trademark infringement

Wisconsin Insurance Case Provides Guidance to IP Owners in Preparing Infringement Complaints

Trademark and other IP owners who file lawsuits against infringers are the masters of the complaints that start the litigation.  One consideration often overlooked is insurance coverage; many defendants have commercial general liability insurance policies that might provide coverage on the claims. 

Sometimes having a defendant with coverage is desirable; insurance can be a source of funds to pay a settlement.  Other times, coverage will make the litigation more protracted. 

A recent decision of the Wisconsin Supreme Court, West Bend Mutual Insurance Co. v. Ixthus Medical Supply, Inc. (Wis. 2019) found coverage for an insured that had been sued for trademark infringement. 

The decision provides guidance to IP owners in points to include (or exclude) in an infringement complaint that would implicate insurance coverage for the target defendant.

Honey Badger Case Shows Limits of First Amendment Protection in Trademark Cases

A recent Ninth Circuit decision, Gordon v. Drape Creative, Inc. (2018), involving two well-known “Honey Badger” trademarks, shows the limits of the First Amendment defense in trademark cases. 

Parties that seek to use trademarks in creative ways would be well advised to consider its facts when determining whether to proceed or risk legal exposure.

Federal courts have adopted a special set of rules for trademark infringement cases involving expressive content, which, for First Amendment reasons, makes it harder for a trademark owner to enforce its rights when the accused use involves expressive content, such as the title or content of movies, video games, etc.  The test originates in Rogers v. Grimaldi (2d Cir. 1989), but has most often been applied by the Ninth Circuit in a long line of cases. 

The Honey Badger case, however, involved very minimal creativity – the mark was used on greeting cards with virtually no embellishment, and it appears that there was a deliberate intent to exploit the mark.  The Ninth Circuit reversed a grant of summary judgment for the defendant, finding that there was an issue for trial as to whether the mark was used in a way that was “explicitly misleading as to [the] source or content” of the product. 

The Gordon opinion is helpful in understanding the limits of the First Amendment defense in these types of cases.

German Website Operator Held Subject to U.S. Jurisdiction

A recent decision by the First Circuit in a trademark infringement case, Plixer Intl v. Scrutinizer GmbH (1st Cir 2018) held that a German website used to sell software services, had done substantial business with U.S. customers, and was subject to a trademark infringement suit in the U.S. by another company claiming that the trademark used to market the services infringed its rights. 

This was the case despite the fact that the website did not specifically target the U.S., but merely offered the services to the world at large (to be paid in Euros).  What clinched the finding of jurisdiction was that the company had done significant U.S. business (about $200,000) over three years.

Although the site had a forum selection clause requiring its customers to litigate any disputes in Germany, the plaintiff was not a customer – its claim of trademark infringement lay completely outside any contractual relationship the German company had with its customers.

The decision is significant not only for foreign companies, but also for website operators in the U.S.  Websites that do business with any states might subject their owners to jurisdiction where the site does business – even if the site is not specifically targeted to particular states. 

The plaintiff in the Plixer case brought its claims in the District of Maine, hardly a convenient forum for many large companies.  It is easy to see how, under the same reasoning, a California or New York based website that does significant business throughout the country could be subject to suit in many jurisdictions.

Is Bait and Switch Advertising Actionable Under the Lanham Act?

A recent Eastern District of New York decision, Sussman-Automatic Corp. v. Spa World Corp., 15 F.Supp.3d 258,  (E.D.N.Y. 2014), holds that use of a trademark in “bait and switch” advertising does not constitute trademark infringement (although it might constitute false advertising).  In dismissing the plaintiff’s trademark infringement complaint, the decision appears to have unduly narrowed the scope of Lanham Act actionable “confusion.”  

We analyze this case and discuss why its reasoning is flawed and inconsistent with the Second Circuit interpretation of the Lanham Act.

Awarding Profits in Trademark Infringement Cases Made Easier by District Court Ruling

Recent case law has made monetary remedies easier to achieve in trademark cases – even absent a finding of willful infringement.  The recent Southern District of New York decision in Nike, Inc. v. Top Brand Co. Ltd., 2005 WL 1654859 (S.D.N.Y. 2005)  has held that the prior Second Circuit rule in trademark cases requiring a showing of willful infringement for an award of an infringer’s profit is no longer good law and has in effect been overturned by Congress. 

According to District Judge Kimba Wood’s decision, the 1999 amendments to the Lanham Act mean that willfulness is no longer a prerequisite to an award of profits.  However, willfulness remains an important equitable factor to be considered.  Procedurally, it remains unclear whether a trademark plaintiff can recover such an award on summary judgment, or whether the issue of willfulness will always necessitate a trial.