Trade Dress

June 6, 2016

Indiana Trademark Litigation: Brew Pub Accused of Infringing Use of Yeti Trademarks

New Albany, Indiana – Trademark attorneys for Plaintiff Great Divide Brewing Company of Denver, Colorado filed an infringement lawsuit in the Southern District of Indiana against Defendant Red Yeti Brewing Company, Inc. of Jeffersonville, Indiana.

Defendant is listed in the complaint as the owner of a restaurant and brewery named “Red Yeti Brewing Co.” a/k/a “Red Yeti Restaurant and Brewpub.” The complaint asserts that Red Yeti Brewing Co. wrongfully employs the term “Yeti” and a yeti design in its marketing.

Specifically, Plaintiff contends that Defendant Red Yeti’s conduct infringes two of its trademarks, U.S. Trademark Registration No. 2,957,257 for a Yeti word mark and U.S. Trademark Registration No. 4,115,050 for a Yeti design mark. Both have been registered by the U.S. Patent and Trademark Office.

Plaintiff asserts that Red Yeti’s actions constitute a deliberate attempt to trade upon Defendant’s goodwill and reputation and that its actions are willful and malicious. In this Indiana federal lawsuit, filed by trademark lawyers for Plaintiff, the following claims for relief are listed:

• Trademark Infringement in Violation of 15 U.S.C. § 1114(1)
• Unfair Competition – False Designation of Origin in Violation of 15 U.S.C. 1125(a)
• Federal Dilution
• Common Law Unfair Competition
• Common Law Trademark Infringement

• Deceptive Trade Practices in Violation of C.R.S. § 6-1-113

Great Divide seeks damages, including punitive damages, along with equitable relief, costs and attorneys’ fees.

April 6, 2016

Indiana Trademark and Copyright Litigation: Coach Sues Indiana Retailer on Allegations of Counterfeiting

By Overhauser Law Offices, LLC

South Bend, Indiana – Intellectual property attorneys for Plaintiffs Coach, Inc. of New York, New York and Coach Services, Inc. of Jacksonville, Florida (collectively, “Coach”) filed an intellectual property complaint in the Northern District of Indiana.

Coach contends that Defendants Zip Thru Mart, Charles Estok Sr., and Janice Estok, all of Knox, Indiana, infringed various Coach trademarks, which have been registered by the U.S. Patent and Trademark Office. In addition to trademark infringement under the Lanham Act, Coach asserts that Defendants have committed trade dress infringement, trademark dilution and counterfeiting under the Lanham Act, copyright infringement under the Copyright Act, as well as trademark infringement, unfair competition and unjust enrichment under Indiana common law.

Coach’s allegations stem from Defendants’ purported “designing, manufacturing, advertising, promoting, distributing, selling, and/or offering for sale” products that bear counterfeit Coach trademarks. Defendants are further accused of having engaged in this behavior “negligently and/or knowingly and intentionally, with reckless disregard or willful blindness to Coach’s rights, or with bad faith.”

In support of its allegations of infringement and related conduct, Coach states that it sent an investigator to the Zip Thru Mart. Its investigator saw multiple items bearing Coach trademarks, which Coach contends were counterfeit. Additional goods bearing purportedly counterfeit trademarks were seized by a Homeland Security Investigations officer during a subsequent visit to the business.

The intellectual property listed in this litigation includes numerous trademarks for “Coach,” “Coach New York,” “CC,” “Poppy” and similar trademarks. Coach also claims infringement of its copyrights, listing copyright registrations, registered with the U.S. Copyright Office, for its “Legacy Stripe” design (registration number VA000704542) “Signature C” design (registration number VA0001228917), “Op Art” design (registration number VA0001694574) and “Horse & Carriage” design (registration number VA0001714051).

In this Indiana lawsuit, filed by trademark and copyright attorneys for Coach, the intellectual property claims are listed as follows:

• Count I: Trademark Counterfeiting, 15 U.S.C. § 1114
• Count II: Trademark Infringement, 15 U.S.C. § 1114
• Count III: Trade Dress Infringement, 15 U.S.C. § 1125(a)
• Count IV: False Designation of Origin and False Advertising, 15 U.S.C. § 1125(a)
• Count V: Trademark Dilution, 15 U.S.C. § 1125(c)
• Count VI: Copyright Infringement, 17 U.S.C. § 501
• Count VII: Common Law Trademark Infringement
• Count VIII: Common Law Unfair Competition

• Count IX: Unjust Enrichment

In addition to statutory damages of $2 million per counterfeit mark, per type of counterfeit good, Coach seeks equitable relief; additional damages, both statutory and punitive; costs and attorneys’ fees.

