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JMBM attorneys Rod Berman and Jessica Sparkman authored an article exploring the availability of damages for counterfeiting in trademark infringement cases that was published in the May-June 2023 issue of the Trademark Reporter, a peer-reviewed journal on trademarks and related intellectual property issues.
The article, “Inconsistency and Confusion in the Judicial Treatment of Counterfeiting Claims,” discusses the statutory provisions of The Lanham Act (the federal trademark statute) that establish special damages in cases of infringement involving the use of a counterfeit mark.
These special damages include: statutory damages between $1,000 and $200,000 in any case of infringement involving the use of a counterfeit mark; statutory damages of up to $2,000,000 in cases of infringement involving the willful use of a counterfeit mark; and/or mandatory awards, absent extenuating circumstances, of up to triple damages or profits and attorney’s fees where an infringing mark is intentionally used with knowledge that the mark is counterfeit.
It is notoriously difficult to recover meaningful monetary awards in trademark cases, which makes the availability of the special damages available in cases involving counterfeit marks an important tool for brand owners. Not only do brand owners stand to recover more if successful at trial, but the prospect of a meaningful monetary award can generate leverage for a favorable settlement.
There are few appellate cases in this area and a number of lower courts have narrowly construed the universe of cases in which the special remedies are available, limiting them to cases that involve “stitch-for-stitch” copies of the brand owner’s products. But, Berman and Sparkman argue, this universe is far narrower than the one created by the statute, which extends to any cases involving a mark that is identical to the brand owner’s mark – even if the products themselves are distinguishable in appearance. In other words, it is enough that an infringer is marketing a bag as a “Chanel” bag; it need not also have copied the appearance of an authentic Chanel bag.
“We’ve noticed in our practice that clients are hesitant to assert counterfeit claims in their trademark infringement cases, leaving significant monetary remedies on the table,” said Berman. “We think the improperly narrow interpretation of ‘counterfeiting’ adopted by a number of courts contributes to this hesitancy, and we sought to bring some clarity to the issue. We do see this issue under discussion in current cases, including one pending before the Ninth Circuit, and one before the Fifth Circuit.”
Berman’s legal practice includes patent, trademark, trade dress, copyright, unfair competition and internet responsibilities. He is rated one of the Best Lawyers in America® and is recognized by one of America’s foremost legal publications, the Daily Journal, as one of the top 30 intellectual property attorneys in the State of California.
Sparkman specializes in trademark, trade dress, unfair competition, copyright, and trade secret law, including prosecution, enforcement, litigation and client counseling. She has experience managing portfolios of more than two thousand trademark registrations, and has applied for or maintained trademark registrations in more than 150 countries.
About JMBM’s Intellectual Property Group
JMBM’s Intellectual Property Group represents entrepreneurs, family-owned businesses, middle-market companies, startups, universities and the FORTUNE 500, handling patents, trademarks, copyrights, domain names, trade dress, trade secrets, and related licensing and litigation. Our approach is aggressive and efficient, and we keep a keen focus on helping clients achieve their goals.
About Trademark Reporter
Founded in 1911, The Trademark Reporter delivers engaging and comprehensive peer-reviewed scholarship on trademarks and related intellectual property from practitioners, academics, and judges worldwide. The Trademark Reporter’s thought leadership is renowned across the industry, and U.S. and international courts often cite the TMR. Learn more at www.inta.org.
