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Berry Bad Outcomes: Millions at Stake for Dewberry Group, Inc.
On June 24, 2024, the U.S. Supreme Court (SCOTUS) granted certiorari to decide a $43 million suit between two real estate developers over the name “Dewberry.” This stems from an Aug. 9, 2023, decision by the United States Court of Appeals for the Fourth Circuit which affirmed a lower court ruling that found Atlanta, Georgia-based Dewberry Group, Inc. (DGI) “pervasively breached [prior agreement] over Dewberry Engineers’ objection,” and awarded attorneys’ fees and equitable profit disgorgement. Dewberry Engineers Inc. v. Dewberry Group, Inc., 77 F.4th 265, 294 (4th Cir. 2023). The crux of the case once it reached SCOTUS is the extent to which courts can award the profits, not of the named defendant, but of the defendant’s affiliate for trademark infringement.
The Dispute
Dewberry Engineers Inc. (DEI), a Virginia-based real estate developer, owns federal trademark rights to the DEWBERRY mark. On the heels of years of disputes over the “Dewberry” name, DEI brought suit claiming DGI’s rebranding efforts infringed the DEWBERRY mark and breached a confidential settlement agreement previously reached between DEI and DGI, signed in 2007.
The confidential settlement agreement allowed DEI to use its registered marks freely and prevented DGI from challenging the registrations. The agreement also strictly limited DGI’s use of the DEWBERRY mark. However, the agreement dissolved in 2017 when DGI’s decision to rebrand took effect with the launch of a new hotel in South Carolina, adoption of new sub-brands, and further creation of a new logo. DGI’s owner, John Dewberry, did not inform the then general counsel of the prior litigation with DEI or the confidential settlement agreement.
DEI’s first cease-and-desist letter to DGI was sent on December 27, 2017, for these efforts and the subsequent U.S. trademark application filing for DEWBERRY GROUP. In June 2018, DEI sent its second cease-and-desist letter demanding that DGI withdraw new mark applications for additional marks incorporating DEWBERRY. In addition, DEI challenged these applications with the USPTO. DEI filed suit in May 2020 claiming breach of contract and trademark infringement under the Lanham Act and Virginia common law.
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