It nicely synthesizes recent case law on contributory liability, including Second Circuit’s April 1 decision in Tiffany v. eBay.

One takeaway is the case law remains unsettled.

“In finding that Rosetta Stone had not met its burden of showing that summary judgment was proper as to the contributory trademark infringement claim, the court’s language left unclear what its conclusions were regarding Google’s liability for the sale of trademark-protected keywords to competitors who were not necessarily counterfeiters.”

Here’s Eric Goldman’s rundown on the case.

I understand Rosetta Stone appealed the decision today, so in time the Fourth Circuit will get a shot at clarity.

James Garcia’s having a tough time of it.

In August, Western District Judge Richard Jones gave the owner of defendant Seattle Roof Brokers a choice: either publish a statement on his Web site linking to the court’s order finding him liable for making false statements about plaintiff Certainteed Corp., or take all content offline until the court approves it. (Previous STL post here.)

Yesterday, the court found Mr. Garcia went in a different direction.

“Rather than publish the specific website content that the court authorized, Mr. Garcia published a website that not only substantially altered the content he had submitted to the court, but included a substantial amount of new content as well,” which Certainteed alleges is filled with false statements.

Without considering the truth or falsity of the statements, the court found that Mr. Garcia violated the court’s order.

Here’s its remedy.

“Accordingly, the court orders [Mr.] Garcia to take ‘offline’ all websites under this control (including seattleroofbroker.com and any similar sites). He shall do so no later than 12:00 p.m. on September 2, 2010, and the websites shall remain ‘offline’ until further order of the court. If he does not comply with this order, he will be deemed in contempt of court, and will, at a minimum, be subject to a sanction of $100 for each day that his website or websites remain online.”

The case cite is Certainteed Corp. v. Seattle Roof Brokers, No. 09-563 (W.D. Wash. Aug. 30, 2010) (Jones, J.).

Defendant Welch Foods, Inc., sells various bottled juices under its WELCH brand.

In 2006, Welch developed a juice blend it named “Welch’s 100% White Grape Pomegranate.” The ingredient declaration identifies the juices used in the product, namely white grape, apple, and pomegranate juices (from concentrate), but does not does not disclose the percentage of any of the juices.

In January 2009, Pom filed suit in the Central District of California for false advertising based on Welch’s use of the word “pomegranate” because the product allegedly contains very little pomegranate juice.

After a number of other motions, Welch filed a motion for summary judgment on its unclean hands defense. Welch argued that Pom had engaged in the same kind of conduct that Pom alleges is deceptive and misleading, including Pom’s failure to disclose that its 100% pomegranate juice product at one point contained elderberry and Pom’s sale of juice blends that, at one point, contained juices other than those identified in the product name.

The Central District of California concluded these facts were not sufficiently “egregious” or causally related to consumer deception to sustain Welch’s unclean hands claim on summary judgment.

“The Court finds that while Welch has offered undisputed evidence of Pom’s misleading label, Welch has not demonstrated by clear and convincing evidence that Pom’s conduct was ‘egregious.’ Welch has not offered evidence that Pom’s deception was material, i.e. that it induced customers to purchase a product that they otherwise might not have purchased. Welch has not attempted to link Pom’s inclusion of trace amounts of elderberry juice in its 100% Pomegranate Juice to consumer deception or harm. Its only evidence is that one customer called Pom asking whether ‘the plain pomegranate juice [has] any other ingredients in it’ and another customer stated to a Pom customer service representative: ‘I noticed on the bottle it says pomegranate juice from concentrate with added natural flavors. This implies that it is not 100 percent pomegranate juice …’ This anecdotal evidence, while unrefuted, does not establish that any appreciable number of consumers were confused such that Pom’s conduct could be deemed ‘egregious.’ Welch’s failure to demonstrate the existence or extent of harm caused by Pom’s deception precludes a finding that it would be inequitable for Pom to proceed on its claims.”

Unclean hands doesn’t simply mean the plaintiff was a bad actor. It means that the plaintiff has “dirtied his hands in acquiring the right presently asserted.”

The case cite is Pom Wonderful v. Welch Foods, Inc., 2010 WL 3368430, No. 09-567 (C.D. Calif. Aug. 25, 2010).

Defendant and counterclaim plaintiff Viacom International, Inc., owns the MTV and Nickelodeon television networks. On or about May 1, 2009, MTV began marketing a live-action children’s television program called “The JumpArounds” (a name it later changed to “The Fresh Beat Band”).

On May 15, 2009, Jumpitz filed suit in the Southern District of California for trademark and trade dress infringement. Viacom counterclaimed for trade dress infringement.

