Pattishall IP Blog

January 31, 2013

Hear This: Court Denies Motion for Summary Judgment in Dispute over Headphone Trademarks Between Dolby Labs and Monster, Inc.

Filed under: Licensing, Litigation — Tags: , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 2:02 pm

JAWby Jeffrey A. Wakolbinger

From a dispute involving trademarks used in connection with headphones, we are reminded how inherently difficult it is to defeat a likelihood-of-confusion claim on summary judgment.

I.   The Parties

Monster, Inc., is a consumer electronics company, which sells a variety of goods to musicians and home-audio enthusiasts in connection with the following registered trademarks:

Monster3

Dolby Laboratories specializes in audio-signal processing.  It licenses its technologies to manufacturers of audio/visual equipment and to content producers, who display Dolby’s trademarks on their products.  Many people may be familiar with the Dolby Double-D symbol from noise-reduction technologies used during the cassette-tape era.  More recently, most people have almost certainly encountered the following trademark on television broadcasts, DVD cases, home-theater equipment, and cinema screens:

Dolby

Both parties either sell headphones or license technology used for headphones.  Monster sells a variety of higher-end headphones, which retail between $100 and $299 per pair.  Dolby developed a headphone technology that purports to deliver 7.1-channel surround sound to a single pair of headphone transducers and licenses this technology to manufacturers who display Dolby’s logo on their products.  Monster and Dolby use the following trademarks, respectively:

Headsets

Dolby’s headphone mark has been registered since 2002.[1]  Monster applied to register its mark in 2008.  After Dolby opposed registration of Monster’s application, Monster filed suit in the Northern District of California, seeking a declaratory judgment that its headphone trademark did not infringe Dolby’s and that Dolby had abandoned its mark by failing to exercise sufficient control over its licensees.  Dolby counterclaimed for infringement.  Both parties moved for summary judgment. (more…)

October 15, 2012

Motley Crue Successfully Moves for Dismissal of Suit Involving Copyright in “Too Fast for Love” Album Artwork

Filed under: Copyright, Litigation — Tags: , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 11:17 am

by Jeffrey A. Wakolbinger

On October 9, 2012, Judge Grady, in the United States District Court for the Northern District of Illinois, dismissed a copyright-infringement action against rock band Mötley Crüe for lack of personal jurisdiction.[1]

The suit was brought by Ron Toma, who owns copyrights in certain photographs of band members Vince Neil, Nikki Sixx, Mick Mars, and Tommy Lee.  One of those photographs was a close up of singer Vince Neil’s waist area, featuring a prominent studded belt buckle (the “Belt Buckle Image”).

The photograph was taken by Michael Pinter in 1981 and used as the cover artwork for Mötley Crüe’s debut album, “Too Fast for Love.”  Toma acquired the copyright in that image in 2008 through assignment.  In September 2011, he filed a complaint in the Northern District of Illinois against Motley Crue, Inc., alleging that the defendants infringed his copyright in the Belt Buckle Image by projecting it on screen during live performances.  He later amended the complaint to add the band’s touring company, Red White & Crue, Inc, as a defendant.  The only specific example of alleged infringement in the complaint is a link to a YouTube video showing live footage from a concert in Las Vegas, during which the Belt Buckle Image was displayed on a screen while the band performed the title track of the album.  Defendants moved to dismiss the complaint for lack of personal jurisdiction.

Toma asserted the defendants were subject to general and specific jurisdiction in Illinois.  Relying on a declaration submitted by bass player, Nikki Sixx, Defendants asserted that they had no physical or legal presence in Illinois.  Toma argued otherwise, citing the band’s performances in Illinois, relationships with Illinois vendors, album and merchandise sales in Illinois, and activities related to a settlement agreement resolving a prior lawsuit with Toma in Illinois.  (This was actually Toma’s third suit against the band, notwithstanding that he apparently was a fan—his declaration stated that he attended Mötley Crüe concerts in Illinois in 1997, 1998, 2000, 2005, and 2006.)  The court found these contacts to be “extensive in the aggregate” but not “continuous and systematic” as required to meet “the demanding standard required to subject the defendants to general jurisdiction in Illinois.” (more…)

