Unfair Competition

July 1, 2013

Coach Sues Downtown Gift Shop and Chun Ying Huang for Trademark Infringement, Forgery and Counterfeiting – 1

South Bend, Ind. — Trademark lawyers for Coach, Inc. of New York, N.Y. and Coach Services, Inc. of Jacksonville, Fla. (collectively, “Coach”) sued Downtown Gift Shop of Mishawaka, Ind. and Chun Ying Huang of Granger, Ind. (“Huang”) alleging various violations of intellectual-property law, including trademark infringement, forgery and counterfeiting.

Coach was founded more than 70 years ago as a family-run workshop in Manhattan. Since then, the company has been engaged in the manufacture, marketing and sale of fine leather and mixed-material products including handbags, wallets and accessories including eyewear, footwear, jewelry and watches. Coach products have also become among the most popular in the world, with Coach’s annual global sales currently exceeding three billion dollars.

On December 8, 2012, a private investigator from Coach visited the Downtown Gift Shop and observed thousands of handbags, boots, and accessories displayed for sale. These items bore the trademarks of many high-end brands including Coach, Louis Vuitton, Chanel and Tiffany.

On December 11, 2012, investigators from Coach accompanied officers from the St. Joseph County Police Department, Indiana State Police Department, and the Department of Homeland Security, to execute a search warrant on Downtown Gift Shop.

The investigators and officers identified, photographed, and seized over 3,000 counterfeit trademarked merchandize, including over 1,000 Coach handbags, wallets, scarves, sunglasses, jewelry, and hats. Coach contends that all of the seized items are counterfeit.

Coach, the owner of at least 47 trademarks, subsequently sued Downtown Gift Shop and Huang, whom Coach contends is individually liable for any infringing activities. It alleges that Downtown Gift Shop and Huang are engaged in designing, manufacturing, advertising, promoting, distributing, selling, and/or offering for sale products bearing logos and source-identifying indicia and design elements that are studied imitations of the Coach trademarks.

The complaint includes counts for trademark infringement, false designation of origin and false advertising under the Lanham Act, 15 U.S.C. §§ 1114, 1116, 1117, 1125(a) and (c); trademark infringement and unfair competition under the common law of the State of Indiana; and forgery under Indiana Code § 35- 43-5-2(b) as well as counterfeiting under Indiana Code § 35-43-5-2(a), pursuant to Indiana Code § 34-24-3-1. These counts are listed as:

· COUNT I (Trademark Counterfeiting, 15 U.S.C. § 1114)

· COUNT II (Trademark Infringement, 15 U.S.C. § 1114)

· COUNT III (False Designation of Origin and False Advertising, 15 U.S.C. § 1125(a))

· COUNT IV (Common Law Trademark Infringement)

· COUNT VII [sic] (Common Law Unfair Competition)

· COUNT VIII (Forgery Under Ind. Code § 35-43-5-2(b))

· COUNT IX (Counterfeiting Under Ind. Code § 35-43-5-2(a))

· COUNT X (Common Law Unjust Enrichment)

· COUNT XI (Attorneys’ Fees)

Coach asks the court, inter alia, to enter judgment against the defendants on all counts; for an injunction against further wrongful activity; to order that all infringing materials be recalled and disposed of; to award to Coach statutory damages of $2,000,000 per counterfeit mark per type of good; to award punitive damages; and to award to Coach its costs and attorneys’ fees.

Practice Tip: Homeland Security Investigations (“HSI”), a directorate of U.S. Immigration and Customs Enforcement, is one of the agencies charged with investigating counterfeit goods. Much of the sales volume of counterfeit goods has moved to the Internet and, as part of its efforts, HSI is authorized to petition a court to order the seizure of domain names of websites selling counterfeit goods over the Internet.

One such seized domain name, http://designsfauxreal.com/, has been redesigned by HSI as a warning for visitors and includes such advertising copy as “FREE identity theft with every purchase” and “LOOK! Low quality counterfeit product. On closer inspection, alligator may resemble a tadpole.”

June 26, 2013

Microsoft Sues Mister HardDrive and Mark Cady for Copyright and Trademark Infringement

By Overhauser Law Offices, LLC

New Albany, Ind. — Intellectual property lawyers for Microsoft Corp. of Redmond, Wash. sued Mister HardDrive and Mark Cady of Scottsburg, Ind. alleging infringement of copyrighted work TX 5-407-055 titled Microsoft Windows XP Professional : version 2002 registered with the U.S. Copyright Office; and Trademark Registration Nos. 1,200,236; 1,256,083; 1,872,264 and 2,744,843 registered with the U.S. Trademark Office.

