Seattle Trademark Lawyer

Another year! That’s right — two years ago this weekend I was tapping away at my first-ever post. Ron Coleman outted me before I was ready for prime-time. I’m still not ready, and this ain’t prime-time, but the rest is history. It’s been fun, and I’m grateful for those who’ve paid me a visit. Here’s to another year! Trademark owners out there: Keep suing! Courts out there: Keep those opinions coming!

On Nov. 17, the Western District transferred the cybersquatting case of eNom, Inc. v. Philbrick to the District of New Hampshire.

Judge Robert Lasnik took that step based on the first-to-file rule and in the interests of justice in light of a case between the parties in the District of New Hampsire that has been pending for 14 months. The case Philbrick’s Sports owner Daniel Philbrick filed against Bellevue-based domain name registrar eNom, originally focused on philbricksports.com and philbricksports.net — domain names that Mr. Philbrick claims are identical or confusingly similar to his trade name and trademark.

After filing suit, Mr. Philbrick stated his intent to seek leave to add claims involving a third domain name, philbrickssports.net. eNom then filed its action in the Western District for declaratory judgment that its registering, using, and trafficking in the third domain name does not constitute cybersquatting or violate trademark laws.

In deciding Mr. Philbrick’s motion to dismiss or, in the alternative, to transfer the action, the court found: “Despite the additional claim in this case [for declaratory judgment], the factual and legal issues in the two cases are overwhelmingly similar. Both cases involve liability under the [Anticybersquatting Consumer Protection Act], the Lanham Act, the New Hampshire Consumer Protection Act and New Hampshire common law. Both cases involve the legality of eNom’s registration, use and trafficking of the third domain name. An adjudication of the parties’ rights in one case would necessarily affect their rights in the other case. Moreover, substantially the same evidence will be presented in both actions. Both cases arise out of the same nucleus of operative facts, so simultaneous adjudication of both cases would waste judicial resources, multiply the proceedings, undermine judicial efficiency, and risk conflicting determinations of the parties’ legal rights.”

The court also found if it didn’t transfer the case based on the first-to-file rule, it would do so pursuant to 28 U.S.C. § 1404(a), which permits a court to transfer a civil action “for the convenience of the parties and witnesses [and] in the interest of justice … to any other district or division where it might have been brought.

“In this case, Philbrick suffered the alleged injury in New Hampshire. New Hampshire is Philbrick’s chosen forum, and he filed suit long before eNom filed this action. Philbrick’s witnesses are in New Hampshire, but eNom’s are in this district. Both parties assert claims under New Hampshire state law. Finally, transferring this action will likely result in consolidation of the two cases, so the issues will be tried efficiently, expeditiously, and in a cost-effective manner. Therefore, the relevant factors weigh in favor of transferring this case to the United States District Court for the District of New Hampshire.”

The case cite is eNom, Inc. v. Philbrick, 2008 WL 4933976, No. 08-1288 (W.D. Wash. Nov. 17, 2008) (Lasnik, J.).

On Dec. 15, I’ll be presenting on “Litigation Planning for Licensing Attorneys” as part of the Washington State Bar Association’s CLE on “Licensing Essentials” (brochure here). 

Here are some drafting and negotiating considerations for trademark license agreements I put together while gearing up for the program:

• Parties. Identifies the licensor and licensee.
• Description of mark. Identifies the licensed mark.
• Form of use. Identifies any restrictions on use of the licensed mark, including on the goods/services sold under the mark.
• Term. Identifies the duration of the agreement.
• Consideration/royalty. Describes the means in which the licensor will be compensated.
• Territorial scope. Identifies geographic restrictions on the licensed mark.
• Quality control. Clarifies licensor’s right and means to control quality of goods/services sold under the licensed mark.
• Self-renewing/non-self-renewing. Clarifies whether the agreement will automatically renew and, if not, the conditions under which the agreement will be renewed.
• Exclusive/nonexclusive. Clarifies whether the licensor may license the trademark to parties other than the licensee.
• Sublicensable/non-sublicensable. Clarifies whether the licensee may sublicense the mark and, if so, under what conditions.
• Assignable/non-assignable. Clarifies whether the parties may assign the agreement and, if so, under what conditions.
• Ownership of mark. (Favors licensor) Clarifies the licensee does not acquire any rights to the licensed mark, and may not challenge the licensor’s exclusive right to the licensed mark.
  
• Goodwill inures to licensor’s benefit. (Favors licensor) Clarifies that licensee’s use of the licensed mark benefits the licensor and does not give the licensee independent trademark rights.
• Right/duty to enforce trademark rights. Clarifies which party has the right to enforce the licensed mark, and which party has the duty to do so.
• Termination. Describes conditions in which the agreement may be terminated.
• Tax liability. (Favors licensor) Clarifies the licensee is liable for all taxes assessed in connection with the licensed goods/services.
• Indemnity. (Favors licensor) Clarifies the licensee must indemnify the licensor for tort and other claims third parties bring against the licensor in connection with the licensed mark.
• Insurance for tort claims. (Favors licensor) Clarifies the licensee must obtain adequate liability insurance to cover claims brought in connection with the licensed mark.
• Irreparable injury/right to obtain injunctive relief. Clarifies that any breach of the agreement will cause irreparable harm and the non-breaching party may obtain injunctive relief to cure the breach.
• Licensee’s ability to register domain names. Clarifies whether the licensee is permitted to register domain names containing the mark.

