Entries from March 1, 2008 - March 31, 2008

Ninth Circuit Finds Endorsement No Reason to Dismiss Advertising Injury Case

Ex-members of The Doors and surviving relatives of Jim Morrision sued Ray Manzarek, a founding member of The Doors, and Doors Touring, Inc., in two lawsuits, alleging that Mr. Manzarek and his new band were liable for infringing THE DOORS name, trademark, and logo in conjunction with their planned national and international tours. Mr. Manzarek’s defense fees and costs in those suits exceeded $3 million.

St. Paul Fire & Marine Insurance Co. insured Mr. Manzarek under a commercial general liability policy and Mr. Manzarek, DTI, and another band member under a second CGL policy. Mr. Manzarek and the other insureds claimed they were entitled to coverage under the policies’ “advertising injury” provisions.

Mr. Manzarek and DTI sued St. Paul in California state court after St. Paul refused to defend or indemnify them based on a “Field of Entertainment Endorsement” (FELE) that excepted from coverage advertising injury within the policyholders’ “field of entertainment business.” St. Paul removed the action to the Central District of California and then moved to dismiss for failure to state a claim. The court granted the motion, finding the Field of Entertainment Endorsement was conspicuous, unambiguous, and enforceable.

On March 25, the Ninth Circuit reversed this finding. It found:

“The fundamental problem with the district court’s decision is that it fails to apply the language of the FELE to the factual allegations contained in the complaints in the Underlying lawsuits. The FELE excludes coverage for ‘advertising or publicizing for, any Properties or Programs which are within your Field of Entertainment Business.’ Contrary to the interpretation adopted by the district court, the definition of Field of Entertainment Business is not broad enough to cover the entirety of the allegations in the Underlying Lawsuits.”

The court concluded:

“In this case, the Underlying Lawsuits allege that Manzarek and DTI marketed products and merchandise at their concerts and on The Doors official website. The Underlying Lawsuits, however, are silent about what type of products and merchandise that Manzarek and DTI produced and marketed. For all St. Paul knew when it denied coverage, the products marketed by Manzarek and DTI included guitars, t-shirts, and perhaps (although we realize it is not likely) salad dressing bottles with The Doors logo and/or Morrison’s likeness affixed to them. These allegations raised the potential for coverage under the Policies and, for that reason, the district court erred by summarily dismissing Manzarek’s and DTI’s breach of contract claim.”

For the same reasons, the court also concluded the district court erred by summarily dismissing the insureds’ claim for breach of the implied covenant of good faith and fair dealing.

The case cite is Manzarek v. St. Paul Fire & Marine Ins. Co., __ F.3d __, 2008 WL 763385, No. 06-55936 (9th Cir. March 25, 2008).

Posted on March 31, 2008 by Registered CommenterMichael Atkins in | CommentsPost a Comment | EmailEmail | PrintPrint

Hazelden Band Name Dispute Pits Drug Treatment Center Against Indie Rockers

Hazelden%20logo.pngThis month, Los Angeles-based indie rock band Hazelden received a cease-and-desist letter from the Minnesota-based drug and alcohol treatment center of the same name. The Hazelden Foundation claims the band has infringed and diluted its HAZELDEN family of registered trademarks.

Hazelden%20record%20cover.jpgThe Hazelden Foundation particularly objects to the “derogatory drug-related, stage named singer, Mary Jane Snow.”

Its cease-and-desist letter states:

“We demand that you immediately cease and desist all use and reference to the registered mark HAZELDEN together with any other derivative names (i.e., Hazeldon, etc.) and acknowledge your willingness to do so within seven days of receipt of this letter.

“Alternatively, should you not cease your infringement of Hazelden Foundation’s mark and acknowledge your willingness to do so, we will bring a Federal District Court action against you under the Federal Lanham Act for trademark and service mark infringement, dilution of Hazelden’s famous mark, the creation of a false affiliation of sponsorship with Hazelden Foundation and disparagement.”

The band, for its part, says it selected its name after World War II test pilot Hedley Hazelden, who crashed several times and lived to tell the tale. However, citing lack of financial resources to defend itself, on March 25 the band offered to change its name once the remaining inventory of its t-shirts and debut album is sold, though no later than the end of the year.

This dispute has been tough on the band. As Ms. Snow put it in the band’s response:

“[C]hanging the name of a band might seem like a simple concept, but really you are asking me to go out of but really you are asking me to go out of business, virtually overnight. [I] come from an extremely poor family, graduated from [N]orthwestern with massive amounts of debt and now for the last two years risked everything for this band by putting over $15,000 on credit cards in an attempt to bring it to market. [A]ll that money went to pay for graphic designers (logo and CD artwork), CDs, website, and overall the initial states of marketing a band — it’s really no different than starting a small business. [I] am truly devastated over this whole situation.”

Think anyone would really confuse a rock band with a treatment center? Doesn’t seem likely. Dilution by blurring or dilution by tarnishment is a closer call, though I can hardly see a nonprofit treatment center believing that suing an upstart band is a good way to spend its money.

Let’s hope the Hazelden Foundation accepts the band’s offer, the band changes its name within the next nine months, and then becomes a huge success.

