South Bend, Ind. — Tough Mudder LLC of Brooklyn, N.Y. sued alleging trademark infringement by Mudderland of Kingsbury, Ind.; and Rick and Susan Hollaway, both of Hebron, Ind. of Tough Mudder trademarks registered under Registration Nos. 3,810,118; 4,131,912; 4,308,918; 4,131,913; 4,241,510; 4,241,512; 4,241,513; and 4,233,607 for marks containing “MUDDER,” which have been registered with the U.S. Trademark Office.

Tough Mudder is in the obstacle-course industry with challenges such as multi-mile mud ToughMudderLogo.JPGobstacle courses.  In the past three years, Tough Mudder has held such challenges in the United States, Canada, the United Kingdom and Australia with over a million registrations.  Tough Mudder has been recognized by such well-known news sources as The Wall Street Journal, ESPN, National Geographic and Sports Illustrated.

In addition to federally registered marks, Tough Mudder asserts that it is the owner of common law and federal service mark rights available without registration in the words “Mudder” and “Mudders” for use in connection with various outdoor events.  It also asserts common law and federal unregistered service mark rights in the phrases “Walk the Plank” and “Berlins Walls” that are also used in conjunction with outdoor obstacle courses and similar events.

Also in the obstacle-course industry, Rick and Susan Hollaway co-own and co-operate an unincorporated entity named “Mudderland.”  In 2012, the Hollaways designed, organized and promoted an obstacle-course mud challenge under the name “Mudderland” which was similar MudderlandLogo2.JPGto those held by Tough Mudder. In doing so, Tough Mudder alleges that the Holloways were attempting to benefit illegally from Tough Mudder’s brand by using the similar name “Mudderland” for an obstacle-course event.  The Hollaways also included other similar indicia such as the color orange and similar-or-identical obstacle names.  After having been contacted by Tough Mudder, Susan Hollaway agreed to cease using the name “Mudderland” and to abandon the domain name www.mudderland.com.

Despite this purported agreement to discontinue the use of the name “Mudderland” and the associated domain name, Tough Mudder learned in 2013 that the Hollaways had resumed using both.  The Hollaways planned to host a 2013 event which would also include an event named “Walk the Plank” and another named “Berlin Wall,” both of which are similar to names claimed by Tough Mudder.  The Holloways’ “Mudderland” website is again using the same color scheme as Tough Mudder’s website, with orange as the predominant color.

Trademark lawyers for Tough Mudder brought this case after the Holloways failed to abide by the alleged earlier agreement by the Holloways to cease what the complaint calls their “admittedly infringing activity” of Tough Mudder’s “extraordinarily valuable trademark rights.”

Tough Mudder claims that its first use in commerce of both the Tough Mudder mark and the Mudder family of marks predate the Hollaways’ first use and therefore Tough Mudder’s use of the marks has priority.  The complaint asserts that, in addition to the constructive notice of the Mudder marks provided by the federal trademark registrations, the Holloways also had actual notice of Tough Mudder’s rights in the marks as of May 21, 2012 when Tough Mudder sent the first cease-and-desist letter via e-mail to the Hollaways.  Further, it is asserted that the Holloways knew of Tough Mudder’s rights and acted with wanton disregard for those rights and with the willful intent of benefiting from the goodwill of the Tough Mudder marks.  Tough Mudder asserts that the Hollaways’ actions are likely to cause confusion, to cause mistake and to deceive consumers as to the source, nature and quality of the goods and services offered by the Hollaways and/or Tough Mudder.

