Romag v Fossil and the two things I would like to see in a 9-0 opinion.

I expect the opinion will be 9-0 and issue in early May. 

Note: I'm hoping the Court explains in the opinion that yes, buying handbags is difficult, what with so many factors going into the purchasing decision. This should be an idea example suitable for opinion, see point 6 below. 

I don't expect that to be the first part of the opinion. Just hoping it's somewhere in the opinion. Then I can point to the U.S. reports on R's birthday (instead of McCarthy's once again). 

Here's what I do expect the opinion to address.

1. First, while it would be great for the Court to use the "hot mess" description that Romag's counsel gave to the common law (on whether willfulness requirement existed way back when), that's not needed. 

Even without that label, the Court will probably acknowledge that the Lanham Act and predecessor trademark laws aren’t built on a clear common law foundation when it comes to willfulness being a precondition for disgorgement. 

As Justice Kagan commented to Fossil’s counsel, "although you point to a lot of cases in which the results come out your way, there are comparatively few where the court sets out the [willfulness as a prerequisite to disgorgement] rule as a categorical one. You know, in many of these cases, the courts do seem to be thinking of willfulness as a factor, a significant factor, but not a gateway requirement. So those results might come out your way, but they don't articulate the rule that you propose, do they?" 

The Court will probably state that the canon of construction cited by Fossil isn't working. As Romag’s counsel noted: "And I think in at least in the -- the -- Justice Scalia and Garner book, it says, when you're talking about clarity, it's something that all the members of the bar had to agree was settled, and if the very case as it's -- that was conflicted, if the treatises say it wasn't clear, and if the cases are all over the map, again, the fact that we have three cases where they award profits is kind of either here nor there when we had eight cases that are just inconsistent with the willfulness requirement, including, I will end with, I will sit down early, this Champion Sparkplug case. It's a case in 1947, it was construing the 1905 Act, said it's relevant. And then it cited two other factors as part of the equities. That's, to me, you know, just -- it would be hard to find a settled rule from 40 years of silence under the Lanham Act's predecessor..."

(Emphasis added.)

But maybe the Court does go far enough to agree with Romag’s line about older cases being a "hot mess." It could be the second best part of the opinion. 

2. I think the Court will agree with Romag’s points about willfulness being in § 1125(c) arguments, but this will not play a large issue because of the above. Lack of background clarity removes the foundation of important arguments by Fossil. 

3. More importantly, the Court will see that they are asking for line drawing cases if Fossil wins and willfulness is now a prerequisite to disgorgement. As Justice Kavanaugh said: “there is a gray area of behavior that's not good faith or innocent but reckless but nonetheless is not willful.” Because a win for Fossil demands the next case on willfulness, the Court will not want to ask for more line-drawing. Let's keep in mind that the Lanham Act is a body of law that covers advertising of satellites, too, and not just retail goods like handbags, or components, like fasteners. Let's leave the details to district courts. 

4. District courts are, in any event, given explicit authority to question when a reward is inadequate or excessive in 15 USC § 1117(a). Justice Breyer noted this provision in the statute. "Let’s not make this overly complicated," I read him as suggesting. Entirely reasonable. 

5. Fossil’s counsel said that it’s unfair and tactical for plaintiffs to seek disgorgement from innocent infringers, but externality-tactics go both ways. If Fossil wins, isn't this imposing the burden on trademark owners to police innocent infringement, requiring the Romags of the world to obtain the injunction for such innocent infringement and other Lanham Act violations before they start? How are the brand owners or victims of innocent but wrongful advertising in a good position to deal with this? 

The tactics should be a non-factor for another reason. The Lanham Act doesn't exist in a vacuum. I still think citing to UCC § 2-312(3) helps here. If Macy’s is an “innocent” infringer, to counter Fossil's example, Macy's can look to the merchant supplier for liability through the UCC or through contracts. Maybe a footnote issue, but it's important context about the Lanham Act world: 

"Unless otherwise agreed a seller who is a merchant regularly dealing in goods of the kind warrants that the goods shall be delivered free of any rightful claim of any third person by way of infringement ... " UCC § 2-312 (3)

6. Fossil suggested damages were not hard to prove in Lanham Act cases at one point. I think the case law will show otherwise and I’m not sure I know any trademark lawyers that would disagree this. Justice Kavanaugh’s suggestion is correct: 

Justice Kavanaugh: "But damages is notoriously hard to prove, correct?" 

[Fossil/Respondent]: "Well, I actually disagree with that. She doesn't cite any study or anything. The only study I'm aware of is the Lex Machina study in 2017, which surveyed 2009 to 2017, and every trademark award and found that profits accounted for a total of 13 percent of profits awards and also 13 percent of the dollars. And so to the extent you think that's somehow, you know -- you know, worth the candle or something and you should bump that up, that's something that I think Congress should be dealing with, but of course here they did. They have a statutory damages provision to deal with low damages awards – […]"

Which leads me to why the Court should agree that buying presents is difficult.  

After any finding of infringement, any requested award of compensatory damages requires some degree of quantification. Did the purchase occur because there is a small fastener on the handbag, or, was the purchase made because the handbag has that inside lining with the same value as red under-soles on footwear, or because it came in a box with the cache of a robin’s egg blue jewelry box? 

It's tremendously difficult to identify how many handbag sales happened not because of a fastener but because of the design, the size, the weight, or the pocket features. This is part of why damages are hard to prove. There's also the loss of goodwill and reputational harm damage. 

<rant> So here's the thing I'd like the Court to explain -- consumers have so many options that it is entirely reasonable to have trouble buying certain presents. This is part of why damages are hard to prove. And plus, it would really help to show my wife if the U.S. Supreme Court agrees that birthdays are hard. I keep citing McCarthy's to her but a little extra would help. 

It starts weeks before. You know? Like, WEEKS. And the Court does not have to name the issue, just agree with the principle that a dizzying number of factors go into a purchase of handbags. So many factors. I'm sweating. Her birthday is in July, which is plenty of time (for the Court). </rant>

Plus, there is a common understanding by all trademark lawyers that yes, damages are hard to prove. 

See § 30:46, 5 McCarthy on Trademarks and Unfair Competition § 30:46 (5th ed.) (“difficult, if not impossible, to adequately compensate for after the fact of injury”); § 30:47.50 (“damage to business goodwill and commercial reputation cannot easily be remedied by monetary compensation after the damage is done”); George Basch Co., Inc. v. Blue Coral, Inc., 968 F.2d 1532, 1539, 23 U.S.P.Q.2d 1351 (2d Cir. 1992) (“Due to the inherent difficulty in isolating the causation behind diverted sales and injured reputation, damages from trademark or trade dress infringement are often hard to establish.”).
  
The Court should leave discretion in this area to the trial courts. Again, the Lanham Act covers trademark and competition rights for handbags and satellites, this is a broad swath.