Romag Fasteners, Inc. v. Fossil, Inc. ( 2020 )

(Slip Opinion) OCTOBER TERM, 2019 1
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
ROMAG FASTENERS, INC. v. FOSSIL GROUP, INC.,
FKA FOSSIL, INC., ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE FEDERAL CIRCUIT
No. 18–1233. Argued January 14, 2020—Decided April 23, 2020
Romag Fasteners, Inc., and Fossil, Inc., signed an agreement to use Ro-
mag’s fasteners in Fossil’s leather goods. Romag eventually discovered
that factories in China making Fossil products were using counterfeit
Romag fasteners. Romag sued Fossil and certain retailers of Fossil
products (collectively, Fossil) for trademark infringement pursuant to
15 U. S. C. §1125(a). Relying on Second Circuit precedent, the district
court rejected Romag’s request for an award of profits, because the
jury, while finding that Fossil had acted callously, rejected Romag’s
accusation that Fossil had acted willfully.
Held: A plaintiff in a trademark infringement suit is not required to show
that a defendant willfully infringed the plaintiff’s trademark as a pre-
condition to a profits award. The Lanham Act provision governing
remedies for trademark violations, §1117(a), makes a showing of will-
fulness a precondition to a profits award in a suit under §1125(c) for
trademark dilution, but §1125(a) has never required such a showing.
Reading words into a statute should be avoided, especially when they
are included elsewhere in the very same statute. That absence seems
all the more telling here, where the Act speaks often, expressly, and
with considerable care about mental states. See, e.g., §§1117(b), (c),
1118. Pointing to §1117(a)’s language indicating that a violation under
§1125(a) can trigger an award of the defendant’s profits “subject to the
principles of equity,” Fossil argues that equity courts historically re-
quired a showing of willfulness before authorizing a profits remedy in
trademark disputes. But this suggestion relies on the curious assump-
tion that Congress intended to incorporate a willfulness requirement
here obliquely while it prescribed mens rea conditions expressly else-
2 ROMAG FASTENERS, INC. v. FOSSIL, INC.
Syllabus
where throughout the Act. Nor is it likely that Congress meant to di-
rect “principles of equity”—a term more naturally suggesting funda-
mental rules that apply more systematically across claims and practice
areas—to a narrow rule about a profits remedy within trademark law.
Even crediting Fossil’s assumption, all that can be said with certainty
is that Pre-Lanham Act case law supports the ordinary principle that
a defendant’s mental state is relevant to assigning an appropriate rem-
edy. The place for reconciling the competing and incommensurable
policy goals advanced by the parties is before policymakers. Pp. 2–7.
Vacated and remanded.
GORSUCH, J., delivered the opinion of the Court, in which ROBERTS,
C. J., and THOMAS, GINSBURG, BREYER, ALITO, KAGAN, and KAVANAUGH,
JJ., joined. ALITO, J., filed a concurring opinion, in which BREYER and
KAGAN, JJ., joined. SOTOMAYOR, J., filed an opinion concurring in the
judgment.
Cite as: 590 U. S. ____ (2020) 1
Opinion of the Court
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SUPREME COURT OF THE UNITED STATES
_________________
No. 18–1233
_________________
ROMAG FASTENERS, INC., PETITIONER v.
FOSSIL, INC., ET AL.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE FEDERAL CIRCUIT
[April 23, 2020]
JUSTICE GORSUCH delivered the opinion of the Court.
When it comes to remedies for trademark infringement,
the Lanham Act authorizes many. A district court may
award a winning plaintiff injunctive relief, damages, or the
defendant’s ill-gotten profits. Without question, a defend-
ant’s state of mind may have a bearing on what relief a
plaintiff should receive. An innocent trademark violator
often stands in very different shoes than an intentional one.
But some circuits have gone further. These courts hold a
plaintiff can win a profits remedy, in particular, only after
showing the defendant willfully infringed its trademark.
The question before us is whether that categorical rule can
be reconciled with the statute’s plain language.
