Road to Recovery: Recouping Profits From Trademark Infringement

BACKGROUND

Since 1947, the Lanham Act (also known as the Trademark Act of 1946) has governed trademark infringement litigation in the United States. When a defendant is found to have infringed on a plaintiff’s trademark under § 1125 of the Act, § 1117(a) allows the plaintiff to recover the defendant’s profits from the violation. It was never entirely clear whether the infringement must be willful in order for the plaintiff to recover. However, in 1999, Congress added to the confusion. That year, Congress amended § 1117 of the Act, allowing profits, damages to the plaintiff, and costs to be recovered for a violation under section 43(a) or (d), or a willful violation under section 43(c).

THE ISSUE

The statutory construction of §1117(a) appears to attach the word “willful” only to dilution-related violations under §1125(c). However, the statute requires recovery to be “subject to the principles of equity,” which suggests judicial discretion on the matter. If the courts decide that willful conduct is required for plaintiffs to recover, will that result in unjust enrichment of unwittingly infringing defendants? Or do the principles of equity point the courts away from punishing unintentional violators?

The question dividing the courts is as follows: Does §1117(a) allow a plaintiff to recover a defendant’s profits from an unintentional violation of a trademark?

THE SPLIT

There are two sides to this split: The first view generally requires the defendant’s conduct to be willful in order for a plaintiff to recover profits. This includes the First, Second, Eighth, Ninth, Tenth, and D.C. Circuits. The treatment of willfulness does have some variation within this side. For example, the First Circuit only requires evidence of willful infringement in cases where the parties were not direct competitors. In Fishman Transducers, Inc. v. Paul (2012), the First Circuit described the direct competition rule as an exception to the willfulness requirement.

The second view does not require willfulness for a plaintiff to recover. Instead, willfulness is often treated as one factor in a multi-factor test for recovery, and in other circuits, one situation in which recovery is warranted. This general side is represented by the Third, Fourth, Fifth, Sixth, Seventh, and Eleventh Circuits. The Eleventh Circuit illustrated its multiple-situations approach in Optimum Techs., Inc. v. Home Depot U.S.A., Inc. (2007). In this opinion, the court listed as potential circumstances leading to recovery: “(1) the defendant’s conduct was willful and deliberate, (2) the defendant was unjustly enriched, or (3) it is necessary to deter future conduct.” Based on the logic of the Optimum opinion, the absence of willful conduct may yield a requirement of causation between the infringement and the enrichment of the defendant through sales. There is a strong consideration of unjust enrichment in these circuits.

It should be noted that in no Circuit can a plaintiff automatically recover profits from an infringing defendant. Even when willfulness is not a requirement, recovery is still “subject to the principles of equity” through varying tests.

LOOKING FORWARD

The Supreme Court will directly address this issue in the upcoming term. On June 28, the Court granted the petition for certiorari to hear Romag Fasteners, Inc. v. Fossil, Inc. In this case, Fossil was found to have unwilfully infringed on Romag’s trademark. The Second Circuit applied its longstanding willfulness requirement and affirmed a judgment barring recovery of profits from Fossil. In its respondent brief, Fossil argued that “no meaningful conflict exists,” asserting that in the Circuits hearing the majority of trademark cases (the Second and Ninth), the willfulness requirement prevails. Fossil also claims that even in circuits treating willfulness as a factor, it is rare for a plaintiff to recover in its absence.

As the case awaits adjudication, the Intellectual Property Owners Association has filed an amicus brief in favor of the interpretation requiring willfulness for recovery. In its brief, the Association argued that prior to the addition of the word “willful” in 1999, courts largely held willfulness as a requirement based on the “principles of equity” language of the statute. The American Intellectual Property Law Association disagreed with that statement in its amicus brief, calling a willfulness requirement “antithetical to the principles of equity.” The majority of amicus briefs already filed appear to align more closely with the latter view.

If the petitioners prevail, there is no guarantee that they will recover. However, a verdict for either party would most likely change the standard for recovery in half of the circuits. The decades-long difference in approaches will hopefully be resolved and provide a more uniform law nationwide.

High (Flying) Crimes: Where is Venue Proper for Crimes Committed on an Airplane in Flight?

Background

Determining proper venue for a trial is essential to guarantee the constitutional right to a fair trial. The determination also helps to avoid imposing undue hardship on that defendant in the course of the already strenuous and expensive litigation process by forcing her to defend in “an environment alien” to her. United States v. Johnson (1944).

