Profits, Symbols, and Infringement: The SCOTUS in Mishawaka v. Kresge

The U.S. Supreme Court’s 1942 decision in Mishawaka Rubber & Woolen Manufacturing Co. v. S. S. Kresge Co. is a cornerstone in American trademark law, clarifying how profits should be measured when infringement is established.

It elevated the principle that a trademark is not merely a label but a psychological symbol with real commercial power and that those who unlawfully trade upon it must disgorge their gains.

What's The Matter?

Mishawaka had created and popularised its red plug trademark embedded in the heel of its shoes, investing heavily to make it a mark of quality in the public’s mind.

Kresge, a retailer, sold heels not made by Mishawaka but marked with a confusingly similar red plug, of inferior quality.

While there was no direct proof that any buyer was actually deceived, the District Court recognised the “reasonable likelihood” of confusion. It enjoined infringement but limited recovery of profits to sales Mishawaka could affirmatively prove were made because of deception. The Sixth Circuit affirmed.

Justice Felix Frankfurter, writing for the Supreme Court, reversed.

The Court held that Section 19 of the 1905 Trademark Act does not require the trademark owner to prove that each sale was diverted from him because of confusion. Once infringement is established, the owner need only prove the infringer’s sales.

The burden shifts to the infringer to show what portion of profits, if any, were not attributable to the unlawful use of the mark. Otherwise, all profits belong to the mark’s rightful owner.

The Court grounded this in policy: trademarks exist because symbols influence human behavior. Once a mark acquires goodwill, its exploitation by another draws upon value created by the owner. To deny recovery absent proof of actual confusion would “give the windfall to the wrongdoer.”

Instead, equity demands that ambiguity in tracing profits be resolved against the infringer, not the victim.

Justice Black dissented, joined by Justices Douglas and Murphy, cautioning that Mishawaka did not even sell detached heels, and Kresge’s sales may not have diverted customers at all. He feared the majority granted Mishawaka an unearned windfall and imposed a penalty on Kresge, despite no fraudulent intent or proof of actual harm. For him, an injunction sufficed.

Yet the majority’s vision has endured: trademark protection is not limited to instances of proven deception but extends to preserving the symbol’s marketplace magnetism. By placing the evidentiary burden on the infringer, the Court fortified the deterrent value of trademark law and underscored its psychological dimension.

Mishawaka thus represents a decisive moment when the Court tied trademark law not only to fairness between competitors but also to consumer perception and the intangible power of symbols in commerce.

Case CITATION: Mishawaka Rubber & Woolen Mfg. Co. v. S. S. Kresge Co., 316 U.S. 203 (1942)