Unfair Competition

April 7, 2014

Indiana Trademark Litigation: Order Inn Asserts Trademark Infringement by “Order In”

Indianapolis, Indiana – A trademark attorney for Order Inn, Inc. of Las Vegas, Nevada filed a lawsuit in the Southern District of Indiana alleging that TJ Enterprises of Indiana, LLC d/b/a Order In (“Order In”) and Tom Ganser, both of Carmel, Indiana and other unknown “Doe” individuals infringed trademarks for “ORDER INN”, Registration Nos. 3,194,903 and 2,801,951, which have been issued by the U.S. Trademark Office.

Order Inn Hospitality Services, also known as Order Inn, was founded in 2001. The company’s initial core product, Order Inn Room Service, was created to provide room service to guests of limited-service hotels and timeshares. Order Inn states that it has developed partnerships with over 10,000 hotels and 700 restaurants nationwide and that it does business in Indiana.

Order Inn asserts ownership over several registered trademarks for “Order Inn,” among them a registration for “On-line ordering services in the field of restaurant take-out and delivery; on-line order fulfillment services for goods and services which hotel guests, residents or businesses may wish to purchase; promoting the goods and services of others by preparing and placing advertisements in menus placed in hotels, residences or businesses; providing information in the field of on-line restaurant ordering services.”

Order Inn claims that, as a result of its extensive, continuous and exclusive use of the “Order Inn” trademark in connection with its services, that trademark has come to be recognized by consumers as identifying Order Inn’s services as well as distinguishing them from services offered by others. It further claims that its trademark has developed substantial goodwill throughout the United States.

Order In, which also does business in Indiana, facilitates restaurant takeout and delivery through its website and via telephone. Order In is accused of trademark infringement of a registered trademark and false designation of origin. Ganser is alleged to be an owner and/or manager of Order In and to have personally participated in any trademark infringement. Both Order In and Ganser are accused of infringing upon the Order Inn trademark willfully, intentionally and deliberately and with full knowledge and willful disregard of Order Inn’s intellectual property rights.

In its complaint, filed by a trademark lawyer for Order Inn, the following counts are alleged:

• Federal Trademark Infringement Under 15 U.S.C. §1114
• False Designation of Origin and Unfair Competition under 15 U.S.C. §1125(a)

Order Inn asks for an injunction; damages, including treble damages; interest; costs and attorney’s fees

Practice Tip:

The protection afforded to a registered trademark is not exhaustive in scope. Among the limits to its applicability are restrictions based on the type of business to which the trademark pertains. From its website, it appears that Order Inn directs its efforts primarily towards guests at hotels, inns and similar temporary-lodging facilities. In contrast, Order In’s offerings are not similarly limited.

Trademarks protection is also unavailable for generic words that merely describe the goods or services for sale. For example, while “Apple” could be trademarked for use in conjunction with the sale of computers, a company would not be allowed to trademark the term to refer to the sale of apples. Similarly here, Order Inn may have difficulty in showing that it should be allowed to prohibit nationwide the use by anyone else of the generic term “order in.”

April 3, 2014

Indiana Trademark Litigation: Noble Roman’s Sues for Trademark Infringement

By Overhauser Law Offices, LLC

Indianapolis, Indiana – An Indiana trademark attorney for Noble Roman’s, Inc. of Indianapolis, Indiana filed a lawsuit in the Southern District of Indiana alleging that Sahara Sam’s Indoor Water Park, LLC of Pennsauken, New Jersey (“Sahara”) infringed its trademarks. These trademarks are: Noble Roman’s®, Trademark Registration No. 987,069; THE BETTER PIZZA PEOPLE, Trademark Registration No. 1,920,428; and a design mark, Trademark Registration No. 1,682,308. Noble Roman’s also states that it has registered the Tuscano’s® mark. In addition to trademark infringement, Noble Roman’s asserts that Sahara engaged in false designation of origin and unlawful competition. Noble Roman’s has registered its marks with the U.S. Patent and Trademark Office.

Noble Roman’s is in the business of franchising the operation of Noble Roman’s pizza franchises that feature pizza, breadsticks, and other related food items to various franchisees throughout the world. Noble Roman’s has used its trademarks, among them “Noble Roman’s” and “The Better Pizza People,” registered in 1974 and 1995, respectively, in commerce in connection with marketing, identifying, and promoting its pizza franchises.

On or about June 27, 2005, Noble Roman’s and entered into two franchise agreements. Under the terms of the agreements, Sahara became a franchisee of Noble Roman’s, licensed and authorized to sell “Noble Roman’s” and “Tuscano’s” branded food products using Noble Roman’s intellectual property assets. Noble Roman’s asserts that these agreements included terms relating to the accurate reporting of sales and timely payment of franchise fees and other fees.

Sahara is accused of failing to pay royalties as required under the agreement and of misreporting sales, among other things. Noble Roman’s contends that Sahara purposely, intentionally and knowingly misreported its sales to Noble Roman’s for the purpose of avoiding payment of franchise fees and/or royalties which were due.

