Reply Brief — Romag Fasteners, Inc., Petitioner v. Fossil Group, Inc., fka Fossil, Inc., et al.

No. 18-1233

In the Supreme Court of the United States

ROMAG FASTENERS, INC., PETITIONER

v.

FOSSIL, INC., FOSSIL STORES I, INC.,

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

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

REPLY BRIEF FOR PETITIONER

JONATHAN FREIMAN

WIGGIN AND DANA LLP

One Century Tower

265 Church Street

New Haven, CT 06510

JODY P. ELLANT

ROMAG FASTENERS, INC.

P.O. Box 895

Orange, CT 06477

LISA S. BLATT

Counsel of Record

AMY MASON SAHARIA

A. JOSHUA PODOLL

KAITLIN J. BEACH*

WILLIAMS & CONNOLLY LLP

725 Twelfth Street, N.W.

Washington, DC 20005

(202) 434-5000

lblatt@wc.com

*Admitted in Massachusetts and practicing law in the District of

Columbia pending application for admission to the D.C. Bar under

the supervision of bar members pursuant to D.C. Court of Appeals

Rule 49(c)(8).

TABLE OF CONTENTS

Page

I. The Circuit Split Warrants Review .......................................2

II. This Case Is An Ideal Vehicle For Review .........................7

III. The Decision Below Was Incorrect .....................................9

CONCLUSION ............................................................................12

(I)

II

TABLE OF AUTHORITIES

Page

Cases:

Banjo Buddies, Inc. v. Renosky,

399 F.3d 168 (3d Cir. 2005) ........................................ 3

Church & Dwight Co. v. Russ,

99 F. 276 (C.C.D. Ind. 1900) .................................... 10

Cooper Indus., Inc. v. Aviall Servs.,

Inc., 543 U.S. 157 (2004) .......................................... 11

Dep’t of Banking, Nebraska v. Pink,

317 U.S. 264 (1942) (per curiam) .......................... 7, 8

Dig. Realty Tr., Inc. v. Somers,

138 S. Ct. 767 (2018) ................................................... 9

Duncan v. Walker, 533 U.S. 167 (2005) ...................... 11

Fed. Trade Comm’n v. MinneapolisHoneywell Regulator Co.,

344 U.S. 206 (1952) ..................................................... 7

Halo Electronics, Inc. v. Pulse

Electronics, Inc.,

136 S. Ct. 1923 (2016) ................................................. 4

Hamilton-Brown Shoe Co. v. Wolf

Bros. & Co., 240 U.S. 251 (1916) ........................... 7, 8

Kirtsaeng v. John Wiley & Sons, Inc.,

136 S. Ct. 1979 (2016) ............................................. 3, 4

Lamar, Archer & Cofrin, LLP v.

Appling, 138 S. Ct. 1752 (2018)............................... 11

Lawrence Mfg. Co. v. Tennessee Mfg.

Co., 138 U.S. 537 (1891)............................................ 10

Major League Baseball Players Ass’n

v. Garvey, 532 U.S. 504 (2001)

(per curiam) ................................................................. 7

Menendez v. Holt, 128 U.S. 514 (1888) ....................... 10

Mercer v. Theriot, 377 U.S. 152 (1964)

(per curiam) ................................................................. 7

III

Page

Cases—continued:

Oakes v. Tonsmierre,

49 F. 447 (C.C.S.D. Ala. 1883)...................................... 10

Octane Fitness, LLC v. ICON Health &

Fitness, Inc., 572 U.S. 545 (2014) ............................. 4

PlayNation Play Sys., Inc. v. Velex Corp.,

-- F.3d ---, 2019 WL 2180589

(11th Cir. May 21, 2019) ............................................. 5

Retractable Techs., Inc. v. Becton Dickinson & Co.,

919 F.3d 869 (5th Cir. 2019) ...................................... 5

SCA Hygiene Products Aktiebolag v. First

Quality Baby Products, LLC,

137 S. Ct. 954 (2017) ........................................... 6, 7, 8

Stone Creek, Inc. v. Omnia Italian Design,

Inc., 875 F.3d 426 (9th Cir. 2017) ............................. 5

Stonebraker v. Stonebraker, 33 Md. 252

(Md. 1870) .................................................................. 10

Synergistic International, LLC v. Korman,

No. 05-49, 2007 WL 517677

(E.D. Va. Feb. 8, 2007) ............................................... 3

Statutes and rule:

