April 18, 2012 Articles

Is Actual Confusion Required to Recover Actual Damages?

A claim for actual damages can be based on all elements of injury to the business of the trademark owner, such as injury to business reputation or the mark's goodwill.

By Charlene R. Marino

Section 35 of the Lanham Act, 15 U.S.C. § 1117(a), governs the award of monetary remedies in trademark infringement and unfair competition cases, and provides, in part, for "(1) defendant's profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action." While only a likelihood of confusion is needed to establish liability, and the plain language of section 35 does not require that a prevailing plaintiff prove actual confusion to be entitled to the listed remedies, courts generally have implied such a requirement with respect to the recovery of actual damages. J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 30:74 (4th ed. 2011). The Tenth Circuit articulated this distinction between proving liability and proving damages in Brunswick Corp. v. Spinit Reel Co.:

Although damages may be awarded for a violation of section 43(a), the award is distinguishable from injunctive relief, because plaintiff bears a greater burden of proof of entitlement. Likelihood of confusion is insufficient; to recover damages plaintiff must prove it has been damaged by actual consumer confusion or deception resulting from the violation.

832 F.2d 513, 525 (10th Cir. 1987).

There is a great deal of semantic confusion regarding what constitutes "damages" under the Lanham Act. This lack of clarity in the case law stems in part from the tendency of some courts to collapse different forms of monetary relief into a single category they call "damages," thereby failing to distinguish between the equitable remedy of an accounting of the "defendant's profits" and the legal remedy of an award of the plaintiff's "damages." McCarthy, supra, § 30:57.

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