Trademark Infringement

Trademark infringement is the unauthorized use of a trademark with goods and/or services in a manner likely to cause confusion, mistake, deception, or otherwise interfere with other goods and/or services.

As a general rule, trademark law grants a trademark owner exclusive ownership over a word, slogan, or design (called a “logo”) for limited goods/services.

What is Trademark Infringement?

Trademark infringement involves enforcing a trademark owner’s exclusive right of ownership over a word, slogan, or logo for limited goods and/or services. These assets are a type of intellectual property (“IP”).

Generally, trademark law is governed by federal statutes under what is known as The Lanham Act for registered and unregistered marks.

In order to bring a trademark infringement claim, a plaintiff must show that it:

1. has a valid and legally protectable mark;
2. owns the mark; and
3. the defendant’s use of the mark to identify goods or services causes a likelihood of confusion.

See A&H Sportswear, Inc. v. Victoria’s Secret Stores, Inc., 237 F.3d 198 (3rd Cir. 2000).

What Claims Can a Trademark Infringement Plaintiff Bring?

Below are some common claims plaintiffs may bring for trademark infringement in federal district court:

1. Trademark Infringing and Counterfeiting – 15 U.S.C. § 1114
2. False Designation of Origin – 15 U.S.C. § 1125(a)
3. State law claims (often under the Uniform Deceptive Trade Practices Act or similar state law)

Trademark Infringement – Common Themes Our Law Firm Has Seen

Our law firm commonly sees mom-and-pop stores or even well-established businesses caught up in “Schedule A” trademark/counterfeit cases alongside hundreds of defendants. Due to its lower personal jurisdiction requirements, these cases are typically brought in the United States District Court for the Northern District of Illinois, a federal court. We offer Walmart trademark infringement attorney services for businesses caught in the wide net.

What happens is that a plaintiff goes out and hires a software monitoring company to find and list hundreds of defendants. These defendants are then rounded up and listed on a sealed complaint together as “The Individuals, Partnerships, and Unincorporated Associations identified on Schedule ‘A’“. The defendants (our clients), are not notified until summons are issued.

Understandably so, this is a scary experience for our clients. We are licensed to practice before the Northern District of Illinois, routinely represent clients listed as trademark infringement defendants, and successfully obtain dismissals for lawsuits, and mitigate financial harm to our clients.

Trademark Infringing and Counterfeiting – 15 U.S.C. § 1114

15 U.S.C. § 1114 creates a cause of action for registered trademarks. For unregistered trademarks, see 15 U.S.C. § 1125(a), which is also discussed below.

Elements of Trademark Infringement

Breaking down the elements of trademark infringement, the plaintiff must show:

1. A valid trademark, capable of protection – i.e., it is senior to others
2. The defendant’s unauthorized use of the mark (i.e., no consent from plaintiff); and
3. That the defendant’s use is likely to cause confusion as to the:
   • “affiliation, connection, or association of [defendant] with [plaintiff]” or
   • “as to the origin, sponsorship, or approval of [the defendant’s] goods, services, or commercial activities by [plaintiff].” 1-800 Contacts, Inc. v. WhenU.com, Inc., 414 F.3d 400 (2d Cir. 2005).

1. A Valid Trademark and Seniority

To bring an action for trademark infringement, one must have ownership over a valid trademark. Notice how I did not say it needed to be “registered” (we will see below that owners of unregistered trademarks are capable of bringing suit under a different section of the Lanham Act and/or state law claims).

Ownership of a valid, registered trademark on the United States Patent and Trademark Office’s (“USPTO”) Principal Register creates a strong presumption that the trademark is valid. This presumption is heightened when filing for Section 15 “incontestability” during a 5th-6th year Declaration (a.k.a. a “maintenance” document). However, this does not necessarily mean that the user is a senior trademark user.

• Related: Renewals and Section 15 Incontestability

In other words, simply going to the USPTO, filing a trademark, and obtaining registration is necessary, but not sufficient—the trademark registrant must also be the senior user.

The senior user has greater trademark rights than junior users. While I do not discuss this here, there is the Tea Rose—Rectanus Doctrine for concurrent users in the United States (i.e., when use arises simultaneously in different geographic regions of the United States). This may serve as a defense for a junior user defendant in a trademark infringement suit.