15 U.S.C. § 1114(2) ........................................................ 10

15 U.S.C § 1117(a) ........................................... 5, 9, 10, 11

15 U.S.C. § 1125(a) .............................................. 9, 10, 11

15 U.S.C. § 1125(c) .............................................. 9, 10, 11

15 U.S.C. §1125(d) ............................................... 9, 10, 11

15 U.S.C. § 1125(d)(1)(A) .............................................. 10

Sup. Ct. R. 10(a) ............................................................... 2

IV

Page

Miscellaneous:

Br. in Opp., Contessa Premium Foods, Inc.

v. Berdex Seafood, Inc. (No. 04-1693),

2005 WL 2178847 (Sept. 1, 2005) .......................... 5, 6

Br. in Opp., Halo Electronics, Inc. v. Pulse

Electronics, Inc., 136 S. Ct. 1923 (2016) .................. 4

Br. in Opp., Kirtsaeng v. John Wiley & Sons,

Inc., 136 S. Ct. 1979 (2016) ........................................ 4

Br. in Opp., M2 Software, Inc. v. Viacom,

Inc. (No. 07-202), 2007 WL 3071017

(Oct. 17, 2007) .............................................................. 6

H.R. Rep. No. 79-219 (1945) .......................................... 4

S. Rep. No. 79-1333 (1946) ............................................. 4

Mark A. Thurmon, Confusion Codified: Why

Trademark Remedies Make No Sense,

17 J. Intell. Prop. L. 245 (2010) .............................. 10

In the Supreme Court of the United States

No. 18-1233

ROMAG FASTENERS, INC., PETITIONER

v.

FOSSIL, INC., FOSSIL STORES I, INC.,

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

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

REPLY BRIEF FOR PETITIONER

The question whether a showing of willfulness is a

prerequisite to an award of an infringer’s profits has divided the courts of appeals six to six. The question arises

virtually every time a plaintiff succeeds in a trademarkinfringement case. The question has important implications for the policies underlying the Lanham Act. And the

question is squarely presented and outcome determinative. This is a paradigmatic case for review.

Fossil does not dispute that a six-six circuit split exists. Although Fossil contends that the divergent approaches produce “similar results,” Br. in Opp. 2, as long

as the question presented can be, and sometimes is, dispositive, similarly situated parties are treated differently

(1)

2

depending on where they file suit. This Court’s certiorari

jurisdiction exists to prevent this very scenario. See Sup.

Ct. R. 10(a). This case illustrates the point: the application

of Second Circuit precedent here deprived Romag of the

opportunity to prove its entitlement to an award of profits—an opportunity Romag would have had in six geographic circuits.

Unable to meet those points head-on, Fossil falls back

on a set of purported vehicle problems. But its vehicle arguments only underscore the triviality of its objections to

certiorari. Fossil’s threshold jurisdictional objection is

baseless and, if accepted, would force a sea change in this

Court’s practice. And Fossil’s effort to litigate—at the

certiorari stage—Romag’s ultimate entitlement to an

award of Fossil’s profits misses the point of the question

presented: namely, whether Romag should have the opportunity to litigate the profits issue in the first place.

Finally, Fossil’s construction of the Lanham Act on

the merits conflicts with the statutory text and misconstrues background common-law principles. Nothing in

Fossil’s opposition detracts from the indisputable fact

that the courts of appeals are evenly divided on a pure and

outcome-determinative question of federal law.

I.

The Circuit Split Warrants Review

1. Fossil concedes that the question presented has

sharply divided the courts of appeals. Br. in Opp. 24-25.

So Fossil tries to minimize it by arguing that the split “has

little practical importance” because the presence of willfulness will dictate whether profits are awarded regardless of the applicable test. Id. at 25. That argument is

unpersuasive.

