(decided February 26, 2025)
The federal Lanham Act protects a business’s trademark, including its trademarked names, in part by authorizing the victim of a trademark infringement to recover its damages, in the form of its lost profits, from the infringing party. In this case, howevwer, the Court unanimously ruled that the trial court in an infringement lawsuit could not award the corporate affiliates of the plaintiff their lost profits resulting from the infringement when those affiliates were not named as parties to the lawsuit. The Court explained that the common law doctrine of corporate separateness prevented such awards, at least in the absence of some other equitable doctrine actually pled by the actual plaintiff justifying disregard of the corporate separateness doctrine.
Comment: There were likely sufficient circumstances apparent in the record to justify the application of the common law “piercing the corporate veil” theory, but the plaintiff apparently never pled that theory, or any facts necessary to establish it. Other language in the federal Lanham Act does allow damage awards for trademark infringements pursuant to “principles of equity,” but that is simply too vague to justify relief based on specific equitable theories that were never mentioned during trial. The Court remanded the case to the lower courts to give the plaintiff a second chance to plead and prove its trademark infringement case. Under modern procedural rules in federal trial courts, that kind of remand to a trial court is entirely appropriate. See Fed.R.Civ.P. 59.
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