The determination of damages for trademark infringement or unfair competition is not as uniform as in patent cases or copyright cases because the enforcement of trademarks can be governed by federal substantive law, state law or both.
Damages in trademark infringement cases can be directed to an amount of money that reasonably and fairly compensates the trademark owner for the infringement. For trademark infringement under the Lanham Act, such damages can include the defendant’s profits, the trademark owner’s damages and the costs of the action. 15 U.S.C. § 1117.
Courts can have a jury consider various factors, such as: (1) the injury to the trademark owner’s reputation; (2) the injury to the trademark owner’s goodwill; (3) the trademark owner’s lost profits; (4) the expense of preventing customers from being deceived; (5) the cost of corrective advertising; and (6) any other relevant factor. The determination of lost profits can include price erosion.
If the amount of actual damage that a trademark owner sustains from the trademark infringement is not easily determinable, a court can have a jury consider the infringer’s profits or can have the jury base the award on unjust enrichment.
A court can also award the infringer’s profits, but the amount of profits cannot be “double counted” with the profits associated with the determination of actual damages.
Statutory damages are also available in some trademark cases, pursuant to 15 U.S.C. § 1117(c). Statutory damages can range from $1,000 to $200,000 for cases in which infringement is not willful. The amount can be increased to as much as $2 million for willfulness.
Other Related Torts
There are two other torts that can be related to unfair competition or trademark infringement. The first type of tort is trade dress infringement. The determination of damages in such cases can be very similar to the determination of damages in trademark infringement cases.
The second type of tort is the misappropriation of the right of publicity, which, unlike in trademark law, is exclusively a creature of state law. The determination of damages is less uniform in such cases, as compared to trademark law. The measurement of damages can be based on the value of the right of publicity for an individual, the loss associated with the future earnings potential of the individual or unjust enrichment.