By Wallace Feng
Recently, the United States Court of Appeals for the Seventh Circuit held that a plaintiff in a trademark infringement action is entitled to the revenue from a defendant’s sale of an infringing product if the defendant cannot prove its profits.[1]
The Seventh Circuit’s holding reversed a prior decision in a Schedule A trademark infringement case in which the Northern District Court of Illinois declined to award the defendants’ revenue in view of a default judgment against those defendants.[2] The Lanham Act permits an award of profits to a prevailing party in a trademark infringement action.[3] In the Schedule A case, the district court observed that the plaintiff did not provide evidence of profits from the purportedly infringing sales.[4]
The Seventh Circuit did not dispute this observation, but ruled that under the Lanham Act, the alleged infringer bears the burden to prove profits from an infringing sale.[5] Absent such proof, the trademark owner may obtain the defendant’s revenue.[6] While acknowledging that an award of revenue may result in a windfall to the trademark owner, the Seventh Circuit noted that this windfall “is a price worth paying” and reasoned that its decision is consistent with Supreme Court jurisprudence.[7]
The Seventh Circuit remanded the case to the district court for the final determination of damages. However, the Seventh Circuit acknowledged that“[i]f the [district] court shall find that the amount of the recovery based on profits is either inadequate or excessive the court may in its discretion enter judgment for such sum as the court shall find to be just, according to the circumstances of the case.”[8] Thus, “[o]n remand, if the district court wishes to award more or less than these profits, it retains the discretion to do so, as long as it makes a finding based on the facts of the case.”[9]
[1] Dyson Tech. Ltd. v. David 7 Store, 132 F.4th 526 (7th Cir. 2025).
[2] Dyson Tech. Ltd. v. P’ships and Unincorporated Ass’ns Identified on Schedule A, No. 1:22-cv-05936, Dkt. No. 51 (N.D. Ill. Aug. 29, 2023).
[3] 15 U.S.C. § 1117(a).
[4] Dyson, No. 1:22-cv-05936, Dkt. No. 51.
[5] Dyson, 132 F.4th at 528.
[6] Id. at 529.
[7] Id.
[8] Id.
[9] Id.