Microsoft, the seventh largest publically traded company in the world, has sued Mister Harddrive, a business entity of unknown legal structure that is also known as Mister HardDrive’s Wipe and Restore (“Mister HardDrive”), and Mark Cady, an individual, alleging that they engaged in copyright and trademark infringement; false designation of origin, false description and representation; and unfair competition.

Microsoft develops, markets, distributes and licenses computer software. Microsoft’s software programs are recorded on discs, and they are packaged and distributed together with associated proprietary materials such as user’s guides, user’s manuals, end user license agreements, and other components. Mister HardDrive is engaged in the business of advertising, marketing, installing, offering, and distributing computer hardware and software, including products sold as Microsoft software.

In its complaint, Microsoft alleges that Mister HardDrive and Mark Cady offered, installed, and distributed unauthorized copies of Microsoft software and thereby infringed Microsoft’s copyrights, trademarks and/or service mark. Infringement and/or misappropriation of Microsoft’s copyrights, advertising ideas, style of doing business, slogans, trademarks and/or service mark in defendants’ advertising is also alleged.

Microsoft asserts that in December 2012, defendants were found to have distributed computer systems with unauthorized copies of Windows XP installed on them. Microsoft asked defendants to stop making and distributing infringing copies of Microsoft software but claims that additional computers with unauthorized copies of Windows XP were subsequently distributed by defendants. Microsoft claims that such distribution of counterfeit and infringing copies of their software — along with related infringing items — is ongoing.

The complaint lists the following counts:

· First Claim [Copyright Infringement – 17 U.S.C. § 501, et seq.]

· Second Claim [Trademark Infringement – 15 U.S.C. § 1114]

· Third Claim [False Designation Of Origin, False Description And Representation –

· 15 U.S.C. § 1125 et seq.]

· Fourth Claim [Indiana Common Law Unfair Competition]

· Fifth Claim [For Imposition Of A Constructive Trust Upon Illegal Profits]

· Sixth Claim [Accounting]

Microsoft asks that the court adjudge that the defendants have willfully infringed its federally registered copyright; that the defendants have willfully infringed several of its federally registered trademarks and one of its service marks; that the defendants have committed and are committing acts of false designation of origin, false or misleading description of fact, and false or misleading representation against Microsoft; and that the defendants have engaged in unfair competition in violation of Indiana common law.

Microsoft seeks damages, an accounting, the imposition of a constructive trust upon defendants’ illegal profits, and injunctive relief.

Practice Tip: Microsoft has named as defendants both the business entity and the individual who has been identified as related to Mister HardDrive as “an owner, operator, officer, [or] shareholder, [who] does business as and/or otherwise controls” the business. A corporate officer, director or shareholder is, as a general matter, personally liable for all torts which he authorizes or directs or in which he participates, even if he acted as an agent of the corporation and not on his own behalf.

June 25, 2013

Australian Gold Sues Devoted Creations for Trademark Infringement of LIVE LAUGH TAN®

By Overhauser Law Offices, LLC

Indianapolis, Ind. — Trademark lawyers for Australian Gold, LLC of Indianapolis, Ind. sued in the Southern District of Indiana alleging that Devoted Creations, Inc. of Oldsmar, Fla. intentionally and willfully infringed its trademark, Registration No. 4,154,194, for “LIVE LAUGH TAN,” which is registered with the U.S. Trademark Office.

Australian Gold has been in the business of selling indoor-tanning preparations for over 20 years. Devoted Creations also sells indoor-tanning preparations and is a competitor of Australian Gold. Australian Gold contends 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. Australian Gold asserts that it has used the LIVE LAUGH TAN mark continuously, notoriously and extensively with respect to sales of the preparations since that time. It claims that, as a result of its promotional activities, the mark has acquired substantial goodwill. It also states that the mark is both “distinctive” and “inherently distinctive” and that it serves to distinguish Australian Gold’s indoor-tanning preparations from those of others.

