Trademark, Copyright, and Trade Secret Damages
| Author | Russell L. Parr |
| Profession | President of Intellectual Property Research Associates |
| Pages | 484-495 |
CHAPTER 30
TRADEMARK, COPYRIGHT,
AND TRADE SECRET DAMAGES
The preceding chapters in the third section of this book focused on patent infringement dam-
ages. Many of the concepts discussed also apply to the other intellectual property discussed
in this chapter with subtle differences.
TRADEMARK DAMAGES
Trademark damages law is derivedfrom § 25 of the Lanham Act and § 36 of the Restatement
of Unfair Competition Third. They allow for discovery of the plaintiff’s losses and the
defendant’s prots, also called unjust enrichment.
Plaintiff’s losses are also referred to as lost prots, which has been previously dened
as infringing sales less variable expenses. Unjust enrichment is calculated in two different
ways. Federal courts are split about how to calculate unjust enrichment. Many courts opt
for full-absorption where xed costs are included in the calculation. Other courts consider
only the incremental or variable costs in reaching a conclusion. To make matters worse,
some courts opting for full-absorption count only the xed costs directly used in making
the infringed product. Presumably, factoryoverhead is allocated to the damages calculation,
but the xed costs for the corporate jet would be excluded.
Additional damage awards can include corrective advertising that the plaintiff had to
conduct to educate its customers about the infringing activity.
Trademarks deliver economic benets in a variety of ways. Well-recognized trademark
can generate high sales volume. Trademarks might also allow the owner to command pre-
mium pricing for its products or services.
HIGH SALES VOLUME. A well-recognized trademark provides customers with certain
assurances. The name might be associated with quality, safety,and value. A customer with
these assurances from the trademark is likely to gravitate to the trademarked products with-
out hesitation, not even considering the alternative offerings of competitors. Customers
looking for a canned tomato soup are very likely to remember their childhood and auto-
matically grab for a can of Campbell’s soup while rushing through the grocery store. There
is no need to think about other options. The customer knows the product and is almost
conditioned to make the purchase. High sales volume results.
PREMIUM PRICING. Trademarks that convey quality allow their owner to charge a pre-
mium for its products. Think of Band-Aids®. Many alternatives exist to the wound covers
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