Practice Tip: Coach has a history of requesting statutory damages that are considerably in excess of what has eventually been awarded by the courts. For example, in Coach, Inc. v. Paula’s Store Sportwear LLC, 2014 WL 347893 (D.N.J. Jan. 31, 2014), Coach requested $800,000 in statutory damages – $100,000 for each of eight counterfeited marks – from a shop from which four counterfeit Coach wallets and two counterfeit Coach handbags had been seized. When awarding damages to Coach, the court noted that the retail value of the six counterfeit items was less than $1500 and awarded $5000 for each of the eight marks that had been counterfeited, multiplied by the two types of goods, for a total statutory damages award of $80,000.

January 26, 2016

Indiana Trademark Litigation: Texas Roadhouse v. Texas Corral Litigation Moves to Indiana

By Overhauser Law Offices, LLC

Hammond, Indiana – Trademark litigation commenced in the Western District of Michigan in 2013 was transferred to the Northern District of Indiana yesterday.

This federal lawsuit, filed by trademark attorneys for Plaintiffs Texas Roadhouse, Inc. and Texas Roadhouse Delaware LLC, both of Louisville, Kentucky, alleges infringement of U.S. Service Mark Reg. No. 1,833,533, U.S. Service Mark Reg. No. 2,231,309, and U.S. Service Mark Reg. No. 2,250,966. These marks have been filed with the U.S. Patent and Trademark Office.

The Defendants listed in the Michigan complaint were Texas Corral Restaurants, Inc.; Switzer Properties, LLC; Texcor, Inc.; Texas Corral Restaurant II, Inc.; T.C. of Michigan City, Inc.; T.C. of Kalamazoo, Inc.; Chicago Roadhouse Concepts, LLC; Paul Switzer; Victor Spina; and John Doe Corp. Defendants filed a motion to dismiss or, in the alternative, transfer venue, with the Michigan court, which was granted. The lawsuit will continue in the Northern District of Indiana.

Plaintiffs, via their trademark lawyers, asserted the following claims:

• Count I: Trade Dress Infringement
• Count II: Federal Trademark Infringement
• Count III: Trademark Infringement Under Michigan Statutory Law
• Count IV: Trademark Infringement Under Indiana Statutory Law
• Count V: Trademark Infringement Under Common Law
• Count VI: Copyright Infringement

• Count VII: Unfair Competition Under Michigan and Indiana Common Law

Texas Roadhouse seeks equitable relief; damages, including punitive damages; costs and attorney fees.

December 11, 2015

Indiana Trademark Litigation: Trademark Lawsuit Filed Over Use of “All Star” Name

By Overhauser Law Offices, LLC

Indianapolis, Indiana – Plaintiff All Star Heating & Cooling, Inc. (“All Star”) of Camby, Indiana sued in the Southern District of Indiana alleging that Quality Heating and Air, Inc. (“Quality Heating”) d/b/a All Star Air and Richard Cusick (“Cusick”) of New Palestine, Indiana are infringing its trade name.

Both Plaintiff and Defendants are in the business of providing heating, venting and air conditioning service, installation and repair. Plaintiff All Star states that it began business in December of 2005 and that it has used the same name since that time. It also indicates that it has been using “the same trade dress since 2011.” This trademark infringement complaint does not indicate that Plaintiff’s business name has been registered by the U.S. Patent and Trademark Office.

The complaint states that Defendant Cusick, who is believed to be the owner and operator of Defendant Quality Heating, began business in 2014 under the assumed business name All Star Air. Plaintiff asserts that Quality Heating is currently located less than 30 miles from Plaintiff’s location.

Plaintiff All Star contends that customers and vendors have been confused by Defendants’ use of the All Star name, stating that they have “wrongly believed that there is an association or connection between the Plaintiff’s business and the Defendants’ business.” Plaintiff avers that, as a consequence, Defendants are liable for trade name infringement and unfair competition.