In particular, Viacom alleged that Jumpitz infringed Viacom’s trade dress by infringing Nickelodeon’s “visual system,” which Viacom asserted is made up a particular color palette (“distinctive shades of orange, green, and cyan blue”) and design (“‘soft’ and ‘whimsical’ geometric shapes as mortise or framing devices”). Viacom defined a “visual system” as “the visual expression of a brand, including through color, imagery, and typography, so as to promote a consistent, coherent, and distinctive brand image.”

Jumpitz moved for summary judgment.

On Aug. 13, the court found Viacom’s “visual system” was functional and, therefore, was not protectable as trade dress. 

Its discussion is interesting.

The court noted Nickelodeon’s creative director, Richard Hicks, admitted that “‘A significant portion of Nickelodeon’s audiences is comprised of young children, many of whom are not yet of reading age and therefore identify brands not by words but instead by visual elements, including colors and shapes.’ Mr. Hicks also states, ‘Colors are among the first things children are able to distinguish ….’ This evidence demonstrates that the use of colors is important to Viacom because of the limited cognitive abilities of children, the intended audience, not to distinguish its brand from other competitors in the market. Furthermore, there is no evidence in the record to demonstrate that Viacom’s use of ‘simple yet whimsical shapes’ is Viacom’s attempt at distinguishing the Nickelodeon brand from other competitors. Rather, it appears to be Viacom’s attempt to appeal to children, who are inherently less adept at cognitive functioning. Thus, the Court is not convinced that Viacom has adequately carried its burden of demonstrating that its ‘visual system’ is non-functional.”

The court added: “[T]he Court would be remiss if it did not express its concerns over affording trade dress protection to Nickelodeon’s broadly defined ‘visual system.’ Children present a unique audience and companies attempting to reach children must figure out how to reach children in light of their limited cognitive abilities. The use of bright, fun colors and whimsical, playful shapes are not quintessential Nickelodeon; they are tools that companies have used for years to reach children. Allowing Viacom to assert a protectable interest in its broadly defined ‘visual system’ would stifle competitors in the filed of children’s entertainment in a way not contemplated by the Lanham Act.”

The case cite is The Jumpitz Corp. v. Viacom Int’l, Inc., 2010 WL 3238953, No. 09-1063 (S.D. Calif. Aug. 13, 2010).

On Aug. 12, the Ninth Circuit affirmed.

The way the Ninth Circuit tells the story, it’s pretty clear-cut.

“Defendant initially adopted the contested mark, HYDRAMEDIA, before it knew that Plaintiff even existed. When Defendant discovered Plaintiff’s use of a similar mark, it relied on in-house counsel’s opinion that there was little likelihood of confusion based on the companies’ distinct services. Defendant enjoyed a strong reputation and there was no evidence that it sought to mislead consumers or usurp any goodwill associated with Plaintiff’s mark. Under such circumstances, Defendant’s infringement was not willful.”

The Ninth Circuit also affirmed the district court’s refusal to award an accounting of defendant’s profits, which also makes sense given its finding that the infringement was not willful.

“Our decisions regarding an award of profits emphasize the importance of willfulness in the analysis. ‘Indeed, this court has cautioned that an accounting is proper only where the defendant is attempting to gain the value of an established name of another.’ Defendant was not trading off Plaintiff’s name. Defendant’s infringement was not willful. The district court did not abuse its discretion by denying Plaintiff’s motion for an award of profits.”

The case cite is HydraMedia Corp. v. Hydra Media Group Inc., 2010 WL 3190611, Nos. 09-55237, 09-56047, and 09-56050 (9th Cir. Aug. 12, 2010).

That’s what the Ninth Circuit reiterated last week in Fortune Dynamic, Inc. v. Victoria’s Secret Stores Brand Management, Inc.

In that case, Victoria’s Secret sold or gave away hot pink tank tops with the word “Delicious” printed across the front. The purpose of its efforts was to promote its BEAUTY RUSH beauty products.

Fortune Dynamic sued, alleging that Victoria’s Secret’s use infringed its incontestable registration for DELICIOUS for footwear.

As the Ninth Circuit later summarized, “Victoria’s Secret executives offered two explanations for using the word ‘Delicious’ on the tank top. First, they suggested that it accurately described the taste of the BEAUTY RUSH lip glosses and the smell of the BEAUTY RUSH body care. Second, they thought that the word served as a ‘playful self-descriptor,’ as if the woman wearing the top is saying, ‘I’m delicious.’”

The Central District of California granted summary judgment in Victoria’s Secret’s favor.

Fortune Dynamic appealed to the Ninth Circuit.

