Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-14-01857/USCOURTS-ca13-14-01857-0/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 

---

United States Court of Appeals 

for the Federal Circuit ______________________ 

ROMAG FASTENERS, INC.,

Plaintiff-Appellant

v.

FOSSIL, INC., FOSSIL STORES I, INC., MACY’S, 

INC., MACY’S RETAIL HOLDINGS, INC., BELK, 

INC., THE BON-TON STORES, INC., THE BON-TON 

DEPARTMENT STORES, INC., DILLARD’S, INC., 

NORDSTROM, INC., ZAPPOS.COM, INC., ZAPPOS 

RETAIL, INC.,

Defendants-Cross-Appellants

______________________ 

2014-1856, 2014-1857

______________________ 

Appeals from the United States District Court for the 

District of Connecticut in Nos. 3:10-cv-01827-JBA, 3:11-

cv-00929-CFD, Judge Janet Bond Arterton.

______________________ 

Decided: March 31, 2016

______________________ 

JONATHAN FREIMAN, Wiggin and Dana LLP, New Haven, CT, argued for plaintiff-appellant. Also represented 

by TONIA A. SAYOUR, NORMAN H. ZIVIN, Cooper & Dunham, LLP, New York, NY.

JEFFREY E. DUPLER, Gibney Anthony & Flaherty, 

LLP, New York, NY, argued for defendants-cross appelCase: 14-1857 Document: 3-2 Page: 1 Filed: 03/31/2016
2 ROMAG FASTENERS, INC. v. FOSSIL, INC. 

lants. Also represented by LAWRENCE BROCCHINI, Reavis 

Parent Lehrer LLP, New York, NY; LAUREN ALBERT, Law 

Offices of Lauren S. Albert, New York, NY; NICHOLAS 

GEIGER, Cantor Colburn LLP, Hartford, CT.

______________________ 

Before DYK, WALLACH, and HUGHES, Circuit Judges.

DYK, Circuit Judge. 

Romag Fasteners, Inc. (“Romag”) owns U.S. Patent 

No. 5,777,126 (“the ’126 patent”) on magnetic snap fasteners, which Romag sells under its registered trademark, 

ROMAG. Romag sued Fossil, Inc. and Fossil Stores I, Inc. 

(together, “Fossil”), along with retailers of Fossil products, 

alleging, inter alia, patent and trademark infringement. A 

jury found Fossil liable for both patent and trademark 

infringement and made advisory awards. The district 

court reduced the patent damages because of Romag’s 

laches and held as a matter of law that Romag could not 

recover Fossil’s profits for trademark infringement because the jury had found that Fossil’s trademark infringement was not willful. We affirm.

BACKGROUND

Romag sells magnetic snap fasteners (for wallets, 

purses, handbags, and other products) under its registered trademark, ROMAG. The fasteners are also covered 

by the claims of Romag’s ’126 patent. Fossil designs, 

markets, and distributes fashion accessories, including 

handbags and small leather goods, and contracts with 

independent businesses to manufacture its products. In 

2002, Fossil and Romag entered into an agreement to use 

ROMAG magnetic snap fasteners in Fossil products. 

Pursuant to the agreement, Fossil instructed its authorized manufacturers of handbags and other products to 

purchase, where necessary, ROMAG fasteners from Wing 

Yip Metal Manufactory Accessories Limited (“Wing Yip”), 

Case: 14-1857 Document: 3-2 Page: 2 Filed: 03/31/2016
ROMAG FASTENERS, INC. v. FOSSIL, INC. 3

a Romag licensee located in China that manufactures all 

of Romag’s fasteners. 

One of Fossil’s authorized manufacturers, Superior 

Leather Limited (“Superior”), purchased tens of thousands of ROMAG fasteners from Wing Yip between 2002 

and 2008. However, between August 2008 and November 

2010, Superior purchased only a few thousand fasteners. 