October 10, 2012

Pattishall Client Prevails On Counterfeiting and Infringement Claims Over Marks for Vehicle Braking Systems; Court Awards Over $13 Million in Damages, Attorneys’ Fees, Costs and Sanctions

Pattishall client Robert Bosch LLC (“Bosch”) was awarded judgment of over $13 Million by default on its claims of counterfeiting, infringement, unfair competition, and false advertising after nearly three years of litigation and “extensive and cumbersome discovery” in Robert Bosch LLC v. A.B.S. Power Brake, Inc., Case No. 09-14468 (E.D. Mich. August 2, 2012).  Pattishall attorneys Belinda Scrimenti, Bradley Cohn, Thad Chaloemtiarana, and Jeffrey Wakolbinger represented Bosch in this litigation in the United States District Court for the Eastern District of Michigan before the Honorable Patrick J. Duggan.

Specifically, Judge Duggan:

  • awarded Bosch $12,875,997.96; consisting of $3,931,220 in defendant’s profits (which the court trebled to $11,793,660), $993,309.00 in reasonable attorneys’ fees, and $89,028.96 in costs;
  • awarded Bosch $142,082.52 as a judgment for previously entered sanctions;
  • enjoined defendants from future use of Bosch’s HYDRO-BOOST and HYDRO-MAX marks in connection with hydraulic vehicle braking systems or remanufactured, reconditioned or rebuilt Bosch products; and
  • ordered the defendants to destroy all infringing products and promotional materials.

The Court’s opinion highlighted the difficulty of assessing actual damages given the actions of the defendants in discovery and found the Pattishall team’s method for estimating damages to be reasonable.  Relying on survey evidence of law firms nationwide, Judge Duggan also found Pattishall’s Chicago-based attorneys’ fees request reasonable and consistent with rates of comparably-situated firms in Detroit with large intellectual property practices under the traditional lodestar analysis.

The defendants’ alleged violations covered a range of activities, including manufacturing of counterfeit products sold under Bosch’s trademarks, use of identical and similar infringing marks on generic products, sale of refurbished Bosch products that failed to meet genuine Bosch specifications, and false advertising of refurbished hydraulic brake products as new, genuine Bosch products.

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May 11, 2012

Cuervo Misses the Mark in Sixth Circuit Appeal Involving Seals on Liquor Bottles

Filed under: Litigation, Trade Dress — Tags: , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 12:14 pm

by Jeffrey A. Wakolbinger, Trademark Attorney

By U.S. regulation, a bottle labeled as “bourbon” must contain contents that were made in the United States according to certain procedures.  And by order of the Sixth Circuit, a bottle topped with a red, dripping-wax seal, must be made by Maker’s Mark.  See Maker’s Mark v. Diageo N. Am., No. 10-5508 (6th Cir. May 9, 2012).

Maker’s Mark Distillery, Inc., makes bourbon whisky and sells it in bottles topped with a distinctive, red, dripping wax.[1]  Maker’s Mark has packaged its product this way since 1958, when the wife of the man credited with the recipe first used the family deep fryer to apply a wax seal to the top of a bottle.  In 1985, Maker’s Mark obtained U.S. Trademark Registration No. 1,370,465 for a “wax-like coating covering the cap of the bottle and trickling down the neck of the bottle in a freeform irregular pattern.”

Jose Cuervo started producing its “Reserva de la Familia” premium tequila in 1995 and initially topped its bottles with a straight-edged wax seal.  By 2001, however, bottles sold in the United States were adorned with a red, dripping-wax seal.  Maker’s Mark brought suit in 2003, seeking to enjoin Cuervo’s use of this registered mark and also seeking an award of damages.  Cuervo counterclaimed for cancellation of the trademark.

After a six-day bench trial in—where else?—Kentucky, a district court found that Maker’s Mark’s wax seal is a valid trademark and that Cuervo had infringed it.  The court enjoined Cuervo permanently “from using red dripping wax on the cap of a bottle in the sale, offering for sale, distribution or advertising of Cuervo tequila products at any locality within the United States.”  The court denied Maker’s Mark’s claim for dilution and request for damages, as well as Cuervo’s counterclaim for cancellation.  The judgment was affirmed by the Sixth Circuit on May 9, 2012.

