By: Sharon Urias, Esq.
In the realm where trademarks and corporate identities collide, few cases have captured the ongoing legal saga as prominently as Dewberry Group Inc. v. Dewberry Engineers. This case, which has spanned nearly two decades, delves into the complexities of trademark infringement and the intricate relationships between corporate entities. In this blog, I will explore the background, the implications of the Supreme Court’s review, and what this means for future interpretations of the Lanham Act.
At its core, this dispute pits Dewberry Engineers, a civil engineering and surveying firm, against Dewberry Group, a real estate developer operating primarily in the Southern United States. The controversy arose from conflicting claims over the use of the “Dewberry” name—a brand identity both parties sought to protect and leverage in their respective fields.
Dewberry Engineers, founded in the 1950s in Virginia, expanded its operations over the years to include real estate development services across the nation. On the other hand, Dewberry Group, based in Georgia, focused on real estate development through affiliates owned by John Dewberry. The clash intensified in 2006 when legal actions were initiated, leading to a confidential settlement in 2007 that addressed the terms of using the “DEWBERRY” mark.
Fast forward to 2020, Dewberry Engineers reignited the legal battle in federal court in Virginia, alleging breach of contract and trademark infringement by Dewberry Group. The district court ruled in favor of Dewberry Engineers, asserting that profit disgorgement was appropriate. Due to Dewberry Group providing its “infringing” services to affiliates under common ownership, the court treated the revenues linked to Dewberry Group’s actions as appearing on the affiliates’ balance sheets. Consequently, Dewberry Group and its affiliates were considered a unified corporate entity for calculating profits derived from the use of the infringing mark, a decision upheld by the Fourth Circuit.
SCOTUS Review: Key Takeaways
The pivotal moment arrived when the Supreme Court decided to review the case, primarily focusing on whether the calculation of profits under the Lanham Act should extend to include corporate affiliates. This inquiry delves into the concept of “piercing the corporate veil,” a legal doctrine that challenges the separation between a corporation and its shareholders or affiliates in certain circumstances.
The crux of the matter lies in interpreting the Lanham Act’s provisions on profit disgorgement. Dewberry Group argues for a narrow construction, limiting the scope of “defendant’s profits” strictly to the entity directly involved in the infringement. They caution against the broader implications of allowing courts to aggregate profits across corporate affiliates, fearing detrimental consequences to corporate structure and business operations.
Implications for the Lanham Act
The Supreme Court’s forthcoming decision carries significant implications for trademark law and beyond. By examining whether corporate affiliates’ profits can be included in damages calculations, the Court will influence not only future trademark disputes but potentially broader applications of corporate law. Should the Court uphold the lower rulings, it may set a precedent that expands the reach of liability under the Lanham Act, impacting how corporations manage and protect their brand identities.
In conclusion, Dewberry Group Inc. v. Dewberry Engineers stands at a critical juncture in trademark litigation, spotlighting the tension between corporate autonomy and accountability in intellectual property disputes. Stay tuned as we await the Court’s decision.
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