With regard to criminal proceedings, all crimes must be prosecuted in the district in which the crimes were allegedly committed. In furtherance of this, the Supreme Court has provided a two-part inquiry to determine in which district the alleged crime was committed and, therefore, in which district venue is proper. “(A) court must initially identify the conduct constituting the offense (the nature of the crime) and then discern the location of the commission of the criminal acts.” United States v. Rodriguez-Moreno (1999).

The Issue

The standard seems simple enough, but what happens when the crime takes place in the sky? Where is venue proper when a crime occurs on an airplane during flight? In applying the Rodriguez-Moreno inquiry to an inflight crime, the first part (nature of the crime) will often be fairly straightforward. However, the second part (location of the commission of the crime) poses more difficulty and presents the legal question at issue.

When an inflight crime is committed, is venue proper in the district over which the airplane was flying when the crime occurred or in the district where the airplane lands after the inflight crime occurred? The answer to this question has serious implications for procedural logistics of prosecuting criminal offenses committed on airplanes as well as concerns of unfairness and undue hardship to criminal defendants accused of committing such crimes.

The Split

Traditionally, courts have deemed venue proper in the district in which the airplane lands, as held by the Eleventh Circuit in United States v. Breitweiser (2004) and the Tenth Circuit in United States v. Cope (2012). In their respective decisions, the Eleventh and Tenth Circuits found venue proper pursuant to 18 U.S.C.S. §3237, specifically §3237(a), in which Congress provided the method for ascertaining venue for crimes involving the use of transportation:  “Any offense involving the use of… transportation in interstate or foreign commerce… is a continuing offense and, except as otherwise expressly provided by enactment of Congress, may be inquired of and prosecuted in any district from, through, or into which such commerce… moves.”

The Eleventh Circuit has explained §3237(a) as “a catchall provision designed to prevent a crime which has been committed in transit from escaping punishment for lack of venue… where venue might be difficult to prove.” United States v. McCulley (1982). In Breitweiser, the Eleventh Circuit affirmed Breitweiser’s convictions for abusive sexual conduct with a minor and simple assault and rejected his challenge to the district court’s finding of venue. The Court reasoned venue was proper in the Northern District of Georgia (where the plane landed) pursuant to the “catchall” provision of §3237(a) because the continuing offenses involved the use of transportation in interstate commerce and, “[I]t would be difficult if not impossible for the government to prove… exactly which federal district was beneath the plane when Breitweiser committed the crimes.” The Court held, “[T]o establish venue, the government need only show that the crime took place on a form of transportation in interstate commerce.”

In Cope, the Tenth Circuit affirmed Cope’s conviction for operating a commercial airplane while under the influence of alcohol and rejected his challenge to venue in the District of Colorado. The Court found venue proper pursuant to §3237(a), citing Breitweiser for the proposition that one “need only show that the crime took place on a form of transportation in interstate commerce.” Since Cope committed the offense while operating the plane in interstate commerce, venue was proper in any district Cope had traveled “from, through, or into,” which included the District of Colorado where the plane landed.

The Ninth Circuit split from the Eleventh and Tenth Circuits on this issue in United States v. Lozoya (2019), in which the defendant was convicted of inflight simple assault in the Central District of California where the plane landed. In reviewing Lozoya’s conviction and her challenge to venue, the Court found the provisions of §3237(a) to be not applicable to establish venue in that district. Specifically, the Court found the statutory language “[continuing] offenses involving… transportation in interstate or foreign commerce” inapplicable after applying the Rodriguez-Moreno inquiry to the offense.

The Ninth Circuit determined that (1) as to the nature of the assault, Lozoya committed a single, instantaneous offense which, though it “occurred on a plane… did not implicate interstate or foreign commerce,” and (2) partly because of its instantaneous nature, the crime was likely committed only in the district over which the plane was flying at the time of the offense. Accordingly, the Court held venue would be proper only in the district over which the plane was flying when the crime occurred and reversed Lozoya’s conviction on the grounds of improper venue. The Court acknowledged (and Judge Owens’ dissent emphasized) “a creeping absurdity” in mandating the exact district over which an inflight offense occurred to be pinpointed for the purpose of ascertaining venue. Further, both the majority and dissent raised concerns about the feasibility and potential absurdity of this requirement and the unfair hardship it could impose on defendants. However, the Court did not find these concerns sufficient to overcome the Constitution and binding precedent. The Court also suggested, and the dissent expressed hope, that if Congress deemed this an absurd result, it would enact a new statute to ascertain venue for crimes committed at 30,000 feet.

