Mishawaka Rubber & Woolen Manufacturing Co. v. S.S. Kresge Co.
316 U.S. 203 (1942)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
In a trademark infringement action, once the trademark owner proves the infringer's gross sales of the infringing product, the burden shifts to the infringer to prove any deductible costs and to demonstrate that its profits were not attributable to the unlawful use of the mark.
Facts:
- Mishawaka Rubber & Woolen Mfg. Co. manufactured shoes featuring a registered trademark: a red circular plug embedded in the center of the heel.
- Mishawaka invested considerable sums of money in advertising to promote the mark and build goodwill with the consuming public.
- Mishawaka did not sell the heels separately; they were always attached to its shoes.
- S. S. Kresge Co. sold detached rubber heels, not made by Mishawaka, that featured a very similar red circular plug.
- The heels sold by Kresge were inferior in quality to those made by Mishawaka.
- While a district court found a 'reasonable likelihood' of confusion, there was no direct evidence that any particular purchaser was actually deceived into believing Kresge's heels were Mishawaka's product.
Procedural Posture:
- Mishawaka Rubber & Woolen Mfg. Co. sued S. S. Kresge Co. in federal District Court for trademark infringement.
- The District Court found infringement and granted an injunction.
- The District Court ordered Kresge to account for profits, but limited the award to sales where Mishawaka could prove purchasers were actually deceived and that Mishawaka would have otherwise made those sales.
- Mishawaka, as appellant, appealed the limited scope of the profit award to the U.S. Court of Appeals for the Sixth Circuit; Kresge was the appellee.
- The Court of Appeals affirmed the District Court's decree.
- The U.S. Supreme Court granted certiorari to review only the decree's provisions on the measure of profits and damages.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
In a trademark infringement action under the Trade-Mark Act of 1905, must the trademark owner, after proving the infringer's sales, also bear the burden of proving that specific purchasers were induced to buy the infringing product because of the mark in order to recover the infringer's profits?
Opinions:
Majority - Mr. Justice Frankfurter
No. After a trademark owner proves the infringer's sales, the burden shifts to the infringer to prove that its profits were not attributable to the unlawful use of the mark. The Trade-Mark Act of 1905 only requires the plaintiff to prove the defendant's sales, not to undertake the often impossible task of proving that specific customers would have bought the plaintiff's goods but for the infringement. The law presumes that profits from infringing sales are due to the mark's goodwill. It is the infringer's responsibility to disprove this connection. Any windfall from the uncertainty of this calculation should go to the trademark owner, not the wrongdoer.
Dissenting - Mr. Justice Black
Yes. The dissent argues that the lower courts acted within their discretion, as the economic rivalry between the parties was remote and there was no evidence of actual deception or fraudulent intent. Mishawaka sold shoes with attached heels, while Kresge sold detached heels, making it difficult to conclude that Kresge's sales took business from Mishawaka. The majority's holding grants a windfall to the petitioner and imposes an undeserved penalty on the respondent, which is not compelled by the Trade-Mark Act.
Analysis:
This decision significantly strengthens trademark protection by clarifying the burden of proof for recovering an infringer's profits. By shifting the burden to the infringer to disprove the causal link between its profits and the infringement, the Court relieved trademark owners of a nearly impossible evidentiary hurdle. This precedent makes it easier for plaintiffs to obtain monetary awards, thereby discouraging infringement by ensuring that wrongdoers cannot easily retain the profits from their unlawful actions. The ruling establishes a strong presumption that all profits from infringing sales are attributable to the mark's power, placing the risk of uncertainty squarely on the infringer.
