Seattle Trademark Lawyer

There’s been a lot of talk this week about parties’ litigation Web sites — much of it stemming from OMS Investments, Inc. v. TerraCycle, Inc., a trade dress case STL wrote about last week. The Chicago IP Litigation Blog posted on the subject and linked to a Wall Street Journal article, both of which discuss the Web site that defendants established, www.SuedByScotts.com. The 43(b)log and The Wall Street Journal’s Law Blog discussed the suit and the site as well.

Locally, I know of at least two trademark cases that have spawned Web sites: Autodesk, Inc. v. Open Design Alliance (discussed by STL here, here, and here) and Moonstruck Chocolate Co. v. Moonray Espresso Corp. (discussed by STL here, here, and here). Autodesk generated www.ADSKvODA.com. Moonstruck was vigorously discussed in the DuvallForums message board and, for a time, on a site whose name belies the owner’s loyalties, www.BoycottMoonstruck.com.

I can’t judge the impact these sites have on the cases they cover. But as a blogger I can say that I paid more attention to them knowing how closely they were being watched. I saw my traffic jump when I wrote about them. So, I kept writing about them. I can see that I’m not alone in reacting that way. The little New Jersey district court case of OMS Investments v. TerraCycle — one of one hundred such cases currently pending in federal district courts — has now been covered by The New York Times, The Wall Street Journal, and even The Herald from Everett, Wash., weighing in on the dispute from 3,000 miles away. Similarly, the Moonstruck case landed on the front page of The Seattle Times, garnered a rare Seattle Times editorial, and was discussed in Portland’s The Oregonian. If nothing else, these sites seem to get attention.

That can be important for a small company. Forget about litigation for a minute — more attention can mean more sales. Today’s WSJ article bears this out. While the request for donations to defray legal costs on TerraCycle’s litigation site hasn’t yet paid off — WSJ reports the site has only raised $515 so far — “overall company sales for the four weeks since the online campaign launched surged 122% from the immediately previous four weeks. Last year, the company’s sales increased 31% in the same period. Meantime, TerraCycle’s main Web site, which averages about 1,000 visitors a day, has spiked to as high as 13,000, according to the company — and 2% to 4% of the visitors to suedbyscotts.com click the ‘purchase online’ or ‘store locator’ links.”

With numbers like these, litigation Web sites are probably here to stay.

I give credit to The Seattle Times for really opening up Washington courts. It used to be common for parties to sign a stipulated motion for protective order and to have the court pretty much go along with it. Not anymore. After the Times’ series, “Your courts, their secrets,” ran last year, Washington courts have become much more reluctant to make court filings non-public.

The Western District case of Bourne International, Inc. v. Stoler, No. 06-5680, reflects this sentiment. Plaintiff Bourne International alleges the defendant Chet Stoler, a former officer, director, and shareholder of plaintiff, usurped a corporate opportunity by setting up a competing importing business, the South Seas Trading Company, and infringed plaintiff’s trade dress in the process. Plaintiff moved to compel production of documents pursuant to a subpoena it served on the parties’ import broker. The broker appeared and opposed the motion on grounds the subpoena sought “privileged, protected, or proprietary information, trade secrets, or other confidential commercial information.” The Western District granted the motion in part and denied it in part. The parties then moved for the entry of a stipulated protective order.

On May 15, Judge Robert Bryan instead entered an Order Declining to Enter Stipulated Protective Order. He began with the premise: “This is a public court, and its business should be conducted publicly unless there is a specific reason to keep things confidential.” The court went on to find the stipulated order was deficient for six reasons.

First, it found: “The parties have not provided the Court with a privilege log or demonstrated agreement that particular documents constitute trade secrets. Without such a showing of good cause, issuance of a protective order would be inappropriate and premature. The parties may, of course, agree on confidentiality among themselves, but when the parties request the involvement of the Court, the parties must make the requisite showing.

“Second, the stipulated protective order appears to govern the actions of persons not parties to the protective order. The protective order should govern the conduct only of parties thereto.

“Third, the proposed protective order expressly provides the Court retains jurisdiction over the protective order but that only laws of the State of Washington apply. The applicability of state and federal law to the protective order is an issue not yet before the Court and beyond the bounds of a proper protective order.

“Fourth, the stipulated protective order provides for filing documents under seal. This provision is not in accord with Local Rule CR 5(g).

“Fifth, the stipulated protective order provides that other persons may become parties to the protective order without court action. While other persons may agree to be bound by the stipulated protective order, only current signatories thereto are parties to the proposed protective order.

“Finally, the order must contain a provision that the court may change the terms of the protective order on its own motion after notice to the parties and an opportunity to be heard.”

In December, Western District Judge Marsha Pechman rejected another stipulated protective order for some of these same reasons. STL discussion of that case here with the rejected stipulated order here.

As STL previously reported, the plaintiff in Jonathan Neil & Associates, Inc. v. JNA Seattle, Inc., alleges the defendants infringe its trade name and tradedmark in connection with defendants’ competing collection agency. Here, plaintiff served discovery requests on defendants. Defendants refused to answer one interrogatory and one request for production unless a “suitable protective order” was entered. Plaintiff brought a motion to compel, which defendants did not oppose.

On May 14, Western District Judge James Robart granted the motion. He wrote:

“The court agrees that the discovery requests at issue, which relate to Defendants’ income, are directly relevant to Plaintiff’s claim for damages. The court hereby ORDERS Defendants to provide complete responses to Interrogatory No. 6.8 and Request for Production No. 4, by May 21, 2007. While Defendants may move for a protective order, the court cautions Defendants that should they fail to promptly produce the requested information, the court may impose sanctions.”

