Unfair Competition

November 20, 2013

Eli Lilly Sues Pet Supply, Pet Products Net and Graham Nelson for Trademark Infringement

Indianapolis, Indiana – Eli Lilly and Company of Indianapolis, Indiana (“Lilly”) has filed a trademark infringement lawsuit in the Southern District of Indiana alleging that Graham Nelson, Zoja Pty Ltd. d/b/a Pet Supply International Ltd., and Pet Products Net, all of Australia, infringed the trademark COMFORTIS, Trademark Registration No. 3,370,168, which has been registered by the U.S. Trademark Office.

Lilly, through its Elanco Animal Health Division, manufactures, markets and sells pet medicines, including flea-control preparations and treatments for parasitic infestations. It contends that it has made long and continuous of the name and mark “Elanco” in connection with veterinary preparations. It also asserts that it has long used the “Comfortis” mark, which was registered by the U.S. Trademark Office in 2008. Lilly claims that it has sold tens of millions of dollars’ worth of veterinary preparations, pet medicines and related goods and services under the Elanco and Comfortis marks.

Among Lilly’s products is Trifexis, a once-monthly veterinary medication, which contains the veterinary chemicals spinosad and milbemycin oxime. Trifexis is for the prevention of heartworms, fleas and intestinal worms. It is sold in the United States with what Lilly contends to be an inherently distinctive and non-functional trade dress. Trifexis is available only by prescription through licensed veterinarians. Lilly sells a similar product in Australia, with similar trade dress, under the name “Panoramis.”

Defendants Nelson, Zoja, Pet Supply and Pet Products Net do business over the Internet, including at the website www.bestvaluepetsupplies.com. Among the products listed on their website is “Panoramis aka Trifexis.” While the companies are apparently based in Australia, the website indicates that they ship to the United States.

Lilly has sued Defendants over the sale of Panoramis to the United States. It asserts that units designed for sale in markets such as Europe and Australia are neither intended nor authorized for sale in the United States. Lilly further indicates that the Elanco- and Comfortis-branded pet medicines are tailored to meet the requirements of different geographic regions and countries to reflect the differences in language, climate, government regulations, units of measure, local addresses and telephone numbers, among other things.

Lilly objects to the Defendants’ purported advertisement of units designed for the Australian and European markets as identical to or interchangeable with the units designed for sale in the United States. It states that that the Elanco-branded “Panoramis” pet medicines are materially different from its Elanco-branded “Trifexis” pet medicines sold in the United States.

Trademark attorneys for Lilly assert that Defendants are not authorized to use Lilly’s Elanco or Comfortis names and trade dress in connection with the sale of once-monthly spinosad and milbemycin oxime pet medicines outside of Australia. Lilly has sued Defendants, asserting willful infringement of its trademarks. It asserts the following in its complaint:

• First Claim for Relief: Trademark Infringement in Violation of Section 32 of the Lanham Act
• Second Claim for Relief: Unfair Competition in Violation of Section 43(a) of the Lanham Act
• Third Claim for Relief: False Advertising in Violation of Section 43(a) of the Lanham Act
• Fourth Claim for Relief: Unfair Competition in Violation of Indiana Common Law

Lilly asks for preliminary and permanent injunctions; damages, including treble damages; the Defendants to be required to notify all purchasers of the accused products, request the return of the products and refund the price paid; pre- and post-judgment interest and costs of the suit.

Practice Tip:

Lilly is objecting to the so-called “grey market” for its veterinary pharmaceuticals. Prices for drugs can vary considerably between countries, often as a result of government intervention in the market. As a result, a “grey market” – selling a drug intended for use in one country to consumers in another country – can emerge. In this complaint, Lilly has framed its objection to a grey market for its pet-care pharmaceuticals as an intellectual property dispute.

Intellectual property law requires a balancing of competing interests. On the one hand, innovation will be discouraged if inventors, authors and other creators of intellectual property are not allowed to benefit from their labors. Such a problem arises if others are allowed to use creators’ ideas without compensating them (the “free-rider problem”). On the other hand, the public good is promoted by encouraging free competition in the marketplace and easy alienability of property.

Under the first-sale defense to infringement, once a copy of an item protected by intellectual property laws has been sold to a purchaser, the creator of the intellectual property generally may not prevent that purchaser from reselling or otherwise disposing of the item. In patent and copyright law, the first-sale rule in most cases provides an absolute defense against infringement. In patent law, this is also referred to as “patent exhaustion.” As a result, the purchaser of a copy of the work and the owner of the intellectual property rights to that work may become competitors in the marketplace if the purchaser goes to resell a copy of the work.

