Mortg. Co., No. CIV.A. 3:04-CV-1767J, 2007 WL 4800725(D. Conn. Dec. 27, 2007), amended in part, No. CIV.A. 3:04-CV-1767J, 2008 WL 349191 (D.Conn. Feb. 6, 2008) . . . . . . . . . . . . . . . . . . . . . . . . 5

Pogrebnoy v. Russian Newspaper Distrib., Inc., 289 F. Supp. 3d 1061 (C.D. Cal. 2017), aff’d, 742 F. App’x 291 (9th Cir. 2018) . . . . . . . . . . . 3, 4

Quick Techs., Inc. v. Sage Grp., 313 F.3d 338 (5th Cir. 2002). . . . . . . . . . . . 6, 7, 13

Quiksilver, Inc. v. Kymsta Corp., No. CV 02-5497-VBF(MCX), 2008 WL 11342749(C.D. Cal. Jan. 25, 2008). . . . . . . . . . . . . . . . . . . . 8

v

Reebok Int’l, Ltd. v. Marnatech Enters., 970 F.2d 552 (9th Cir. 1992). . . . . . . . . . . . . . . . . 3

Roulo v. Russ Berrie & Co., 886 F.2d 931 (7th Cir. 1989). . . . . . . . . . . . . . . 7, 8

S.E.C. v. Wyly, 56 F. Supp. 3d 394 (S.D.N.Y. 2014) . . . . . . . . . . . 5

Synergistic Int’l, LLC v. Korman, 470 F.3d 162 (4th Cir. 2006). . . . . . . . . . . . . . . 6, 7

Tamko Roofing Prods., Inc. v. Ideal Roofing Co., 282 F.3d 23 (1st Cir. 2002) . . . . . . . . . . . . . . . 8, 10

Visible Sys. Corp. v. Unisys Corp., 551 F.3d 65 (1st Cir. 2008) . . . . . . . . . . . . . . . . . . 7

W.E. Bassett Co. v. Revlon, Inc., 435 F.2d 656 (2d Cir. 1970) . . . . . . . . . . . . . . . . . 8

Weinberger v. Romero-Barcelo, 456 U.S. 305 (1992). . . . . . . . . . . . . . . . . . . . . . . . 4

STATUTES AND LAWS

15 U.S.C. § 1117(a). . . . . . . . . . . . . . . . . . 3, 10, 11, 12

15 U.S.C. § 1124 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

15 U.S.C. § 1125(a). . . . . . . . . . . . . . . . . . . . . . . . . . 13

15 U.S.C. § 1125(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 12

15 U.S.C. § 1125(d). . . . . . . . . . . . . . . . . . . . . . . . . . 13

Pub. L. No. 106-43, § 3(b), 113 Stat. 219 (Aug. 5, 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

vi

OTHER AUTHORITIES

J. Thomas McCarthy, McCarthy on Trademarksand Unfair Competition § 30:64 (5th ed.) . . . . . . 7

S. Rep. 93-1400. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

1

STATEMENT OF INTEREST

The American Intellectual Property LawAssociation (“AIPLA”),1 which files this brief with thewritten consent of both parties, is a national barassociation of approximately 12,000 members engagedin private and corporate practice, government service,and academia. AIPLA’s members represent a diversespectrum of individuals, companies, and institutionsinvolved directly or indirectly in the practice of patent,trademark, copyright, and unfair competition law, aswell as other fields of law affecting intellectualproperty. Our members represent both owners andusers of intellectual property. AIPLA’s mission includesproviding courts with objective analyses to promote anintellectual property system that stimulates andrewards invention, creativity, and investment whileaccommodating the public’s interest in healthycompetition, reasonable costs, and basic fairness.

1 In accordance with Supreme Court Rule 37.6, AIPLA states thatthis brief was not authored, in whole or in part, by counsel to aparty, and that no monetary contribution to the preparation orsubmission of this brief was made by any person or entity otherthan AIPLA and its counsel. Specifically, after reasonableinvestigation, AIPLA believes that: (i) no member of its Board orAmicus Committee who voted to file this brief, or any attorney inthe law firm or corporation of such a member, represents a partyto the litigation in this matter; (ii) no representative of any partyto this litigation participated in the authorship of this brief; and(iii) no one other than AIPLA, or its members who authored thisbrief and their law firms or employers, made a monetarycontribution to the preparation or submission of this brief.