Judge Martin, writing for the Sixth Circuit, provides an interesting analysis of the doctrine of aesthetic functionality and the familiar likelihood-of-confusion factors as applied to the wax seals of the two distillers, but not before waxing academic on the history of bourbon itself.  Judge Martin discusses how bourbon is made (using corn as the primary grain, a sour-mash method of production, and new, charred oak barrels for aging); where the name originated (Bourbon County, Kentucky); and other interesting bits of bourbon trivia.  (Who knew that President Truman liked to start his day with a walk, a rubdown, a light breakfast, and a shot of bourbon?)

One issue addressed on appeal is the concept of “aesthetic functionality,” recognized in dicta in TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23 (2001).  The Sixth Circuit had previously proposed that “where an aesthetic feature (like color), serves a significant function . . . courts should examine whether the exclusive use of that feature by one supplier would interfere with legitimate competition.”  Maker’s Mark, slip op. at 8 (quoting Antioch Co. v. W. Tramming Corp., 347 F.3d 150, 155 (6th Cir. 2003)).  But it had never expressly adopted the doctrine and did not do so in this case.  Instead, the court applied two alternative tests for functionality and agreed with the district court’s finding that Cuervo’s argument failed under either test.  Under the “comparable alternatives” test, a design is functional if it deprives competitors of a “variety of comparable alternatives [they] may use to compete in the market”; under the “effective competition” test, a design is functional if it is likely to “hinder the ability of another manufacturer to compete effectively in the market for the product.”  Maker’s Mark, slip op. at 9 (quoting Abercrombie & Fitch Stores, Inc. v. Am. Eagle Outfitters, Inc., 280 F.3d 619, 642 (6th Cir. 2002)).  The court found that neither test was met here because it would not be difficult or costly for competitors to design around the mark, and “red wax is not the only pleasing color of wax . . . nor does it put competitors at a significant non-reputation related disadvantage to be prevented from using red dripping wax.”

Having held that the dripping-wax trademark is not subject to cancellation on grounds of functionality, the court applied the Sixth Circuit’s Frisch factors and held that the balance of those factors compels a finding of infringement. The court relied heavily on the district court’s finding that the Maker’s Mark’s trademark is “extremely strong,” and it reached its conclusion despite finding that the “likely degree of purchaser care” factor “clearly” favors Cuervo.

The Sixth Circuit also affirmed the district court’s award of $66,749.21 of Maker’s Mark’s $72,670.44 in requested costs.  Cuervo argued that, because Maker’s Mark did not succeed on its claim for damages or its request for a permanent injunction on its dilution claim, Maker’s Mark was not a “prevailing party” as that term is used in Federal Rule of Civil Procedure 54(d).  The Sixth Circuit rejected that argument, stating, “Maker’s Mark did not need to win every claim to be considered the prevailing party.”

Thus, the case serves as a useful reminder that a party need not claim total victory in order to be a “prevailing party” entitled to costs under Rule 54, as well as an interesting read for anyone interested in the aesthetic-functionality doctrine—or curious about such things as the brand of General Grant’s favorite whiskey.

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Jeffrey A. Wakolbinger is an attorney with Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP, a leading intellectual property law firm based in Chicago, Illinois.  Pattishall McAuliffe represents both plaintiffs and defendants in trademark, copyright, and unfair competition trials and appeals, and advises its clients on a broad range of domestic and international intellectual property matters, including brand protection, Internet, and e-commerce issues.   Jeff’s practice focuses on trademark and copyright litigation, as well as domestic and international trademark, Internet, e-commerce, and copyright law.

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[1] As noted in the Sixth Circuit’s opinion, “whiskey” is the preferred spelling in the United States, while “whisky” is the typical spelling in Scotland and Canada.  Maker’s Mark nonetheless identifies its product as “bourbon whisky”—without the “e.”

March 28, 2012

Court Deals Blow to Hasbro in Dispute Involving Transformers Trademark

Filed under: Litigation, Trademark (General) — Tags: , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 10:34 am

by Jeffrey A. Wakolbinger, Trademark Attorney

The storyline developed to market the “Transformers” line of toy robots that transform into vehicles and other objects is probably familiar to any child of the ’80s and certainly to anyone who contributed to the box-office success of the 2007 Transformers movie and its sequels.  It’s a battle between Optimus Prime’s virtuous Autobots and Megatron’s evil Decepticons, an epic robot battle between good and evil.

