Ninth Circuit Decision Broadens Scope of Civil Penalty for Counterfeit Goods Bearing Registered Trademarks

The Ninth Circuit concluded that U.S. Customs can impose a civil penalty on importers who import merchandise bearing a counterfeit mark of a registered trademark even though the owner of the registered mark does not manufacture or sell the same type of merchandise imported. See United States v. Able Time, Inc., Case No. 06-56033 (9th Cir. September 25, 2008).

On May 7, 1999, Able Time, Inc. (“Able Time”) imported a shipment of watches into the United States that bore the Tommy Hilfiger registered trademark “Tommy”. At the time, Tommy Hilfiger had a registered trademark for the mark TOMMY for cosmetic goods such as cologne, after-shave and deodrants (in International Class 3). Even though Tommy Hilfiger did not make or sell watches at the time (a class of goods in International Class 14), the watches were seized by the Bureau of Customs and Border Protection (“Customs”) pursuant to 19 U.S.C. § 1526(e) (which allows Customs to seize merchandise bearing a “counterfeit mark”). Tommy Hilfiger later applied to register the mark TOMMY for watches in class 14 on November 30, 1999, and received its registration on September 17, 2002.

Meanwhile, Customs filed in rem forfeiture action against the watches on November 3, 2000, but the action became mired in appeals and defective service of process such that the government was ultimately unable to pursue the forfeiture lawsuit because the statute of limitations had run and the watches were returned to Able Time on April 8, 2005.

In February and March 2004, Customs also issued several notices to Able Time of the imposition of a civil penalty on Able Time pursuant to 19 U.S.C. § 1526(f) which allows for the imposition of a penalty against any person who imports merchandise seized under § 1526(e). Customs filed the current lawsuit at issue over the civil penalty on April 15, 2004. The district court ultimately granted Able Time’s motion for summary judgment after concluding as a matter of law that the imported watches could not be “counterfeit” under the Tariff Act because Tommy Hilfiger did not make watches at the time of the seizure.

The government appealed to the Ninth Circuit, which reversed the district court’s granting of Able Time’s motion for summary judgment and remanded the case for further proceedings. The Ninth Circuit agreed with the government that the Tariff Act (19 U.S.C. § 1526 et seq) does not require an the owner of the registered mark to make the same type of goods as those imported bearing the counterfeit mark – the so-called "identity of goods or services" requirement:

We conclude that the Tariff Act does not contain an identity of goods or services requirement. We hold that Customs may impose a civil penalty pursuant to 19 U.S.C. § 1526(f) upon an importer of merchandise bearing a counterfeit mark, even though the owner of the registered mark does not manufacture or sell the same type of merchandise.

While there is a lot of discussion from the Court addressing other trademark statutes and the legislative history therof in addressing each of Able Time’s valiant (but ultimately doomed) arguments that the Tariff Act does require identity of goods or services, at the end of the day the Court found that the plain language of the statute does not contain an identity of goods or services requirement, and because the language of the statute is unambiguous, one should not be read into the statute.



Just a friendly reminder to all registered trademark owners holding a trademark registered on the Principal Register which brands goods which are susceptible to counterfeits being made overseas and imported into the U.S. – you can electronically record your registered trademark with U.S. Customs and Border Protection through CBP’s Intellectual Property Rights e-Recordation (IPRR) application. Recordation allows CBP officers monitoring imported goods to prevent the importation of goods bearing a counterfeit infringing mark.

Pennsylvania Law Firm Sues Domainer Company Using Firm’s Name to Host Web Directory Sites

On September 22, 2008, the Pennsylvania law firm of Hourigan, Kluger & Quinn, P.C. (“HKQ”) filed a trademark infringement and cybersquatting lawsuit in the U.S. District Court for the Middle District of Pennsylvania against Domain Discreet, a Canadian company (based on its phone number since its whois record lists an address in the remote Portugal island of Madeira) in the business of domaining (buying and selling domain names like real estate - its inventory of domain names reportedly is in excess of 300,000 domain names and growing). See Hourigan, Kluger & Quinn, P.C. v. Domain Discreet, Case No. 08-cv-01753 (M.D. Penn.). Click here for an article on the lawsuit.

