Arkansas Business Litigation Lawyer & Attorney : Allen Law Firm : Serving Little Rock, Fort Smith, North Little Rock

A couple of interesting issues with trademark and copyright management are going on with Apple's OS X operating system. InformationWeek reports that Psystar has moved to dismiss Apple's copyright infringement claim based on the system, arguing that Apple failed to register a copyright for OS X .

 

Meanwhile, on the trademark front, Apple has filed a trademark application for OS X without the Mac prefix. Apparently the move is part of a promotional campaign to focus on Apple's technology products other than computers.

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An odd dispute over a school newspaper name occurred in St. Louis Univ. v. Meyer, 2008 U.S. Dist. LEXIS 104032 (E.D. Mo. Dec. 24, 2008).

 

The school newspaper at St. Louis University is "The University News." In 2007, circumstances arose where the paper may have to break away from the university. In anticipation of this event, a professor registered a corporation. The corporate name consisted of "The University News" along with the paper's slogan, A Student Voice Serving St. Louis University Since 1921." The corporation never printed or sold anything, and the professor dissolved it when the university decided to retain the paper. The university still sued him for trademark infringement and other claims.

 

The district court granted summary judgment, finding the professor's use did not amount to trademark use that can be remedied through the Lanham Act. One count still remains--a claim based on a state statute that creates a cause of action for misuse of a benevolent society name. However, the university is only pursuing injunctive relief under this claim, which would now appear to be a moot request.

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An Arkansas trademark infringement complaint was recently filed. Bad Boy Bad Boy, Inc. v. Bad Boy Enterprises, LLC, No. 08-050 (E.D. Ark., filed 9/12/08). Bad Boy Inc. sells lawnmowers, while  Bad Boy Enterprises sells all terrain vehicles that are primarily used for hunting and related outdoor travel. According to the Complaint, both companies own federal trademark registrations for variations of "Bad Boy," and Plaintiff's last application was denied based on confusion with Defendant's registrations. The Complaint seeks damages, an injunction, and cancellation of Defendant's marks.

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The District Court of Minnesota has determined that keyword advertising is "use in commerce" for purposes of trademark infringement. Hysitron Inc. v. MTS Systems Corp., 2008 WL 3161969 (D. Minn. 8/1/08).

 

MTS purchased the term "hysitron" to generate a sponsored link through Google, and Hysitron filed suit. The Eighth Circuit has not determined if sponsored link advertising constitutes "use in commerce." The court sided with the majority of courts and found that sponsored link advertising is "use in commerce."   

 

Of course, the use in commerce issue is pedagogical unless the plaintiff can show likelihood of confusion. Here, the court agreed with Hysitron that additional discovery is needed to determine likelihood of confusion.

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The District Court of Minnesota granted summary judgment based on laces in Roederer v. J. Garcia Carrion, S.A., 2008 WL 2901609 (D. Minn. 7/23/08).

 

Roederer, which produces the famous Cristal champagne, filed suit for trademark infringement and dilution based on the defendants' selling Cristalino wine. Cristalino had been sold in the U.S. since 1993. The document records of an unrelated USPTO proceeding showed that Roederer's attorneys obtained an affidavit in 1995 that alerted them to the sale of Cristalino. 

 

Roederer did not file this suit until 2002, providing no rational basis for the delay. The court found the delay was inexcusable and would the defendants would incur prejudice if the suit proceeded. The court granted summary judgment to the defendants.

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On several occasions, we have posted about Rotoworks Int'l Ltd. v. Grassworks USA, LLC (most recently posted here 11/21/07). The case has concluded in a very favorable judgment for Rotoworks.The jury awarded a total of $578,545.66 for trademark infringement. The court then found this was an exceptional case and awarded attorney's fees of $191,699.30. (See judgment here). Finding the case exceptional was not particularly difficult, given the court had to impose sanctions pursuant to Rule 11 (See order granting sanctions here).  

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Microsoft has filed a lawsuit alleging trademark infringement and copyright infringement. See Microsoft Corp. v. Delta Computer Experts, LLC, No. 08-0168 (E.D. Ark., filed 6/9/08). According to the complaint, defendants distributed unauthorized copies of Microsoft software like Word and Power Point. Microsoft is seeking an extensive array of damages.

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The Western District of Arkansas dismissed a trademark case for lack of jurisdiction in Flexible Staffing Services, Inc. v. Integro Employment Services, Inc., 2008 WL 1928827 (W.D. Ark. 4/29/08) (previously posted 1/23/08). Integro filed an Arkansas state trademark case against one of FSS's affiliates in Northwest Arkansas. The district court held the federal action was really a response to the state action raising a federal defense. The court held it had no jurisdiction over the dispute and dismissed the federal action.

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Candy Bouquet has filed a trademark infringement action against one of its former franchisees. Candy Bouquet International, Inc. v. McClendon, No. 08-340 (E.D. Ark., filed 4/ 17/08). According to the complaint, McClendon owned three Candy Boutique franchises. After violating the terms of her franchise agreements, Candy Bouquet terminated the agreements. The complaint alleges McClendon is still using Candy Bouquet's trademarks and trade secrets, although the complaint has no count for trade secret misappropriation.

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The Eastern District of Missouri granted a temporary restraining order based on trademark infringement in Sensient Technologies Corp. v. SensoryFlavors, Inc., 2008 WL 762092 (E.D. Mo. 3/21/08).

 

Sensient Technologies is the corporate umbrella that used to be Universal Foods Corporation. One of Sensient's companies is Sensient Flavors. SensoryFlavors is a competitor that was formed by Charles Nicolais, the former head of Sensient Colors, Inc., which is another of Sensient's subsidiaries.  Defendants argued they came up with the name SensoryFlavors without copying Sensient Flavors.

 

The court easily granted the TRO and only required a $25,000 bond. This case is a good reminder that trademark infringement turns on likelihood of confusion; it does not matter how the infringing mark was created.

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The Western District of Missouri dismissed a declaratory action claiming no trademark infringement in Sustainable Community Development, LLC v. EMRO USA, Inc., 2008 WL 495603 (W.D. Mo. 2/20/08).

 

The parties have an interesting history. SCD filed suit in 2005, which the parties eventually settled. In August 2007, EMRO sent a cease and desist letter alleging trademark violations. Instead of responding, SCD filed this action in Missouri. One day after receiving service, EMRO filed suit in Texas and moved to dismiss this case. The court held that this lawsuit was a preemptive strike suit for declaratory relief. See Northwest Airlines, Inc. v. American Airlines, Inc., 989 F.2d 1002 (8th Cir. 1993). The court dismissed this case, and the parties' dispute will proceed in the Texas lawsuit.  

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The Eastern District of Arkansas denied cross motions for summary judgment in Otto Dental Supply, Inc. v. Kerr Corp., 2008 WL 410630 (E.D. Ark. 2/13/08).

 

For 25 years, Otto Dental was an authorized dealer of Kerr, using Kerr's trademarks to market and sell its goods. In 2004, Kerr imposed a purchasing requirement on its dealers. When Otto could not meet the requirement, Kerr terminated the relationship. Otto argues the parties formed a franchise under the Arkansas Franchise Practices Act, and Kerr violated the act. See A.C.A. § 4-72-201, et seq. Kerr argues the parties did not create a franchise.

 

Both parties moved for summary judgment, but the court determined that the jury must decide whether the parties created a franchise.

