IP Law Chat : IP Law Chat -- Hendricks & Lewis, intellectual property, trademark, copyright and technology attorneys

Plaintiff Zino Davidoff SA ("Davidoff"), the creator of high-end luxury goods including  the COOL WATER branded cologne and fragrance, sued CVS Corporation, a retail drugstore chain, for federal trademark infringement, unfair competition, and trademark dilution, among other things.  Originally, Davidoff sought relief only in connection with CVS's alleged marketing of counterfeit Davidoff products.

However, during a court-authorized inspection of undistributed Davidoff products in CVS's inventory, Davidoff discovered 16,600 items on which the UPCs on the packages and labels had been removed.  The UPCs had been removed by, among other things, cutting the portion of the box or label on which the UPC appeared, using chemicals to wipe the UPC away and grinding the bottom of the bottles to remove the UPC.

Davidoff then amended its complaint to claim relief based upon CVS's sale of Davidoff products on which the UPC had been removed and moved for a preliminary injunction forbidding the sale of such products.  The District Court granted Davidoff's motion for a preliminary injunction, concluding that Davidoff was likely to succeed on the merits of its trademark infringement claims on the theory that CVS's sale of Davidoff branded products with the UPCs removed constituted trademark infringement.

The Second Circuit affirmed the District Court's decision, finding that the injunction was justified on the ground that removal of the UPCs from Davidoff's trademarked products unlawfully interfered with Davidoff's trademark rights, specifically, its ability to control the quality of its products.  The Second Circuit relied on an earlier case holding that

a trademark holder is entitled to an injunction against one who would subvert its quality control measures upon a showing that (i) the asserted quality control procedures are established, legitimate, substantial, and nonpretextual, (ii) it abides by these procedures, and (iii) sales of products that fail to conform to these procedures will diminsh the value of the mark.

The Second Circuit agreed with the District Court that Davidoff had satisfied each of these requirements.  Davidoff demonstrated adequately that the affixation of the UPC was a legitimate procedure to detect counterfeits, identify defective products and faciliate effective recalls.  In addition, the Second Circuit concluded that CVS was selling under Davidoff's mark goods that were materially different from Davidoff's genuine trademarked products.  Specifically, the Court concluded that the damage to the packaging caused by the removal of the UPCs--the cutting of the packaging, the application of chemicals to wipe away the UPC, and the grinding of the bottles to remove the UPC--made the goods sold by CVS materially different from Davidoff's genuine trademarked products.

The Second Circuit thus affirmed the District Court's grant of a preliminary injunction to Davidoff.

The Court's opinion in Zino Davidoff SA v. CVS Corp., No. 07-2872, can be found here (PDF, 16 pgs).

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Keeping with the theme of the previous post, here are brief descriptions of some of the recent trademark claims filed in the Western District of Washington:

adidas America, Inc., et al. v. The Topline Corp., No. CV09-00646 RSM, filed May 11, 2009

adidas alleges that The Topline Corporation imported, sold or offered for sale a variety of footwear that infringed adidas' registered trademarks, namely, its "three-stripe mark" and its corporate logo, as well as adidas' trade dress which adidas refers to as the "SUPERSTAR", "MEI" and "PRAJNA" trade dress.  In total, adidas asserts nine claims against The Topline Corporation including federal trademark infringement, unfair competition, and dilution, common law trademark infringement and unfair competition, and state trademark and trade dress dilution and unfair and deceptive trade practices pursuant to the statutes of a number of states.

A copy of the complaint, including photos of the respective products, here (PDF, 32 pgs).

