Supreme Court: Only Named Defendants Can Pay
Justice Elena Kagan, writing for the unanimous court, made it clear that the Lanham Act, the federal statute governing trademarks, only allows courts to order disgorgement of profits from actual defendants—not their affiliates.
“In awarding the ‘defendant’s profits’ to the prevailing plaintiff in a trademark infringement suit under the Lanham Act, §1117(a), a court can award only profits ascribable to the ‘defendant’ itself,” Kagan wrote. “The engineers chose not to add the group’s affiliates as defendants. Accordingly, the affiliates’ profits are not the (statutorily disgorgable) ‘defendant’s profits’ as ordinarily understood.”
Corporate Protection vs. Trademark Enforcement
The ruling is a victory for Dewberry Group, which had argued that the Fourth Circuit’s decision misinterpreted the Lanham Act and disregarded well-established corporate law principles. The company claimed the lower court wrongly sidestepped legal protections that prevent courts from holding affiliates liable without proper due process.
Dewberry Engineers, on the other hand, contended that federal trademark law grants courts broad discretion in dealing with infringement cases and their complexities. The company maintained that Dewberry Group’s affiliates had directly benefited from the alleged infringement and should be held accountable.