Petitioner filed a consent to the filing of amicus briefs onAugust 12, 2019. Respondent filed a corresponding consent onAugust 19, 2019.

2

AIPLA has no stake in any of the parties to thislitigation or in the result of this case. AIPLA’s onlyinterest is in seeking correct and consistentinterpretation of the law as it relates to intellectualproperty issues.

SUMMARY OF ARGUMENT

The Lanham Act provides for an accounting, ordisgorgement, of the defendant’s profits, subject to theprinciples of equity, as one possible remedy forviolating the Act. Congress has required a showing ofthe defendant’s willfulness for such relief under othertypes of Lanham Act claims, but not for theSection 43(a) claim at issue in this case. Requiringwillfulness for an accounting of defendant’s profitsviolates the statute’s direction that the availability ofsuch a remedy rests on the equities of each case. Theequitable principles underlying the accounting remedydo not necessarily require willfulness, and courtsshould be free to grant that remedy based on the factsand circumstances of each case. Willfulness is andshould remain an important equitable factor indetermining appropriate remedies for violations of theAct, but it is not a threshold requirement for anaccounting in cases arising from alleged violations ofSection 43(a).

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ARGUMENT

I. PROOF OF WILLFULNESS SHOULD NOT BEA PREREQUISITE TO AN ACCOUNTING OFPROFITS UNDER SECTION 35(a) OF THELANHAM ACT2

A. Adding A Categorical WillfulnessRequirement Is Antithetical to TheStatute’s Mandate that Principles of Equityare to Govern

Section 35(a) of the Lanham Act provides that aplaintiff that successfully proves a violation of Section43(a) “shall be entitled . . . , subject to the principles ofequity, to recover (1) defendant’s profits, (2) anydamages sustained by the plaintiff, and (3) the costs ofthe action.” 15 U.S.C. § 1117(a). On its face, the lawdoes not require a plaintiff to prove willfulness by theinfringer as a prerequisite for an accounting.3 Instead,

2 AIPLA expresses no position as to whether an accounting isappropriate in this case. The district court should address thatissue on remand based on guidance from this Court.

3 The equitable remedy of an accounting of a defendant’s profits isseparate and distinct from the legal remedy of an award of theplaintiff’s actual damages. Reebok Int’l, Ltd. v. Marnatech Enters.,970 F.2d 552, 559 (9th Cir. 1992) (“An accounting of profits under[Section 35(a)] is not synonymous with an award of monetarydamages . . . .”). Nevertheless, confusion can (and often does) arisewhen imprecise language conflates the two forms of monetaryrelief. See, e.g., Pogrebnoy v. Russian Newspaper Distrib., Inc., 289F. Supp. 3d 1061, 1072 (C.D. Cal. 2017) (declining to orderaccounting in light of plaintiff’s failure to adduce “sufficientevidence of Defendants’ sales to support an award of Defendants’profits even if an award of such damages [sic] were otherwise

4

the law provides that a plaintiff may recover, as one ofthe remedies under the Lanham Act, an accounting“subject to the principles of equity.”

Adding an extra-statutory willfulness requirementfor any possible accounting is antithetical to havingcourts apply principles of equity based on the facts andcircumstances of each case. The nature of equityrequires flexibility to address the facts of each matter.See Holland v. Florida, 560 U.S. 631, 650 (2010) (“The‘flexibility’ inherent in ‘equitable procedure’ enablescourts ‘to meet new situations [that] demand equitableintervention, and to accord all the relief necessary tocorrect ... particular injustices.’”); Weinberger v.Romero-Barcelo, 456 U.S. 305, 312 (1992) (“The essenceof equity jurisdiction has been the power of theChancellor to do equity and to mould each decree to thenecessities of the particular case. Flexibility ratherthan rigidity has distinguished it.” (citation omitted));Brown v. Bd. of Educ. of Topeka, Kan., 349 U.S. 294,300 (1955) (“Traditionally, equity has beencharacterized by a practical flexibility in shaping itsremedies and by a facility for adjusting and reconcilingpublic and private needs.” (footnote omitted)). The rulearticulated by the court of appeals in this case, whichfollows the precedent in several circuits, represents arigid rule that disregards the flexible nature of equity.

appropriate”), aff’d, 742 F. App’x 291 (9th Cir. 2018). Unlessdirectly quoting other sources, this brief therefore uses“accounting” when referring to the equitable remedy of defendant’sprofits and “award” when referring to the legal remedy ofplaintiff’s damages.

