Damages

June 26, 2012

Dillinger Sues Pour House on Lincoln for Trademark Infringement of PUBLIC ENEMY

Indianapolis; IN – Trademark attorneys for Dillinger, LLC of Mooresville, Indiana filed a complaint for injunctive relief and damages in alleging The Pour House on Lincoln, Inc. d/b/a Dillinger’s Chicago Bar & Grill, Inc. of Chicago, Illinois infringed trademark registration nos. 3,483,359 for the mark DILLINGER’S and no. 4,091,160 for the mark PUBLIC ENEMY which have been registered by the US Trademark Office.

Dillinger, LLC is owned and operated by Jeff Scalf and, according to the Complaint, is the descendant of gentleman bandit John Dillinger. Dillinger, LLC owns numerous trademark registrations for DILLINGER, JOHN DILLINGER, PUBLIC ENEMIES, and many other trademarks related to the life of John Dillinger. Dillinger, LLC is also the owner of all rights, title, and interest to both DILLINGER’S and PUBLIC ENEMIES and both marks have been used in interstate commerce in connection with restaurant and bar services as early as 2002. According to the Complaint, Dillinger, LLC has never authorized The Pour House on Lincoln d/b/a Dillinger’s Chicago Bar & Grill to use the DILLINGER or PUBLIC ENEMIES marks in any way and also alleges that in July 2010 it came to their attention that the Defendants were operating a restaurant using the DILLINGER and PUBLIC ENEMIES trademarks. Upon their knowledge of the trademark usage, Dillinger, LLC alleges that The Pour House was contacted about the infringement and in August of the same year they traveled to Indianapolis for the purpose of obtaining a license for the use of the trademarks. The Complaint states that an oral agreement was reached and reduced to writing, but never executed and yet The Pour House willfully continued its infringing usage of the DILLINGER and PUBLIC ENEMIES trademarks, specifically on their website, food and drink menus and the menus posted on the storefront. Dillinger, LLC asserts five counts for the violations of the defendants, including demand for preliminary and permanent injunction; federal trademark infringement; cybersquatting; false designation of origin, false descriptions and unfair competition; and dilution by blurring. In order to avoid any irreparable harm from the loss of reputation the DILLINGER names could suffer as a result of the unauthorized use of the trademarks and the accrual thereof, Dillinger, LLC is seeking to permanently enjoin The Pour House from using the DILLINGER and PUBLIC ENEMIES trademarks or inducing such belief, actual damages suffered as a result of the alleged trademark violations, statutory and exemplary damages, and the profits derived from the infringing activities.

Practice Tip: U.S.C. title 15, chapter 22 governs trademarks, and §1117 specifically details the relief which can be granted as a result of trademark violation.
Continue reading

December 23, 2011

Northern District Grants Default Judgment and Damages of Over $113,000 in favor of Century 21 in Trademark Infringement Case

By Overhauser Law Offices, LLC

Lafayette, IN – The Northern District of Indiana granted a default judgment, damages and a permanent injunction in a trademark infringement case involving a hold-over franchisee. Century 21 Real Estate, LLC of Parsippany, New Jersey had filed a trademark infringement lawsuit in the Northern District of Indiana alleging that Destiny Real Estate Properties LLC, f/d/b/a Century 21 Destiny Real Estate and Daniel Sutton of Lowell, Indiana infringed Century 21’s trademarks and service marks. Indiana Intellectual Property Law and News blogged about the case when it was filed. The defendants failed to file any response to the Century 21’s complaint. After finding that the defendants had been properly served, the court granted Century 21’s motion for a judgment by default.

The Court analyzed a legal question that has not yet been examined by the Seventh Circuit Court of Appeals and that different federal circuit courts have reached different results: “whether a hold-over franchisee’s continued unauthorized use of a franchisor’s mark constitutes counterfeiting[?]” The court found that the defendants use to Century 21’s mark was counterfeiting in this case and noted “The Court can conceive of no reason why an ex-franchisee should escape liability for counterfeiting simply because that person had access to franchise’s original marks because of the former relationship[.]” The court then analyzed the damages claims of Century 21 and awarded $113,656 plus attorneys fees of $5,419 and costs of $595 to Century 21. The Court also granted Century’s 21’s request for a permanent restraining order that prevents the defendants from using the Century 21 marks.

Practice Tip: Since the Court found that the defendant’s trademark infringement was counterfeiting, treble damages were available to Century 21. This case explains how intellectual property rights are generally well protected in statutory damages provisions and explains how the trebling of damages, ability to recover a defendant’s “profits” and recovery of attorney fees can lead to significant recoveries, even without the intellectual property owner having to prove “actual” damages.
Continue reading

November 4, 2011

Patent Lawsuit Filed Over Playground “Curved Rail Panels”

By Overhauser Law Offices, LLC

Evansville, IN – Parents try to protect their children from playground hazards. Now there is a new threat to watch out for – patent infringement.

Patent lawyers for Plaintiff, INDIAN INDUSTRIES, INC. d/b/a Escalade Sports of Evansville, IN, have sued Defendant RAINBOW PLAYSYSTEMS, INC. of Brookings, South Dakota alleging it has infringed patent no. 8,002,642, PLAYSET SYSTEM COMPONENTS, which has been issued by the US Patent Office.

The Complaint alleges that Rainbow’s “Turbo Sunshine Castle, Turbo Sunshine Clubhouse, Rainbow Castle Supersized, and King Kong Quarter Turned Club Playsets” infringe Indian’s “curved rail panels” feature. Although parents seek to protect their children from “playground injuries,” Indian alleges that the accused playsets cause it “irreparable injury.”

