Unfair Competition

September 13, 2013

Steak n Shake Sues for Trademark Infringement

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.

August 7, 2013

Royal Purple Sues Liqui Moly GmbH and Liqui Moly USA for Trademark Infringement

By Overhauser Law Offices, LLC

Indianapolis, Indiana — Royal Purple, LLC (“Royal Purple”) of Indianapolis, Indiana sued Liqui Moly GmbH of Ulm, Germany and Liqui Moly USA, Inc. of Hauppauge, New York (collectively, “Liqui Moly”) alleging infringement of two marks, Registration Nos. 2,691,774 and 2,953,996, which have been registered with the U.S. Trademark Office.

Royal Purple is again suing over the use of the color purple. We have blogged previously about the company here. 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. 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.

Liqui Moly is accused of distributing, offering to sell and selling products that infringe upon Royal Purple’s trademarks and engaging in acts that constitute unfair competition and dilution. Royal Purple also alleges that Liqui Moly’s use is a purposeful attempt to trade upon Royal Purple’s trademarks. It asserts that Liqui Moly’s infringing use of Royal Purple’s intellectual property is likely to cause confusion, mistake or deception in customers or potential customers who encounter the Liqui Moly products. It also claims that Liqui Moly’s use will dilute the “distinctive quality” Royal Purple’s trademarks. Finally, it alleges that Liqui Moly’s use removes from Royal Purple its ability to control the quality of products and services provided under Royal Purple’s trademark, by placing them partially under the control of Liqui Moly, USA and Liqui Moly GmbH, two third parties unrelated to Royal Purple.

Trademark attorneys for Royal Purple filed suit alleging:

· Count One: Trademark Infringement Under Federal Law – 15 U.S.C. § 1114

· Count Two: Unfair Competition; False Designation of Origin Under Federal Law – 15 U.S.C. § 1125(a)

· Count Three: Dilution Under Federal Law 15 U.S.C. 1125(c)

· Count Four: Dilution in Violation of Indiana Code § 24-2-1-13.5

· Count Five: Common Law Trademark Infringement

· Count Six: Unfair Competition Under Indiana Common Law

· Count Seven: Unjust Enrichment

Royal Purple seeks preliminary and permanent injunctions, the destruction of all allegedly infringing inventory, treble damages, costs and attorneys’ fees.

Practice Tip #1: Color can serve as a useful identifier of the source of goods to consumers. The courts, however, have had to draw some narrow lines to balance the various interests. On the one hand, companies often invest significant amounts of money in promoting their brands and color is frequently a component of that promotion. On the other hand, there are a limited number of colors — and an even more limited number of colors that are pleasing and appropriate for any given type of product — and courts are wary of providing a monopoly on any given color to any one company. After all, if such a monopoly is first provided to one company, all too soon the entire spectrum may be spoken for.

Practice Tip #2: This complaint, which is very similar to an earlier action filed by Royal Purple, has added Liqui Moly USA, Inc. as a defendant and largely omitted the earlier-filed claims relating to a third trademark, registered under the U.S. Registration No. 3,819,988.

July 31, 2013

Riders Choice Sues Golden West Saddle Blankets for Declaratory Relief

By Overhauser Law Offices, LLC

Terre Haute, Indiana — Copyright lawyers for Riders Choice, LLC d/b/a Show and Tell Saddle Blankets (“Riders Choice”) and Loni Rhodes (“Rhodes”; collectively,”Plaintiffs”) of Center Point, Indiana sued for declaratory relief over allegations of copyright infringement made by Lori Heckaman (“Heckaman”) d/b/a Golden West Saddle Blankets (“Golden West” or “Defendant”) of Gainesville, Texas.

Riders Choice, sometimes operating as “Show and Tell Saddle Blankets,” makes and sells products related to horseback riding, including hand-woven saddle blankets with colorful geometric designs. Rhodes owns Riders Choice. Heckaman, doing business as Golden West Saddle Blankets, also makes and sells products related to horseback riding, including blankets with colorful geometric designs.