The first-sale defense is not as broad in a trademark context. Enunciated in 1924 by the U.S. Supreme Court, the general rule for the resale of a trademark item provides that, after a trademark owner has sold a trademarked product, the buyer ordinarily may resell that product under the original mark without incurring any trademark liability. See Prestonettes, Inc. v. Coty, 264 U.S. 359 (1924). However, unlike patent or copyright law, trademark law has as one of its primary goals preventing confusion among potential purchasers. Typically, but not always, such confusion will not exist where a genuine article bearing an authentic trademark is sold. While there is a split among the circuits concerning the extent to which consumer confusion is a relevant factor, some hold that certain types of confusion about a product’s origin cause the first-sale defense to be inapplicable to the resale of a trademarked good. See Au-Tomotive Gold Inc. v. Volkswagen of America, Inc., 603 F.3d 1133, 1134 (9th Cir. 2010).

November 15, 2013

Ambre Blends Sues doTERRA For Trademark Infringement of “Solace”

By Overhauser Law Offices, LLC

Indianapolis, Indiana – Ambre Blends, LLC of Fishers, Indiana has filed a trademark infringement lawsuit in the Southern District of Indiana alleging that doTERRA, Inc., doTERRA International, LLC, both of Orem, Utah (collectively, “doTERRA”) and Kerry Dodds d/b/a Kerry Essentials of Indianapolis, Indiana (“Kerry”) infringed SOLACE®, Trademark No. 4266473, which has been registered by the U.S. Trademark Office.

In its complaint, Ambre Blends claims to have been producing organic body products since 2001. It offers four fragrances which are designed to be worn by both women and men. Founded in 2008, doTERRA offers essential oils both as single oils and as proprietary essential oil blends via independent product consultants. Both companies claim rights in the mark “Solace” in connection with essential oil products.

Ambre Blends asserts that it has used the Solace mark continuously in commerce since at least as early as February 2007. It holds a federally registered trademark on the mark in connection with “Aromatic preparations, namely, oils, body creams, body sprays, soaps, shower gel; Beauty creams; Body and beauty care cosmetics; Body cream; Body sprays; Essential oils for use in aromatherapy; Essential oils for use in manufacturing of candles, lip balm, shower gel, shampoo, conditioner; Face and body lotions; Non-medicated skin creams with essential oils for use in aromatherapy; Oils for perfumes and scents; Perfume; Perfume oils; Perfumed creams; Perfumed soaps; Scented body spray; Skin soap.” It describes its essence as having been “created for the sole purpose of comfort and attraction” and marks its products with “Solace®”.

According to the doTERRA website, doTERRA sells its product, a blend for women, as “Solace™”. It describes its oil as “a proprietary blend of Certified Pure Therapeutic Grade® essential oils carefully formulated to balance hormones and manage symptoms of PMS and the transitional phases of menopause.” (It also provides the disclaimer, required by the Food and Drug Administration, that the “product is not intended to diagnose, treat, cure, or prevent disease.”)

In its complaint, Ambre Blends contends that doTERRA willfully and intentionally used the Solace mark knowing both that the mark was the property of Ambre Blends and that such a use was unlawful. It further asserts that doTERRA’s use of the mark was intended to cause confusion, mistake or deception among the general public and that doTERRA acted in bad faith.

The complaint asserts, inter alia, violations of the Lanham Act and unfair competition:

• Count I: Trademark Infringement
• Count II: False Designation of Origin
• Count III: Unfair Competition
• Count IV: Forgery
• Count V: Corrective Advertising Damages
• Count VI: Declaratory Judgment
• Count VII: Preliminary and Permanent Injunctive Relief

Trademark counsel for Ambre Blends seeks a declaratory judgment; a preliminary injunction; a permanent injunction; damages, including treble damages; costs and attorney’s fees; the transfer to Ambre Blends of any domain name that includes “Solace”; and corrective-advertising damages.

Practice Tip #1: From the complaint, this appears to be a straightforward case of infringement. However, Ambre Blends may have a tougher case than is obvious from the complaint itself. It appears from doTERRA’s sales literature that doTERRA has used the mark “Solace” along with “™”, thus claiming rights in the mark, at least as early as 2011. In contrast, Ambre Blends did not file its application until April 4, 2011; it was published for opposition on October 16, 2012. A federal registration confers a presumption of validity. However, here, the right to use the mark “Solace” may result in a battle of the facts.

Practice Tip #2: This complaint highlights the difference between the “®” mark and the “™” mark. While the former may not be used until a mark has been granted a federal registration, the latter has no such requirement. Instead, it may be used whenever a business wishes to put competitors on notice that it considers the mark to be its intellectual property.

Practice Tip #3: doTERRA is currently embroiled in litigation in both state and federal court in Utah with Young Living, another giant in the essential-oil industry.

November 7, 2013

WindStream Sues Rambo and Keebler for Trademark Infringement

By Overhauser Law Offices, LLC

New Albany, Indiana – WindStream Technologies, Inc. of North Vernon, Indiana filed a trademark infringement lawsuit in the Southern District of Indiana alleging that Rambo LLC, Rambo Montrow Corporation (collectively, “Rambo”) and Rick Keebler, all of Madison, Indiana, as well as ten unidentified John Does residing in Indiana, infringed its trademarked TurboMill, Trademark Registration No. 3,986,494, which has been registered by the United States Patent and Trademark Office.