On Nov. 14, Western District Judge Robert Bryan granted and denied in part plaintiff’s motion for summary judgment on the trademark claims in Suarez Corporation Industries v. Earthwise Technologies, Inc.

Suarez Corporation Industries sells consumer products, including portable electric space heaters, under its EDENPURE and SUN-TWIN trademarks.

Defendants Earthwise Technologies, Earthwise Innovations, Inc., and Bruce Searle were involved to varying degrees in creating Web sites that sell Suarez Corporation Industries’ heaters, heater parts, and refurbished heaters. The Web sites are associated with the domain names edenpure-heater.com and edenpureoutlet.com, among others.

The court found Earthwise Innovations’ use of the the domain names and Suarez Corporation Industries’ trademarks on its Web sites was likely to cause confusion. “In this case, consideration of the Internet trinity and the remaining Sleekcraft factors favors SCI. Consideration of the Internet trinity strongly favors SCI because the trademarks at issue are identical, and Earthwise and SCI simultaneously sold related products through the Internet. The remaining Sleekcraft factors slightly favor SCI because SCI’s marks are unique and because there is no question as to Earthwise’s knowledge of SCI’s marks.”

The court went on to grant summary judgment on a claim of continuing infringement against defendant Earthwise Innovations despite the court’s preliminary injunction order.

“Moreover, Earthwise fails to create a genuine issue of material fact as to whether Earthwise’s use of SCI’s marks ceased on January 30, 2008. For example, as of February 15, 2008, edenpureoutlet.com claimed to be ‘America’s source for EdenPURETM and SUN-TWINTMParts and Refurbished Heaters,’ even though Earthwise was preliminarily enjoined ‘from buying and/or selling refurbished Edenpure or Sun-Twin heaters on the edenpure-heater.com and/or edenpureoutlet.comwebsites.’ Similarly, as of February 15, 2008, Earthwise continued to advertise its program to buy EDENPURE and SUN-TWIN heaters via edenpure-heater.comand to use SCI’s marks on infraredappliances.com, infrared-heating.com, and comfortzoneinfraredheaters.com. In this respect the motion should be granted.”

The court denied summary judgment as to whether Earthwise Technologies or Mr. Searle were liable for the infringement. The court also denied summary judgment on Suarez’s cybersquatting claim.

The case cite is Suarez Corporation Industries v. Earthwise Technologies, Inc., No. 07-5577 (W.D. Wash. Nov. 14, 2008) (Bryan, J.).

On Nov. 12, the Ninth Circuit handed down a reminder that a trademark registrant has standing to sue for infringement even when the parties’ goods do not compete.

In doing so, it vacated the Central District of California’s summary judgment dismissal of plaintiff’s trademark claims in Halicki Films, LLC v. Sanderson Sales and Marketing concerning trademark rights stemming from the motion picture Gone in 60 Seconds.

Long story short, the district court threw out the trademark claim to GONE IN 60 SECONDS on standing grounds because the plaintiff’s trademark registrations were for toy cars, toy model car kits, and baseball caps, whereas the defendant’s use of the mark was in connection with actual cars. (“Because Plaintiffs are not the registered owner of ‘Gone in 60 Seconds’ for vehicles or automobiles, Plaintiffs may not claim standing in this instance as a registrant.”)

The Ninth Circuit commented: “This conclusion confuses an analysis of the merits of Halicki’s infringement claim with an analysis of whether she has standing to bring these claims. To establish standing under the Lanham Act, a plaintiff need only demonstrate that she is the registered owner of a mark for any class of products, even one that does not compete directly with the defendant’s products. The question of whether the products on which the allegedly infringing mark appears are sufficiently related to goods sold by the plaintiff such that the defendant’s actions qualify as infringement is, by contrast, a merits question.”

The court concluded: “In this case, it is undisputed that Halicki is a registered owner of the ‘Gone in 60 Seconds’ mark for ‘toy model cars and toy model car kits’ and ‘baseball caps.’ She therefore has standing under the Lanham Act to bring an infringement claim against others allegedly using the mark in a proscribed manner.”

Whether plaintiff can prove infringement — that consumers are likely to be confused as to the source of defendant’s cars with the source plaintiff’s toy cars — remains to be seen. However, plaintiff will get a chance to put on its case.

The case cite is Halicki Films, LLC v. Sanderson Sales and Marketing, No. 06-55806 and No. 05-55807 (9th Cir. Nov. 12, 2008).