Cosmopolitan Loses "Reverse" Cybersquatting Claim But Trademark Infringement Claims Move On

I’ve previously written (here and here) about the lawsuits filed by 3700 Associates, LLC (“3700 Associates”) – the owner of the troubled (but still under construction) “The Cosmopolitan Resort & Casino” condo-hotel project in Las Vegas, Nevada – against a Florida domainer in a case that epitomizes reverse cybersquatting while at the same time exploring the boundaries of trademark law by claiming that a “web directory” website (those websites featuring a multiple click-through links) constitutes use in commerce for purposes of causes of action for trademark infringement and unfair competition (click here for previous blog entry on this type of trademark infringement litigation). Click here for Sept. 8, 2008 Las Vegas Sun article about the troubled project.

When we last left the story, 3700 Associates had its Nevada District Court case dismissed on jurisdictional grounds. 3700 Associates decided to refile its trademark infringement and cybersquatting lawsuit in Florida (to overcome personal jurisdiction problems) against Tim Griffin, Sr. and Griffin IT Median, Inc. (together “Griffin”) over Griffin’s ownership and use of the Internet domain name “cosmopolitanresort.com” which Griffin registered on or about August 15, 2003 – approximately 16 months before 3700 Associates began using the mark “Cosmopolitan” in connection with its planned condo-hotel project. See 3700 Associates, LLC v. Griffin et al, Case No. 08-cv-80158 (S.D. Fla. Feb. 14, 2008).

On October 6, 2008, U.S. District Court Judge Donald M. Middlebrooks granted in part and denied in part Griffin’s Motion for Summary Judgment. See 3700 Associates, LLC v. Griffin et al, 2008 U.S. Dist. LEXIS 79721 (S.D. Fla. Oct. 6, 2008)

As one would expect given the timeframe in which Griffin registered the domain name compared to when 3700 Associates announced its intent to use the Cosmopolitan name, the court dismissed 3700 Associates’ cybersquatting claim. 3700 Associates attempted to argue that “the fact that Defendants registered the Domain Name a little over a year before Plaintiff began its COSMOPOLITAN Marks is of no consequence to the analysis of whether Defendants violated the ACPA.” Well, the court begged to differ:

Contrary to Plaintiff's assertion, I find that this is a critical fact. It is evident to me--and agreed by all parties--that Plaintiff's Marks did not exist at the time that Defendants registered the domain name in August, 2003. Plaintiff weakly proposes that “[a]t the time Defendants registered the [Domain Name at issue], 'Cosmopolitan' was distinctive as a mark for resort services.” See id. at P 16. However, I find this to be a conclusory assertion unsupported by the record. The term “Cosmopolitan” is a descriptive word meaning “international,” “multinational, or “sophisticated.” Clearly, the term itself is not distinctive or famous standing alone in the context of resort services; arguably, it is most distinct in another context, as the title of a woman's magazine. Moreover, even assuming that Plaintiff has developed the term such that it has become distinctive or famous with regard to its Marks and resort services, this has only occurred since February 2005, approximately 16 months after Defendants registered the Domain Name. To prevail on an ACPA claim, the Act plainly requires that the plaintiff's mark is “distinctive” or “famous” at the time of registration of the domain name. According to the parties' agreed-upon timeline, I find as a matter of law that Plaintiff cannot prevail on its ACPA claim. Simply put, at the time that Defendants registered the Domain Name, Plaintiff's COSMOPOLITAN Marks were not distinctive or famous because the Marks did not exist, and the term “Cosmopolitan” standing alone was not distinctive or famous in real estate services.

(footnotes omitted) (emphasis in original)

Unfortunately for Griffin, however, the court denied summary judgment on 3700 Associates’ federal and common law trademark infringement and unfair competition claims on the basis of too many issues of material fact in dispute.

3700 Associates argued that Griffin was attempting to trade on 3700 Associates’ goodwill by using the domain name to host a directory website containing multiple advertising links, with pop-up advertisements that redirected consumers to various other Las Vegas-oriented websites. Griffin countered that its website did not constitute “use in commerce” of the Cosmopolitan mark because it does not compete with Plaintiff for the sale of hotel, resort, or condo services.

The court stated that while the Eleventh Circuit has quoted another court's language that establishing a web page on the Internet satisfies the Lanham Act's “in commerce” requirement (see Planetary Motion, Inc. v. Techsplosion, Inc., 261 F.3d 1188, 1195 (11th Cir. 2001) (quoting Planned Parenthodd Fed'n of Am., Inc. v. Bucci, 1997 WL 133313 (S.D.N.Y. 1997), aff'd, 152 F.3d 920 (2nd. Cir.), cert. denied, 525 U.S. 834 (1998)), the Eleventh Circuit has not yet “squarely” determined whether directory websites such as Griffin’s qualifies as a “commercial use” and other circuits have been split on the issue. As such, whether Griffin’s use of the domain name in connection with a web directory website constitute “use in commerce” remained an issue of material fact.

