Seattle Trademark Lawyer

On Aug. 7, the Western District sanctioned the plaintiff in Mother, LLC v. L.L. Bean, Inc., for failing to comply with an order compelling discovery. In this trade dress infringement and false designation of origin case arising out of the parties’ competing hunting vests, the court had ordered Mother to produce “all electronically stored information regarding its finances (including sales, financial statement data, and data relating to its claimed damages)” by April 16. The court also had authorized L.L. Bean to continue the deposition of Mother’s president, Martin Grabijas, until after Mother produced such information. (STL previously discussed this order here.)

Mother responded by producing four pages of documents on May 17. In June, two weeks before the continued deposition, L.L. Bean’s attorney informed Mother’s attorney that the four pages Mother had produced did not appear to constitute full compliance with the court’s order. Mother’s attorney did not respond. At the deposition, Mother’s president acknowledged that the information had been in “summary form” and said he would be “happy to provide any additional information at any time.” He also told L.L. Bean’s counsel that “you’ve got the data, you could have pulled it together,” referring to Mother’s vendor files that Mother had previously produced. In response, L.L. Bean filed a motion for sanctions seeking to have all of Mother’s damages claims dismissed.

Magistrate Judge J. Kelly Arnold found Mother had violated the court’s order. As the court put it, “To announce at the deposition, and then only in response to questions seeking an explanation for failure to disclose, that the information in the form requested by defendant was unnecessary because defendant could calculate the content of the missing information from other data is disingenuous at best. It is important to remember that this was a continuing deposition required by an earlier failure to disclose.”

Addressing the appropriate sanction, Mother stated the need for any sanction was moot because it was willing to forgo its damages claim based on its “lost profits” and to pursue only the claim for “disgorgement” of L.L. Bean’s profits. L.L. Bean argued that the disgorgement claim necessarily required Mother to prove that L.L. Bean had earned some profits from the sale of an infringing product in an infringing market. Since the parties have different marketing channels, L.L. Bean argued it needed the requested financial information to counter Mother’s attempt to prove damages in an overlapping market. 

The court accepted Mother’s offer. It found: “Because the court is not familiar with the particular evidence supporting plaintiff’s damage claim for disgorgement, it is difficult to ascertain the degree of validity the court should place on defendant’s argument regarding the need for the undisclosed information as it may relate to the ‘infringement’ issue. There is, however, the potential for prejudice. Plaintiff submits that less serious sanctions may be imposed by accepting plaintiff’s offer to abandon all claims for plaintiff’s lost profits, although the tenor of plaintiff’s proposal suggests that it has chosen to proceed on that basis voluntarily, and its utilization as a sanction, standing alone, appears to be weak.”

The court also ordered Mother to pay the reasonable expenses, costs, and attorney’s fees that L.L. Bean incurred in bringing the motion.

The case cite is Mother, LLC v. L.L. Bean, Inc., No. 06-5540 (W.D. Wash. 2007).

It’s that time of year again…. Time for the Interbrand rankings of the Best Global Brands, which BusinessWeek published yesterday. (BusinessWeek article here; Interbrand analysis here.) Three Seattle companies cracked the top 100: Microsoft, Amazon.com, and Starbucks. Each maintained its position from last year or climbed a bit higher on the list. Microsoft ranked second, same as last year; Amazon.com rose three spots to 65, and Starbucks likewise advanced three spots to 88.

Here’s what the the BusinessWeek story says about Seattle’s big brands:

• Microsoft (2007 brand value listed at $58,709,000,000): “The launch of its Windows Vista operating system, coupled with its Xbox game console, keeps the software giant’s latest technology in front of consumers.”)
• Amazon.com (2007 brand value listed at $5,411,000,000): “Finally viewed by consumers as the superstore it always tried to be, Amazon is adding cool, participatory Web services that may enhance its brand image.”
• Starbucks (2007 brand value listed at $3,631,000,000): “With 2,400 new stores opening globally in 2007, Starbucks continues to make itself the world’s ubiquitous coffee shop.”