Tough Mudder’s complaint lists ten counts:

·         Count 1: Federal and State Trademark Infringement

·         Count 2: Trade Name Infringement

·         Count 3: State Trademark Infringement

·         Count 4: Federal Statutory Unfair Competition

·         Count 5: False Designation of Origin

·         Count 6: Common Law Unfair Competition

·         Count 7: Trademark Dilution, § 1125(c)

·         Count 8: Trademark Dilution, Indiana Code § 24-2-1-13.5

·         Count 9: Violation of the Anticybersquatting Consumer Protection Act, 15 U.S.C. § 1125(d)(1)(A)

·         Count 10: False Advertising, 15 U.S.C. 1125(a)

Tough Mudder lists 20 separate requests for relief, among them: preliminary and permanent injunctions; transfer of the domain name www.mudderland.com to Tough Mudder; destruction of infringing items; an accounting of the profits by Mudderland attributable to infringement or other wrongful conduct; an accounting of damages to Tough Mudder; statutory damages; punitive and/or treble damages; costs of the action; and attorneys’ fees.

Practice Tip: There are facts weighing in favor of both parties in this case and, perhaps, that is why the Hollaways have decided to continue with the allegedly infringing activities.  Tough Mudder has in its favor such elements as similarity of various names, along with use of the color orange, in conjunction with muddy endurance races.  On the other hand, courts are reluctant to set aside colors for any one entity (see here).  Also, both the terms “Mudder” (a racehorse that runs well on a muddy racetrack) and “Mudderland” (when considered to be a whimsical spelling of “Motherland”) have meaning independent of any given to them through commercial use.

 

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Indianapolis, Ind. — Malibu Media, LLC of Los Angeles, Calif. has sued twenty-eight “John Does” for copyright infringement in separate complaints filed in the Northern District of Indiana and Southern District of Indiana

Copyright lawyer Paul Nicoletti is again in federal court on behalf of Malibu Media.  The company has filed twenty-eight similar lawsuits claiming copyright infringement.  The “John Doe” defendants allegedly used the BitTorrent file-sharing protocol to illegally download, copy and distribute elements of various works of Malibu Media’s copyrighted material. 

We have previously blogged about Malibu Media here and here.  We have also blogged about some of the other copyright-infringement litigation filed by Paul Nicoletti here

Malibu Media seeks a permanent injunction against infringing activities; an order by the court to remove infringing materials from all computers of each defendant; an award of statutory damages of $150,000 per infringed work and reasonable attorneys’ fees and costs. 

Practice Tip: The actions of companies such as Patrick Collins and Malibu Media have been called “extortionate” and, in at least one case, a class action suit has been filed against these “trolls.”  The issue of “trolls” has also caught the attention of at least one U.S. lawmaker.  Senator Charles Schumer has proposed legislation wherein the U.S. Patent and Trademark Office would review patent infringement suits before they could be filed in court.  Of course, such legislation is not directly relevant to actions sounding in copyright, such as the multiplicity of lawsuits filed by Malibu Media.  It may, however, sound a warning bell that tolerance of the questionable activities of intellectual-property trolls of all varieties is wearing thin.

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Ft. Wayne, Ind. — Trademark lawyers for Manchester University, Inc. (“Manchester”) of North Manchester, Ind. sued Sportswear, Inc. of Seattle, Wash. alleging trademark infringement of the “Manchester University” trademark, Registration No. 3,375,265, which is registered with ManchesterUnivLogo.JPGthe U.S. Trademark Office.

Manchester is an independent, liberal-arts university with campuses in North Manchester, Ind. and Fort Wayne, Ind.  It owns a federal trademark for “Manchester University.”  The use of the Manchester mark dates back to 1895.

PreSportwearCampusTeamShopLogos.JPGSportswear, doing business as “Prep Sportswear” and “Campus Team Shop,” operates the “Manchester University Spartans Apparel Store” as part of its online presence.  The store carries items for men, women and children including assorted shirts, sweatshirts, pants, hats and accessories that bear the name “Manchester,” often with another word or words (e.g., “Spartans” or “University”). 

Manchester has sent at least two letters to Sportswear asking it to discontinue selling goods bearing these markings, which Manchester claims infringe upon its trademark.  Despite these requests to stop, Sportswear continues to sell goods bearing the Manchester name.

