In a trade mark infringement case, US trade mark law does not require wrongful intent as a prerequisite to a finding in favour of an allegedly aggrieved plaintiff. However, a court's determination to award damages to a plaintiff is typically influenced by the nature of the defendant's conduct. Specifically, in situations where a defendant wilfully or intentionally infringed a plaintiff's trade mark, courts have demonstrated that they are willing to award significantly higher damages.

Similarly, in cases where the defendant's infringing activities can be characterized as wilful or intentional, US courts have the discretion to direct the defendant to pay plaintiff's reasonable attorneys' fees incurred in connection with the claim. Accordingly, the determination as to whether a defendant acted wilfully can have a significant impact on the amount of damages it may be compelled to pay and ultimate accountability for the other party's attorneys' fees.

One factor that courts take into consideration in determining whether a defendant's infringing activity was wilful is whether defendant relied on the advice of trade mark counsel. Generally, obtaining the advice of counsel negates a finding of wilfulness unless such advice is ignored or found to be incompetent. Simply obtaining competent advice from competent trade mark counsel is not sufficient. Rather, a court will look at the totality of the circumstances surrounding the advice given and analyze whether the defendant acted reasonably when relying on such advice.

Therefore, companies should take certain affirmative steps in order to best shield themselves from a finding of wilful infringement prior to embarking on a new product offering, and not only after a lawsuit has been filed. It is recommended that companies engage specialized trade mark counsel to perform, as appropriate, trade mark clearance searches, and that companies be certain to provide counsel with all relevant information relating to the trade mark at issue and the products to be sold under such trade marks. However, the benefits of working with trade mark counsel may be negated or compromised if a company does not then act in a reasonable manner when interpreting and relying on the advice obtained.

Working with counsel to develop an appropriate strategy for selection, use and registration of a mark will help companies to minimize the risk of third-party challenges.

Karen Artz Ash and Bret J Danow

Katten Muchin Rosenman LLP
575 Madison Avenue
New York
New York 10022-2585
United States
Tel: +1 212 940 8554
Fax: +1 212 940 8671
karen.ash@kattenlaw.com 
www.kattenlaw.com