In its lawsuit, filed by an Indiana trademark lawyer, Plaintiff lists the following counts:

• Count I: Federal Unfair Competition
• Count II: State and Common Law Trademark Infringement

• Count III: Common Law Unfair Competition

All Star seeks equitable relief, including an injunction; damages, including treble damages; costs and attorney fees.

January 30, 2015

Indiana Trademark Litigation: Archetype Sues Alleging Trade Dress Infringement

By Overhauser Law Offices, LLC

Indianapolis, Indiana – An Indiana intellectual property attorney for Archetype Ltd. (“Archetype”) of Short Hills, New Jersey sued in the Southern District of Indiana alleging that LTD Commodities LLC (“LTD”) of Bannockburn, Illinois infringed the trademark PathLights™.

Plaintiff Archetype contends that it has been marketing a distinctive and famous battery-operated motion-detection lighting system under the PathLights trademark since at least as early as 2009. It states that the overall look and feel of the PathLights product is non-functional and serves as a source identifier. In this Indiana lawsuit, Archetype accuses LTD of trade dress infringement, false designation of origin or sponsorship, passing off, and unfair competition.

Archetype indicates in the complaint that LTD is marketing, selling, and promoting a battery-operated motion-detection lighting product that is almost identical to Archetype’s PathLights product. It further claims that the accused LTD lights illustrated on LTD’s website are actually images of Archetype’s PathLights product and that the lighting products that consumers actually receive from LTD upon purchase of the LTD product are not an Archetype’s PathLights product but are, instead, a different, lower-quality light.

Defendant LTD is accused of “intentionally, willfully and deliberately pull[ing] a ‘bait and switch’ on consumers” and, in doing so, damaging Archetype’s sales volume and business reputation.

In this lawsuit, filed by an Indiana intellectual property lawyer for Archetype, the following counts are asserted:

• Count I: Trade Dress Infringement

• Count II: False Designation of Origin or Sponsorship and Passing Off

• Count III: False Advertising

• Count IV: Trade Dress Dilution

Archetype asks the court for judgment that LTD’s acts constitute trade dress infringement, unfair competition, false designation of origin and/or sponsorship, false advertising and trade dress dilution; for an award of LTD’s profits and actual damages, including corrective advertising, as well as trebling those damages pursuant to 15 U.S.C. § 1117; for an order that all accused LTD products and other accused materials be surrendered for destruction; for an injunction; and for an award of Archetype’s attorneys’ fees, costs and expenses.

The case was assigned to Chief Judge Richard L. Young and Magistrate Judge Denise K. LaRue in the Southern District of Indiana and assigned Case No. 1:15-cv-00106-RLY-DKL.

August 13, 2014

Indiana Patent and Trade Dress Litigation: Polymer Technology Systems Asserts Patent and Trade Dress Infringement of Its Cholesterol Testing Technology

By Overhauser Law Offices, LLC

Indianapolis, Indiana – Indiana patent attorneys for Polymer Technology Systems, Inc. (“PTS”) of Indianapolis, Indiana filed an intellectual property lawsuit in the Southern District of Indiana alleging that Jant Pharmacal Corporation of Encino, California (“Jant”) Infopia America LLC of Titusville, Florida (“Infopia USA”) and Infopia Co., Ltd. of Kyunggi, Korea (“Infopia

Korea”) infringed “Method for determining HDL concentration from whole blood or plasma,” Patent No. 7,087,397, which was issued by the U.S. Patent Office. PTS has also accused Defendants of federal unfair competition under the Lanham Act.

PTS develops, manufactures and sells point-of-care diagnostic products for the human healthcare market. At issue in this Indiana litigation is PTS’s “CardioChek® Multi-Analyte Strip,” a hand-held, point-of-care testing system that can test for total cholesterol, high-density lipoproteins (HDL) and triglycerides with a single drop of blood. In August 2006, Patent No. 7,087,397 (“the ‘397 Patent”) was issued to PTS. PTS indicates that this patent includes a significant portion of the technology embodied in this Indiana invention.

Defendant Infopia Korea has also developed a test strip that tests for total cholesterol, high-density lipoproteins and triglycerides. This system is branded as the LipidPlus Lipid Profile Test Strip. PTS contends that Infopia Korea imports the LipidPlus testing strip into the United States and that Defendants Infopia USA and Jant offer and sell the LipidPlus product in the U.S. market.

