During a time when online marketing, virtual shopping and electronic communication are more widely used than ever, it is critically important for individuals and businesses to be highly aware of how they are using trademarks, the scope of a trademark owner’s rights, and the consequences of infringing them. Monetary damages are one such consequence, and for many, the amount of recoverable damages at stake is a primary driver to strategic decisions regarding when to initiate, defend or settle litigation.

Federal trademark infringement is governed by the Lanham Act. Under that statute, a trademark owner may recover three broad categories of monetary damages: actual damages, disgorgement of the defendant’s profits, and attorney fees and costs. See 15 U.S.C. Section 1117(a). Each category of damages subject to recovery is discussed below, along with strategies for both plaintiffs and defendants to consider.

Actual Damages

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