To qualify for the list, “each brand  must derive at least a third of its earnings outside of its home country, be recognizable outside of its base of customers, and have publicly available marketing and financial data.” Interbrand also excluded portfolios of brands like Procter & Gamble, airlines because it deemed it too difficult to separate brand from nonbrand value, and pharmaceutical brands because it found consumers relate primarily to the product rather than the producer.

The Canadian Trademark Blog, which tipped me off that the list was out, discusses how Canadian brands fared here.

On Aug. 2, the Ninth Circuit handed down a new dilution decision, albeit under the old standard.

In Jada Toys, Inc. v. Mattel, Inc., Jada sued Mattel for trademark infringement, false designation of origin, and unfair competition on the theory that Mattel’s OLD SCHOOL and NEW SCHOOL lines of miniature vehicles infringed Jada’s registered trademark OLD SKOOL for toy trucks. Mattel counterclaimed on several grounds, including that Jada’s HOT RIGZ mark infringed and diluted Mattel’s HOT WHEELS mark. The Central District of California granted summary judgment for Mattel on Jada’s OLD SCHOOL and NEW SCHOOL claims, and granted summary judgment for Jada on Mattel’s counterclaims. Mattel appealed the dismissal of its counterclaims. The court’s treatment of Mattel’s dilution claim is discussed below.

As a threshold matter, the Ninth Circuit applied the “actual dilution” standard set forth in the Federal Trademark Dilution Act rather than the “likelihood of dilution” standard contained in the Trademark Dilution Revision Act. In a footnote, the court explained: “Because this action was filed in 2004, prior to the 2006 amendment of § 1125, the previous version of § 1125 applies….” This may be the first time an appellate court has applied the “actual dilution” standard on summary judgment after the TDRA was enacted based on when the lawsuit was filed. (STL has covered courts’ retroactive and prospective application of the October 2006 statute here and here.)

Analyzing the FTDA, the court found a reasonable trier of fact could conclude that HOT WHEELS is famous and that Jada began to use HOT RIGZ after HOT WHEELS became famous. As for actual dilution, the court found that because the marks were not identical, Mattel needed to show that consumers “mentally associate one mark with the other” and that “the mental association that occurs reduces the capacity of the famous marks to identify its goods.”

“Here, Mattel submitted two surveys to show actual dilution. In the first survey, respondents were exposed to the HOT RIGZ name and asked who they believed ‘puts out or makes’ a toy vehicle with that name. Twenty-eight percent of respondents thought that the toy vehicle put out under that name was either made by Mattel or by the same company that produced HOT WHEELS, or that whatever company that did produce it required permission from Mattel to sell the product.”

The court stated: “In a separate survey, respondents were shown a HOT RIGZ package and asked who they thought put out that product. Of the respondents, 7% believed it was either made by Mattel or by the same company that produced HOT WHEELS, or that whatever company that did produce it required permission from Mattel to sell the product.”

The court concluded: “These surveys do more than indicate that consumers associate one mark with the other; they suggest that Mattel’s HOT WHEELS mark does not adequately identify its product because Jada is able to convey, through the use of its HOT RIGZ mark, the impression that MATTEL either produces or allows the production of HOT RIGZ. Thus, a reasonable trier of fact could conclude that this evidence was sufficient to establish the existence of actual dilution.

Based on this finding, the court reversed the district court’s summary judgment dismissal of Mattel’s dilution counterclaim. The court likewise reversed the district court’s dismissal of Mattel’s infringement claim. Those claims are remanded for trial.

The case cite is Jada Toys, Inc. v. Mattel, Inc., 2007 WL 2199286, No. 05-55627 (9th Cir.).

On Aug. 1, the Western District granted in part and denied in part defendants’ motion to limit plaintiff’s damages expert testimony in Baden Sports, Inc. v. Molten. The case turns on Molten’s sale of “dual-cushion technology” basketballs, which Baden claims infringes its patent and constitutes unfair competition. STL previously wrote about the case here. The 43(B)log wrote about the case here. 

Molten moved in limine to limit Baden’s expert testimony under Rule 37(c), which prevents a party from offering at trial evidence it failed to disclose in an expert report as required by Rule 26(a)(2)(B) or in a supplemental disclosure under Rule 26(e)(1). Trial is scheduled to begin tomorrow.