In 2010, Howard Reiter, the founder and president of 

Romag, discovered that certain Fossil handbags contained 

counterfeit fasteners. Romag filed suit against Fossil on 

November 22, 2010, alleging patent infringement, trademark infringement, false designation of origin, common 

law unfair competition, and violation of Connecticut’s 

Unfair Trade Practices Act. Romag moved for a temporary 

restraining order and preliminary injunction on November 23, 2010, three days before “Black Friday,” the highest-volume shopping day in the United States (when the 

motion would have maximum impact on Fossil’s sales).1 

On April 4, 2014, after a seven-day trial, the jury returned a verdict finding Fossil liable for patent and 

trademark infringement. For patent infringement, the 

jury awarded a reasonable royalty of $51,052.14. For 

trademark infringement, the jury made an advisory 

award of $90,759.36 of Fossil’s profits under an unjust 

enrichment theory, and $6,704,046.00 of Fossil’s profits 

under a deterrence theory. But, despite determining as 

part of its deterrence-based award that Fossil had acted 

with “callous disregard” for Romag’s trademark rights, 

the jury found that Fossil’s patent and trademark in-

 

1 On November 30, 2010, the district court granted 

Romag’s motion for a temporary restraining order (later 

converted into a preliminary injunction), enjoining Fossil 

from selling or offering for sale Fossil handbags bearing 

counterfeit ROMAG fasteners. 

Case: 14-1857 Document: 3-2 Page: 3 Filed: 03/31/2016
4 ROMAG FASTENERS, INC. v. FOSSIL, INC. 

fringement was not willful. After a two-day bench trial to 

address equitable defenses and equitable adjustment of 

the amount of profits awarded by the jury, the district 

court held that Romag’s delay in bringing suit until just 

before “Black Friday” constituted laches, and reduced the 

jury’s reasonable royalty award for patent infringement 

by 18% to exclude sales made during the period of delay.2

The district court also held as a matter of law that, because Fossil’s trademark infringement was not willful, 

Romag was not entitled to an award of Fossil’s profits. 

Romag appealed, and Fossil filed a conditional crossappeal challenging the jury instructions as to the award 

of profits. We have jurisdiction under 28 U.S.C. 

§ 1295(a)(1). We review the district court’s legal conclusions de novo. Arkema Inc. v. Honeywell Int’l, Inc., 706 

F.3d 1351, 1356 (Fed. Cir. 2013). We apply our own law 

with respect to issues of substantive patent law and the 

law of the regional circuit with respect to non-patent 

issues. Baden Sports, Inc. v. Molten USA, Inc., 556 F.3d 

1300, 1304 (Fed. Cir. 2009).

DISCUSSION

I 

We first address Romag’s argument that Fossil cannot 

invoke a laches defense to patent infringement. Romag 

relies on the Supreme Court’s decision in Petrella v. 

Metro-Goldwyn-Mayer, Inc., which held that the equitable 

defense of laches cannot be invoked as a defense against a 

claim for copyright infringement. 134 S. Ct. 1962, 1974 

 

2 Notably, in deciding whether to impose sanctions 

on Romag and its counsel, the district court found that 

Romag engaged in a pattern of misleading filings and that 

a declaration filed in support of a temporary restraining 

order was “misleading in several respects.” J.A. 29–33. 

Case: 14-1857 Document: 3-2 Page: 4 Filed: 03/31/2016
ROMAG FASTENERS, INC. v. FOSSIL, INC. 5

(2014). After briefing in this case, we held en banc that 

laches remains a defense to legal relief in a patent infringement case because “Congress codified a laches 

defense in 35 U.S.C. § 282(b)(1).” SCA Hygiene Prods. 

Aktiebolag v. First Quality Baby Prods., LLC, 807 F.3d 

1311, 1321 (Fed. Cir. 2015) (en banc). As Romag conceded 

at oral argument, SCA Hygiene controls here. The district 

court did not err in holding that Fossil could bring a 

laches defense to a patent infringement claim. 

II

We next address Romag’s contention that the district 

court erred in holding that a trademark owner must prove 

that the infringer acted willfully to recover the infringing 

defendant’s profits. 

A 

Before 1999, § 35(a) of the Lanham Act, codified at 15 

U.S.C. § 1117(a), provided that plaintiffs who had established “a violation of any right of the registrant of a mark 

registered in the Patent and Trademark Office, or a 

violation under section § 1125(a) of this title . . . shall be 

entitled . . . subject to the principles of equity, to recover 

(1) defendant’s profits, (2) any damages sustained by the 

plaintiff, and (3) the costs of the action.” 15 U.S.C. 

§ 1117(a) (1996) (emphasis added) (amended 1999). 