All that matters for present purposes is whether

courts can and have awarded lost profits without finding

3

willfulness. In Banjo Buddies, Inc. v. Renosky, for instance, the Third Circuit affirmed a profits award without

determining whether the infringement was willful because “all of the other [equitable] factors”—including the

defendant’s culpable, if not willful, behavior and the public

interest in deterring the defendant’s conduct—“support[ed] an award of profits.” 399 F.3d 168, 175-76 (3d Cir.

2005). Similarly, in Synergistic International, LLC v.

Korman, the trial court awarded an infringer’s profits

even though it found that the defendant had not engaged

in willful infringement. No. 05-49, 2007 WL 517677, at *11

(E.D. Va. Feb. 8, 2007). There, as in Banjo Buddies, the

defendant’s conduct was “not blameless” and an award of

profits would serve the public interest by making infringement unprofitable. Id. at *9-12. Although neither mark

holder established willfulness, both recovered profits.

That approach stands in stark contrast to the standard the district court applied below. Here, as in Banjo

Buddies and Synergistic, the defendant was “not blameless.” See Synergistic, 2007 WL 517677, at *12; Pet. 8 (discussing jury finding that Fossil acted with “callous disregard”). Here, as in those cases, a substantial public interest exists in deterring the defendant’s conduct. See Banjo

Buddies, 399 F.3d at 176; Pet. 28 (discussing policy consequences of allowing manufacturers to escape meaningful

trademark liability by failing to monitor their supply

chains). But here, in contrast to Banjo Buddies and Synergistic, the district court struck the jury’s profits award

without analyzing any factors other than willfulness.

These concrete examples illustrate the broader principle that the difference between “an important factor”

and “the controlling one” is significant. Kirtsaeng v. John

Wiley & Sons, Inc., 136 S. Ct. 1979, 1988 (2016). The

Court, for example, granted certiorari in Kirtsaeng to

consider what weight “objective reasonableness” should

4

have in the attorney’s-fees analysis in copyright cases. Id.

at 1984 & n.1. Octane Fitness, LLC v. ICON Health &

Fitness, Inc. involved a similar question: whether there

is a threshold bad-faith requirement for fee awards in patent cases. 572 U.S. 545, 548 (2014). And in Halo Electronics, Inc. v. Pulse Electronics, Inc., the Court assessed

whether “objective recklessness” is a prerequisite to an

award of enhanced patent damages. 136 S. Ct. 1923, 1932

(2016).

The parties opposing review in those cases, just like

Fossil, argued that review was not warranted because the

petitioner could not succeed “under any . . . standard.”

Br. in Opp. 6, Halo Elecs., 136 S. Ct. 1923; see also Br. in

Opp. 27, Kirtsaeng, 136 S. Ct. 1979. The Court nevertheless granted certiorari to determine which legal test

should apply. Certiorari is similarly warranted here.

2. Fossil’s other efforts to minimize the importance

of the circuit split are similarly flawed. First, Fossil incredibly suggests that, if the circuit split really mattered,

litigants would forum shop for their preferred rule. Br. in

Opp. 22, 26-27 & n.4. The remedies available under a federal statute, however, should not depend on where a plaintiff brings suit. That is especially true under the Lanham

Act, which Congress enacted to promote consistency in

the Nation’s trademark law. H.R. Rep. No. 79-219, at 2

(1945); see also S. Rep. No. 79-1333, at 5 (1946). Plaintiffs’

decisions about where to bring suit say nothing about the

importance of the question presented. Consider this case.

Romag is a small family business located in Orange, Connecticut. Romag reasonably brought suit near its

hometown. Romag (and businesses like it) do not have the

resources to survey trademark law nationwide before suing, and they should not have to litigate in a distant forum

simply to exercise federal rights.

5

Fossil next posits, without elaboration, that “[c]ontinued percolation” in the lower courts could eliminate the

disagreement. Br. in Opp. 23. That is demonstrably

wrong. In the last two years, courts of appeals on both

sides of the split have reaffirmed their prior interpretations of section 35(a). See PlayNation Play Sys., Inc. v.

Velex Corp., -- F.3d --, 2019 WL 2180589, at *6 (11th Cir.

