Seattle Trademark Lawyer

The New York Times ran a disturbing story on Thursday: “Counterfeit Food More Widespread Than Suspected.”

That’s right. Counterfeit food.

The article talked about how a Russian gang faked vodka. It put booze in “genuine vodka bottles with near-perfect counterfeit labels and duty stamps,” which they sold in stores in England. The main difference between the gang’s vodka and the genuine article it copied?

The counterfeit vodka contained bleach to lighten its color, along with high levels of methanol, which can cause blindness.

The article said at least 20 people died last year from drinking counterfeit liquor.

It adds that counterfeiters employ a “huge array” of deceptions. “Simple ones involve presenting cheap products as branded or top-quality ones, like selling catfish as sea bream, labeling farmed salmon as wild or marketing battery-produced eggs as organic or free range.”

“In other cases, cheaper ingredients are added to genuine products to increase profit margins. Sometimes vegetable oil goes into chocolate bars, or pomegranate juice, wine, coffee, honey or olive oil is adulterated with water, sweeteners or cheaper substitutes.”

All this is scary. It also illustrates how much consumers depend on brands. If you see a mark you trust, you’re comfortable putting that food on the table.

I’ve said it before: counterfeiting isn’t all about fake hand bags. Fortunately, it isn’t an epidemic in our country. But sometimes consumers become casualties in the struggle between brand owners and criminals.

Courts don’t award attorney’s fees that often in trademark cases.

That’s because the statute only authorizes fees awards in “exceptional” cases.

So what’s that mean?

The Ninth Circuit recently reviewed the standard. “Under the Lanham Act, ‘[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party.’”

For the plaintiff, “[a]n exceptional case is one ‘where the acts of infringement can be characterized as ‘malicious’, ‘fraudulent’, ‘deliberate’, or ‘willful.’” For the defendant, “’[e]xceptional circumstances can be found when the non-prevailing party’s case is groundless, unreasonable, vexatious, or pursued in bad faith.’”

The court added that ”’[w]hile a finding that the losing party has acted in bad faith may provide evidence that the case is exceptional, other exceptional circumstances may warrant a fee award.’”

The court didn’t offer much analysis in upholding the district court’s award to the prevailing plaintiff. It just said that “[c]onsidering all of the circumstances of this case, including the jury’s verdict, we agree with the district court that the threshold standard for awarding fees has been met, and further that the district court did not abuse its discretion in awarding attorneys’ fees.”

A little more explanation would have been nice. However, trademark owners still have an important take-away from the decision: it’s important to know the court’s standards when seeking or defending against a claim for attorney’s fees. Most claims won’t cut it, but the cases with egregious facts can.

The case cite is Haas Automation, Inc. v. Denny, No. 11-56991, 2013 WL 2303528 (9th Cir. May 28, 2013).

One of the things a client gets when he hires a lawyer is loyalty. Undivided loyalty.

That means the lawyer can’t use things he learns in the course of representing a client against that client in the future while representing someone else.

This principle was reflected in a recent case decided in the Central District for California.

In Cole Asia Bus. Ctr., Inc. v. Manning, a lawyer represented client DebtorWise Foundation in two trademark-related matters: first, in writing a cease-and-desist letter to an alleged infringer, then in a licensing dispute. Thereafter, the lawyer took on a case against DebtorWise arising out of a business dispute.

DebtorWise moved to disqualify the lawyer, arguing that he had learned confidential information about DebtorWise in the course of his representations that he should not be able to use to its detriment, including information about its “business plan, account volume, and litigation strategy.”

The California Rules of Professional Conduct state that a lawyer “shall not, without the informed written consent of the client or former client, accept employment adverse to the client or former client where, by reason of the representation of the client or former client, the [lawyer] has obtained confidential information material to the employment.”

The court found the rule prevented the lawyer from taking on the adverse representation and granted DebtorWise’s motion to require him to to withdraw from the case.

The court noted “[t]he purpose of [this] rule is to protect the confidential relationship which exists between attorney and client, a relationship which continues after the formal relationship ends. The fiduciary nature of that relationship requires the application of strict standards. For that reason, a former client may seek to disqualify a former attorney from representing an adverse party.”

Washington has a similar rule.

Hopefully, it gives clients confidence that what they tell their lawyer will never come back to haunt them in a future case.

The case cite is Cole Asia Bus. Ctr., Inc. v. Manning, No. CV 12-00956 DDP CWX, 2013 WL 2445194 (C.D. Cal. June 5, 2013).

The Ninth Circuit’s May 21 decision in U.S. v. Chen says a lot about the folks who make money selling counterfeit goods. Not surprisingly, they make money a whole lot of nasty ways.

Mr. Chen was convicted of trafficking in counterfeit Marlboro cigarettes.

But that’s not all.

The first line of the opinion summarizes his misdeeds: “Yi Qing Chen appeals his conviction and sentence on five counts involving smuggling of cocaine, methamphetamine, cigarettes, and missiles.”

Missiles?!

That’s right. A guy who transported “roughly 8 million cigarettes” also conspired “to acquire missiles designed to destroy aircraft.”

The court found: “In his post-arrest statement Chen stated that the missiles would have been delivered” if he had been paid.

Wow!

Counterfeiters are criminals. It shouldn’t be surprising some of them are involved in selling more than fake consumer goods.

The case cite is United States v. Yi Qing Chen, No. 11-50196, 2013 WL 2177019 (9th Cir. May 21, 2013).