Trademark Infringement and the Lanham Act: the Time for "willfulness" to Be Uniformly Defined and Applied Under the Lanham Act Is Now

• Jurisdiction: United States,Federal
• Citation: Vol. 52
• Publication year: 2022

52 Creighton L. Rev. 71. TRADEMARK INFRINGEMENT AND THE LANHAM ACT: THE TIME FOR "WILLFULNESS" TO BE UNIFORMLY DEFINED AND APPLIED UNDER THE LANHAM ACT IS NOW

TRADEMARK INFRINGEMENT AND THE LANHAM ACT: THE TIME FOR "WILLFULNESS" TO BE UNIFORMLY DEFINED AND APPLIED UNDER THE LANHAM ACT IS NOW

NICOLLE ZAVADOFF ^[*]

I. INTRODUCTION

The Lanham Act, codified under 15 U.S.C. §§ 1051-1129, 1141, prescribes how the owner of a trademark is to register such a trademark with the United States Patent and Trademark Office. ^[1] Less popularly known as the Trademark Act of 1946, Congress enacted this statute to ensure consumer protection with the goal of organizing trademark laws already found under common law into a set of more easily applicable, codified laws. ^[2] When studying the Lanham Act, it is important to look at it concurrently with 15 U.S.C. § 1117, commonly known as Section 35 of the Lanham Act, which lays out when monetary recovery is available for the violation of trademark rights. ^[3] Monetary recovery of profits are outlined in § 1117(a):

When a violation of any right of the registrant of a mark registered in the Patent and Trademark Office, a violation under section 43(a) or (d) [15 U.S.C. § 1125(a) or (d)], or a willful violation under section 43(c) [15 U.S.C. § 1125(c)], shall have been established in any civil action arising under this Act, the plaintiff shall be entitled . . . subject to the principles of equity, to recover defendant's profits . . . . ^[4]

The requirements for satisfaction of § 1117(a) have repeatedly changed over the years due to numerous statutory amendments, specifically with the addition of language of intent behind the violation of 15 U.S.C. § 1125(c). ^[5] Section 35 reflects the 1999 Amendment (the "1999 Amendment") to § 1117(a), which is not the most recent amendment to the statute, but is the most current addition of a "willful violation" regarding § 1125(c). ^[6] Because of this added language, the interpretation of the monetary recovery portion of a defendant's profits under § 1117(a), specifically the "disgorgement of defendant's profits," has been litigated for decades. ^[7]

In 1999, § 1117(a) was amended and the term "willful" was added to modify the word "violation"; this added a seemingly new requirement to the collection of defendant's profits for trademark violations under § 1125(c). ^[8] Section 43 of the Lanham Act, otherwise known as § 1125, provides civil penalties for false designations of origin, false descriptions, and forbidden dilutions, which help guide courts through an infringement analysis. ^[9] This analysis under § 1125 codified the common law likelihood of confusion test, ^[10] and thus, allowed trademark owners to recover monetary or injunctive relief when such confusion factors were met. ^[11]

Accordingly, since "willful" was added to § 1117(a), much of the disagreement over the 1999 Amendment has centered around the role willfulness plays in a defendant's misappropriation of a plaintiff's trademark, and the role that common law continues to play in an infringement analysis. ^[12] The definition of "willful" and how to apply such intent when disgorging a defendant's profits has been another problem. ^[13] This has consequently led to inconsistent case law, as the understanding of the 1999 Amendment has varied throughout jurisdictions. ^[14]

One significant reason behind the inconsistent readings of the 1999 Amendment is diverging interpretations of the legislature's intent. ^[15] Some courts vehemently hold that Congressional intent behind the 1999 Amendment is clear because the Lanham Act was originally enacted to codify common law. ^[16] These courts assert that innocent infringers should not be punished. It was inferred from the time the Lanham Act was passed that willfulness was always required for an infringement violation, and therefore disgorgement of profits, under § 1117(a). ^[17] The same courts hold that the 1999 Amendment was simply to resolve an earlier drafting error in the Lanham Act. ^[18] Therefore, both Congressional intent and legislative history point to willfulness as intended language since the early days of the Lanham Act. ^[19]