2. Unauthorized Use

Unlike other countries (e.g., most EU countries, China, etc.), trademark rights accrue in the US by “use in commerce.”

Use in commerce means “[t]he bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark.”

The word “commerce” here refers to “interstate commerce” under the Commerce Clause because it is “all commerce which may lawfully be regulated by Congress.”

In the United States, the threshold for use in commerce is very low. For example, a federal court found that an appellant church selling two hats with a similar name to an Adidas brand to out of state purchasers for $38.34 was enough for “use in commerce.” See Christian Faith Fellowship Church v. Adidas AG, No. 16-1296 (Fed. Cir. 2016).

3. Likelihood of Confusion

In trademark infringement cases, “likelihood of confusion” depends on a number of factors. Those factors vary from federal circuit to circuit (there are a total of 13 federal circuits).

In the 7th Circuit, where the Northern District of Illinois, Cook County, the City of Chicago, and one of our offices are located, the seven-part test is as follows:

1. similarity of the marks in appearance and suggestion;
2. similarity of the products;
3. the area and manner of concurrent use;
4. the degree of care likely to be exercised by consumers;
5. the strength of the senior user’s mark;
6. existence of actual confusion; and
7. the intent of the defendant to `palm off’ its product as that of another.

Grubhub Inc. v. Relish Labs LLC, 80 F.4th 835, 847 (7th Cir. 2023) (noting that no one factor is sufficient). Courts typically assign varying weights to each factor, depending on the merits of the case. A skillful attorney can assess which factors will be relevant to your business.

Having an experienced trademark infringement attorney will make or break the difference between a successful trademark infringement claim or defense. Syed Law has experience handling these matters, we have an intimate understanding of trademark law honed from years of experience dealing with trademark infringement matters.

Remedies for Trademark Infringement under 15 U.S.C. § 1114

There are broad range of remedies for trademark infringement under 15 U.S.C. § 1114 including:

• Actual damages (monetary damages)
• Treble damages (i.e., triple the number of damages)
• Disgorgement of profits
• Reasonable royalty
• Statutory damages (i.e., damages under statute)
• Injunctive relief (i.e., a court order to the losing party to either do or not do something).
• Attorney fees

There is one remedy that is missing – punitive damages. Punitive damages are money damages designed to punish a bad-faith actor’s egregious behavior at the court’s discretion. According to one Circuit Court, the Lanham Act does not provide for punitive damages. Zazu Designs v. L’ORÉAL, SA, 979 F. 2d 499, 507 (7th Cir. 1992) (“Punitive damages are problematic because the Lanham Act, although providing for the trebling of compensatory damages, forbids other penalties.”).

Below, I go through each remedy.

Trademark Infringement – Actual Damages

Under the trademark infringement statute (15 U.S.C. § 1114), money damages are allowed. An infringement plaintiff can recover monetary damages if the defendant’s “acts have been committed with knowledge that such imitation is intended to be used to cause confusion, or to cause mistake, or to deceive.” A trademark infringement plaintiff is not automatically entitled to monetary damages, and a court has wide discretion to make an award.

In addition, the Lanham Act allows actual damages and statutory damages. Actual damages (also known as “compensatory damages”) seek to make the plaintiff whole by putting it in the position it would have been absent the infringement.

Actual damages consist of “defendant’s profits, ‘any damages sustained by the plaintiff,’ and court costs.” Rolls-Royce PLC v. Rolls-Royce USA, Inc., 688 F. Supp. 2d 150, 156 (E.D.N.Y) (quoting 15 U.S.C. § 1117(a)).

Disgorgement of Unlawful Profits

Disgorgement is a proxy for actual damages (called “proxy theory”). This means that if a plaintiff has difficulty proving an amount of actual damages, that plaintiff can look at the defendant’s unlawful profits to approximate the amount of an actual damages award.

Recently, the Supreme Court ruled in Romag Fasteners, Inc. v. Fossil, Inc. that a plaintiff in a trademark infringement suit does not need to show that a defendant acted “willfully” in infringing upon the plaintiff’s trademark to obtain a damages award. See Romag Fasteners, Inc. v. Fossil, Inc., 590 U.S. ___ (2020). Thankfully, the Court pointed out that for “innocent infringers” Section 1114 limits remedies to injunctive relief.