WindStream manufactures wind turbines for municipal, residential and commercial use. Those turbines are shipped worldwide from its Indiana manufacturing facility. It contracted with Rambo and Keebler, who is asserted to be a principal of the Rambo entities, to provide component parts and to act as an authorized dealer of TurboMill turbines in certain territories.

WindStream has multiple contractual disputes with Defendants and Defendants’ predecessors in interest and asserts that component parts in which WindStream has an interest are being held “hostage” in an attempt to renegotiate the terms of one of the contracts. Further, WindStream contends that the failure of Defendants to deliver the parts has damaged its business. WindStream also charges Defendants with unfair competition, claiming that they are selling WindStream products, including WindStream’s TurboMill, as their own. Finally, it asserts that, among the prospective customers that Keebler and Rambo are targeting are individuals and entities that had previously been identified by WindStream as potential customers.

In its complaint, filed by the trademark attorney for WindStream, the following counts are alleged:

• Federal Unfair Competition and Passing Off (15 U.S.C. § 1125(a))
• Trademark Infringement (15 U.S.C. § 1114)
• Breach of Contract (Dealer Agreement)
• Breach of Contract (Purchase Orders)
• Interference with Contract and Prospective Economic Advantage

WindStream asks the court for an injunction prohibiting trademark infringement and similar conduct; damages, including treble damages; punitive damages for Defendants’ willful and malicious acts; and attorney’s fees and costs of the lawsuit.

Practice Tip: The complaint asserts that the trademark for TurboMill was registered on June 28, 2001 and that the mark has been used in commerce since at least 2009. In contrast, the registration is listed by the U.S. Patent and Trademark Office as having occurred on June 28, 2011 with the mark shown as having first been used in commerce in 2011, the same year in which WindStream began manufacturing its wind turbines. While the former inconsistency, which adds exactly ten years to the apparent life of the trademark, can be assumed to be a typographical error, the origin of the latter inconsistency, which adds another two years to the period during which the TurboMill mark is claimed to have been used in commerce, in unclear.

October 21, 2013

Dissimilarity Between Trademarked Goods and Allegedly Infringing Goods is Not Dispositive

By Overhauser Law Offices, LLC

Indianapolis, Indiana — In June 2013, Australian Gold, LLC of Indianapolis, Indiana sued Devoted Creations, LLC of Oldsmar, Florida in the Southern District of Indiana alleging trademark infringement of the mark LIVE LAUGH TAN, Trademark Registration No. 4,154,194, which has been registered with the U.S. Trademark Office. Devoted Creations moved to dismiss the lawsuit for failure to state a claim.

Australian Gold has been in the business of selling indoor-tanning preparations for over 20 years. Devoted Creations also sells indoor-tanning preparations. Australian Gold contended in its complaint that, since at least October 2010, it has used the registered mark “LIVE LAUGH TAN” as a trade name and trademark in conjunction with sales of its Australian Gold line of indoor-tanning products.

Devoted Creations, which competes directly with Australian Gold for customers, uses the name “LIVE LOVE TAN” to advertise its indoor-tanning preparations. Australian Gold alleges that Devoted Creations’ use of a similar trademark to sell products similar to those which it sells infringes on its intellectual property rights in the “LIVE LAUGH TAN” trademark. It further asserted that Devoted Creations was aware of the goodwill and reputation associated with Australian Gold’s trademark, and that Devoted Creations intentionally copied that trademark. Australian Gold sued for trademark infringement and unfair competition.

In this opinion, Judge Jane Magnus-Stinson addressed the request of Defendant Devoted Creations to invoke Federal Rule of Civil Procedure 12(b)(6) and dismiss the case against it on the basis that Australian Gold had stated no plausible claim. Devoted Creations asserted that the claims against it failed because Devoted Creations’ use of a mark on one product – indoor tanning preparations – could not as a matter of law infringe on Australian Gold’s use of its own mark in conjunction with an entirely different product – tote bags, the class of products for which the trademark is registered.

Judge Magnus-Stinson pointed out that Devoted Creations made two errors. Devoted Creations’ first error was one of fact. Devoted Creations asserted that Australian Gold did not use the trademark in conjunction with the sale of tanning products but, rather, that the mark was used only for tote bags. The court did not accept this version of the facts. Instead, the court referred to the standard of review for a motion to dismiss under 12(b)(6), which asks whether the complaint “contain[s] sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” As Australian Gold had explicitly alleged in its complaint that its use of the trademark was “in conjunction with the marketing and sale of its AUSTRALIAN GOLD® line of indoor tanning preparations,” the court was not persuaded that a motion to dismiss was appropriate.

The second error was one of law. Even if it were true that the purported infringement occurred only on a different type of goods, that dissimilarity is not dispositive, as the analysis of likelihood of confusion requires the application of a seven-factor test.