The question comes to us in a case involving handbag
fasteners. Romag sells magnetic snap fasteners for use in
leather goods. Fossil designs, markets, and distributes a
wide range of fashion accessories. Years ago, the pair
signed an agreement allowing Fossil to use Romag’s fasten-
ers in Fossil’s handbags and other products. Initially, both
sides seemed content with the arrangement. But in time
Romag discovered that the factories Fossil hired in China
2 ROMAG FASTENERS, INC. v. FOSSIL, INC.
Opinion of the Court
to make its products were using counterfeit Romag fasten-
ers—and that Fossil was doing little to guard against the
practice. Unable to resolve its concerns amicably, Romag
sued. The company alleged that Fossil had infringed its
trademark and falsely represented that its fasteners came
from Romag. After trial, a jury agreed with Romag, and
found that Fossil had acted “in callous disregard” of Ro-
mag’s rights. At the same time, however, the jury rejected
Romag’s accusation that Fossil had acted willfully, as that
term was defined by the district court.
For our purposes, the last finding is the important one.
By way of relief for Fossil’s trademark violation, Romag
sought (among other things) an order requiring Fossil to
hand over the profits it had earned thanks to its trademark
violation. But the district court refused this request. The
court pointed out that controlling Second Circuit precedent
requires a plaintiff seeking a profits award to prove that the
defendant’s violation was willful. Not all circuits, however,
agree with the Second Circuit’s rule. We took this case to
resolve that dispute over the law’s demands. 588 U. S. ___
(2019).
Where does Fossil’s proposed willfulness rule come from?
The relevant section of the Lanham Act governing remedies
for trademark violations, §35, 60 Stat. 439–440, as
amended, 15 U. S. C. §1117(a), says this:
“When a violation of any right of the registrant of a
mark registered in the Patent and Trademark Office, a
violation under section 1125(a) or (d) of this title, or a
willful violation under section 1125(c) of this title, shall
have been established . . . , the plaintiff shall be enti-
tled, subject to the provisions of sections 1111 and 1114
of this title, and subject to the principles of equity, to
recover (1) defendant’s profits, (2) any damages sus-
tained by the plaintiff, and (3) the costs of the action.”
Immediately, this language spells trouble for Fossil and
Cite as: 590 U. S. ____ (2020) 3
Opinion of the Court
the circuit precedent on which it relies. The statute does
make a showing of willfulness a precondition to a profits
award when the plaintiff proceeds under §1125(c). That
section, added to the Lanham Act some years after its
initial adoption, creates a cause of action for trademark
dilution—conduct that lessens the association consumers
have with a trademark. But Romag alleged and proved a
violation of §1125(a), a provision establishing a cause of ac-
tion for the false or misleading use of trademarks. And in
cases like that, the statutory language has never required a
showing of willfulness to win a defendant’s profits. Yes, the
law tells us that a profits award is subject to limitations
found in §§1111 and 1114. But no one suggests those cross-
referenced sections contain the rule Fossil seeks. Nor does
this Court usually read into statutes words that aren’t
there. It’s a temptation we are doubly careful to avoid when
Congress has (as here) included the term in question else-
where in the very same statutory provision.
A wider look at the statute’s structure gives us even more
reason for pause. The Lanham Act speaks often and ex-
pressly about mental states. Section 1117(b) requires
courts to treble profits or damages and award attorney’s
fees when a defendant engages in certain acts intentionally
and with specified knowledge. Section 1117(c) increases the
cap on statutory damages from $200,000 to $2,000,000 for
certain willful violations. Section 1118 permits courts to
order the infringing items be destroyed if a plaintiff proves
any violation of §1125(a) or a willful violation of §1125(c).
Section 1114 makes certain innocent infringers subject only
to injunctions. Elsewhere, the statute specifies certain
mens rea standards needed to establish liability, before
even getting to the question of remedies. See, e.g.,
§§1125(d)(1)(A)(i), (B)(i) (prohibiting certain conduct only if
undertaken with “bad faith intent” and listing nine factors
relevant to ascertaining bad faith intent). Without doubt,
the Lanham Act exhibits considerable care with mens rea
4 ROMAG FASTENERS, INC. v. FOSSIL, INC.
Opinion of the Court
standards. The absence of any such standard in the provi-
sion before us, thus, seems all the more telling.