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A declaratory action alleging no trademark infringement was filed yesterday in the Western District of Arkansas. Flexible Staffing Services, Inc. v. Integro Employment Services, Inc., No. 08-5018 (W.D. Ark., filed 1/22/08).

 

Flexible Staffing Services (FSS) is a nationwide firm providing temporary staffing services. FSS operates in 10 states by setting up local affiliates that use variations of the FSS name. Integro offers a competing service in northwest Arkansas. Integro claimed trademark rights to "flexible staffing" and filed a state trademark infringement action against the FSS affiliate in northwest Arkansas (but did not sue FSS).

 

FSS filed this action to declare that the terms "flexible" and "staffing" are generic for the temporary staffing services industry. Because it is not a party to the state lawsuit, FSS claims the federal lawsuit is necessary to fully defend its rights.  

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The District Court of Minnesota granted a preliminary injunction based on trademark infringement and trademark dilution in J&B Wholesale Distributing, Inc. v. Redux Beverages, LLC, 2007 WL 4563457 (D. Minn. 12/20/07).

 

J&B sells steaks and other meat products under the trademark No Name. It owns several trademark registrations for "No Name" and has sales over $26 million. Redux sold Cocaine energy drinks, but the FDA caused them to quit using the word "cocaine." Redux renamed its energy drinks No Name.  

 

Although the companies are not direct competitors, the court held the products are closely related enough to create confusion. The court found that J&B was likely to succeed on both claims and would suffer irreparable harm without the injunction. J&B was required to post a $50,000 bond.

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The District Court of Minnesota granted a preliminary injunction based on trademark infringement and false advertising in Fitger's On-The-Lake, LLC v. The Fitger Company, LLC, 2007 WL 4531502 (D. Minn. 12/19/07).

 

Fitger's has operated a brewery in Minnesota since the 1880's, and it holds a number of trademarks that have now become famous. The current location is a full resort spa complete with a hotel, restaurants and ample shopping. The defendant Douglas Donnelly claims he is related to August Fitger, the original brewmaster for Fitger's. Donnelly believes this entitles him to set up businesses using Fitger's trademarks and making false statements that his companies are the "official Fitger beer" operated "since 1881." He even filed fraudulent trademark applications with the USPTO.

 

Despite Donnelly's novel argument, ancestry cannot confer trademark rights. The court granted the preliminary injunction both on grounds of trademark infringement and false advertising.

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The Western District of Arkansas denied plaintiff's motion to dismiss the counterclaim in Lewis & Clark Outdoors, Inc. v. Mahco, Inc., 2007 WL 4510364 (W.D. Ark. 12/18/07) (previously posted 5/1/07).

 

Mahco has counterclaimed against Lewis & Clark Outfitters (LCO) for trademark infringement. Mahco has admitted it no longer uses the "Lewis & Clark" mark, and LCO moved to dismiss on grounds of abandonment. To abandon a trademark, the owner has to cease use and show an intent not to resume use. The court denied the motion because all that LCO established is that Mahco no longer uses the mark; no evidence has been submitted regarding Mahco's intent.

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A trademark infringement dispute involving university merchandise has taken an interesting turn. See Lloyd Sales Co., Inc. v. The Game, LLC, No. 07-1198 (E.D. Ark., filed 12/18/07). The Game sells merchandise of various universities by placing university logos on its own 3-bar logo. Lloyd Sales provides similar goods for the University of Arkansas and filed this suit to declare its use of a similar 3-bar pattern is not trademark infringement.

 

It is unclear what this lawsuit is meant to accomplish because The Game has already filed suit against Lloyd Sales in Georgia. See The Game, LLC v. Lloyd Sales Co., Inc., No. 07-2498 (N.D. Ga., filed 10/10/07). In that case, Lloyd Sales has filed a motion to dismiss for lack of jurisdiction, or alternatively, to transfer the case to Arkansas. The motion was submitted to United States District Court Judge Charles A. Pannell yesterday.

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The Western District of Missouri granted a preliminary injunction based on trademark infringement in Community of Christ Copyright Corp. v. Miller, 2007 WL 4333192 (W.D. Mo. 12/7/07).

 

Community of Christ holds federal trademark registrations for "RLDS" and "Reorganized Church of Jesus Christ of Latter Day Saints." Defendants' church is named South Restoration Branch, but they advertised themselves as members of RLDS. The court easily granted the preliminary injunction and rejected the defendants' fair use defense. Contrary to some public opinion, use of trademarks for worshiping God are not automatically fair use.

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The Eastern District of Missouri denied summary judgment in St. Louis Cardinals, LLC v. Lewis, 2007 WL 4205798 (E.D. Mo. 11/26/07).

 

Douglas Lewis has attempted to obtain federal trademark registrations based on the St. Louis Cardinals' trademarks, such as this application for "Go Cards." He also obtained a number of state registrations. The Cardinals filed this action for trademark infringement, and  Lewis moved for summary judgment. In a one-page opinion, the court denied the motion without comment. It is likely the Cardinals will file their own motion for summary judgment before the trial.

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The Western District of Arkansas found the defendant in civil contempt for violating a court order in Rotoworks Int'l Ltd. v. Grassworks USA, LLC, 2007 WL 3444261 (W.D. Ark. 11/8/07). The most interesting part of the ruling came from the court's frustration with the attorneys, which was already evident in the last order (previously posted 9/12/07).

 

The final straw came when the parties sent letters to the court without first getting permission to do so.  Aside from suffering service defects, these letters were "presumptuous and inappropriate." The court stated:

This is not the first time that personal feuding between the attorneys has disrupted the orderly progress of this case and wasted judicial resources, and the Court will have no more of such conduct

The court then stated it may hold a hearing to examine the conduct of the attorneys and concluded with this directive:

It may be that, after such a hearing, it will be appropriate to refer the entire matter to the Arkansas Supreme Court on Professional Conduct for a review of the conduct of the attorneys throughout the case. In the meantime, the Court will insist that the attorneys focus their efforts and energies on the issues which affect their respective clients, and cease bickering among themselves.  

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The Eastern District of Arkansas imposed sanctions in Kashlan v. TCBY Systems, LLC, 2007 WL 3309123 (E.D. Ark 11/6/07).

 

Kashlan sued TCBY for breach of contract and trademark infringement. Kashlan refused to comply with discovery requests and provided inadequate information to others. The Court was clearly most disturbed by Kashlan's counsel refusing to communicate with TCBY's counsel regarding discovery issues:

The Court notes that the majority of these discovery issues could have and should have been resolved without court intervention if Kashlan's counsel had taken the time to communicate. That Plaintiff's counsel refused to engage in any discussions regarding discovery, thereby necessitating the filing of a motion, supports an award of sanctions.

The Court will award reasonable expenses, including attorney's fees. Kashlan's counsel will be responsible for paying the expenses.  

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A recent trademark infringement case featured the seldom-used counterclaim-in-reply. Feed Management Systems, Inc. v. Brill, 2007 WL 3156282 (D. Minn. 10/30/07).

 

Feed Management filed suit for breach of contract and related claims. With permission from the court, Brill filed a counterclaim for trademark infringement after the deadline to amend pleadings. Feed Management filed a counterclaim-in-reply for trademark infringement, which Brill moved to dismiss as not permitted under Fed. R. Civ. P. 7(a).

 

The court stated a counterclaim-in-reply is a proper pleading if it is a compulsory reply to the counterclaim. The court determined that Feed Management's counterclaim-in-reply for trademark infringement was a compulsory reply to Brill's counterclaim and permitted the pleading.