In counts one and two of its complaint, Manchester alleges federal trademark infringement under §§ 32 and 43 of the Lanham Act, respectively.  Count three asserts trademark infringement and unfair competition under common law.  Manchester further contends that Sportswear’s infringement is intentional, deliberate and willful.

Manchester asks for preliminary and permanent injunctions; damages, including treble damages; Sportswear’s profits; interest; costs and attorneys’ fees.  It also lists a separate request for punitive damages. 

Practice Tip:

Litigation can be time consuming and expensive for parties.  To best protect their clients, litigators usually have the possibility of settlement in mind.  In a settlement, no one typically gets “everything they want.”   Everyone, however, usually gets something (even if it’s merely paying less in damages than they would likely pay after a trial).  But, to settle, parties need to find common ground.  Sometimes, instead of finding that common ground, they seem determined to compound the dispute. 

This case is an interesting illustration wherein, even in the complaint, one can see the parties moving farther apart.  For example, the complaint includes several exhibits.  One shows a page from the Sportswear website from September 2012 advertising “Manchester College” goods.  A September 2012 letter from Manchester College asked Sportswear to cease infringing.  A November 2012 letter followed, also demanding that the unauthorized use of the “Manchester” name cease.  In that letter, written on Manchester University stationery, the attorney for Manchester also noted that the institution’s name had been changed from “Manchester College” to “Manchester University.” 

Instead of evidence of an attempt to reach an understanding, and also visible in the exhibits to the complaint, is Sportswear’s response.  The screenshots of its website that had been captured prior to the letter from “Manchester University” showed “Manchester College” apparel available for sale.  After Manchester’s attorney mentioned the name change in the subsequent letter, Sportswear began carrying new merchandise bearing the “Manchester University” name.  For example, under “New Stuff” on the Sportswear website, you can find items featuring “Manchester University Spartans,” apparently designed and ordered after (and, perhaps, somewhat ironically, as a result of) receiving the November 2012 cease-and-desist letter.  Sportswear has also added a disclaimer to its “Manchester University Spartans Apparel Store” in an attempt to avoid liability: “This store is not sponsored or endorsed by Manchester University.”

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Indianapolis, Ind. — The Southern District of Indiana has dismissed two of four claims by Konecranes, Inc. of Pascagoula, Miss. against Industrial Crane Service, Inc. of Pascagoula, Miss. and Brian Scott Davis of Marion County, Ind.

Plaintiff Konecranes, Inc. (“Konecranes”) provides lifting equipment and services to various KonecranesLogo.JPGclientele including manufacturing and process industries, shipyards, ports and terminals.  To serve its customers, Konecranes enters into agreements with subcontractors to assist it in the performance of the maintenance agreements it has entered into. 

Industrial Crane Service, Inc. (“ICS”) has served as a subcontractor for Konecranes, although ICS and Konecranes also compete for customers to enter into maintenance agreements with them directly.

Brian Scott Davis (“Davis”) was employed at Konecranes as a Service Manager.  During that Industrial&CraneServicesLogo.JPGemployment, he and Konecranes entered into a noncompetition and confidentiality agreement, which contained provisions to keep certain Konecranes information confidential.  Davis and ICS both worked for Konecranes on various maintenance and service contracts with Nucor Sheet Metal Group (“Nucor”) and Steel Dynamics Incorporated (“SDI”). 

In May 2012, Davis resigned from Konecranes and began working for ICS.  Since Davis began working for ICS, Nucor has cancelled purchase orders with Konecranes and SDI did not renew an existing purchase order with Konecranes. Instead, both have contracted with ICS to perform the work.  Konecranes also alleged that Davis and ICS have been actively soliciting other customers to change their crane maintenance provider from Konecranes to ICS.

In response to the activities of Davis and ICS, Konecranes sued for injunctive relief and damages, asserting claims for: (1) breach of contract, (2) breach of fiduciary duty and/or duty of loyalty, (3) tortious interference with contractual relationships and (4) unfair competition. Davis and ICS moved to dismiss the claims for tortious interference with contractual relationships and unfair competition. 

