Remedies in Trademark Litigation
In trademark litigation, a plaintiff can:
(1) potentially obtain injunctive relief, including a court order that the defendant cease its objectionable conduct, take affirmative steps to distinguish its products or services from that of the plaintiff, place corrective advertising or recall its product,
(2) obtain defendant’s profits, its own lost profits, damages and attorney’s fees. So
Why not litigate?
Most cases settle and the Plaintiff usually loses!
85% of trademark cases are either resolved through settlement negotiations or a default judgment. See http://abovethelaw.com/2017/12/3-lessons-on-data-from-trademark-cases/ In fact, according to one study of lawsuits in general, plaintiffs succeed at trial in less than 5% of filed cases. See http://scholarship.law.cornell.edu/cgi/viewcontent.cgi?article=1202&context=facpub
When litigation is necessary
Yet, litigation can sometimes be necessary, e.g., if you’re the Rolling Stones and you become aware on the night before your tour stops in Chicago that a truckload of counterfeit merchandise bearing your trademark or a poor copy of it is about to hit the streets the day of your concert. In order to stop the sale of that merchandise, you will need to go to court and get a temporary restraining order barring those sales. Otherwise, by the time you “lawyer up,” the unauthorized merchandise will be sold, and the Stones will be on to their next stop. Time will not be on their side and they will get no satisfaction if they don’t go to court ahead of time.
Settlement is a cheaper alternative to litigation
Litigation is expensive. In a trademark infringement case involving identical marks where I represented the defendant, I sought to engage a lawyer who had previously represented another defendant against that same plaintiff in a case involving the same mark. He requested a $100,000.00 retainer for his services. In a domain name dispute where my client refused to settle and I turned the matter over to litigation counsel, his legal fees ran over $100K. In the latter case he could have settled for under $20,000. In the former case, we decided to settle. The plaintiff got injunctive relief out of court in that my client had to cease and desist from using the mark, pull the infringing product off of store shelves and have it destroyed and pay monetary damages in an amount significantly less than that retainer amount plus a few thousand dollars in attorneys fees. In a copyright licensing matter that I handled for a defendant the plaintiff asked for close to half a million dollars. In settlement, we obtained an assignment from the plaintiff of the rights at issue in exchange for a payment of less than a tenth of the amount claimed. In a copyright infringement case where I represented a defendant and the plaintiff asked for hundreds of thousands of dollars in damages, while my client had to cease the production, marketing and sale of the alleged infringing products at issue, it got to sell off its inventory of those products before hand and pay a little over a tenth of that amount at settlement.
It works both ways. Where a defendant was using my client’s registered trademark to identify its similar products online, we succeeded in getting the defendant to stop using the mark at issue and actually rename its similar product without going to court. Where another defendant was using another client’s registered trademark to identify the same services that my client performed, that defendant agreed to restrict its use of that mark to use on unrelated products, to drop its federal trademark application for that identical mark and modify its advertising to avoid confusion in the future. In another case involving a major national retailer selling the same products as my client under its registered trademark, it agreed to cease using my client’s mark and rebrand those goods.
You can get the same relief by settling a case as you can by litigating it
So, without entering a courthouse and paying the costs of taking depositions, engaging in electronic discovery or lawyer travel and lodging, it’s possible to get relief in the form of an injunction against further manufacture or sale of the subject product, monetary relief and attorney’s fees, recall of a product and even corrective advertising.
But it’s not just the cost.
The difficulties at getting at the truth
As noted above, there’s also the uncertainty and the difficulty in winning a case at trial to consider.
In trademark cases, establishing an intent to copy is of significant assistance in proving likelihood of confusion. In my first trademark infringement case in private practice a major national consumer products company not only simulated our client’s product’s shape but placed their similar shaped product on store shelves immediately adjected to our client’s product. Between myself and my partner, we journeyed to Springfield, Missouri, Rochester, New York, Northern New Jersey and Palo Alto, California taking depositions in an effort to search for evidence of intent. We came up empty. To quote Robert Mueller, “When a subject of an investigation obstructs that investigation or lies to investigators, it strikes at the core of their government’s effort to find the truth and hold wrongdoers accountable.” See http://www.politico.com/story/2019/05/29/robert-mueller-statement-russia-investigation-text-transcript-1346453 When I was sitting on the other side of the table I was advised to tell deponents, unless they remembered the exact details of some event, not to guess or assume that certain events took place but respond with “I do not recall.” I’m not suggesting that the deponents in my infringement case lied; only that getting at the truth in litigation can be a long, slow, expensive slog that can be avoided by having some case law on your side and making a deal.
It sure beats the 5% odds noted above.