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Coulson Oil has filed a declaratory action of no trademark infringement in the Eastern District of Arkansas. See Coulson Oil Co., Inc. v. Deweese Enterprises, Inc., No. 07-1102 (filed 11/9/07).

 

According to the Complaint, Coulson Oil operates gas stations under the trademark "SuperStop" (picture below, obviously a few years old from the gas prices). Deweese obtained a federal trademark registration in 1982 for "Super Stop." The Complaint alleges that Coulson obtained trademark rights in Arkansas before Deweese obtained its registration.

 

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Lindsey Management filed a trademark infringement action in the Eastern District of Arkansas. See Lindsey Management Co., Inc. v. The Links at Northcreek, LLC, No. 07-1076 (filed 11/1/07).

 

The main defendant is Hayden Properties, LLC, an Oregon company. The Complaint states that Hayden owns The Links at Northcreek, LLC. The dispute arises over an apartment community in Mississippi called The Links at Northcreek. Lindsey Management owns a federal trademark for "The Links" as applied to residential real estate development services.  

 

Two issues look interesting from reading the Complaint. First, it is unclear how Arkansas has jurisdiction over these defendants. The Complaint just makes a conclusory allegation that defendants conduct business and commit trademark infringement in Arkansas. Second, the word "links" seems to be common for apartments. A quick Google search shows one here in Georgia and one here in North Carolina; neither of these are Lindsey properties.

 

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The Northern District of Iowa refused to compel production of customer names in J. Lloyd Int'l, Inc. v. Imperial Toy Corp., 2007 WL 2934903 (N.D. Iowa 10/5/07).

 

J. Lloyd filed a trademark infringement action against Imperial Toy. In discovery, J. Lloyd requested the names of Imperial Toy's manufacturers and customers. Imperial Toy objected, and J. Lloyd filed a motion to compel. The court denied the motion, noting that the names of the defendant's customers are rarely if ever revealed in litigation.

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An Arkansas trademark infringement action was filed in the Eastern District of Arkansas. Thirty Eight Street, Inc. v. Bajrang, LLC, No. 07-920 (E.D. Ark., filed 10/2/07). Plaintiffs operate a chain of hotels under the trademarks Best Value Inn and America's Best Value Inn. According to the Complaint, Bajrang was a licensee operating a hotel in Helena, Arkansas. Plaintiffs terminated the license on February 14, 2007, but Bajrang continues to operate a hotel using Plaintiffs' trademarks. Plaintiffs did not file a motion for preliminary injunction.

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Lewis & Clark Outfitters filed a trademark infringement action against L.C. Industries (Case No. 07-, Western District of Arkansas, filed 9/26/07). The Complaint alleges that L.C. Industries has infringed Lewis & Clark's numerous trademark registrations and fraudulently obtained registrations for "Lewis N. Clark" from the USPTO. The Complaint also states that the companies communicated with each other in 2000 about trademark issues, but L.C. Industries recently threatened to file a lawsuit against Lewis & Clark.

 

This case could have an interesting twist. Earlier this year, Lewis & Clark filed a trademark infringement action against Mahco, Inc. (previously posted 5/1/07) L.C. Industries also filed a trademark infringement lawsuit against Mahco in the Northern District of Illinois (filed 2/5/07, see Justia docket summary here).  

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The Eastern District of Arkansas granted a motion to dismiss based on res judicata in B & B Hardware, Inc. v. Hargis Industries, Inc., 2007 WL 2711647 (E.D. Ark. 9/13/07).

 

The parties have a long and unique history that is important to understand the case. B&B Hardware sells  a variety of fasteners in various industries under the mark "Sealtight." Hargis sells fasteners exclusively used for portable buildings under the trademark "Sealtite." B & B received a federal trademark registration, and the parties engaged in lengthy TTAB proceedings when Hargis tried to register its mark. In 1997, B & B filed suit for trademark infringement.

 

The jury returned a verdict for Hargis, finding that Sealtight was merely descriptive, and that judgment was affirmed in B & B Hardware, Inc. v. Hargis Industries, Inc., 252 F.3d 1010 (8th Cir. 2001). Hargis did not petition to cancel "Sealtight." In 2006, "Sealtight" became incontestable, which eliminated the merely descriptive defense. B & B filed the instant action, and Hargis moved to dismiss on grounds of res judicata.

 

The court agreed with Hargis that incontestability alone does not create an exception to res judicata. The court held that while incontestability affects a trademark's validity, it has no bearing on a trademark's strength, and that the only recognized exception to res judicata for trademark infringement is a significant increase in strength over a significant amount of time. See Test Masters Educational Services v. Singh, 428 F.3d 559 (5th Cir. 2005). B & B failed to establish either of these two factors, and the court dismissed the complaint.  

Continue Reading...

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Judge Hendren refused to decide a discovery dispute in Rotoworks Int'l Ltd. v. Grassworks USA, LLC, 2007 WL 2582190 (W.D. Ark. 9/4/07) (last posted here 9/6/07). After an award of sanctions was entered, the case has continued its downward spiral, with the exasperation evident in the tone of the court's opinion:

 

The Court has read the submissions of the parties, which amount to literally hundreds of pages, much of it devoted to bickering about who has done what to whom, or failed to do it, or might do it in the future. None of this is particularly helpful to the Court in trying to resolve whether there is some discoverable piece of information about which plaintiff has inquired, and about which one or more defendants has failed to permit discovery. Nor does it advance the preparation of this case for trial; in the Court's view, the case is being delayed by the acrimonious turn discovery has taken.

The Court declines to sort through the masses of material submitted to it in connection with the pending motions and try to separate the legitimate issues from the bickering of the parties. It is the responsibility of the parties to present a concise motion to the Court setting forth matters that are really, truly, in dispute.

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The District Court of Minnesota granted summary judgment on a number of claims in Gregerson v. Vilana Financial, Inc., 2007 WL 2509718 (D. Minn. 8/31/07) (previously posted 1/31/07).

 

Vilana copied two of Gregerson's photographs in various advertisements. Gregerson created websites where he discussed Vilana's copying of the photographs and made unflattering statements about Vilana. Gregerson filed suit for copyright infringement, while Vilana filed a counterclaim for trademark infringement, cybersquatting, deceptive trade practices, and other claims.

 

The court easily granted summary judgment on the copyright claim. A comparison of the photographs showed they were identical. The court also granted summary judgment against the trademark and cybersquatting counterclaims, finding that Gregerson just made a descriptive use of Vilana's trademarks in his metatags.

 

However, the court refused to grant summary judgment on the deceptive trade practices and related claims. There was evidence in the record that Gregerson made statements that Vilana is a thief, actively engaged in predatory lending, and a member of the Russian mafia. These issues and the damages on the copyright claim must be resolved at trial.

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Two important orders were entered in the Arkansas trademark case Rotoworks Int'l Ltd. v. Grassworks USA, LLC, No. 07-5009 (W.D. Ark.) (previously posted here 4/19/07 and here 3/27/07). The Court granted partial summary judgment on Rotoworks' cybersquatting claims. (See order here). Grassworks must transfer the domain name www.rotowiper.com to Rotoworks by September 11, 2007.

 

The Court also granted Rotoworks' motion for sanctions. In a lengthy opinion (here) the Court found that Grassworks had no basis for filing its counterclaim. Moreover, the opinion highlights misconduct by Grassworks' attorney. The attorney continued to claim information was confidential despite numerous rulings to the contrary. The attorney even attempted to designate depositions as confidential, threatening to take action Rotoworks once Grassworks appealed the rulings.