The Supreme Court has never addressed whether 

proof of willfulness is required to recover the infringer’s 

profits either as a matter of traditional equitable principles or under the pre-1999 version of § 1117(a). The 

closest the Court came was in a pre-Lanham Act decision, 

Saxlehner v. Siegel-Cooper Co., 179 U.S. 42 (1900). There, 

the Court held that, under the common law, “an injunction should issue against [three trademark infringers], 

but that, as [one defendant] appears to have acted in good 

faith, and the sales of the other[] [defendants] were small, 

they should not be required to account for gains and 

Case: 14-1857 Document: 3-2 Page: 5 Filed: 03/31/2016
6 ROMAG FASTENERS, INC. v. FOSSIL, INC. 

profits.” Id. at 42–43. In contrast, in Hamilton-Brown 

Shoe Co. v. Wolf Brothers & Co., another pre–Lanham Act 

decision, the Court affirmed an accounting of the infringer’s profits where the “defendant [did] not stand as an 

innocent infringer” but, rather, “the findings of the court 

of appeals, supported by abundant evidence, show[ed] 

that the imitation of complainant’s mark was fraudulent, 

[and the defendant] persiste[d] in the unlawful simulation 

in the face of the very plain notice of [the trademark 

owner’s] rights.” 240 U.S. 251, 261 (1916); see also 

McLean v. Fleming, 96 U.S. 245, 257 (1877) (reversing an 

award of an accounting of profits where “acquiescence of 

long standing [was] proved . . . and inexcusable laches in 

seeking redress” and explaining that an accounting is 

“constantly refused . . . in case[s] of acquiescence or want 

of fraudulent intent”).

The Restatement of Unfair Competition, beginning 

with a tentative draft approved in 1991 and as eventually 

adopted in 1993, took the position that “[o]ne . . . is liable 

for the net profits earned on profitable transactions 

resulting from [trademark infringement], but only if . . . 

the actor engaged in the conduct with the intention of 

causing confusion or deception.” Restatement (Third) of 

Unfair Competition § 37(1) (1995); Restatement (Third) of 

Unfair Competition § 37(1) (Tent. Draft. No. 3, 1991). 

Before 1999, however, there was a division in the courts of 

appeals as to whether willfulness was required under the 

“principles of equity” standard adopted in the statute. 

Several courts of appeals determined that a finding of 

willfulness was required for an award of the defendant’s 

profits. Among these was the Second Circuit, whose law 

governs here. The Second Circuit took the view that 

“under [15 U.S.C. § 1117(a)] of the Lanham Act, a plaintiff 

must prove that an infringer acted with willful deception 

before the infringer’s profits are recoverable by way of an 

accounting.” George Basch Co. v. Blue Coral, Inc., 968 

F.2d 1532, 1540 (2d Cir. 1992); see also Int’l Star Class 

Case: 14-1857 Document: 3-2 Page: 6 Filed: 03/31/2016
ROMAG FASTENERS, INC. v. FOSSIL, INC. 7

Yacht Racing Ass’n v. Tommy Hilfiger, U.S.A., Inc., 80 

F.3d 749, 753 (2d Cir. 1996) (“In order to recover an 

accounting of an infringer’s profits, a plaintiff must prove 

that the infringer acted in bad faith.”). The Second Circuit 

reasoned that “this requirement is necessary to avoid the 

conceivably draconian impact that a profits remedy might 

have in some cases. While damages directly measure the 

plaintiff’s loss, defendant’s profits measure the defendant’s gain. Thus, an accounting may overcompensate for a 

plaintiff’s actual injury and create a windfall judgment at 

the defendant’s expense.” Id. (citing the Restatement 

(Third) of Unfair Competition § 37 cmt. e (Tent. Draft.

No. 3, 1991)). And, in the Second Circuit, while “a finding 

of willful deceptiveness is necessary in order to warrant 

an accounting for profits . . . it may not be sufficient”— 

generally, there are other factors to be considered. 

Among these are such familiar concerns as: (1) the 

degree of certainty that the defendant benefited 

from the unlawful conduct; (2) availability and 

adequacy of other remedies; (3) the role of a particular defendant in effectuating the infringement; 

(4) plaintiff’s laches; and (5) plaintiff’s unclean 

hands. The district court’s discretion lies in assessing the relative importance of these factors 

and determining whether, on the whole, the equities weigh in favor of an accounting. As the Lanham Act dictates, every award is “subject to 

equitable principles” and should be determined 

“according to the circumstances of the case.”

George Basch, 968 F.2d at 1540–41 (citations omitted).

Before the 1999 amendment, the District of Columbia

Circuit also held that “an award based on a defendant’s 

profits requires proof that the defendant acted willfully or 

in bad faith,” ALPO Petfoods, Inc. v. Ralston Purina Co., 

913 F.2d 958, 968 (D.C. Cir. 1990) (Thomas, J.), as did the 

Third Circuit, SecuraComm Consulting Inc. v. Securacom 

Case: 14-1857 Document: 3-2 Page: 7 Filed: 03/31/2016
8 ROMAG FASTENERS, INC. v. FOSSIL, INC. 

