Intellectual Property Protection and Enforcement Manual - Ipr-policy.eu

Brand Protection Manual
where it is proven that the infringement was willful, deliberate, or malicious, the plaintiff may recover
three times the defendant’s profits or its own damages (whichever is greater), as well as its reasonable
attorneys’ fees. 23
The Trademark Counterfeiting Act of 1984 was enacted to provide additional causes of actions and
remedies for injured IP owners. Under the act, courts are authorized to order the seizure of goods
and counterfeit marks involved in the violation, the means of making the counterfeit marks, and the
records documenting the manufacture, sale, or receipt of items involved in the violation.
Trademark owners may apply to the court for such orders without notifying the adverse party (an ex
parte seizure order). Nevertheless, the courts will not grant an application unless security (that is, a
dollar amount adequate to cover damages the adverse party may suffer as a result of wrongful seizure
or attempted seizure) is provided by the person obtaining the order, and the court finds that the
facts clearly show that (1) the application is likely to succeed in showing that the person against
whom seizure would be ordered used a counterfeit mark; (2) immediate and irreparable injury
to the applicant will occur if seizure is not ordered; (3) harm to the applicant by denying the
application outweighs the harm to the interests of the person against whom seizure would be ordered;
(4) the person against whom seizure would be ordered would destroy, move, hide or otherwise make
the goods in question inaccessible to the court if notified of the proceeding; (5) the applicant has not
publicized the requested seizure; and (6) the items to be seized will be located at a place identified in
the application. 24
In 1996, the Lanham Act was further amended to provide for statutory damage awards in
counterfeiting cases. Prior to 1996, courts made awards solely on the basis of a defendant’s profits or a
plaintiff’s actual damages. Proving defendant’s profits or plaintiff’s actual damages, though, was often
difficult, given the typical defendant’s incomplete, inaccurate, or nonexistent records. Recognizing
the problem trademark owners were experiencing in proving damages in counterfeiting actions,
Congress amended the Lanham Act to provide for an award of statutory damages. Plaintiffs can now
elect statutory damages to recover monetary compensation while avoiding the burden of proving
actual damages or the defendant’s profits. 25 A court may award statutory damages between $500 and
$100,000 per counterfeit mark per type of goods or services sold, but for willful use of the counterfeit
mark, the court may award up to $1 million per counterfeit mark per type of goods or services sold. 26
A claim for statutory damages can be a powerful tool, particularly where the conduct is egregious but
the quantities involved are relatively small.
Federal Criminal Trademark Laws
In addition to civil remedies, federal law provides a range of criminal law sanctions for the intentional
infringement and counterfeiting of federally registered trademarks. For example, the Trademark
Counterfeiting Act provides up to 10 years of federal imprisonment and up to a $2 million fine, or twice
the gross gain or gross loss, against a defendant who “intentionally traffics or attempts to traffic in goods
or services and knowingly uses a counterfeit mark on or in connection with such goods or services.” 27
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