5

Requiring willfulness regardless of the otherequities of the case is also inconsistent with thisCourt’s traditional preference for flexible standards,rather than bright-line rules in intellectual propertycases. See Kirtsaeng v. John Wiley & Sons, Inc., 136S. Ct. 1979, 1988-89 (2016); Halo Elecs., Inc. v. PulseElecs., Inc., 136 S. Ct. 1923, 1934 (2016); OctaneFitness, LLC v. ICON Health & Fitness, Inc., 572 U.S.545 (2014); Fogerty v. Fantasy, Inc., 510 U.S. 517, 534(1994). The accounting remedy is similarly an equitableone that does not lend itself to the application of bright-line rules.

Outside of the trademark context, there is nogeneral principle of equity that demands proof ofwillfulness for an accounting of profits. Indeed, thewillfulness requirement is at odds with the flexiblenature of the remedy. For example, in securities cases,disgorgement is a remedy that gives courts flexibilityto determine the appropriate remedy “to fit thewrongful conduct.” S.E.C. v. Wyly, 56 F. Supp. 3d 394,426 (S.D.N.Y. 2014) (internal quotation marksomitted). Likewise, there is no categorical requirementof willfulness to recover for unjust enrichment underthe common law. See Pierce v. Emigrant Mortg. Co.,No. CIV.A. 3:04-CV-1767J, 2007 WL 4800725, at *7 (D.Conn. Dec. 27, 2007) (applying Connecticut law to holdin non-trademark case that “a plaintiff is not compelledto establish bad faith in order to recover under a theoryof unjust enrichment”), amended in part, No. CIV.A.3:04-CV-1767J, 2008 WL 349191 (D. Conn. Feb. 6,2008); Koyo Corp. of U.S.A. v. Comerica Bank, No. 1:10CV 2557, 2011 WL 4540957, at *6 (N.D. Ohio Sept. 29,2011) (holding, in non-trademark case, that

6

“Defendants erroneously read[] a fourth element intoOhio’s standard for unjust enrichment, arguing thatPlaintiff must also sufficiently allege fraud,misrepresentation or bad faith.”).

Willfulness should be a factor in judging whether anaccounting is appropriate in Section 43(a) cases.4

Indeed, even courts rejecting the bright-line rulerequiring willfulness have nonetheless noted that it isan “important factor.” See, e.g., Quick Techs., 313 F.3dat 349 (“It is obvious from our cases that willfulinfringement is an important factor which must beconsidered when determining whether an accounting ofprofits is appropriate.”). There is, however, no reasoncourts should require it in all cases as a necessarythreshold.5

Several courts have applied a factor-based approachfor determining whether an accounting is appropriate.Under this test, the factors for consideration include,but are not limited to: “(1) whether the defendant hadthe intent to confuse or deceive, (2) whether sales have

4 A lack of willfulness should weigh against an accounting, and itdoes under the tests for an accounting articulated by the Third,Fourth, and Fifth Circuits. See Synergistic Int’l, LLC v. Korman,470 F.3d 162, 175 (4th Cir. 2006); Banjo Buddies, Inc. v. Renosky,399 F.3d 168, 175 (3d Cir. 2005); Quick Techs., Inc. v. Sage Grp.,313 F.3d 338, 349 (5th Cir. 2002).

5 As in the context of other equitable remedies, evidence of thedefendant’s intent is an important factor in the analysis of whetheran accounting of a defendant’s profits is an appropriate remedy. Adefendant’s intent might not necessarily rise to the level of“willful” infringement, but still could support an accounting.Willfulness is too rigid a standard.

