Dewberry Group, Inc. v. Dewberry Engineers Inc.

Court: U.S. Supreme Court

Docket: 23-900

Opinion Date: February 26, 2025

Judge: Elena Kagan

Areas of Law: Business Law, Corporate Compliance, Intellectual Property, Trademark

Dewberry Engineers sued Dewberry Group for trademark infringement under the Lanham Act, alleging that Dewberry Group's use of the "Dewberry" name violated their trademark rights. Dewberry Group, a real-estate development company, provides services to separately incorporated affiliates, which own commercial properties. The affiliates generate rental income, while Dewberry Group operates at a loss, surviving through cash infusions from its owner, John Dewberry.

The District Court found Dewberry Group liable for trademark infringement and awarded Dewberry Engineers nearly $43 million in profits. The court treated Dewberry Group and its affiliates as a single corporate entity, totaling the affiliates' real-estate profits to calculate the award. The Fourth Circuit Court of Appeals affirmed this decision, agreeing with the District Court's approach to treat the companies as a single entity due to their economic reality.

The Supreme Court of the United States reviewed the case and held that the District Court erred in treating Dewberry Group and its affiliates as a single corporate entity for calculating profits. The Court ruled that under the Lanham Act, only the profits of the named defendant, Dewberry Group, could be awarded. The affiliates' profits could not be considered as the defendant's profits since they were not named as defendants in the lawsuit. The Supreme Court vacated the Fourth Circuit's decision and remanded the case for a new award proceeding consistent with its opinion.