So how exactly does Fossil seek to conjure a willfulness
requirement out of §1117(a)? Lacking any more obvious
statutory hook, the company points to the language indicat-
ing that a violation under §1125(a) can trigger an award of
the defendant’s profits “subject to the principles of equity.”
In Fossil’s telling, equity courts historically required a
showing of willfulness before authorizing a profits remedy
in trademark disputes. Admittedly, equity courts didn’t
require so much in patent infringement cases and other
arguably analogous suits. See, e.g., Dowagiac Mfg. Co. v.
Minnesota Moline Plow Co., 235 U. S. 641, 644, 650–651
(1915). But, Fossil says, trademark is different. There
alone, a willfulness requirement was so long and univer-
sally recognized that today it rises to the level of a “principle
of equity” the Lanham Act carries forward.
It’s a curious suggestion. Fossil’s contention that the
term “principles of equity” includes a willfulness require-
ment would not directly contradict the statute’s other, ex-
press mens rea provisions or render them wholly superflu-
ous. But it would require us to assume that Congress
intended to incorporate a willfulness requirement here
obliquely while it prescribed mens rea conditions expressly
elsewhere throughout the Lanham Act. That might be pos-
sible, but on first blush it isn’t exactly an obvious construc-
tion of the statute.
Nor do matters improve with a second look. The phrase
“principles of equity” doesn’t readily bring to mind a sub-
stantive rule about mens rea from a discrete domain like
trademark law. In the context of this statute, it more nat-
urally suggests fundamental rules that apply more system-
atically across claims and practice areas. A principle is a
“fundamental truth or doctrine, as of law; a comprehensive
rule or doctrine which furnishes a basis or origin for others.”
Black’s Law Dictionary 1417 (3d ed. 1933); Black’s Law
Cite as: 590 U. S. ____ (2020) 5
Opinion of the Court
Dictionary 1357 (4th ed. 1951). And treatises and hand-
books on the “principles of equity” generally contain
transsubstantive guidance on broad and fundamental ques-
tions about matters like parties, modes of proof, defenses,
and remedies. See, e.g., E. Merwin, Principles of Equity
and Equity Pleading (1895); J. Indermaur & C. Thwaites,
Manual of the Principles of Equity (7th ed. 1913); H. Smith,
Practical Exposition of the Principles of Equity (5th ed.
1914); R. Megarry, Snell’s Principles of Equity (23d ed.
1947). Our precedent, too, has used the term “principles of
equity” to refer to just such transsubstantive topics. See,
e.g., eBay Inc. v. MercExchange, L. L. C., 547 U. S. 388, 391,
393 (2006); Holmberg v. Armbrecht, 327 U. S. 392, 395
(1946). Congress itself has elsewhere used “equitable prin-
ciples” in just this way: An amendment to a different sec-
tion of the Lanham Act lists “laches, estoppel, and acquies-
cence” as examples of “equitable principles.” 15 U. S. C.
§1069. Given all this, it seems a little unlikely Congress
meant “principles of equity” to direct us to a narrow rule
about a profits remedy within trademark law.
But even if we were to spot Fossil that first essential
premise of its argument, the next has problems too. From
the record the parties have put before us, it’s far from clear
whether trademark law historically required a showing of
willfulness before allowing a profits remedy. The Trade-
mark Act of 1905—the Lanham Act’s statutory predecessor
which many earlier cases interpreted and applied—did not
mention such a requirement. It’s true, as Fossil notes, that
some courts proceeding before the 1905 Act, and even some
later cases following that Act, did treat willfulness or some-
thing like it as a prerequisite for a profits award and rarely
authorized profits for purely good-faith infringement. See,
e.g., Horlick’s Malted Milk Corp. v. Horluck’s, Inc., 51 F. 2d
357, 359 (WD Wash. 1931) (explaining that the plaintiff
“cannot recover defendant’s profits unless it has been
shown beyond a reasonable doubt that defendant was guilty
6 ROMAG FASTENERS, INC. v. FOSSIL, INC.
Opinion of the Court
of willful fraud in the use of the enjoined trade-name”); see
also Saxlehner v. Siegel-Cooper Co., 179 U. S. 42, 42–43
(1900) (holding that one defendant “should not be required
to account for gains and profits” when it “appear[ed] to have
acted in good faith”). But Romag cites other cases that ex-
pressly rejected any such rule. See, e.g., Oakes v.
