IP Alert: Two Recent IP Rulings Have Far-Reaching Consequences

America’s highest court issued two significant IP rulings in the past week. They can be summed up, paradoxically, as decisions that don’t break new ground, but have far-reaching consequences.

Trademarks. Last Friday, the Supreme Court ruled in Romag Fasteners, Inc. v. Fossil Group, Inc., Case No. 18-1233, that willfulness is not always a prerequisite to an award of profits to a successful trademark plaintiff. In that case, Romag sought damages from Fossil for the profits Fossil made from counterfeit “Romag” fasteners used by a Chinese factory assembling Fossil handbags.  The most common relief sought and granted in trademark cases is injunctive relief, i.e. an order requiring the defendant to stop its infringing use of the plaintiff’s trademark.  However, depending on a number of factors, the Lanham Act provides other forms of relief to a successful trademark plaintiff, including damages, attorney fees, statutory damages, treble damages, and disgorgement of profits.  The question before the Supreme Court concerned disgorgement damages, and what level of misconduct had to be established to entitle a plaintiff to a profit award.  Justice Gorsuch, writing for the majority, described a disgorgement, or “profit award” as a requirement that the defendant “hand over the profits it had earned thanks to its trademark violation.”  The Court determined that the Lanham Act was not silent in provisions where the legislature had determined willfulness must be established, and so Fossil could not “conjure” such a requirement where it was not specifically stated concerning damages for violations of Section 1125(a) (establishing a cause of action for false or misleading use of trademarks).  The Court said that reading into statutes words that were not there is a “temptation we are doubly careful to avoid when Congress has (as here) included the term in question elsewhere in the very same statutory provision.” The Court’s ruling will have its biggest impact on precedent and practice in a few circuits, including the Second and Ninth, where a finding of willfulness was required before a profit award was permitted. However, it should not change a substantive evaluation of the merits and potential damages in Lanham Act cases in those circuits or anywhere else. The Court said repeatedly that, though willfulness is not a prerequisite to a profit award, a “trademark defendant’s mental state is a highly important consideration in determining whether an award of profits is appropriate.” 

Copyright. This Monday, the Supreme Court answered “No” to the question of whether the State of Georgia was entitled to copyright protection for an annotated version of Georgia’s statutes. In Georgia v. Public.Resources.Org, Inc., Case No. 18-1150, the Court affirmed the Eleventh Circuit’s decision finding that Georgia could not stop Public.Resources.Org, Inc. from making Georgia’s Code with annotations available to the public for free use and download on several websites. The Court relied on a long-standing precedent called the government edicts doctrine, which holds that public officials cannot be the authors of works they create in the course of their official duties. Because copyright is a grant of protection for “original works of authorship” (17 USC 102(a)), and a government official cannot be the “author” of work they created in the course of their duties, that work is not protected by copyright. The doctrine was first used to find that judges could not assert copyright rights over the opinions they issued.  The Court noted that the doctrine is equally applicable to the work of legislators, and specifically applied to the annotations at issue because the annotations had been created under the direction of a commission funded by the legislature and consisting mostly of legislators. As stated by the Eleventh Circuit, 906 F.3d 1229, 1239 (2018), in a democracy, “the People” are “the constructive authors” of the law, and judges and legislators are merely “draftsmen.” Though this decision is described by the Court as “a clear path”…. “and one that we are already on,” many states had been acting contrary to this precedential path. Those states had been treating work product of their legislatures as subject to copyright. They will have to change agreements with reporting services or publishers like LexisNexis Group, since states can no longer give exclusive rights to publish work created by the legislature concerning statutes and interpretation. The Court found that such practice improperly placed judicial and legislative work product behind a “paywall.”