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Trademark Act §1117 Damages

• §1117 enables courts to award the following relief in claims brought under the Trademark Act:
  1. Defendants' profits
     • Plaintiffs need only prove a defendant's gross sales or revenues attributable to the infringement.
     • Defendants must prove any overhead, expenses and other deductions to be made from their gross sales or revenue.
  2. Any actual damages sustained by the plaintiff
  3. Costs of the action (subject to principles of equity)
• Courts have broad discretion to award the monetary damages they find appropriate in the circumstances of the case.
  • As a maximum award, trebling of actual damages is possible based on equity and the circumstances of the case.
    • Intentional use of a counterfeit mark in selling or offering for sale goods or services requires the awarding of treble damages, along with a possible award of discretionary prejudgment interest.
  • Courts have discretion to award reasonable attorneys fees in exceptional cases.
    • This generally means in cases of intentional or deliberate infringement or violation.
  • An accounting of a defendant's profits may be awarded based on equitable considerations.
    • A lack of actual damages will not necessarily preclude a plaintiff from being awarded an accounting of a defendant's profits.
  • Where competing goods are involved, disgorgement of a defendant's profits will likely be awarded only where lost sales or profits damages (actual damages) are nominal.
  • No lost sales or profits damages (actual damages) will be awarded in claims involving non-competing goods or services.
    • Awards of a defendant's profits for unjust enrichment and damages to commercial reputation may be granted in the court's discretion.
      • The existence of bad faith or intentional conduct is usually the primary consideration.
        
    • Some courts will also award a defendant's profits as a deterrent to willful infringement.
  • Courts may adjust awards based on disgorgement upward or downward, as they deem just.

  
  

  Treatment of Defendants' Profits
  

  **	Type of Damages Awarded to Plaintiff	Profits Recoverable from a Defendant
  1.	Lost sales / Lost profits (for competing goods/services)	Actual damages are presumptively equal to defendant's profits (i.e., disgorgement, as such, is generally awarded only if actual damages are nominal or equity requires)
  2.	Goodwill & reputation Deterrent to willful infringement (for non-competing goods/services)	To the extent of unjust enrichment or to the extent needed to create the desired deterrent effect

• At any time before judgment, the plaintiff may elect to recover statutory damages if counterfeit marks are involved.
  • Statutory damages are between $500 and $100,000 per good or service.
  • They rise up to $1,000,000 per good or service if the counterfeiting was willful.
  • In actions under Trademark Act §1125(d), statutory damages will be set in the court's discretion at between $1,000 and $100,000 per domain name.

Trademark Act §1118 Destruction of Infringing Articles

• §1118 Provides for impounding and destruction of infringing articles and their means of production.
  • Ten days notice must be given the Attorney General prior to destruction.

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