 Soaring Helmet Corp. v. Bill Me, Inc., et al., No. CV09-00789 JLR, filed June 9, 2009

Soaring Helmet Corp., a Washington corporation and owner of the registered trademark "VEGA" for motorcycle helmets, alleges that Defendant Google sold Soaring Helmet's "VEGA" trademark to Defendant Leatherup.com as a keyword such that a sponsored link for Leatherup.com appears alongside the search results for "VEGA helmets".  Specifically, Soaring Helmet alleges that when the query "VEGA helmets" is searched via Google's search engine, an advertisement appears under the sponsored listings stating that Leatherup.com offers "50% off Vega Helmets" when it does not in fact sell any of Soaring Helmet's VEGA products.  Soaring Helmet alleges claims for federal trademark infringement and unfair competition, state unfair competition and tortious interference with prospective economic advantage.

A copy of the complaint, including exhibits, here (PDF, 25 pgs).

Kona USA, Inc. v. DBM Nutrition, et al., No. CV09-00822 MJP, filed June 15, 2009

Kona, the owner of the registered "KONA" mark for bicycles, alleges that DBM Nutrition infringed on Kona's rights in the "KONA" mark by marketing and selling goods and services, including cycling clothing products and cycling related goods and services, under the confusingly similar "KONA ENDURANCE" mark.  Kona alleges claims for federal trademark infringement and false designation of origin and state unfair competition.

A copy of the complaint, including exhibits, here (PDF, 49 pgs).

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For a change of pace, here are brief summaries of some of the recent copyright infringement complaints filed in the Western District of Washington:

Corbis Corp. v. Infinity Commercial Capital, LLC, No. CV09-00657 JPD, filed May 12, 2009

Corbis alleges that Infinity Commercial Capital ("ICC"), a business providing hotel and commercial mortgage lending services, downloaded, without authorization, at least 16 images from Corbis' website and uploaded and displayed those images on ICC's website.  Corbis alleges claims for direct and vicarious copyright infringement, as well as breach of contract.  In connection with the latter claim, Corbis alleges that, pursuant to the Corbis Content License Agreement, by using the Corbis images without authorization, ICC agreed to pay Corbis 10 times the licensing rate in addition to other fees, damages and penalties claimed by Corbis.

Complaint here (PDF, 22 pgs).

Global Research & Rescue v. Six Flags, Inc., No. CV09-00749 MJP, filed May 29, 2009

Global Research and Rescue ("GRR"), a non-profit "engaged in the activity of benefiting whales and other marine mammals by promoting public awareness of the existence of these animals," alleges that it is the owner of the copyrights in three films depicting killer whales in their natural habitat.  In 2004, GRR provide complete copies of these films to Six Flags Discovery Kingdom for purposes of demonstrating GRR's capabilities.  GRR alleges that Six Flags then used the films through at least the 2006 and 2007 tourist seasons at the Six Flags Discovery Kingdom Park in Vallejo, California without GRR's permission or authorization.  GRR alleges claims for copyright infringement and unjust enrichment.

Complaint here (PDF, 5 pgs).

Blue Nile, Inc. v. Gem Stone King, Inc., No. C09-0828 RSL, filed June 16, 2009

Blue Nile, the market leader in the online diamond and fine jewelry retail industry, alleges that Gem Stone King willfully and without authorization copied Blue Nile's distinctive diamond photographs and displayed those photographs on Gem Stone King's website.  Blue Nile alleges a single claim of copyright infringement against Gem Stone King.

Complaint here (PDF, 7 pgs).

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Although it is not hot off the presses, the Third Circuit's decision in William A. Graham Co. v. Haughey is worth a brief mention.

Most notably, the Third Circuit was faced with a question of first impression, namely, whether the discovery rule or the injury rule governed the accrual of claims under the Copyright Act.  Under the discovery rule, a claim accrues when the plaintiff discovers, or with due diligence should have discovered, the injury forming the basis of the claim.  Conversely, under the injury rule, a claim accrues at the time of the injury.

Ultimately, the Third Circuit joined the ranks of eight of its sister courts of appeals--the First, Eighth, Sixth, Ninth, Seventh, Fourth, Fifth and Second Circuits--and concluded that the discovery rule governed the accrual of civil claims under the Copyright Act.

The Third Circuit's opinion can be found here.

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