HKQ has been in business since May 1, 1997. The law firm received a registration for its name HOURIGAN, KLUGER & QUINN as a servicemark for legal services in 1998. In 2004, the firm also registered the initials HK&Q for legal services, and more recently received in 2007 a registration for the above design mark HKQ HOURIGAN, KLUGER & QUINN, PC NO ONE WILL WORK HARDER FOR YOU for legal services.

Around March 13, 2000, Domain Discreet registered several domain names incorporating the law firm’s registered service mark, including houriganklugerquinn.com and houriganklugerquinn.net (the company supposedly purchased houriganklugerquinn.org, but a quick search reveals that name to now be available). The websites currently lead to the typical “web directory” page with multiple click-through links to other law firms with pay-per-click ads.

HKQ argues that Domain Discreet’s use of its trademarked name in connection with its web directory site takes advantage of HKQ’s name to generate revenue through its pay-per-click links to competitors and causes HKQ to lose potential clients.

Given HKQ’s clear cut cybersquatting case against Domain Discreet, one wonders why HKQ opted for a lawsuit against Domain Discreet versus a UDRP action. Perhaps HKQ is hoping that it can obtain a judgment for the $100,000 per domain name statutory damages for Domain Discreet’s cybersquatting. See 15 U.S.C. §1117(d). Of course, given the personal jurisdiction issues that HKQ is likely to face in going after a company located outside the U.S. (be it Canada or Portugal), HKQ will likely be limited to an in rem civil action under 15 U.S.C. §1125(d)(2) against Domain Discreet’s domain name registrar in which case HKQ’s ultimate remedies will be limited to an order against the domain name registrar transferring the domain names anyway (the same outcome as a successful UDRP action).

Of course, the real question is why would a law firm which had the foresight to file a trademark application to register its name as a federal service mark not also obtain the related domain names?

Jones Day Continues War on Free Speech by Opposing Amicus Brief in Trademark Infringement Lawsuit Against Blockshopper

Paul Alan Levy provides an update (link here) on the Opposition filed by Jones Day opposing the Motion for Leave to File the Amicus Curiae Brief in Support of Blockshopper.com’s Motion to Dismiss filed by Public Citizen, the Electronic Frontier Foundation, Public Knowledge and Citizen Media Law Project (a brief that has received overwhelming praise among the trademark law community – its impact evident by Jones Day’s quick action to exhaust any effort to prevent its consideration by the court). Techdirt also comments here.

In short, Jones Day, as part of its ongoing battle to move forward with its absurd trademark infringement lawsuit against Blockshopper, is using additional absurd arguments (although not so absurd that Jones Day isn't able to make them appear nonfrivolous) to oppose the filing of the Amicus Brief. One has to wonder – if Jones Day is truly confident in its underlying legal position, why would it be concerned at all about an amicus brief? [Comment—Methinks Jones Day doth protest too much.

The “friends” supporting Blockshopper have already filed their Reply in Support of their Motion for Leave to File Their Amicus Brief arguing against the points made in Jones Day’s brief.

Wine and Dine Corporation Files (and then Withdraws) $250 million Cybersquatting Lawsuit

This lawsuit makes you wonder “What do you think really happened?”

On September 19, 2008, Wine and Dine Corporation filed a $250 million lawsuit against MDNH, Inc., Marchex, Inc. and Brendhan Hight in the U.S. District Court for the District of Nevada. See Wine and Dine Corporation v. MDNH, Inc. et al, Case No. 08-cv-01259 (D. Nev.)

Unfortunately, I can’t provide my usual level of details on the lawsuit because it turns out that the lawsuit was administratively terminated today and the complaint no longer available on PACER. The docket indicates it was terminated on the basis that the case was "opened in error by counsel."

Of course, in the fast-paced world of the Internet, it didn’t take long for news of this lawsuit to start generating buzz amongst those websites and forums that monitor and discuss domain-name related stories and lawsuits. See, for example, here and here .

