Dan’s Comp Sues Ian Smith for Trademark Infringement in Facebook Advertisement

Evansville, Ind. — Trademark lawyers for XP Innovation, LLC d/b/a Dan’s Comp (“Dan’s Comp”) of Mt. Vernon, Ind. sued Ian Smith (“Smith”) of Massillon, Ohio alleging that he infringed various trademarks owned by Dan’s Comp, Registration Nos. 2,176,911, 2,176,580, 2,607,447, 3,853,112, 3,940,083, 3,957,948, 4,074,705 and 4,101,708, which have been registered with the U.S. Trademark Office.

Dan’s Comp owns and operates one of the world’s largest BMX bicycle stores.  It also DansComLogo.JPGowns related trademarks registered in connection with sales of bicycles and bicycle-related goods.  These marks include “Dan’s,” “Dan’s Competition,” “Dan’s BMX” and “high speed mail order.”  Dan’s Comp also owns trademarks to “Dan’s Comp” with a lightning-bolt graphic and to the same lightning-bolt graphic and a similar lightning-bolt graphic as separate marks.

In its complaint, Dan’s Comp alleged that it uses its marks in connection with bicycles and bicycle-related goods and services in all fifty states, the District of Columbia, and throughout the world.  It further claimed that it spends tens of thousands of dollars each year to advertise and promote the Dan’s Comp marks and the associated goods and services in the United States and throughout the world.  It asserts that, as a result of its use of the Dan’s Comp marks, the marks have developed significant goodwill in the market.

This lawsuit pertains to an advertisement that Dan’s Comp claims that Smith placed on Facebook.com.  The advertisement read “Free Bike From Dans [sic] Comp.”  Users who clicked on the advertisement were redirected to a survey website, which was alleged to have been designed to appear as if it were affiliated with Dan’s Comp through the unauthorized use of the Dan’s Comp marks.  Users were prompted to answer survey questions regarding their buying habits in relation to Dan’s Comp goods and services. 

At the conclusion of the survey, users were prompted to enter their email addresses and mobile phone numbers.  Immediately afterward, a text message containing an “offer” was sent to each user’s mobile number.  Various offers included an “Amazing Facts Mobile Alert” for $9.99 per month and a membership to the “Mobile Tunez Club,” also for $9.99 per month.  The text message also included a PIN number that was to be entered on the website addressed “http://surveysallday.com/bmx/winner.php” in a box on a page entitled “SCORE YOUR BIKE.”  Apparently, entry of the four-digit pin would register the user for the service described in the text message.  It is further claimed that no free bicycles were provided to any users.  Allegedly, thousands of individuals entered their personal information on the survey website.

Dan’s Comp alleges that Smith profited (i) from users inadvertently signing up for services believing that they would win a free bicycle (or the chance for a free bicycle) and (ii) by selling the user information gathered from unsuspecting users of the survey website.  Dan’s Comp asserts that Smith’s unauthorized use of the Dan’s Comp marks, and marks confusingly similar to the Dan’s Comp marks, caused confusion, mistake, and deception as to the source of the survey website, and falsely suggested an affiliation with Dan’s Comp.

The complaint lists four counts:

·         Count I: Trademark Infringement of the Dan’s Comp Marks Under 15 U.S.C. § 1114(1)

·         Count II: Unfair Competition and False Designation of Origin of the Dan’s Comp Marks under 15 U.S.C. § 1125(a)(1)(A)

·         Count III: False Advertising Under 15 U.S.C. § 1125(a)(1)(B)

·         Count IV: Unfair Competition and Trademark Infringement of the Dan’s Comp Marks under Indiana Common Law

Dan’s Comp asked that the court find that Smith infringed the rights of Dan’s Comp in its marks; for an injunction against further infringement; that Smith be ordered to engage in corrective advertising; that Smith be ordered to disgorge to Dan’s Comp all profits it derived from the infringement; for damages, including treble damages; and for attorneys’ fees and costs.

Practice Tip: Under the Digital Millennium Copyright Act (“DMCA”), website operators may be liable for the posting by others of infringing copyrighted materials on the operator’s website.  The Online Copyright Infringement Liability Limitation Act (also known as “OCILLA”) is generally referred to as the safe-harbor portion of the DMCA; it provides a safe harbor for website operators who take various measures to avoid copyright infringement (e.g., establishing a take-down procedure).  That safe harbor does not, however, include protection against claims of trademark infringement.  Various cases have discussed the issue (see, e.g., Tiffany (NJ) Inc. v. eBay, Inc.) and it is generally accepted that it is the responsibility of the owner of the brand, not the website, to monitor for infringement.  However, the website owner does have some responsibility.  For example, failure to remove infringing material despite having received notice that the material is infringing can result in liability (see, e.g., Louis Vuitton Malletier v. Akanoc Solutions, Inc., a case in which a $32 million verdict was granted against web-hosting companies for failing to remove counterfeited products despite repeated notices from trademark owners).

This case has been assigned to The Honorable Chief Judge Richard L. Young and Magistrate Judge William G. Hussmann in the Southern District of Indiana, and assigned Case No. 3:13-cv-00106-RLY-WGN.

XP Innovations v. Smith – Complaint

Further Information about the case is as follows:

XP INNOVATION, LLC v. SMITH

Filed: April 12, 2013 as 3:2013cv00106 Updated: April 13, 2013 01:40:16

Plaintiff: XP INNOVATION, LLC

Defendant: IAN SMITH

Cause Of Action: Trademark Infringement

Court: Seventh Circuit > Indiana > Southern District Court

Type: Intellectual Property > Trademark

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