PTS alleges that much of the technology incorporated into the LipidPlus testing strip is copied from PTS’s CardioChek product. It contends that the copied aspects include the concept of the testing strip itself, the analytes selected for analysis, the structure of the strip and the chemistries used. PTS also contends that Defendants have copied the trade dress of PTS’s CardioChek testing strip. PTS further accuses Defendants of offering the LipidPlus testing strip at a price that is both extremely low and below cost.

In its complaint, filed by Indiana trade-dress and patent lawyers, PTS alleges the following:

• Count I: Patent Infringement of the ‘397 Patent

• Count II: Violation of the Lanham Act, 15 U.S.C. 1125(a)

PTS asks the court:

• for a judgment that the ‘397 Patent is valid and enforceable;

• for a judgment of direct or indirect infringement, or inducement to infringe, by Defendants;

• to declare that Defendants have unfairly competed with PTS by infringing and misappropriating PTS’s trade dress;

• for an award to PTS of lost profits and a reasonable royalty for Defendants’ acts of patent infringement and trade-dress infringement;

• to treble the award of damages pursuant to a finding of willful, intentional and deliberate infringement;

• for an injunction prohibiting Defendants from engaging in acts of infringement or unfair competition; and

• for a declaration that the case is exceptional and an award of attorneys’ fees.

Practice Tip: The United States Supreme Court addressed the elements required for trade dress to be protected in Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992). In Two Pesos, the Court held that, to establish a cause of action for trade dress infringement, a plaintiff must establish that (a) the design is non-functional; (b) the design is inherently distinctive or distinctive by virtue of having acquired secondary meaning; and (c) there is a likelihood of confusion.

May 16, 2014

Indiana Trademark Law: Seventh Circuit Holds Indiana Court Lacked Personal Jurisdiction Over RAP4

By Overhauser Law Offices, LLC

Chicago, Illinois – Indiana trademark attorney Paul B. Overhauser, on behalf of K.T. Tran and Real Action Paintball, Inc., a California corporation (collectively “RAP4”), argued before the United States Court of Appeals for the Seventh Circuit that the trademark infringement suit brought in the Northern District of Indiana by Advanced Tactical Ordnance Systems, LLC, an Indiana corporation (“ATO”), was not properly before the Indiana court, as it lacked personal jurisdiction over RAP4. The Seventh Circuit agreed and instructed the district court to dismiss the complaint.

RAP4 and ATO are competitors in the “irritant projectile” market. Unlike the more familiar game of paintball, in which a paint-filled sphere is shot at opponents as part of a war game, these irritant projectiles are used by the police and military to intervene in hostile situations where lethal force is unnecessary. While paintballs are filled with paint, irritant projectiles use capsaicin, the active ingredient in pepper spray. Irritant projectiles, thus, allow law enforcement personnel to use less-than-lethal force from a distance.

Among the many issues in this lawsuit, including assertions by ATO of trade-dress infringement, unfair competition and misappropriation of trade secrets, were allegations that RAP4 had infringed the trademarked term “PEPPERBALL,” to which ATO claimed ownership. That trademark, Registration No. 2716025, was issued in 1999 by the U.S. Trademark Office to a non-party to this suit.

The trouble began when another company, non-party PepperBall Technologies, Inc. (“PTI”), began to have financial problems. PTI had also been a competitor in the irritant-projectile market. To address its difficulties, PTI held a foreclosure sale, the validity of which was hotly contested. ATO claimed that it had purchased PTI’s trademarks – including “PEPPERBALL” – and other property during this foreclosure sale.

During the time that PTI ceased its operations and was attempting to convey its assets, RAP4 was contacted by an executive of non-party APON, a company which had manufactured some of PTI’s irritant projectiles. He asked if RAP4 was interested in acquiring irritant projectiles from APON.

RAP4 agreed to purchase irritant projectiles from APON. After having negotiated this access to APON’s machinery, recipes, and materials – which had had at one time been used by PepperBall Technologies Inc. – RAP4 announced this fact to the people on its e-mail list. Specifically, it stated in its e-mail that it had acquired access to, “machinery, recipes, and materials once used by PepperBall Technologies Inc.” It was this language to which ATO, which claimed to be the successor in interest to PTI, particularly objected.

