|
|
|
|
|
|
||||
|
|
|
|
|
|
» Home Page » Members » Practice Areas » Clients   » Publications Articles VIP Newsletter Guide to Registering Read Excerpts  » Events & Speaking » Contact Us » 1-800-343-IDEA |
|
U.S. Intellectual Property and New Media Law Update ACCOUNTING 101 Hamil America, Inc. v. GFI, et al. (Second Cir. - September 29, 1999) WHERE'S THE FRAUD The L. D. Kichler Co. v. Davoil, Inc. (Federal Cir. - September 30, 1999) OH GOODY, OGGETTI Frehling Enterprises, Inc. v. International Select Group, Inc. (Eleventh Cir. - October 18, 1999) EVERYONE GETS TO UNSUCCESSFULLY SUE NSI AT LEAST ONCE Lockheed Martin Corp. v. Network Solutions, Inc. (Ninth Cir. - October 15, 1999) PLEASE NOTE: NOTE: New Forms for Old: As you all must know by now, the Trademark Law Treaty Information Act (TLTIA) went into effect on October 31, 1999. At the last possible moment, the Trademark Office has posted new recommended forms incorporating the changes required by the Act. The on-line filing system has also been modified. Thttp://www.uspto.gov/web/forms/index.htm ACCOUNTING 101 Hamil America, Inc. v. GFI, et al. (Second Cir. - September 29, 1999) This is another one of those cases where someone trying to save a few cents ended up costing themselves more than a few dollars. How many dollars is the question here. Plaintiff Hamil and Defendant GFI each sell printed fabrics to manufacturers that, in turn, create garments for sale to wholesalers and/or retailers. One of Hamil's artists created an original design, GFI copied it, SGS manufactured it and J. C. Penney sold it. In fact, the garments were originally sampled to J. C. Penney using Plaintiff's pattern, but, to save a few cents, SGS apparently had GFI come up with a copy. The Judge had little trouble finding intentional infringement and awarding damages and the Second Circuit had less problems affirming these findings. The first issue on accounting was whether general overhead figures should be included in the deductions in determining the Defendants' profits. The district court had rejected GFI's submissions of expenses to the extent it sought deductions for several overhead expenses and also rejected certain specific expenses such as country club dues, because the general administrative expenses would not have changed whether or not it sold the infringing goods, i.e., they did not add to the incremental cost of producing the infringing fabric. The Second Circuit said the correct analysis was to decide which categories of general overhead expenses had to be maintained if the business was to go ahead at all. If an expense falls into such a category, then the pro rata share should be included in calculating the deduction. Once you fell into a general category, no particular expense with regard to that general category should be singled out for special analysis. When infringement is found to be willful, the district courts should give extra scrutiny to the categories of overhead expenses claimed by the infringer to assure that each category is directly and validly connected to the sale and production of the infringing product, unless the strong nexus is established, the Court should not permit the deduction for that overhead category. The second question of interest was whether the Plaintiff was entitled to its lost profits for goods sold to other companies. Here, the Plaintiff's fabric was appreciably more expensive than that offered by Defendant GFI and, thus, even though GFI and Plaintiff had several shared customers and their shared customers had bought samples of Plaintiff's fabric but ended up buying Defendant's fabric, it was not clear that they would have bought Plaintiff's fabric due to its high cost. The burden is on the Plaintiff to demonstrate that it would have made the sale but for the infringing activity. The decision can be reviewed at: http://www.tourolaw.edu/2ndCircuit/September99/98-75730.htm WHERE'S THE FRAUD The L. D. Kichler Co. v. Davoil, Inc. (Federal Cir. - September 30, 1999) Plaintiff sells and designs electric lighting fixtures. On March 4, 1992, Kichler sought trademark protection for its "racetrack backplate" used to mount light fixtures on a wall which is an oval design which differs from previous rectangular backplates. During prosecution, Kichler's president filed a declaration under Section 2(f) of the Lanham Act declaring that Kichler had set substantial exclusive and continuous use of the "racetrack backplate" for five years. At the time, there were at least three other companies, including the Defendant, that sold similar backplate described as copies of Kichler's backplate. The volume of such sales is unknown. Kichler obtained a trademark registration on November 9, 1993, and Defendant also obtained a trademark registration for its "Olde Brick" finish of several distinct colors applied to the metal portions of electric lighting fixtures. It was commercially successful because of its weathered or antique appearance, also described as "rust-type" and color-compatible with many interior furnishings. Plaintiff sued on its two registrations as well as design patents and anything else it could think of. Defendant moved for summary judgment and the district court held that because other companies were selling racetrack backplate at the time, the Section 2(f) affidavit was false which warranted cancellation of its registration. It also found that the Olde Brick was de jure functional because of its color compatibility make it necessary for competition. Here, the Federal Circuit rather pointedly disagreed on both counts. While the district court found the Section 2(f) declaration false because the declaration did not disclose other companies' use of the backplate, there was