License

January 4, 2012

Southern District Issues Partial Summary Judgment in Norwood Promotional Products v. Kustom Koozies Trademark Suit Over KOOZIE Mark

Indianapolis, IN – Judge Magnus-Stinson of the Southern District of Indiana has issued a partial summary judgment in a trademark infringement case. Trademark attorneys for Norwood Promotional Products, Inc. of Indianapolis, Indiana had filed a trademark infringement lawsuit in the Southern District of Indiana alleging that KustomKoozies, LLC and Steve Liddle of Raleigh, North Carolina infringed trademark registration no.3,240,989 for the KOOZIE mark registered with the US Trademark Office. Trademark attorneys for Norwood had sued Kustom in 2005 and 2006 over the use of the term “Koozie.” The parties reached a settlement of those lawsuits that included the terms that Kustom abandon its trademark application for the mark “KUSTOM KOOZIE”and accept a royalty-free license agreement regarding Norwood’s claimed mark, “Koozie.” In 2008, Norwood alleged that Kustom was not complying with terms of the license agreement, specifically it was required that KOOZIE be in all capital letter in any use and was not displaying ® after the mark. Further it was alleged that Kustom had registered internet domain names and sold products that were not allowed by the license agreement. The defendants attempted to cure the non-compliance, but in 2009 Norwood informed Kustom that it was cancelling the license agreement due to Kustom’s non-compliance and filed this lawsuit. Both parties moved for summary judgment.

One of Kustom’s counterclaims was that Norwood’s registered trademark for “KOOZIE” should be cancelled. Kustom argued that the mark was invalid. However, the Court rejected this claim finding that Kustom was estopped from challenging the legitimacy of the KOOZIE mark because it had voluntarily gave up the right to challenge this mark in the prior settlement agreement. The Court also cited the doctrine of “licensee estoppel” that a trademark licensee is barred from challenging the validity of the licensor’s mark. The Court granted summary judgment in favor of Norwood, finding that Kustom had breached the settlement and license agreements. The issue of damages was reserved for trial. The Court, however, granted summary for Kustom, finding that it had not infringed the trademark after the license agreement was cancelled. Several issues in this case remain pending for upcoming trial.

Practice Tip: In its opinion, the Court is critical of both parties’ trademark attorneys litigation strategies. The Court notes “The advocacy in this matter has been zealous if not always effective or efficient.” Later, the Court notes “the briefs have defined the issues with a preference for litigation tactics and strategy, as opposed to clarity.” The court then noted that the parties’ briefs were not well organized and noted it was structuring its opinion in a more logical organization.
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October 28, 2011

Southern District Court Grants Partial Summary Judgment for Eli Lilly and Company in Dispute With Parkinson’s Disease Drug Licensee Over Products Liability Lawsuit

By Overhauser Law Offices, LLC

Indianapolis. IN – Judge Tanya Walton Pratt of the Southern District of Indiana has granted a Partial Summary Judgment for Eli Lilly and Company of Indianapolis, Indiana in a dispute with licensee Valeant Pharmaceuticals International of Irvine, California involving the costs associated with product liability lawsuits over Lilly’s Parkinson’s disease drug.

Lilly began selling a product called Permax, which is used to treat Parkinson’s disease, in 1989. In March 2002, Lilly entered an exclusive licensing agreement with Amarin Corporation allowing Amarin to market, use and sell Permax in the United States, including the licensed use of Permax trademarks. The parties’ license agreement prohibited either party from assigning rights or obligations under the contract to any third party absent written consent of the other party. In 2004, Valeant purchased the assets of Amarin, including the rights under the Permax license. Lilly provided written consent to this assignment in a letter agreement that also addressed costs and indemnification relating to defending a pending products liability lawsuit involving Permax. The present lawsuit was filed when a dispute arose between Lilly and Valeant over the costs and indemnification relating to the products liability lawsuit. After settlement of one of the products liability cases, Valeant refused to indemnify Lilly. Lilly sought a declaratory judgment requiring Valeant to pay certain litigation and settlement costs relating to the products liability suit.

In the court’s decision, Judge Pratt found that the parties’ contract was clear and unambiguous in providing a schedule for sharing costs associated with the product liability suit. Thus Valeant must pay Lilly pursuant the schedule in the contract.

Practice Tip: This case illustrates that license agreements, which grant the licensee limited rights to use the intellectual property, owned by the licensor, can come with additional responsibilities and obligations. It is important to have an intellectual property attorney draft and review license agreements to ensure that the parties understand what is included.
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October 25, 2011

American Petroleum Institute Sues Tailor Made Oil Co., LLC for Trademark Infringement of Engine Oil Quality Certification Mark

By Overhauser Law Offices, LLC

Indianapolis, IN – Trademark lawyers for American Petroleum Institute (“API”) of Washington, D.C. filed a trademark infringement suit in alleging Tailor Made Oil Co., LLC of Cambridge City, Indiana, TMO Oil, LLC of Fishers, Indiana, Circle Town Oil of Fishers, Indiana, William R. Selkirk and Rebecca Selkirk of Cambridge City, Indiana, Lincoln R. Schneider of Fishers, Indiana and Jafarikal Corporation of Rosedale, New York infringed trademark registration no. 1,864,428 for the AMERICAN PETROLEUM INSTITUTE CERTIFIED STARBURST registered with the US Trademark Office.