October 8, 2011

Coach, Inc. Wins Default Judgment of $30,000 in Trademark Infringement Suit Against Tom’s Treasure Chest of Gary, Indiana

By Overhauser Law Offices, LLC

Chief Judge Philip P. Simon of the Northern District of Indiana has award a default judgment and $30,000 in damages to Coach, Inc. of New York, New York in a trademark infringement case over the sale of knock-off Coach purses against a Gary, Indiana business.

In June 2010, trademark attorneys for Coach filed a trademark infringement lawsuit in the Northern District of Indiana alleging that Tom’s Treasure Chest of Gary, Indiana infringed 48 trademarks registered with the US Trademark Office. Coach also alleged Tom’s Treasure Chest infringed the copyrighted works of Registration No. VAu000704542, LEGACY STRIPE, Registration No. VA0001228917, SIGNATURE C DESIGNS, Registration No. VAu1-046658, COACH 70^th ANNIVERSARY SNAPHEAD PRINT AND Registration No. VA1-010-918, COACH CLOVER DESIGN which have been registered by the US Copyright Office. The complaint alleged that a Coach representative purchased two handbags labeled “Coach” at Tom’s Treasure Chest store in Gary on May 12, 2010. The purchased handbags were not genuine Coach products, rather they were knock-off products. The complaint made claims of trademark counterfeiting, trademark infringement, trade dress infringement, false designation of origin and false advertising, trademark dilution, copyright infringement, unfair competition, criminal forgery, and criminal counterfeiting.

Since Tom’s has failed to respond to the lawsuit in anyway, Coach filed a motion for default judgment. The court in its opinion granted the default judgment. The court then turned to the issue of damages. Coach sought statutory damages of $100,000 per violation, which would total $600,000 and argued that these damages were reasonable since Coach could have sought up to $12,000,000 under the statute. The court, however, found this amount was unreasonable. The court noted the only allegation was the sale of two infringing handbags and that Coach had not presented evidence of actual damages in this range. The court concluded that damages in the amount of $5,000 per violation for a total of $30,000. The court also awarded attorney fees and costs.

Practice Tip: Coach filed a nearly identical complaint against J & J.S. Petroleum just a few days ago. Indiana Intellectual Property Law News blogged about case here.

This case illustrates the importance of seeking legal counsel from a trademark infringement lawyer who will properly respond to a lawsuit if you are served with a similar complaint and summons. Federal Rule of Civil Procedure 55(b)(2) governs default judgment and allows the court to enter a default judgment after considering numerous factors. Here, the court gave great weight to the fact that the lawsuit was filed in June 2010 and Tom’s had not filed any type of response. The court also considered that “it’s in the public’s interest to protect intellectual property from trademark infringement.”
Continue reading

January 4, 2011

25% Rule of Thumb for Patent Royalty Damages Rejected By Court of Appeals for the Federal Circuit

By Overhauser Law Offices, LLC

Washington DC – The “25% Rule” has often been used by damages experts in assessing damages in patent infringement cases. The rule states that in determining a base royalty rate in a hypothetical negotiation, a starting point is to consider that a reasonably royalty would be 25% of the marginal profits that would be realized by using the patented improvement. USE OF THE 25 PER CENT RULE IN VALUING IP, 37 les Nouvelles 123, 123 (Dec. 2002). On January 4, 2011, the Court of Appeals for the Federal Circuit resoundingly rejected this theory in Uniloc USA v. Microsoft. The Court stated:

“This court now holds as a matter of Federal Circuit law that the 25 percent rule of thumb is a fundamentally flawed tool for determining a baseline royalty rate in a hypothetical negotiation. Evidence relying on the 25 percent rule of thumb is thus inadmissible under Daubert and the Federal Rules of Evidence, because it fails to tie a reasonable royalty base to the facts of the case at issue.”

This has been a much-anticipated case, because the jury had awarded Uniloc damages of $388 million – a huge amount by any measure.

Practice Note: Although this case did not originate in Indiana, appeals in all patent infringement litigation are made to the Court of Appeals for the Federal Circuit. Thus, this ruling impacts patent infringement cases in every State, including Indiana.

This opinon is also notable because it comments on other important subjects in patent law, such as:

The Entire Market Value Rule – “The entire market value rule allows a patentee to assess damages based on the entire market value of the accused product only where the patented feature creates the ‘basis for customer demand’ or ‘substantially create[s] the value of the component parts. . . This case provides a good example of the danger of admitting consideration of the entire market value of the accused where the patented component does not create the basis for customer demand.”

Standard of Review of Jury Verdicts The Court ruled that de novo review applies in cases where “the parties conceded that under one claim construction there was infringement and under the other there was none, and were arguing only over which claim construction was appropriate.” In contrast, if “the claim construction itself is not contested, but the application of that claim construction to the accused device is,” the substantial evidence standard governs

Willful Infringement. A court can “treble” damages and award attorneys fees when “willful infringement” occurred. The Court stated, “If the accused infringer’s position is susceptible to a reasonable conclusion of no infringement, the first prong of Seagate cannot be met.” Slip Op. at 32. Particularly obtuse is the court’s triple-negative articulation of the factual holding: “Uniloc has not presented any evidence at trial or on appeal showing why Microsoft, at the time it began infringement, could not have reasonably determined that [Microsoft’s algorithms] did not meet the “licensee unique ID generating means,” “licensee unique ID,” or “registration system”/”mode switching means” limitations.”

Clear and Convincing Standard for Proving Patent Invalidity. Microsoft had vigorously argued that patent invalidity need only be shown by a preponderance of the evidence as opposed to clear and convincing evidence . However, the Court did not rule in Microsoft’s favor, stating, “Until changed by the Supreme Court or this court sitting en ban, this is still the law.”

Given the amount of damages at issue, the case is likely to be appealed to the U.S. Supreme Court.

The opinion appears below