Finally, the court reminded Devoted Creations and its counsel of the ethical duties imposed by “both Federal Rule of Civil Procedure 11(b)(2) (stating that a motion presented to the Court functions as a certification by the presenting attorney that ‘the claims, defenses, and other legal contentions are warranted by existing law’) and 28 U.S.C § 1927 (providing for sanctions for unreasonably protracting litigation) when filing a motion with the Court.”

Practice Tip: The precedent in the Seventh Circuit is that similarity between a plaintiff’s goods and a defendant’s allegedly infringing goods is only one of seven factors considered in evaluating whether there is a likelihood of confusion. Dissimilarity alone is not dispositive. Even when products are “quite different,” an evaluation of the other factors is required. The factors are:

1. the similarity between the marks in appearance and suggestion;
2. the similarity of the products;
3. the area and manner of concurrent use;
4. the degree of care likely to be exercised by consumers;
5. the strength of the plaintiff’s mark;
6. any actual confusion; and
7. the intent of the defendant to “palm off” his product as that of another.

September 13, 2013

Steak n Shake Sues for Trademark Infringement

By Overhauser Law Offices, LLC

Denver, Colorado — Intellectual property lawyers for Steak n Shake Enterprises, Inc. and Steak n Shake, LLC of Indianapolis, Indiana (collectively “Steak n Shake”) sued in the United States District Court for the District of Colorado alleging that Globex Company, LLC; Springfield Downs, LLC; Christopher Baerns; Larry Baerns; Kathryn Baerns and Control, LLC, all of Colorado, are infringing the “Steak n Shake” marks, which have been registered by the U.S. Trademark Office.

Non-party Steak n Shake Operations, Inc., Steak n Shake Enterprises’ parent company, has continuously operated Steak n Shake restaurants specializing in burgers and milkshakes since 1934. There are currently 415 company-owned Steak n Shake restaurants in 15 states across the country. In addition, Steak n Shake Enterprises grants franchises to establish and operate Steak n Shake restaurants pursuant to written franchise agreements with Steak n Shake Enterprises, and written license agreements with Steak n Shake, LLC. There are currently 100 franchised Steak n Shake restaurants operating in 23 states, including Colorado. Steak n Shake asserts that the Steak n Shake trademarks, and the products and services offered in association with those marks, have been extensively promoted throughout the United States for many years.

This action against Defendants arose subsequent to the termination of franchise and license agreements between Plaintiffs Steak n Shake Enterprises, Inc., as franchisor, and Steak n Shake, LLC, as licensor, and Defendants as franchisees, licensees and/or guarantors. Steak n Shake contends that Defendants materially breached their obligations under the franchise and license agreements and failed to cure such breaches. As a result, Steak n Shake terminated the agreements.

Steak n Shake alleges that, notwithstanding the termination of the franchise and license agreements, Defendants continue to use the Steak n Shake name and marks in connection with the operation of competitive restaurants at the same locations as their former franchised Steak n Shake restaurants, and to hold their restaurants out to the public as authentic Steak n Shake restaurants.

In the complaint, trademark attorneys for Steak n Shake assert the following:

· Count I – Trademark Infringement

· Count II – Unfair Competition

· Count III – Breach of Contract – Specific Performance

· Count IV – Breach of Contract – Damages

· Count V – Breach of Guaranty – Damages

Steak n Shake seeks the following relief against Defendants, jointly and severally: preliminary and permanent injunctive relief enjoining Defendants’ trademark infringement and unfair competition, and ordering Defendants to perform their post-termination obligations under their franchise and license agreements and area development agreement, including their noncompetition covenants; recovery of the amounts owed to them by Defendants, including the damages each has sustained by reason of Defendants’ breaches and the resulting termination of the franchise and license agreements and area development agreement; and an award of the attorneys’ fees and costs incurred by Steak n Shake.

Practice Tip: Franchise agreements typically require the franchisee to cease using all of the franchise marks, as well as return all items bearing the franchise marks, in the event the franchise agreement is terminated. Failure to comply promptly with these provisions can lead to liability for trademark infringement, among other claims.

September 12, 2013

80/20 Sues “John Doe” for Trademark Infringement and Passing Off

By Overhauser Law Offices, LLC

Fort Wayne, Indiana — Trademark lawyers for 80/20, Inc. of Columbia City, Indiana filed a trademark infringement suit in the Northern District of Indiana alleging John Doe d/b/a TNutz of Champlain, New York infringed the trademark “80/20”, Trademark Registration No. 2,699,302, which has been registered with the U.S. Trademark Office.

80/20 is a manufacturer of T-slotted aluminum extrusion products and accessories. It sells to customers through a distribution network and an online “garage sale.” It asserts that it has marketed products and services under the trademark “80/20” since at least 1990. TNutz does business via its own website and an eBay store.

TNutz is accused of unfairly competing with 80/20 by, among other things, falsely representing that some of the products that it offers for sale are genuine 80/20 products when, according to 80/20, they are not. 80/20 indicates that it has no affiliation with TNutz.