Devoted Creations advertises its indoor-tanning preparations under the name “LIVE LOVE TAN.” Australian Gold asserts that Devoted Creations is aware that Australian Gold’s customers use the LIVE LAUGH TAN mark to identify Australian Gold products and that the designation LIVE LOVE TAN was an intentional and willful copy. It claims that Devoted Creations acted in bad faith and with full knowledge and conscious disregard of Australian Gold’s rights and that, as a result, this is an exceptional case. It further states that Devoted Creations’ mark is substantially identical, that its indoor-tanning products directly compete with those of Australian Gold and that those products are for sale in the same channels of trade. Finally, Australian Gold claims that Devoted Creations derives significant revenue from products sold using LIVE LOVE TAN and that such use of the mark is likely to cause confusion among consumers regarding the origins of Devoted Creations’ goods and to diminish goodwill associated with Australian Gold’s LIVE LAUGH TAN mark.

Australian Gold’s complaint lists a count of “Federal and Common Law Trademark Infringement” and a count of “Unfair Competition.” It seeks a judgment that the use of LIVE LOVE TAN infringes its mark; an injunction against confusing advertising or sales by Devoted Creations; damages, costs and attorney’s fees; and an award of any wrongful profits made by Devoted Creations.

Practice Tip: Australian Gold’s decision to trademark LIVE LAUGH TAN as a mark for “Tote bags” is a curious one, as tote bags are not the products at issue. While the United States Patent and Trademark Office will not provide legal advice online concerning an individual’s particular circumstance, in addressing similar situations, it states, “similar trademark registrations can co-exist on the register so long as the goods or services identified in the registration are adequately different so as not to raise a likelihood of confusion in the purchasing public.”

June 14, 2013

Leon Isaac Kennedy Sues GoDaddy, Spirit Media, Arthur Phoenix and Five Doe Defendants for Purchase of Leonisaackennedy.com

By Overhauser Law Offices, LLC

Indianapolis, Ind. – A trademark lawyer for American actor, minister, producer and writer Leon Isaac Kennedy of Burbank, Calif. sued alleging Lanham Act violations, unfair competition and violations of various Indiana state statutes as a result of defendants’ purchase of the domain name Leonisaackennedy.com. The defendants are GoDaddy.com, LLC of Scottsdale, Ariz., Spirit Media of Phoenix, Ariz., Arthur Phoenix of Phoenix, Ariz. and John Does 1-5.

In a complaint for damages and injunctive relief, Kennedy alleges that the defendants have violated his intellectual property rights by purchasing a domain name consisting of Kennedy’s first, middle and last name. Spirit Media is the registrant and owner of the domain name. Phoenix is also listed as a registrant. GoDaddy is the current registrar.

Kennedy claims that no content has ever been placed on the domain website and that the defendants have offered the domain name for sale for $5,000 at a domain auction. He asserts that this “use of the Domain violates the “Anti Cybersquatting Piracy [sic] Act.”

Kennedy asserts ownership of all interests in his name, image, likeness and voice (“Kennedy right of publicity”) as well as other intellectual property rights such as trademarks, copyrights and rights of association as associated with the Kennedy right of publicity. He alleges that the purchase constitutes unauthorized and illegal commercial use and registration of a domain name and violates his personal and/or property rights. He further claims that this commercial use has siphoned the goodwill from his various property interests and asserts that he has been irreparably harmed as a result.

The complaint lists seven claims:

· Count I: Violation of Section 1125 (a) of the Lanham Act

· Count II: Violation of Section 1125 (d) of the Lanham Act

· Count III: Unfair Competition

· Count IV: Violation of Indiana Right of Publicity

· Count V: Conversion (I.C. § 35-43-4-3)

· Count VI: Deception I.C. § 35-43-5-3(a)(6)

· Count VII: Indiana Crime Victims’ Act I.C. § 35-24-3-1

Kennedy asks for the immediate transfer of the domain name to him; an injunction enjoining the defendants from future use of Kennedy’s intellectual property; an order directing the immediate surrender of any materials featuring Kennedy’s intellectual property; damages, including treble damages; costs and attorneys’ fees.

This complaint, initially filed in an Indiana state court, was removed by GoDaddy to federal court.

Practice Tip #1: The Anticybersquatting Consumer Protection Act was enacted to create a cause of action for registering, trafficking in or using a domain name confusingly similar to, or dilutive of, a trademark or personal name. Despite alleging malicious behavior on the part of all defendants, including GoDaddy, it will be tricky to pursue this count against GoDaddy, a domain-name registrar. Under § 1125(d)(2)(D)(ii), the “domain name registrar or registry or other domain name authority shall not be liable for injunctive or monetary relief under this paragraph except in the case of bad faith or reckless disregard, which includes a willful failure to comply with any such court order.”

