In Minnesota Pet Breeders, Inc. v. Schell & Kampeter, Inc., the Court of Appeals for the Eighth Circuit held that a trademark owner need not prove actual market penetration in a geographic area to recover an infringer's profits under Section 35(a) of the Lanham Act.

Minnesota Pet Breeders, Inc. (MPB) sold dry pet food under its federally registered mark PRO-DIET in a limited geographic area. After they commenced use of PRO-DIET, the defendants, Schell & Kampeter, Inc. (S&K), learned of MPB's federal registration and unsuccessfully attempted to purchase the mark from MPB. Although S&K nevertheless continued to use the PRO-DIET mark for dry pet food, they sold no such products within MPB's geographic business area.

MPB brought suit against S&K, alleging willful infringement of the PRO-DIET trademark, and seeking injunctive relief, as well as an accounting of S&K's profits under Section 35(a) of the Lanham Act. The lower court denied summary judgment with respect to MPB's request for an injunction but granted summary judgment dismissing MPB's claim for profits on the basis that S&K had made no infringing sales in MPB's area of "actual market penetration." MPB thereafter voluntarily dismissed its claims for injunctive relief so as to allow a direct appeal of the judgment denying profits.

The Eighth Circuit disagreed with the lower court's determination that, due to lack of actual market penetration, MPB was not entitled to an accounting of profits as a matter of law. The Eighth Circuit observed that an accounting of profits "may be appropriate to remedy a registered owner's actual loss, or to deter a willful bad faith infringer, despite the absence of direct competition...." Moreover, ownership of a federal trademark registration affords the owner the right to protection nationwide. Furthermore, since all remedies available under the Lanham Act are equitable in nature, the Eighth Circuit held that, in a geographic area case, an accounting of profits "cannot be made unavailable as a matter of law when another equitable remedy, injunction, requires a trial." Since the lower court, however, made no determination as to the merits of an injunction, the lower court could not properly even consider the profits issue.

The appellate court nevertheless affirmed the lower court's judgment due to MPB's own actions, since MPB had voluntarily dismissed its claims for injunctive relief. Therefore, it had deprived the lower court of its ability to adjudicate the claims for injunctive relief, and, on that basis, the appellate court upheld the lower court's judgment denying MPB an accounting of profits.