The Ninth Circuit reversed and remanded, finding that it was not appropriate for the district court to decide that no likelihood of confusion existed and that the fair use doctrine applied as a matter of law.

“This case is yet another example of the wisdom of the well-established principle that ‘[b]ecause of the intensely factual nature of trademark disputes, summary judgment is generally disfavored in the trademark arena,’” the court said. “We are far from certain that consumers were likely to be confused as to the source of Victoria’s Secret’s pink tank top, but we are confident that the question is close enough that it should be answered as a matter of fact by a jury, not as a matter of law by a court.

“The same is true of Victoria’s Secret’s reliance on the Lanham Act’s fair use defense. Although it is possible that Victoria’s Secret used the term ‘Delicious’ fairly — that is, in its ‘primary, descriptive sense’ — we think that a jury is better positioned to make that determination.”

The case cite is Fortune Dynamic, Inc. v. Victoria’s Secret Stores Brand Management, Inc., __ F.3d __, 2010 WL 3258703, No. 08-56291 (9th Cir. Aug. 19, 2010).

Photo credit: Borrowed from The Briefcase: Commentary and Analysis of Ohio Law

Plaintiff Mirina Corp. is a Seattle-based biotech firm.

Defendant Marina Biotech is a Bothell, Wash.-based biotech firm.

According to plaintiff’s complaint, both companies promote RNA-based therapeutic research and drug development services.

The complaint alleges that on July 22, defendant’s predecessor changed its company’s name to Marina Biotech. It states that plaintiff warned defendant that the name change would create a conflict with Mirina’s name, which plaintiff claims it started to use in August 2008.

The complaint says the dominant part of both names sounds the same and defendant’s use is likely to cause confusion with plaintiff’s use.

The case cite is Mirina Corp. v. Marina Biotech, No. 10-01322 (W.D. Wash.).

Mr. Gasper sued 1444942 Canada Inc., d/b/a Kaytel Video Distribution, and other defendants in the Central District of California for copyright infringement and for violating his right of publicity on the ground that defendants allegedly copied and sold 13 DVDs featuring his performances.

The jury found for Mr. Gasper on both issues, and the court rejected the defendants’ motion for judgment as a matter of law that the Copyright Act preempted Mr. Gasper’s right of publicity claim.

On appeal, the Ninth Circuit summarized Mr. Gasper’s right of publicity claim as the unauthorized reproduction of his performance on the DVDs.

“Gasper’s claim that the Kaytel defendants misappropriated his name and persona is based entirely on the misappropriation of the DVDs and Gasper’s performance therein. Indeed, the complaint alleged that ‘Defendants have willfully and systematically infringed Plaintiffs’ copyrights and rights of publicity (directly and by assignment) by the repeated unauthorized reproduction, counterfeiting, and sale of such counterfeit copies of Plaintiffs’ copyrighted works to third parties.’ In the amended Pre-Trial Conference Order Gasper again listed the evidence in support of his right of publicity claim as ‘Mr. Gasper’s name, likeness, photograph and voice appear in the counterfeit Gasper Films without his authorization.’ Thus, throughout the litigation Gasper has claimed that the factual basis of his right of publicity claim was the unauthorized reproduction of his performance on the DVDs.”

When Mr. Gasper’s right of publicity claim is framed as overlapping with his copyright claim, the result seems obvious.

“In the instant case, we conclude that Gasper’s right of publicity claim falls within the subject matter of copyright, and that the rights he asserts are equivalent to the rights within the scope of §106 of the Copyright Act. The essence of Gasper’s claim is that the Kaytel defendants reproduced and distributed the DVDs without authorization. His claim is under the Copyright Act. Accordingly, we reverse the district court and vacate Gasper’s judgment against the Kaytel defendants for violation of his right of publicity under California law.”

The case cite is Jules Jordan Video, Inc. v. 144942 Canada Inc., __ F.3d __, 2010 WL 3211818, Nos. 08-55075 and 08-55126 (9th Cir. Aug. 16, 2010).

The case was tried to a jury in April 2010. Trial lasted four days. The jury deliberated less than three hours. It returned a verdict finding that Gamber-Johnson had deliberately engaged in false advertising and awarded National Products $10 million in damages.

The next day, Western District Judge James Robart ordered the parties to submit supplemental briefing on Gamber-Johnson’s motion for judgment as a matter of law addressing the jury’s award of damages.

On August 13, the court reduced the jury’s award to $492,332.

Key to the court’s decision was its finding that National Products did not seek actual damages for lost sales. Given that finding, the court only considered damages based on an unjust enrichment theory or disgorgement of Gamber-Johnson’s profits and did not consider whether substantial evidence existed to support a finding of actual damages to the tune of $10 million.