Practice Tip #2: I.C. §§ 35-43-4-3 and 35-43-5-3(a)(6) are criminal statutes, claimed in the complaint in conjunction with an attempt to parlay the accusation into an award for damages, costs and attorneys’ fees. The Indiana Court of Appeals has discussed “theft” and “conversion” as they pertain to takings of intellectual property in several recent cases (see, for example, here and here) and has made it clear that criminal statutes often apply differently to an unlawful taking of intellectual property.

Practice Tip #3: This complaint was submitted by Theodore Minch, who is, coincidentally, also the attorney for LeeWay Media, about which we blogged yesterday. As with LeeWay, none of the parties seems to have much connection to Indiana. It will be interesting as the case develops to analyze the rationale behind the decision to file in an Indiana court.
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June 13, 2013

Bruce Lee’s Daughter Sues Regarding 1965 Bruce Lee Screen Test

By Overhauser Law Offices, LLC

Indianapolis, Ind. — Copyright lawyers for LeeWay Media Group, LLC of Los Angeles, Calif. filed a declaratory judgment suit against Laurence Joachim of New York, N.Y. and Los Angeles, Calif. and Trans-National Film Corporation of New York in a copyright dispute over the use of portions of Bruce Lee’s 1965 screen test in the 2012 documentary “I Am Bruce Lee.”

Bruce Lee, widely considered to have been one of the most influential martial artists of all time, was also an actor and filmmaker. He is most famous for his roles in the films The Big Boss (1971), Fist of Fury (1972), Way of the Dragon (1972), Enter the Dragon (1973) and The Game of Death (1978). Lee was the first celebrity to be cast in major motion pictures after his death.

Lee completed his first Hollywood screen test in or about 1965. It is over eight minutes long and, according to LeeWay Media, has been used freely in many productions over the intervening decades. It is allegedly available for viewing on such sites as youtube.com.

A documentary about Lee entitled I Am Bruce Lee was produced by LeeWay Media, a company founded by Lee’s daughter Shannon Lee. It was released and aired on Spike TV in early 2012. Approximately 91 seconds of the 1965 screen test were included in the documentary. Prior to including the material from the screen test, LeeWay Media searched to determine whether the screen test was copyrighted. It concluded that the material was in the public domain.

LeeWay Media was contacted in July 2012 by Joachim, who claimed to own the copyright to the screen-test footage. He asserted that his copyright had been infringed. Negotiations ensued, but the dispute was not resolved. Among other issues, LeeWay Media asserted that it had requested but not received any relevant copyright-ownership documentation from Joachim.

In May 2013, Joachim informed LeeWay Media that, unless a six-figure settlement fee was paid, he would sue for violations of federal copyright law; federal law for unfair competition; and Indiana and California state law for unfair competition. LeeWay Media instead filed suit against Joachim and Trans-National Film under the Declaratory Judgment Act, asking the court to declare, inter alia, that LeeWay had not committed copyright infringement.

The complaint asks the court for the following:

· Declaration of No Valid Copyright

· Declaration of No Standing

· Declaration of No Copyright Infringement

· Declaration of No Unfair Competition

LeeWay Media also asks for attorneys’ fees and costs; and for a declaration that the claim of copyright infringement and unfair competition are in bad faith and, as such, should be sanctioned.

Practice Tip: In 1994, the Supreme Court addressed the issue of fee shifting in copyright cases in Fogerty v. Fantasy, Inc. Since then, the federal circuit courts have taken a variety of approaches to Fogerty and its statutory underpinning, 17 U.S.C. § 505. The Seventh Circuit is among the most willing of the circuits to shift fees, stating in Riviera Distributors, Inc. v. Jones, “Since Fogerty we have held that the prevailing party in copyright litigation is presumptively entitled to reimbursement of its attorneys’ fees.” This, perhaps, provides some insight into the rationale for a California plaintiff to sue citizens of California and New York in an Indiana court.

May 9, 2013

Tough Mudder Sues Mudderland for Trademark and Service Mark Infringement

By Overhauser Law Offices, LLC

South Bend, Ind. — Tough Mudder LLC of Brooklyn, N.Y. sued alleging trademark infringement by Mudderland of Kingsbury, Ind.; and Rick and Susan Hollaway, both of Hebron, Ind. of Tough Mudder trademarks registered under Registration Nos. 3,810,118; 4,131,912; 4,308,918; 4,131,913; 4,241,510; 4,241,512; 4,241,513; and 4,233,607 for marks containing “MUDDER,” which have been registered with the U.S. Trademark Office.