May 21, 2019); Retractable Techs., Inc. v. Becton Dickinson & Co., 919 F.3d 869, 876 (5th Cir. 2019); Stone Creek,

Inc. v. Omnia Italian Design, Inc., 875 F.3d 426, 441 (9th

Cir. 2017). Fossil offers no reason to think that any circuit—much less six—would spontaneously change course.

Finally on this score, Fossil notes that “most” of the

cases cited in the petition at pp. 18-19 “simply refer to an

accounting of profits without addressing the issue raised

here.” Br. in Opp. 26. But Romag cited those cases for

the proposition that trademark plaintiffs frequently seek

lost profits, not that district courts continue to rehash a

legal question that has been decided by every circuit. Fossil concedes the presence of a circuit conflict and indeed

one in which every circuit has weighed in. Moreover,

countless trademark cases are resolved without any district court opinion. The issue of what a successful mark

holder must prove to obtain an award of infringer’s profits

arises virtually every time a trademark-infringement

plaintiff prevails or settles its claim.

3. That leaves Fossil’s observations that the Court

has denied certiorari in the past and that Romag’s petition

did not have amicus support. Neither is relevant.

Fossil identifies two prior cases in which the Court

declined review. Br. in Opp. 21-22. Both involved unpublished decisions addressing trademark-infringement

claims that predated the 1999 amendment of the Lanham

Act. Br. in Opp. 11, Contessa Premium Foods, Inc. v.

Berdex Seafood, Inc. (No. 04-1693), 2005 WL 2178847

6

(Sept. 1, 2005); Br. in Opp. 12-16, M2 Software, Inc. v. Viacom, Inc. (No. 07-202), 2007 WL 3071017 (Oct. 17, 2007).1

In one case, the petitioner had waived the question presented in the lower court. See Br. in Opp. 8-9, Contessa

Premium Foods, (No. 04-1693). The most recent petition

was filed twelve years ago. In the interim, the circuit split

deepened as courts considered, and disagreed about, the

effect of the 1999 amendment. Pet. 13-17. Nor has the

issue faded from view: the leading trademark treatises

continue to discuss the lower courts’ various approaches.

See Pet. 17.

The absence of amicus participation is similarly

meaningless. Br. in Opp. 23. This Court has never entertained the notion that a petitioner must obtain amicus

support to secure a writ of certiorari. That makes sense:

amici may choose not to file certiorari-stage briefs for any

number of reasons, including cost, considerations of timing, and—where amici such as trade groups are concerned—the often-disparate interests of their members.

Notably, nearly half of the merits cases argued this Term

did not have amicus briefing at the certiorari stage.

*

*

*

This case, in sum, presents a clean and persistent circuit split on an important question of federal law. Only

this Court’s intervention can resolve the split and restore

the uniformity the Lanham Act was meant to impose.

1

In this case, of course, the Court granted, vacated, and remanded

for further proceedings in light of SCA Hygiene Products Aktiebolag

v. First Quality Baby Products, LLC, 137 S. Ct. 954 (2017). That

does not imply any view on the question presented. See p. 7, infra.

7

II.

This Case Is An Ideal Vehicle For Review

1. Fossil manufactures two vehicle issues. It first

suggests that the Court does not have jurisdiction because Romag did not file an interlocutory petition after

the Federal Circuit remanded this case to the district

court for further proceedings in light of SCA Hygeine

Prods. Aktiebolag v. First Quality Baby Prods., LLC, 137

S. Ct. 954 (2017). Fossil’s argument is frivolous. The

Court has “authority to consider questions determined in

earlier stages of the litigation where certiorari is sought

from the most recent of the judgments of the Court of Appeals.” Major League Baseball Players Ass’n v. Garvey,

532 U.S. 504, 508 n.1 (2001) (per curiam); Mercer v. Theriot, 377 U.S. 152, 153 (1964) (per curiam). That is true

even when, as here, a prior appeal conclusively settled the

question presented and the parties did not litigate it further on remand. Hamilton-Brown Shoe Co. v. Wolf Bros.