ATO sent a cease-and-desist letter to RAP4. In response, RAP4 added a disclaimer that it was not affiliated with PTI. ATO then sued in the Northern District of Indiana. It claimed several different theories of recovery, including intentional violations of the Lanham Act, 15 U.S.C. § 1111 et seq., common law trademark infringement and unfair competition, trade dress infringement, and misappropriation of trade secrets.

Of particular interest to the Seventh Circuit in addressing this Indiana trademark litigation was the issue of personal jurisdiction over RAP4 in the Northern District of Indiana. RAP4 contested that such jurisdiction over it was lacking. ATO countered that RAP4 had sufficient contacts, including a “blast e-mail” announcement from RAP4 that would suffice for jurisdiction in Indiana, stating that “many [RAP4 customers] are located here in the state of Illinois. I mean, state of Indiana.” It also contended that RAP4 regularly e-mailed customers or potential customers from all over the United States, including Indiana, and that RAP4 had made at least one sale to an Indiana resident.

ATO conceded that it lacked general jurisdiction. Thus, the Seventh Circuit turned to an analysis of specific jurisdiction. “For a State to exercise jurisdiction consistent with due process, the defendant’s suit-related conduct must create a substantial connection with the forum State,” noted the appellate court. Moreover, the relation between the defendant and the forum “must arise out of contacts that the ‘defendant himself’ creates with the forum.”

In determining that personal jurisdiction existed, the Indiana district court had relied on several facts: “first, [RAP4] fulfilled several orders of the allegedly infringing projectiles for purchasers in Indiana; second, it knew that Advanced Tactical was an Indiana company and could foresee that the misleading emails and sales would harm Advanced Tactical in Indiana; third, it sent at least two misleading email blasts to a list that included Indiana residents; fourth, it had an interactive website available to residents of Indiana; and finally, it put customers on its email list when they made a purchase, thereby giving the company some economic advantage.”

The Seventh Circuit held that these facts were insufficient to support specific jurisdiction. The only Indiana sales that would have been relevant were those that related to RAP4’s allegedly unlawful activity. ATO failed to meet its burden of proof of any such Indiana sales. Similarly, the court held that any effects that were purportedly felt in Indiana by ATO did not support specific jurisdiction. Instead, the relation between RAP4 and the Indiana forum “must arise out of contacts that the defendant himself creates with the forum State.”

Further, neither RAP4’s e-mail communications nor its website were held to create specific jurisdiction. If such contacts were sufficient, the court held, there would be no limiting principle on personal jurisdiction and a plaintiff could sue almost any defendant with an Internet presence or which utilized e-mail in almost any forum in the United States or the world. To find jurisdiction on such vanishingly small contacts would offend the long-held and traditional “notions of fair play and substantial justice.”

The Seventh Circuit remanded the case to the Indiana district court with instructions to vacate the judgment and dismiss the complaint for lack of personal jurisdiction.

Practice Tip #1: RAP4’s references to “Pepperball Technologies, Inc.” could not as a matter of law constitute trademark infringement, counterfeiting or false advertising. Instead, RAP4’s use of its competitor’s name is a merely a wholly permissible nominative use of that mark. As a matter of law, a “nominative use of a mark – where the only word reasonably available to describe a particular thing is pressed into service – lies outside the strictures of trademark law.”

Practice Tip #2: Personal jurisdiction is an essential element of federal court jurisdiction, without which the court is powerless to adjudicate the matter before it. However, a defendant’s argument that personal jurisdiction does not exist can easily be waived inadvertently by the incautious litigant. In this case, an evidentiary hearing regarding personal jurisdiction was conducted in December 2012. It was only by careful preservation of this argument by trademark counsel for RAP4 while litigating in the district court that the appellate court was able to hear RAP4’s claim and reverse the district court.

Practice Tip #3: This case was successfully argued before the Seventh Circuit by Paul B. Overhauser, Managing Partner of Overhauser Law Offices.

February 19, 2014

Maker of SNOWTIME anytime! Indoor Snowballs Sues for Trade Dress Infringement

By Overhauser Law Offices, LLC

Indianapolis, Indiana – An Indiana trademark attorney for KM Innovations, LLC of New Castle, Indiana (“KM”) filed a lawsuit in the Southern District of Indiana alleging that Opportunities, Inc. of Colo, Iowa competed unfairly and infringed the trade dress of KM’s “SNOWTIME anytime!” indoor snowballs.

