Traverse Internet Law Federal Court Report: October 2008 Trademark Infringement Lawsuits

Traverse Internet Law Disclaimer

The facts are unproven allegations of the Plaintiff and all commentary is based upon the allegations, the truthfulness and accuracy of which are likely in dispute.

OMAHA STEAKS INTERNATIONAL, INC. v. RAEMICA, INC., ET AL.
CENTRAL DISTRICT OF CALIFORNIA (LOS ANGELES)
2:08-CV-06975
FILED: 10/22/2008

This issue of the use of a business or product name by a competitor on its website is taking on a life of its own. While this issue used to be debated, and some will still argue as to whether simply using a competitor's name can be a commercial use and therefore trademark infringement, it is apparent that many dozens of lawsuits have been filed in recent months all across the country in federal courts asserting this use as a trademark infringement. Anytime your business uses a competitor's business name, service name, or any product name it is essential that you have that use evaluated in advance. The doctrines of fair use and comparative advertising can provide the legal justification for using a competitor's name but these are very complex issues.

Plaintiff Omaha Steaks is a Nebraska Corporation and is a well known purveyor of quality meats. Defendant is a California corporation that engages in the sale of beef, pork, and poultry. Plaintiff owns a trademark for "triple-trimmed" that identifies a lean filet mignon steak trimmed of virtually all exterior fat. The Defendant is alleged to be using the term "triple-trimmed" in the content on its website and using it as a meta-element or keyword in its html on its website. The result is that when Internet search engines are used by consumers seeking the Plaintiff's product, the Defendant's website is presented as a result.

Omaha Steaks claims trademark infringement, "passing off", trademark dilution, unfair competition, and unjust enrichment. The lawsuit also demands an accounting, the establishment of a constructive trust of monies generated through this alleged misconduct, the entry of permanent injunction, award of compensatory damages, punitive damages, attorneys' fees, costs, interest, and the entry of permanent injunction from the use of the term "triple-trimmed" in the metatags or keywords or otherwise on its website. Traverse Internet Law Cross-Reference Number 1236.

PETMED EXPRESS, INC. v. PETCARERX, INC.
SOUTHERN DISTRICT OF FLORIDA (FT. LAUDERDALE)
0:08-CV-61694
FILED: 10/21/2008

Another metatag trademark infringement case but with a slight twist. This lawsuit alleges the use of the trademark in the text of pay-per-click ads. This is not a gray area at all. You can’t do that. With the money at stake, an accommodating resolution to this matter is not likely to occur.

Plaintiff PetMed is in the business of offering for sale, selling and distributing prescription and non-prescription pet medications, nutritional supplements, and pet accessories through its website. The Defendant is in the business of offering for sale, selling and distributing prescription and non-prescription pet medications, nutritional supplements, and pet accessories also. The Plaintiff helps consumer identify its PetMed’s trademarks by purchasing targeted keywords and achieving prominent organic placement on the top search engines. From 2003 through the end of 2007, PetMed sold approximately $750 million worth of merchandise. Defendant is alleged to have used the word "Petmeds" in the text of advertisements on presumably pay-per-click in the major search engines, and in the metatags of its website to increase its organic results when consumers are searching for the Plaintiff's name.

Plaintiff has sued for federal trademark infringement, federal unfair competition, and false designation of origin. The Plaintiff requests the enforcement of the preexisting permanent injunction, additional injunctive relief, an order awarding the Defendant's profits to the Plaintiff, other compensatory damages, treble damages, punitive damages, attorneys' fees, its cost, and an order that the Defendant be held in contempt of court for violating the previous injunction relating to the same subject matter. Traverse Internet Law Cross-Reference Number 1237.


HALF PRICE BOOKS, RECORDS, MAGAZINES, INC. v. HALF PRICE BOOKS, INC.
NORTHERN DISTRICT OF TEXAS (DALLAS)
3:08-CV-01860
FILED: 10/17/2008

Trademarks are often all about geographic location. Of course, on the web, a local store's website most often competes nationally, at a minimum. The Plaintiff may be the first to use the mark in interstate commerce and may in fact have a valid federal trademark, and this case is a good lesson for those expanding the geographic reach of your business. Trademark attorneys can provide "trademark clearance" so that your business understands the conflicts that may exist prior to expanding your reach. This case does raise a couple of interesting issues. Has the Plaintiff been infringing on the Defendant's state trademark over the years? And how does your business, when taking orders overseas, know that it is not infringing on the trademark of a business located in a foreign country? This issue is a potential liability that exists for almost all web businesses taking orders outside the U.S., and all web businesses located in the U.S. that have not obtained "clearance" of your business, product or service name.