 

The Court was clearly frustrated with Grassworks' and its attorney's conduct. The Court ordered Grassworks to pay Rotoworks' attorney's fees and expenses associated with the counterclaim and the motion for sanctions. The Court also assessed a sanction of $1,000 against Grassworks' attorney.

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The District Court of Minnesota granted a preliminary injunction in MSP Corp. v. Westech Instruments, Inc., 2007 WL 2253473 (D. Minn. 8/6/07).

 

MSP is a particle technology company that makes devices for various industries. In the pharmaceutical industry, an impactor is a device to measure and test medical inhalers. A consortium of 15 pharmaceutical companies (the "Consortium") hired MSP to design a new impactor. MSP created the next generation impactor. This impactor has a specific blue color and puzzle design, but MSP did not register the trademarks or trade dress. 

 

Westech Instruments began marketing its own impactor that it called "next generation." This impactor was also blue. Moreover, Westech made statements on its website that its impactor was sponsored by the Consortium. MSP brought suit for trademark infringement, false advertising, and trade dress infringement.

 

The court agreed with MSP on the trademark infringement and false advertising claims. However, the court found that MSP was unlikely to succeed on its trade dress claims. The court granted the preliminary injunction as to the trademark and false  advertising claims, requiring a $100,000 bond.

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The District Court of Minnesota granted in part and denied in part a preliminary injunction in Novus Franchising, Inc. v. Oksendahl , 2007 WL 2084143 (D. Minn. 7/17/07).

 

Novus specializes in auto glass repair and has over 250 franchisees, including Oksendahl. The franchise contract prohibits franchisees from competing with Novus for 2 years after the expiration of the contract. It also prohibits use of Novus trademarks after expiration. When Oksendahl's franchise expired, he continued to operate a competing business.

 

The court granted a partial injunction against Oksendahl prohibiting him from using Novus trademarks. However, the court determined that Novus failed to show irreparable harm on the noncompete claim. Oksendahl can operate the competing business while the case proceeds.

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The District Court of Minnesota dismissed a declaratory action under an exception to the first-filed rule in ABC Teacher's Outlet, Inc. v. School Specialty, Inc., 2007 WL 2028903 (D. Minn. 7/17/07).

 

This case actually began on March 25, 2002 when School Specialty sent a cease and desist letter to ABC Teacher's Outlet (ABC) accusing it of trademark infringement. ABC responded, but School Specialty never replied. Several years later, on November 14, 2006, and January 5, 2007, School Specialty sent additional letters threatening to file a lawsuit.

 

ABC filed a declaratory action in Minnesota on January 11, 2007, and served School Specialty on February 21. School Specialty filed suit in Wisconsin on February 6 and served ABC on February 21. The court dismissed this case as an exception to the first-filed rule because (1) the claim was for declaratory relief and (2) ABC knew of School Specialty's intent to sue.

 

The court surprisingly gave no weight to the fact that School Specialty waited 5 years before actually filing the lawsuit. ABC should win on a laches defense whether Wisconsin or Minnesota ultimately hears the case.

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It is never a good sign when the court's opinion begins "This troubled matter comes before the Court . . . " but that is what happened in Master Craft Tool Co., LLC v. Stanley Works, 2007 WL 2008685 (D. Minn. 7/6/07).

 

Master Craft filed suit against Stanley Works on behalf of other plaintiffs. Prior to the lawsuit, the other plaintiffs assigned to Master Craft their right to file suit against Stanley. The lawsuit was filed in 2004. The other plaintiffs terminated the contract in July 2005, but Master Craft dismissed the claims with prejudice in October 2005. The other plaintiffs wanted to revoke the dismissal and proceed with the litigation.

 

The court refused, noting that standing must be determined at the beginning of the lawsuit. Steger v. Franco, 228 F.3d 889, 892 (8th Cir. 2000). Thus, the other plaintiffs lost their standing when the lawsuit was filed. The later termination of their agreement with Master Craft had no effect on standing.

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The District Court of South Dakota quashed a subpoena in Pinnacle Pizza Company, Inc. v. Little Caesar Enterprises, Inc., 2007 WL 1960585 (D.S.D. 7/3/07).

 

Pinnacle Pizza is a franchisee of Little Caesar's Pizza. Pinnacle claimed it invented the slogan "Hot n' Ready" and that Little Caesar's wrongfully used their slogan. James Fischer, Pinnacle's president, revealed in his deposition that he hired an attorney to perform a trademark search. When asked the results of the search, Fischer replied, the attorney opined that "Hot n' Ready was too generic to receive trademark protection. Pinnacle's counsel never objected to this line of questioning.  

 

Little Caesar's issued a subpoena to depose the attorney. The court agreed with Pinnacle that Fischer had made an inadvertent disclosure of a statement protected by attorney-client privilege. The court adopted the five factors from Hydraflow, Inc. v. Enidine Inc., 145 F.R.D. 626 (W.D.N.Y. 1993) and held that Pinnacle did not waive the privilege through the inadvertent disclosure.

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Chanel filed a trademark infringement lawsuit in the Western District of Arkansas: Chanel v. Jacobia, No. 07-3021 (filed 5/23/07). According to the Complaint, two business partners sold counterfeit and infringing items on the website chicboutique4u.com (now inactive). One of the partners is an Arkansas resident, and the goods were distributed in Arkansas. The Complaint seeks monetary damages and injunctive relief.

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Anheuser-Busch filed a trademark infringement complaint against USA Bai Wei Group, Inc. in Pulaski County Circuit Court, Case No. 07-5817, filed 5/4/07. See full complaint here. According to the Complaint, "Bai Wei" is the pronunciation of the Chinese language trademark for Budweiser. USA Bai Wei has made extensive sales through China without Anheuser-Busch's permission.

 

The Complaint was filed in Arkansas because USA Bai Wei registered as an Arkansas corporation. However, it is unclear why the case was filed in state court rather than federal court. The Complaint seeks millions of dollars in damages including a revocation of Bai Wei's corporate charter.  

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The District Court of Minnesota granted partial summary judgment in Cosi, Inc. v. WK Holdings, LLC, 2007 WL 1288028 (5/1/07).

 

Cosi is a chain of sandwich restaurants with locations in 16 states.  Bill Kozlak opened Kozy's Steaks and Seafood, a fine dining restaurant in Minnesota. Because Cosi and Kozy are pronounced the same, Cosi filed suit for trademark infringement and dilution. Kozy moved for summary judgment on the dilution claim and the claim for attorney's fees.

 

The court agreed that Cosi is not a famous trademark as required to establish a dilution claim. The court also agreed that Mr. Kozlak did not act willfully and deliberately by adopting the trademark Kozy's from his last name. The court granted summary judgment as to the dilution claim and the claim for attorney's fees.  

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The Eastern District of Missouri denied a motion to enforce a settlement agreement in BP Products North Am., Inc. v. Wallis Petroleum, L.C., 2007 WL 1240261 (E.D. Mo. 4/27/07). This was the opposite result on the same issue in Enterprise Rent-a-Car Co. v. U-Haul Int'l, Inc. (previously posted 4/19/07).

 

Wallis purchased a gas station from BP but refused to remove the sign bearing the AMOCO trademark. BP filed suit for trademark infringement, and the parties entered into settlement negotiations. The parties exchanged drafts of settlement agreements but never executed one. When the negotiations reached an impasse, BP filed this suit.