Tough Mudder is in the obstacle-course industry with challenges such as multi-mile mud obstacle courses. In the past three years, Tough Mudder has held such challenges in the United States, Canada, the United Kingdom and Australia with over a million registrations. Tough Mudder has been recognized by such well-known news sources as The Wall Street Journal, ESPN, National Geographic and Sports Illustrated.

In addition to federally registered marks, Tough Mudder asserts that it is the owner of common law and federal service mark rights available without registration in the words “Mudder” and “Mudders” for use in connection with various outdoor events. It also asserts common law and federal unregistered service mark rights in the phrases “Walk the Plank” and “Berlins Walls” that are also used in conjunction with outdoor obstacle courses and similar events.

Also in the obstacle-course industry, Rick and Susan Hollaway co-own and co-operate an unincorporated entity named “Mudderland.” In 2012, the Hollaways designed, organized and promoted an obstacle-course mud challenge under the name “Mudderland” which was similar to those held by Tough Mudder. In doing so, Tough Mudder alleges that the Holloways were attempting to benefit illegally from Tough Mudder’s brand by using the similar name “Mudderland” for an obstacle-course event. The Hollaways also included other similar indicia such as the color orange and similar-or-identical obstacle names. After having been contacted by Tough Mudder, Susan Hollaway agreed to cease using the name “Mudderland” and to abandon the domain name www.mudderland.com.

Despite this purported agreement to discontinue the use of the name “Mudderland” and the associated domain name, Tough Mudder learned in 2013 that the Hollaways had resumed using both. The Hollaways planned to host a 2013 event which would also include an event named “Walk the Plank” and another named “Berlin Wall,” both of which are similar to names claimed by Tough Mudder. The Holloways’ “Mudderland” website is again using the same color scheme as Tough Mudder’s website, with orange as the predominant color.

Trademark lawyers for Tough Mudder brought this case after the Holloways failed to abide by the alleged earlier agreement by the Holloways to cease what the complaint calls their “admittedly infringing activity” of Tough Mudder’s “extraordinarily valuable trademark rights.”

Tough Mudder claims that its first use in commerce of both the Tough Mudder mark and the Mudder family of marks predate the Hollaways’ first use and therefore Tough Mudder’s use of the marks has priority. The complaint asserts that, in addition to the constructive notice of the Mudder marks provided by the federal trademark registrations, the Holloways also had actual notice of Tough Mudder’s rights in the marks as of May 21, 2012 when Tough Mudder sent the first cease-and-desist letter via e-mail to the Hollaways. Further, it is asserted that the Holloways knew of Tough Mudder’s rights and acted with wanton disregard for those rights and with the willful intent of benefiting from the goodwill of the Tough Mudder marks. Tough Mudder asserts that the Hollaways’ actions are likely to cause confusion, to cause mistake and to deceive consumers as to the source, nature and quality of the goods and services offered by the Hollaways and/or Tough Mudder.

Tough Mudder’s complaint lists ten counts:

· Count 1: Federal and State Trademark Infringement

· Count 2: Trade Name Infringement

· Count 3: State Trademark Infringement

· Count 4: Federal Statutory Unfair Competition

· Count 5: False Designation of Origin

· Count 6: Common Law Unfair Competition

· Count 7: Trademark Dilution, § 1125(c)

· Count 8: Trademark Dilution, Indiana Code § 24-2-1-13.5

· Count 9: Violation of the Anticybersquatting Consumer Protection Act, 15 U.S.C. § 1125(d)(1)(A)

· Count 10: False Advertising, 15 U.S.C. 1125(a)

Tough Mudder lists 20 separate requests for relief, among them: preliminary and permanent injunctions; transfer of the domain name www.mudderland.com to Tough Mudder; destruction of infringing items; an accounting of the profits by Mudderland attributable to infringement or other wrongful conduct; an accounting of damages to Tough Mudder; statutory damages; punitive and/or treble damages; costs of the action; and attorneys’ fees.