The complaint also states that TNutz represents its own goods as 80/20 goods with the intention of causing confusion among, and deceiving, consumers who seek to purchase genuine 80/20 parts from or through 80/20. It also contends that TNutz has purposely hidden its true identity and physical location from consumers and competitors, asserting that the businesses listed as contacts for both TNutz’s website and its physical address are unrelated third parties.

80/20 indicates that it sent a cease-and-desist letter to TNutz on May 10, 2013 demanding that TNutz cease infringement and compensate 80/20 for the damages caused by the allegedly infringing conduct. 80/20 apparently received no response to its demands.

The complaint lists the following causes of action:

· Count I: Trademark Infringement

· Count II: Lanham Act Violation — Passing Off

Trademark lawyers for 80/20 ask the court for preliminary and permanent injunctions prohibiting infringement; an award of actual damages and profits by TNutz attributable to infringement of 80/20’s trademarks and/or statutory damages; an award of reasonable attorneys’ fees, upon a finding that this is an exceptional case; and the destruction of all materials in TNutz’s control bearing the “80/20” mark.

Practice Tip:

If a defendant’s identity is not clear from the evidence available when a complaint is filed, a “John Doe” designation is typically used to represent that unidentified defendant. After filing such a complaint, the plaintiff may then ask the court to use its authority to subpoena various third parties, such as internet service providers, to disclose the identity of the Doe defendant(s). Here, presumably, the plaintiff will subpoena to eBay to discover the identity of “John Doe.”

Although trademark lawsuits with a “John Doe” defendant are a relative rarity, this is the second one we have blogged about this week. Sometimes, as was the case in the other recent trademark complaint with a “John Doe” defendant, revealing the identity of the unknown defendant is largely procedural. In other cases, however, Doe defendants are highly motivated to preserve their anonymity, as they do not want to be associated with the embarrassing allegations in the complaint. See, e.g., one Doe defendant’s request to quash or modify a subpoena in a copyright case which involved the alleged illegal downloading of adult content.

September 6, 2013

Texas Roadhouse Sues Multiple Restaurants Operating as “Texas Corral” or “Amarillo Roadhouse”

By Overhauser Law Offices, LLC

Grand Rapids, Michigan — Trademark lawyers for Texas Roadhouse, Inc. and Texas Roadhouse Delaware LLC, both of Louisville, Kentucky (collectively, “Texas Roadhouse”) sued for trademark infringement in the Western District of Michigan alleging that the Defendants, including those doing business as multiple Texas Corral restaurants located in Indiana (collectively “Texas Corral”), as well as one Amarillo Roadhouse restaurant, also located in Indiana, infringed the service mark TEXAS ROADHOUSE, Trademark Registration Nos. 1,833,533; 2,231,309; and 2,250,966, which have been registered by the U.S. Trademark Office.

Texas Roadhouse operates a Texas-themed restaurant chain. The first Texas Roadhouse restaurant opened in Clarksville, Indiana in 1993. As of March 2013, there were 397 Texas Roadhouse restaurants in 47 states and three countries.

Texas Roadhouse contends that each of the restaurants is required to comply with strict exterior and interior design requirements so that the look and feel is substantially identical across all Texas Roadhouse locations. It lists three U.S. Service Mark Registrations that include the mark “Texas Roadhouse” and asserts that each of them is incontestable. Texas Roadhouse also claims ownership of various unregistered marks that include the word “Texas” and “Roadhouse” as well as copyright protection, including a U.S. Copyright registration, of its marquee. Finally, Texas Roadhouse claims intellectual-property rights in the trade dress of its restaurants, including the look of the exterior design of the building, the interior décor, the music and the menu.

Texas Corral, against which Texas Roadhouse filed this complaint, also operates casual, western-themed, family restaurants. It owns and operates nine restaurant locations doing business under the name “Texas Corral.” A total of ten locations are at issue in this lawsuit. Six Indiana cities have “Texas Corral” restaurants: Highland, Merrillville, Portage, Michigan City, Martinsville and Shelbyville. Texas Corral also purportedly owns and operates a location that does business as “Amarillo Roadhouse” in Indiana, which is also at issue in this trademark-infringement lawsuit. In addition, three other Texas Corral restaurants have been listed in the complaint: two in Michigan and one in Illinois.

Also listed in the complaint are Paul Switzer, asserted to be the franchisor/licensor of Texas Corral restaurants and Victor Spina, asserted to be a franchisee/licensee. “John Doe Corp.,” a fictitious name intended to represent entities or individuals whose actual identity is not currently known to Texas Roadhouse, is also listed as a Defendant.

In the complaint, trademark attorneys for Texas Roadhouse assert that Texas Corral and Amarillo Roadhouse routinely use trade dress, trademarks, service marks, trade names, designs or logos that are confusingly similar to or copies of intellectual property owned by Texas Roadhouse. This purportedly infringing use is asserted to be visible in signage, print and electronic promotional materials, menus, décor, building design and websites.

