德伯里集团诉德伯里工程师公司案

Dewberry Engineers successfully sued Dewberry Group—a competitor real-estate development company—for trademark infringement under the Lanham Act. Dewberry Group provides services to separately incorporated affiliates that own commercial properties and generate rental income; Dewberry Group itself operates at a loss. The District Court treated Dewberry Group and its affiliates "as a single corporate entity" and awarded Dewberry Engineers nearly $43 million in profits. A divided Fourth Circuit panel affirmed. The Supreme Court granted certiorari and heard arguments on December 11, 2024.

The Supreme Court unanimously (9-0) vacated the Fourth Circuit's decision and remanded the case. Justice Kagan authored the opinion, holding that in awarding "defendant's profits" under §1117(a), a court can award only profits ascribable to the "defendant" itself—the party against whom relief is sought. The affiliates' profits are not statutorily disgorgable as "defendant's profits" absent a legal basis like veil piercing. Justice Sotomayor filed a concurring opinion.

Whether an award of the "defendant's profits" under the Lanham Act can include an order for the defendant to disgorge the distinct profits of legally separate non-party corporate affiliates. The central question was whether courts may aggregate profits of non-party affiliates when calculating disgorgement awards against a named defendant.

The decision reaffirms the vital importance of respecting corporate separateness, allowing companies to structure their operations and anticipate liability in a sensible and predictable manner. The holding will reverberate beyond the Lanham Act to other statutory schemes that permit disgorgement and other remedies. While defendants can better shield affiliates from discovery and damages, plaintiffs may pursue alternative theories including piercing the corporate veil or invoking the "just-sum" provision to expand potential recovery.