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Articles Posted in Trademark Infringement Litigation

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The judicial remedies for victims of trademark infringement  vary depending upon the intentions of the infringer. A Florida business which has been victimized by a malicious counterfeiter can seek lost profits, treble damages, attorneys’ fees, and other remedies. By contrast, a company which accidentally violated trademark law has significantly less exposure. A recent United States Supreme Court precedent, in Romag Fasteners, Inc v. Fossil, Inc., 140 S. Ct. 1492 (2020), settled whether “lost profits” is an available remedy for unintentional trademark infringement.  Peter Mavrick is a Miami business litigation lawyer.  The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, and other legal disputes in federal and state courts and in arbitration.

The Lanham Act makes it unlawful for a party to sell goods which appear to originate from a trademark holder. Specifically,

(1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which–

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A trademark owner can of course sue the business selling counterfeit copies of the trademark owner’s goods, but it may also sue other businesses that sufficiently provide products or services which the counterfeiter uses.  In Luxottica Group, S.p.A. v. Airport Mini Mall, LLC, 932 F.3d 1303 (2019), the United States Court of Appeals for the Eleventh Circuit recently confirmed that a landlord can be held liable for the trademark infringement of its tenant when the landlord has actual or constructive knowledge of a tenant’s counterfeiting activities.  Peter Mavrick is a Miami business litigation attorney who represents clients in trademark infringement litigation and other unfair competition litigation.

The Lanham Act allows trademark owners to sue businesses that “use in commerce any reproduction, copy, or […] imitation” of a mark when that use is “likely to cause confusion” with the trademark owner’s mark. 15 U.S.C. § 1114(1)(a); Dieter v. B & H Indus. of S.W. Fla., Inc., 880 F.2d 322 (11th Cir.1989).  In such a situation, a trademark owner can recover the profits that the infringer earned and the damages that the owner suffered due to the infringement.  15 U.S.C. § 1117(a).  When the product being sold has a mark that is “identical” or “substantially indistinguishable” from the trademark owner’s mark, it may be considered as a “counterfeit.”  15 U.S.C. § 1127.  The stakes are much higher for sellers of counterfeit products – a counterfeiter will likely be required to pay attorneys’ fees and either treble damages or statutory damages, which could be up to $2,000,000.  15 U.S.C. 1117(b)-(c).  When a business is selling counterfeits, it is not necessary to prove that the violating business was acting in bad faith.  Chanel, Inc. v. Italian Activewear of Florida, Inc., 931 F.2d 1472 (11th Cir. 1991).

A business can also be held liable for the enhanced counterfeiter penalties for supplying goods or services to counterfeiters.  Particularly, a business can be contributing to counterfeiting if it “provid[es] goods or services necessary to the commission of a [counterfeiting], with the intent that the recipient of the goods or services would put the goods or services to use in [counterfeiting].” 15 U.S.C.A. § 1117(b)(2).

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Under the Lanham Act, a defendant may be liable for trademark infringement, if, without consent, he/she uses “in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark” which “is likely to cause confusion or to cause mistake, or to deceive.” 15 U.S.C. § 1114(1). The Act defines a “counterfeit” as a “spurious mark which is identical with, or substantially indistinguishable from, a registered mark.” 15 U.S.C. § 1127. However, the test for whether marks are “substantially indistinguishable” is not well-defined by the applicable case law. Peter Mavrick is a Miami business litigation lawyer who represents clients in trademark infringement and other unfair competition litigation.

In Coach, Inc. v. Chung Mei Wholesale, Inc., 2016 WL 7470001 (S.D. Fla. June 17, 2016), Plaintiffs, Coach, Inc. and Coach Services, Inc.’s (collectively “Coach”), was a luxury consumer goods company that specialized in the design, manufacturing, and sale of, among other things, handbags and wallets. Coach owned a variety of trademarks, which it used in connection with the advertisement and sale of its products. Shen Biao Huang (“Huang”) and his wife, Lian Xiao Fu (“Fu”) operated a business called Chung Mei Wholesale, Inc. (“Chung Mei”) out of a warehouse in Hialeah, Florida. Chung Mei imported goods from China and sold them to retailers and wholesalers. Huang primarily selected merchandise himself, but sometimes his friend, Hung Jain Ke (“Jain Ke”) ordered goods on Huang’s behalf. During the course of their dealings, Huang instructed Jain Ke not to send him any goods that might be counterfeit.

There were two shipments ordered by Jain Ke on behalf of Chung Mei that were seized by the U.S. Customs and Border Protection (“CBP”) seized two shipments imported by Chung Mei from China, which CBP determined contained about 3,000 “Coach Design Handbags,” identified as constituting “counterfeit copies” of the Coach Trademarks. A Coach employee trained to identify counterfeits, examined CBP’s photographs of these bags and concluded the pictured items were counterfeit and bore counterfeit representations of four registered Coach trademarks as well as trade dresses, and were substantially indistinguishable from the Coach trademarks and trade dresses.