7

been diverted, (3) the adequacy of other remedies,(4) any unreasonable delay by the plaintiff in assertinghis rights, (5) the public interest in making themisconduct unprofitable, and (6) whether it is a case ofpalming off.” Synergistic, 470 F.3d at 175; BanjoBuddies, 399 F.3d at 175; Quick Techs., 313 F.3d at349. This multi-factor test includes willfulness as aconsideration, but allows courts the flexibility toanalyze it as one of many important factors in decidingwhether the principles of equity warrant anaccounting.

Regardless of the particular standard applied,courts considering an accounting as a possible remedyfor trademark infringement and unfair competitiontypically review whether equitable rationales offeredwarrant this remedy. The circuits apply differingapproaches based on several policy rationalesunderlying the accounting remedy. See generally J.Thomas McCarthy, McCarthy on Trademarks andUnfair Competition § 30:64 (5th ed.). These rationalesinclude making plaintiffs whole as a proxy for the legalremedy of an award of their actual damages,6 deprivingdefendants of unjust gains,7 and deterring defendants

6 See, e.g., Visible Sys. Corp. v. Unisys Corp., 551 F.3d 65, 80 (1stCir. 2008); Minn. Pet Breeders, Inc. v. Schell & Kampeter, Inc., 41F.3d 1242, 1247 (8th Cir. 1994); George Basch Co. v. Blue Coral,Inc., 968 F.2d 1532, 1539 (2d Cir. 1992); Roulo v. Russ Berrie &Co., 886 F.2d 931, 941 (7th Cir. 1989).

7 See, e.g., Hamilton–Brown Shoe Co. v. Wolf Bros., 240 U.S. 251,259 (1916); Masters v. UHS of Del., Inc., 631 F.3d 464, 474 (8thCir. 2011); Marshak v. Treadwell, 595 F.3d 478, 495 (3d Cir. 2009);Burger King Corp. v. Mason, 855 F.2d 779, 781 (11th Cir. 1988);

8

from future misconduct. The importance of willfulnessshould vary depending on the facts of each case and therationale offered by the plaintiff in each case.8 Forexample, if the proxy-for-actual-damages modelapplies, a prevailing plaintiff should be made wholeregardless whether the defendant acted willfully. Nowillfulness prerequisite exists for awarding actualdamages. See Quiksilver, Inc. v. Kymsta Corp., No. CV02-5497-VBF(MCX), 2008 WL 11342749, at *2 (C.D.Cal. Jan. 25, 2008) (“The weight of authority in theNinth Circuit supports the conclusion that proof ofwillfulness is required to obtain profits under either anunjust enrichment or deterrence theory, but is notrequired to obtain profits under a ‘rough proxy’damages theory.”). Most courts do appear to require ashowing of willfulness when applying the deterrencemodel, even in jurisdictions that do not requirewillfulness as a threshold to an accounting. In fact, thisreasoning is typically phrased in terms of “deterrenceof a willful infringer.” See, e.g., Minn. Pet Breeders, 41F.3d at 1247. Therefore, even if willfulness is not anecessary prerequisite, a court may properly concludethat an accounting is inappropriate if the onlyargument advanced by a plaintiff for an accounting isdeterrence of future infringement.

Maltina Corp. v. Cawy Bottling Co., 613 F.2d 582, 585 (5th Cir.1980); W.E. Bassett Co. v. Revlon, Inc., 435 F.2d 656, 664 (2d Cir.1970).

8 See Tamko Roofing Prods., Inc. v. Ideal Roofing Co., 282 F.3d 23,38 (1st Cir. 2002); Mason, 855 F.2d at 781; Maltina Corp., 613 F.2dat 205; W.E. Bassett Co., 435 F.2d at 664; Roulo, 886 F.2d at 941.

9

The underlying facts of the case, and the equitabletheory underlying the remedy, should determine theimportance of proof of willfulness. The rule applied bythe court of appeals in this case, however, eschewsanalysis of the particular facts of each case in favor of anarbitrary rule. That rule turns the analysis on its headby demanding proof of willfulness as a prerequisitebefore even considering whether an accounting isappropriate under the principles of equity.

B. T h e W i l l f u l n e s s R e q u i r e m e n tUnnecessarily Harms the Important Goalsof the Trademark Laws

A categorical willfulness requirement undercuts theimportant policies protecting trademarks andpreventing unfair competition. It is important thatcourts retain the full range of remedies available underSection 35(a) for trademark infringement and unfaircompetition. The remedy of an accounting of aninfringer’s profits can be an important proxy for aplaintiff’s damages, and can also be used by courts todeter infringement. The willfulness requirementundercuts those important remedial goals.

