Willfulness[TM].

Author:Welkowitz, David
Position:Different meanings of willfulness which can lead to expansion of trademark remedies - I. Willfulness in the Trademark Statute through III. But What Does Willful Mean? D. Case Law Discussing the Meaning of Willful, p. 509-540
 
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"When I use a word," Humpty Dumpty said, in rather a scornful tone, "it means just what I choose it to mean--neither more nor less." "The question is," said Alice, "whether you can make words mean so many different things." "The question is," said Humpty Dumpty, "which is to be master-that's all." (1)

And the word is willfulness. A chameleon-like term, dreaded by the likes of Learned Hand, (2) willfulness is used in trademark law for many purposes, usually without a comprehensible definition. In this article, I propose to demonstrate that the term willfulness (or willful) not only has a shifting meaning, but that its loose definition encourages expansion of trademark remedies to an extent that should at least give us pause. Moreover, in some cases the remedial decisions are delegated to lay juries with a decided lack of guidance or restraint, leading to even more expansive remedial possibilities. These expansions feed on themselves. As others have shown, expanding the realm of liability and remedies leads to more expansive claims of right, not only through lawsuits, but through cease-and-desist letters (and possible licensing). (3) Since, as will be seen, some measures of willfulness incorporate those same cease-and-desist letters, the expanding cycle begins again. (4) This may be a welcome result for trademark owners; whether it is a boon to consumers and others who would use trademarks in various unauthorized but socially useful ways is not so clear.

The article proceeds as follows. Part I discusses the appearance (and non-appearance) of the word willful in the federal trademark statute. Part II sets out various situations in which willfulness is made relevant by judicial construction of the trademark statute. Part III examines the myriad meanings that can be, and have been, ascribed to willfulness, drawing from criminal law, the Restatement of Torts, case law using willfulness in trademark cases, case law using willfulness in patent and copyright cases, and jury instructions in trademark cases. Part IV discusses how these different meanings can lead to an expansion of trademark remedies beyond what seems appropriate given that willful behavior ought to be viewed as extraordinary, not ordinary. Finally, in the conclusion I discuss the idea that willfulness should be a more limited concept, directed at intentional, or deliberate infringement.

  1. WILLFULNESS IN THE TRADEMARK STATUTE

    The word "willful" only appears a few times in the federal trademark statute. It appears most prominently in the trademark counterfeiting provisions. (5) Section 35(c) of the Lanham Act permits a plaintiff to choose statutory damages for counterfeiting in lieu of demonstrating actual damages. (6) This section contemplates different levels of culpability, which should correspond to different quantities of damages: (1) The "standard" range for statutory damages is between $1000 and $200,000 "per counterfeit mark per type of goods or services sold"; (7) and (2) if "the use of the counterfeit mark was willful" then the upper range is increased to $2 million "per counterfeit mark per type of goods or services sold." (8) This is a truly breathtaking range: $1000 to $2 million or two thousand times the minimum. Even the "standard" range is large: the maximum is two hundred times the minimum amount, with no guidance except "as the court considers just." (9)

    Oddly, although willfulness vastly increases statutory damages for counterfeiting, "willfulness" is not a consistent feature of the trademark counterfeiting laws. For example, the word "willful" does not appear in the criminal counterfeiting statute. (10) That statute applies to one who "knowingly uses a counterfeit mark" and/or "intentionally" does various things, including "traffic[king] in labels [and other items] knowing that a counterfeit mark has been applied thereto." (11) While one might argue that "knowing" and "willful" should be treated as synonymous, this is not a foregone conclusion. (12)

    The term "willful" also does not appear in the first of the civil counterfeiting remedies sections. Section 35(b) requires (absent "extenuating circumstances") a trebling of damages if the violation consists of--

    (1) intentionally using a mark or designation, knowing such mark or designation is a counterfeit mark (as defined in section 1116(d) of this title), in connection with the sale, offering for sale, or distribution of goods or services; or

    (2) providing goods or services necessary to the commission of a violation specified in paragraph (1), with the intent that the recipient of the goods or services would put the goods or services to use in committing the violation. (13)

    Thus, depending on how the terms "intentionally," "knowing," "with the intent," and "willful" are interpreted, it is possible that a "willful" violation would lead to the most significant award of damages for the least culpable conduct. (14)