Inc., 166 F.3d 182, 190 (3d Cir. 1999) (Alito, J.) (“[A]

plaintiff must prove that an infringer acted willfully 

before the infringer’s profits are recoverable.”), overruled 

by Banjo Buddies, Inc. v. Renosky, 399 F.3d 168, 175 (3d 

Cir. 2005), and the Tenth Circuit, Bishop v. Equinox Int’l 

Corp., 154 F.3d 1220, 1223 (10th Cir. 1998) (an award of 

profits requires proof that “defendant’s actions were 

willful or in bad faith”).3

But the willfulness requirement was not uniformly 

adopted. The Fifth Circuit held that “whether the defendant had the intent to confuse or deceive” is simply a 

“relevant factor[] to the court’s determination of whether 

an award of profits is appropriate.” Pebble Beach Co. v. 

Tour 18 I Ltd., 155 F.3d 526, 554 (5th Cir. 1998); see also 

Roulo v. Russ Berrie & Co., 886 F.2d 931, 941 (7th Cir. 

1989) (“Other than general equitable considerations, 

there is no express requirement that . . . the infringer 

wilfully infringe the trade dress to justify an award of 

profits.”); Wynn Oil Co. v. Am. Way Serv. Corp., 943 F.2d 

595, 607 (6th Cir. 1991) (holding that the plaintiff is not 

required to prove actual confusion to recover profits, and 

quoting the Seventh Circuit rule that “there is no express 

requirement . . . that the infringer willfully infringe . . . to 

justify an award of profits”) (internal quotation marks 

omitted) (quoting Roulo, 886 F.2d at 941); Burger King 

Corp. v. Mason, 855 F.2d 779, 781 (11th Cir. 1988) (“Nor 

is an award of profits based on either unjust enrichment 

 

3 See also Aktiebolaget Electrolux v. Armatron Int’l, 

Inc., 999 F.2d 1, 6 (1st Cir. 1993) (“[D]amages have never 

been allowed under the deterrence or unjust enrichment 

theories absent some form of fraud.”) (internal quotation 

marks omitted); Lindy Pen Co. v. Bic Pen Corp., 982 F.2d 

1400, 1406 (9th Cir. 1993) (an accounting of profits was 

not justified where a “trademark was weak and Bic’s 

infringement was unintentional”).

Case: 14-1857 Document: 3-2 Page: 8 Filed: 03/31/2016
ROMAG FASTENERS, INC. v. FOSSIL, INC. 9

or deterrence dependent upon a higher showing of culpability on the part of the defendant, who is purposely using 

the trademark.”).

Romag argues that George Basch and other pre-1999 

authority requiring willfulness are no longer applicable in 

light of the 1999 statutory amendment to the Lanham 

Act.

Understanding the 1999 amendment requires starting 

in 1996. Before 1996, and at the time of the Second Circuit’s decision in George Basch, the monetary relief provisions of the Lanham Act permitted recovery only for 

violations of § 1125(a), i.e., trademark infringement and 

false advertising. In 1996, Congress amended the Lanham 

Act to create a cause of action for trademark dilution, 

providing for injunctive relief and also monetary relief if 

the dilution was “wilfully intended.” See Federal Trademark Dilution Act of 1995, Pub. L. No. 104-98, § 3, 109 

Stat. 985, 985–86 (1996) (codified at 15 U.S.C. § 1125(c)

(1997)).4 

 

4

 Section 1125, as amended in 1996, provided, 

(a) Civil action 

(1) Any person who, on or in connection with any 

goods or services . . . , uses in commerce any word, 

term, name, symbol, or device, or any combination 

thereof, or any false designation of origin, false or 

misleading description of fact, or false or misleading representation of fact, which— 

(A) is likely to cause confusion, . . . as to the 

affiliation, connection, or association of such 

person with another person . . . or, 

(B) in commercial advertising or promotion, 

misrepresents the nature . . . of his or her or 

Case: 14-1857 Document: 3-2 Page: 9 Filed: 03/31/2016
10 ROMAG FASTENERS, INC. v. FOSSIL, INC. 

But the effort to award monetary relief for willful dilution was ineffective because the new dilution provision 

made available “the remed[y] set forth in section[] 

1117(a)” without amending § 1117(a) to provide for such 

 

another person’s goods, services, or commercial activities,

shall be liable in a civil action . . . . 