The court granted the motion on both counts.  On the claim of tortious interference with contractual relationships, the court found that the plaintiff had “pled itself out of court” by admitting in its pleadings that an element of its claim was not present.  Under Indiana law, the elements of a claim for tortious interference with a contract are: (1) the existence of a valid and enforceable contract; (2) defendant’s knowledge of the existence of the contract; (3) defendant’s intentional inducement of breach of the contract; (4) the absence of justification; and (5) damages resulting from defendant’s wrongful inducement of the breach. 

While Konecranes did allege the element of “absence of justification” in its complaint, it also alleged that Davis and ICS had induced Nucor, SDI and others to break their contracts with Konecranes, or not renew them, so that ICS could gain their business.  The court held that this amounted to an acknowledgement that the actions of Davis and ICS were motivated at least in part by a legitimate business interest — their own desire to secure new customers.  The court held that this constituted justification under Indiana law.  Having admitted in its pleadings that it lacked an element of this claim, Konecranes was barred from pursuing it.

On the claim of unfair competition, the court cited the Indiana Uniform Trade Secret Act, Ind. Code § 24-2-3-1(b) and (c) (the “IUTSA”) which “‘abolishes…causes of action for theft or misuse of confidential, proprietary, or otherwise secret information falling short of trade secret status….”  It held that, under the facts of the case, Konecranes’ unfair competition claim was preempted by the IUTSA and not cognizable under Indiana law.

Practice Tip: As the court notes, while the claim under unfair competition failed, Konecranes may still pursue claims for misappropriation of information or ideas that are protected by contract.  This is a good reminder to those whose practice of law includes shielding sensitive information from disclosure: if you want it protected, get it in writing.

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The US Trademark Office issued the following 163 trademark registrations to persons and businesses in Indiana in April, 2013, based on applications filed by Indiana Trademark Attorneys:

 Reg. Number   Mark  Click to View
1 4324437 MPC View
2 4326145 WARBIRD DIGEST View
3 4324176 DEX 360 View
4 4324174 DEX View
5 4323979 MEDIBEACON View

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Los Angeles, Calif. — Trademark lawyers for Gravity Defyer Corporation of Pacoima, Calif. sued Under Armour, Inc. of Baltimore, Md., sixteen retailers and nine “Doe” defendants alleging infringement of the trademarked “G Defy,” Registration No. 3,749,223, which is registered with the U.S. Trademark Office.

UnderArmourLogo.JPGGravityDefyerLogo.JPGGravity Defyer has been engaged in the business of manufacturing and selling specialty shoes in the U.S. and elsewhere since 2006, primarily online and through catalogs. The patent-pending shoes and related products are sold under the mark “G DEFY®.”  Recently, Gravity Defyer became aware of Under Armour’s use of “G Defy” in the U.S. and elsewhere for similar specialty shoes.  

Under Armour, Inc. and nine unidentified “Does” were listed as defendants in the original trademark-infringement complaint.  Gravity Defyer recently amended its complaint, adding Finish Line, Inc. of Indianapolis, Ind., Foot Locker, Inc. of New York, N.Y., Nordstrom, Inc. of All Logos.JPGSeattle, Wash., Dick’s Sporting Goods, Inc. of Albany, N.Y., Champs Sports, Inc. of Tarrytown, N.Y., Sport Chalet, Inc.

of La Canada, Calif., Amazon.com, Inc. of Turnwater, Wash., Zappos IP, Inc. of Henderson, Nev., Backcountry.com, Inc. of Park City, Utah, Rogan’s Shoes, Inc. of Racine, Wis., Road Runner Sports Retail, Inc. of San Diego, Calif., MonkeySports, Inc. of Corona, Calif., Holabird Sports, LLC of Baltimore, Md., Eastbay, Inc. of Madison, Wis., and Dodd Shoe Company, Inc. of Laramie, Wyo.

