On April 23, 2020, the Supreme Court weighed in on a question that had split the circuits: to receive an award of profits for trademark infringement under the Lanham Act, does a plaintiff first have to show that the defendant infringed with willful intent? All the Justices agreed that the answer is “no.” Romag Fasteners, Inc. v. Fossil, Inc., No. 18-1233. Instead, a court must consider “principles of equity” in deciding whether to award the equitable remedy of the defendant’s profits. Recognizing that eliminating a threshold requirement of willfulness may create uncertainty in the law, the Court found that the statute’s language clearly mandated that lack of willfulness is not, in itself, a barrier to a profits award. Nonetheless, willfulness remains a factor for strong consideration in deciding whether an award is equitable.
The case arose from a dispute between a supplier of fasteners for handbags and other accessories that respondent Fossil made. Over time, Fossil’s factories in China had started to source counterfeit fasteners. Romag claimed that Fossil was doing little to guard against the practice, and Romag sued. After trial, the jury found that Fossil had acted “in callous disregard” of Romag’s rights, but the jury rejected the claim that Fossil acted willfully. The district court refused Romag’s request that Fossil hand over all the profits from the sales of its bags and other products containing the counterfeit fasteners, pointing out that controlling Second Circuit precedent required a plaintiff seeking profits to prove that the defendant’s violation was willful. Other circuits took a different position from the Second Circuit, so the Court granted certiorari.
On March 30, 2020, in Blaney, et al., v. XYZ Films, et al., the U.S. District Court for the Eastern District of New York dismissed copyright infringement and false endorsement claims arising out of the depiction of a well-known Brooklyn mural in the dystopian, thriller motion picture Bushwick. While the defendants undeniably filmed, and thus reproduced, the mural in the motion picture, the court held that such copying was both de minimis and fair use and therefore not copyright infringement. In dismissing the false endorsement claims, the court determined that the defendants’ use of the mural created little risk of confusion that the murals’ creator and subject, both peace activists, endorsed the defendants’ motion picture.
The decision bolsters the ability of movie and TV production companies to depict, accurately and briefly, iconic or well-known community sites as part of background “establishing shots.” Meanwhile, the outcome might inject some uncertainty into whether artists can pursue licensing revenue for works depicted in those films and TV shows.
The U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) has struck down the Lanham Act’s ban on the registration of “immoral” or “scandalous” trademarks as an unconstitutional restriction of free speech under the First Amendment. See In re: Erik Brunetti, No. 2015-1109 (Fed. Cir. Dec. 15, 2017). The ruling comes less than six months after the U.S. Supreme Court’s decision in Matal v. Tam, 137 S. Ct. 1744 (2017), in which it similarly struck down the Lanham Act’s ban on “disparaging” marks as unconstitutional under the First Amendment.