Where a monetary award comes from
Under the federal Lanham Act, a successful owner can usually pursue the infringer's profits, its own losses, or both, and the court has broad discretion over the award. Profits often get the most attention because they can be easier to document than lost sales: the owner generally needs to prove the infringer's sales, and the infringer then has to prove any costs and deductions it wants subtracted. Willfulness is not a strict prerequisite for an award of profits, but it weighs heavily in the court's decision. Courts can adjust an award they find inadequate or excessive, and attorney's fees are reserved for exceptional cases. Counterfeiting has its own remedies, including statutory damages that do not depend on proof of actual loss.
Proving the loss
Actual damages can include sales diverted to the infringer and harm to reputation, including the cost of correcting confusion through advertising. Each needs evidence that ties the harm to the infringement rather than to the market, a new competitor, or a weak season. Useful records include your own sales trends by region and channel, customer complaints or misdirected inquiries, and anything showing what the infringer earned. Retained economists and survey researchers often play a role, and their work is only as good as the data underneath it. Start preserving financial and marketing records now, since they will be requested in discovery anyway.
Setting expectations early
A damages claim is only as large as what can be proven, and some infringement cases are worth more for the injunction than for the money. The Supreme Court has held that the Lanham Act reaches infringing use in US commerce, so sales that happened entirely abroad may need a different strategy. Insurance on either side can affect how a claim is resolved, though many policies exclude most trademark claims. To size a damages claim, we look at how long the use has gone on, what records exist on each side, and whether the realistic goal is a payment, a stop, or both.