What we can glean is that Wine and Dine (or more accurately Wine and Dine Properties Ltd.) owns the federal registered mark WINE & DINE for magazines in the field of food and spirits – registered since 1995 (with date of first use as early as September 24, 1993). The company publishes the online magazine Wine and Dine. As for MDNH, it is the named owner of the website http://www.wineanddine.com/, which was originally purchase in August 2000 and is currently just set up as a web-directory website with the typical pay-per-click links (courtesy of Marchex). Brendhan Hight is the named registrant contact for the domain.

Thus, the lawsuit would appear to be your standard cybersquatting lawsuit (except for the $250 million request for damages). But unless someone out there was able to nab a copy of the complaint before it was removed, I guess we’ll never know – unless the lawsuit is filed again.



[Full Disclosure: My current law firm has performed some services related to trademark maintenance and assignments on behalf of a company that previously owned the subject mark.]

Weight Watchers Sues Campbell Soup Over Weight Watcher’s POINTS

On September 16, 2008, Weight Watchers International, Inc. (“WWI”) filed a trademark infringement lawsuit against Campbell Soup Company (“Campbell”) in the U.S. District Court for the Southern District of New York. See Weight Watchers International, Inc. v. Campbell Soup Company, Case No. 08-cv-8014 (S.D.N.Y.). A copy of the complaint can be downloaded viewed at The Trademark Blog.

WWI is famous for its diet program marketed under the WEIGHT WATCHERS mark. Since 1997, one of WWI’s diet program (the “Flex Plan”) has involved a “Points” system whereby Weight Watcher dieters are given an individual “Points” budget and all food items are assigned a particular “Points” value based on WWI’s own derived formula (pictured below).

p = Points
c = Calories
f = Fat Grams

r = Dietary Fiber Grams

WWI has even registered the mark POINTS for various goods and services including for “food nutrition consultation and advice.”

In July 2008, Campbell introduced a line of “light” soups marketed under its “Select Harvest” brand name. As part of its marketing strategy, Campbell apparently has labeled (or will be labeling) these soups with the “Weight Watcher Points” value as calculated by Campbell according to WWI’s formula. Campbell is also marketing its soups on retail store display racks and online.

Campbell attempted to protect itself by having the following disclaimer on the can’s label as well as on its website:

WEIGHT WATCHERS®, POINTS®, and POINTS VALUE® are registered trademarks of Weight Watchers International, Inc. The number of POINTS® provided here was calculated by Campbell's based on published Weight Watchers International, Inc. information and does not imply sponsorship or endorsement of such number of POINTS® or Campbell's® products by Weight Watchers International, Inc.

However, WWI is apparently unsatisfied with such a disclaimer and feels that Campbell is improperly using without authorization WWI’s trademarks and its reputation and goodwill in the weight-loss industry in order to market its Select Harvest Light product line to consumers trying to lose weight. WWI further argues that consumers are likely to be confused into believing that WWI has approved Campbell’s use of its marks on Campbell’s Select Harvest Light soup products.

WWI sent Campbell a cease and desist letter on August 13, 2008. Campbell responded to WWI’s letter on September 9, 2008, but the complaint does not provide any insight into that response. According to WWI, Campbell is already stocking grocery store shelves with its Select Harvest Light soup products having the infringing label.

WWI’s causes of action are (1) Registered Trademark Infringement under 15 U.S.C. §1114, (2) Unfair Competition/False Designation of Origin under 15 U.S.C. §1125(a), (3) Trademark Dilution under 15 U.S.C. §1125(a), (4) Common law trademark infringement, (5) Common law unfair competition, (6) Dilution under New York law, (7) Unjust enrichment, and (8) Breach of Contract.