Intellectual property counsel for Heckaman sent two cease-and-desist letters to Rhodes and Riders Choice, the first on June 14, 2013 and the second on July 2, 2013. The first cease-and-desist letter asserted that the designs on Heckaman’s blankets were copyrighted and alleged against Rhodes and Riders Choice claims for copyright infringement based on Rhodes’s and/or Riders Choice’s manufacture, marketing and sale of its own blankets. The second cease-and-desist letter made similar allegations. Claims were also made against Rhodes and Riders Choice for business interference, unfair competition and misappropriation of trade secrets based on Rhodes’s and/or Riders Choice’s marketing of Riders Choice’s blankets and alleged copying of Golden West’s weaving and design methods.

Both cease-and-desist letters threatened Rhodes and/or Riders Choice with imminent litigation if Rhodes and/or Riders Choice did not comply with Defendant’s demands, the first by writing “we will have no choice but to advise our client to protect her interests by instituting a suit in a court of competent jurisdiction,” and the second by writing that although “Golden West prefers to resolve this matter without the necessity of court intervention, all necessary action will be taken if a voluntary agreement cannot be reached.” Both cease-and-desist letters demanded that Rhodes and/or Riders Choice stop marketing, selling and producing its blankets. Further, a July 3, 2013 e-mail threatened Rhodes and Riders Choice with imminent litigation by writing that if Rhodes and/or Riders Choice did not “refrain from promoting, marketing, producing, and selling saddle blankets,” Heckaman would have “no choice but to seek available remedies.”

In response, copyright lawyers for Riders Choice filed a complaint under the Declaratory Judgment Act. In the complaint, Plaintiffs assert that blankets with similar designs are widely produced and sold by third parties, that they did not believe that Heckaman had registered any of her designs with the U.S. copyright office, that the blankets Riders Choice sells are original works designed by Rhodes and that every blanket Riders Choice sells is unique in that no two blankets are sold with an identical pattern. They further asserted that Rhodes learned these methods from books and other publicly available materials unaffiliated with Heckaman and that Rhodes had never copied Defendant’s designs.

In the complaint, Plaintiffs ask for judgments of:

· Count I — No Copyright Infringement

· Count II — No Business Interference

· Count III — No Unfair Competition

· Count IV — No Misappropriation of Trade Secrets

Plaintiffs request that the court: (a) declare that Rhodes’s and Riders Choice’s blankets did not in the past and do not now infringe any of Defendant’s valid copyrights; (b) declare that Rhodes and Riders Choice did not commit in the past and are not now engaged in business interference against Defendant based on the sale, marketing or production of blankets; (c) declare that Rhodes and Riders Choice did not commit in the past and are not now engaged in unfair competition against Defendant based on the sale, marketing or production of blankets; (d) declare that Rhodes and Riders Choice did not commit in the past and are not now engaged in the misappropriation of trade secrets from Defendant based on the sale, marketing or production of blankets; (e) award to Plaintiffs their costs and attorneys’ fees.

Practice Tip:

As with a patentee who believes that his or her patent is being infringed, holders of copyrighted materials often will send a “cease-and-desist letter” — a letter demanding that the purported infringer cease infringing. To aid in convincing the accused infringer to meet its demands, the holder of the intellectual property may be tempted to use language such as plans of “instituting a suit” and seeking “court intervention,” as Defendant did here.

As this case demonstrates, this strategy may backfire. By using such language, the Defendant can create an “actual controversy” for purposes of the Declaratory Judgment Act. Thus, the party alleging infringement (the natural plaintiff in an infringement suit) may instead find itself being sued by the alleged infringer (the natural defendant), often in a jurisdiction that would not have been the first choice of the owner of the intellectual property.

One approach that may have yielded better results for Golden West might have been to approach the accused infringer with an offer to license the purportedly protected intellectual property. With carefully crafted language, such a proposal might have served to put Riders Choice on notice of Golden West’s belief that infringement was occurring without going so far as to create an “actual controversy” sufficient to support a lawsuit under the Declaratory Judgment Act.

July 22, 2013

Bekins Van Lines Sues Corporate Transfer & Storage, JLV Software and The Verderber Enterprise for Trademark Infringement of Bekins Marks

By Overhauser Law Offices, LLC

Indianapolis, Indiana — Trademark lawyers for Bekins Van Lines, Inc. (“Bekins”) of Indianapolis, Indiana sued Corporate Transfer & Storage, Inc. (“Corporate Transfer”) of Ronkonkoma, New York; JLV Software of Pompano, Florida (also referred to in the complaint as “JVL Software”) and The Verderber Enterprise of Orlando, Florida (collectively, “Defendants”) alleging infringement of the trademark BEKINS which has been registered as Trademark No. 2,427,605 with the U.S. Trademark Office.

