Published 06/11/2021 by CIONCA IP TEAM (SE)
Sometimes to get ahead, business owners feel the need to copy others. One way business owners do this is by committing trademark infringement. Whenever an individual or business uses a trademark or service mark of a competing company without authorization, they infringe on another entity's brand.
However, not all trademark infringement is done knowingly. For example, some innocently are not aware when a company has rights to a specific service or trademark. And when someone has no reason to believe that using a work constitutes infringement, they might feel that they can dispute copyright infringement charges.
Yet, it does not matter whether someone uses trademarked assets unknowingly, as even unintentional misuse qualifies as trademark infringement. Although most individuals who unintentionally infringe on the rights of others rarely pay penalties on ill-gotten gains, there’s always a risk that the trademark owner can recover damages for their stolen property.
With copyright law, when someone infringes on the copyright of another person, it doesn’t matter if they do it out of negligence or intent to harm. Therefore, a copyright holder can impose liability on an infringer without proving negligence. Instead, a claimant can prove that another party infringes on their copyright and recover damages from a defendant. And there are strict penalties for those that wrongfully or innocently use someone else's property to profit financially.
It is essential to be aware of the penalties for trademark infringing since it can happen innocently yet put individuals' and companies' finances at risk. In addition, even if a service or trademark is not identical to the plaintiff's mark, it can still infringe upon the owners' rights if the similarities confuse the average consumer. Thus, those creating new trade or service marks should be aware of federally registered trademarks using the U.S. Patent and Trademark Office's Trademark Electronic Search System.
Traditionally, whenever a defendant's infringement causes confusion and weakens the plaintiff's trademark, defendants have their profits taken from them and given to the trademark holder. The process occurs whenever a court determines that a plaintiff must repay ill-gotten gains, with interest and penalties.
Trademark infringement claims typically go through the federal court system, although business owners can file suits with state courts. While it's difficult to determine the complete total of damages the trademark owner suffers, they're still able to receive profit awards that rid those who infringe of their unjust gains.
In the past, some courts determined whether there was intent before awarding damages, while others wanted proof of willfulness before considering the awarding damages as a remedy. However, in April 2020, the U.S. Supreme Court resolved whether there is a difference between willful vs. innocent use of a trademarked property. In a case named Romag Fasteners, Inc. v. Fossil, Inc., the Court finally resolved a split on the issue.
After that historic ruling, trademark owners can now recover profits from innocent trademark infringement. The court system no longer needs to determine whether someone's willfulness to infringe on a registered trademark or service mark gives the trademark holder rights to the infringer's profits.
Although this is an exciting ruling that solves longstanding questions about willful vs. innocent service and trademark copyright infringement, there is some debate on the effectiveness of this ruling. Whereas willful infringers usually pay significant penalties, ignorant misuse of trademarks rarely leads to trademark owners being awarded profits. With that in mind, it is nice to understand that the legal system is solving longstanding questions about trademark law.
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Marin Cionca, Esq.
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