In addition, the court determined that there existed genuine issues of material fact as to whether 3700 Associates even possessed a valid mark for purposes of maintaining an infringement action against Griffin. While 3700 Associates attempted to argue that its COSMOPOLITAN marks were inherently distinctive, the court found that the evidence demonstrated that the marks were merely descriptive:

First, the words in the Marks consist of (1) “Cosmopolitan,” a term frequently used to describe a hotel or resort; and (2) “Resort and Casino” or “Resort Casino,” words that describe the goods that Plaintiff is providing. Second, evidence of myriad hotels and resorts around the world using the term “Cosmopolitan” indicates that the term is not a particularly innovative idea. Third, although not determinative, Plaintiff disclaimed the exclusive use of the terms in its trademark applications. Finally, Plaintiff has not had more than five years of continuous, exclusive use, as it first began promoting its resort hotel casino and condominiums in 2005.

(footnotes and citations omitted). As such, 3700 Associates faces the burden of showing evidence of secondary meaning prior to the date when Griffin began using its domain name (a date that also has yet to be ascertained) in order to maintain its infringement claims against Griffin.

The court did not even bother addressing likelihood of confusion given the other issues of material fact in dispute.

The Epic Battle Over the Patsy's Restaurants Comes To A Bitter (but Fair) End

I previously wrote (link here) about the long running dispute between Patsy's Pizzeria and Patsy's Italian Restaurant in New York City. On September 9, 2008, U.S. Magistrate Judge Ramon E. Reyes, Jr. issued a 72-page decision dealing with a flurry of post-verdict motions filed by each of the parties following the jury verdict earlier this year which found there was a likelihood of confusion between the two names. See Patsy's Italian Restaurant, Inc. et al v. Banas et al, Case No. 06-cv-05857, 2008 U.S. Dist. LEXIS 77802 (E.D.N.Y. September 9, 2008). Articles on the verdict can be found here and here. While the parties are likely to still file appeals to the Second Circuit Court of Appeals (after such a long battle, what’s another appeal to the Second Circuit in the grand scheme of things), the lengthy opinion is likely to be the ultimate end to this contentious battle between the Patsy’s.

In the end, the court ordered the two parties to use their full trade names going forward – both parties were enjoined from using the mark PATSY'S alone. In addition, the court, finding both parties to be partly at blame for the conflicting registrations (but also noting the careless manner in which the PTO handled the issue), put the parties back on an even playing field by ordering the PTO to cancel the registrations acquired by Patsy's Italian Restaurant for PATSY’S PR (stylized) (for restaurant services) and PATSY’S (for restaurant services not including pizza) and ordering the PTO not to restore the registration for PATSY’S PIZZERIA (for restaurant services) acquired by Patsy's Pizzeria.

The court added that with its decision the parties are free to seek new concurrent trademark registrations for the marks PATSY'S ITALIAN RESTAURANT and PATSY'S PIZZERIA and “strongly advised” them to fully acknowledge each other's existence and rights to the PTO, and that they should define as precisely and as narrowly as possible their own rights for services.

It deserves to be noted that Patsy's Italian Restaurant also was denied attorney's fees in the case despite a jury verdict of willful infringement -- the court did not find the case to be so exceptional as to jusify an award of attorney's fees becasue the victory was a minor one which paled in comparison to the claims on which Patsy's Italian Restaurant did not prevail.

What was most interesting about the opinion was the court’s eloquent expression of frustration and contempt towards the parties at wasting so much of time, money, and resources on a ridiculous case that should have been resolved with a coexistence agreement ages ago:

The Court ends by reproving the parties for what was been, in the end, wholly unnecessary and protracted litigation. As this Opinion and Order makes clear, both parties are to blame for what has transpired to date. The parties have expended an untold amount of money to litigate this action. They instead would have been well-advised to invest that money in their businesses. The Court is highly aware that Patsy's Italian Restaurant and Patsy's Pizzeria have each developed their goodwill through the sweat and labor of generations of restauranteurs. Patsy's Italian Restaurant and Patsy's Pizzeria are as much labors of love as they are businesses. However, it is the Court's sincere suggestion that the parties do not allow that love to blind them to the simple reality that there is plenty of room, and plenty of appetites in this world for Patsy's Italian Restaurant and Patsy's Pizzeria to exist and expand simultaneously and amicably.