The SNOWTIME anytime! concept was conceived in December 2012. At a party, several parents realized that a market might exist for “indoor snowballs,” which would enable children to have a “snowball fight” but without the usual requirements of snow or being outside. KM later introduced a product based on this idea. KM also indicates that it is pursuing a patent on its indoor snowballs.

In this lawsuit for trade dress infringement, which also includes allegations of unfair competition, KM asserts that Opportunities imports, sells and/or is offering to sell polyester-based indoor snowballs and that Opportunities’ indoor snowballs are low-quality knockoffs of KM’s famous product. KM also contends that Opportunities has deliberately copied the distinctive features of KM’s trade dress in an attempt to trade upon the goodwill associated with that trade dress.

To support its contentions of trade dress infringement, KM states that, inter alia, its SNOWTIME anytime! snowballs come in a clear package that includes a label on the front that depicts a mountainous background set in a blue and white theme. At the top of the package, the term “SNOWTIME” appears in a blue that is darker than the lighter blues used elsewhere in the label. The upper part of the lettering is covered with “snow,” giving the commercial impression of fresh snow. Also shown are a blue and white snowball with wording inside and people in snowsuits having fun playing with KM’s indoor-snowball product outdoors.

KM lists several similarities that it contends support a finding of trade dress infringement. It indicates that Opportunities’ packaging includes, among other features: a partially clear exterior that depicts a mountainous background set in a blue and white theme; an illustration of fresh snow covering the words “Snowball Fun” with letters that are a darker blue than the other blues on the package; a generally blue and white snowball with wording inside; and a depiction of people dressed in snowsuits playing outside with the product.

In the complaint, filed by an Indiana trademark lawyer, one count, “Trade Dress Infringement and Unfair Competition” is alleged. KM asks the court for:

• a judgment that Opportunities’ accused packaging infringes KM’s trade dress rights;
• a judgment that Opportunities committed unfair competition by offering its product in the accused packaging;
• damages, including treble damages for willful and deliberate infringement of KM’s trade dress rights and acts of unfair competition;
• a permanent injunction; and
• an award to KM of its attorneys’ fees, costs and expenses.

Practice Tip:

The United States Supreme Court addressed the elements required for trade dress to be protected in Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992). In Two Pesos, the Court held that, to establish a cause of action for trade dress infringement, a plaintiff must establish that (a) the design is non-functional; (b) the design is inherently distinctive or distinctive by virtue of having acquired secondary meaning; and (c) there is a likelihood of confusion.

This product was conceived barely a year ago. While SNOWTIME anytime! may have won first place at the Christmas Gift and Hobby Show in Indianapolis, that victory clearly did not take place in November 2012, as was stated in the complaint, as the product did not yet exist.

As a result of the product’s short time in the marketplace, one of the primary hurdles for Plaintiff may be timing. Specifically, if Plaintiff fails to prove that the trade dress in question is inherently distinctive, it could be difficult to prove that secondary meaning has been established in the minds of the consuming public in the time that the product has been available for purchase.

November 25, 2013

Eli Lilly Sues Singpet for Trademark Infringement

By Overhauser Law Offices, LLC

Indianapolis, Indiana – Eli Lilly and Company of Indianapolis, Indiana has filed a trademark infringement lawsuit in the Southern District of Indiana alleging that Sebastian Wiradharma a/k/a Sebastian Singh (“Singh”) and Singpet Pte. Ltd., both of Singapore, infringed the trademark COMFORTIS, Registration Number 3,370,168, which has been registered by the U.S. Trademark Office.

Lilly, through its Elanco Animal Health Division, manufactures, markets and sells pet medicines, including flea-control preparations and treatments for parasitic infestations. It contends that it has made long and continuous of the name and mark “Elanco” in connection with veterinary preparations. It also asserts that it has long used the “Comfortis” mark, which was registered by the U.S. Trademark Office in 2008. Lilly claims that it has sold tens of millions of dollars’ worth of veterinary preparations, pet medicines and related goods and services under the Elanco and Comfortis marks.