(b) Importation

Any goods marked or labeled in contravention of 

the provisions of this section shall not be imported 

into the United States . . . . 

(c) Remedies for dilution of famous marks

(1) The owner of a famous mark shall be entitled, 

subject to the principles of equity . . . to an injunction against another person’s commercial use in 

commerce of a mark or trade name, if such use 

begins after the mark has become famous and 

causes dilution of the distinctive quality of the 

mark, and to obtain such other relief as is provided in this subsection. . . . 

(2) In an action brought under this subsection, the 

owner of the famous mark shall be entitled only to 

injunctive relief unless the person against whom 

the injunction is sought willfully intended to trade 

on the owner’s reputation or to cause dilution of 

the famous mark. If such willful intent is proven, 

the owner of the famous mark shall also be entitled to the remedies set forth in sections 1117(a) 

and 1118 [(i.e., destruction of infringing articles)] 

of this title, subject to the discretion of the court 

and the principles of equity. . . . 

15 U.S.C. § 1125 (1997) (1996 amendment underscored).

Case: 14-1857 Document: 3-2 Page: 10 Filed: 03/31/2016
ROMAG FASTENERS, INC. v. FOSSIL, INC. 11

monetary remedies in the case of dilution. Id. In 1999, 

Congress amended § 1117(a) to correct this error. See

Trademark Amendments Act of 1999, Pub. L. No. 106-43, 

§ 3(b), 113 Stat. 218, 219.5 The current version of 

§ 1117(a) reads, 

[w]hen a violation of any right of the registrant of 

a mark registered in the Patent and Trademark 

Office, a violation under section 1125(a) or (d) of 

this title, or a willful violation under section 

1125(c) of this title, shall have been established in 

any civil action arising under this chapter, the 

plaintiff shall be entitled, subject to the provisions 

of sections 1111 and 1114 of this title, and subject 

to the principles of equity, to recover (1) defendant’s profits, (2) any damages sustained by the 

plaintiff, and (3) the costs of the action.

15 U.S.C. § 1117(a) (2014) (new language added by 1999 

amendment underscored). 

 

5 The 1999 amendment substituted the phrase “a 

willful violation under [section 1125(a)] of this title, or a 

willful violation under [section 1125(c)] of this title,” for “a 

violation under [section 1125(a)] of this title.” Trademark 

Amendments Act of 1999, Pub. L. No. 106-43, § 3(b), 113 

Stat. 218, 219. Later in 1999, Congress amended 

§ 1117(a) to insert “, (c), or (d)” after “[section 1125(a)]” in 

the first sentence. Anticybersquatting Consumer Protection Act, Pub. L. No. 106-113, § 3003, 113 Stat. 1501, 

1501A-549 (1999). In 2002, Congress removed the redundant reference by substituting “a violation under [section 

1125(a)] or (d) of this title,” for “a violation under [section 

1125(a)], (c), or (d) of this title.” Intellectual Property and 

High Technology Technical Amendments Act of 2002, 

Pub. L. No. 107-273, § 13207(a), 116 Stat. 1758, 1906.

Case: 14-1857 Document: 3-2 Page: 11 Filed: 03/31/2016
12 ROMAG FASTENERS, INC. v. FOSSIL, INC. 

Romag contends that the 1999 change made clear that 

“Congress chose to make willful infringement a prerequisite to recovery of monetary relief for trademark dilution,” 

but when “Congress chose not to insert ‘willful’ before 

‘violation under section 43(a) [1125(a)],’ [it] made plain 

that it did not intend willful infringement to be a prerequisite to recovery of monetary relief for the other types of 

infringement covered by that section, including the sale of 

counterfeits.” Appellant’s Br. at 37. 

This argument has had varied success in the courts of 

appeals. After the 1999 amendment, the Fifth Circuit 

continued to hold that willfulness is not a prerequisite to 

an award of infringer’s profits for violations of § 1125(a). 

See Quick Techs., Inc. v. Sage Group PLC, 313 F.3d 338, 

349 (5th Cir. 2002) (“In accordance with our previous 

decisions, and in light of the plain language of § 1117(a), 

however, we decline to adopt a bright-line rule in which a 

showing of willful infringement is a prerequisite to an 

accounting of profits.”). The Third Circuit reversed course, 

holding that the 1999 amendment barred a willfulness 

requirement, see Banjo Buddies, Inc. v. Renosky, 399 F.3d 

168, 175 (3d Cir. 2005) (“By adding this word [‘willful’] to 

the statute in 1999, but limiting it to [§ 1125(c)] violations, Congress effectively superseded the willfulness 

requirement as applied to [§ 1125(a)].”), and the Fourth 

Circuit held that a finding of willfulness is not required, 

see Synergistic Int’l, LLC v. Korman, 470 F.3d 162, 175 

(4th Cir. 2006) (“[A]lthough willfulness is a proper and 

important factor in an assessment of whether to make a 

damages award, it is not an essential predicate thereto.”); 

see also Laukus v. Rio Brands, Inc., 391 F. App’x 416, 424 

(6th Cir. 2010) (“Although showing willfulness is not 

required, willfulness is one element that courts may 

consider in weighing the equities.”).