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The Lanham Act provides that a successful plaintiff may recover: (1) defendant’s profits, (2) any damages sustained by the plaintiff, and (3) costs of the action. 15 U.S.C. § 1117(a). In exceptional cases, a district court may award attorney fees to the prevailing party. The Lanham Act gives broad discretion to the district court to determine the proper relief due an injured party. See 15 U.S.C. § 1117(a); Burger King v. Weaver, 169 F.3d 1310 (11th Cir.1999).  Peter Mavrick is a Miami business litigation lawyer who represents clients in trademark infringement lawsuits.

In Optimum Technologies, Inc. v. Home Depot U.S.A., Inc., 217 Fed.Appx. 899 (11th Cir. 2007), Optimum Technologies, Inc. (“Optimum”) sued Home Depot, Inc. (“Home Depot”) alleging that Home Depot committed trademark infringement in violation of the Lanham Act, 15 U.S.C. § 1114, and false advertising in violation of 15 U.S.C. § 1125(a). Optimum sold a variety of floor related products, including the Lok–Lift Gripper (“Lok–Lift”). Lok-Lift was applied in strips to the back of rugs and mats to prevent slippage on hard floors and carpets. Optimum owned the Lok–Lift mark. Optimum sold the Lok–Lift product to Home Depot through a joint venture partnership between Optimum and Henkel Consumer Adhesives, Inc. (“Henkle”). Henkle purchased the Lok–Lift product from Optimum then distributed it to Home Depot, among other retailers.

Henkle later developed its own similar product called Hold–It for Rugs (“Hold–It”); however, the Hold–It product was only intended for use on floors, not on carpets. Henkle notified Home Depot that it intended to substitute its Hold–It product in the place of the Lok–Lift product. Henkle sent Home Depot the Hold–It product with the same product number and tracking information as the Lok–Lift product. Home Depot’s computer system did not reflect that the products had changed, so the cash register receipts showed Hold-It purchases to be Lok-Lift purchases. Home Depot also did not update its shelf tags, which still displayed the name Lok–Lift. The Hold–It product that was sold at Home Depot, however, was packaged and marked with the Hold–It name with no reference to Lok–Lift.

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The term ‘trade dress’ refers to the appearance of a product when that appearance is used to identify the creator of that product. Trade dress encompasses the total image of a product and may include features such as size, shape, color, texture, graphics, or particular sales techniques.” AmBrit, Inc. v. Kraft, Inc., 812 F.2d 1531 (11th Cir. 1986). The party seeking trade dress protection bears the burden of proving that the features of the trade dress sought to be protected are not functional in nature. The functionality doctrine prevents trademark law from inhibiting legitimate competition by allowing businesses to compete through imitation of a useful product feature. Peter Mavrick is a business litigation lawyer who represents clients in trademark infringement lawsuits.

In the case of Dippin’ Dots, Inc. v. Frosty Bites Distribution, LLC, Plaintiff Dippin’ Dots, Inc. (“DDI”) sued Defendant Frosty Bites Distribution, LLC (“FBD”) for trade dress infringement of DDI’s product and logo design, in violation of the Lanham Act, 15 U.S.C. § 1125. Plaintiff DDI sold brightly-colored, small beads of ice cream called “dippin’ dots.” DDI’s dippin’ dots were created through a six-step process involving, among other things, dripping, freezing and storing an ice cream composition into beads.

FBD was secretly started by a group of retail dealers who terminated their contracts with DDI. FBD sold a competing brightly-colored, small, popcorn-shaped and spherical-shaped ice cream product called “frosty bites.” FBD’s frosty bites were created, in part, by streaming and dripping an ice cream solution into liquid nitrogen where it freezes and forms beads and clusters of frozen ice cream.

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The Lanham Act does not contain a statute of limitations. When the filing of a trademark infringement lawsuit is delayed for years, the defendants may instead assert laches as an affirmative defense.  Federal courts use the limitations period for analogous state law claims as a standard for the defense of laches. Peter Mavrick is a business litigation lawyer who represents clients in unfair competition and trademark infringement lawsuits.

The laches defense requires a defendant to show 1) a delay in asserting a right or a claim, 2) that the delay was not excusable, and 3) that there was undue prejudice to the party against whom the claim is asserted.” Ares Defense Systems, Inc. v. Karras, 2016 WL 7042957 (M.D. Fla. March 10, 2016) citing AmBrit, Inc. v. Kraft, Inc., 812 F.2d 1531 (11th Cir. 1986). In Florida, Plaintiff’s delay in asserting its trademark infringement claims is assessed against a four-year limitations period, pursuant to Florida Statute § 95.11(3). AmBrit, Inc. v. Kraft, Inc., 812 F.2d 1531 (11th Cir. 1986). Florida Statute § 95.11(3) sets forth a four-year statute of limitations for several causes of action, including actions based on statutory liability, actions for injury to property and is also a “catch-all” limitations period for any action not specifically provided for in Florida Statutes.

A recent case examined this issue. In Ares Defense Systems, Inc. v. Karras, Plaintiff Ares Defense Systems, Inc. (“ADS”) was a firearm manufacturing company that designed, manufactured, and sold a variety of firearms and components under the marks Ares and Ares Defense since 1999.  ADS filed suit alleging trademark infringement against (among others) Defendants Double A and Lycurgan (and their president Dimitrios Karras (“Karras”)), two companies that each claimed use of the mark “Ares Armor” since 2010 or 2011.

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