    On the other hand, section 35 does contain a reference to "willful" in section 35(e). That section provides:

    In the case of a violation referred to in this section, it shall be a rebuttable presumption that the violation is willful for purposes of determining relief if the violator, or a person acting in concert with the violator, knowingly provided or knowingly caused to be provided materially false contact information to a domain name registrar.... (15) This is a curious provision. It applies to any violation "referred to in this section," which means all of section 35, not just section 35(e), since there is no reference to any specific violation in section 35(e). (16) Because section 35 as a whole creates remedies (except for injunctions, which are dealt with elsewhere) for the full panoply of trademark violations, section 35(e) would include virtually any Lanham Act violation. (17) Yet the most logical part of the Lanham Act for which it would apply is section 43(d), the anti-cybersquatting provision, and its specialized statutory damage provisions in section 35(d). (18) How failure to give accurate information to a domain name registrar could reasonably be connected to a presumption of "willful" trademark infringement of any kind, other than cybersquatting, is a mystery. (19) Even more puzzling, the most logically relevant provision, section 35(d), providing statutory damages for cybersquatting, does not give any extra measure of damage for "willful" cybersquatting. (20) Given the wide range of damages available under section 35(d) (21) ($1000 to $100,000 per domain name), willfulness--whatever it may mean--could be relevant to the cybersquatting damages decision. But the general applicability of the section 35(e) presumption to all forms of infringement is curious. (22)

    The anti-cybersquatting statute (also known as the "ACPA"), of which section 35(e) was a part, requires a "bad faith intent to profit" as a prerequisite to liability. (23) However, neither the main operative provision, nor the factors listed as guidelines to determining bad faith use the term "willful." (24) The only place in section 43(d) in which the word willful appears is section 43(d)(2)(D)(ii). (25) Section 43(d)(2) deals with in rem actions for cybersquatting. (26) Section 43(d)(2)(D)(ii) provides: "The domain name registrar or registry or other domain name authority shall not be liable for injunctive or monetary relief under this paragraph except in the case of bad faith or reckless disregard, which includes a willful failure to comply with any such court order." (27) Like section 35(e), this provision's use of willful is somewhat odd, although for different reasons. It seems to equate "a willful failure to comply with any such court order" (28) with "had faith or reckless disregard." But reckless disregard of what? A logical inference would be reckless disregard of a court order (or bad faith refusal to implement it). However, if that is the case, why Congress chose to word the statute in that manner would be a mystery. It would have made more sense to say "except in cases of a deliberate failure to comply with any such court order, or bad faith or reckless disregard of such court order." (29) But that does not appear to be the way "bad faith or reckless disregard" is interpreted. (30) On the other hand, disconnecting bad faith and reckless disregard from the issue of the court order makes the willful failure provision somewhat odd. It is also odd that Congress did not specify to what "reckless disregard" refers.

    Another place in the Lanham Act in which the word "willful" appears is section 43(c), the dilution provision. (31) In order to obtain non-injunctive relief (e.g., damages) for dilution, a plaintiff must show if the claim is:

    (i) by reason of dilution by blurring, the person against whom the injunction is sought willfully intended to trade on the recognition of the famous mark; or

    (ii) by reason of dilution by tarnishment, the person against whom the injunction is sought willfully intended to harm the reputation of the famous mark. (32)

    The concept of "willful intent" is an odd one depending on how one defines "willfully"; more will be said about this shortly. But the "willfulness" aspect of dilution also affects section 35(a), the general monetary remedies section of the Lanham Act. (33) Section 35(a) allows monetary remedies for violations of sections 32 (registered marks), 43(a) (unregistered marks and false advertising), 43(d) (cybersquatting), and "a willful violation under section 1125(c)" (i.e., section 43(c)). (34) This provision apparently is intended to implement the above-quoted requirements of section 43(c)(5). (35) However, it is an inaccurate representation of section 43(c)(5)'s requirements. It refers simply to a "willful violation" of section 43(c), while section 43(c)(5) is much more specific, requiring both "willful intent" and specific objectives of that intent. (36) Moreover, the addition of "willful violation of section 1125(c)" caused interpretive...

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