Under Armour uses the mark “Micro G Defy” on shoes.  In the complaint, Gravity Defyer alleges that Under Armour’s use of the G Defy mark as part of “Micro G Defy,” particularly for shoes having similar features, is likely to cause confusion, mistake or deception.  Gravity Defyer alleges that those encountering defendants’ products may mistakenly assume, at least initially, that Under Armour products are in some way connected with Gravity Defyer.

Gravity Defyer further asserts that, as a result of the care and skill it has exercised in the conduct of its business, the high quality of its products offered under its marks, and the long-running advertising, sale and promotion of Gravity Defyer’s products bearing the marks, the marks have acquired secondary meaning.  It also contends that Under Armour infringed purposely and with the wrongful intent of trading upon Gravity Defyer’s goodwill. 

The complaint lists two counts, each against all defendants: trademark infringement under federal law and unfair competition under California law.  It asks for a preliminary and permanent injunction; for a finding that this is an exceptional case; for damages, including enhanced damages; and for costs and expenses.  Gravity Defyer has demanded a jury trial.

Practice Tip: Under Armour is no stranger to trademark infringement suits.  In 2012, it sued BodyArmor, a maker of sports drinks, alleging that BodyArmor’s name and logo infringed upon Under Armour’s trademarks.  In February 2013, it sued Nike alleging trademark infringement of Under Armour’s advertising phrase “I will.” 

 

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Indianapolis, Ind. — Trademark lawyers for American Professional Nursing Resources, LLC (“APNR”) and Doyle Silvers (“Silvers”) of La Fontaine, Ind. sued Medical Staffing Worldwide, LLC (“MSW”) of Marion, Ind. et al. for use of APNR’s trademark and trade secrets; for breachMedicalStaffingWorldwideLogo.JPG of contract and fiduciary duty; for tortious interference with contracts and for violation of § 43(a) of the Lanham Act. 

In March 2004, Silvers formed APNR, a global recruitment company that assists domestic employers in recruiting foreign medical professionals by providing domestic screening, training tools and foreign processing facilities.  APNR and Silvers recruited Larry Myers (“Myers”), Tom Reto (“Reto”), Jon Marler (“Marler”), Dan Hasslinger (“Hasslinger”) and James Greg Bowers (“Bowers”) to develop APNR into a fully operational business.  Benny Spensieri (“Spensieri”), who signed a Non-Disclosure Agreement (“NDA”), was also recruited.  Myers, Reto, Marler, Hasslinger, Bowers and Spensieri agreed to maintain the secrecy of APNR’s confidential, proprietary and trade-secret information.

Silvers provided Myers, Reto, Marler, Hasslinger, Bowers and Spensieri with confidential, proprietary and trade-secret information of APNR including its business plan, business model, financial information, and methods and techniques for global recruitment, immigration, screening and training of foreign medical professionals.

In the summer of 2012, Myers, Reto, Marler, Hasslinger, and Bowers reserved the business name “Medical Staffing Worldwide, LLC.”  Using that name, they formed a company that allegedly had the same business plan, business model and financial projections as APNR and that used identical methods and techniques for global recruitment, immigration, screening, and training of foreign medical professionals as APNR.  MSW also began using APNR’s trademark, “The Future of Medical Staffing,” which APNR had used since 2005.

APNR and Silvers filed suit alleging breach of contract, breach of fiduciary duty, misappropriation of trade secrets, tortious interference with contracts and violation of § 43(a) of the Lanham Act.  They ask for actual, consequential and punitive damages; attorneys’ fees; costs; and pre-judgment and post-judgment interest.

Practice Tip: Indiana considers non-compete agreements to be in restraint of trade and, thus, construes them narrowly.  In other states, there has also been a growing trend, fueled in no small part by states’ difficulties in paying increasing unemployment benefits, to limit via legislation the enforceability of non-compete agreements.  Among the states that have considered such limitations are Maryland, New Jersey, Minnesota, Massachusetts and Virginia. 