Nicely put. And the same could be said for so much trademark litigation out there.

In the trademark world, it's all about timing.

As noted by Marty Schwimmer's Trademark Blog, it didn't take long for some enterprising individual to turn John McCain's questionable choice of words in reference to Barack Obama at last night's second Presidential debate into what could turn into a nice little business (for a few news cycles anyway). Nor did it take long for some creative individuals to put up a webpage and Facebook page in honor of "That One."

And it will probably comes as no surprise to discover in about two weeks that someone filed an application to register the mark "THAT ONE" for clothing within hours of the debate. Of course, I won't even get into the inevitable ornamental/decorative refusal such an application is likely to encounter.

Plaza Hotel & Casino loses lawsuit to stop Plaza Las Vegas

I previously wrote (link here) about the lawsuit between Tamares Group (“Tamares”) – the owner of the Plaza Hotel & Casino in Downtown Las Vegas – against the El-Ad Group, Ltd. (“El-Ad”), the owner of New York’s famed “Plaza Hotel” over the rights to the name “Plaza” for a hotel-casino in Las Vegas.

As reported today by numerous news outlets (NYTimes as well as articles here, here , here, and here), a jury ruled on Monday in favor of El-Ad and against Tamares in its lawsuit to stop El-Ad from naming its planned $5 billion mega-resort “Plaza Las Vegas.” The news reports uggest that lawyers for El-Ad were successful in arguing that the Plaza Hotel & Casino failed to secure its rights to the “Plaza” name by operating under several other names during its history including Union Plaza and Jackie Gaughan's Plaza (as I noted in my own blog post).

Now the only thing standing in the way of El-Ad's planned mega-resort is the massive downturn in the economy and the freezing of the credit market. I wouldn't be surprised if El-Ad ends up scrapping its plans to build Plaza Las Vegas due to the inability to obtain the necessary financing as well as the outlook for the Las Vegas hotel and gaming market -- which will leave our downtown jewel of Glitter Gulch once again the one and only Plaza in Las Vegas.

Ron Riley Responds to Dozier Internet Law with Declaratory Judgment Action

I previously wrote (link here) about the “trademark infringement” lawsuit filed by Dozier Internet Law PC which essentially was a diatribe against well-known “patent expert” Ronald Riley (along with various other arguably-defamatory comments protected, of course, from claims of defamation by the litigation privilege) with some weak allegations of trademark infringement thrown in at the end which were directed at shutting down Riley’s Dozier-gripe site www.cybertriallawyer-sucks.com (although it now appears that these “trademark claims” were not necessarily intended to go after Riley directly, but rather attacked his website in a much more creative, yet sinister way described herein).

Well, the Riley/Dozier battle has moved to federal court with the filing of a declaratory judgment action by Ron Riley in the U.S. District Court for the Eastern District of Virginia against Dozier Internet Law and its principal, John Dozier. See Riley v. Dozier Internet Law, PC, Case No. 08-cv-00642 (E.D. Va. October 2, 2008). A copy of the complaint can be downloaded from Justia here. Public Citizen, representing Riley the action against Dozier, comments here.

In addition, the original state court action filed by Dozier Law has apparently been moved to federal court. See Dozier Internet Law, P.C. v. Riley et al, Case No. 08-cv-00643 (E.D. Va. October 2, 2008).

Riley’s declaratory judgment action seeks a declaration that Riley has not infringed any Dozier’s trademarks or defamed Dozier with his website. Riley also seeks injunctive relief to stop Dozier from claiming that Riley’s website constitutes defamation or trademark infringement and from threatening any internet service provider hosting Riley’s website with claims of contributory infringement or aiding and abetting.

Just as Dozier Law’s website may have shed some light on Riley’s background (even though those details were completely irrelevant to its claims for trademark infringement), Riley’s action sheds light on Dozier Law’s aggressive tactic of attacking gripe sites not by attacking the source of the speech, but rather by going directly to the website’s hosting company and, if necessary, the hosting company’s internet service provider. [Comment—Of course, Dozier’s aggressiveness described herein probably comes as no surprise from the law firm that claimed its “cease and desist” letter was copyrighted and therefore could not be legally posted online without their consent.]

When Riley first put up his website, it was hosted by an Atlanta, Georgia company named A Small Orange, which obtains its Internet access through a company named Global Net Access. On August 28, 2008, Dozier apparently wrote a letter to Global Net Access stating that Riley’s website was defaming Dozier and infringing Dozier’s trademark rights. Global Net Access then directed A Small Orange to remove Riley’s website, which it did forcing Riley to move his site to a second hosting company, pSek.