Looking Forward

Judge Owens concluded by urging the Supreme Court to rule on this split or Congress to act to restore the rule finding venue where the plane lands. It remains to be seen whether the Supreme Court or Congress will take up this issue. In the meantime, frequent fliers, pay close attention if the captain tells you what you’re flying over. You never know when you’ll need venue.

Riding Free From Controversy: Freedom of Speech Guarantee and Public Transit Systems

BACKGROUND

Before an advertisement is displayed on a public bus, it has likely undergone an extensive vetting process, where the transit authority has deemed it acceptable to occupy this space. Each locale often has varying policies regarding which advertisements it will choose to air. Both religious and non-religious groups alike have attempted to circumvent transit authority policies in order to run advertisements with their respective viewpoints.

The First Amendment prohibits government actors from taking action that would violate a citizen’s right to free speech. In the context of monitoring public transport advertising, these violations are often seen as censorship issues — meaning a government actor is attempting to censor certain speech by not allowing a potential ad to run. First Amendment censorship claims are broken down into two categories: content-based discrimination and viewpoint discrimination. Viewpoint discrimination will target a specific view taken by a speaker, rather than disavowing an entire subject. On the other hand, content-based discrimination policies tend to be more blanketed, banning entire subject areas. There are reasonable limits that can be imposed on one’s right to freedom of speech. Thus, courts will often uphold subject-matter regulations, despite limiting one’s free speech rights, because “even protected speech is not equally permissible in all places and at all times.” Archdiocese of Washington v. Washington Metro. Area Transit Authority (2018).

THE ISSUE

With respect to public transportation, is a ban on religious advertisements considered a permissible subject-matter regulation or an impermissible viewpoint regulation under the freedom of speech guarantee of the First Amendment?

THE SPLIT

The Third Circuit and the D.C. Circuit are split on the issue. The disagreement not only lies in how the circuits answered the question, but also in their reasoning. Ultimately, in Archdiocese of Washington v. Washington Metro. Area Transit Authority (2018), the D.C. Circuit held that public transit authorities could reasonably regulate speech on their properties because buses fall under a non-public forum. Whereas in Northeastern Pennsylvania Freethought Society v. City of Lackawanna Transit System (2019), the Third Circuit found that public transit authorities could not prohibit advertisements that discriminate on the basis of viewpoint.

In Archdiocese (2018), the D.C. Circuit addressed the First Amendment question using the forum analysis, assessing whether the restrictions are warranted based on the category of forum that the buses fall under. The court distinguished between public forums and non-public forums. Public forums are places that “have been devoted to assembly and debate, such as sidewalks or parks.” Here, the government’s ability to limit speech is minimal. In contrast, non-public forums are public properties where speech can be regulated if the regulation is reasonable and is not grounded in viewpoint discrimination. The D.C. Circuit reasons that “advertising space on public transit was properly treated as a non-public forum because a ‘bus is plainly not a park or sidewalk or other meeting place for discussion’ but rather ‘only a way to get to work or back home.’” Furthermore, it discussed that the Washington Metro Area Transit Authority’s exclusions were subject-matter discrimination, prohibiting religion as subject matter rather than religious viewpoint.

In Northeastern Pennsylvania (2019), the Third Circuit does not even consider the forum analysis because this would be “putting the cart before the horse.” Instead, the Court requires an assessment of the type of discrimination to take place first, seeing no rationale for addressing the forum if the discrimination is one regarding viewpoint. In the Court’s view, advertisement policies fall within viewpoint discrimination, and are thus impermissible under the First Amendment. Under this holding, the transit authority cannot exclude speech that it considers controversial because this would be an exclusion based on one particular view. Ultimately, the Third Circuit urges that other courts construe viewpoint discrimination broadly in the pursuit of “providing greater protection to private religious speech on public property” and not relegating religious speech to a “second-class status.”

LOOKING FORWARD

First Amendment claims, especially with regard to religious freedom, are rarely clear-cut issues for courts to tackle. However, if this circuit split is left unresolved, the gray area regarding permissible speech only expands. This uncertainty could very well expand past an advertisement on your morning commute, and could have longstanding impacts on how government actors limit speech in various public areas. To ensure that free speech rights are not infringed upon, the Supreme Court will need to address religious speech, determining the permissibility of certain expressions.

Excessive Entanglement: The Legislative Prayer Doctrine and School Board Meetings

BACKGROUND

The Establishment Clause of the First Amendment reads, “Congress shall make no law respecting an establishment of religion or prohibiting the free exercise thereof.” This clause was motivated by the Framers’ experience with state-sponsored religious persecution and is thought to serve two purposes: (1) allowing individuals to express themselves according to the dictates of their own conscience; and (2) preventing the government from acting “to make belief — whether theistic or nontheistic, religious or nonreligious — relevant to an individual’s membership” within the political community. Freedom From Religion Foundation v. Chino (9th Cir. 2018).

