Earlier today, the Supreme Court ruled that a plaintiff in a Lanham Act trademark infringement case may recover a defendant's profits without having to prove that the defendant acted willfully. This precedential decision will make it easier for plaintiffs to obtain monetary recovery for trademark violations and false advertising under the Lanham Act.
Previously, plaintiffs in certain appellate circuits were required to prove that a defendant acted willfully in order to disgorge a defendant's profits, a challenging evidentiary burden that often weighed against pursuing a case to judgment. Today, the Court resolved that circuit split, unanimously agreeing that willfulness is not required for a profits recovery. Justice Gorsuch wrote the majority opinion, with concurrences by Justices Alito and Sotomayor.
Because a profits award is subject to "principles of equity," the Court noted that "a trademark defendant's mental state [will remain] a highly important consideration in determining whether an award of profits is appropriate." However, "acknowledging that much is a far cry from insisting on the inflexible precondition to recovery" of proving willfulness.
Thus, while battles will likely continue over a defendant's intent, the decision provides a significant boost to plaintiffs pursuing claims for trademark infringement under the Lanham Act. The same should hold true for false advertising claims under the Lanham Act, which involve the same statutory provision at issue in the case. The threat of a profits award alone may make defendants think twice about proceeding through trial.