Noble Roman’s also contends that, after electing not to renew the franchise agreements, Sahara violated certain post-termination provisions of the Agreements, including those which require Sahara to: (1) cease to use any Noble Roman’s proprietary products; and (2) remove from public view and display any signage or other articles containing or depicting the trademarks.

Sahara is further accused of having violated the non-competition covenants by selling, after termination of the franchise agreements, various food items “which can be utilized without knowledge gained from Noble Roman’s.”

Noble Roman’s states that Sahara’s actions were without the authorization or consent of Noble Roman’s and that they constitute trademark infringement, in violation of 15 U.S.C. § 1114(1), as well as false designation of origin in violation of 15 U.S.C. § 1125.

The complaint, filed by an Indiana trademark lawyer, lists the following:

• Count One (Trademark Infringement)
• Count One [sic] (Breach of Contract)
• Count Two (Fraud)
• Count Three (Injunctive Relief)

Noble Roman’s asks for injunctive relief, as well as judgment in its favor in amount to be proven at trial, together with interest, punitive damages, costs of collection and reasonable attorney’s fees.

Practice Tip: Noble Roman’s has been particularly aggressive in enforcing franchise agreements. Since 2007, it has also filed the following suits in the Southern District of Indiana:

February 12, 2014 – NOBLE ROMAN’S, INC. v. B & MP and LESLIE PERDRIAU

September 5, 2012 – NOBLE ROMAN’S, INC. v. VILLAGE PANTRY

March 17, 2011 – NOBLE ROMAN’S, INC. v. FINDLAY TIFFIN OIL, LLC and AYMAN MAGDADDI

January 27, 2011 – NOBLE ROMAN’S INC. et al. v. BRABHAM OIL COMPANY and BRABHAM OIL COMPANY

October 9, 2009 – NOBLE ROMAN’S, INC. v. CITY CENTER FOOD CORP., INC.

August 31, 2009 – NOBLE ROMAN’S INC. v. W.J. INTERNATIONAL GROUP, LLC

July 17, 2009 – NOBLE ROMAN’S, INC. v. MARDAN, INC.

July 8, 2009 – NOBLE ROMAN’S, INC. v. RENTON WILLIAMS

April 21, 2009 – NOBLE ROMAN’S, INC. v. RICHARD A. GOMES and RRCM FOODS, INC.

April 2, 2009 – NOBLE ROMAN’S, INC. v. KANDAKAR ALAM

February 17, 2009 – NOBLE ROMAN’S, INC. v. EXPRESS LANE, INC.

February 10, 2009 – NOBLE ROMAN’S, INC. v. JJP&L, LLC

November 6, 2008 – NOBLE ROMAN’S, INC. v. PARDIS & ASSOCIATES, INC.

October 24, 2008 – NOBLE ROMAN’S, INC. v DELTA PROPERTY MANAGEMENT LLC, ZACK BROTHERS TRUCK STOP, LLC and STANDARD PETROLEUM CORP.

October 6, 2008 – NOBLE ROMAN’S INC. v. JAY’S GAS LLC

April 9, 2008 – NOBLE ROMAN’S, INC. v. SHAHRAM RAHIMIAN

March 17, 2008 – NOBLE ROMAN’S, INC. v. MEDALLION CONVENIENCE STORES, INC.

December 20, 2007 – NOBLE ROMAN’S, INC. v. MICHAEL J. BRUNSWICK, LAURIE BRUNSWICK, and M&L RESTAURANTS, LLC

September 17, 2007 – NOBLE ROMAN’S, INC. v. THE FRENCH BAGUETTE, LLC et al.

July 26, 2007 – NOBLE ROMAN’S, INC. v. MR. RON’S, L.C.

July 19, 2007 – NOBLE ROMAN’S INC. v. BAUER BUILT, INC. et al.

March 31, 2014

Indiana Trademark Litigation: Agler Sues Westheimer Over Use of Stratotone Mark

By Overhauser Law Offices, LLC

Fort Wayne, Indiana – Indiana trademark attorneys for Darryl Agler, doing business as The Stratotone Guitar Company of Fort Wayne, Indiana, filed a lawsuit in the Northern District of Indiana alleging that Westheimer Corporation of Northbrook, Illinois infringed the trademark “STRATOTONE” (the “Stratotone mark”), Trademark Registration No. 3,986,754 which has been issued by the U.S. Patent and Trademark Office (“USPTO”). Counterfeiting, unfair competition, and false designation of origin arising under the Lanham Act, 15 U.S.C. § 1051 et seq., and the statutes and common law of the State of Indiana have also been alleged.

Agler custom manufactures guitars and sells them across the United States. Each of Agler’s guitars is hand crafted from the wood of a customer’s choosing and features vintage hardware. Agler currently accepts orders for his guitars on his website at www.stratotoneguitar.com. He also displays and sells his guitars, which sell at retail for $1,250 or more, at vintage guitar shows across the nation. Angler asserts that, since at least as early as January of 2007, his marketing and promotions in connection with his guitars have included the Stratotone Mark.