In addition to actual damages, a plaintiff can have a court order a trademark infringement defendant to return to the plaintiff (i.e., disgorge) the money it unlawfully gained through unauthorized trademark use.

Treble Damages

“Treble damages” means that after actual damages are decided, a court may triple the actual damages. In addition to actual damages, the Act allows courts to triple the actual damages. 15 U.S.C. § 1117(a) (“[f]or any sum above the amount found as actual damages, not exceeding three times such amount.”).

Trademark Infringement – Reasonable Royalty

An additional factor to trademark infringement damages is a “reasonable royalty.” Awarding a reasonable royalty is left to a court’s discretion where actual damages may be inadequate.

The thinking goes that since the defendant engaged in the unauthorized use of a trademark, the defendant should pay the reasonable licensing fee (usually a percentage) that a licensee would pay the plaintiff-licensor at the time infringement began. Naturally, determining such a percentage is difficult to determine, so courts look to evidence of the plaintiff’s other licensing agreements to determine the reasonable royalty.

Some factors in calculating a reasonable royalty are laid out from Georgia-Pacific Corp. v. United States Plywood Corp., 318 F. Supp. 1116 (S.D.N.Y. 1970). These factors guide courts in establishing a reasonable royalty from a hypothetical in which the plaintiff-licensor and defendant-licensee engaged in reasonable negotiations.

The Georgia-Pacific factors include:

1. The duration, scope, and/or nature of the infringer’s use
2. What licensees would normally pay in similar circumstances
3. The plaintiff-licensor’s use of its mark (i.e., exclusive, non-exclusive).
4. The loss to the plaintiff by allowing the defendant’s infringement to continue
5. Expert witness testimony corroborating the reasonable royalty

Statutory Damages for Trademark Infringement

Statutory damages under the Lanham Act involving a counterfeit trademark are plaintiff-friendly. Before final judgment, a trademark infringement plaintiff can ask the court for statutory damages instead of actual damages.

For each mark infringed, the court can order:

1. Not less than $1,000 or more than $200,000.
2. If willful, then “not more than $2,000,000” per mark.

Of course, trademark infringement plaintiffs are eager to brand anyone they see as not innocent. This is reflected in our law firm’s involvement in dozens of “Schedule A” matters in the United States District Court for the Northern District of Illinois.

A common tactic among plaintiffs is arguing that “willful blindness” – in other words, “ostrich-like business practices” (i.e., sticking your head in the sand), is enough for intentional trademark infringement. In addition, trademark infringement claims can be brought against businesses—like shopping malls or office buildings—that fail to inspect third parties clearly involved in infringement on their premises.

Damages are calculated by a number of factors, such as “the difficulty or impossibility of proving actual damages, the circumstances of the infringement, and the efficacy of the damages as a deterrent.” And, as one federal court notes “the awards are all over the map, and perhaps rightly so, since the award is meant to be tailored to the facts of the case at hand.”

However, there are limitations on damages. For “innocent infringers” or “innocent violators” damages are usually limited to an injunction (i.e., court order to stop infringement). This is discussed next. See also 15 U.S.C. § 1114.

Injunctive Relief

An injunction is a court order to either do or not do something. For “innocent infringers” under the statute (and as understood by the courts), § 1114 makes certain innocent infringers subject only to injunctions. See 15 U.S.C. § 1114. The Supreme Court confirmed this recently. Of course, the question becomes: “In a trademark infringement scenario, who is a ‘innocent infringer'”?

If a court finds a defendant in contempt of an injunction order, the court may (depending upon the jurisdiction in question), confine the defendant in jail for a reasonable period of time and then bring the defendant before it to answer. In addition, courts may fine defendants for failure to comply with their orders. Courts rarely resort to such measures because the vast majority of defendants comply.

Attorney Fees

In addition, the Lanham Act allows the winning party to recover its attorney fees, but these are not often granted unless there is an “exceptional case[].” 15 U.S.C. § 1117(a). The courts have not defined “exceptional case,” except to grant attorney fees where the defendant’s conduct is egregious or willful.

What are the Defenses to Trademark Infringement?

Defenses to trademark infringement include:

• Laches
• Estoppel
• Unclean hands
• Acquiesence

Can Unregistered Trademark Owners Sue in Federal Court?

Yes. 15 U.S.C. § 1125(a) provides unregistered trademark owners a federal cause of action for false designation of origin and false advertising. Even registered trademark owners may avail themselves of this law.