In light of this purpose, courts express “heightened concerns with protecting freedom of conscience from subtle coercive pressure in the elementary and secondary public schools.” American Humanist Association v. McCarty (5th Cir. 2017). School children are in the process of developing their own beliefs and learning to think for themselves — they are far more susceptible to pressure to conform to social norms and expectations. “The Constitution decrees that religion must be a private matter for the individual, the family, and the institutions of private choice,” and therefore religious opining by those with authority over impressionable adolescents in a mandatory secular school has been deemed unacceptable in the eyes of the Supreme Court. Lemon v. Kurtzman (1971).

The relationship between Church and State is not one of total separation, but the Supreme Court has carved out certain exceptions to this Constitutional prohibition. Town of Greece v. Galloway (2014). Here, a resident challenged the practice of the town board’s practice of opening its monthly meetings with a prayer from an invited clergy member. Writing for a five-justice majority, Justice Kennedy writes: “Legislative prayer lends gravity to public business, reminds lawmakers to transcend petty differences in pursuit of higher purpose and expresses a common aspiration to a just and peaceful society.” The Court affirmed that the Establishment Clause was never meant to prohibit the longstanding tradition of legislative prayer. Despite the fact that some audience members were offended by the prayer, the Court found that the primary audience consisted of the board members who governed the town, and therefore, opening the board meeting with a prayer was permissible. The Court did not limit its ruling, however, leading to many questions as to how far this “legislative prayer” doctrine could extend.

THE ISSUE

Is the opening of a public school board meeting with a prayer or invocation permissible as an extension of the “legislative prayer” doctrine, or is it an unconstitutional entanglement of Church and State?

THE SPLIT

The Fifth and Ninth Circuits, in particular, have diverged on the issue of whether school boards should be permitted to invoke religious doctrine in meetings. The difference in opinion stems from an overall uncertainty as to whether school board meetings are viewed more as school-sanctioned events or legislative sessions.

In American Humanist Association v. McCarty (5th Cir. 2017), the AHA challenged the actions of the Birdville Independent School District in having a student speaker deliver an invocation prior to each of its monthly school board meetings. The invocation was given after another student led the Pledge of Allegiance and was normally some sort of prayer. The Fifth Circuit upheld the student-led invocation, arguing that the school board is “more like a legislature than a classroom,” distinguishing it from the public-school setting. The Court based its decision on the “legislative prayer” doctrine from Town of Greece, claiming that the Framers saw this form of prayer as merely a “benign acknowledgment of religion’s role in society.” The Court acknowledged that there may be children in the audience, but maintained that their presence did not transform the legislative nature of the school board meeting.

One year later, the Ninth Circuit split with its sister circuit in Freedom From Religion Foundation v. Chino Valley Unified School District (9th Cir. 2018).In this case, the school board permitted a prayer, usually led by a clergy member, to begin its opening sessions. The clergy members were invited from a list of eligible local religious leaders and were permitted to give the invocation on a first-come, first-serve basis. It also became common practice for board members to use these opening invocations as an opportunity to link student, teacher, and district accomplishments to Christianity by citing Bible verses and stressing the need for God in schools and society. The school board had a student representative who attended the meetings, and commonly invited students to highlight their various accomplishments. The Ninth Circuit ruled this opening invocation to be a violation of the Establishment Clause. The Court differentiated the permissible town board meeting in Town of Greece from this case in that the town board meeting was typically attended by mature adults who could express dissent, and had the option to remain or leave at will. “Instead, these prayers typically take place before groups of school children whose attendance is not truly voluntary and whose relationship to school district officials, including the Board, is not one of full parity.” The Court further argued that public schools lack the historical foundation that legislatures have in allowing opening prayer. The court reasoned that the school board should not be permitted to invoke such religious doctrine in their meetings.

LOOKING FORWARD

Until this split is reconciled, school districts will continue to face uncertainty as to how to proceed with such a practice. As of now, it is not clear if the school board meeting is more like a school-sanctioned event or a legislative session, an important distinction in deciding the issue. Due to these important constitutional ramifications, the Supreme Court should intervene and clarify its ruling in Town of Greece. The conflict here is important because it calls into question the protections afforded by the First Amendment, a bedrock of our democratic society. Additionally, this concerns the imperative right of children in a public school to be free from religious indoctrination, allowing them to develop their beliefs and faculties unimpeded by religious pressure from public authority figures.