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The Intellectual Property StrategistFeaturesIntellectual PropertyLitigationTrademarks

An Overview of Recovering Trademark Infringement Damages

By Marcus Harris and Ryan Burandt

While enjoining infringing activity is the objective of most trademark infringement lawsuits, an analysis of the potential damages available in a trademark infringement action and the methodology for proving damages should be conducted prior to filing a complaint. Basic questions that need to be answered before filing a lawsuit include:

  • When are courts likely to award monetary damages?;
  • What methodology for proving damages is appropriate for the particular facts of the case?; and
  • How does a plaintiff establish monetary damages?

This article discusses recovering damages for trademark infringement and various strategies for establishing those damages.

In an infringement action, "[d]amages are typically measured by any direct injury which a plaintiff can prove, as well as any lost profits which the plaintiff would have earned but for the infringement." Lindy Pen Co. v. Bic Pen Corp., 982 F.2d 1400, 1407 (9th Cir. 1993), abrogated on other grounds by SunEarth, Inc. v. Sun Earth Solar Power Co., 839 F.3d 1179 (9th Cir. 2016). In trademark cases, plaintiffs can seek: 1) the defendant's profits; 2) an award of actual damages sustained by the plaintiff; 3) recovery of costs of the action; 4) an award of reasonable attorney's fees (in exceptional cases); and 5) statutory damages. Int'l Star Class Yacht Racing Ass'n. v. Tommy Hilfiger, U.S.A., Inc., 80 F.3d 749,752-53 (2d Cir. 1996). An award of actual damages can take the form of: a) lost sales or revenue; b) corrective advertising or the cost to prevent, correct or mitigate consumer confusion; and c) harm to market reputation/loss of goodwill. A plaintiff may also seek reasonable royalties and lost franchise fees. N.Y. Racing Ass'n v. Stroup News Agency Corp., 920 F.Supp. 295, 302 (N.D.N.Y. 1996); Hair Assoc. v. Nat'l Hair Replacement Servs., Inc., 987 F. Supp. 569, 596 (W.D. Mich. 1997).

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