As a practical matter, recovery of a defendant’sprofits may be the only substantive monetary reliefavailable in some cases. An award of actual damagesrequires proof of the fact and the amount of injury, andcan in many cases be too speculative. Many courts alsorequire proof of actual consumer confusion, which canbe difficult to prove. Therefore, it is important thatcourts have the accounting remedy available to dojustice, even in the absence of willful misconduct by adefendant. See Banjo Buddies, 399 F.3d at 172

10

(damages arising from defendant’s “usurpation of acorporate opportunity, breach of the non-competecontract and overcharging” for the product were “toospeculative to support any monetary award,” such thatnet profits were the only viable option for monetaryrelief); Basketball Mktg. Co. v. Upscale Entm’t & Mktg.Grp., 227 Fed. Appx. 492, 493 (6th Cir. 2007)(monetary relief based solely on the profits earned bythe defendants from its infringing use of plaintiff’strademarks); see also Am. Rice, Inc. v. Producers RiceMill, Inc., 518 F.3d 321, 338 (5th Cir. 2008) (orderingaccounting along with an injunction, as “an injunctionalone would not compensate [the plaintiff] for [thedefendant’s] past infringement and [because] infringingconduct should be unprofitable to infringers”); TamkoRoofing Prods., Inc. v. Ideal Roofing Co., 282 F.3d 23,34 (1st Cir. 2002) (“the award of [infringer’s] entireprofits was correct” as was the award of attorney’s fees,as the “legislative intent [for an award of profits] waspartly to encourage the enforcement of trademarkrights in cases where the ‘measurable damages arenominal,’” (citing S. Rep. 93-1400)). Finally, unless adefendant has engaged in counterfeiting, awards ofattorneys’ fees are reserved for “exceptional cases. 15U.S.C. § 1117(a).

In sum, requiring proof of willfulness may preventany recourse at all, even when a trademark is clearlyinfringed and other equitable factors support anaccounting. In other words, a rule allowing anaccounting only upon proof of willfulness does notadequately serve the policy of protecting trademarkowners. The “paramount” public interest of unfaircompetition law in preventing confusion in the

11

marketplace, see Coach House Rest., Inc. v. Coach &Six Rests., Inc., 934 F.2d 1551, 1564 (11th Cir. 1991),will necessarily also suffer as a result.

The policy rationale for the willfulness requirementoffered by some courts does not justify thatrequirement in all cases. In this case, the court ofappeals applied the law of the Second Circuit thatrequires willfulness for an accounting. The SecondCircuit authority upon which it relied:

reasoned that this requirement is necessary toavoid the conceivably draconian impact that aprofits remedy might have in some cases. Whiledamages directly measure the plaintiff’s loss,defendant’s profits measure the defendant’sgain. Thus, an accounting may overcompensatefor a plaintiff’s actual injury and create awindfall judgment at the defendant’s expense.

817 F.3d at 786 (internal quotation marks omitted).Concern about overcompensating a plaintiff islegitimate, and relevant to the principles of equity. Itis not, however, a valid basis for a prophylacticrequirement in all cases. Courts easily can avoid the“conceivably draconian impact” of an accounting byapplying the full range of the principles of equity.9

9 The same provision of the Act also provides: “If the court shallfind that the amount of the recovery based on profits is eitherinadequate or excessive the court may in its discretion enterjudgment for such sum as the court shall find to be just, accordingto the circumstances of the case. Such sum in either of the abovecircumstances shall constitute compensation and not a penalty.”15 U.S.C. §1117(a).

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In addition, the willfulness requirement can itselfimpose a “conceivably draconian impact” of denyingany monetary remedy to a deserving plaintiff whocannot demonstrate actual damages or prove that theinfringer acted willfully. To avoid overcompensating aplaintiff, this willfulness requirement may violate the“Congressional purpose of making infringementunprofitable.” Banjo Buddies, 399 F.3d at 178. Beyondthat, there may be cases in which, even if a plaintiffreceives a windfall, “it is preferable” that the plaintiffrather than the infringer receive the benefits of theinfringement. Id.; see also Marshak v. Treadwell, 595F.3d 478, 496 (3d Cir. 2009) (“Moreover, to the extentthat Appellants argue that such an accounting wouldresult in a windfall for [the plaintiff], we believe it to bemore equitable that [the plaintiff], rather than [thedefendant] and his associates, receive the benefits ofthe infringement.”)