Posted on March 30, 2008 by Registered CommenterMichael Atkins in | Comments1 Comment | EmailEmail | PrintPrint

Derek Andrew Settles TWISTED HEART Trademark Suit with Chrome Hearts

Chrome%20Hearts%20design%20mark2.gifIn November 2007, Bellevue-based clothier Derek Andrew, Inc., filed suit against California-based jeweler and clothier Chrome Hearts, Inc. Derek Andrew sought a declaratory judgment from the Western District that its TWISTED HEART line of clothing does not infringe Chrome Hearts’ CHROME HEARTS registered fleur de lis design marks, among other claims.

Today, the parties officially made nice. Derek Andrew filed a Notice of Dismissal stating that “this matter has settled and that this action and all claims herein may be dismissed without prejudice and without costs to either party.”

The case cite is Derek Andrew, Inc. v. Chrome Hearts, Inc., No. 07-1830 (W.D. Wash. 2008). 

New Interpretation Speeds Resolution of Trademark Disputes in China

Effective March 1, the judicial committee of the Supreme People’s Court of the People’s Republic of China adopted a new judicial interpretation speeding the time for courts to resolve trademark disputes and giving the owners of famous trade names and trademarks the ability to sue those who register the same or similar names or marks.

Beijing-based Wisdom IP Services recently translated the New Judicial Interpretation on Civil Disputes Over Registered Trademarks, Company Names and Conflicts of Prior Rights as follows:

“Objective: To correctly try cases of civil disputes over Registered Trademarks, Company Names and Conflicts of Certain Prior Rights, by taking judicial practices into account, New Judicial Interpretation are formulated in accordance with the Civil Procedure Act of PRC, the General Principles of the Civil Law of PRC, the Trademark Law of PRC, the Anti-unfair Competition Law of PRC and other relevant laws.

“Article 1. For a lawsuit filed on the ground that the character or graph used in the registered trademark of other party infringes upon the plaintiff’s copyright, design patent, company name or other prior right, if the lawsuit conforms to the provision of Article 108 of the Civil Procedure Law, the people’s court shall accept and hear the case. …

“Article 2. For a lawsuit is filed on the ground that a registered company used by other party is identical or similar to a prior registered company name of the plaintiff, which will bring confusion to the public on the commodity’s source of the defendant and thus is against Article 5(3) of the Anti-unfair competition law, if the lawsuit conforms to the provision of Article 108 of the Civil Procedure Law, the people’s court shall accept and hear the case.

“Article 3. The People’s Court should determine case brief for Civil Disputes Over Registered Trademarks, Company Names and Conflicts of Certain Prior Rights, in accordance with the Civil Case Brief Provisions (provisional), and apply suitable provisions, considering the claims of the plaintiff and the nature of the civil dispute.

“Article 4. If the company name of the defendant infringes the exclusive right of a registered trademark or falls into unfair competition, the people’s court should decide, according to the plaintiff’s appeal and the actual circumstances of the case, that the defendant must bear such civil liabilities as stop of use or proper use.”

Western District Finds Lanham Act Claim Deficient But Allows it to be Amended

In the Western District case of Teragren, LLC v. Smith & Fong Co., the parties are competing bamboo floor paneling processors. Smith & Fong responded to Teragren’s complaint for patent infringement by asserting six counterclaims, including that Teragren was liable for making false statements that amounted to unfair competition prohibited by the Lanham Act.

Teragren moved to dismiss Smith & Fong’s counterclaims, including its unfair competition claim. In particular, Teragren argued:

“Defendant never asserts that Teragren’s descriptions or representations were made in promotions or advertising or that Teragren’s alleged ‘statements’ cause confusion, mistake, or deceive as to the affiliation, connection, association, origin, sponsorship, or approval of goods, services, or commercial activities. As such, defendant’s allegations never even suggest likelihood of confusion by the public, which is required to assert a claim under the Lanham Act.”

On March 17, Western District Judge Ronald Leighton agreed with Teragren’s argument, but allowed Smith & Fong to amend its counterclaim to correct the deficiency:

“To prove a false statement is actionable under Section [43(a)] of the Lanham Act, a person must show that the statement is 1) likely to cause confusion as to the affiliation or connection of the parties, or 2) is made in commercial advertising and promotion and misrepresents the nature, characteristics and qualities of another person’s goods.

“The Ninth Circuit has required a party to plead a claim under the Lanham Act with some particularity. In order to state a claim for false advertising under 43(a) of the Lanham Act, a party must allege 1) the opposing party made a false statement of fact in a commercial advertisement or promotion about his own or another’s product; 2) that the statement actually deceived or has the tendency to deceive a substantial segment of its audience; 3) that the deception is material, in that it is likely to influence the purchasing decision; 4) that the party caused its false statement to enter interstate commerce; and, 5) that there has been or will be injury as a result.

“The Defendant’s counterclaim does not allege allegations that the false representations of the Plaintiff are likely to cause confusion. Rather than dismissing the counterclaim, the Court will permit the Defendant to amend its Lanham Act counterclaim.”

The case cite is Teragren, LLC v. Smith & Fong Co., No. 07-5612, 2008 WL 725186 (W.D. Wash. March 17, 2008) (Leighton, J.).

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