If a trademark owner successfully convinces the court that an alleged infringing mark has caused consumer confusion, it may be possible to recover economic damages suffered as a result of the infringement. Some courts, however, require direct proof of actual confusion before actual damages may be awarded.
The Lanham Act, in 15 U.S.C. § 1117(a), governs the award of monetary remedies for trademark infringement and unfair competition, and allows for the recovery of a defendant’s profits, any damages sustained by the plaintiff, costs of the action, and, “in exceptional cases,” the plaintiff’s attorney fees.
In the case of violations that involve the intentional use of a counterfeit mark, subsection 1117(b) requires the court to triple the profits or damages referenced in subsection 1117(a) and to award reasonable attorney fees “unless the court finds extenuating circumstances.”
Likelihood of Confusion or Actual Confusion?
Likelihood of confusion is sufficient for establishing liability and obtaining an award reflecting the infringer’s profits. However, courts have often determined that it is not sufficient for recovering actual damages. The Tenth Circuit, in Brunswick Corp. v. Spinit Reel Co., 832 F. 2d 513 (1987), required the plaintiff to “prove it has been damaged by actual consumer confusion or deception resulting from the violation.”
Actual damages are intended to compensate the trademark owner for an actual injury resulting from the infringement. They can include compensation for lost profits, a reasonable royalty, a diminution of the value of the plaintiff’s mark or damage to its reputation, or the costs of corrective advertising.
The general rule is that the plaintiff must provide proof that some consumers were actually confused or deceived, although some courts are stricter than others in requiring direct proof of actual confusion before awarding actual damages.
Evidence of actual confusion often takes the form of a consumer survey that demonstrates that individuals saw the two marks in the marketplace and believed they were somehow related.
Lanham Act Surveys
Keegan & Donato Consulting specializes in conducting surveys to test a wide variety of Lanham Act claims, including likelihood of confusion, strength of mark, acquired distinctiveness, secondary meaning, genericness, trade dress, and more, as well as false and deceptive advertising, and consumer perception. We also provide expert witness testimony on consumer survey, marketing and economic issues.
Principals Mark Keegan and Tony Donato offer more than 25 years of combined experience and education in consumer-based survey research and data analysis in the context of intellectual property disputes, and follow a solid methodological foundation in survey design, execution and presentation.
Our consumer surveys have been admitted into evidence in federal and state courts, at arbitration, to the TTAB and the NAD, and we have testified extensively at deposition and at trial.
Because each case is unique, we work with each client to understand the fundamental issues of their cases in order to maximize the value of the survey evidence to the overall case strategy. We work on a fixed rate or hourly basis depending on the needs of each client, and will help you design a survey that is both reliable and within your budget.
Keegan & Donato Consulting would be pleased to advise you on the best approach to proving damages sustained as a result of a trademark infringement. Get in touch with us at (914) 967-9421 to find out how we can help.