Agler claims a right to exclude others’ use of the “Stratotone” mark in connection with guitars based on, inter alia, ownership of trademark rights to the mark “Stratotone” conferred by U.S. Reg. No. 3,986,754 (“‘754 Registration”). The ‘754 Registration was issued by the USPTO in 2011 as a result of a 2006 application for the Stratotone mark in association with “musical instruments, namely, guitars.”

According to the complaint, at the National Association of Music Merchants (“NAMM”) show in 2010, Westheimer offered and sold cheaper guitars using the Stratatone mark. Agler states that he spoke to Westheimer personnel twice at this show, notifying them that Westheimer’s products were infringing the Stratotone mark. Agler alleges that he was unable to sell any of his guitars at the NAMM show that year.

Agler indicates that, since the 2010 NAMM show, Westheimer has flooded the market with lower quality, cheaper guitars that bear the Stratotone mark. These guitars retail between $199.00 and $399.00. Agler contends that Westheimer’s “Stratotone” guitars have destroyed the market for Agler’s more expensive Stratotone guitars.

On April 25, 2013, Westheimer filed a petition to cancel the ‘754 Registration (the “Cancellation Petition”) with the Trademark Trial and Appeal Board. The Cancellation Petition is currently pending.

In the complaint, filed by Indiana intellectual property lawyers for Agler, the following counts are alleged:

• Count I: Federal Unfair Competition and False Designation of Origin
• Count II: Federal Trademark Infringement
• Count III: Federal Trademark Counterfeiting
• Count IV: Common Law Unfair Competition and Trademark Infringement
• Count V: Unjust Enrichment
• Count VI: Conversion
• Count VII: Deception
• Count VIII: Indiana Crime Victim’s Relief Act

Agler asks the court for injunctive relief; an accounting of damages; the surrender by Westheimer of items featuring the Stratotone mark; damages, including treble damages; and attorney’s fees.

Practice Tip: Indiana Code §§ 35-43-4-3 and 35-43-5-3(a)(6) are criminal statutes, claimed in the complaint in conjunction with an attempt to parlay the accusation into an award for damages, costs and attorneys’ fees. The Indiana Court of Appeals has discussed “theft” and “conversion” as they pertain to takings of intellectual property in several recent cases (see, for example, here and here) and has made it clear that criminal statutes often apply differently to an unlawful taking of intellectual property.

March 13, 2014

Indiana Court of Appeals Finds Noncompetition Agreement Overly Broad and Unenforceable

By Overhauser Law Offices, LLC

Indianapolis, Indiana – The Court of Appeals of Indiana has affirmed the decision of the Marion Superior Court to deny injunctive relief to Clark’s Sales & Service, Inc. (“Clark’s”) of Indianapolis, Indiana in its suit against John D. Smith (“Smith”) of Indiana and Ferguson Enterprises, Inc. (“Ferguson”) of Newport News, Virginia.

In 1998, Smith began working for Clark’s, a company that sells and services appliances in the builder-distributor market in Indiana. In 2004, after one of Clark’s high-level managers left for a competitive position at another company, Clark’s had Smith and various other employees sign a written employment agreement containing both a confidentiality clause and a noncompetition agreement.

Smith resigned his position at Clark’s on April 13, 2012 but, before doing so, he took copies of Clark’s sales records from 2010 and 2011, including customer and builder contact information, the price of materials sold and the costs and profit margins of Clark’s. On April 18, 2012, he accepted an offer of employment with Ferguson, a nearby competitor. In his new position, he solicited business from various customers of Clark’s.

Indiana attorneys for Clark’s sued to enforce the confidentiality and noncompetition provisions of the agreement entered into with Smith. The trial court concluded that the restrictive covenant that Clark’s drafted was overly broad and unreasonable, and denied Clark’s motion for a preliminary injunction. From that order, this interlocutory appeal was brought.

On appeal, Clark’s challenged the trial court’s ruling, calling it clearly erroneous. It claimed that the noncompetition agreement was not unreasonable and unenforceable. Clark’s also argued that, even if the noncompetition agreement were unreasonable and unenforceable as written, the court should apply the “blue-pencil doctrine” to make whatever modifications were necessary to render the covenant reasonable and enforceable.

The Indiana appellate court first discussed whether Clark’s had a legitimate and protectable interest, defined as “some reason why it would be unfair to allow the employee to compete with the former employer.” Indiana courts have held that “the advantageous familiarity and personal contact which employees derive from dealing with an employer’s customers are elements of an employer’s ‘good will’ and are a protectible interest which may justify a restraint.” The appellate court held that, while the trial court had not explicitly stated that it had found such a protectable interest, such a finding was implicit in its ruling. The appellate court ruled that the trial court had not erred by determining that Clark’s had established this element.

