Mishawaka Rubber & Woolen Manufacturing Co. v. S. S. Kresge Co.
Headline: Trademark dispute: Court reverses lower court’s tight rule and allows a brand owner broader recovery of an infringer’s profits unless the seller proves sales weren’t due to the copied red‑plug mark.
Holding: The Court held that under the 1905 Trade‑Mark Act the owner need only prove the defendant’s infringing sales, and the defendant must prove costs or that sales were unrelated to the mark before keeping any profits.
- Easier for trademark owners to recover profits from sellers of look‑alike products.
- Shifts burden to sellers to prove sales weren’t caused by the copied mark.
- May require sellers to produce detailed cost records to avoid forfeiture.
Summary
Background
A shoe and heel manufacturer uses a registered trademark: a red circular plug set into the center of its heels. A retailer sold detached rubber heels made by others that bore a very similar red plug and were of poorer quality. The trial court found a likelihood of confusion, enjoined future use, and ordered the retailer to account for profits from purchases induced by belief the heels were the maker’s. The appeals court affirmed. The Supreme Court took the case only to decide how to measure profits and damages for the found infringement.
Reasoning
The key question was how much of the seller’s profits must be turned over when a mark is copied. The Court read the Trade‑Mark Act to require the trademark owner to prove only the infringer’s sales of marked goods. The infringer then must prove costs or that those sales were not caused by use of the mark. If the infringer cannot show sales had no value from the copied mark, the profits rightly belong to the mark owner. The Court therefore vacated the decree and sent the case back so the lower court can enter a decree consistent with this rule and assess any additional damages the owner can prove.
Real world impact
This ruling changes how courts measure money recoverable for trademark copying. Brand owners who prove infringing sales will have a clearer path to get the profits from those sales unless the seller can show costs or lack of connection to the mark. The decision addresses damages calculation, not whether infringement did or did not occur, and the case goes back to the lower court for further proceedings.
Dissents or concurrances
A dissent argued the record showed little risk of consumer deception, that an injunction would have sufficed, and that forcing profit recovery here would unfairly give a windfall to the trademark owner.
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