Texas Roadhouse’s complaint against Texas Corral and Amarillo Roadhouse lists the following:

· Count I: Trade Dress Infringement

· Count II: Federal Trademark Infringement

· Count III: Trademark Infringement Under Mich. Comp. Laws § 429.42

· Count IV: Trademark Infringement Under Ind. Code § 24-2-1-13

· Count V: Trademark Infringement Under Common Law

· Count VI: Copyright Infringement Under 17 U.S.C. § 101 et seq.

· Count VII: Unfair Competition Under Michigan and Indiana Common Law

Texas Roadhouse asks for a judgment that Texas Roadhouse owns enforceable rights in the Texas Roadhouse intellectual property and that all registrations for the Texas Roadhouse intellectual property are valid; a judgment that the Defendants have been and are directly or indirectly infringing the Texas Roadhouse intellectual property; a judgment that the Defendants have been and are engaging in unfair competition by their unauthorized use of the Texas Roadhouse intellectual property; a judgment that Defendants acted deliberately, willfully, intentionally or with malicious intent; an injunction against Defendants prohibiting infringement; damages, including treble damages; a judgment that this case is exceptional and that the Defendants be ordered to pay all of Texas Roadhouse’s attorney fees associated with this action pursuant to 15 U.S.C. § 1117 and 17 U.S.C. § 505; and a judgment that the defendants be ordered to pay all costs and expenses incurred by Texas Roadhouse in this action.

Practice Tip:

The U.S. Supreme Court has addressed the requirements for trade dress protection in a similar context. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992). At issue in Two Pesos was similar restaurant décor. Taco Cabana had sued rival Two Pesos for copying the look of its restaurant, described as “a festive eating atmosphere having interior dining and patio areas decorated with artifacts, bright colors, paintings and murals. The patio includes interior and exterior areas with the interior patio capable of being sealed off from the outside patio by overhead garage doors. The stepped exterior of the building is a festive and vivid color scheme using top border paint and neon stripes. Bright awnings and umbrellas continue the theme.” The lawsuit alleged that Two Pesos had imitated this scheme and had thereby infringed on Taco Cabana’s trade dress. Among the issues considered was whether trade dress which was inherently distinctive must also be shown to have secondary meaning to be granted protection under the Lanham Act. The Supreme Court held that trade dress which is inherently distinctive is protectable under § 43(a) of the Lanham Act without a showing that it has acquired secondary meaning, since such trade dress itself is capable of identifying products or services as coming from a specific source.

Also at issue in this case, among other matters, will be the eligibility of the words “Texas” and “Roadhouse” for protection under federal and Indiana intellectual-property laws. Under the Lanham Act, a federal law, the holder of a mark may ask the United States Patent and Trademark Office to register the mark on the principal register. 15 U.S.C.A. § 1051, et seq. Marks that are “primarily descriptive” and “primarily geographically descriptive” of the goods or services with which they are associated are not eligible for registration on the principal register unless they have “become distinctive of the applicant’s goods in commerce.” 15 U.S.C.A. § 1052(e), (f). Thus, registration of a descriptive mark on the principal register requires a showing of secondary meaning.

Although the Lanham Act protects both registered and unregistered marks, registration is desirable because it constitutes prima facie evidence of the mark’s validity. See 15 U.S.C.A. §§ 1057(b), 1115(a). Thus, federal registration of a mark “‘entitles the plaintiff to a presumption that its registered trademark is not merely descriptive or generic, or, if merely descriptive, is accorded secondary meaning.'” The plaintiff bears the burden, however, of establishing that an unregistered mark is entitled to protection.

The Indiana Trademark Act is similar, and in some respects identical, to the Lanham Act. Although Indiana’s body of trademark law is relatively undeveloped, the General Assembly has specified that the Indiana Trademark Act “is intended to provide a system of state trademark registration and protection that is consistent with the federal system of trademark registration and protection under the Trademark Act of 1946.” Ind. Code Ann. § 24-2-1-0.5. Moreover, “[a] judicial or an administrative interpretation of a provision of the federal Trademark Act may be considered as persuasive authority in construing a provision of the Indiana Trademark Act.