Other courts of appeals considering the issue found a 

willfulness requirement for an award of the infringer’s 

profits. See Fifty-Six Hope Rd. Music, Ltd. v. A.V.E.L.A., 

Case: 14-1857 Document: 3-2 Page: 12 Filed: 03/31/2016
ROMAG FASTENERS, INC. v. FOSSIL, INC. 13

Inc., 778 F.3d 1059, 1073–74 (9th Cir. 2015) (“Awarding 

profits is proper only where the defendant is attempting 

to gain the value of an established name of another. 

Willful infringement carries a connotation of deliberate 

intent to deceive.”) (quoting Lindy Pen, 982 F.2d at 1406), 

cert. denied, 136 S. Ct. 410; M2 Software Inc. v. Viacom 

Inc., 223 F. App’x 653, 656 (9th Cir. 2007) (characterizing 

the argument that the 1999 amendment negated the 

willfulness requirement as a “shaky assumption”); see also

Fishman Transducers, Inc. v. Paul, 684 F.3d 187, 191 (1st 

Cir. 2012) (“[O]ur cases usually[, with the exception of 

direct competition cases,] require willfulness . . . to allow 

either (1) more than single damages or (2) a recovery of 

the defendant’s profits.”); W. Diversified Servs., Inc. v. 

Hyundai Motor Am., Inc., 427 F.3d 1269, 1270 (10th Cir. 

2005) (“We hold that the willfulness required to support 

an award of profits under the Lanham Act typically 

requires an intent to appropriate the goodwill of another’s 

mark.”); 5 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 30.62 (2015) (“Th[e] 

reading of Congressional intent [as removing the willfulness requirement] is inaccurate. In fact, the 1999 

amendment of Lanham Act § 35(a) was not intended to 

change the law by removing willfulness as a requirement 

for an award of profits in a classic infringement case, but 

rather was meant to correct a drafting error . . . . The 

courts have leveraged this statutory change beyond its 

intended scope . . . .”).

Critically important for us, however, is the rule followed in the Second Circuit. Contrary to Romag’s argument, the willfulness rule was reaffirmed by the Second 

Circuit. In Merck Eprova AG v. Gnosis S.p.A., a district 

court found that Gnosis had misrepresented the purity of 

certain nutritional supplement products and was liable 

for violating section 43(a) of the Lanham Act, 15 U.S.C. 

§ 1125(a). 760 F.3d 247, 252–53 (2d Cir. 2014). The district court found that Gnosis had willfully deceived its 

Case: 14-1857 Document: 3-2 Page: 13 Filed: 03/31/2016
14 ROMAG FASTENERS, INC. v. FOSSIL, INC. 

customers and awarded Gnosis’s profits to prevent its 

unjust enrichment, to compensate Merck for the business 

it lost as a result of Gnosis’s false advertising, and to 

deter future unlawful conduct. Id. at 262. The Second 

Circuit restated its rule that “a finding of defendant’s 

willful deceptiveness is a prerequisite for awarding profits,” id. at 261 (quoting George Basch, 968 F.2d at 1537), 

and affirmed the district court’s award of profits, as 

“willful, deliberate deception [had] been proved,” id. at 

262.

While the Second Circuit has not directly addressed 

the 1999 amendment,6 we see nothing in the 1999 

amendment that permits us to declare that the governing 

Second Circuit precedent is no longer good law. 

First, the limited purpose of the 1999 amendment was 

simply to correct an error in the 1996 Dilution Act. The 

legislative history of the Trademark Amendments Act of 

1999 does not indicate that Congress contemplated its 

addition of “or a willful violation under section § 1125(c),” 

 

6 See Fendi Adele, S.R.L. v. Ashley Reed Trading, 

Inc., 507 F. App’x 26, 31 (2d Cir. 2013) (noting that “some 

of our sister circuits [held] that a 1999 amendment to the 

Lanham Act changed the governing rule” regarding 

willfulness, but “assuming arguendo that [the trademark 

owner] [was] still required to prove willfulness” and

finding that the district court properly determined that 

the defendant willfully infringed). 