no analysis of the extent of these sales. The holding, therefore, improperly suggested that ANY use by others including an infringing use deriving from the originator of the mark precludes an applicant's substantially exclusive use under Section 2(f). Pointing to its own cases, the court said this was of course not the law. The key word in the statute is "substantially." The grant of summary judgment was improper because there was a genuine issue of fact regarding the extent of the other company's use, whether it was inconsequential or whether, in fact, it was infringing. Further, to cancel the registration there must also be shown not only a falsehood but that it was knowingly submitted with an intent to deceive. There was no showing as to intent to deceive. With regard to the Olde Brick finish, the district court itself noted evidence that several alternative rust-type finishes existed and acknowledged that there was "a question of fact whether there is a competitive need for others to use the Olde Brick finish." Therefore, a genuine issue of material fact exists and remanded the case so that the district court may make the proper inquiry. Some day it just doesn't pay to be a judge. The decision can be reviewed at: http://www.ll.georgetown.edu/Fed-Ct/Circuit/fed/opinions/98-1488.htm OH GOODY, OGGETTI Frehling Enterprises, Inc. v. International Select Group, Inc. (Eleventh Cir. - October 18, 1999) It always amazes me to see how far apart a district court and a court of appeals can be when interpreting the same set of facts. Here, a trademark infringement case based on alleged confusion between the Plaintiff's OGGETTI mark for high prices furniture and Defendant's mark BELL'OGGETTI for ready-to-assemble furniture designed to house electronic equipment in the home. OGGETTI means "object" and BELL'OGGETTI means "pretty object." The district court found no likelihood of confusion using the Eleventh Circuit confusion factors. The Eleventh Circuit said the reverse. In going through the factors, it was clear that while the circuit court was unwilling to call the district court's decision clearly erroneous, it clearly found that the district court had mis-weighed various components of the factors themselves in reaching its determination. For example, in examining the marks, the Eleventh Circuit noted that the district court did not address the lack of third-party use or that the Plaintiff's mark was incontestible and therefore constituted a relatively strong mark. Similarly, it found reasons why similarity of the mark, similarity of the goods, similarity of the party's retail outlets and customers, similarity of advertising media, were all misjudged by the district court. The decision can be reviewed at: http://caselaw.findlaw.com/cgi-bin/getcase.pl?court=11th&navby=case&no=984153OP EVERYONE GETS TO UNSUCCESSFULLY SUE NSI AT LEAST ONCE Lockheed Martin Corp. v. Network Solutions, Inc. (Ninth Cir. - October 15, 1999) The appeal in this case concerns NSI's registration procedures for domain name combinations. Lockheed's famous "SKUNK WORKS" was an aircraft design and construction laboratory. SKUNK WORKS was registered and the registration is incontestible. A large number of individuals have registered domain name combinations with NSI constituting variations on the phrase SKUNK WORKS. These include skunkworks.com, skunkworks.net, skunkwrds.com, skunkwerks.com, skunkworx.com, skunkworksl.com, theskunkworks.com, skunkworksl.com, skunkworks.org, skunkwear.com, theskunkwerks.com, skunksurks,com and theencrypteskunkworks.com. Lockheed wrote NSI complaining that these either infringed or diluted its registered mark and requested NSI to cancel the offending registrations and that NSI, in the future, refuse to register domain names containing the phrase "Skunk Works" or variations on that phrase. NSI more or less lifted its tail and walked away. Lockheed sued NSI claiming contributory service mark infringement, unfair competition and service mark dilution in violation of the Lanham Act. NSI moved for summary judgment and Lockheed moved to amend its Complaint to add a cause of action for contributory dilution and to allege several additional domain name combinations. The district court denied the motion to amend and granted summary judgment to NSI and found that in order for NSI to be contributorily infringing, it must prove that NSI supplies a product or service to a third party which contributed to the infringement, with actual or constructive knowledge that the product is being used to infringe Skunk Works. (See also Vol. I, Issue 5, dated April 28, 1997, and Vol. I, Issue 31, dated December 15, 1997. This gave two questions for the Ninth Circuit to ponder. First, whether NSI supplied a product or service to third parties used in infringement and, second, whether NSI had actual constructive knowledge of any infringement. Here, the Ninth Circuit following the courts "excellent analysis of the first question" affirmed the summary judgment without reaching the second. The Ninth Circuit found that all evidence in the record indicates NSI's role differs little from that of the United States Postal Service. Here, NSI does not supply the domain name combination any more than the Postal Service supplies a street address. It is the use of the NSI domain name, not NSI's publication of the domain name list which is the infringement. NSI's involvement with the use of the domain name does not extend beyond registration. Thus, it found NSI is not liable for contributory infringement as a matter of law. The decision can be reviewed at: http://caselaw.findlaw.com/cgi-bin/getcase.pl?court=9th&navby=case&no=975673 |
|
|
|
|
|
|
||||
|
|
Call for a free consultation:
|
|