Protect Your Business: Supreme Court Ruling – Corporate Structure Matters More Than Ever
Successful business owners work hard to build and grow their company, investing time, resources and energy to create something valuable. But what if one lawsuit could put everything you’ve built at risk?
A recent U.S. Supreme Court decision has reinforced an important legal principle: businesses that don’t separate their assets properly can face serious financial consequences in litigation. If your company owns multiple brands, properties, or ventures under a single corporate entity You may be vulnerable to massive liability.
A Supreme Court Case That Every Business Owner Should Pay Attention To
On February 26, 2025, the Supreme Court ruled in Dewberry Group, Inc. v. Dewberry Engineers Inc., addressing an issue in trademark law, whether a company’s affiliated businesses can be forced to pay damages when they weren’t directly named in a lawsuit.
Initially, the lower courts treated the defendant and its affiliated companies as a single entity, ordering them to pay $43 million in damages. The Supreme Court ruled that only the named defendant’s profits could be considered—not those of its separate affiliates. They vacated the lower Court’s decision and remanded for further proceedings.
This case highlights a key lesson: if your businesses are not properly structured as separate legal entities, a lawsuit could put everything at risk.
Background
Trademark infringement can result in an award of the infringer’s profits. In this case, the lower court awarded Dewberry Group the profits of the named defendant, Dewberry Engineers, and its affiliated corporations, which were not named in the lawsuit. Dewberry Engineers and the affiliated corporations are all owned by a single individual. Dewberry Engineers provided services to the other corporations at below-market rates and did not generate profits. However the affiliated corporations reported $43 million in profits.?
The Dangers of Keeping Everything Under One Company
Many business owners operate within a single corporation or LLC, believing it’s enough to protect their interests. But if you have multiple revenue streams, valuable assets, or distinct business operations under one umbrella, a legal dispute involving one part of your company could threaten everything else you own.
Why Corporate Separation Matters
What Business Owners Should Do Now
The Supreme Court’s ruling makes it clear: courts will respect corporate separateness, but only if you take the proper legal steps. You could expose yourself to unnecessary risk if you don’t properly separate your businesses and assets. Do I have multiple businesses, brands, or assets under one legal entity?
Ask Yourself:
If you’re unsure, now is the time to act. A strategic corporate structure is one of the most effective ways to protect what you’ve built. Call me at 248-433-7381, and we can discuss your corporate structure.
My book Invisible Assets: How to Maximize the Hidden Value in Your Business will help you understand your business’s IP and its value. It will also explain the traps and mistakes that can get you sued.
About the Author:
Bill Honaker, “The IP Guy” is a former USPTO Examiner, a partner with Dickinson-Wright, and author of the new book, Invisible Assets – How to Maximize the Hidden Value in Your Business.
To get answers to your questions schedule a time to talk, you can access my calendar by clicking here, email [email protected], or call me at 248-433-7381.