Friday, November 13, 2009

Trademark Infringement: Attorney’s Fees

Welding Servs. v. Forman, 2008 U.S. App. LEXIS 24402 (11th Cir. Ga. Dec. 2, 2008)

NOTICE: SEE FEDERAL RULES OF APPELLATE PROCEDURE RULE 32.1 WHICH GOVERN CITATION TO UNPUBLISHED OPINIONS.

The District Court entered a summary judgment in favor of the defendant/appellee and ordered the plaintiff/appellant to pay attorneys fees. The court of appeals examined whether the district court abused its discretion when awarding attorneys fees to the defendant/appellee. In awarding attorneys fees to the defendant/appellee, the district court cited the following factors (1) the trademark holder waited until three of its former employees acquired the alleged infringer, even though the alleged infringer had used the mark two years prior to the lawsuit commencing; (2) The alleged infringer tried to resolve the dispute without litigation, and responded to the holder’s cease and desist letter by volunteering to change the mark; and (3) Despite offers of settlement, including a pre-discovery offer of judgment, the trademark holder pursued the litigation. The court of appeals found that the district court did not abuse its discretion in awarding attorneys fees to the defendant/appellee. Also, the plaintiff/appellant waived its challenge of the attorneys fees award because the plaintiff/appellee did not challenge the amount at the district court level.

On another issue, the court of appeals did find that the district court erred in one respect. The court of appeals ruled contrary to the district court’s finding that the defendant/appellee had volunteered to change the allegedly offending mark in offer of settlement.

The district court’s judgment was reversed in part, affirmed in part, and remanded.

Monday, November 9, 2009

Trademark Counterfeiting Act: Parallel Brands, The Helms-Burton Act, Cuban Cigars

United States v. Penton, 2008 U.S. App. LEXIS 25373 (11th Cir. Fla. Dec. 17, 2008)

NOTICE: SEE FEDERAL RULES OF APPELLATE PROCEDURE RULE 32.1 WHICH GOVERN CITATION TO UNPUBLISHED OPINIONS.

The Defendant appealed from a judgment that found him in violation of 18 U.S.C.S. § 2320(a), the Trademark Counterfeiting Act. The defendant was caught when an undercover officer went to his shop and purchased cigar boxes that looked similar to trademarked “Cuban” cigar boxes. The defendant contended that the trademarks of the “Cuban” cigars were not valid United States trademarks because of the Helms-Burton Act, at 22 U.S.C.S. § 6032(h). However, the companies at issue, although originally from Cuba, had set up independently in the United States after the owner families fled from Cuba. The companies had established trademarks in the U.S. by common law. In the meantime, back in Cuba, there were still the other separate brands with the same marks, now run by the Cuban government. Consequently, parallel brands had developed, with the Cuban government selling Cuban style cigars made in Cuba to the rest of the world, and the Cuban exile company selling Cuban style cigars made in the United States distributing them in the U.S. The trademarks for the company owned by the Cuban government are not U.S. trademarks and not entitled to U.S. trademark protection. However, the companies at issue here were the companies based in the United States which own common law U.S. trademarks. Therefore, the trademarks in question are U.S. trademarks, the Helms-Burton Act does not apply here, and these U.S. trademarks are protected. Also, testimony of consumers and experts was not necessary to prove confusion.

Monday, November 2, 2009

Anticybersquatting Consumer Protection Act (ACPA) and Lanham Act: Not Duplicative Damages

St. Luke's Cataract & Laser Inst., P.A. v. Sanderson, 573 F.3d 1186, 1193 (11th Cir. Fla. 2009).

At trial, Plaintiff St. Luke's sued Dr. Sanderson and his LLC, alleging that Dr. Sanderson made unauthorized use of the domain names laserspecialist.com and lasereyelid.com, and the website the LaserSpecialist.com to promote his practice after he had resigned from practicing with St. Luke’s.

The jury found for Dr. Sanderson on a copyright infringement claim, but for St. Luke’s on claims of service mark infringement and ACPA. The United States District Court for the Middle District of Florida declared the ACPA damages should be reduced as duplicative of the service mark damages. Both parties appealed.

The appellate court disagreed with the reduction in ACPA damages. The appeals court found that that ACPA at 15 U.S.C.S. § 1125(d)(3) provided for damages even if duplicative of other damages because the text explicitly states that damages for cyberpiracy are “in addition to” any other available civil remedies.

The appellate court further explained that the damages for ACPA cannot be duplicative for damages for service mark infringement under the Lanham Act because ACPA requires the additional showing of bad faith intent to profit from a domain name.

Thursday, October 29, 2009

Anticybersquatting Consumer Protection Act (ACPA): Bad Faith Intent to Profit

Southern Grouts & Mortars, Inc. v. 3M Corporation, 575 F.3d 1235, 1238 (11th Cir. Fla. 2009)

The Plaintiff-Appellant Southern Grouts owned the trademark for Diamond Brite and wanted to own the rights to the domain name diamondbrite.com. However, the Defendant-Appellee 3M had re-registered its ownership of the domain name diamondbrite.com, even though it did not own the word mark and did not sell a product under that name. The Defendant-Appellee 3M refused to relinquish its registration of the domain name.