The Indiana Trademark Act’s definitions of “trademark” and “service mark” track the Lanham Act’s definitions of those terms nearly verbatim. See I.C. § 24-2-1-2(8), (9). Like the Lanham Act, the Indiana Trademark Act does not adversely affect common-law trademark rights. See I.C. § 24-2-1-15. Registration of a trademark or service mark with the office of the Indiana Secretary of State provides a registrant with a remedy for the infringement thereof under the Indiana Trademark Act. I.C. § 24-2-1-14(a). Like the Lanham Act, the Indiana Trademark Act prohibits the registration of marks that are “primarily geographically descriptive or deceptively geographically misdescriptive of the goods or services[.]” I.C. § 24-2-1-3. This provision does not, however, prevent the registration of a mark that is used in Indiana by the applicant and has become distinctive of the applicant’s goods or services. In other words, a geographically descriptive mark may be registered under the Indiana Trademark Act if it has acquired secondary meaning.
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August 12, 2013

Hallmark Home Mortgage Sues Hallmark Rentals & Management for Declaratory Judgment of Non-Infringement

By Overhauser Law Offices, LLC

Indianapolis, Indiana — Hallmark Home Mortgage, LLC of Fort Wayne, Indiana sued Hallmark Rentals & Management, Inc. of Bloomington, Indiana seeking a declaration that its uses of “Hallmark,” including an application for the trademark “Hallmark,” Serial No. 85/937,259, which is currently pending with the U.S. Trademark Office, are non-infringing.

Hallmark Home Mortgage was founded in February 2007. It operates a mortgage-lending business under the trademark “Hallmark Home Mortgage,” which currently operates in 11 locations in Indiana, Ohio and Florida. It asserts that it has plans to expand its business into other states. Hallmark Home Mortgage focuses on financial services for residential real estate.

In its complaint, Hallmark Home Mortgage states that it began using the Hallmark Home Mortgage trademark in connection with its home mortgage lending business in February 2007. Since then, it claims that it has continuously and prominently used the trademark in connection with its home-mortgage lending business.

Hallmark Home Mortgage has a pending application for trademark registration with the U.S. Patent and Trademark Office for the “Hallmark” mark (word only), in International Class 036 and used in connection with the following: Financial services, namely, mortgage planning; Financial services, namely, mortgage refinancing; Housing services, namely, real property acquisition and consumer financing to facilitate home ownership; Insurance agencies in the field of home, vehicles, personal property; Insurance brokerage in the field of home insurance; and Mortgage brokerage.

In addition to the application pending with the U.S. Patent and Trademark Office, Hallmark Home Mortgage is also the owner of the Trademark “Hallmark Home Mortgage,” Registration No. 2013-0263, which is registered with the State of Indiana. This mark is registered for use in connection with residential mortgage financing, settlement of mortgage loans, mortgage insurance and related services.

Hallmark Rentals & Management, the Defendant, operates one location in Bloomington, Indiana, at which it provides commercial and residential property management services under the brand name “Hallmark Rentals & Management.”

In May 2013, Hallmark Rentals & Management sent a cease-and-desist letter to Hallmark Home Mortgage claiming that the latter was infringing on Hallmark Rentals & Management’s intellectual-property rights in the “Hallmark” mark and, further, was engaging in unfair competition. In its communications, it claimed to own “common law trademark rights, common law service mark rights, and trade name rights . . . with regard to the Hallmark name.” It further indicated that it uses the Hallmark name in “activities hav[ing] to do with real estate.” Finally, it stated that it would sue Hallmark Home Mortgage if Hallmark Home Mortgage did not immediately cease and desist from any use of the term “Hallmark.”

In response, Hallmark Home Mortgage sued Hallmark Rentals & Management for declaratory judgment. It seeks a judgment of non-infringement of common law trademark rights under the Lanham Act, common law and the laws of Indiana.

In the complaint for declaratory relief, intellectual-property lawyers for Hallmark Home Mortgage listed the following:

· Count I: Declaratory Judgment of Non-Infringement

· Count II: Declaratory Judgment of No Unfair Competition

Hallmark Home Mortgage asks for a judgment that its use of the “Hallmark” trademark does not infringe upon any trademark rights of Hallmark Rentals and Management; a judgment that its use of the “Hallmark” trademark does not constitute unfair competition; an injunction preventing Hallmark Rentals and Management from interfering with Hallmark Home Mortgage’s use and registration of the trademark “Hallmark,” and from opposing, seeking to cancel, or otherwise objecting to any registration applications to the “Hallmark,” trademark; attorney’s fees and costs.

Practice Tip: Rights to a trademark may be limited to a particular segment of trade, on the theory that consumers would not be confused by two entities with similar names that engaged in significantly dissimilar businesses. For example, consumers are not likely to confuse Delta Airlines and Delta Faucet. Concurrent trademark registrations may also be allowed for marks that are geographically separate.

August 9, 2013

North American Van Lines Sues North American Master Lines for Infringement of “northAmerican” Mark

By Overhauser Law Offices, LLC

South Bend, Indiana — Trademark lawyers for North American Van Lines, Inc. of Ft. Wayne, Indiana sued North American Master Lines, Inc. of Hallandale, Florida alleging infringement of two trademarks for NORTHAMERICAN, Registration Nos. 0917431 and 0915264, which have been registered by the U.S. Trademark Office.

North American Van Lines asserts that, as early as 1946, it has used the mark “northAmerican” in conjunction with its packing and transportation services and that it has provided such services in all fifty states and the District of Colombia. It owns two registrations for the mark, both of which were issued in 1971.

North American Master Lines provides packing and transportation services across the United States. It offers local and interstate services for residential, business and military customers.