 

The court found that the parties never reached a meeting of the minds as to a settlement agreement. Although the parties exchanged settlement drafts, several material terms remained in dispute. A pretrial order will issue shortly.

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Lewis & Clark Outfitters filed a trademark infringement lawsuit against Mahco, Inc. (Case No. 07-05075, Western District Arkansas,  filed 4/24/07). The Complaint alleges that officers and owners of Mahco were former customers and vendors of Lewis & Clark. Mahco began using a Lewis & Clark trademark (seen here) and has filed for a federal trademark. The Complaint does not request a preliminary injunction.

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The Eastern District of Missouri denied a preliminary injunction based on breach of contract and trademark infringement in Noodles Development, L.P. v. Ninth Street Partners, LLP, 2007 WL 1115216 (E.D. Mo. 4/13/07).

 

Noodles Development (N.D.) is the franchisor of the Nothing but Noodles restaurant chains. Defendants are franchisees. When their contracts expired, they continued running noodle-themed restaurants called Ninth Street Noodles. They later changed the restaurants to Ninth Street Cafe and quit using a noodle theme.

 

After a strange preliminary injunction hearing that began November 17, 2006 but did not end until January 8, 2007, the court denied the preliminary injunction. The court found N.D. could not show irreparable harm because the defendants had returned all N.D.'s operating manuals and quit operating noodle-themed restaurants. However, the court noted that the merits of the case appear to strongly favor N.D.

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The Western District of Arkansas denied a protective order in Rotoworks Intern. Ltd. v. Grass USA, LLC, 2007 WL 1106108 (W.D. Ark. 4/11/07) (previously posted 3/5/07).

 

Rotoworks subpoenaed telephone records from Defendants. Defendants moved for a protective order asking that the records be restricted to plaintiff's counsel's use only and that plaintiff's counsel be prohibited from contacting customers. Defendants claimed the phone records are trade secrets.

 

In a brief order, Judge Hendren found that Defendants failed to present any evidence that the telephone records were trade secrets and denied the requested protective order.

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The Eastern District of Missouri enforced a settlement agreement in Enterprise Rent-a-Car Co. v. U-Haul Int'l, Inc., 2007 WL 1063528 (E.D. Mo. 4/9/07).

 

Enterprise brought suit against U-Haul for trademark infringement. The parties agreed to a settlement and notified the court. However, they could never agree on the final terms. The lawyers exchanged numerous drafts, but the parties never executed a signed version. Enterprise then moved for the court to enforce the unsigned settlement agreement.

 

U-Haul's main argument was that its lawyers did not have the authority to agree to terms of the settlement. The court rejected this argument because the record was clear their lawyers had the authority. Judging from the various correspondences regarding the settlement, the court found that the parties mutually accepted the terms of the unsigned agreement and granted Enterprise's motion to enforce the agreement.

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Bennett Productions filed a lawsuit claiming trademark infringement and trade dress infringement against a local photographer (Case No. 07-6020, filed 4/5/07). Bennett Productions markets Bikini Destinations, a popular line of videos, television shows and calendars.

 

Erick David Blair, a successful photographer in Heber Springs, Arkansas, markets his own bikini calendar. The Complaint alleges that Mr. Blair's calendar infringes Bennett's Bikini Destination trademarks.

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Chattanooga Bakery, Inc., owner of the famed "Moon Pie" trademark has filed a trademark infringement lawsuit in the Eastern District of Arkansas (Case No. 07-00061, filed 1/25/07). 

 

The defendant is the Moon Pie Cafe in Bryant, Arkansas, which has received warm reviews in local newspapers. The Complaint seeks a preliminary injunction, but no such motion accompanied the Complaint.

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The University of Arkansas filed a trademark infringement action in the Western District of Arkansas against two Florida corporations, Concordia Investment Partners and Armadillo Distribution (Case No. 07-05021, filed 2/5/07). According to the Complaint, the defendants infringed University of Arkansas trademarks by selling guitars with several variations of the word "Razorback."

 

Defendants filed an Answer claiming that the guitars were made in tribute to Dimebag Darrell Abbott, who was known for wearing a razorblade on stage (like these). Defendants counterclaimed against the University of Arkansas for trademark infringement, claiming they have priority to the word "Razorback" for guitars.

 

The case is currently scheduled for a bench trial in Fayetteville before Judge Hendren on January 28, 2008.

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Some additional summary judgment issues were decided in Green Edge Enterprises, LLC v. Rubber Mulch Etc., LLC (previously posted 2/18/07) in a pair of orders. See 2007 WL 957343 (E.D. Mo. 3/28/07) and 2007 WL 957349 (E.D. Mo. 3/28/07).

 

Green Edge claimed it was entitled to summary judgment on Rubber Mulch's breach of contract counterclaim because Rubber Mulch had not disclosed damages. The court denied this motion because both parties have caused delays in the litigation, which has now been ongoing for 5 years.

 

Meanwhile, Rubber Mulch had asserted counterclaims against International Mulch (IM). Rubber Mulch sought a declaration that it was not infringing IM's Rubberific Mulch trademark, or alternatively, that the mark was invalid. IM successfully argued that Rubber Mulch failed to establish a course of conduct that brought it into conflict with IM, which is one of the factors to establish a case or controversy to make a declaratory action available.  The court granted summary judgment to IM.  

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Another preliminary injunction was granted in an Arkansas trademark case. Tempur-Pedic Int'l, Inc. v. Waste to Charity, Inc., 2007 WL 951879 (W.D. Ark. 3/28/07).

 

Tempur-Pedic is a well-known manufacturer of mattresses, pillows and cushions. In 2005, Tempur-Pedic sought to make a donation to victims of Hurricane Katrina. It donated $15 million of merchandise to Waste to Charity (WTC) to distribute to the victims. Rather than give the merchandise to the victims, WTC sold them for a profit.

 

Tempur-Pedic styled its claim as one for breach of contract and fraud rather than trademark infringement. The court still had no trouble in granting the preliminary injunction, but it did require Tempur-Pedic to post a $500,000 bond.

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Summary judgment was granted in part and denied in part in Northern PCS Services, LLC v. Sprint Nextel Corp., 2007 WL 951546 (D. Minn. 3/27/07).

 

In 1994, several Sprint-related entities formed a joint venture called Sprint PCS to develop a national wireless telecommunications network. Sprint contracted urban service areas to affiliates, including Northern PCS. Sprint entered into management contracts that stated that no entity of Sprint will compete with the affiliates in their respective service areas during the term of the contracts. The agreements also gave the affiliates licenses to use Sprint's trademarks.

 

In 2005, Sprint merged with Nextel, who already had a national network. The newly-formed Sprint Nextel sold Nextel wireless products under the Sprint trademarks, but they never restructured the affiliates' contracts. Various affiliates sued, and Northern PCS brought this action in Minnesota.

 

The court granted in part and denied in part Sprint Nextel's motion for summary judgment. The primary claim is breach of the management contract, and the court denied summary judgment on this claim. This case is a good example that an intellectual property audit is highly beneficial when firms seek to merge.

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The District Court of Minnesota required production of trade secret documents subject to protective order in Kia Motors America, Inc. v. Autoworks Distributing, 2007 WL 844674 (D. Minn. 3/19/07).

 

Kia brought suit against Autoworks for trademark infringement. Kia sought information regarding Autoworks' suppliers to determine if the goods sold by Autoworks were counterfeit. Autoworks refused, claiming this information is a trade secret.

