Actual Damages Derived from Trademark Infringement Must be Proved Before the Courts

DC Shoes Inc. filed a court action against Siete Nueve Tres San Rafael seeking to enjoin use of the disputed mark and damages. Division 3 of the Federal Court of Appeals allowed the injunction but refused to award damages (Federal Court of Appeals, Division 3, September 10, 2015, “DC Shoes INC v. Seven Nine Three San Rafael SA”, Docket No. 12,706/07).

There is a widespread consensus among the different Divisions of the Federal Court of Appeals, shared by most authors, that trademark infringement causes an unjustified damage that should be compensated.

In this case, the judge of first instance considered that the use made by the defendant was in good faith and therefore there was neither infringement nor need for compensation. The Federal Court of Appeals reversed, holding that there was no doubt that the disputed use constituted a trademark infringement that the right holder was entitled to avoid regardless of the good or bad faith of the defendant. However, the Federal Court rejected the action for damages as it ruled that the plaintiff failed to prove its assertions of having suffered loss of sales and illicit consumers’ deviation.

This case is relevant because it reinforces the notion that the owner of trademark must submit sufficient evidence of any alleged damage.