Practice Tip: There are facts weighing in favor of both parties in this case and, perhaps, that is why the Hollaways have decided to continue with the allegedly infringing activities. Tough Mudder has in its favor such elements as similarity of various names, along with use of the color orange, in conjunction with muddy endurance races. On the other hand, courts are reluctant to set aside colors for any one entity (see here). Also, both the terms “Mudder” (a racehorse that runs well on a muddy racetrack) and “Mudderland” (when considered to be a whimsical spelling of “Motherland”) have meaning independent of any given to them through commercial use.

May 6, 2013

Manchester University Sues Sportswear for Trademark Infringement

By Overhauser Law Offices, LLC

Ft. Wayne, Ind. — Trademark lawyers for Manchester University, Inc. (“Manchester”) of North Manchester, Ind. sued Sportswear, Inc. of Seattle, Wash. alleging trademark infringement of the “Manchester University” trademark, Registration No. 3,375,265, which is registered with the U.S. Trademark Office.

Manchester is an independent, liberal-arts university with campuses in North Manchester, Ind. and Fort Wayne, Ind. It owns a federal trademark for “Manchester University.” The use of the Manchester mark dates back to 1895.

Sportswear, doing business as “Prep Sportswear” and “Campus Team Shop,” operates the “Manchester University Spartans Apparel Store” as part of its online presence. The store carries items for men, women and children including assorted shirts, sweatshirts, pants, hats and accessories that bear the name “Manchester,” often with another word or words (e.g., “Spartans” or “University”).

Manchester has sent at least two letters to Sportswear asking it to discontinue selling goods bearing these markings, which Manchester claims infringe upon its trademark. Despite these requests to stop, Sportswear continues to sell goods bearing the Manchester name.

In counts one and two of its complaint, Manchester alleges federal trademark infringement under §§ 32 and 43 of the Lanham Act, respectively. Count three asserts trademark infringement and unfair competition under common law. Manchester further contends that Sportswear’s infringement is intentional, deliberate and willful.

Manchester asks for preliminary and permanent injunctions; damages, including treble damages; Sportswear’s profits; interest; costs and attorneys’ fees. It also lists a separate request for punitive damages.

Practice Tip:

Litigation can be time consuming and expensive for parties. To best protect their clients, litigators usually have the possibility of settlement in mind. In a settlement, no one typically gets “everything they want.” Everyone, however, usually gets something (even if it’s merely paying less in damages than they would likely pay after a trial). But, to settle, parties need to find common ground. Sometimes, instead of finding that common ground, they seem determined to compound the dispute.

This case is an interesting illustration wherein, even in the complaint, one can see the parties moving farther apart. For example, the complaint includes several exhibits. One shows a page from the Sportswear website from September 2012 advertising “Manchester College” goods. A September 2012 letter from Manchester College asked Sportswear to cease infringing. A November 2012 letter followed, also demanding that the unauthorized use of the “Manchester” name cease. In that letter, written on Manchester University stationery, the attorney for Manchester also noted that the institution’s name had been changed from “Manchester College” to “Manchester University.”

Instead of evidence of an attempt to reach an understanding, and also visible in the exhibits to the complaint, is Sportswear’s response. The screenshots of its website that had been captured prior to the letter from “Manchester University” showed “Manchester College” apparel available for sale. After Manchester’s attorney mentioned the name change in the subsequent letter, Sportswear began carrying new merchandise bearing the “Manchester University” name. For example, under “New Stuff” on the Sportswear website, you can find items featuring “Manchester University Spartans,” apparently designed and ordered after (and, perhaps, somewhat ironically, as a result of) receiving the November 2012 cease-and-desist letter. Sportswear has also added a disclaimer to its “Manchester University Spartans Apparel Store” in an attempt to avoid liability: “This store is not sponsored or endorsed by Manchester University.”

May 3, 2013

District Court Dismisses Two Counts in Konecranes’ Suit Against Industrial Crane Service

By Overhauser Law Offices, LLC

Indianapolis, Ind. — The Southern District of Indiana has dismissed two of four claims by Konecranes, Inc. of Pascagoula, Miss. against Industrial Crane Service, Inc. of Pascagoula, Miss. and Brian Scott Davis of Marion County, Ind.

Plaintiff Konecranes, Inc. (“Konecranes”) provides lifting equipment and services to various clientele including manufacturing and process industries, shipyards, ports and terminals. To serve its customers, Konecranes enters into agreements with subcontractors to assist it in the performance of the maintenance agreements it has entered into.