The court particularly considered that: “(1) a remedy should not be granted as a matter of right; (2) the remedy must represent compensation for damages and not a punishment to the defendant; (3) NPI is not entitled to a windfall; (4) there must be some evidence of damage attributable to the false advertisement; (5) the court must look to the ‘totality’ of the circumstances; and (6) the court should consider the jury’s findings that Gamber-Johnson engaged in deliberate false advertisement.”

Applying these principles, the court accepted the testimony of Gamber-Johnson’s damages expert but applied the higher Gamber-Johnson profit margin that National Product’s damages expert calculated.

Gamber-Johnson’s expert “opined that NPI’s lost profit from sales during this time period of approximately $365,000 was the best indication of Gamber-Johnson’s gained profit from a diverted sales that would have gone to NPI. This calculation is also consistent with [NPI’s expert’s] trend analysis of NPI’s lost sales during the relevant time period. [Gamber-Johnson’s expert], alternatively, performed a trend analysis on Gamber-Johnson’s profits to determine if it made a profit during the relevant time period. [Gamber-Johnson’s expert] first assumed that there were no other factors that could have increased Gamber-Johnson’s profits other than diverted sales from NPI. He then calculated Gamber-Johnson’s revenue over the relevant period and identified an increase in sales of $1,183,492, in relation to Gamber-Johnson’s historical revenue trend. Using the lower profit margin he calculated of 29.8%, [Gamber-Johnson’s expert] determined that based on the historical trend analysis, Gamber-Johnson’s additional profits during this time were $352,796. NPI did not offer additional evidence to refute this calculation. However, the court notes that had [Gamber-Johnson’s expert] used the higher profit margin posited by [NPI’s expert] of 41.6%, Gamber-Johnson’s net profit during the relevant time-period, based on a trend analysis, would have been approximately $492,332.”

The case cite is National Products, Inc. v. Gamber-Johnson LLC, No. 08-0049 (W.D. Wash. Aug. 13, 2010) (Robart, J.).

STL readers may recall the Western District case of Loops, LLC v. Phoenix Trading, Inc., in which the plaintiff accused the defendant of violating the Lanham Act (among other claims) when the defendant bid to sell flexible “non-shank” toothbrushes to the New York City Department of Corrections.

Phoenix Trading, d/b/a Amercare, moved for summary judgment on Loops’ Lanham Act claim.

Here’s Western District Judge Ricardo Martinez’s summary of the claim.

“Loops describes the factual basis of its claim as follows: ‘In June 2006, unbeknownst to Plaintiffs, Defendants bid on a contract to supply the [NYC-DOC] with Loops Flexbrush toothbrushes. Plaintiffs did not have notice, did not provide their approval or consent to Amercare to bid on the contract, and did not have any agreement to supply Amercare with Loops Flexbrush toothbrushes to NYC-DOC. As a result, Amercare bid Loops Flexbrush toothbrushes with the intent to supply the toothbrushes directly.’”

The court found these facts could not sustain a Lanham Act claim.

“Crediting Loops’s version of the facts, the evidence merely shows that Amercare offered to provide the Loops Flexbrush to NYC-DOC in 2006 when, in fact, it had no ability to do so because Loops had not agreed to allow Amercare to distribute its products. There is no evidence that Amercare ever provided toothbrushes to NYC-DOC in 2006 falsely designated as Loops Flexbrushes. Nor is there evidence that NYC-DOC was confused or deceived. In any case, Amercare did not win the 2006 bid and Loops did not suffer injury caused by Amercare’s 2006 bid.

“Alternatively, Loops argues that Defendants’ ‘unfair competitive practices’ of soliciting samples of Loops Flexbrushes, copying them, and using the copies to bid against Loops, violate the Lanham Act. This is unpersuasive. When Amercare bid on the NYC-DOC contract in 2007, it offered to provide the Amerfresh toothbrush. The bid documents indicated that Amercare was offering to provide the Amerfresh toothbrush, the toothbrushes were labeled ‘AmerCare’ and the packaging was labeled with ‘AmerCare.’ There is no possibility that NYC-DOC wasa confused regarding the origin of Amercare’s toothbrushes. While Loops objects to what it characterizes as the ‘slavish copying’ of its Flexbrush, the Lanham Act offers no protection. As the Supreme Court has stated, ‘unless an intellectual property right such as a patent or copyright protects an item, it will be subject to copying.’”

The case cite is Loops, LLC v. Phoenix Trading, Inc., 2010 WL 3041866, No. 08-1064 (W.D. Wash. July 20, 2010) (Martinez, J.).