North American Van Lines claims that North American Master Lines previously did business as “1^st Choice Van Lines, Inc.” and that it changed its name to North American Master Lines in October 2012. North American Master Lines also registered and is using the “NorthAmericanMasterLines.com” domain name.

North American Van Lines has filed a lawsuit alleging trademark infringement, unfair competition and cybersquatting. It states in its complaint that North American Master Lines was aware of the “northAmerican” marks and used them to profit from the consumer goodwill related to those marks. It claims that it has received complaints from consumers who were confused regarding whether North American Master Lines was affiliated with North American Van Lines. It also asserts that it sent a cease-and-desist letter to North American Master Lines but received no response.

The complaint lists the following counts:

· Count I: Cybersquatting Under 15 U.S.C. § 1125(d) with Respect to the NORTHAMERICAN Marks

· Count II: Trademark Infringement of the NORTHAMERICAN Marks Under 15 U.S.C. § 1114(1)

· Count III: Unfair Competition and False Designation of Origin of NORTHAMERICAN Marks Under 15 U.S.C. § 1125(a)

· Count VI [sic]: Unfair Competition and Trademark Infringement of the NORTHAMERICAN Marks Under Common Law

North American Van Lines asks for a judgment that North American Master Lines has infringed upon the “northAmerican” marks; the transfer of the domain name “NorthAmericanMasterLines.com”; an injunction; an order directing North American Master Lines to engage in corrective advertising; an accounting and disgorgement of profits resulting from unlawful acts; damages, including treble damages; statutory damages up to $100,000 for domain-name infringement; and attorney fees and costs.

Practice Tip: Under U.S. trademark law, geographic terms or signs cannot be registered as trademarks if they are geographically descriptive of where the goods (or services) originate. However, a geographical indication, as defined by the World Trade Organization, can also identify a particular good, not merely a geographic area. In such a case, a geographic term has been used to identify the provider of a good and, over time, consumers begin to use that geographic term not only as a descriptor of the geographic source, but also of a particular company. In such a case, the term has acquired “secondary meaning” — the capacity to identify the provider of the good — and can be protected as a trademark.

August 8, 2013

Royal Purple Sues Compressor Parts, Michael Klipstein and Southern Parts & Engineering for Trademark Infringement

By Overhauser Law Offices, LLC

Indianapolis, Indiana — Royal Purple, LLC of Indianapolis, Indiana has sued Compressor Parts of Holland, Ohio; Michael Klipstein (“Klipstein”) and Southern Parts & Engineering Company, LLC (“Southern Parts”) of Alpharetta, Georgia (collectively, “Defendants”) for infringement of the trademarks ROYAL PURPLE and SYNFILM, which have been registered by the U.S. Trademark Office.

Royal Purple, which has also recently sued Liqui Moly, about which we blogged yesterday and previously, has filed an additional trademark-infringement suit in the Southern District of Indiana against Compressor Parts, Klipstein and Southern Parts.

Royal Purple claims it has sold lubricants for more than 20 years and has trademarked the color purple, at least in conjunction with various lubricating oils. It owns several federal trademark registrations for the color purple as applied to lubricating oils for automotive, industrial and household uses. It also owns multiple trademarks incorporating the word “purple” as applied to various goods. It also owns a trademark for the term “Synfilm,” for synthetic, para-synthetic and hydrocarbon lubricants for industrial uses. These trademarks are registered with the U.S. Trademark Office.

Purple was chosen for its association with royalty. (Historically, purple dye was so expensive to produce that it was used only by royalty.) Royal Purple’s purple-identified lubricant products are sold in over 20,000 retailers in the United States and Royal Purple claims a strong secondary meaning and substantial goodwill in its trademark as a result of this use.

In this complaint, trademark lawyers for Royal Purple assert that Defendants offer goods on the compressorparts.com website using Royal Purple marks in a manner that is likely to cause a substantial number of ordinary consumers to be mistaken, confused or deceived into thinking that Defendants’ goods are offered by or affiliated with Royal Purple. The complaint includes the following:

· Count I: Federal Trademark Infringement

· Count II: False Designation of Origin/False Advertising

· Count III: Unfair Competition Under Indiana Common Law

· Count IV: Common Law Trademark Infringement

Royal Purple seeks a permanent injunction; an accounting; damages, including punitive damages; interest; costs and attorneys’ fees.

Practice Tip: As part of the claim, Royal Purple’s lawyers included a count of trademark dilution. This cause of action is distinct from trademark infringement and applies to trademarks that are deemed to be famous. An action for dilution can assert either, or both, of two principal harms: blurring and tarnishment. Dilution by blurring, codified in 15 U.S.C. 1125(c)(2)(B), arises when association with another similar mark causes the distinctiveness of the famous mark to be compromised. In contrast, dilution by tarnishment under 15 U.S.C. § 1125(c)(2)(C) happens when the reputation of the famous mark is damaged by association with a similar mark.