Dewberry Group, Inc. v. Dewberry Engineers Inc.

In this case, the court considered this issue: 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?The case was decided on February 26, 2025.The Supreme Court held that the Lanham Act limits recovery of profits in trademark infringement cases to those earned by the named defendant, not its separately incorporated affiliates. Justice Elena Kagan authored the unanimous opinion of the Court.The text of the Lanham Act authorizes recovery of the “defendant’s profits,” which refers only to profits of parties named in the lawsuit. This interpretation aligns with fundamental corporate law principles that treat separately incorporated organizations as distinct legal entities with separate rights and obligations, even when they share common ownership. While exceptions exist through corporate veil-piercing doctrines, Dewberry Engineers never pursued this legal pathway. Courts may not, as the lower courts here did, disregard corporate separateness and treat a party and its non-party affiliates as “a single corporate entity” when calculating the profit award.Justice Sonia Sotomayor authored a concurring opinion.The opinion is presented here in its entirety, but with citations omitted. If you appreciate this episode, please subscribe. Thank you.