With regard to expert Scott Hamilton, Judge Marsha Pechman found that preclusion of certain testimony was proper. Mr. Hamilton’s report stated that Baden had asked him to assess damages from Molten’s alleged patent infringement, unfair competition and other claims as stated in Baden’s Third Amended Complaint. In his report, Mr. Hamilton stated he did not calculate the royalty rate that would compensate Baden for Molten’s alleged patent infringement because Molten had not yet provided copies of its financial statements and other data he needed to make the calculation. Thereafter, Molten supplemented its sales numbers and deposed Mr. Hamilton. Baden sought leave to allow Mr. Hampton to provide a supplemental report in which he would apply his previously-disclosed methodology to the numbers provided after his original report.

The court found his failure to promptly supplement his report violated disclosure rules. As the court explained: “Although Defendants provided all necessary information by April 25, Mr. Hampton has not yet provided a supplemental report. Under Federal Rule 26(e)(1), Baden was required to supplement Mr. Hampton’s disclosure no later than June 25, 2007. This delay of over three months is not justifiable. Once Molten produced additional disclosures in April, Badden should have promptly supplemented Mr. Hampton’s expert report. Badden’s offer to allow Molten to depose Mr. Hampton again, now six days before the start of trial, does not remedy the prejudice created by this late disclosure.” Therefore, the court limited Mr. Hampton’s testimony at trial to the information and opinions he expressed in his report and during his deposition.

Molten also sought to preclude Mr. Hamilton’s and fellow expert Richard Yalch’s opinions on the basis that neither expert’s report provided an opinion that Molten’s payments to the International Basketball Federation (known as FIBA) served as a measure of Baden’s Lanham Act damages. The court, however, found that both experts had indeed raised in their reports and depositions the theory of using Molten’s payments to FIBA as a proxy for the benefit that Molten received for wrongfully advertising “dual cushion technology.” Given this disclosure, the court found both experts could express such opinions at trial, though it limited their testimony to the information and opinions they previously had disclosed. 

The case cite is Baden Sports, Inc. v. Molten, 2007 WL 2220215, No. 06-210 (W.D. Wash.).

Burglars take note: in the future, those bottles marked “PEPSI” in the fridge of the house you’re robbing probably contain nothing more than a carbonated drink. No secret stash there.

That’s because on July 20, the Northern District of Georgia found that defendant Sahni Enterprises, Inc., and its affiliates, makers of bottle and can safes, infringed and diluted plaintiff PepsiCo, Inc.’s PEPSI, DIET PEPSI, MOUNTAIN DEW, SIERRA MIST and AQUAFINA trademarks. The court made the same finding with respect to defendants’ food canister safes bearing plaintiff’s CHEETOS, DORITOS and FRITOS marks. After the parties stipulated to a preliminary injunction, the court permanently enjoined defendants from manufacturing and selling safes bearing PepsiCo’s marks.

The court explained: “The Infringing Safes marketed by Sahni are manufactured by converting genuine PepsiCo bottles, cans and canisters into separate and different products — concealment devices that contain hidden compartments — that are outwardly identical to PepsiCo’s products. Upon visual inspection, and even when handled, the Infringing Sales are indistinguishable from PepsiCo’s legitimate products.”

The court found: “The modification process for the can safes creates sharp edges where the can safe lid screws into the can body. These sharp edges can cut people who use the products. As part of PepsiCo’s quality control procedures, all cans undergo a thorough rinsing process to guard against contamination and ensure product safety. Sahni’s cans do not go through this quality control process.”

Without much further analysis, the court concluded that Sahni’s safes are likely to confuse consumers about the source or sponsorship of the safes. It also found the safes “dilute and tarnish the PepsiCo Marks because Sahni uses the marks on goods commonly associated with the concealment of illicit narcotics.”

I guess I have no real quarrel with this decision. But I just can’t help thinking the court seriously lacks a sense of humor.

The case cite is PepsiCo, Inc. v. # 1 Wholesale, LLC, 2007 WL 2142294, No. 07-367 (N.D. Ga.).