The Indiana appellate court then evaluated the reasonableness of the restrictions. Both parties agreed that the two-year limit was reasonable and valid. They disagreed, however, regarding the reasonableness of the noncompetition agreement as to the scope of activities and geographic area restricted.

The appellate court held that the one type of activities prohibited – Clark’s restrictions against contact with any of its past or prospective customers – was vague and too broad. The agreement also prohibited not merely those activities which Smith had engaged in during his tenure at Clark’s, but also prohibited him from providing any services competitive to “those offered by” Clark’s. That provision was held to be “overly broad, onerous, and an undue restriction on Smith’s economic freedom” and, thus, unenforceable.

The restrictions placed on the geographic area in which Smith could work were also evaluated. Those restrictions included working “in any state in which Gregg [Smith’s previous employer] does business, as well as working for any other entity providing services competitive to Clark’s in Marion County, any county contiguous to Marion County, any county in Indiana in which Clark’s has at least one customer, the State of Indiana, or within a fifty-mile radius of Smith’s principal office with Clark’s, which was in Castleton.” The appellate court held that it was “unquestionable that the expansive geographic scope . . . is unreasonable as written.”

Finally, the court addressed the “blue-pencil doctrine.” This doctrine allows a court to strike unreasonable restrictions in a covenant not to compete, provided that they are divisible. However, this doctrine does not extend to allow a court to create a reasonable restriction, as this would subject the parties to an agreement that they have not made.

The court held that blue pencil doctrine was inapplicable, as the terms that Clark’s proposed be stricken had been written as merely a small part of an indiscrete whole. Moreover, it held that, even if it were to strike the text that Clark’s had proposed be stricken, the restrictions would still be overly broad and in excess of what would be required to protect Clark’s legitimate business interest.

The Indiana appellate court affirmed the trial court, holding that its judgment was not clearly erroneous.

Practice Tip #1: To demonstrate the reasonableness of a noncompetition agreement, the employer must first show that it has a legitimate interest to be protected by the agreement. The employer also bears the burden of showing that the agreement is reasonable in terms of the time, activities, and geographic area restricted.

Practice Tip #2: Covenants not to compete are in restraint of trade and are not favored by the law. If a court applying Indiana law finds that portions of a noncompetition agreement are unreasonable, it may not modify the restrictions to make them reasonable. Doing so would subject the parties to an agreement they had not made. The court may, however, employ the “blue pencil” rule to “cross out” portions deemed unreasonable while leaving any separable and reasonable portions intact.

Practice Tip #3: This is at least the second time that the Indiana Court of Appeals has heard an interlocutory appeal on this non-compete litigation. In a prior appeal, the Court of Appeals reversed the trial court, which had improperly concluded that the noncompetition agreement failed for lack of consideration. We blogged about that appeal here.

Practice Tip #4: While Appellant-Plaintiff here argued that broad drafting was permissible and simply a “good faith effort to provide itself the greatest level of protection allowed by law,” the Indiana appellate court did not agree. Instead, it called the practice “unsavory” and reminded Clark’s that “Indiana law strongly discourages employers’ attempts to draft unreasonably broad and oppressive covenants.”

March 7, 2014

Supreme Court Grants Review for Four Intellectual Property Lawsuits

By Overhauser Law Offices, LLC

Washington, D.C. – The Supreme Court of the United States agreed to review the judgments of several Courts of Appeals in four intellectual property disputes. The cases included two patent cases (regarding joint-infringement liability and indefiniteness invalidity), a copyright case (concerning public performances), and a case which may have implications under trademark law (whether a Lanham Act claim is barred by the Food Drug and Cosmetic Act).

Limelight Networks, Inc. v. Akamai Technologies, Inc., Docket No. 12-786, is a patent case involving technology for managing web images and video. Appellate attorneys for Limelight Networks brought the case to the Court after the U.S. Court of Appeals for the Federal Circuit held that, in the case of method patents, multiple parties could be found to jointly infringe on a patent. The Federal Circuit, sitting en banc, held by a 6-5 vote that “all the steps of a claimed method must be performed in order to find induced infringement, but that it is not necessary to prove that all the steps were committed by a single entity.”

The question raised for review by the Supreme Court is whether a defendant may be liable for inducing patent infringement under 35 U.S.C. § 271(b) even if none has committed direct infringement under § 271(a). Patent attorneys for technology companies including Google Inc., Cisco Systems, Inc., Oracle Corporation, Red Hat, Inc., and SAP America, Inc. filed a brief in support of Limelight.

February 21, 2014

Rieth-Riley Sues Superior Asphalt for Cybersquatting

By Overhauser Law Offices, LLC

South Bend, Indiana – An Indiana trademark attorney for Rieth-Riley Construction Co., Inc. of Goshen, Indiana (“Rieth-Riley”) sued in the Northern District of Indiana alleging that Jeffrey Kresnak and Superior Asphalt, Inc. (“Superior”), both of Michigan, infringed the RIETH-RILEY trademark, Trademark Registration No. 1,659,123, which has been issued by the U.S. Trademark Office.

