Dewberry Group, Inc. v. Dewberry Engineers Inc.

Justia · Docket · oyez.org

Argued on Dec 11, 2024.

Petitioner: Dewberry Group, Inc.
Respondent: Dewberry Engineers Inc.

Advocates:

• Thomas G. Hungar (for the Petitioner)

Facts of the case (from oyez.org)

Dewberry Engineers and Dewberry Group are two businesses in the real estate development industry that both use the “Dewberry” name. In 2006, they confronted each other over their competing brands, leading to a lawsuit that was settled in 2007 with a confidential settlement agreement (CSA). The CSA allowed Dewberry Engineers to use its registered marks freely while strictly limiting Dewberry Group’s use of “Dewberry.” It prohibited Dewberry Group from challenging Dewberry Engineers’ federal trademark registrations and required Dewberry Group to abandon pending applications for the “Dewberry Capital” mark.

In 2017, Dewberry Group decided to rebrand, changing its name from “Dewberry Capital” to "Dewberry Group” and adopting several subbrands. Despite the CSA, Dewberry Group applied to register new “Dewberry” marks with the U.S. Patent and Trademark Office (USPTO) for real estate-related services. The USPTO rejected these applications due to likelihood of confusion with Dewberry Engineers’ marks. Dewberry Engineers sent cease-and-desist letters to Dewberry Group, claiming trademark infringement and breach of the CSA. Dewberry Group refused to abandon its applications, arguing that the CSA allowed its use of “Dewberry” marks other than “Dewberry Capital” for non-architectural services.

The district court ruled in favor of Dewberry Engineers and ordered Dewberry Group to pay almost $43 million in disgorged profits for infringing on Dewberry Engineers’ trademark. The district court also enjoined Dewberry Group from further violating its agreement with Dewberry Engineers and required Dewberry Group to pay Dewberry Engineers’ attorney fees. The U.S. Court of Appeals for the Fourth Circuit affirmed.

Question

Does an award of the “defendant's profits” under the Lanham Act allow a court to require the defendant to disgorge profits earned by legally separate, non-party corporate affiliates?