Bekins is the fourth-largest household-goods carrier in the United States. Headquartered in Indianapolis, Indiana, Bekins offers private and corporate household-goods relocation services both domestically and internationally. The United States Military is one of the company’s largest customers.

Corporate Transfer offers household moving, corporate relocation and storage services. The Verderber Enterprise specializes in providing technology innovations to entrepreneurs and corporate enterprises worldwide.

In December 1955, Bekins’ predecessors in interest were granted the registration of the stylized mark “Bekins.” The first use in commerce was noted as 1891. A second “Bekins” mark was granted to Bekins’ predecessors in interest in February 2001. The two marks were assigned to the plaintiff in this case on April 16, 2012.

The Defendants were, at one point, licensed agents of Bekins Van Lines, LLC. However, Bekins asserts, they have never been affiliated in any way with Bekins Van Lines, Inc. After Bekins Van Lines, Inc.’s acquisition of certain assets from Bekins Van Lines, LLC and Bekins Holding Corp. on April 2, 2012, Corporate Transfer was allegedly notified that it was required to cease using all of the Bekins marks immediately, as it was not an agent for the new owner of the Bekins marks.

Bekins claims that, despite this notice and three additional notices, the Defendants’ use of the Bekins marks on the Corporate Transfer website, the use of the domain name www.bekinsrelo.com and the use of the Bekins mark on social-media sites continued. Bekins also asserts that Corporate Transfer indicated that its use of the Bekins mark would be discontinued but that, in the spring of 2013, the website was reactivated. Bekins contends that, when it again demanded that the domain name be taken down and transferred to Bekins, Corporate Transfer then redirected the domain to point to a consumer-comment site which was tremendously critical of Bekins Van Lines, Inc.

Finally, Bekins asserts that Corporate Transfer continues to infringe upon the Bekins marks through the maintenance of the www.bekinsrelo.com site, the use of Bekins marks on its website at www.corporatetransfer.com and various references to the Bekins marks on social-media sites.

For its claims, Bekins lists the following:

· Count I: Federal Trademark Infringement

· Count II: Federal and State Unfair Competition/Trademark Dilution

Bekins asks for an injunction; for an award of Defendants’ profits earned from the acts claimed to be infringing; for an award of damages, including punitive damages; and for attorneys’ fees and costs.

Practice Tip: Bekins asserts that its marks have acquired strong secondary meaning as a symbol of origin among consumers and the industry as a result of many years of use. It further asserts that the marks are famous. The assertion that its marks are famous allows it to pursue the additional claim of trademark dilution under the Federal Trademark Dilution Act.

July 19, 2013

Batman Villainess Catwoman Gets “Clean Slate”

By Overhauser Law Offices, LLC

South Bend, Indiana — The Northern District of Indiana has ruled in favor of Warner Brothers Entertainment, Inc. (“Warner Bros.”) of Burbank, California which had been sued by trademark holder Fortres Grand Corporation (“Fortres Grand”) of Plymouth, Indiana. Fortres Grand had alleged that Warner Bros. infringed its trademark, Registration No. 2,514,853, for the mark CLEAN SLATE, which has been registered by the U.S. Trademark Office.

Fortres Grand develops, markets and sells software. Since 2000, it has marketed and sold software called “Clean Slate.” The Clean Slate software protects the security of computer networks by erasing all evidence of user activity so that subsequent users see no indication of a previous user’s activity, meaning that each new user starts his or her computer activity with a “clean slate.” Fortres Grand has sold millions of dollars worth of its Clean Slate software. In 2001, Fortres Grand obtained a federal trademark registration for the use of “Clean Slate” in connection with “computer software used to protect public access computers by scouring the computer drive back to its original configuration upon reboot.”

Warner Bros. is one of the most famous names in movie history. In the summer of 2012, it released its latest Batman film, The Dark Knight Rises. One of the plot lines in the film involves the character Selina Kyle (a.k.a. supervillainess Catwoman) and her attempt to procure a software program that will erase her criminal history from every computer database in the world. The software program she is trying to obtain was designed by the fictional company Rykin Data and is referred to four times in the film as “clean slate.”