Rieth-Riley, founded in 1916, provides many services under the Rieth-Riley brand, including highway construction, asphalt and concrete paving, site preparation and excavation, bridge construction, underground utilities and drainage construction, asphalt and concrete recycling, curb and sidewalk construction, mining and aggregate processing, and providing sand, gravel and other aggregates for construction projects.

Superior, in business for over 30 years, is in the asphalt manufacturing, supplying, paving and maintenance business. It provides its services to residential, commercial, manufacturing and municipal customers. Defendant Kresnak owns Superior. Rieth-Riley indicates that it considers Superior to be a competitor.

Both companies maintain websites to promote their companies. Rieth-Riley operates its website at www.riethriley.com. Superior operates its site at www.superiorasphalt.com/. Rieth-Riley contends that Superior also purchased and began operating “rieth-riley.net” in violation of Rieth-Riley’s intellectual property rights in the trademarked name; it further indicates that this accused domain name resolves to Superior’s website. Rieth-Riley states that it attempted to reach an agreement with Defendants to cease using the accused website but that, in response, Defendants indicated that they would do so for $10,000.

Rieth-Riley contends that Defendants are unlawfully profiting through their use of the Rieth-Riley trademark. Specifically, Superior is accused of using the rieth-riley.net domain name with a bad-faith intent to profit by redirecting Internet traffic intended for the Rieth-Riley website to Superior’s website.

Rieth-Riley also states that Defendants’ unauthorized use of the Domain Name is likely to cause confusion or mistake or to deceive the consuming public as to the affiliation, connection, association or sponsorship of Superior with Rieth-Riley or the Rieth-Riley Mark, or as to the origin, sponsorship, or approval of Superior’s goods, services or activities by Rieth-Riley or the Rieth-Riley brand.

Finally, Rieth-Riley asserts that this use was with notice and actual knowledge of Rieth-Riley’s prior rights and, as a result, Superior’s acts constitute knowing and willful violations of the Lanham Act.

In this Indiana trademark litigation, the following counts are asserted:

• Count I: Federal Trademark Infringement
• Count II: Unfair Competition
• Count III: Cyberpiracy

Rieth-Riley asks the court for:

• preliminary and permanent injunctions enjoining the infringement of the Rieth-Riley trademark;
• preliminary and permanent injunctions enjoining Defendants from engaging in acts of false designation of origin and false description, pursuant to 15 U.S.C. §1125;
• preliminary and permanent injunctions enjoining conduct which causes, or is likely to cause, confusion, mistake, deception, or misunderstanding as to the source, affiliation, connection or association of Defendants’ products or services;
• preliminary and permanent injunctions enjoining the operation of any web site utilizing the accused domain name or the Rieth-Riley trademark;
• a judgment against Defendants for statutory damages;
• a judgment against Defendants for (1) all profits attributable to Defendants’ unauthorized use of the accused domain name, (2) damages sustained by Rieth-Riley on account of Defendants’ unlawful activities, and (3) treble damages;
• an order transferring the accused domain name to Plaintiff;
• an order for the destruction of any infringing items bearing the Rieth-Riley trademark; and
• costs and attorneys’ fees.

Practice Tip:

Plaintiff indicates that it attempted to obtain an agreement from Defendants to cease using the accused domain name. Despite this effort, Plaintiff contends that Defendants continued to use the allegedly infringing website name. This lawsuit for trademark infringement, unfair competition and cyberpiracy followed.

Another approach available to a plaintiff in such a situation is to seek a transfer the domain name under the Uniform Domain-Name Dispute-Resolution Policy (“UDRP”). This policy was established to resolve “The Trademark Dilemma” inherent in the largely unpoliced sales of domain names — the registration of a trademark without the consent of the trademark owner.

As part of the process of registering a domain name, registrants must, among other things, 1) “represent and warrant” that registering the name “will not infringe upon or otherwise violate the rights of any third party” and 2) agree to have the matter heard as an UDRP proceeding if any third party asserts that the domain name violates its trademark rights.

The UDRP is an administrative procedure. A UDRP limits itself to matters concerning abusive registrations and will not intervene in genuine disputes over trademark rights. To prevail in a UDRP proceeding, the complainant must establish three elements:

1) The domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights;
2) The registrant does not have any rights or legitimate interests in the domain name; and
3) The registrant registered the domain name and is using it in “bad faith.”

February 19, 2014

Maker of SNOWTIME anytime! Indoor Snowballs Sues for Trade Dress Infringement

By Overhauser Law Offices, LLC

Indianapolis, Indiana – An Indiana trademark attorney for KM Innovations, LLC of New Castle, Indiana (“KM”) filed a lawsuit in the Southern District of Indiana alleging that Opportunities, Inc. of Colo, Iowa competed unfairly and infringed the trade dress of KM’s “SNOWTIME anytime!” indoor snowballs.