Analysis of the two unique circumstances and nine non-exclusive permissive factors for finding bad faith intent to profit weighed in favor of granting 3M’s motion for summary judgment to dismiss the ACPA claim.

The first unique circumstance was that, “through its registration of the diamondbrite.com domain name, 3M had the ability to monitor the viability and value of Internet traffic, the number of “hits,” to diamondbrite.com, and the geographic location of all or most of the “hits,” which could be used to determine strategic commercial information. This assertion was based solely on the report of Mr. Moody, an expert witness for Southern Grout. In the report, Mr. Moody stated that 3M enjoyed a commercial advantage from keeping the registration for diamonbrite.com. The Appellate court found that the District court did not abuse its discretion because the report was “imprecise and unspecific” or “the factual basis is not adequately explained”. The Appellate Court found that even if the report were admissible, Southern Grouts did not identify which part supported the idea that 3M had the ability to use its control over the domain name to monitor hits, and no evidence that 3M intended to do that. Also, there was no explanation in the report how the information would be useful to 3M when there were at least six other registered users of the DIAMOND BRITE mark.

The second unique circumstance Southern Grout argued to show bad faith intent to profit by 3M was that 3M retained control of the domain name not to display content but to prevent others from registering it. The Appellate court stated that bad faith may be proved here by 3M re-registering the domain name a month after receiving the cease and desist letter from Southern Grouts. However, ACPA required intent to profit from that bad faith. The appellate court cited a US Senate report defining cybersquatters, but the Senate report stated nothing about competitors who hold onto a domain name to prevent a competitor from using it. The Appellate court found that the legislative intent of ACPA was to prevent the practice of holding a domain name ransom with intent to profit from selling it for a price. Here, 3M was refusing to sell the domain name at all, and thus was not holding the domain name for ransom. Also, there was no evidence that 3M had the intent to divert customers to its site so that they would purchase their products instead. Therefore, there was no bad faith intent to profit shown from the second unique circumstance.

The appellate court found that of the nine discretionary factors for finding bad faith, § 1125(d)(1)(A): five factors favored the 3M, two factors favored Southern Grout, and the two other factors were inapplicable. Therefore, the nine factors weighted in favor of 3M.

Also, the court of appeals held that Southern Grout’s Lanham Act claim failed because it did not demonstrate that 3M used the domain name in commerce.

Wednesday, October 28, 2009

Trademark Infringement: Injunctions, False Designation of Origin and Strength of Mark, False Advertising

Green Bullion Financial Services, LLC, v. Money4Gold Holdings, Inc., 2009 WL 1758728 (S.D. Fla. June 22, 2009).

False Designation of Origin:

Plaintiff claimed that Defendant is engaging in trademark infringement by creating a false designation of origin of its services. Normally the likelihood of confusion factors are considered as a whole, but here the strength of the plaintiff’s mark factor was determinative. The trademark at issue in this case is the word mark "Cash4Gold" and a stylized logo bearing the same words. The Parties agree that the mark is not inherently distinctive but is a descriptive word mark. Since the mark is descriptive, to be worthy of protection Plaintiff had to show that "Cash4Gold" has acquired "secondary meaning" applying factors from the Conagra case. There was a maximum of eighteen months of use before the infringement in September of 2008.

There are four advertisements in question: a commercial read by Howard Stern on his radio show, frequent nationwide television commercials on “major” cable stations, mark "Cash4Gold" affixed prominently to the car of driver Brandon Knupp, although it is dated August 12, 2008, and corporate advertisements with the Washington Wizards. The court found there was not enough evidence in the record to establish the size of consumer base that was reached with this advertising, recognition of the advertisements, or amount of sales attributable to them. Therefore the court held secondary meaning was not proved.

The second element of determining the strength of the "Cash4Gold" mark is its strength in the marketplace, which was also not proved with the evidence, using the same consideration for secondary meaning.

The court denied the motion for injunction based on false designation of origin for lack of evidence.

False Advertising:

Several advertisements are at issue and all were false. First, sub-affiliates advertising for Defendant placed sponsored links on Google asking the viewer "See our Super Bowl Ad?". These are literally false because they indicate to the viewer that the company placing those links advertised during the Super Bowl. Second, the advertisements containing the name under which Plaintiff does business, Cash4Gold, are also false. They imply that Plaintiff, who does business as Cash4Gold, is the operator of those websites and that the consumer doing business through those websites is doing business with Plaintiff.

However, the second element, of customer deception, was not proved by the evidence in the record. Although literal falsity of several of Defendant's advertisements was apparent and there is no need to prove the advertisements actually deceived any customer, Plaintiff offered no evidence to establish that the literally false advertisements were material to any customer's purchasing decision. Since Plaintiff did not provide evidence establishing that the falsie advertisements influenced the decisions of customers, the court found that Plaintiff was unlikely to succeed on the merits at that time.

The motion for an injunction was not granted.

