The U.S. Supreme Court is set to hear arguments Wednesday on whether corporate affiliates of Dewberry Group Inc. should shoulder a nearly $47 million trademark infringement judgment, despite not being named as defendants.
The legal battle, rooted in a dispute between Dewberry Group and Dewberry Engineers Inc., highlights the intersection of trademark law and corporate separateness, sparking debate over the interpretation of the Lanham Act.
The controversy stems from a 2020 lawsuit in which Dewberry Engineers accused its rival of breaching a prior agreement through rebranding efforts that allegedly infringed on its trademark. The Fourth Circuit upheld a Virginia federal court’s ruling that Dewberry Group’s affiliates must pay damages, intensifying scrutiny of how courts treat profits from legally distinct entities.
Dewberry Group argues the judgment violates corporate separateness principles and constitutes a penalty rather than compensation, given its zero net profits. Meanwhile, Dewberry Engineers defends the ruling as consistent with the Lanham Act’s equitable discretion.