Tonsmierre, 49 F. 447, 453 (CC SD Ala. 1883); see
also Stonebraker v. Stonebraker, 33 Md. 252, 268 (1870);
Lawrence-Williams Co. v. Societe Enfants Gombault et Cie,
52 F. 2d 774, 778 (CA6 1931).
The confusion doesn’t end there. Other authorities ad-
vanced still different understandings about the relation-
ship between mens rea and profits awards in trademark
cases. See, e.g., H. Nims, Law of Unfair Competition and
Trade-Marks §424 (2d ed. 1917) (“An accounting will not be
ordered where the infringing party acted innocently and in
ignorance of the plaintiff’s rights”); N. Hesseltine, Digest of
the Law of Trade-Marks and Unfair Trade 305 (1906) (con-
trasting a case holding “[n]o account as to profits allowed
except as to user after knowledge of plaintiff’s right to trade-
mark” and one permitting profits “although defendant did
not know of infringement” (emphasis added)). And the vast
majority of the cases both Romag and Fossil cite simply
failed to speak clearly to the issue one way or another. See,
e.g., Hostetter v. Vowinkle, 12 F. Cas. 546, 547 (No. 6,714)
(CC Neb. 1871); Graham v. Plate, 40 Cal. 593, 597–599
(1871); Hemmeter Cigar Co. v. Congress Cigar Co., 118
F. 2d 64, 71–72 (CA6 1941).
At the end of it all, the most we can say with certainty is
this. Mens rea figured as an important consideration in
awarding profits in pre-Lanham Act cases. This reflects the
ordinary, transsubstantive principle that a defendant’s
mental state is relevant to assigning an appropriate rem-
edy. That principle arises not only in equity, but across
many legal contexts. See, e.g., Smith v. Wade, 461 U. S. 30,
38–51 (1983) (42 U. S. C. §1983); Morissette v. United
Cite as: 590 U. S. ____ (2020) 7
Opinion of the Court
States, 342 U. S. 246, 250–263 (1952) (criminal law);
Wooden-Ware Co. v. United States, 106 U. S. 432, 434–435
(1882) (common law trespass). It’s a principle reflected in
the Lanham Act’s text, too, which permits greater statutory
damages for certain willful violations than for other
violations. 15 U. S. C. §1117(c). And it is a principle long
reflected in equity practice where district courts have often
considered a defendant’s mental state, among other factors,
when exercising their discretion in choosing a fitting
remedy. See, e.g., L. P. Larson, Jr., Co. v. Wm. Wrigley, Jr.,
Co., 277 U. S. 97, 99–100 (1928); Lander v. Lujan, 888 F. 2d
153, 155–156 (CADC 1989); United States v. Klimek, 952
F. Supp. 1100, 1117 (ED Pa. 1997). Given these traditional
principles, we do not doubt that a trademark defendant’s
mental state is a highly important consideration in deter-
mining whether an award of profits is appropriate. But ac-
knowledging that much is a far cry from insisting on the
inflexible precondition to recovery Fossil advances.
With little to work with in the statute’s language, struc-
ture, and history, Fossil ultimately rests on an appeal to
policy. The company tells us that stouter restraints on prof-
its awards are needed to deter “baseless” trademark suits.
Meanwhile, Romag insists that its reading of the statute
will promote greater respect for trademarks in the “modern
global economy.” As these things go, amici amplify
both sides’ policy arguments. Maybe, too, each side has a
point. But the place for reconciling competing and incom-
mensurable policy goals like these is before policymakers.
This Court’s limited role is to read and apply the law those
policymakers have ordained, and here our task is clear.
The judgment of the court of appeals is vacated, and the
case is remanded for further proceedings consistent with
this opinion.