In addition, unregistered trademark owners can bring state law claims against infringers.

False Designation of Origin – 15 U.S.C. § 1125(a)

Under a violation of 15 U.S.C. § 1125(a) or § 1125(d), the remedies for trademark infringement are found in 15 U.S.C. § 1117.

The remedies for trademark infringement under 15 U.S. Code § 1117 are:

1. Actual damages (not just the defendant’s profits, but the damage to the plaintiff)
2. Attorney fees (rare)
3. Treble damages
4. Statutory damages

Actual Damages

Actual damages are defined as profits that include not just the defendant’s gains from the trademark’s unauthorized use, but actual damages to the defendant. 15 U.S.C. §1117(a). Normally, proving some economic harm to the plaintiff requires proof of actual confusion with the relevant consumer base.

The actual damages figure may be established in a number of ways:

Ways to Establish Actual Damages	What It Means
Consumer surveys	Surveys that poll the relevant purchasing base about attitudes and buying habits with respect to a brand to establish some degree of confusion
“But for” causation	Money the plaintiff could have made “but for” the defendant’s activities. For example, if the defendant earned $8,000 in net profits, the plaintiff can reasonably establish that the plaintiff lost at least $8,000 in sales, return customers, and goodwill.
Harm to goodwill	This means that the defendant’s action caused concrete harm to the plaintiff’s intellectual property right in the trademark. Usually done by comparing the value of goodwill before and after infringement. Subject area expert witnesses are normally retained to establish such a figure.
Corrective Advertising	If the plaintiff and defendant compete with a similar consumer base, then the plaintiff can show actual damages by the amount expended to “correct” public understanding about the damage.

Trademark Infringement – Statutory Damages

Statutory damages under 15 U.S.C. § 1117 for a violation of 15 U.S.C. § 1125(a) favor trademark infringement plaintiffs. At any time before final judgment, instead of recovering actual damages, the plaintiff can request statutory damages. Statutory damages range from “not less than not less than $1,000 or more than $200,000.” 15 U.S.C. § 1117(c)(1). For willful infringement, “not more than $2,000,000.” 15 U.S.C. § 1117(c)(2).

Reasonable Royalty

This is discussed in detail above, but briefly, the court will engage in a hypothetical scenario involving trademark infringement between a plaintiff-licensor and the defendant-licensee to reach a reasonable royalty rate.

Factors assessed are the (1) duration and scope of use; (2) expert witness testimony; (3) what licensees would normally pay in similar circumstances; and/or (4) cost to the plaintiff for continued infringement by the defendant.

Attorney Fees

15 U.S.C. § 1117 allows attorney’s fee recovery in “exceptional cases” of trademark infringement. 15 U.S.C. § 1117. However, the Lanham Act does not provide guidance about what an “exceptional case” would entail. Generally, courts award attorney fees when requested when the prevailing party can show (1) intentional and/or (2) willful. In exceedingly rare cases, defendants may be awarded attorney fees for abuse of process or meritless claims.

State Law Claims for Trademark Infringement

Trademark owners may file for a state-level trademark that provides coverage for trademarks at the state level and protects against trademark infringement occurring within the state only. Is an unregistered trademark owner, with no federal or state trademark registrations out of luck? The answer is “no.”

Unregistered Trademark Owner Remedies at the State Level

Unregistered (and registered) trademark owners can, in most states, bring state law claims under the Uniform Deceptive Trade Practices Act or Model Trademark Bill. Most states have some version of these laws.

Uniform Deceptive Trade Practices Act (“UDTPA”)

The Uniform Deceptive Trade Practices Act or Model Trademark Bill has been accepted by most states. Each state has its own name for law(s) that protect against unauthorized use of a mark such that it would confuse the reasonable consumer. Below, I provide a helpful table of states that adopted the Uniform Deceptive Trade Practices Act.