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Effective May 1, 2013, the civil case filing fee for the United States District Court for the Southern District of Indiana, will increase from $350 to $400, as approved by the Judicial Conference in its March 2013 session. This fee includes cases related patent, trademark, copyright or other intellectual property litigation.  The fee increase does not apply to miscellaneous case filings, for which the fee remains $46.

Indianapolis, Ind. – The Indiana Court of Appeals has affirmed the judgment of the Hamilton Circuit Court granting a preliminary injunction in favor of Classic Restaurant Services of Westfield, Ind. against former employee Christopher Snyder for tortious interference with business relationships.

Classic Restaurant Services, LLC (“Classic”) provides heating, air conditioning, refrigeration, and cooking equipment sales and service predominantly to restaurants throughout central Indiana. Christopher Snyder began working as a service technician for Classic in 2009.  Snyder did not have a non-compete agreement with Classic and was expressly permitted to do residential jobs on the side while using his company vehicle. During his more than three years of employment, Snyder serviced all of Classic’s customers.

In the summer of 2011, Snyder began organizing his own competing business and planning to take customers from Classic.  By July 2011, Snyder had succeeded in taking the business of two Subway restaurants from Classic.  He serviced these restaurants after hours on his own behalf.  Classic did not know that it had lost these customers to Snyder.

In the fall of 2011, Snyder unsuccessfully attempted to solicit Ruby Tuesday restaurants to transfer their business to him.  Although he was still employed by Classic, Snyder had prepared to compete by purchasing and outfitting a van, obtaining business cards and insurance, and printing marketing flyers. He distributed his flyers to several restaurants in central Indiana and, in February 2012, organized his new company, A Plus Air LLC.

Snyder resigned from Classic in April 2012 but retained a binder that contained contact information of all Classic’s vendors and customers. This list was marked confidential and Classic employees had been directed on numerous occasions to keep its contents confidential. Snyder continued to use the list for his new business.  He also obtained additional Classic documents from Doris Warswick, Classic’s office manager, who knew of Snyder’s intention start a competing business.

Classic sued, asking that Snyder be enjoined from “continuing to interfere with the relationships that Classic had with customers while he was employed” but agreed that Snyder should be otherwise free to compete in the local restaurant HVAC business.  The Hamilton Circuit Court found that “while he was Classic’s employee and agent, Mr. Snyder engaged repeatedly in self-dealing and other acts of disloyalty to his employer and principal, thereby breaching his fiduciary duties to Classic.”  It concluded that Classic had a reasonable likelihood of success on the merits on its claims for 1) tortious interference with Classic’s business relationships and 2) misappropriation of trade secrets and granted the injunction.

Snyder appealed.  He did not dispute that he had actively violated his fiduciary duties to Classic during the last year of his employment but argued instead that this prior misconduct should not affect his ability to compete with Classic following the termination of his employment.

In a unanimous memorandum opinion, the appellate court upheld the injunction on the grounds of a likelihood of success on Classic’s tortious interference claim.  It further held that Snyder’s claim that a preliminary injunction was improper because he no longer owed a fiduciary duty to Classic was entirely unsupported and without merit.  The appellate court did not reach Snyder’s arguments against Classic’s trade-secret claim, as Classic’s tortious interference claim was sufficient to support the trial court’s grant of a preliminary injunction.

Practice Tip: As the appellate court stated: “An employee owes his employer a fiduciary duty of loyalty. To that end, an employee who plans to leave his current job and go into competition with his current employer must walk a fine line. Prior to his termination, an employee must refrain from actively and directly competing with his employer for customers and employees and must continue to exert his best efforts on behalf of his employer….”  Further, although the employee’s fiduciary relationship with his employer ends upon the termination of his employment, he is not then “free to enjoy the fruits of his breach of fiduciary duties.”
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