Among Lilly’s products is Trifexis, a once-monthly veterinary medication, which contains the veterinary chemicals spinosad and milbemycin oxime. Trifexis is for the prevention of heartworms, fleas and intestinal worms. It is sold in the United States with what Lilly contends to be an inherently distinctive and non-functional trade dress. Trifexis is available only by prescription through licensed veterinarians. Lilly sells a similar product in Australia, with similar trade dress, under the name “Panoramis.”

Defendant Singh, who is allegedly the principal of Singpet, and Singpet do business over the Internet, including via websites at www.singpet.com, www.petcorporate.com, www.fleastuff.com and http://www.ourpetworld.net/home.asp, among others.

Defendants are accused of marketing and selling European and Australian versions of Elanco- and Comfortis-branded pet medicines to customers in the United States. Specifically, Lilly contends that Defendants market “Panoramis (Triflexis)” [sic] on their websites. While the Defendants are apparently based in Singapore, this marketing is allegedly directed at consumers in the United States. Lilly asserts that units designed for sale in markets such as Europe and Australia are neither intended nor authorized for sale in the United States.

Lilly further objects to the Defendants’ purported advertisement of units designed for the Australian and European markets as identical to or interchangeable with the units designed for sale in the United States. It states that that the Elanco-branded “Panoramis” pet medicines are materially different from its Elanco-branded “Trifexis” pet medicines sold in the United States.

Lilly contends that the Elanco- and Comfortis-branded pet medicines are tailored to meet the requirements of different geographic regions and countries to reflect the differences in language, climate, government regulations, units of measure, local addresses and telephone numbers, among other things.

Trademark attorneys for Lilly assert that Defendants are not authorized to use Lilly’s Elanco or Comfortis names and trade dress in connection with the sale of once-monthly spinosad and milbemycin oxime pet medicines outside of Australia. Lilly has sued Defendants, asserting willful infringement of its trademarks. It asserts the following in its complaint:

• First Claim for Relief: Trademark Infringement in Violation of Section 32 of the Lanham Act
• Second Claim for Relief: Unfair Competition in Violation of Section 43(a) of the Lanham Act
• Third Claim for Relief: False Advertising in Violation of Section 43(a) of the Lanham Act
• Fourth Claim for Relief: Unfair Competition in Violation of Indiana Common Law

Lilly asks for preliminary and permanent injunctions; damages, including treble damages; the Defendants to be required to notify all purchasers of the accused products, request the return of the products and refund the price paid; pre- and post-judgment interest and costs of the suit.

Practice Tip:

Lilly is objecting to the so-called “grey market” for its veterinary pharmaceuticals. Prices for drugs can vary considerably between countries, often as a result of government intervention in the market. As a result, a “grey market” – selling a drug intended for use in one country to consumers in another country – can emerge. In this complaint, Lilly has framed its objection to a grey market for its pet-care pharmaceuticals as an intellectual property dispute.

Intellectual property law requires a balancing of competing interests. On the one hand, innovation will be discouraged if inventors, authors and other creators of intellectual property are not allowed to benefit from their labors. Such a problem arises if others are allowed to use creators’ ideas without compensating them (the “free-rider problem”). On the other hand, the public good is promoted by encouraging free competition in the marketplace and easy alienability of property.

Under the first-sale defense to infringement, once a copy of an item protected by intellectual property laws has been sold to a purchaser, the creator of the intellectual property generally may not prevent that purchaser from reselling or otherwise disposing of the item. In patent and copyright law, the first-sale rule in most cases provides an absolute defense against infringement. In patent law, this is also referred to as “patent exhaustion.” As a result, the purchaser of a copy of the work and the owner of the intellectual property rights to that work may become competitors in the marketplace if the purchaser goes to resell a copy of the work.

The first-sale defense is not as broad in a trademark context. Enunciated in 1924 by the U.S. Supreme Court, the general rule for the resale of a trademark item provides that, after a trademark owner has sold a trademarked product, the buyer ordinarily may resell that product under the original mark without incurring any trademark liability. See Prestonettes, Inc. v. Coty, 264 U.S. 359 (1924). However, unlike patent or copyright law, trademark law has as one of its primary goals preventing confusion among potential purchasers. Typically, but not always, such confusion will not exist where a genuine article bearing an authentic trademark is sold. While there is a split among the circuits concerning the extent to which consumer confusion is a relevant factor, some hold that certain types of confusion about a product’s origin cause the first-sale defense to be inapplicable to the resale of a trademarked good. See Au-Tomotive Gold Inc. v. Volkswagen of America, Inc., 603 F.3d 1133, 1134 (9th Cir. 2010).