Industrial Crane Service, Inc. (“ICS”) has served as a subcontractor for Konecranes, although ICS and Konecranes also compete for customers to enter into maintenance agreements with them directly.

Brian Scott Davis (“Davis”) was employed at Konecranes as a Service Manager. During that employment, he and Konecranes entered into a noncompetition and confidentiality agreement, which contained provisions to keep certain Konecranes information confidential. Davis and ICS both worked for Konecranes on various maintenance and service contracts with Nucor Sheet Metal Group (“Nucor”) and Steel Dynamics Incorporated (“SDI”).

In May 2012, Davis resigned from Konecranes and began working for ICS. Since Davis began working for ICS, Nucor has cancelled purchase orders with Konecranes and SDI did not renew an existing purchase order with Konecranes. Instead, both have contracted with ICS to perform the work. Konecranes also alleged that Davis and ICS have been actively soliciting other customers to change their crane maintenance provider from Konecranes to ICS.

In response to the activities of Davis and ICS, Konecranes sued for injunctive relief and damages, asserting claims for: (1) breach of contract, (2) breach of fiduciary duty and/or duty of loyalty, (3) tortious interference with contractual relationships and (4) unfair competition. Davis and ICS moved to dismiss the claims for tortious interference with contractual relationships and unfair competition.

The court granted the motion on both counts. On the claim of tortious interference with contractual relationships, the court found that the plaintiff had “pled itself out of court” by admitting in its pleadings that an element of its claim was not present. Under Indiana law, the elements of a claim for tortious interference with a contract are: (1) the existence of a valid and enforceable contract; (2) defendant’s knowledge of the existence of the contract; (3) defendant’s intentional inducement of breach of the contract; (4) the absence of justification; and (5) damages resulting from defendant’s wrongful inducement of the breach.

While Konecranes did allege the element of “absence of justification” in its complaint, it also alleged that Davis and ICS had induced Nucor, SDI and others to break their contracts with Konecranes, or not renew them, so that ICS could gain their business. The court held that this amounted to an acknowledgement that the actions of Davis and ICS were motivated at least in part by a legitimate business interest — their own desire to secure new customers. The court held that this constituted justification under Indiana law. Having admitted in its pleadings that it lacked an element of this claim, Konecranes was barred from pursuing it.

On the claim of unfair competition, the court cited the Indiana Uniform Trade Secret Act, Ind. Code § 24-2-3-1(b) and (c) (the “IUTSA”) which “‘abolishes…causes of action for theft or misuse of confidential, proprietary, or otherwise secret information falling short of trade secret status….” It held that, under the facts of the case, Konecranes’ unfair competition claim was preempted by the IUTSA and not cognizable under Indiana law.

Practice Tip: As the court notes, while the claim under unfair competition failed, Konecranes may still pursue claims for misappropriation of information or ideas that are protected by contract. This is a good reminder to those whose practice of law includes shielding sensitive information from disclosure: if you want it protected, get it in writing.

April 29, 2013

Gravity Defyer Sues Under Armour and Multiple Retailers, Including Indiana-Based Finish Line, for Trademark Infringement of G Defy Mark

By Overhauser Law Offices, LLC

Los Angeles, Calif. — Trademark lawyers for Gravity Defyer Corporation of Pacoima, Calif. sued Under Armour, Inc. of Baltimore, Md., sixteen retailers and nine “Doe” defendants alleging infringement of the trademarked “G Defy,” Registration No. 3,749,223, which is registered with the U.S. Trademark Office.

Gravity Defyer has been engaged in the business of manufacturing and selling specialty shoes in the U.S. and elsewhere since 2006, primarily online and through catalogs. The patent-pending shoes and related products are sold under the mark “G DEFY®.” Recently, Gravity Defyer became aware of Under Armour’s use of “G Defy” in the U.S. and elsewhere for similar specialty shoes.

Under Armour, Inc. and nine unidentified “Does” were listed as defendants in the original trademark-infringement complaint. Gravity Defyer recently amended its complaint, adding Finish Line, Inc. of Indianapolis, Ind., Foot Locker, Inc. of New York, N.Y., Nordstrom, Inc. of Seattle, Wash., Dick’s Sporting Goods, Inc. of Albany, N.Y., Champs Sports, Inc. of Tarrytown, N.Y., Sport Chalet, Inc.

of La Canada, Calif., Amazon.com, Inc. of Turnwater, Wash., Zappos IP, Inc. of Henderson, Nev., Backcountry.com, Inc. of Park City, Utah, Rogan’s Shoes, Inc. of Racine, Wis., Road Runner Sports Retail, Inc. of San Diego, Calif., MonkeySports, Inc. of Corona, Calif., Holabird Sports, LLC of Baltimore, Md., Eastbay, Inc. of Madison, Wis., and Dodd Shoe Company, Inc. of Laramie, Wyo.