UDTPA Table

State	State Statute
Alabama	Ala. Code § 8-19A-1 et seq.
Alaska	Alaska Stat. § 45.50.471 et seq.
Arizona	Ariz. Rev. Stat. Ann. § 44-1521 et seq.
Arkansas	Ark. Code Ann. § 4-88-101 et seq.
Colorado	Colo. Rev. Stat. § 6-1-105 et seq.
Connecticut	Conn. Gen. Stat. § 42-110a et seq.
Delaware	Del. Code Ann. tit. 6, § 2531 et seq.
District of Columbia	D.C. Code Ann. § 28-3901 et seq.
Georgia	Ga. Code Ann. § 10-1-370 et seq.
Hawaii	Haw. Rev. Stat. § 481A-1 et seq.
Idaho	Idaho Code § 48-601 et seq.
Illinois	815 Ill. Comp. Stat. 510/1 et seq.
Indiana	Ind. Code § 24-5-0.5-1 et seq.
Iowa	Iowa Code § 714.16 et seq.
Kansas	Kan. Stat. Ann. § 50-626 et seq.
Kentucky	Ky. Rev. Stat. Ann. § 367.170 et seq.
Louisiana	La. Rev. Stat. Ann. § 51:1401 et seq.
Maine	Me. Rev. Stat. tit. 5, § 205-A et seq.
Maryland	Md. Code Ann., Com. Law § 13-301 et seq.
Massachusetts	Mass. Gen. Laws ch. 93A, § 1 et seq.
Michigan	Mich. Comp. Laws § 445.901 et seq.
Minnesota	Minn. Stat. § 325D.43 et seq.
Mississippi	Miss. Code Ann. § 75-24-51 et seq.
Missouri	Mo. Ann. Stat. § 407.020 et seq.
Montana	Mont. Code Ann. § 30-14-101 et seq.
Nebraska	Neb. Rev. Stat. § 87-301 et seq.
Nevada	Nev. Rev. Stat. Ann. § 598.0915 et seq.
New Hampshire	N.H. Rev. Stat. Ann. § 358-A:1 et seq.
New Jersey	N.J. Stat. Ann. § 56:8-1 et seq.
New Mexico	N.M. Stat. Ann. § 57-12-1 et seq.
New York	N.Y. Gen. Bus. Law § 349 et seq.
North Carolina	N.C. Gen. Stat. § 75-1 et seq.
North Dakota	N.D. Cent. Code § 51-15-01 et seq.
Ohio	Ohio Rev. Code Ann. § 4165.01 et seq.
Oklahoma	Okla. Stat. tit. 15, § 750 et seq.
Oregon	Or. Rev. Stat. § 646.605 et seq.
Pennsylvania	73 Pa. Stat. Ann. § 201-1 et seq.
Rhode Island	R.I. Gen. Laws § 6-13.1-1 et seq.
South Carolina	S.C. Code Ann. § 39-5-10 et seq.
South Dakota	S.D. Codified Laws § 37-24-1 et seq.
Tennessee	Tenn. Code Ann. § 47-25-101 et seq.
Texas	Tex. Bus. & Com. Code § 17.41 et seq.
Utah	Utah Code Ann. § 13-5a-101 et seq.
Vermont	Vt. Stat. Ann. tit. 9, § 2451 et seq.
Virginia	Va. Code Ann. § 59.1-196 et seq.
Washington	Wash. Rev. Code Ann. § 19.86.010 et seq.
West Virginia	W. Va. Code § 33-11-1 et seq.
Wisconsin	Wis. Stat. § 100.18 et seq.
Wyoming	Wyo. Stat. Ann. § 40-12-101 et seq.

Common Law Remedies for Trademark Infringement or Business Torts

In addition, most states have statutes or common law (i.e., court made law), for “business torts” (a type of harm to a business).

Some examples of business torts that protect against trademark infringement are:

• Unfair Competition
• False Advertising
• Fraudulent and Negligent Misrepresentation
• Civil Conspiracy
• Tortious Interference with a Prospective Economic Advantage

There are more, depending upon the state. However, the two biggest state-law claims, that trademark owners may use, whether or not they have a registered trademark, are unfair competition and false advertising.

Conclusion

In conclusion, if you have been sued for trademark infringement, particularly before the United States District Court for the Northern District of Illinois, we urge you to hire an attorney as soon as practicable.

Syed Law has experience representing trademark infringement defendants in the Northern District of Illinois. We have successfully represented clients on trademark, counterfeit, false designation of origin, and false advertising cases in the Northern District of Illinois and may be able to actively represent you to either dismiss you from a lawsuit or mitigate the harm done. Please call us today at 312-618-0713 or schedule a call with us.