The Eighth Circuit has also recognized the question 

presented by the 1999 amendment but has not yet resolved the issue. See Masters v. UHS of Del., Inc., 631 

F.3d 464, 471 n.2 (8th Cir. 2011) (acknowledging the issue 

of the “effect of amendments to the Lanham Act Congress 

made in 1999” but “assum[ing], without deciding, that 

willful infringement is a prerequisite of monetary relief”). 

Case: 14-1857 Document: 3-2 Page: 14 Filed: 03/31/2016
ROMAG FASTENERS, INC. v. FOSSIL, INC. 15

as affecting any change to the willfulness requirement for 

violations of § 1125(a). See H.R. Rep. No. 106-250, at 6 

(1999). Rather, the legislative history indicates only that 

Congress sought to correct the mistaken omissions, from 

the text of 15 U.S.C. §§ 1117(a) and 1118, of willful violations of § 1125(c). Id.7 In short, there is no indication that 

Congress in 1999 intended to make a change in the law of 

trademark infringement as opposed to dilution. The 

history does not even acknowledge the pre-1999 split in 

the courts of appeals on the willfulness requirement for a 

recovery of infringer’s profits, much less indicate a desire 

to change it. Given the alleged significance of the purported change, one would have expected to see an acknowledgement or discussion from Congress of the courts of 

appeals cases in the relevant area if Congress had intended to resolve the circuit conflict. See Dir. of Revenue of Mo. 

 

7 The House Judiciary Committee Report stated,

[s]ection three seeks to clarify that in passing the 

[Federal Trademark] Dilution Act, Congress did 

intend to allow for injunctive relief and/or damages against a defendant found to have wilfully intended to engage in commercial activity that 

would cause dilution of a famous mark. . . . The 

language of the Dilution Act presented to the 

President for signing did not include the necessary changes to sections 35(a) [1117(a)] and 36

[1118] of the Trademark (Lanham) Act of 1946 as 

referred to in the Dilution Act. Therefore, in an 

attempt to clarify Congress’ intent and to avoid 

any confusion by courts trying to interpret the 

statute, section three makes the appropriate 

changes to sections 35(a) [1117(a)] and 36 [1118] 

to allow for injunctive relief and damages. 

See H.R. Rep. No. 106-250, at 6. 

Case: 14-1857 Document: 3-2 Page: 15 Filed: 03/31/2016
16 ROMAG FASTENERS, INC. v. FOSSIL, INC. 

v. CoBank ACB, 531 U.S. 316, 323–24 (2001) (“[I]t would 

be surprising, indeed, if Congress . . . made a radical—but 

entirely implicit—change . . . [with a] ‘technical and 

conforming amendment[].’”) (citation omitted); Whitman 

v. Am. Trucking Ass’ns, Inc., 531 U.S. 457, 468 (2001) 

(Congress does not “hide elephants in mouseholes.”). 

Second, the language of the statute as to infringement 

liability remained unchanged with regard to the award of 

profits under the “principles of equity.” 15 U.S.C. 

§ 1117(a). By reenacting that standard, Congress could 

not have ratified a consistent judicial construction of 

§ 1117(a) because there was a split in the courts of appeals, at the time of the 1999 amendment, as to the 

willfulness requirement. See Jama v. Immigration & 

Customs Enf’t, 543 U.S. 335, 349 (2005) (holding that 

Congress could not have ratified a “settled construction” 

of a statute, because there was no “judicial consensus so 

broad and unquestioned that we must presume Congress 

knew of and endorsed it”); Metro. Stevedore Co. v. Rambo, 

515 U.S. 291, 299 (1995) (no ratification where cases 

“were not uniform in their approach”).

Third, the inserted language concerning willfulness in 

dilution cases does not create a negative pregnant that

willfulness is always required in dilution cases but never 

for infringement. The cases relied on by Romag where a 

negative pregnant was inferred involve statutory provisions enacted at the same time. See, e.g., Duncan v. 

Walker, 533 U.S. 167, 172–73 (2001) (comparing 28 U.S.C. 

§ 2244(d)(2) with §§ 2254(i), 2261(e), and 2264(a)(3), all 

enacted by the Antiterrorism and Effective Death Penalty 

Act of 1996, Pub. L. No. 104-132, 110 Stat. 1214 (1996)); 

see also Bates v. United States, 522 U.S. 23, 29 (1997)

(comparing two provisions “enacted at the same time”). 

