US Supreme Court overturns $43 mln award in 'Dewberry' trademark case

Feb 26 (Reuters) - The U.S. Supreme Court on Wednesday overturned a Virginia judge's award of $43 million to a real-estate developer, ruling that plaintiffs in trademark cases cannot recover profits from a defendants' affiliates without suing the affiliates themselves.

In a unanimous decision by Justice Elena Kagan, the court vacated the award to plaintiff Dewberry Engineers, which had sued rival developer Dewberry Group over its use of the "Dewberry" name.

Dewberry Engineers attorney Elbert Lin of Hunton Andrews Kurth said that the company "appreciates the deliberately narrow ruling and looks forward to reclaiming a disgorgement award on remand."

An attorney for Dewberry Group did not immediately respond to a request for comment on the decision.

Virginia engineering firm Dewberry Engineers began operating in the 1950s and later expanded to add real estate development services in the southeastern United States. Developer John Dewberry founded Atlanta-based Dewberry Group in 1989, which provides similar real estate services through several affiliates.

infringement in 2006. The companies settled in 2007.

Dewberry Capital changed its name to Dewberry Group in 2017 and began offering services under sub-brands including Dewberry Living, Dewberry Office and Studio Dewberry. Dewberry Engineers sued Dewberry Group again in 2020 for allegedly infringing its trademarks and breaking their settlement agreement.

U.S. District Judge Liam O'Grady ruled for Dewberry Engineers in 2021, and later awarded it $43 million in profits stemming from intentional trademark infringement. The Richmond, Virginia-based 4th U.S. Circuit Court of Appeals upheld O'Grady's decisions in 2023.

Dewberry Group argued in its appeal to the Supreme Court that O'Grady had wrongly awarded Dewberry Engineers the profits of group affiliates that were not named in the case. The justices agreed with Dewberry Group on Wednesday and sent the case back to the Virginia court.

"The Engineers chose not to add the Group's property-owning affiliates as defendants," Kagan wrote. "Accordingly, the affiliates' profits are not the (statutorily disgorgable) 'defendant's profits' as ordinarily understood."

The case is Dewberry Group Inc v. Dewberry Engineers Inc, U.S. Supreme Court, No. 23-900.