The SNOWTIME anytime! concept was conceived in December 2012. At a party, several parents realized that a market might exist for “indoor snowballs,” which would enable children to have a “snowball fight” but without the usual requirements of snow or being outside. KM later introduced a product based on this idea. KM also indicates that it is pursuing a patent on its indoor snowballs.

In this lawsuit for trade dress infringement, which also includes allegations of unfair competition, KM asserts that Opportunities imports, sells and/or is offering to sell polyester-based indoor snowballs and that Opportunities’ indoor snowballs are low-quality knockoffs of KM’s famous product. KM also contends that Opportunities has deliberately copied the distinctive features of KM’s trade dress in an attempt to trade upon the goodwill associated with that trade dress.

To support its contentions of trade dress infringement, KM states that, inter alia, its SNOWTIME anytime! snowballs come in a clear package that includes a label on the front that depicts a mountainous background set in a blue and white theme. At the top of the package, the term “SNOWTIME” appears in a blue that is darker than the lighter blues used elsewhere in the label. The upper part of the lettering is covered with “snow,” giving the commercial impression of fresh snow. Also shown are a blue and white snowball with wording inside and people in snowsuits having fun playing with KM’s indoor-snowball product outdoors.

KM lists several similarities that it contends support a finding of trade dress infringement. It indicates that Opportunities’ packaging includes, among other features: a partially clear exterior that depicts a mountainous background set in a blue and white theme; an illustration of fresh snow covering the words “Snowball Fun” with letters that are a darker blue than the other blues on the package; a generally blue and white snowball with wording inside; and a depiction of people dressed in snowsuits playing outside with the product.

In the complaint, filed by an Indiana trademark lawyer, one count, “Trade Dress Infringement and Unfair Competition” is alleged. KM asks the court for:

• a judgment that Opportunities’ accused packaging infringes KM’s trade dress rights;
• a judgment that Opportunities committed unfair competition by offering its product in the accused packaging;
• damages, including treble damages for willful and deliberate infringement of KM’s trade dress rights and acts of unfair competition;
• a permanent injunction; and
• an award to KM of its attorneys’ fees, costs and expenses.

Practice Tip:

The United States Supreme Court addressed the elements required for trade dress to be protected in Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992). In Two Pesos, the Court held that, to establish a cause of action for trade dress infringement, a plaintiff must establish that (a) the design is non-functional; (b) the design is inherently distinctive or distinctive by virtue of having acquired secondary meaning; and (c) there is a likelihood of confusion.

This product was conceived barely a year ago. While SNOWTIME anytime! may have won first place at the Christmas Gift and Hobby Show in Indianapolis, that victory clearly did not take place in November 2012, as was stated in the complaint, as the product did not yet exist.

As a result of the product’s short time in the marketplace, one of the primary hurdles for Plaintiff may be timing. Specifically, if Plaintiff fails to prove that the trade dress in question is inherently distinctive, it could be difficult to prove that secondary meaning has been established in the minds of the consuming public in the time that the product has been available for purchase.

February 12, 2014

Sprint Weighs in with Civil Suit Against Defendants in Criminal Phone-Trafficking Scheme

By Overhauser Law Offices, LLC

Indianapolis, Indiana – In a 42-page complaint for damages and injunctive relief, trademark attorneys for Sprint Solutions, Inc. of Reston, Virginia; Sprint Communications Company L.P. and Boost Worldwide, Inc., the latter two of Overland Park, Kansas (collectively, “Sprint”), sued in the Southern District of Indiana alleging that Reginald Aldridge and Arrice Aldridge, both of Park Forest, Illinois, and Damion Transou of Humboldt, Tennessee infringed certain Sprint trademarks. These trademarks include the following Sprint marks: Registration Nos. 1,104,943, 1,573,863, 1,712,259, 1,839,302, 2,833,134, 2,836,616, and 3,046,207. They have been registered with the U.S. Trademark Office.

Sprint sells wireless handsets (“Phones”) under the brands Sprint, Boost Mobile, Virgin Mobile, payLo and Assurance Wireless for use on Sprint’s wireless network at prices significantly below the wholesale prices of the Phones so that they will be more widely accessible to consumers. Sprint states that it subsidizes the cost of the new Phones for the benefit of its “legitimate” customers. Sprint asserts that it spent more than $6.6 billion on handset subsidies in 2012.

Defendants, along with their alleged co-conspirators are accused of perpetrating an unlawful scheme of bulk handset theft and trafficking to profit from the illegal acquisition and resale of new Phones for their own profit and to the detriment of Sprint. As part of this purportedly fraudulent scheme, Sprint Phones are purchased and resold multiple times. During that process, the Phones are “unlocked” so that they may be used with any service provider, including non-Sprint providers. Sprint contends that, ultimately, these Phones end up in the hands of someone other than the Sprint customer whom Sprint intended to benefit. Sprint contends that the Phones often are sold overseas, where it does not provide service. As a result, Sprint states, Defendants are profiting from this scheme by appropriating the subsidies that Sprint provides to its customers.