The trademark at issue is a starburst mark used by API to designate that products have met certain quality standards, which are monitored and enforced continuously. The complaint alleges that the individual defendants own and operate the corporate defendants as an interrelated business that offers low quality engine oil for sale. In March 2010, Tailor Made obtained certification for its engine oil, and a one year license to use the starburst mark on its products. In order to renew the one year license, Tailor Made was required to report its sales and to pay a renewal fee to API. Tailor Made failed to comply with these requirements and has continued to sell products bearing the trademarked starburst without authorization.

The complaint also states that API obtained a sample of the engine oil in April 2011 and found that the oil did not meet API’s quality standards. API claims that Tailor Made and Circle Town maintain websites that falsely advertise that their engine oil meets the API quality standards. Jafarikal is a distributor of Tailor Made Oil products and also advertises that Tailor Made’s products meet or exceed API’s standards. API has made claims of trademark counterfeiting under the Lanham Act, trademark infringement, false advertising, unfair competition, trademark dilution, breach of contract, common law trademark infringement and unfair competition, fraud and forgery. API is seeking an injunction, statutory damages of $1,000,000 per type of good sold, seizure and destruction of any infringing products, actual and treble damages, attorney fees and costs.

Practice Tip: Here, API has cited 15 U.S.C. § 1117(c)(2) for its request of statutory damages for each class of goods sold with a counterfeit mark. This section of the Lanham Act caps damages at $2,000,000 for willfully selling, offering, or distributing a type of good with a counterfeit mark.
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October 14, 2011

French Lick Resort and Casino Sued by Colorado Artist for Copyright Infringement in Commissioned Artwork

By Overhauser Law Offices, LLC

Indianapolis, IN – French Lick Resorts and Casino Group has been sued in the Southern District of Indiana by Pamela Mougin for Copyright Infringement, violation of the Visual Artist Rights Act (17 USC § 106A), Breach of Contract and Unjust Enrichment. The West Baden Hotel is a historic hotel in Southern Indiana that was extremely popular in the early 1,900’s. However, it fell in to disrepair. In the 2,000’s it was restored in connection and converted into a hotel / casino in an effort to revitalize the economically depressed region.

Copyright attorneys for Ms. Mougin allege that in 2006, she was commissioned by a Colorado Interior Design firm, Worth Group, to create “an archival hand-painted canvas series of angels with topography of story for the resorts West Baden Hotel, featuring angels from an existing work in the dome of the resorts hotel.”

Later, in November, 2007, Mougin claims she entered into an agreement with the hotel whereby, in exchange for $2,800 she granted permission on a “one time print agreement only” to make “large prints to be displayed at the resort West Baden Hotel.” Allegedly, in the agreement, the hotel acknowledged Mougin’s Copyrights in the Works.

Copyright lawyers for Mougin further claim that on October 13, 2008, she discovered that additional “3D relief productions of the Works were present in the upper lobby mezzanine of the hotel” and at least 48 outdoor banners hanging on light posts. She alleges she notified the French Lick Resort of Copyright Infringement that same day.

The lawsuit was filed October 11, 2011, apparently two days before the 3 year Copyright statute of limitations would have run on the copyright claim.

Practice Tip: This lawsuit raises several interesting issues, among them, the scope of Copyright in Ms. Mougin’s work, since the complaint alleges that she made her angels from copies of what was preexisting at the hotel. The complaint also raises issues of the interplay between Copyright Infringement and Breach of Contract, as Mougin admits that the hotel had rights in the Copyrighted Works, although Mougin claims the scope of that license has been exceeded. Also, it appears that Ms. Mougin’s claim for Unjust Enrichment is preempted by the Copyright Act, as its only factual basis appears to be acts that would constitute copyright Infringement. It is unclear why Worth Group is named a Defendant; as no specific actions of it are implicated.
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June 9, 2011

Gabbard Sues VMB LLC, Music Factory Direct for Copyright Infringement of Music Web Graphic

By Overhauser Law Offices, LLC

South Bend, IN – Copyright lawyers for Joel Gabbard of Fort Wayne, Indiana filed a copyright infringement in alleging VMB LLC, doing business as Music Factory Direct, and Vento LLC, both of Cassopolis, Michigan, infringed Copyright Registration No. VA0001734862, WEB GRAPHICS; which has been registered by the US Copyright Office.

The Complaint alleges that Mr. Gabbard and VMB entered a contract where Mr. Gabbard granted a license to VMB to use the copyrighted work in VMB’s advertisements on eBay, amazon.com, and ChannelAdvisor. The license contract stated that the graphics were to “be used exclusively for the above mentioned projects. All alterations, updates, and revisions must be first approved by the author.” The Complaint alleges that on August 22, 2010 VMB sent out a promotional e-mail utilizing Mr. Gabbard’s copyrighted work. Mr. Gabbard’s copyright attorneys claim this e-mail was not authorized by the license agreement and therefore was copyright infringement. Mr. Gabbard seeks an injunction, damages, costs, attorney fees, for an order impounding all copies made or used and has requested “The Defendants be required to notify all present and prospective customers of the infringement and that the proper ownership of the materials is Mr. Gabbard.”

Practice Tip: In addition to injunction and damages, this plaintiff is also seeking an impounding order and for the defendants to notify customers that it has infringed the plaintiff’s copyright. The applicable copyright law, 17 U.S.C. § 503, does allow for a court issue an order impounding all copies of the copyrighted work. The plaintiff’s request that customers be informed of the infringement, however, would be an unusual remedy and not specifically provided for in the copyright laws.