Monday, November 17, 2008

Jones Day Lives to Fight Another Day In Trademark Infringement Lawsuit Against Blockshopper

Those liberal pleading rules have allowed Jones Day to survive a Motion to Dismiss Under Rule 12(b)(6) for Failure to State a Claim with respect to its trademark infringement lawsuit against BlockShopper, a website which collects publicly available information on real estate transactions, for identifying two law firm associates (Dan Malone and Jacob Tiedt) who purchased some expensive condos as being employed by “Jones Day” and linking their names to their Jones Day website bios. See previous blog posts here and here.

News reports of the court’s opinion can be read here, here and here. The actual opinion can be downloaded here.

The court, accepting all well-pleaded factual allegations set forth in Jones Day’s complaint as true, found that Jones Day had plead sufficient facts to make out “plausible” claims for trademark infringement and trademark dilution.

While the court allowed the case against BlockShopper to proceed, the court did dismiss claims against the company’s principals, Brian Timpone and Edward Weinhaus, on the basis that the complaint did not have sufficient allegations to plausibly state a claim of individual liability against the two principals for infringement by the company.

Vegas™Esq. Comments:
I wonder how many people out there can truly appreciate how much this lawsuit is going to cost Blockshopper to defend in terms of legal fees. To the extent that Blockshopper is being charged for time spent by its attorneys, Blockshopper has probably already spent about $10,000 to $20,000 up to this stage. And since the court has chosen not to dismiss the complaint, BlockShopper will now have to file an answer (another $5,000 and possibly up to $10,000 if counterclaims are included). Discovery will soon begin thereafter. Jones Day will use its behemoth resources to deluge BlockShopper’s counsel with document requests and other discovery – all of which BlockShopper’s counsel will have to treat seriously and spend countless hours reviewing such discovery and preparing responses thereto (another $10,000 to $20,000). And that’s just the beginning of discovery. Add $25,000 to $50,000 for additional discovery (assuming Jones Day comes out guns blazing) and then $25,000 for the Summary Judgment Motions.

All of this just for posting public domain information online.

And the truly sad part of it all is that even if Blockshopper ultimately wins this case (and is there anybody out there not employed by Jones Day who thinks they won’t?), the company might not be able to recover its attorney’s fees for having to defend this case. The court has the authority under 15 U.S.C. § 1117(a) to award a winning defendant in a trademark case attorney’s fees in “extraordinary circumstances” – however, so long as the claims are deemed to be not frivolous or unreasonable (and Jones Day will certainly fight hard to show that even though it lost, its claims were not frivolous or unreasonable), then an award of attorney’s fees will be denied.

1 comment:

trademark said...

I think that this case is much more difficult for the defendant than generally recognized in the commentary going around.
Consider this:
1. There is no doubt that the defendant used Jones Day's name in order to say to the world "we're so good, the largest firm in our area consistently uses us." Therefore, the defendant wanted to get attention and legitimacy for its business by leveraging off of Jones Day name.
2. Law firms generally never use clients names like this without client permission. How common is that restriction in other areas of commerce? More importantly, what percentage of the general public would assume that professional companies don't use these types of references without permission? Were the ads aimed at lawyers who might make that assumption?
3. We always say in trademark law that a brand owner should be able to control their reputation so that even if the infringer's products are just as good as the plaintiff's, so what. So lets apply that logic here. What if the KKK put out an advertisement with the headline saying something like: "We're Tired of Being Mischaracterized By the Press" and then continued to discuss all the allegedly great things they had done for this country. (I trust that no one will assume that this hypo is anything other than an effort to find an example to illustrate a point assuming that we all think the KKK is an offensive organization). At the bottom in large letters the ad had this closing:
"We are American as apple pie. Our members bank at Citibank just like you do; shop at Safeway just like you do; and have worked at such presitgious law firms as Jones Day." Lets also assume that the only factual basis for this claim is that in the 1950s there were two partners who were KKK mmebers before the firm found out and fired them.

Would you be more sympathetic to Jones Day in this case? If so, then the only difference is that you don't find this defendant -- just a real estate firm --- to be offensive. But isn't the point of trademark law that the brand owner controls the destiny of their brand?

Now, I am not suggesting that the nominative fair use defense does not have some role -- even a major role -- in establishing limits to trademark rights. But it seems to me that when there is no need to use the trademark that the burden to justify the use should be higher.

If you read New Kids closely you will see that the decision talks about the fact that there are some trademarks for which there is no easily available substitute but that there are others for which there are, such as adhessive tape for Band Aid or tissue for Kleenex. The famous quote about trademark law not forcing someone to use "second best" language does not mean that they always have the right to use someone's trademark if there is an easily available alternative. Is Jones Day necessary or could it be enough to say "large national law firm." ???
I have not seen the actual infringing use in this case and perhpas that would chnage my mind but I think that in cases like this when the defendant is obviously trying to leverage off of a brand association that the burden should be on them to show what they did to ensure that there would be no confusion as to the affiliation or sponsorship of the promtion. Did they use a disclaimer that was as promenient as the use? What else abou the context of the use might have diminsihed the perception that this was a sanctioned use? Do they typically get permission from other clients before they use their name?
Famous brands are alwyas having people wanting to leverage off of their success. Do you know how expensive that can be? Why should not the burden of expense fall first to the person who is seeking to make some association between his brand and the famous brand to show that he took steps to safeguard the senior brand?
Isn't that consistent with the theory that a second comer has a duty to avoid confusion?

Again, there may be some good defenses here and Jones Day may be overreacting but I am surprised that the trademark blog world has not been at least more understanding of Jones Day's position. They may not win but they clearly have a valid concern.