Plaintiff is the owner of the "Half Price Books" registered trademark which it has used continuously for more than 25 years. Defendant operated a single store in Englewood, Colorado since 1987 called "Half Price Books". Plaintiff acknowledges Defendant's rights to continue to operate its single store in Englewood, Colorado. However, Defendant launched a website advertising and taking orders on a national basis over the Internet in early 2008, and at that time Plaintiff alleges that its trademark was being infringed.

Plaintiff has sued for federal trademark infringement, common law trademark infringement and unfair competition. The Plaintiff is asking for the entry of a permanent injunction prohibiting the use of the "Half Price Books" trademark by the Defendant except at its current store location in Englewood, Colorado, and requesting an award of compensatory damages, an accounting and award of all profits, an award of attorneys' fees, and court costs, and an additional award of the three times the amount found as actual damages due to willful misconduct. Traverse Internet Law Cross-Reference Number 1238.


SOLUTIONARY, INC. v. PANASAS, INC.
DISTRICT OF NEBRASKA (OMAHA)
8:08-CV-00468
FILED: 10/16/2008

This is not the use of a trademark in the pay-per-click advertising. This is, however, the use of a product trademark of a competitor on at least 10 occasions on a website. While the impact of this technique may not be self evident, the repetitive use of a name on a website is a search engine optimization technique that will rank that website higher in search results when the competing product is sought by consumers. In other words, repeating a term is an SEO technique for optimizing organic or natural search results.

Solutionary conducts business in the computer services industry and is a managed security service provider ("MSSP"). Panasas is engaged in the computer services industry and does business throughout the U.S. and the world with customers throughout Europe and China. Plaintiff claims a registered trademark in the term "Active Guard", which is an award winning, patented IT security technology owned exclusively by Solutionary. The Defendant is using the "Active Guard" trademark on its website and a search returned at least ten (10) references to "Active Guard". An organic search for "Active Guard" reveals results for both the Plaintiff and the Defendant.

Plaintiff sues for trademark infringement, false advertising and false designation of origin, federal trademark dilution, state trademark dilution, violations of the state Deceptive Trade Practices Act, common law unfair competition, and unjust enrichment. Prayer for relief includes a request for entry of monetary judgment for triple damages, compensatory damages, costs and attorneys' fees. The Plaintiff also requests entry of an extensive injunction prohibiting the use by the Defendant of its trademark name in any manner. The injunctive relief also requests remedial actions including an order requiring the Defendant to display a disclaimer on its website for one year that it is not affiliated with the Plaintiff, send notices by mail to all current, past, and prospective clients with appropriate disclaimers, and other mandatory injunctive relief. Traverse Internet Law Cross-Reference Number 1239.


HARRY AND DAVID v. ICG AMERICA INC.
DISTRICT OF OREGON (MEDFORD)
1:08-CV-03106
FILED: 10/15/2008

If the allegations are true, the Defendant likely is either a very savvy SEO or hired an SEO company to optimize its webpage so that it would be presented when "fruit-of-the-month club" is searched by a consumer on a search engine. The term is used in the meta-keywords, meta-description, and page title, all of which are significant techniques for optimizing a webpage for organic/natural results. The repetition of the name in the content within the first 100 words of the page is a classic SEO technique for "on-page" search engine optimization. The knowledge base of online businesses in the field of SEO is evolving rapidly, and techniques that have gone undetected historically are obviously being identified and being met head-on with lawsuits.

Harry and David is a nationally famous premier direct marketing, e-commerce and retail company operating over 140 stores nationwide. Its best known and most successful offering is the "fruit-of-the-month club". The Defendant is a competitor. The Defendant uses the term "fruit-of-the-month club" on its website even though Harry and David owns a federally registered trademark to the term. In addition, "fruit-of-the-month club" is used in the title for a page located at the "fruit" extension on the site, and also used in the meta-keywords and meta-description. In addition, the name itself is set forth 4 times within the first 100 words on the page. Defendant is also alleged to be using the "fruit-of-the-month club" trademark in both the title and the text of pay-per-click advertising on Google.

The lawsuit includes a claim for trademark infringement, false designation of origin, unfair competition under Oregon state law, and trademark infringement under Oregon state law. The prayer for relief requests the entry of an extensive injunction, an order requiring an accounting of all gains, profits and advantages derived by the Defendant, statutory damages, compensatory damages, triple damages, attorneys' fees and costs. Traverse Internet Law Cross-Reference Number 1240.