C. Imposing a Willfulness Requirement IsInconsistent with The Statutory Scheme

The remedies provision of the statute at issueapplies “[w]hen a violation of any right of the registrantof a mark registered in the Patent and TrademarkOffice [under section 32], or a violation under section43(a) or (d), or a willful violation under section 43(c),shall have been established in any civil action arisingunder this Act… .” 15 U.S.C. § 1117(a). The plainlanguage of the statute requires proof of a willfulviolation only for Section 43(c) of the Lanham Act, 15U.S.C. § 1125(c), which recognizes a cause of actionagainst the likely dilution of a famous mark. There isno such limitation in the statute for accountings arising

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from trademark infringement under Section 32 of theAct, id. § 1124, from unfair competition under Section43(a) of the Act, id. § 1125(a) – the particular claim atissue here – and cybersquatting under Section 43(d) ofthe Act, id. § 1125(d). In neither the original enactmentnor any of its amendments over the years did Congressinclude willfulness as a requirement for an accountingof profits arising from trademark infringement orunfair competition under Section 43(a).

In 1999, Congress amended the language of thisstatute. The 1999 amendment replaced “or a violationunder section 43(a)” with “a violation under section43(a), or a willful violation under section 43(c).” Pub. L.No. 106-43, § 3(b), 113 Stat. 219 (Aug. 5, 1999). Theplain language of this amendment indicates Congress’sintent to condition monetary awards for trademarkdilution claims, but not trademark infringement orunfair competition claims, on proof of willfulness.

Several courts have concluded that this 1999amendment “effectively superseded the willfulnessrequirement” that some courts applied prior to thattime. See Banjo Buddies, 399 F.3d at 174; Quick Techs.,313 F.3d at 347-48. Those courts have assumedcongressional awareness that many courts prior to theamendment required proof of willfulness beforeordering an accounting of an infringer’s profits. Theyhold that by qualifying the remedy for a trademarkdilution claim, but not a trademark infringement,unfair competition, or cybersquatting claim, Congressabrogated the willfulness requirement in the latterthree contexts.

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On the other hand, some courts argue that thelegislative history of the 1999 amendment is notsufficiently clear to abrogate the willfulnessrequirement. Regardless of the history of theamendment, however, the plain text of the amendmentshould be instructive. The lack of an expresswillfulness requirement in the portion of Section 35(a)at issue here, given other uses of willfulness to qualifyremedies in the same statutory provision, supports theconclusion that willfulness should not be required forthe accounting of profits remedy. The amendmentshows that Congress can qualify the availability of anaccounting by requiring willfulness, yet, Congress didnot do so for a trademark infringement or unfaircompetition claim. The court of appeals applied a rulethat is inconsistent with the plain language of thestatute. Holding that willfulness is not a perquisite toan accounting is the only result consistent with theexpress terms of the statute.

CONCLUSION

This Court should confirm that willfulness is not aprerequisite to an accounting of profits arising fromviolations of Section 43(a) of the Lanham Act.Consistent with the flexible nature of equitable reliefgenerally, as well as the express text of Section 35(a) ofthe Act, willfulness should not be a bright-lineprerequisite for that remedy. Instead, willfulness is animportant factor, along with other principles of equity,for district courts to apply based on the facts andcircumstances of each case.

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Respectfully submitted,

SHELDON H. KLEIN

PresidentAmerican IntellectualProperty LawAssociation1400 Crystal Dr. Suite 600Arlington, VA 22202(703) 415-0780

DEAN C. EYLER

KIRSTEN E. DONALDSON

Counsel of RecordGRAY, PLANT, MOOTY,MOOTY & BENNETT, P.A.500 IDS Center80 South Eighth StreetMinneapolis, MN 55402(612) 632-3000dean.eyler@gpmlaw.comkirsten.donaldson@gpmlaw.com

Counsel for Amicus Curiae