The evolution of § 1117(a) is more comparable to when

two closely related statutes are enacted at different times. 

See Merck & Co., Inc. v. Reynolds, 559 U.S. 633, 647 

(2010); id. at 656 (Scalia, J., concurring). We do not think 

Case: 14-1857 Document: 3-2 Page: 16 Filed: 03/31/2016
ROMAG FASTENERS, INC. v. FOSSIL, INC. 17

that Congressional intent can be inferred from an 

amendment passed years after the fact to address a 

drafting error. See H.R. Rep. No. 106-250, at 6 (1999).

In any event, the “willful violation” language added in 

1999 to cover dilution cannot simply be explained as a 

desire to distinguish dilution cases from violations of 

§ 1125(a) for purposes of profits awards. The “willful 

violation” language was necessary to distinguish dilution 

cases from, inter alia, infringement cases in the area of 

damages (as opposed to profits), since it was established 

in the courts of appeals that willfulness was not required 

for damages recovery, see 5 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 30.75 

(2015), and Congress wished to limit damages awards for 

dilution to cases involving willfulness. So too, even with 

respect to awards of profits in dilution cases, the addition 

of “willful violation” was necessary to establish a uniform 

rule since the courts of appeals were divided as to the 

willfulness requirement in the infringement context, and 

silence might have generated a circuit split in the dilution 

area. 

In sum, we see nothing in the 1999 amendment that 

allows us to depart from Second Circuit precedent requiring willfulness for the recovery of profits in infringement 

cases.

B 

In a final effort to find support for its position in the 

Lanham Act, Romag argues that various other provisions 

of the Act assume that there is no willfulness requirement 

for the award of an infringer’s profits. We are unconvinced. Section 1117(c) provides for statutory damages as 

an alternative to actual damages and profits for counterfeit marks, allowing a higher statutory award for willful 

use of counterfeit marks. Nothing can be inferred from 

this provision, particularly since it applies both to damages and profits, and then only in cases of counterfeiting. 

Case: 14-1857 Document: 3-2 Page: 17 Filed: 03/31/2016
18 ROMAG FASTENERS, INC. v. FOSSIL, INC. 

Similarly uninformative is the imposition of a fraud or 

bad faith requirement for the award of attorney’s fees, see

Louis Vuitton Malletier S.A. v. LY USA, Inc., 676 F.3d 83, 

108, 111 (2d Cir. 2012), and the two exceptions in 

§ 1117(a) to monetary liability for two categories of innocent infringers—infringers who had no notice under 

§ 1111, and certain “innocent infringers,” e.g., those 

“engaged solely in the business of printing the mark” or a 

“publisher or distributor of [a] newspaper, magazine, or 

other similar periodical or electronic communication” with 

paid advertising matter containing the mark, 

§ 1114(2)(A), (B). Romag also argues that “early bills that 

ultimately culminated in the Lanham Act explicitly 

provided that ‘there shall be no recovery of profits from 

any defendant whose adoption and use of an infringing 

mark was in good faith . . . ,’” and that the absence of that 

language in the Lanham Act indicates that Congress 

rejected that limitation. Appellant’s Br. at 51–52. We are 

not persuaded that this limitation in the proposed acts, 

reflecting the common law of trademarks, was not incorporated within the Lanham Act’s “principles of equity” 

standard. See, e.g., H.R. 13109, 70th Cong. § 30 (1928)

(“[T]his Act is declaratory of the common law of trademarks . . . and in case of doubt its provisions are to be 

construed accordingly.”). 

We conclude that the 1999 amendment to the Lanham 

Act left the law where it existed before 1999—namely, it 

left a conflict among the courts of appeals as to whether 

willfulness was required for recovery of profits. We accordingly follow the Second Circuit’s decision in George 

Basch as reaffirmed in Merck. Under that standard, we 

agree with the district court that Romag is not entitled to 

recover Fossil’s profits, as Romag did not prove that Fossil 

infringed willfully. 

Case: 14-1857 Document: 3-2 Page: 18 Filed: 03/31/2016
ROMAG FASTENERS, INC. v. FOSSIL, INC. 19

III

Fossil submits a conditional cross-appeal challenging 

the jury instructions as to profits. Because we affirm, we 

do not reach the questions presented by the conditional 

cross-appeal. 

AFFIRMED

COSTS

Costs to Fossil. 

Case: 14-1857 Document: 3-2 Page: 19 Filed: 03/31/2016