& Co., 240 U.S. 251 (1916), is right on point. There, this

Court granted certiorari to review a trademark question

decided in an earlier appeal, even though the Court had

previously denied certiorari on the issue and the court of

appeals, in the intervening period, had remanded the case

for a calculation of damages under an alternative theory.

Id. at 258.

Fossil’s contrary argument relies on an entirely different—and inapposite—principle. The cases cited by

Fossil stand for the notion that a nonsubstantive or clerical correction to an otherwise final judgment does not restart the time for seeking review. See Fed. Trade

Comm’n v. Minneapolis-Honeywell Regulator Co., 344

U.S. 206, 211 (1952); Dep’t of Banking, Nebraska v. Pink,

317 U.S. 264, 266 (1942) (per curiam). That is because

such a correction does not require the lower courts to “reconsider any question decided in the case,” and therefore

8

does not affect “the finality of the court’s first order.”

Pink, 317 U.S. at 266 (emphasis added).

That was not the case here. The Federal Circuit remanded the case to the district court for further proceedings on an unrelated (patent) issue in light of SCA Hygiene. Pet. App. 14a-15a. There was no final judgment

then because the district court still had to award patent

damages. See id. at 5a-7a. Once the district court did so,

the Federal Circuit summarily affirmed and entered a final judgment. Supp. App. 1a-2a. At that point, “any error

that may have occurred in the interlocutory proceedings”

is subject to this Court’s review. Hamilton-Brown Shoe,

240 U.S. at 258. Romag did not have to file an interlocutory petition to preserve the question presented. Indeed,

had Romag proceeded as Fossil suggests it was required

to do, Fossil would no doubt have urged this Court to deny

certiorari on the ground that Romag should wait until a

final judgment (i.e., now).

2. Fossil’s second vehicle argument—that “[a] ruling

in Romag’s favor . . . will not change the outcome,” Br. in

Opp. 27—is no better. As discussed above, the question

this petition presents is not whether Romag ultimately

should receive an award of Fossil’s profits (although Romag believes it should). See pp. 2-4, supra. The issue,

instead, is whether Romag should have the opportunity to

prove its entitlement to a profits award in the first place.

As to that issue, the question presented is outcome-determinative. Br. in Opp. 12 (conceding that the district court

struck the damages award based entirely on lack of willfulness).

Fossil’s lengthy discussion of why it thinks Romag is

not entitled to an award of profits (Br. in Opp. 27-31) is,

therefore, irrelevant and premature. Fossil moved for

9

judgment as a matter of law on the question whether Romag could recover profits if willfulness were not a threshold requirement. See Def.’s Mem. Supp. Conditional PostTrial Mot. 1-2, 7-8, Romag, 29 F. Supp. 3d 85 (No. 3:10-cv1827), ECF No. 476. The district court denied Fossil’s

motion because it recognized that, if willfulness were not

a prerequisite, “an analysis of the equitable factors governing an award of profits” would be necessary to determine whether Romag was “entitled to such an award.”

Pet. App. 59a. That analysis could include some of the

considerations that Fossil cherry-picks in its brief. See

Br. in Opp. 28-31. But the analysis also would include Fossil’s “callous disregard” for Romag’s trademark rights,

Pet. 22, along with the consequences of allowing brands

like Fossil to escape meaningful trademark liability by

turning a blind eye to misconduct in their supply chains.

None of this matters, however, at this stage. The critical point is that federal courts apply different standards

to determine when a mark holder has an opportunity to

prove its entitlement to an award of profits. Some courts

impose a threshold willfulness requirement. Others do

not. Which of those approaches applies is dispositive of

whether Romag will have an opportunity to prove that it

is entitled to an award of Fossil’s profits.

III. The Decision Below Was Incorrect

Finally, Fossil’s interpretation of the Lanham Act is

flawed. Section 35(a) provides that a mark holder may recover an infringer’s profits, subject to the principles of equity, when “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.” 15 U.S.C § 1117(a)

(emphasis added). Because Congress included “willful” in

one clause but not the other, the Court “presumes that

Congress intended a difference in meaning.” Dig. Realty

10

Tr., Inc. v. Somers, 138 S. Ct. 767, 777 (2018) (internal

quotation marks omitted). Applying that principle, willfulness is required for an award of profits under section

43(c), but not under sections 43(a) or (d).