After Dozier filed his Virginia state action against Riley on September 4, 2008 (which apparently was never actually served on Riley or any of the Defendants mentioned in the complaint), Dozier sent copies of the lawsuit to pSek for the purpose of putting the company “on notice” of Dozier’s claims of trademark infringement and alluding to the possibility that pSek may be liable for “contributory trademark infringement, aiding and abetting, and conspiracy.” When pSek raised questions about Dozier’s claims, Dozier apparently came back with the threat that if pSek did not comply with his demands (uncertain, but likely the demand to remove Riley’s website), he would “escalate the matter up to” pSek’s internet service provider (just as he had done with A Small Orange in contacting Global Net Access). Dozier’s threats worked because pSek asked Riley to move his website.

Riley moved his web site once again to a new web hosting company, Hostgator. Soonafter Riley uploaded his site, Hostgator apparently notified Riley that his account was suspended because “It has come to our attention that you are using our services to infringe upon the trademark of another” (presumably from another letter from Dozier).

Of course, Dozier is careful to cast his claims in terms of trademark infringement so that his threats of liability against the hosting companies and internet service providers fall outside the scope of the immunity provided such internet service providers under the Communications Decency Act (47 U.S.C. § 230) which normally immunizes internet service providers from most claims of liability for content on websites that they host. In essence, Dozier has been able to quash Riley’s speech through his gripe site by taking advantage of the trademark immunity loophole of the Communications Decency Act to coerce the companies doing business with Riley into not allowing him to publish his expression.

Anybody else think Riley should find a web hosting company based outside the U.S. with no offices whatsoever in the U.S. and which relies upon a foreign internet service provider. Let’s see how much impact Dozier’s letters have in persuading a web hosting company based in China or India to take down Riley’s website.

Master P Sued by Pepe Jeans over “P”

A London jeans company named Pepe Jeans London LLC has filed a trademark infringement in the U.S. District Court for the Southern Distirct of New York against Percy Miller, Inc., the company through which famed gangsta rapper turned mulit-millionaire businessman Master P (real name Percy Miller) is producing his P. Miller Designs clothing line. The lawsuit also names Happy Nation Inc., the manufacturer of the clothing, and Wal-Mart Stores, Inc., the exclusive retail seller of the clothing line. See Pepe Jeans London, LLC. et al v. Percy Miller, Inc. et al, Case No. 08-cv-08311 (S.D.N.Y. Filed September 26, 2008); see also news reports here and here.


Pepe Jeans is claiming that its “P” logo is confusing similar to the “P” used in P. Miller’s logo (see above). One news report (link here) quotes Miller as saying that he looked on the Pepe Jeans website and could not find any use of P in a circle logo. Miller also claims to have used the letter "P" enclosed in a circle since 1989 [Query – for what goods and services?]

Be that as it may, Pepe Jeans does have registered U.S. trademarks for the below “P” logo for the various clothing items including jeans, shirts, and caps (registered in 1998 and claiming first use in 1995); Footwear; and various types of bags -- and the stylization of the Pepe Jeans “P” logo is strikingly similar to the one that P. Miller uses.

Miller, calling the allegations frivolous, stated the following (news report here):

"I make clothes for underprivileged and underserved families. P. Miller Designs is about diversity. We cater to the African-American and Latino customer. I'm doing something positive for the community and I'm giving back. What are they doing? Hating? I thought this kind of thing only happened in the rap game. I put out a charitable rap album last year, made no money on it, tried to send a message to the kids about taking profanity out of their music, and because it came through Wal-Mart, I was targeted with a lawsuit."

Miller, describing the lawsuit as David vs. Goliath, also stated that he intends to file a countersuit against Pepe Jeans for interference with contractual relations. [Comment -- Given that Miller is reportedly worth hundreds of millions of dollars, who exactly is the Goliath in this case?]

Exclusive Licensee of Red October Candy Loses Trademark Infringement Lawsuit Against Importer

An appropos court decision to start off this first day of October.

A New York district court has ruled against a U.S. importer of several well-known Russian candy brands who sued a competitor importing the same candy brands for trademark infringement. The court concluded that the company lacked standing to sue for registered trademark infringement and concluded that the importer’s sale of goods, because they were genuine goods, were protected by the exhaustion doctrine from claims of false designation of origin. See Krasnyi Oktyabr, Inc. v. Trilini Imports et al, Case No. 05-cv-05359, 2008 U.S. Dist. LEXIS 74125 (E.D.N.Y. September 25, 2008).

