Dewberry Group v. Dewberry Engineers: Corporate Separateness Survives the Lanham Act

Dewberry Group, Inc. v. Dewberry Engineers Inc., No. 23-900, 604 U.S. ___ (2025), decided February 26, 2025, is a short, unanimous opinion with outsized practical consequences for trademark remedies. The question was whether, in awarding “the defendant’s profits” under the Lanham Act’s disgorgement provision, a court may reach the profits of the defendant’s separately incorporated affiliates that were never named as parties. The Court, in an opinion by Justice Kagan, said no — and in doing so reaffirmed that bedrock principles of corporate separateness are not suspended by the remedial provisions of trademark law.

At a glance

• Case: Dewberry Group, Inc. v. Dewberry Engineers Inc., No. 23-900, 604 U.S. ___ (2025)
• Decided: February 26, 2025; unanimous, opinion by Justice Kagan, concurrence by Justice Sotomayor
• Holding: Under 15 U.S.C. § 1117(a), an award of “the defendant’s profits” is limited to the profits of the named defendant(s); the profits of non-party affiliates cannot be aggregated absent veil-piercing
• Status: Fourth Circuit’s affirmance vacated; remanded to recalculate the award (the ~$43 million figure set aside)

The remedial provision and the problem

Section 35(a) of the Lanham Act, 15 U.S.C. § 1117(a), authorizes a successful trademark plaintiff to recover, subject to equitable principles, “the defendant’s profits.” The disgorgement remedy is designed to capture the gains a defendant realized from its infringement. The interpretive difficulty in Dewberry arose from a common corporate structure: the named defendant, Dewberry Group, operated as part of a corporate family, generating revenue that flowed through separately incorporated affiliates that the plaintiff did not name as parties.

Having prevailed on infringement, Dewberry Engineers persuaded the district court to calculate “the defendant’s profits” by treating Dewberry Group and its non-party affiliates as a single economic unit — on the theory that the named defendant itself booked little profit while its affiliates captured the economic benefit. The court aggregated the affiliates’ earnings and awarded approximately $43 million. The Fourth Circuit affirmed.

The holding: “the defendant” means the defendant

The Supreme Court vacated. The statutory text authorizes recovery of “the defendant’s profits,” and under settled corporate-law principles a corporation is a legal person distinct from its affiliates, even those under common ownership. The profits of a separately incorporated affiliate are, as a matter of law, that affiliate’s profits — not the defendant’s. Because the plaintiff had neither named the affiliates as defendants nor sought to pierce the corporate veil to disregard their separate existence, their earnings could not be folded into the defendant’s profits for purposes of § 1117(a).

The reasoning is notable for its restraint. The Court did not announce a special trademark rule; it applied ordinary principles of corporate personality to the statutory word “defendant.” Veil-piercing and related doctrines remain available to reach affiliated entities, but they must be invoked and proven, not assumed. The Court declined to resolve arguments about how the statute’s separate “just-sum” provision — which allows a court to enter judgment for a sum it finds just where the recovery based on profits is either inadequate or excessive — might permit a court to reflect economic reality on remand. That question was left open.

Justice Sotomayor concurred to caution that the decision should not be read to let defendants escape disgorgement through formalistic intra-corporate arrangements; courts retain tools to look at economic substance through proper channels, including the just-sum provision and ordinary principles for valuing a defendant’s true profits.

Open questions

The principal unresolved issue is the reach of the just-sum provision. On remand, may the court arrive at a figure approximating the economic benefit the defendant actually derived — for instance, by scrutinizing transfer pricing or below-market dealings between the defendant and its affiliates — without formally aggregating the affiliates’ profits? The Court’s express refusal to decide leaves that to the lower courts, and it is where the practical fight over disgorgement in corporate-family cases will now occur.

Implications for litigants

• Name every entity that profits. A trademark plaintiff seeking disgorgement against a corporate family must name as defendants each entity whose profits it intends to reach — or be prepared to pierce the veil. Suing only the operating shell invites a Dewberry problem.
• Plead veil-piercing where warranted. Where affiliates are alter egos or were structured to divert profits, the plaintiff must plead and prove that theory; the court will not disregard corporate separateness on its own.
• Structure has remedial consequences. For businesses, the decision is a reminder that corporate separateness retains force in the disgorgement context — though the just-sum provision and veil-piercing remain live avenues for plaintiffs, so separateness is not an absolute shield.

Frequently asked questions

What does “the defendant’s profits” mean after Dewberry? It means the profits of the entity actually named as a defendant — not the combined profits of its corporate family, unless the plaintiff names those affiliates or pierces the corporate veil.

Did the plaintiff lose its case? No. The infringement liability stood; only the $43 million profits award was vacated and sent back for recalculation under the correct standard.

Can affiliates’ profits ever be reached? Yes — by naming them as defendants, by piercing the corporate veil, or potentially through the Lanham Act’s “just-sum” provision, an avenue the Court expressly left open.

Authorities and sources

• Dewberry Group, Inc. v. Dewberry Engineers Inc., No. 23-900, 604 U.S. ___ (Feb. 26, 2025). Date, docket, unanimous Kagan opinion with Sotomayor concurrence, and the vacated ~$43 million award corroborated by the AIPLA case report (Feb. 27, 2025) and client analyses from Debevoise & Plimpton, Morrison & Foerster, Skadden, and Mitchell Silberberg & Knupp.