How are trademark infringement damages calculated?

If you find that a competitor is using your trademark or a symbol, design or logo similar to yours, you can sue for trademark infringement. For a court to allow a trademark infringement lawsuit, the standard is “likelihood of confusion.”

Likelihood of Confusion in Trademark Cases

Likelihood of confusion occurs when another party uses a trademark in connection with the sale of a good in a way that will confuse the public about the producer or source of a good. For example, if you own a trademark for Candy’s Cupcakes and sell them in City X and another person starts selling Candie’s Cupcakes in nearby City Y, you may have a case for trademark infringement. In deciding these cases, judges will look at a number of factors including: the similarity of the marks, the mark’s use in marketing, evidence of actual confusion and the defendant’s intent. If the court decides there was trademark infringement, then you can receive damages.

Available Remedies for Trademark Infringement

The types of remedies available for trademark infringement include statutory or actual damages, defendant’s profits, and attorney’s fees. Statutory damages are set by law and calculated based upon the type of infringement. Actual damages are equal to the amount of financial damage done by the infringing company. You may also be able to recover the defendant’s profits and attorney’s fees.

How Trademark Infringement Damages Are Paid

If you are awarded statutory damages, the court will award you a judgment and order the defendant to pay it. To reach actual damages, the payment could range from a judgment in court to the need to hire a forensic accountant to go through both the defendant and plaintiff’s financial records. Clearly this is a costly process that can affect both parties. It is because of the expense of litigation that many intellectual property cases never go to trial. Many clients chose to settle and pay before legal fees become too burdensome.

To file a lawsuit for trademark infringement, or to have your questions answered, discuss your case with an intellectual property attorney.

Case Studies: Trademark Infringement Damages Calculation

Case Study 1: Candy’s Cupcakes vs. Candie’s Cupcakes

Candy’s Cupcakes, a company that owns a trademark for their cupcakes, discovers that another person has started selling similar cupcakes under the name Candie’s Cupcakes in a nearby city. Candy’s Cupcakes believes that this constitutes trademark infringement. The court evaluates the likelihood of confusion by considering factors such as the similarity of the marks, their use in marketing, evidence of actual confusion, and the defendant’s intent. If the court determines that trademark infringement occurred, Candy’s Cupcakes may be entitled to damages.

Case Study 2: Statutory Damages and Actual Damages

When trademark infringement is proven, various remedies are available to the plaintiff. These include statutory or actual damages, the defendant’s profits, and attorney’s fees. Statutory damages are predetermined by law, while actual damages are based on the financial harm caused by the infringing company. The court may also order the defendant to pay the plaintiff’s attorney’s fees and award the plaintiff the profits the defendant obtained through the infringement.

Case Study 3: The Costly Process of Litigation

To obtain actual damages, parties may need to go through litigation, which can be an expensive and time-consuming process. In some cases, it may require hiring a forensic accountant to examine the financial records of both the plaintiff and defendant. Due to the high costs involved, many intellectual property cases, including trademark infringement cases, are resolved through settlements. Parties often choose to settle and pay before legal fees become overly burdensome.