Krasnyi Oktyabr (“Red October”) is a Brooklyn-based importer and distributor of Russian candy sold under the brand names Krasnyi Oktyabr, Rot Front and Babayevsky. These brands of candy are produced by three separate Russian companies all of which are owned by the Russian holding company, Obeyediyonne Conditery (“United Confectioners”).

On April 9, 1996, Red October entered into a license agreement with Moscow Confectionary Factory of Krasnyi Oktyabr (“Red October Moscow”), one of the three United Confectioners subsidiaries, which granted Red October the “exclusive license” to use the Krasnyi Oktyabr mark in the U.S. Based on this exclusive right, Red October filed for and in 1999 and 2001 obtained U.S. trademark registrations for, respectively, the word mark KRASNYI OKTYABR and design mark KRASNYI OKTABYR, both for candy, chocolate, and toffee goods.

In April 2005, for reasons not entirely clear from the court’s opinion, Red October entered into another agreement with Rot Front, another one of the United Confectioners subsidiaries – supposedly acting on behalf of United Confectioners – wherein Red October agreed to assign its rights to the “Krasnyi Oktyabr” trademarks to Red October Moscow and which purported to grant Red October the exclusive right to sell the Krasnyi Oktyabr, Rot Front, and Babayevsky brands of candy to the “Russian Ethnic Market” in the United States.

On or about April 5, 2005, Trilini Imports (“Trilini”), a New-York based importer of Russian goods, began importing into the U.S. the same three brands of Russian candy sold by Red October – having purchased the goods from third party Russian distributors who had obtained the candy directly from United Confectioners. Trilini continued to sell the candy despite receiving notice from United Confectioners in September 2005 that Trilini was not allowed to sell the three brands of candy for which Red October had the exclusive right to sell in the United States.

In November 2005, Red October filed suit against Trilini alleging trademark infringement and the usual supplemental state and common law claims. Trilini filed its own counterclaims for abuse of process, fraud, anti-trust violations, and tortious interference with prospective business relations. On cross-motions for summary judgment, the district court ruled in favor of Trilini with respect to Red October’s claims and ruled in favor of Red October on Trilini’s counterclaims. The court also lifted the previously imposed injunction against Trilini preventing it from selling its imported candy.

In his opinion, U.S. District Court Judge David Trager concluded that Red October lacked standing to bring an action under Section 32 of the Lanham Act (15 U.S.C. §1114) for infringement of the registered “Krasnyi Oktyabr” trademarks because Red October could not show that United Confectioners had been damaged by Trilini’s actions, and thus could not be acting as a “legal representative” of United Confectioners in the case. Furthermore, even if Red October could prove that United Confectioners had been damaged by Trilini’s actions, Red October could not show why United Confectioners was unable to participate in the litigation. Red October attempted to argue that Trilini’s actions could hurt its exclusive rights to sell the candy in the United States; however, the court noted that in the very same agreement which gave Red October that exclusive right to sell, Red October not only assigned over to United Confectioners its rights to the Krasnyi Oktyabr marks, but also assigned all potential infringement claims arising from such marks. As such, Red October had nothing which proved that it had any kind of exclusive enforcement rights to the Krasnyi Oktyabr marks that would grant it standing to sue under §1114.

With respect to Red October’s claim for false designation of origin under Section 43(a) of the Lanham Act (15 U.S.C. § 1125(a)), while the court found that Red October did have standing to bring this claim, the court held as a matter of law that there was no likelihood of consumer confusion because the goods were genuine goods from United Confectioners, and thus were protected by the exhaustion doctrine (or first-sale doctrine) which protects a party from claims of trademark infringement for the unauthorized sale of genuine trademarked goods. Red October attempted to argue that Trilini’s imported candy was not genuine because it was not subjected to the same quality controls standards as the candy imported by Red October. However, the court found that Red October lacked any evidence of specific quality control standards that differed between its imported candy and Trilini’s imported candy.

The court then proceeded to summarily dismiss the remainder of Red October’s claims for common law unfair competition, deceptive trade practices under New York law (N.Y. Gen. Bus. Law § 349), false advertising under New York law (N.Y. Gen. Bus. Law § 350), dilution under New York law (N.Y. Gen. Bus. Law § 360-l), and tortious interference with prospective business relations. The court also dismissed Trilini’s counterclaims for abuse of process, fraud on the USPTO, violation of anti-trust laws, and tortious interference with prospective business relations -- all primarily due to the lack of any evidence proving the necessary elements on those claims.