Fossil insists that the Lanham Act’s reference to

“principles of equity” imports a willfulness requirement

from the common law. Opp. 31-34 & n.6. But the common

law was not settled when Congress adopted the Lanham

Act. See Mark A. Thurmon, Confusion Codified: Why

Trademark Remedies Make No Sense, 17 J. Intell. Prop.

L. 245, 285 (2010). Some courts, as Fossil points out, held

that willfulness was a prerequisite to an award of profits.

Br. in Opp. 31-33. Others did not. See, e.g., Oakes v.

Tonsmierre, 49 F. 447, 453 (C.C.S.D. Ala. 1883); Stonebraker v. Stonebraker, 33 Md. 252, 268 (Md. 1870). In any

event, willfulness was easier to prove in common-law

trademark cases than it is today. Confusion Codified, 17

J. Intell. Prop. at 284-85. Once a mark holder established

infringement of a distinctive mark, “a fraudulent intent to

injure the complainant, or an actual misleading of the public, [did not need to] be proved, as it [was] presumed.”

Church & Dwight Co. v. Russ, 99 F. 276, 279 (C.C.D. Ind.

1900); see also Lawrence Mfg. Co. v. Tennessee Mfg. Co.,

138 U.S. 537, 549 (1891) (“[I]f an infringement were

clearly shown, the fraudulent intent would be inferred”);

Menendez v. Holt, 128 U.S. 514, 523 (1888).

Congress knows how to impose a willfulness requirement when it wants to. Congress did so throughout the

Lanham Act—including in section 35(a), where it distinguished between “a violation under section 1125(a) or (d)”

and “a willful violation under section 1125(c).” 15 U.S.C

§ 1117(a); see also, e.g., 15 U.S.C. §§ 1114(2),

1125(d)(1)(A). Fossil’s interpretation oversimplifies the

11

state of the common law when the Lanham Act was enacted; it flouts Congress’ decision not to impose a willfulness requirement for profits awards in section 43(a) cases;

and it improperly renders the reference to “a willful violation under section 1125(c)” “entirely superfluous.”

Cooper Indus., Inc. v. Aviall Servs., Inc., 543 U.S. 157, 166

(2004).

Fossil’s speculation about Congress’ purpose in adding the phrase “a willful violation under section 1125(c)”

(Br. in Opp. 34-36) does not change the analysis. The

Court’s “task is to construe what Congress has enacted.”

Duncan v. Walker, 533 U.S. 167, 172 (2005). And the language of the statute is perfectly clear.

In any event, the Court presumes that Congress is

aware of relevant judicial decisions interpreting a statute

when it legislates. See, e.g., Lamar, Archer & Cofrin,

LLP v. Appling, 138 S. Ct. 1752, 1762 (2018). Before Congress amended the statute in 1999, a circuit split already

existed regarding whether willfulness was a prerequisite

to recovery. Pet. 25. Every time Congress amended the

statute after that point, Congress distinguished between

“a willful violation under section 1125(c)” and “a violation

under section 1125(a) or (d).” Pet. 25-26. If Congress had

intended to impose a willfulness requirement for section

1125(a), in addition to section 1125(c), it no doubt would

have done so directly, not through an oblique reference to

“principles of equity.” 15 U.S.C. § 1117(a).

12

CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted,

JONATHAN FREIMAN

WIGGIN AND DANA LLP

One Century Tower

265 Church Street

New Haven, CT 06510

JODY P. ELLANT

ROMAG FASTENERS, INC.

P.O. Box 895

Orange, CT 06477

LISA S. BLATT

AMY MASON SAHARIA

A. JOSHUA PODOLL

KAITLIN J. BEACH*

WILLIAMS & CONNOLLY LLP

725 Twelfth Street, N.W.

Washington, DC 20005

(202) 434-5000

lblatt@wc.com

JUNE 4, 2019

* Admitted in Massachusetts and practicing law in the District of

Columbia pending application for admission to the D.C. Bar under the

supervision of bar members pursuant to D.C. Court of Appeals Rule

49(c)(8).