Remedies for Infringement

Courts have wide latitude in fashioning remedies to protect marks from infringement. They can enter injunctions to forbid the defendant from any further use of the infringing mark; they can order a recall or destruction of infringing articles; they can order the offending party to use a disclaimer when it offers its goods, stating ''ABC Inc. is not affiliated with XYZ Co.''; and they can impose actual damages to compensate the plaintiff for the harm he or she has suffered. Damages often take the form of lost profits and lost sales. The defendant may be ordered to disgorge profits it has made from sales of products that used the infringing mark. The plaintiff's costs in bringing the action are recoverable (assuming the plaintiff is the prevailing party). The actual damages ordered by the court can be tripled. Such tripled damages generally are assessed only when the defendant intentionally infringed the mark. Similarly, attorney's fees generally are awarded only when the defendant's conduct has been willful or in bad faith, or if a contract provides for them. Damage awards can be significant.

Although it is possible to obtain insurance to protect against intellectual property claims, such insurance often is expensive, especially for companies engaged in business on the Internet, those in high-tech industries, and those with significant inventories of trademarks, patents, and copyrights. Consult a broker to determine the costs and feasibility of such insurance. Even without an intellectual property rider to a policy, consider relying on your general liability insurance if a claim is made against you for intellectual property infringement. Immediately notify your carrier and request that the carrier assume your defense. It is possible that protection for general advertising injury or other matters may be broad enough to cover certain intellectual property claims.