Damages In Trademark Infringement Litigations

Federal trademark infringement is governed by the Lanham Act. Under that statute, a trademark owner may recover three broad categories of monetary damages: actual damages, disgorgement of the defendant's profits, and attorney fees and costs. See, 15 U.S.C. §1117(a). Each category of damages subject to recovery is discussed below, along with strategies for both plaintiffs and defendants to consider.

A plaintiff whose trademark was infringed may recover actual damages. These comprise monetary losses the plaintiff actually sustained as a result of the defendant's infringement. Actual damages can often be difficult to prove because it typically requires evidence that consumers were actually confused by the infringing trademark and that the confusion caused the plaintiff an economic loss, such as lost profits or loss of goodwill. For lost profits, the plaintiff must demonstrate that it would have received certain revenue but for the defendant's infringement. Loss of goodwill is determined by comparing the value of the trademark before and after the infringement to show that the value decreased. These can be presented through evidence of diverted sales or a consumer survey, sometimes done with the help of an expert. Additionally, the plaintiff might show that it sustained loss through corrective advertising costs incurred to correct confusion caused by the defendant's infringement. However, corrective advertising costs are only recoverable if the plaintiff and defendant are direct competitors in the same market.