 

The court required disclosure but also issued a protective order limiting disclosure of the information to just Kia's litigation attorneys. The court ordered that Kia's general outside counsel and in-house corporate counsel could not have access to the information.  

 

The court issued a stern warning against wrongful disclosure: If the suppliers suddenly stop doing business with Autoworks or change the nature of the business relationship, the court will presume that Kia's litigation attorneys made a wrongful disclosure. The court reserved the right to impose sanctions and attorney's fees for such conduct.  

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The Eastern District of Arkansas denied motions for sanctions and attorney fees in Mail Boxes Etc., Inc. v. PBC Services, Inc., 2007 WL 841664 (E.D. Ark. 3/15/07).

 

On February 7, 2006, Mail Boxes brought suit against the defendants for trademark infringement and breach of a noncompete agreement. The court granted a temporary restraining order, and the defendants had to cease business operations. The court also ordered the trial to be consolidated with the preliminary injunction proceedings to begin March 20, 2006.

 

The defendants were parties in a California lawsuit (Morgate) against Mail Boxes that had been ongoing for several years and involved hundreds of parties. The court agreed to let the defendants assert their Morgate claims as counterclaims in the Arkansas trademark case. Mail Boxes chose not to try Morgate in Arkansas, and it voluntarily dismissed the Arkansas claims.

 

The defendants promptly moved to execute on the bond. They also moved for attorney fees of just under $300,000 (for a case that lasted 38 days) and moved for sanctions pursuant to 28 U.S.C. § 1927. After a lengthy recitation of the dispute, the court allowed the defendants to execute $19,990.51 against the bond, but denied the motions for attorney fees and sanctions.

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The Western District of Arkansas granted a preliminary injunction based on trademark infringement and trade dress infringement in Rotoworks Int'l Ltd. v. Grassworks USA, LLC, 2007 WL 703747 (W.D. Ark. 3/5/07).

 

Rotoworks, a New Zealand company, sells weed wipers called Rotowipers. All Rotowipers are painted aqua. The defendants were exclusive distributors of Rotowipers in the U.S. However, the defendants began selling their own weed wipers instead of the Rotowipers. The defendants' wipers were designed just like Rotowipers and painted aqua. The defendants told their customers that the Arkansas-made wipers would better suit their needs, which dissuaded them from purchasing Rotowipers.

 

The court had no trouble in issuing the preliminary injunction under these circumstances, and the court only required a $5,000 bond.

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The Western District of Arkansas denied a temporary restraining order based on false advertising and trademark infringement in Trott's WoodProducts, Inc. v. American Cabinet Doors & More, Inc., 2007 WL 625920 (W.D. Ark. 2/27/07).

 

Trott's took pictures of its cabinets to use in promotional materials. American Cabinet acquired these pictures from one of Trott's former employees and used the photographs in their own sales brochures. Trott's claimed false advertising and trademark infringement but failed to assert a claim for copyright infringement.

 

The court found no false advertising claim because there was no evidence consumers were deceived by the photographs. In fact, only a trained professional can distinguish the cabinets of one company from another. The court also found the cabinets themselves were generic and could not qualify for trademark protection. The court easily denied the TRO.

 

Trott's had the right idea but brought the wrong claims. The photographs are copyrightable, and Trott's likely would have been successful had it registered copyrights and asserted copyright infringement.

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The Eighth Circuit affirmed a substantial judgment based on breach of a trademark license and noncompete contract in Matrix Group Limited, Inc. v. Rawlings Sporting Goods Co., 2007 WL 506659 (8th Cir. 2/20/07).

 

Matrix sells bags for sporting equipment. Matrix negotiated an exclusive trademark license with Rawlings to use Rawlings' trademarks on sports bags. The contract also contained a noncompete provision where Rawlings would not compete with Matrix. K2 purchased Rawlings and Worth, a competitor to Matrix. K2 then consolidated parts of the sales forces of Rawlings and Worth.

 

Matrix filed suit claiming Rawlings breached the noncompete provisions of the license contract and that K2 tortiously interfered with that contract. The jury awarded Matrix $6 million against Rawlings and $2.5 million against K2. The Eighth Circuit affirmed the entire award.

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The Western District of Missouri rejected the primary jurisdiction doctrine in Just Enterprises, Inc. v. (888) Justice, Inc., 2007 WL 465635 (W.D. Mo. 2/8/07).

 

Just Enterprises has a federal trademark registration for 1-800-JUSTICE for legal referral services. Justice, Inc. uses the marks "212 Justice" and "888 Justice" for similar services. It operates two websites: www.212justice.com and www.888justice.com.

 

Justice petitioned the TTAB to cancel Just Enterprises' mark as merely descriptive. Before the TTAB decided the matter, Just Enterprises filed the lawsuit. Justice moved to stay the case pending a determination by the TTAB by invoking the primary jurisdiction doctrine.

 

The Eighth Circuit has not considered whether judicial proceedings should be stayed pending a TTAB determination via the primary jurisdiction doctrine. While courts are split on this issue, the majority of courts will not stay judicial proceedings under these circumstances. The Western District of Missouri joined the majority and declined to stay the case.

 

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The Judicial Panel on Multidistrict Litigation held that centralization was not warranted in In re Movie Artwork Copyright Litigation, 2007 WL 473683 (2/7/07).

 

The litigation involves cases in California, Missouri and New York for copyright infringement and trademark infringement. Two of the defendants moved to centralize the litigation in California. The panel denied the transfer because the cases were too individualized.

 

This case is another example that intellectual property litigation usually involves issues that are unique between the parties. As a result, intellectual property litigation typically is not suited for multidistrict litigation or class action litigation.

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The Western District of Arkansas denied all claims based on trademark infringement by both parties in Arkansas Trophy Hunters Ass'n, Inc. v. Texas Trophy Hunters Ass'n, Ltd., 2007 WL 410930 (W.D. Ark. 2/5/07).

 

This is an odd dispute over rights to use the phrase "Arkansas Trophy Hunters Association." TTHA began using the phrase in 2005 when they decided to expand into Arkansas. The USPTO denied their federal trademark applications, but in 2006 they received two Arkansas state trademark registrations. ATHA had been using the phrase since 2003, but they had never applied for a federal or Arkansas state trademark. 

 

The court held the phrase is merely descriptive and not capable of trademark protection. The court dismissed all claims by the parties. It did not cancel TTHA's Arkansas trademark registration because ATHA had failed to make this request in its pleadings.

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The Eastern District of Arkansas denied a preliminary injunction in Sobba v. Elmen, 2007 WL 283140 (E.D. Ark. 1/30/07).

 

The case involved Cupids, which is a lingerie and adult novelty store with locations in Central Arkansas. It has received a lot of publicity through promotions with the Buzz radio station. The Cupids stores are owned by Sobba and Elmen in a peculiar way. The two Little Rock stores and Hot Springs store are each owned by a separate corporation. Sobba and Elmen jointly own each of these corporations. They advertised all 3 stores as a collective, but they never registered the Cupids trademark or created a written agreement involving intellectual property rights.

 

Elmen claims the parties agreed to divide up the state of Arkansas. He opened a new store in Conway in 2006 and planned to open another store in Jacksonville this year. Sobba filed suit to prevent the Jacksonville opening claiming trademark infringement and breach of fiduciary duty. Sobba's argument was greatly damaged by the fact that he unsuccessfully tried to open his own store in Fayetteville.