The breach of contract cause of action relates to a February 2006 Permitted Use Agreement between WWI and Campbell to which WWI listed the POINTS values for various Campbell's products in the 2006 version of its Complete Food Companion and in WWI's food database at http://www.weightwatchers.com/. According to WWI, one provision in the Agreement provided that Campbell agreed not to use any of the logos, trademarks, or copyrights belonging to WWI in any advertising, packaging, public relations and promotional materials, or in any other manner other than as set forth in the Agreement. Another provision in the Agreement specifically stated that WWI’s inclusion of Campbell's products in its publication and food database was not an endorsement of Campbell's products and that Campbell may not use WWI’s trademarks to suggest any such endorsement. Campbell further agreed not use WWI’s trademarks, including the POINTS values of Campbell’s products, in any advertising or promotional materials (including online websites) or on any packaging and may not provide information to consumers about a POINTS value of its products in any manner without WWI’s express approval. The parties entered into a second Permitted Use Agreement for the 2008 version of WWI's Complete Food Companion, whereby Campbell agreed not to use WWI’s trademarks in a manner that would create a likelihood of confusion as to the source of any products or services or as to the sponsorship or endorsement of any products or services. WWI claims that Campbell’s use of its trademarks is in breach of these agreements.

In addition to seeking injunctive relief, WWI requests damages in the amount of Campbell’s profits, treble damages, attorneys' fees and costs, and punitive damages.

UW settles its trademark infringement lawsuit with Washburn over “Motion W” mark

I previously wrote (link here) about the trademark infringement lawsuit by the Board of Regents of the University of Wisconsin System (the “UW”) against Washburn University (“Washburn”) over the latter’s use of a W logo (pictured below) which UW claimed infringed on its so-called Motion “W” registered trademark (pictured above). See Board of Regents of the University of Wisconsin System v. Washburn University, Case No. 3:2007cv00672 (W.D. Wis.).



According to news reports (here and here), the parties reached a settlement agreement whereby Washburn can continue to use its logo so long as the university’s name, mascot name, or mascot symbol is transposed on it. No money reportedly changed hands. Washburn officials also report that they are currently working on developing a new logo for the future.

Seventh Circuit reignites AutoZone's trademark infringement claims against OilZone and WashZone

The Seventh Circuit reversed a district court’s decision finding no likelihood of confusion as a matter of law between the large automotive parts retailer AutoZone and an Illinois businessman, Michael Strick, doing business under the service marks Oil Zone and Wash Zone. See AutoZone, Inc. et al v. Strick et al., Appeal No. 07-2136 (7th Cir. September 11, 2008).



AutoZone, in business since 1987, became aware of Strick's two businesses in December 1998, but did not take any legal action against Strick until November 14, 2003 (a cease and desist letter was sent to Strick in February 2003). On cross-motions for summary judgment, the district court found that AutoZone's claims of trademark infringement and unfair competition failed as a matter of law because AutoZone had failed to produce sufficient evidence to show a likelihood of confusion between AutoZone's marks and Strick’s Oil Zone and Wash Zone marks – the district court found that the AutoZone mark and the Oil Zone and Wash Zone marks were "not similar enough for a reasonable finder of fact to find that there is a likelihood of confusion."

The Court of Appeals, reviewing de novo the district court's decision to grant summary judgment, found that the evidence was not so one-sided that it was proper for the district court to determine the issue of likelihood of confusion at the summary judgment stage, and thus reversed the district court’s decision. The Court reached this conclusion by doing its own analysis of each of the seven likelihood of confusion factors adopted by the Seventh Circuit. See Packman v. Chicago Tribune Co., 267 F.3d 628, 642 (7th Cir. 2001).

Regarding similarity of the marks, because the marks are all comprised of two words in the same font, slanted in the same direction, with “Zone” as the second word and the first letter of both words larger than the other letters in the marks, and feature bar designs that suggest movement or speed, the Court found that the marks in this case were similar enough that a reasonable finder of fact could find that a consumer would believe that the marks are connected to the same source. While the Court acknowledged some dissimilarities, “viewing the facts in the light most favorable to AutoZone, as we are required to do at this stage of the litigation, the prominent similarities between the marks may very well lead a consumer cruising down the street to believe, after driving past both parties' businesses, that Oil Zone and Wash Zone represented AutoZone's entry into the oil-change and car wash-services market.”