November 15, 2013

Ambre Blends Sues doTERRA For Trademark Infringement of “Solace”

By Overhauser Law Offices, LLC

Indianapolis, Indiana – Ambre Blends, LLC of Fishers, Indiana has filed a trademark infringement lawsuit in the Southern District of Indiana alleging that doTERRA, Inc., doTERRA International, LLC, both of Orem, Utah (collectively, “doTERRA”) and Kerry Dodds d/b/a Kerry Essentials of Indianapolis, Indiana (“Kerry”) infringed SOLACE®, Trademark No. 4266473, which has been registered by the U.S. Trademark Office.

In its complaint, Ambre Blends claims to have been producing organic body products since 2001. It offers four fragrances which are designed to be worn by both women and men. Founded in 2008, doTERRA offers essential oils both as single oils and as proprietary essential oil blends via independent product consultants. Both companies claim rights in the mark “Solace” in connection with essential oil products.

Ambre Blends asserts that it has used the Solace mark continuously in commerce since at least as early as February 2007. It holds a federally registered trademark on the mark in connection with “Aromatic preparations, namely, oils, body creams, body sprays, soaps, shower gel; Beauty creams; Body and beauty care cosmetics; Body cream; Body sprays; Essential oils for use in aromatherapy; Essential oils for use in manufacturing of candles, lip balm, shower gel, shampoo, conditioner; Face and body lotions; Non-medicated skin creams with essential oils for use in aromatherapy; Oils for perfumes and scents; Perfume; Perfume oils; Perfumed creams; Perfumed soaps; Scented body spray; Skin soap.” It describes its essence as having been “created for the sole purpose of comfort and attraction” and marks its products with “Solace®”.

According to the doTERRA website, doTERRA sells its product, a blend for women, as “Solace™”. It describes its oil as “a proprietary blend of Certified Pure Therapeutic Grade® essential oils carefully formulated to balance hormones and manage symptoms of PMS and the transitional phases of menopause.” (It also provides the disclaimer, required by the Food and Drug Administration, that the “product is not intended to diagnose, treat, cure, or prevent disease.”)

In its complaint, Ambre Blends contends that doTERRA willfully and intentionally used the Solace mark knowing both that the mark was the property of Ambre Blends and that such a use was unlawful. It further asserts that doTERRA’s use of the mark was intended to cause confusion, mistake or deception among the general public and that doTERRA acted in bad faith.

The complaint asserts, inter alia, violations of the Lanham Act and unfair competition:

• Count I: Trademark Infringement
• Count II: False Designation of Origin
• Count III: Unfair Competition
• Count IV: Forgery
• Count V: Corrective Advertising Damages
• Count VI: Declaratory Judgment
• Count VII: Preliminary and Permanent Injunctive Relief

Trademark counsel for Ambre Blends seeks a declaratory judgment; a preliminary injunction; a permanent injunction; damages, including treble damages; costs and attorney’s fees; the transfer to Ambre Blends of any domain name that includes “Solace”; and corrective-advertising damages.

Practice Tip #1: From the complaint, this appears to be a straightforward case of infringement. However, Ambre Blends may have a tougher case than is obvious from the complaint itself. It appears from doTERRA’s sales literature that doTERRA has used the mark “Solace” along with “™”, thus claiming rights in the mark, at least as early as 2011. In contrast, Ambre Blends did not file its application until April 4, 2011; it was published for opposition on October 16, 2012. A federal registration confers a presumption of validity. However, here, the right to use the mark “Solace” may result in a battle of the facts.

Practice Tip #2: This complaint highlights the difference between the “®” mark and the “™” mark. While the former may not be used until a mark has been granted a federal registration, the latter has no such requirement. Instead, it may be used whenever a business wishes to put competitors on notice that it considers the mark to be its intellectual property.

Practice Tip #3: doTERRA is currently embroiled in litigation in both state and federal court in Utah with Young Living, another giant in the essential-oil industry.