April 18, 2012 Articles

Showing a Disgorgement of Profits under the Lanham Act

Some circuits require evidence of willful infringement as a prerequisite to an award of profits, while others have decided that it is only one of many factors to be considered.

By Oliver Alan Ruiz

The 1999 amendments to the Lanham Act, 15 U.S.C. § 1051 et seq., and, in particular, the revision to section 1117(a) of the act, have spurred dissension among federal circuit courts regarding the evidentiary showing necessary to support a disgorgement of lost profits as an equitable remedy under the revised statute.

Some circuits continue to require evidence of willful infringement as a prerequisite to an award of profits, while other circuits have decided that willfulness is only a factor to be considered in connection with the propriety of an award of a defendant’s profits under the Lanham Act, pointing to the plain language of the revised statute.

Generally, prior to the 1999 amendments to the Lanham Act, federal courts employed a bright-line rule and required evidence of willful infringement to justify the equitable remedy of a disgorgement of profits under the statute. However, with the revision of the statute, and specifically, the inclusion of the word “willful” only with respect to claims under section 43(c) (concerning trademark dilution), some circuits have seized upon the plain language of the amended statute and have relegated the consideration of willful infringement to be only a factor to be considered when deciding on an award of profits under the statute.

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