Under Armour uses the mark “Micro G Defy” on shoes. In the complaint, Gravity Defyer alleges that Under Armour’s use of the G Defy mark as part of “Micro G Defy,” particularly for shoes having similar features, is likely to cause confusion, mistake or deception. Gravity Defyer alleges that those encountering defendants’ products may mistakenly assume, at least initially, that Under Armour products are in some way connected with Gravity Defyer.

Gravity Defyer further asserts that, as a result of the care and skill it has exercised in the conduct of its business, the high quality of its products offered under its marks, and the long-running advertising, sale and promotion of Gravity Defyer’s products bearing the marks, the marks have acquired secondary meaning. It also contends that Under Armour infringed purposely and with the wrongful intent of trading upon Gravity Defyer’s goodwill.

The complaint lists two counts, each against all defendants: trademark infringement under federal law and unfair competition under California law. It asks for a preliminary and permanent injunction; for a finding that this is an exceptional case; for damages, including enhanced damages; and for costs and expenses. Gravity Defyer has demanded a jury trial.

Practice Tip: Under Armour is no stranger to trademark infringement suits. In 2012, it sued BodyArmor, a maker of sports drinks, alleging that BodyArmor’s name and logo infringed upon Under Armour’s trademarks. In February 2013, it sued Nike alleging trademark infringement of Under Armour’s advertising phrase “I will.”

April 25, 2013

American Professional Nursing Resources Sues Medical Staffing Worldwide for Various Unfair Trade Practices

By Overhauser Law Offices, LLC

Indianapolis, Ind. — Trademark lawyers for American Professional Nursing Resources, LLC (“APNR”) and Doyle Silvers (“Silvers”) of La Fontaine, Ind. sued Medical Staffing Worldwide, LLC (“MSW”) of Marion, Ind. et al. for use of APNR’s trademark and trade secrets; for breach of contract and fiduciary duty; for tortious interference with contracts and for violation of § 43(a) of the Lanham Act.

In March 2004, Silvers formed APNR, a global recruitment company that assists domestic employers in recruiting foreign medical professionals by providing domestic screening, training tools and foreign processing facilities. APNR and Silvers recruited Larry Myers (“Myers”), Tom Reto (“Reto”), Jon Marler (“Marler”), Dan Hasslinger (“Hasslinger”) and James Greg Bowers (“Bowers”) to develop APNR into a fully operational business. Benny Spensieri (“Spensieri”), who signed a Non-Disclosure Agreement (“NDA”), was also recruited. Myers, Reto, Marler, Hasslinger, Bowers and Spensieri agreed to maintain the secrecy of APNR’s confidential, proprietary and trade-secret information.

Silvers provided Myers, Reto, Marler, Hasslinger, Bowers and Spensieri with confidential, proprietary and trade-secret information of APNR including its business plan, business model, financial information, and methods and techniques for global recruitment, immigration, screening and training of foreign medical professionals.

In the summer of 2012, Myers, Reto, Marler, Hasslinger, and Bowers reserved the business name “Medical Staffing Worldwide, LLC.” Using that name, they formed a company that allegedly had the same business plan, business model and financial projections as APNR and that used identical methods and techniques for global recruitment, immigration, screening, and training of foreign medical professionals as APNR. MSW also began using APNR’s trademark, “The Future of Medical Staffing,” which APNR had used since 2005.

APNR and Silvers filed suit alleging breach of contract, breach of fiduciary duty, misappropriation of trade secrets, tortious interference with contracts and violation of § 43(a) of the Lanham Act. They ask for actual, consequential and punitive damages; attorneys’ fees; costs; and pre-judgment and post-judgment interest.

Practice Tip: Indiana considers non-compete agreements to be in restraint of trade and, thus, construes them narrowly. In other states, there has also been a growing trend, fueled in no small part by states’ difficulties in paying increasing unemployment benefits, to limit via legislation the enforceability of non-compete agreements. Among the states that have considered such limitations are Maryland, New Jersey, Minnesota, Massachusetts and Virginia.