A somewhat less epic battle is being waged in the Central District of California, where Hasbro, the owner of the Transformers brand, has sued Asus Computer International, a manufacturer of high-end electronics, for trademark infringement and dilution.  See Hasbro, Inc. v. Asus Computer Int’l, Inc., No. 11-cv-10437 (C.D. Cal. Mar. 23, 2012).[1]

Hasbro owns a registration for TRANSFORMERS in class 28 for “toy action figures, toy vehicles, and toy robots convertible into other visual forms.”  Taking advantage of renewed interest in the Transformers brand (owing to the success of the recent film franchise), Hasbro launched the Emmy-nominated “Transformers Prime” animated television series in November 2010 and applied to register its TRANSFORMERS PRIME mark in classes 28 and 41.

On January 4, 2011, Asus announced the launch of its Eee Pad Transformer tablet computer, which uses Google’s Android operating system and is capable of “transforming” from a tablet computer into a laptop when connected to a mobile docking station.  The name did not go unnoticed by Hasbro, which sent Asus a cease-and-desist letter two weeks after the announcement.  Asus’s counsel responded, asserting that Hasbro’s mark did not apply to netbook computers and that Asus’s use of the term was merely descriptive.  No further communications between the parties were exchanged, and Asus began selling the Eee Pad Transformer tablet in April 2011.  On October 19, 2011, Asus announced the second generation of its tablet: the Eee Pad Transformer Prime.  According to Asus, the word “prime” was added to signify the premium nature of the product and “to emphasize the tablet was first in time, rank, authority, and significance.”  It’s also the last name of the Autobots’ protagonist.  Hasbro filed suit on December 16, 2011, and moved for a preliminary injunction shortly thereafter.

The district court denied Hasbro’s motion on March 23, 2012.  The court found that Hasbro failed to establish a likelihood of success on the merits of its claims, explaining, among other things, that Hasbro’s computer-related products, including Transformers-themed USB storage devices, speakers, laptop skins, and a toy “educational laptop,” were “gimmicky,” while Asus’s “sleek” products were anything but.  The court held that this and other equitable considerations weighed against granting the “extraordinary and drastic remedy of preliminary relief.”

The court accepted Asus’s uncontroverted evidence that it would suffer considerable hardship from the recall of goods already in circulation—particularly in light of the very short window of opportunity for computer manufacturers to capitalize on the latest technology—and rejected Hasbro’s claims of hardship in light of the fact that Hasbro waited eleven months after sending a cease-and-desist letter and eight months after Asus launched its original Eee Pad Transformer tablet before filing suit.  Although it may have been the announcement of Asus’s Eee Pad Transformer Prime tablet that ultimately pushed Hasbro into filing, Hasbro still waited two months before filing its complaint on the eve of Asus’s second-generation tablet’s launch.

One could argue that the court’s focus should have been on the time between the announcement of Asus’s second-generation Eee Pad Transformer Prime tablet and Hasbro’s filing, but this is hardly the first case in which a court has resisted a party’s claimed need of immediate injunctive relief in light of a perceived delay in bringing the matter before the court.  Although the denial of a motion for preliminary injunction is not a total defeat, it is often more than meets the eye.  A party making such a motion risks prematurely committing to legal theories and factual positions, losing goodwill with the court, and losing bargaining power with the defendant.  Hasbro’s ultimate likelihood of success remains to be seen, but the outcome of this dispute may easily be influenced by this early decision.  Trademark owners and their counsel must carefully evaluate the strength of their claims and consider appropriate equitable concerns before seeking the “extraordinary and drastic remedy of preliminary relief.”

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Jeffrey A. Wakolbinger is an attorney with Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP, a leading intellectual property law firm based in Chicago, Illinois.  Pattishall McAuliffe represents both plaintiffs and defendants in trademark, copyright, and unfair competition trials and appeals, and advises its clients on a broad range of domestic and international intellectual property matters, including brand protection, Internet, and e-commerce issues.   Jeff’s practice focuses on trademark and copyright litigation, as well as domestic and international trademark, Internet, e‑commerce, and copyright law.


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