Regarding similarity of the products, the court stated that:

in light of the similarity of the marks, a reasonable consumer may very well be led to believe that Oil Zone and Wash Zone are AutoZone spinoffs. A retailer or manufacturer with a strong mark venturing into a related service industry would not be that surprising. And the automotive services provided by Strick's businesses are related to the automotive products sold at AutoZone stores. Indeed, there is even some direct overlap between AutoZone's products and the services provided by Strick's businesses: Strick provides car washes and oil changes while AutoZone sells car-wash and oil-change products. A reasonable consumer, taking into account the similarity of the marks, could therefore conclude from the relatedness of the goods and services provided by AutoZone, Oil Zone, and Wash Zone that the marks are all attributable to a single source. Thus, AutoZone has shown that a genuine dispute exists here as well.

Regarding the relationship in use promotion, distribution, or sales between the services of the parties, the court found that the evidence of record showed that both parties sell and promote their automotive goods and services in the Chicago area. Strick tried to argue that the nationwide scale of AutoZone’s services was different than his very localized offering of services, but the court noted that “trademark law makes no exception for the localized infringer.” As for differences in customers, the court held that “the record before us does not rule out the reasonable inference that a substantial congruence exists between the potential customer base in Naperville and Wheaton for AutoZone and Strick's businesses. AutoZone has therefore created a genuine factual dispute for this factor as well.”

Regarding customer degree of care, the district court had found this factor to support AutoZone’s argument for confusion and the Court agreed. AutoZone presented evidence that many of its automotive products are inexpensive and Strick did not present any evidence that his customers are particularly sophisticated. As such, a reasonable trier of fact could conclude that this factor favors AutoZone.

Regarding the strength of AutoZone’s mark, the Court found the evidence of record more than sufficient to support AutoZone’s argument that its AutoZone marks was strong. “The AutoZone mark is displayed prominently on more than 3,000 stores nationwide, and it has been the subject of hundreds of millions of dollars' worth of advertising since 1987.” Strick attempted to argue that the AutoZone mark is weak based on evidence that the word "Zone" is commonly found in other marks. However, Strick did not actually produce any evidence to show how extensively any of the third party marks that use the word "zone" have been promoted or become recognized by consumers in the marketplace, and thus evidence of such marks does not raise any question about the strength of AutoZone's mark. In addition, Strick’s argument fails to note that a mark must be viewed as a whole, and while the word “zone” by itself may be common, the same is not necessarily true for a composite mark like AutoZone, and a trier of fact could reasonably conclude that AutoZone's mark is strong and thus the factor of confusion would favor AutoZone.

Regarding the factor of Strick’s intent to palm off his services as those of AutoZone, while Strick testified that he was not aware of the AutoZone mark when he created the Oil Zone mark, the Court noted that in some circumstances, an intent to confuse may be reasonably inferred from the similarity of the marks where the senior mark had already attained great notoriety. In this case, “a reasonable trier of fact could conclude from Strick's experience in the industry, AutoZone's extensive marketing of its mark in the area where Strick did business, and the close similarity in design between the marks that Strick designed the Oil Zone mark with the intent to mislead consumers into believing that Oil Zone was somehow affiliated with AutoZone.” Whether Strick was honest in not being aware of the AutoZone mark was a decision for the trier of fact to decide.

The Court concluded that based on its own analysis of the likelihood of confusion factors, “a reasonable finder of fact could have found that consumers might be led to believe that AutoZone and Strick's Oil Zone and Wash Zone are affiliated with each other. AutoZone has therefore presented sufficient evidence to create a triable issue of fact on the issue of likelihood of confusion.” As such, it was improper for the district court to grant summary judgment with the existence of so many unresolved genuine issues of material fact, and the Court remanded the case back to the district court for trial.

Finally, Strick had argued at the district court and again a the Court of Appeals, that AutoZone’s claims were barred by the doctrine of laches – based on the delay between the time when AutoZone first became aware of Strick’s businesses in 1998 and when AutoZone finally took action in 2003. However, because a district court's decision to apply the doctrine of laches is discretionary and the district court declined to rule on the issue in its decision, the Court opted to let the district court determine on remand how it will exercise its discretion in this case.