 

The court easily denied the preliminary injunction. This case could produce some interesting results. At present, it involves 3 corporations, 2 LLCs and 2 owners, but no trademark registrations and no intellectual property agreements.

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The Eastern District of Missouri denied the defendants' motion for summary judgment on the patent  infringement claim in Green Edge Enterprises, LLC v. Rubber Mulch Etc., LLC, 2007 WL 118919 (E.D. Mo. 1/10/07).

 

Green Edge holds a patent for making synthetic wood chips out of rubber particles. Green Edge licenses the patent to International Mulch, who sells the chips using the trademark "Rubberific Mulch." The defendants sell rubber chips and moved for summary judgment claiming the patent is invalid. The court denied the motion, and the patent infringement claim will proceed to trial.

 

Green Edge has also asserted claims for trademark infringement and unfair competition that were not addressed in the summary judgment motion. The defendants have counterclaimed for unfair competition and breach of contract. All these issues will be presented at trial.

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The Southern District of Iowa denied a preliminary injunction in a complex case involving trademark infringement and trade secret misappropriation in Outcomes Pharmaceutical Health Care, L.C. v. Nat'l Community Pharmacists Ass'n, 2006 WL 3782905 (S.D. Iowa 12/22/06).

 

Outcomes provides medication therapy management (MTM) services, which consist of advising patients on how to get the most out of their medications. Outcomes used the term "Encounter" to identify its services. NCPA and the other defendants contracted with Outcomes to provide MTM services. During this time, Outcomes provided defendants with several documents Outcomes used in its business. After the contract expired, the defendants began offering their own MTM services, and they also used the term "Encounter."

 

The court conduced a 3-day hearing before denying the preliminary injunction. On the trade secret claim, the court found some likelihood of success but that Outcomes failed to establish irreparable harm.

 

On the trademark claim, the court found that "Encounter" as used by Outcomes is generic because "encounter" is used throughout the medical industry to describe a meeting between a patient and a medical professional. The court also mad alternate findings that Outcomes failed to establish secondary meaning, and there was no likelihood of confusion caused by the defendants' use.

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The Eastern District of Missouri found the trademark owner was a necessary party to a trademark infringement dispute between nonexclusive licensees in Lion Petroleum of Missouri, Inc. v. Millennium Super Stop, LLC, 2006 WL 3792611 (E.D. Mo. 12/21/06).

 

This is a peculiar case where both Lion Petroleum and Consolidated Energy are nonexclusive licensees of ConocoPhillips. Pursuant to its license, Lion contracted with Millennium to provide fuel products which Millennium would sell under the ConocoPhillips trademarks. Millennium quit making payments to Lion and began selling unbranded fuel products supplied by Consolidated Energy. Lion promptly sued both parties for trademark infringement and various contract theories.

 

The court held that ConocoPhillips was a necessary party and must be added to the lawsuit, which follows the general rule that the trademark owner must be a party to a trademark infringement suit. Once added, the issues between Lion and Consolidated Energy will likely be determined by the the scope of their contracts with ConocoPhillips.

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The District Court of North Dakota issues a temporary restraining order based on trademark infringement in Northwest Airlines, Inc. v. Bauer, 2006 WL 3733295 (D.ND. 12/15/06).

 

Northwest Airlines periodically distributes discount coupons called e-Certificates. Customers can gift the e-Certificates to others but cannot sell them. Without permission, Bauer sold e-Certificates on the website www.northwestdiscountcoupons.com (now inactive). Northwest purchased some certificates from this website, which were used in support of its motion.

 

In a clear-cut decision, the court found likelihood of success on the trademark infringement claim and issued a temporary restraining order for Northwest.

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The District Court of Minnesota denied a preliminary injunction in Gregerson v. Vilana Financial, Inc., 2006 WL 3227762 (D. Minn. 11/7/06).

 

Vilana asserted trademark infringement claims against Gregerson for using Vilana's trademarks as a link and in subject lines on his websites www.cgstock.com and www.phototour.minneapolis.mn.us. Gregerson also used the trademarks as metatags on these sites.

 

Although trademark disputes involving metatags are relatively common, this case is unique because the parties sell entirely different products. Gregerson sells photographs, but Vilana provides financial services. The court found that Vilana could not show likelihood of success and denied the injunction.

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Mean Gene Okerlund of wrestling fame was the center of a trademark dispute in Hot Stuff Foods, LLC v. Mean Gene's Enterprises, Inc., __F.Supp.2d__ 2006 WL 3788813 (D.S.D. 12/13/06). This is a long and unusual opinion where the court ruled for Okerlund on the trademark issues but ruled for Hot Stuff on its unfair compeition claim.

 

Okerlund entered into an endorsement contract with Hot Stuff that permitted Hot Stuff to market Mean Gene's Burgers and Mean Gene's Pizzas. Hot Stuff entered into contracts with more than 200 licensees and franchisees operating under these brand names and received two federal trademark registrations for Mean Gene's Burgers. Okerlund terminated the contract in 2006 and then sent letters to the franchisees to bring them to his new company. Hot Stuff promptly filed suit.

 

The court ruled for Okerlund on the trademark claims. The court canceled Hot Stuff's Mean Gene trademarks and found Hot Stuff does not have common law rights in these marks. However, the court ruled for Hot Stuff on the unfair competition claim and entered an injunction against Mean Gene from using the marks until his royalty term expired under the contract.

 

This brings about the unusual result where (for a limited time) the trademark owner cannot use the trademark, but the party that does not own the trademark has exclusive use. This case serves as a helpful reminder that parties have extensive freedom in structuring intellectual property rights in their contractual agreements. 

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The District Court of Minnesota found that 3M did not commit fraud on the USPTO in obtaining a trademark on the color blue. 3M Co. v. Intertape Polymer Group, Inc., 423 F.Supp.2d 958 (D. Minn. 2006).

 

3M sued Intertape for trademark infringement. Intertape asserted numerous defenses, including a claim that 3M committed fraud by representing to the USPTO that it had "substantially exclusive" use of the blue tape mark. At the time, there were 10 other users of the mark, but 3M commanded 85% - 93% of the market share. In rejecting Intertape's argument, the court relied on the TTAB's ruling that a party claiming fraud on the USPTO is under a heavy burden. Marshall Field & Co. v. Mrs. Fields Cookies, 25 U.S.P.Q.2d 1321 (TTAB 1992). The phrase "substantially exclusive" was also the exact phrase the TTAB found not fraudulent. Id.

 

This case will be interesting to watch as it proceeds to trial. The court denied Intertape's motion for summary judgment because issues of fact exist. The following issues will proceed to trial: functionality, secondary meaning, estoppel by acquiescence, and laches.

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The Minnesota District Court encountered the rare issue of trademark prosecution history estoppel in Eniva Corp. v. Global Water Solutions, Inc., 440 F.Supp.2d 1042 (D. Minn. 2006).

 

Eniva sued Global Water for trademark infringement. Global Water moved for summary judgment based on the defense of prosecution history estoppel, which is not an absolute rule in trademark law. Under this argument, Global Water claimed that Eniva made statements to the USPTO in obtaining its trademark registration that contradicted its position in the present litigation.

 

The court declined to adopt the prosecution history estoppel rule at the summary judgment stage but held that Global Water may raise the defense at trial. Prosecution history estoppel is well-established in patent law, and it would be an appropriate doctrine in the trademark context.