Also, the courts' failure to adhere to a consistent definition of "willful" is largely to blame for the inconsistency in interpretation of the 1999 Amendment. ^[20] Black's Law Dictionary defines "willful" as "voluntary and intentional, but not necessarily malicious." ^[21] Nevertheless, both Congress and the courts have never elaborated on how closely this definition is followed. ^[22] Still, in some circuits, the decision of whether profits will be recovered by those harmed rests wholly on willfulness of the infringement. ^[23] In other circuits, willfulness is only partially decisive. ^[24] Additionally, each circuit may be using its own, entirely different definition of willfulness altogether, crafted to its own liking, because of Congress' failure to give any guidance on the definition of "willful." ^[25] Thus, recovery of profits realized by infringed-upon parties varies widely among circuits. ^[26] In any case, it is clear that there is a deepening circuit split regarding appropriate trademark infringement profits, with the argument centering on how much emphasis should be put on the term "willful." ^[27]

Not only does the circuit spilt allow for unfair competition between trademarked and infringed goods, but it also inequitably punishes trademark owners by allowing their profits to stay within the hands of pilfering defendants. ^[28] Some trademark owners lose rightful claims due to a particular court's interpretation of the term "willful." ^[29] Lack of a uniform standard for recovery on a "willful" infringement claim compels trademark owners to file a circuit-specific complaint, further facilitating the broadening interpretations of the term. ^[30] Without a concrete definition and uniform acceptance of the term "willful," the trademark infringement, profit disgorgement circuit split will perpetuate. ^[31] Therefore, tightening the Lanham Act's definition of willfulness and determining the factors for disgorgement of infringing defendant's profits could be a step towards unifying the country in fair trademarking and product competition.

To establish a concrete set of factors for determining the disgorgement of defendant's profits, the United States Supreme Court must grant certiorari to a proper qualifying case, thus providing the commentary necessary to finally set the record straight. Further, the new test to be used for claims arising under § 1117(a) must more clearly define "willful" when used in connection with § 1125(c). ^[32] As the law stands, the requirements for adequate fulfillment of "willful" infringement are entirely arbitrary among circuits. ^[33] Without a concrete standard, or rather, any standard or definition at all, it is no surprise that courts cannot cohesively conclude what "willfulness" means. ^[34]

This Note argues that "willfulness" should be a requirement and therefore assessed as part of § 1117(a) when used in connection with § 1125(c), as Congress intended. ^[35] This Note also argues that a new test formulated by the Supreme Court would be the solution to the circuit split. Additionally, this Note will argue that the test should incorporate a more thorough definition of "willfulness," with concrete factors and sliding scales for the gravity of the infringement, which aids in determining disgorgement of defendant's profits. Factors this Note will consider when defining "willfulness" in this new test include: intent to defraud, ^[36] knowledgeable use of an existing trademark, ^[37] actual harm proven, ^[38] and level of competition between the goods. ^[39] Previously, these factors have been used separately and interchangeably by various circuits as factors of "willfulness" or in place of "willfulness." ^[40] Combining all of these important factors into one test would enable courts to weigh the elements of the infringement and ultimately decide whether the alleged conduct was "willful," as opposed to the current, arbitrary system of deciding trademark infringement claims. ^[41] While non-"willful" infringers would still have their profits disgorged, the new test would encapsulate a sliding scale, thus imposing lesser punishment on such defendants. If imposed by the Supreme Court, this test would be binding authority upon all circuit courts and thus unify the interpretation of trademark infringement, creating a fairer and more applicable system of disgorging defendants' profits. ^[42] Section II of this Note will discuss the history of the Lanham Act, beginning with background information on trademarks and a definition of trademark infringement. ^[43] Then, this Note will explain the early history of the Lanham Act, followed by judicial interpretation of Congress' intent of the Lanham Act. ^[44] Section III will consider the current circuit split, along with the 1999 Amendment to the Lanham Act, by examining key cases exemplifying the split, its effects, and these cases' interpretations of the legislation. ^[45] Other circuits' interpretations of the 1999 Amendment will also be briefly surveyed. ^[46] Next, Section IV will suggest a solution to the lack of unity among the circuit courts regarding the "willfulness" requirement in § 1117(a). ^[47] This solution would be in the form of a four-factor, easily applied test. ^[48] Section IV will also...