Defendants are also accused of unlawfully accessing Sprint’s protected computer systems and wireless network, trafficking in Sprint’s protected and confidential computer passwords, and/or stealing legitimate customer upgrades. It is asserted that Defendants fraudulently placed at least 65 orders on more than 17 corporate accounts to which they had no legal right of access for the purpose of ordering more than 288 items valued at over $100,000.

Finally, Sprint contends that Defendants’ behavior violates the Terms and Conditions to which the sales of Phones are subject as well as willfully infringes Sprint’s trademark rights.

Defendants Arrice Aldridge and Damion Transou were indicted, in part for the activities described in the complaint.

In the complaint, filed by an Indiana trademark lawyer, in conjunction with trademark attorneys from Florida and Georgia, the following counts are asserted:

• Count I: Unfair Competition
• Count II: Tortious Interference with Business Relationships and Prospective Advantage
• Count III: Civil Conspiracy
• Count IV: Unjust Enrichment
• Count V: Conspiracy to Induce Breach of Contract
• Count VI: Common Law Fraud
• Count VII: Fraudulent Misrepresentation
• Count VIII: Trafficking in Computer Passwords – 18 U.S.C. §1030(a)(6)
• Count IX: Unauthorized Access – 18 U.S.C. §1030(a)(5)(C)
• Count X: Unauthorized Access with Intent to Defraud – 18 U.S.C. §1030(a)(4)
• Count XI: Federal Trademark Infringement – 15 U.S.C. §1114
• Count XII: Federal Common Law Trademark Infringement and False Advertising – 15 U.S.C. §1125(a)(1)(A)
• Count XIII: Contributory Trademark Infringement
• Count XIV: Conversion

Plaintiffs ask the court for damages, including exemplary damages; attorneys’ fees and costs; a permanent injunction prohibiting the practices described in the complaint; and the delivery to Plaintiffs of the Defendants’ inventory of accused Phones.

Practice Tip: Cases of cellular phone trafficking such as these, and there are more than a few of them, are an unusual combination of contract law, trademark law and criminal law. In at least one case similar to this one, 16 defendants were also convicted of terrorism charges when it was found that the proceeds from their phone trafficking and other illegal conduct was being funneled to the terrorist organization Hezbollah.

February 10, 2014

Swag Merchandising and Musical Group Devo Sue for Trademark Infringement

By Overhauser Law Offices, LLC

Indianapolis, Indiana – An Indiana trademark attorney for Swag Merchandising, Inc. and Devo Inc., both of California, sued in Hamilton Superior Court alleging that Your Fantasy Warehouse, Inc. d/b/a T.V. Store Online and Fred Hajjar, both of Commerce Township, Michigan, infringed Devo’s Trademarks, Registration Nos. 3161662 and 3167516, which have been registered by the U.S. Trademark Office. The case has been removed from Indiana state court to the Southern District of Indiana.

Swag claims that it owns the exclusive right to license the various trademarks, copyrights and individual and collective rights of publicity of the musical group Devo. The group is best known for the song “Whip It,” which hit number 14 on the Billboard chart in 1980. Swag indicates that it licenses the Devo intellectual property to third parties around the globe.

T.V. Store Online is in the business of manufacturing, marketing and distributing apparel and memorabilia featuring classic and current television programming, movies and/or music. T.V. Store Online and Hajjar have been accused of manufacturing, producing, marketing, advertising and/or retailing a product known as “Energy Dome Hats.” Plaintiffs assert that these Energy Dome Hats are commonly associated with Devo but have not been licensed by Plaintiffs to Defendants. Plaintiffs further claim that consumers coming into contact with Defendants’ product would “immediately recognize the same as being associated with, sponsored by and/or endorsed by” the ’80s group.

In the complaint, filed by an Indiana trademark attorney, Plaintiffs assert the following:

• I: Violation of 15 U.S.C. §1125(a) of the Lanham Act
• II: Trademark Infringement – 15 U.S.C. §1114 and Common Law
• III: Counterfeiting
• IV: Dilution – 15 U.S.C. §1125(c) and New York General Business Law §360-1
• V: Common Law Unfair Competition
• VI: Statutory Right of Publicity [NB: under Indiana law]
• VII: Right of Publicity Infringement Under California Civil Code §3344
• VIII: Common Law Right of Publicity
• IX: Conversion [NB: under Indiana law]
• X: Deception [NB: under Indiana law]
• XI: Indiana Crime Victims Act

Plaintiffs ask for an injunction; the surrender of infringing materials; damages, including treble damages; costs and fees. An Indiana intellectual property lawyer for Defendants removed the case to federal court, although he noted that the removal was not a concession that the Southern District of Indiana was the proper venue for the California Plaintiffs or the Michigan Defendants.

