The Lanham Act is a federal statute that protects businesses from various types of unfair competition, including trademark infringement. In business litigation, the Lanham Act permits trademark owners to sue other businesses or individuals for violating their trademark rights. The Lanham Act provides that “[w]hen a violation of any right of the registrant of a mark … shall have been established in any civil action arising under this chapter, the plaintiff shall be entitled . . . subject to the principles of equity, to recover (1) defendant’s profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action.” Hard Candy, LLC v. Anastasia Beverly Hills, Inc., 921 F.3d 1343 (11th Cir. 2019). Peter Mavrick is a Fort Lauderdale business litigation attorney, and represents clients in Miami, Boca Raton, and Palm Beach. The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.
In addition to monetary damages, the Lanham Act also permits courts the “power to grant injunctions, according to the principles of equity and upon such terms as the court may deem reasonable, to prevent the violation of any right of the registrant of a mark registered in the Patent and Trademark Office or to prevent a violation under subsection (a), (c), or (d) of 15 U.S.C. § 1125.” In “exceptional cases” in business litigation, a prevailing party can also be awarded attorneys’ fees under the Lanham Act. The Lanham Act, thus “provides a broad menu of remedies to a plaintiff claiming infringement” of its trademarks. Hard Candy, LLC v. Anastasia Beverly Hills, Inc., 921 F.3d 1343 (11th Cir. 2019).
In “ordinary trademark infringement actions . . . complete injunctions against the infringing party are the order of the day.” SunAmerica Corp. v. Sun Life Assurance Co. of Can., 77 F.3d 1325 (11th Cir. 1996). This is typically the case because Courts “the public deserves not to be led astray by the use of inevitably confusing marks,” and injunctive relief is the surest way to prevent future harm. Angel Flight of Ga., Inc. v. Angel Flight Am., Inc., 522 F.3d 1200 (11th Cir. 2008). Indeed, Courts consider that “injunctive relief is the quintessential form of equitable remedy; it does not entitle a plaintiff to a jury trial.” Hard Candy, LLC v. Anastasia Beverly Hills, Inc., 921 F.3d 1343 (11th Cir. 2019).
The Lanham Act permits a plaintiff to recover monetary damages, which can be “divided into five rough categories: recovery of the defendant’s profits, actual business damages and out-of-pocket losses (like corrective advertising), lost profits, punitive damages, and attorneys’ fees.” Hard Candy, LLC v. Anastasia Beverly Hills, Inc., 921 F.3d 1343 (11th Cir. 2019). In this context, “actual damages” cover “everything from damages from lost sales or licensing fees due to the infringer’s sale of offending goods to intangible harm like reputational damage and loss of good will.” Hard Candy, LLC v. Anastasia Beverly Hills, Inc., 921 F.3d 1343 (11th Cir. 2019). A trademark plaintiff “may recover for all elements of injury to the business of the trademark owner proximately resulting from the infringer’s wrongful acts.” Bos. Prof’l Hockey Ass’n, Inc. v. Dallas Cap & Emblem Mfg., Inc., 597 F.2d 71 (5th Cir. 1979). As one example, a liable infringer would have to pay the plaintiff for the nonexclusive license to use the trademarks.
Courts have held that the primary limiting principle is that the damages may not be “speculative.” For example, in Ramada Inns, Inc. v. Gadsden Motel Co., the Eleventh Circuit Court of Appeals considered “whether the district court’s assessment of the actual damages or harm suffered by Ramada was speculative.” 804 F.2d 1562 (11th Cir. 1986). Ramada held that “the trademark infringement award must be based on proof of actual damages and that some evidence of harm arising from the violation must exist.” Ramada Inns, Inc. v. Gadsden Motel Co., 804 F.2d 1562 (11th Cir. 1986).
The Lanham Act also “permits recovery of profits because actual damages are often difficult to prove.” Hard Candy, LLC v. Anastasia Beverly Hills, Inc., 921 F.3d 1343 (11th Cir. 2019). It “shifts the burden of proving economic injury off the innocent party, and places the hardship of disproving economic gain onto the infringer.” Wesco Mfg., Inc. v. Tropical Attractions of Palm Beach, Inc., 833 F.2d 1484 (11th Cir. 1987). Indeed, the statute does so by expressly providing that “the plaintiff shall be required to prove defendant’s sales only,” while the “defendant must prove all elements of cost or deduction claimed” against its profits. 15 U.S.C. § 1117(a).
Peter Mavrick is a Fort Lauderdale business litigation lawyer, and represents businesses in Miami, Boca Raton, and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.