Seattle Trademark Lawyer

In January, Seattle- and Marysville, Wash.-based Alpine Mortgage Services, Inc., filed suit in the Western District against Lake Oswego, Ore.-based Alpine Mortgage, LLC, for trademark infringement and breach of a settlement agreement. 

Turns out, plaintiff sued the wrong “Alpine” entity, which led the defendant to deny liability and counterclaim seeking an award of attorney’s fees based on a prevailing-party clause in the parties’ settlement agreement. In June, after plaintiff settled with the proper “Alpine” entity, Judge Thomas Zilly granted plaintiff’s to dismiss its claims against the defendant but retained supplemental jurisdiction over defendant’s counterclaim.

It took three months, but the parties apparently worked out their dispute over fees. On Oct. 1, they filed a Stipulated Order of Dismissal dismissing all claims and counterclaims between them without an award of fees or costs to either party.

The case cite is Alpine Mortgage Services, Inc. v. Alpine Mortgage, LLC, No. 09-138 (W.D. Wash.).

You destroy evidence; you lose.

That’s what the Ninth Circuit concluded when it affirmed the District of Nevada’s sanction of default judgment against alleged counterfeiters Sungale Group, Inc., Sungale Electronics, Ltd., and Amoisonic Electronics, Inc., along with a $1 million award in statutory damages in favor of plaintiff Koninklijke Philips Electronics N.V. Here’s what the Ninth Circuit had to say:

“The district court found that Sungale deliberately destroyed its computer server, and with it electronic records Philips requested; this destruction demonstrated the ‘willfulness, bad faith, and fault’ required to support terminating sanctions. Sungale’s failure to produce requested documents prejudiced Philips, and this failure was not excused by the fact that Philips possessed some of the requested documents by virtue of the U.S. Marshals’ seizure of Sungale’s business records. Finally, the district court initially considered and awarded less severe sanctions and warned Sungale of the possibility of severe sanctions before entering the default judgment against Sungale.

“Neither did the district court abuse its discretion when it awarded $1,000,000 in statutory damages to Philips. Philips elected statutory damages, as permitted by the Lanham Act. The default judgment against Sungale was warranted by Sungale’s willfulness in offering for sale counterfeit goods bearing Philips’s trademark and by Sungale’s ongoing failure to comply with discovery requests, which made proof of actual damages difficult or impossible.”

For additional case background, see STL’s Aug. 21, 2008, post on an earlier Ninth Circuit decision in the case here.

The case cite is Koninklijke Philips Electronics, N.V. v. KXD Technology, Inc., 2009 WL 3059090, No. 08-16794 (Sept. 24, 2009).

Last week a reader asked if the U.S. Olympic Committee has filed the same number of trademark lawsuits in recent years that it has filed in the past. Interesting question. The federal courts’ PACER database only goes back to 1988 (as best I can tell). During that period, the USOC has filed 39 lawsuits. Its busiest year was 2002 (Winter Games in Salt Lake City) with seven suits, followed by five in 2000 (Summer Games in Sydney), and four in 1994 (Winter Games in Lillehammer). Here’s the breakdown:

1988 - 1          1989 - 0          1990 - 2          1991 - 0          1992 - 0

1993 - 0          1994 - 4          1995 - 3          1996 - 3          1997 - 0

1998 - 0          1999 - 1          2000 - 5          2001 - 3          2002 - 7

2003 - 2          2004 - 1          2005 - 1          2006 - 0          2007 - 3

2008 - 0          2009 - 3  

So, there hasn’t been a big spike in USOC trademark lawsuits in the last few years.

On another Olympic note, the USOC is the defendant in a suit filed last year in the Northern District of Illinois, Frayne v. USOC, No. 08-5290. In it, Stephen Frayne, Jr., owner of www.Chicago2016.com, seeks a declaratory judgment that registration of his domain name does not violate the Lanham Act or the Ted Stevens Act. His Web site states: “This is NOT the official Chicago 2016 Olympic Bid Committee site” and instead is a forum for “analysis by professional economists on the topic of hosting the Olympics.” The USOC, for its part, has asserted counterclaims for trademark infringement, cybersqutting, and violation of the Ted Stevens Act. (The USOC’s Chicago bid Web site is www.Chicago2016.org.) The USOC has moved for summary judgment, which is pending before the court.

This is first for STL: a tax case.

In Blistex Bracken v. City of Seattle, the City imposed a business and occupation (B & O) tax on the licensor of the BLISTEX, BLISTIK and BLIST-FZE trademarks it owns for lip balm and skin care products to Blistex, Inc., an Illinois corporation. Blistex Bracken (BBLP), a Washington limited partnership, objected to the City’s tax on the royalties it received from its licensee. The City assessed $80,406.28 in unpaid B & O taxes plus interest and penalties, for a total of $131,439.84.

BBLP paid the tax and filed an action for a refund in superior court. The court sided in favor of BBLP on summary judgment and ordered the City to pay the refund. The City appealed.

The question on appeal was whether a sufficient nexus existed between BBLP’s activities and the City to justify assessment of the tax under the Due Process Clause of Washington’s Constitution.

On Sept. 21, the Washington Court of Appeals noted that licensee Blistex, not licensor BBLP, develops, manufacturers, markets, licenses, and sells products using the trademarks, and generates the royalty income. The court found the record showed minimal activities that BBLP engaged in relating to owning, managing, and maintaining the trademarks. This led the court to conclude the City lacked the nexus it needed to collect the tax.

“The City argues that maintenance of an office, use of banking services, and hiring accountants and lawyers satisfies the nexus requirement. Whether the BBLP maintains an office and hires accountants to prepare yearly federal income tax returns is not a determining factor in deciding whether the City exceeded its taxing authority. And although the licensing agreement requires the BBLP to register trademarks if requested by Blistex, Inc., there is nothing in the record that indicates that the BBLP actually did so during the assessment period. Nor is there any evidence in the record that the BBLP retained or paid attorneys for activities concerning the trademarks during the assessment period. Moreover, if the BBLP ceased to exist, the trademarks would continue in effect, the Bracken family would continue to receive the same royalty income, retain accountants and attorneys when needed, maintain an office to receive mail and store records, and pay federal income taxes.”

The case cite is Blistex Bracken v. City of Seattle, 2009 WL 2998187, No. 62006-1-I (Wn. App.) (Sept. 21, 2009).

Last Olympic post for a while, I promise. And I’m almost certain it’s the last time this year I’ll quote from Sports Illustrated. But here’s another gem from SI about the USOC’s ham-fisted efforts to enforce its rights to all things Olympic.

From its Dec. 5, 1994 issue:

“In its quest to bring home the gold, the U.S. Olympic Committee apparently believes it must send out several thousand letters every year implying that it will take legal action against businesses using, in their name or logo, the word Olympic or the interlocking rings, to which a 1978 federal law grants the USOC exclusive rights. This is a petty and merciless job, but the Lords of the Rings evidently feel somebody has to do it.”

Seattle doctor Dan Nelson, who at least in 1994 owned a practice called “Olympic Spinal Care,” summed up local sentiment toward the USOC’s enforcement efforts rather nicely: “‘The general provincial attitude around here is: Screw ‘em.’”

I’d say that’s still the sentiment in Seattle fifteen years later.