Economic Damages in Trademark Infringement (Lanham Act)
Here are 8 steps in determining the economic damages for Trademark Infringement (Lanham Act):
1. Identifying Damages:
Within the framework of 15 U.S. Code § 1125, damages can be multifaceted. Consider potential harm to the plaintiff’s reputation, loss of sales, and even future lost profits due to dilution of their brand. For instance, in Louis Vuitton Malletier, S.A. v. Haute Diggity Dog, LLC, the court recognized both actual damages, including lost sales, and punitive damages due to the dilution of the renowned “Louis Vuitton” brand by a parody product.
2. Quantification of Damages:
Quantifying damages often involves intricate calculations. Lost profits can be computed by analyzing historical sales data and estimating the likely sales absent the infringement. In Polar Bear Productions, Inc. v. Timex Corp., the court ordered the defendant to pay plaintiff’s lost profits, determined by the actual sales data and projected earnings.
3. Data Collection:
Gathering comprehensive data is essential. For example, in Vornado Air Circulation Systems, Inc. v. Duracraft Corp., the plaintiff provided extensive financial records and market data to support its claim for damages, ultimately resulting in a favorable ruling.
4. Economic Analysis:
The application of sophisticated economic models can be crucial. In Nike, Inc. v. Already, LLC, a trademark dilution case, the court considered a detailed economic analysis to determine the potential harm to the Nike brand, resulting in a nuanced damages calculation.
5. Expert Testimony:
Expert witnesses can play a pivotal role in presenting complex economic analyses. In Lindy Pen Co. Inc. v. Bic Pen Corp., the court admitted expert testimony to calculate damages in a trademark infringement case, emphasizing the importance of specialized knowledge.
6. Legal Precedents:
Referencing case law is imperative to provide context. In Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., Starbucks successfully established damages by presenting evidence of actual harm, which resulted in a substantial settlement.
7. Comparative Analysis:
Comparing damages across statutes or jurisdictions can enhance the analysis. In Coca-Cola Co. v. Gemini Rising, Inc., the court considered potential damage awards in trademark infringement cases, showcasing the variation in approaches to calculating damages.
8. Mitigation and Causation:
Addressing mitigation and causation principles is crucial. In McCarthy on Trademarks and Unfair Competition, the author highlights how a plaintiff’s failure to mitigate damages may limit the recovery, emphasizing the need to explore all relevant legal nuances.