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The Eastern District of Missouri denied a motion for preliminary injunction based in part on trademark infringement in Furminator, Inc. v. Ontel Products Corp., 429 F.Supp.2d 1153 (E.D. Mo. 2006).

Furminator sought trademark protection for “DeShedding” as applied to shaving devices for removing the loose undercoat of pets. The court found “DeShedding” was generic in this context. The court went on to find that, even if “DeShedding” was descriptive, Furminator failed to establish secondary meaning.

By addressing secondary meaning even after finding the proposed mark was generic, the court followed the approach taken in Frosty Treats, Inc. v. Sony Computer Entertainment Am., Inc., 426 F.3d 1001 (8th Cir. 2005). This is an effective approach because the demarcation between generic marks and descriptive marks is not always clear.

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The Eastern District of Missouri dismissed a trademark lawsuit based on the exception to the first-filed rule in Eveready Battery Co., Inc. v. L.P.I. Consumer Products, Inc., 2006 WL 3391086 (E.D. Mo. 11/22/06).

 

L.P.I. accused Eveready of trademark infringement, and the parties entered into settlement negotiations. During the negotiations, Eveready filed a declaratory action in Missouri. They did not serve L.P.I. and continued to negotiate. More than a month later, L.P.I. filed suit in Florida, then Eveready served the previously-filed Missouri action. The court found these tactics amounted to the "red flags" identified by the Eighth Circuit to create an exception to the first-filed rule.

 

While the court cautions against using the declaratory action in this fashion, the declaratory action remains an effective tool, particularly in trademark litigation. See Mid-State Aftermarket Body Parts, Inc. v. MQVP, Inc., 361 F.Supp.2d 896 (E.D. Ark. 2005) (rev'd on other grounds).

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The Minnesota District Court granted a permanent injunction for cybersquatting and trademark infringement claims in Faegre & Benson, LLP v. Purdy, 447 F.Supp.2d 1008 (D. Minn. 2006).

Purdy, an anti-abortion activist, registered numerous domain names that incorporated a variation of the law firm name Faegre & Benson, such as www.faegre-benson.com (now inactive). On these websites, Purdy published graphic abortion-related images and forceful anti-abortion statements.

Purdy offered to stop his conduct only if the law firm agreed to quit donating money to Planned Parenthood or if the law firm would agree to donate money to anti-abortion organizations. The court found Purdy had engaged in cybersquatting and trademark infringement and granted Faegre & Benson a permanent injunction against Purdy.

The court's decision was an easy one considering Purdy had already done the same thing to a number of famous companies such as Coca-Cola and McDonald's in Coca-Cola v. Purdy, 382 F.3d 774 (8th Cir. 2004).

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The Eighth Circuit affirmed summary judgment denying trademark protection for "Brick Oven" as applied to frozen pizzas. Schwan's IP, LLC v. Kraft Pizza Co., 460 F.3d 971 (8th Cir. 2006).

 

In March 2003, Schwan's labeled its Freschetta brand pizzas as Freschetta Brick Oven pizzas. Later in 2003, Kraft labeled its Tombstone brand pizzas as Tombstone Brick Oven pizzas. Schwan's filed a lawsuit claiming trademark infringement.

 

The court held that "brick oven" is a type of pizza that is too generic for trademark protection because commentators, retailers, newspapers and restaurants all use the term "brick oven" to identify pizzas cooked in a brick oven. This was a straightforward decision; usually a firm cannot claim a trademark in a phrase that has become common in the industry.

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The Eighth Circuit reversed a grant of summary judgment on trademark infringement and false advertising claims in Mid-State Aftermarket Body Parts, Inc. v. MQVP, Inc., 466 F.3d 630 (8th. Cir. 2006).

 

MQVP designed a system for assuring quality in automotive parts and tracing the sales history of each part. They received three federal service mark registrations. Mid-State, a distributor of aftermarket auto parts, advertised they had "MQVP parts available." The district court granted summary judgment to Mid-State primarily on grounds that (a) MQVP used its service marks to identify goods; and (b) Mid-State's use was a certification mark use that could not be protected by a service mark registration.

 

The Eighth Circuit reversed, holding that service marks may be used to identify goods associated with the services, and a service mark owner is entitled to protection against certification mark use.

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Cybersquatting is a claim for trademarks wrongfully used in domain names. The plaintiff must show the defendant:

(i) has a bad faith intent to profit from that mark; and

(ii) registers, traffics in, or uses a domain name that--

(I) in the case of a mark that is distinctive at the time of registration of the domain name, is identical or confusingly similar to that mark;

(II) in the case of a famous mark that is distinctive at the time of registration of the domain name, is identical or confusingly similar to or dilutive of that mark.

See 15 U.S.C. § 1125(d).

 

In determining whether the defendant has a bad faith intent, a court may consider any factors. The statute provides a non-exhaustive list of 9 factors. 

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Trademarks are typically grouped into four categories: (1) generic; (2) descriptive; (3) suggestive; or (4) arbitrary or fanciful.

 

A generic mark is the common name or nature of an article and is never entitled to trademark protection.

 

A descriptive mark conveys an immediate idea of the ingredients, qualities or characteristics of the goods. Descriptive marks can receive protection only if they have acquired secondary meaning, which means consumers associate only one source with the descriptive term. Even if the mark has acquired secondary meaning, competitors can use the mark in its ordinary descriptive sense.

 

Suggestive marks require imagination, thought, and perception to reach a conclusion as to the nature of the goods. These marks receive protection without establishing secondary meaning.

 

Fanciful marks are terms that are made up (like Kodak) or used in an arbitrary fashion for the goods they identify (like Apple). These marks also receive protection without establishing secondary meaning.

 

See Frosty Treats Inc. v. Sony Computer Entertainment America, Inc., 426 F.3d 1001 (8th Cir. 2005). These categories do not have hard boundaries, and it is not always clear in which category a particular trademark should fall.

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The Lanham Act provides a cause of action for trademark infringement. This cause of action exists for both registered marks (15 U.S.C. § 1114(1)) and unregistered marks (15 U.S.C. § 1125(a)). To establish trademark infringement, the plaintiff must show: (1) a valid trademark; (2) likelihood of confusion from the defendant's use; and (3) resulting damages.

 

Likelihood of confusion is the hallmark of trademark infringement. The Eighth Circuit uses a 6-factor test to determine likelihood of confusion: (1) the strength of the owner's mark; (2) the similarity of the owner's mark and the alleged infringer's mark; (3) the degree to which the products compete with each other; (4) the alleged infringer's intent to pass off its goods as those of the trademark owner; (5) incidents of actual confusion; and (6) the type of product, its costs and conditions of purchase. See Kemp v. Bumble Bee Seafoods, Inc., 398 F.3d 1049 (8th Cir. 2005).

• These factors guide the analysis, but courts are not bound to a rigid application of the factors. No one factor controls, and different factors may be entitled to more weight in different cases.

 

Arkansas Trademark Law: Trademark cases are usually filed in federal court, but Arkansas has a trademark statute comparable to the Lanham Act. See A.C.A. 4-71-201, et seq.

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Trade dress is the total image of a product, the overall impression created. To establish a claim for trade dress infringement, the plaintiff must show:

 

(1) the trade dress is inherently distinctive or has acquired distinctiveness through secondary meaning;

(2) the trade dress is nonfunctional; and

(3) imitation of the trade dress would result in likelihood of confusion in consumer's minds as to the source of the product.

 

Gateway, Inc. v. Companion Products, Inc., 384 F.3d 503 (8th Cir. 2004).

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