LITIGATION TRENDS 2025 | 81 T O C E M P E S G A N T I I P C A P R O W C S P O R T C O N T A C T I N T A P P P A T C C L S E C IAI P trademark owner’s rights. Vintage Brand also tried to challenge the validity of the Penn State trademarks as purely ornamental, but the jury did not hear the claim since the district court granted Penn State summary judgment on that issue, finding that it did not apply because the challenged marks at issue were incontestable. Pennsylvania State Univ. v. Vintage Brand, LLC, 715 F. Supp. 3d 602, 642 (M.D. Pa. 2024). While this decision will likely be appealed, those aligned with the plaintiffs may breathe a sigh of relief, at least for now, that their marks constitute identifying sources, rather than merely ornamental graphics, allowing them to maintain control of the use of their highly lucrative trademarks. The question of whether use is purely ornamental rather than a source identifier, however, looms large for another day. Supreme Court Declines to Address the Lanham Act’s “Just Sum” Remedy This term, the Supreme Court heard arguments in Dewberry Group, Inc. v. Dewberry Engineers, Inc. on the question of whether a court can, relying solely on equity, order disgorgement of profits from unnamed corporate affiliates because the named defendant’s profits are inadequate. No. 23-900, at 1 (Feb. 26, 2025). In a unanimous opinion issued on February 26, 2025, the Court reaffirmed the protections of corporate separateness. Id. Dewberry involved two similarly named real estate development companies that have been embroiled in trademark litigation for decades. The present dispute arose from Dewberry Group’s alleged violation of a 2007 confidential settlement agreement that acknowledged Dewberry Engineer’s superior claim to the “Dewberry” mark. The district court granted Dewberry Engineer summary judgment, finding that Dewberry Group engaged in willful, bad faith infringement of Dewberry Engineer’s mark. Id. at 3. While Dewberry Group did not contest the ruling on the merits, it challenged the district court’s $43 million profit disgorgement award. Id. This award ordered Dewberry Group to answer for the profits of its commonly owned but legally distinct affiliates because Dewberry Group itself generated $0 in net profits. Id. Since Dewberry Group, practically speaking, generated all revenue reported by these affiliates, the district court treated Dewberry Group and its affiliates as a “single corporate entity.” Id. at 4. The Fourth Circuit affirmed. Id. Before the Supreme Court, Dewberry Group argued that the plain text of §1117 permits disgorgement of only the “defendant’s” profits” and not unnamed affiliates. See No. 23-900 Petitioner’s Br. at 3, 13. Dewberry Engineer, on the other hand, argued the Lanham Act’s “just sum” provision permits a court to consider the finances of affiliates while determining the defendant’s “true financial gain” from its infringement. See Respondent’s Br. at 25-26. This provision allows that, where the “amount of recovery based on profits is . . . inadequate,” a court may “enter judgment for such sum as the court shall find to be just.” 15 U.S.C. § 1117(a) (emphasis added). Justice Kagan delivered the Court’s opinion, which unanimously vacated the judgment and remanded the case for further proceedings. Id. at 8. The Court held that, under Lanham Act § 1117(a), the lower court could “award only profits properly ascribable to the defendant itself.” Id. at 1. The Court’s reasoning was twofold. First, the statute uses the phrase “defendant’s profits,” and, as defendant is not “specially defined,” it “bears its usual legal meaning” as “the party against whom relief or recovery is sought.” Id. at 4. Second, since Dewberry Engineer failed to invoke any exception to the “long settled” rule of corporate separateness, “the IP/Media 80 | Weil, Gotshal & Manges LLP
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