Practice Tip:

This is at least the third case filed by Theodore Minch about which we have blogged. In at least two prior cases, LeeWay Media Group, LLC v. Laurence Joachim et al. and Leon Isaac Kennedy v. GoDaddy et al., Mr. Minch has filed in an Indiana court despite none of the parties having any connection to Indiana.

It can be surmised that perhaps the choice of Indiana as a forum might have been driven by an attempt to increase damages. I.C. §§ 35-43-4-3 and 35-43-5-3(a)(6) are criminal statutes, claimed in the complaint in conjunction with an attempt to parlay the accusation into an award for damages, costs and attorneys’ fees. The Indiana Court of Appeals has discussed “theft” and “conversion” as they pertain to takings of intellectual property in several recent cases (see, for example, here and here) and has made it clear that criminal statutes often apply differently to an unlawful taking of intellectual property.

February 7, 2014

Licensor of “Tiki Tan” Mark Alleges Infringing Use by Solarium and Solarium Bittersweet

By Overhauser Law Offices, LLC

South Bend, Indiana – An Indiana trademark attorney for Al Reasonover of Elkhart, Indiana sued in the Northern District of Indiana alleging that Solarium LLC of South Bend, Indiana (“Solarium”) and Solarium Bittersweet LLC of Elkhart, Indiana (“Solarium Bittersweet”) committed trademark infringement of “Tiki Tan”, Trademark Reg. No. 2602388, which has been registered by the U.S. Patent and Trademark Office.

In this complaint for trademark infringement and unfair competition, Plaintiff Reasonover states that he operates tanning salons under the Tiki Tan Mark and that he also develops tanning salons operated by others to whom he licenses the use of the Mark for a fee. Among these licensees, claims Plaintiff, is Solarium.

Reasonover asserts that, instead of displaying the Tiki Tan Mark as licensed, Solarium displays a service mark at its website reading “Tiki Tan by Solarium”. Reasonover also claims that, while he and Solarium entered into a licensing agreement that permitted Solarium to use the Mark only within a five mile territory around 4542 Elkhart Road, Elkhart, Indiana, Defendants Solarium and/or Solarium Bittersweet are operating additional tanning salons under the name “Tiki Tan” at 306 N. Bittersweet Road, Mishawaka, Indiana; 1290 E. Ireland Road, South Bend, Indiana and 215 E. University Drive, Granger, Indiana.

Plaintiff indicates that the licensing agreement neither permits Solarium to alter the Mark nor to use the Mark outside of the five mile territory around 4542 Elkhart Road, Elkhart, Indiana. He also claims that Solarium’s modification of the Mark to include its own name in connection with the promotion, sale and distribution of tanning salon services infringes on Plaintiff’s rights in his federally registered trademark, in violation of 15 U.S.C. Sec. 1114. Reasonover further alleges that Defendants’ actions are intended to cause, have caused, and are likely to continue to cause, confusion, mistake, deception among consumers, the public, and the industry as to whether Defendants’ services originate from, are affiliated with, sponsored by or endorsed by Plaintiff.

Finally, Defendants are accused of infringing the Mark intentionally, deliberately and willfully. The complaint, filed by an Indiana trademark lawyer, lists the following counts:

• Count I – Trademark Infringement – Injunctive Relief
• Count II – Trademark Infringement – Damages
• Count III – Common Law Trademark Infringement
• Count IV – Common Law Unfair Competition

Reasonover asks the court for:

• a finding that Defendants have violated 15 U.S.C. Sec. 1114; that Defendants have engaged in trademark infringement and unfair competition under the common law of Indiana; and that such conduct has damaged Plaintiff monetarily and in ways not adequately remedied by monetary damages alone;
• an injunction, preliminarily and permanently restraining Defendants from altering the registered Mark, “Tiki Tan,” in any way including but not limited to including the words “by Solarium” with the Mark; operating tanning salons at 306 N. Bittersweet Road, Mishawaka, Indiana; 1290 E. Ireland Road, South Bend, Indiana; or 215 E. University Drive, Granger, Indiana under the name “Tiki Tan”; engaging in any other activity constituting unfair competition with Plaintiff; and engaging in any other activity constituting trademark infringement or which deceives consumers or the public about the origin of services associated with Plaintiff;
• an order for corrective advertising;
• statutory damages or, alternatively, the disgorgement of all profits realized as a result of Defendants’ wrongful acts and also awarding Plaintiff its actual damages;
• a trebling of damages under 15 U.S.C. Sec. 1117;
• Plaintiff’s costs, attorney fees, investigatory fees, and expenses under 15 U.S.C. Sec. 1117; and
• pre-judgment interest on any monetary award.

Practice Tip: A trademark license may be granted by a licensor to a licensee to permit the licensee to use a trademark in a way that would otherwise infringe upon the licensor’s intellectual property rights. A license to use a trademark typically includes various restrictions. Those restrictions may include, among other things, limits on territory, term and manner of use.