If defendants really wanted a protective order, it’s not clear why they did not immediately seek one, or at least do so in response to plaintiff’s motion to compel. Simply not wanting to produce requested discovery is not a basis for withholding discoverable information.

Everett’s daily newspaper, The Herald, recently reported on a trademark case going on in the District of New Jersey: OMS Investments, Inc., et al. v. TerraCycle, Inc. The plaintiff sellers of the MIRACLE-GRO line of plant food allege the defendant makes false and misleading claims about its TERRACYCLE plant food and infringes plaintiffs’ trade dress. Defendant denies plaintiffs’ claims.

The Herald’s gardening columnist, Debra Smith, sides with TerraCycle. Here’s her take on the dispute:

“The Scotts Miracle-Gro Co., the big boy of lawn-and-garden products, is suing a tiny New Jersey Company that produces organic fertilizer made of worm poop.

“Yes, this is the very same company that sent me worm poop samples, which I talked about in my blog at www.heraldnet.com. The company, TerraCycle, manufactures all-natural fertilizers made from a worm poop compost tea and packaged in recycled soda bottles. What a novel idea: a product made and packaged almost entirely from garbage.

“In the complaint, Scotts claims TerraCycle’s yellow and green packaging infringes on its brand. Scotts also doesn’t like TerraCycle claiming its worm poop works better and is safer than synthetic fertilizers. Scotts is also demanding access to research and proprietary knowledge about how TerraCycle’s products are made.”

Not a bad summary for a layperson.

Ms. Smith goes on to say: “I had a box of TerraCycle’s worm poop products sitting on my desk, and I had no trouble figuring out they weren’t a Scotts Miracle Gro product. In fact, the worm poop packaging looked nothing like anything I’ve seen on the garden center shelf. Another big clue: The contents weren’t Smurf blue.”

It’s always interesting to learn what a potential juror might think after all the legal doctrine is stripped away. If Ms. Smith represents a typical New Jersey juror — though there’s no indication she does — I’d say Scotts should settle.

The case cite is OMS Investments, Inc. v. TerraCycle, Inc., No. 07-1064 (D.N.J.)

In a mammoth 73-page opinion, the Southern District of New York May 4 decided a trademark case involving grey-market TEMPUR-PEDIC mattresses. The summary judgment order in Dan-Foam A/S v. Brand Named Beds, LLC, is chock full of trademark law. In fact, it’s so chock full I’ll only summarize the dilution portion of the opinion.

Plaintiffs Dan-Foam A/S and Tempur-Pedic, Inc., manufacture and distribute TEMPUR-PEDIC mattresses. They sued defendant Brand Name Beds (“BNB”), an unauthorized seller of TEMPUR-PEDIC mattresses.

In a typical grey-market goods trademark case, a cause of action for dilution arises when (1) “material differences” exist between the goods sold by the owner of a famous trademark and its authorized or licensed dealers and those sold by the unauthorized dealer, and (2) the unauthorized dealer sells the materially different trademarked goods in a manner that would be likely to dilute the strength of the trademark owner’s famous mark.

Here, the court found that a reasonable juror could find actual dilution and, therefore, likelihood of dilution, resulting from BNB’s unauthorized sales of TEMPUR-PEDIC mattresses. Therefore, it denied BNB’s motion for summary judgment.

Actual Dilution. The court found “BNB sells TEMPUR-PEDIC® mattresses under the identical TEMPUR-PEDIC® mark used by Tempur-Pedic. This ‘identity of marks creates a presumption of actual dilution.’”

Fame. Drawing all inferences in favor of Tempur-Pedic, the court found “a reasonable juror could find that the TEMPUR-PEDIC® mark is ‘widely recognized by the general consuming public of the United States as a designation of source of the goods … of the trademark owner.’ A consideration of the factors suggested by the TDRA could reasonably support a finding of famousness. The TEMPUR-PEDIC® trademark has been registered on the Principal Register of the United States Patent and Trademark Office since 1994. Since then, ‘the duration, extent, and geographic reach of advertising and publicity of the mark’ has been considerable. Tempur-Pedic advertises through newspaper and magazine ads, mailings, television commercials, infomercials, and on the internet. Tempur-Pedic ‘actively’ and ‘continuously’ advertises and promotes its products ‘on a national level.’ As a result, ‘[t]he brand is a highly regarded, distinctive, and widely known identifier of high quality, therapeutic mattresses, pillows, pads, cushions, slippers and other similar products….”

The court added: “Even though the parties have not yet offered consumer surveys relating to the ‘extent of actual recognition of the mark,’ based on the evidence currently in the record, a reasonable juror could find that the mark ‘posses[es] the requisite degree of recognition’ necessary to maintain an action for trademark dilution.’ BNB has certainly not met its burden to prove that no genuine factual dispute exists as to the issue of famousness.”

Tarnishment. The court found: “A question of material fact remains as to whether BNB’s actions in selling mattresses bearing the TEMPUR-PEDIC® mark have created an ‘association’ between the mattresses that it sells bearing the TEMPUR-PEDIC® mark and those sold by Tempur-Pedic so as to ‘harm[] the reputation’ of the TEMPUR-PEDIC® trademark. As described earlier, BNB’s repackaging and shipping procedures, as well as the likely unavailability of the Tempur-Pedic Warranty to BNB consumers — either because of those procedures or because BNB is not an authorized Tempur-Pedic dealer — could support a finding of material differences between the mattresses sold by BNB and those sold  by Tempur-Pedic and its authorized dealers.

The case cite is Dan-Foam A/S v. Brand Named Beds, LLC, No. 06-6350, 2007 WL 1346609 (S.D.N.Y.).