Sunday, October 25, 2009

Trademark Infringement: Injunctions, Nude Pictures on Infringing Website, Protection for a Stage Name

Paola Miranda v. Eduardo Angel Perez Guerrero. 2009 WL 1381250 (S.D. Fla. May 14, 2009).

An injunction was granted in favor of Plaintiff because she proved likelihood of success on the merits of her Lanham Act Section 43(a) claim, she would suffer irreparable harm, the balance of hardships was in her favor, and the injunction would not disserve the public’s interest. Plaintiff was an entertainer and singer who employed Defendant to promote her. Defendant to nude photographs of Plaintiff under an agreement that they would get placed in Playboy Magazine. The photos were never featured in Playboy and Plaintiff discontinued the services of Defendant. Defendant kept the photos and posted them on a website with Plaintiff’s name as the domain name and under the appearance it was her official website.


First, Plaintiff proved likelihood of success on the merits n her Section 43(a) of the Lanham Act claim. It was undisputed in the record that Plaintiff used "Paula Morena" as her stage name since the beginning of her singing career. Lanham Act provides protection for Plaintiff's stage name because the Act protects "any word, name, symbol, or device,or any combination thereof used by a person ... to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source isunknown."15 U.S.C. s 1127 Plaintiff's use of the name "Paula Morena" not only identified her as a particular individual but, more importantly, identified her unique entertainment services. Since Defendant’s wife registered the domain name, there was a close enough relationship to hold Defendant liable as well. In addition, the domain name of www.paolamorena.com, combined with designation of the site as the "official site," clearly misrepresent to the consumer and the public the site's "affiliation, connection, or association" with the entertainer Paola Miranda. The entire site is dedicated to the Plaintiff, featuring her pictures and news articles. Based on the unchallenged evidence given by Plaintiff, the court found that visitors to Defendant's website were likely to believe that Paola Miranda has sponsored or otherwise approved the contents of the site.

Second, Plaintiff proved irreparable harm, not only by likelihood of success on the merits, but also because the photographs Defendant posted on his website are inconsistent with and repugnant to the image that Plaintiff is seeking to project. The public is likely to develop a certain unwanted perception of the Plaintiff as an entertainer if she continues to be associated with the pictures posted on Defendant's website. Naturally, the public's perception about an individual, especially a celebrity, is difficult, if not impossible, to undo.


Third, The balance of the hardships is in Plaintiff’s favor because her reputation is at stake. Also, Defendant holds no rights to the photographs and will suffer no harm if the injunction is granted.


Finally, an injunction would not disserve the public interest. Preventing dissemination of false information and advertising is not against the public interest, but on the contrary serves the public interest.

Saturday, October 24, 2009

Starting A Fashion Business: Legal Issues

I. Intellectual Property

Copyrights

Trademarks

Trade Dress

Dilution

Design Patents

Utility Patents

Trade Secrets

II. Business Entity Forms

Sole Proprietorship

General Partnership

Limited Liability Partnership

Limited Partnership

Limited Liability Limited Partnership

Limited Liability Company

Corporation

III. Other Registrations, Filings and Occupational Licenses

Fictitious Name

Certificate of Use

City License

Restricted Business License

Home Office Permit

Occupational Licenses

Retail Store

Cutting/Sewing/Pressing Service

Embroidering/Monograming Service

Consultant

Designer or Interior Designer

Artist/Illustrator

IV. Contracts

Employment

Work for Hire

Consulting or Independent Contractor

Confidentiality and Non-Competition

Commercial Workspace

Real Estate Purchase Agreements

Commercial Leases

Materials

Manufacturing and Distribution

Website Development, Hosting and Maintenance Agreements

Licensing

Advertising and Publicity

Merger or Acquisition of Fashion Businesses

Friday, October 23, 2009

Fashion Report: New Orleans

When talking about New Orleans fashion, it isn’t just about the clothes. New Orleans is a way of life, a spirit. There is a certain joie de vivre about the people and everything about the city. I arrived the Sunday of the French Quarter Jazz Festival. It seems like every other week there is some kind of festival in New Orleans. Even when I went in the week or weekend not during a festival, the people and atmosphere are vibrant and have that back-beat cool. There are always street performers and artists on every block, painting, playing chess, a guitar, sax, or miming.


People in New Orleans express their love of eccentricity and tradition with their clothing. If there is one uniform in New Orleans, it is the hat. The hat of New Orleans is the fedora. Jazz musicians wear fedoras as they play in dark smoky bars, revelers wear them as they walk through the parades, and residents wear them while sitting on their front porch reading a newspaper. And if you are looking for a truly original hat, go to Fleur de Paris on Royal Street. This is a couture French millinery, which specializes in marvelous hats worn by local society women and celebrities the likes of Elizabeth Taylor and Madonna.


The next generation of New Orleans continues the funky vibe by mixing and matching vintage. A treasure trove of unique pieces by young designers is the Decatur St. Exchange. The pieces here are all made by local designers and have a deconstructed multicolor look. Definitely go check this place out.


Whatever you wear in New Orleans, it has to be worn with a party attitude. After all, Mardis Gras beads are available here year round. Laissez le bon temps roulez!