Two websites — rykindata.com and rykindata.tumblr.com — were also created to promote the film. These websites are consistent with a recent trend in the online advertising of films: rather than just creating a straightforward promotional website where consumers can get information about the film (like, in this instance, www.thedarkknightrises.com), additional websites are created that market the film in a more subtle or creative way. In this instance, the websites are essentially a creative outgrowth of the fictional world of the film. They look like what a (fictional) citizen of Gotham might find if they were looking for information on the (fictional) Rykin Data company. These websites also use the term “clean slate” to describe the software referenced in the film.

Fortres Grand filed suit on September 19, 2012 alleging three counts based on the use of “clean slate” in the film and on the websites: 1) trademark infringement under the Lanham Act (15 U.S.C. § 1051 et seq.); 2) unfair competition under the Lanham Act; and 3) unfair competition under Indiana state law.

Fortres Grand asserted that it is, in fact, trademark infringement when a fictional product bears the same name as a real product. Warner Bros. took the opposite view and moved to dismiss the case.

The court began by noting that there is surprisingly little case law in matters such as these. Despite the many movie and television releases every year, courts have rarely been called upon to answer the question of whether it is trademark infringement if a fictional company or product in a movie or television drama bears the same name or brand as a real company or product.

The court analyzed all three of Fortres Grand’s claims — infringement, federal unfair competition, and state unfair competition — under the same trademark infringement analysis. It noted that an essential ingredient of trademark infringement is a likelihood of confusion among consumers as to the source of a product. Specifically, only confusion about origin supports a trademark claim. For this purpose, “origin” means the producer of the tangible product sold in the marketplace. Moreover, although the hallmark of trademark infringement is protecting against consumer confusion, it is not enough that there just be some generalized confusion. Trademark infringement protects only against mistaken purchasing decisions and not against confusion generally.

In this case, Grand Fortres was arguing a case of reverse confusion. This type of confusion exists when a junior user uses its size and market penetration to overwhelm the senior, but smaller, user. The “senior user” (here, Grand Fortres) is the first to adopt and use a mark anywhere in the country. The “junior user” (Warner Bros.) is the second user. The reverse confusion doctrine protects the senior user’s control of its mark and the goodwill created by the mark from a junior user’s employment of the mark, and protects the public from being deceived into believing that the senior user’s product emanates from, is connected to, or is sponsored by the junior user.

The court was not persuaded by Grand Fortres’ claim of confusion. To state a claim for reverse confusion in this case, the court held that Fortres Grand had to make plausible allegations that Warner Bros. saturated the market with a product that the public had been deceived into believing emanated from, was connected to, or was sponsored by Fortres Grand. The fatal flaw in Fortres Grand’s case had to do with correctly identifying the exact product that Warner Bros. had introduced to the market — a film, not a piece of software.

The court held that a comparison between the two products led to the conclusion that there was no plausible claim for consumer confusion regarding a consumer’s purchasing decision between the two nonfictional products — Fortres Grand’s software and Warner Bros.’s film. “Plaintiff is not in the motion picture business,” the court stated, citing a Warner Bros. pleading. “[I]t would be absurd to think that customers buy tickets to The Dark Knight Rises or purchase the DVD/Blu-ray because of a perceived association of the Film with Fortres Grand’s products.”

Finally, the court discussed the First Amendment issues associated with considering a trademark infringement claim under the Lanham Act when the asserted infringement took place in an artistic work. The Second Circuit’s Decision in Rogers v. Grimaldi, a landmark opinion in such cases, in discussing the use of intellectual property in the title of a work states:

[T]he [Lanham] Act should be construed to apply to artistic works only where the

public interest in avoiding consumer confusion outweighs the public interest in

free expression. In the context of allegedly misleading titles using a celebrity’s

name, that balance will normally not support application of the Act unless the title

has no artistic relevance to the underlying work whatsoever, or, if it has some

artistic relevance, unless the title explicitly misleads as to the source or the

content of the work.

As several Circuits have done, the court extended this analysis to cover not only the title of an artistic work, but also the body of the work. It concluded by holding that, even if there were a potential for consumer confusion caused by the use of “clean slate” in the film, the case still must be dismissed because Warner Bros.’s use of the term is also protected by the First Amendment.

Practice Tip: A more plausible legal argument might have been trademark dilution. The complaint, however, did not bring a claim under the Trademark Dilution Act. This may have been because Fortres Grand recognized that its “Clean Slate” trademark was not a “famous” one, which is a requirement for bringing a trademark dilution case.