It is so ordered.
Cite as: 590 U. S. ____ (2020) 1
ALITO, J., concurring
SUPREME COURT OF THE UNITED STATES
_________________
No. 18–1233
_________________
ROMAG FASTENERS, INC., PETITIONER v.
FOSSIL, INC., ET AL.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE FEDERAL CIRCUIT
[April 23, 2020]
JUSTICE ALITO, with whom JUSTICE BREYER and JUSTICE
KAGAN join, concurring.
We took this case to decide whether willful infringement
is a prerequisite to an award of profits under 15 U. S. C.
§1117(a). The decision below held that willfulness is such
a prerequisite. App. to Pet. for Cert. 32a. That is incorrect.
The relevant authorities, particularly pre-Lanham Act case
law, show that willfulness is a highly important considera-
tion in awarding profits under §1117(a), but not an absolute
precondition. I would so hold and concur on that ground.
Cite as: 590 U. S. ____ (2020) 1
SOTOMAYOR, J., concurring in judgment
SUPREME COURT OF THE UNITED STATES
_________________
No. 18–1233
_________________
ROMAG FASTENERS, INC., PETITIONER v.
FOSSIL, INC., ET AL.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE FEDERAL CIRCUIT
[April 23, 2020]
JUSTICE SOTOMAYOR, concurring in the judgment.
I agree that 15 U. S. C. §1117(a) does not impose a “will-
fulness” prerequisite for awarding profits in trademark in-
fringement actions. Courts of equity, however, defined
“willfulness” to encompass a range of culpable mental
states—including the equivalent of recklessness, but ex-
cluding “good faith” or negligence. See 5 McCarthy on
Trademarks and Unfair Competition §30:62 (5th ed. 2019)
(explaining that “willfulness” ranged from fraudulent and
knowing to reckless and indifferent behavior); see also, e.g.,
Lawrence-Williams Co. v. Societe Enfants Gombault et Cie,
52 F. 2d 774, 778 (CA6 1931); Regis v. Jaynes, 191 Mass.
245, 248–249, 77 N. E. 774, 776 (1906).
The majority suggests that courts of equity were just as
likely to award profits for such “willful” infringement as
they were for “innocent” infringement. Ante, at 5–6. But
that does not reflect the weight of authority, which indi-
cates that profits were hardly, if ever, awarded for innocent
infringement. See, e.g., Wood v. Peffer, 55 Cal. App. 2d 116,
125 (1942) (explaining that “equity constantly refuses, for
want of fraudulent intent, the prayer for an accounting of
profits”); Globe-Wernicke Co. v. Safe-Cabinet Co., 110 Ohio
St. 609, 617, 144 N. E. 711, 713 (1924) (“By the great weight
of authority, particularly where the infringement . . . was
2 ROMAG FASTENERS, INC. v. FOSSIL, INC.
SOTOMAYOR, J., concurring in judgment
deliberate and willful, it is held that the wrongdoer is re-
quired to account for all profits realized by him as a result
of his wrongful acts”); Dickey v. Mutual Film Corp., 186
App. Div. 701, 702, 174 N. Y. S. 784 (1919) (declining to
award profits because there was “no proof of any fraudulent
intent upon the part of the defendant”); Standard Cigar Co.
v. Goldsmith, 58 Pa. Super. 33, 37 (1914) (reasoning that a
defendant “should be compelled to account for . . . profits”
where “the infringement complained of was not the result
of mistake or ignorance of the plaintiff ’s right”). Nor would
doing so seem to be consistent with longstanding equitable
principles which, after all, seek to deprive only wrongdoers
of their gains from misconduct. Cf. Duplate Corp. v. Triplex
Safety Glass Co., 298 U. S. 448, 456–457 (1936). Thus, a
district court’s award of profits for innocent or good-faith
trademark infringement would not be consonant with the
“principles of equity” referenced in §1117(a) and reflected
in the cases the majority cites. Ante at 6–7.
Because the majority is agnostic about awarding profits
for both “willful” and innocent infringement as those terms
have been understood, I concur in the judgment only.