FRIENDLY FAMILY PRODUCTION LLC v. LITTLE HOUSE ON THE PRAIRIE, INC.
CENTRAL DISTRICT OF CALIFORNIA (LOS ANGELES)
2:08-CV-06602
FILED: 10/7/2008

Your web business may have a federally registered trademark or you may have an unregistered trademark in your business name, and/or the name of your goods or services. In order to keep the trademark rights you must police and protect your trademark from the use by infringers. If you do not do so, you will likely lose the ability to enforce your business's rights in the trademark, which will open you up to big problems. That is why you see so many "cease and desist" and trademark infringement lawsuits filed. The law requires an owner of a trademark to be proactive in policing and protecting the mark from unlicensed commercial uses. Does the Plaintiff have a problem here?

Plaintiff is the owner of all merchandising rights to the famous name and trademark "Little House on the Prairie". Defendant is a not for profit corporation which runs a small museum on the site of the house where Laura Ingalls Wilder once lived near Independence, Kansas. In or around 2001, the Defendant launched a website and started selling a few items of merchandise using the Plaintiff's trademark. Defendants also obtained a domain name with the Plaintiff's trademark contained within it, and registered federal trademarks for various goods and services in the name.

Plaintiff has sued for federal trademark infringement, federal unfair competition and false designation of origin, common law trademark infringement, trademark dilution, state trademark dilution, state unfair competition, federal false advertising, state false advertising, and tortious interference with prospective business advantage. The prayer for relief includes a request for cancellation of the Defendant's registered trademarks, an award of compensatory damages, an award of profits and gains by the Defendant, together with a recovery of Plaintiff's attorneys' fees, costs, and disbursements. Extensive injunctive relief is also requested. Traverse Internet Law Cross-Reference Number 1241.


DISCUSS DENTAL, LLC v. ALEXANDER YAKUBOV AND ANR INTERNATIONAL, INC.
NORTHERN DISTRICT OF ILLINOIS (CHICAGO)
1:08-CV-05600
FILED: 10/1/2008

The Plaintiff probably has missed the issue relating to the use of the product's name for search engine optimization purposes. At any rate, there is a difference between legitimate "comparative advertising" which allows the use of a competitor’s name in certain situations and the ownership and control of "review sites" that appear to the consuming public to be objective and unbiased. Again, using the name of a competitor's business, product, or service, while potentially very lucrative, carries with it very significant risks.

The Plaintiff is an industry leader for teeth whitening products and services. The company was co-founded by William Dorfman, D.D.S., who is known as "America's Dentist" for his appearance on ABC's hit television show "Extreme Makeover". Defendant owns multiple websites that sell teeth whitening products which compete with the Plaintiff's products. Defendants' websites are "comparative advertising" except that they purport to be "review sites" that offer objective information reviewing Plaintiff's and Defendants' products. The Defendants' websites provide false and misleading pricing and effectiveness information for the Plaintiff's products in a manner that appears to be "independent and unbiased". The Plaintiff claims that the reviews are created and controlled by the Defendants and uniformly lists the Defendants' products as the best teeth whitening products available.

The Plaintiff has sued for federal false advertising, deceptive trade practices, and common law unfair competition. The prayer for relief requests the entry of a temporary and permanent injunction, an award of compensatory damages, and other relief as the court deems proper. Traverse Internet Law Cross-Reference Number 1242.


LIFELOCK INC. v. CUSTOM DIRECT INC.
DISTRICT OF DELAWARE (WILMINGTON)
1:08-CV-00626
FILED: 9/26/2008

This is a pure, straight forward trademark infringement lawsuit for buying a keyword that is the trademark of a competitor and presenting an ad that does not apparently contain the mark in either the title, description, or URL presented. You will find that the search engines all handle this type of problem differently, with Google presently being the least restrictive and most accommodating to those purchasing a keyword that is a trademark of a competitor. No matter what the policy of the search engine is in your country, purchasing a keyword so that your advertisement is presented when a search is conducted for a competitor's product or service is high risk.

LifeLock is the industry leader in the field of offering identity theft prevention and recovery services to consumers. The Defendant, Custom Direct, operates a check fraud prevention business, and uses "keyword advertising". Custom Direct is allegedly purchasing the "LifeLock" trademark as a keyword and presenting its ads.

The lawsuit alleges federal trademark infringement, federal unfair competition under the trademark laws, common law trademark infringement, deceptive trade practices, and common law unfair competition. LifeLock requests the entry of a preliminary and permanent injunction prohibiting its competitor from keying its ads off of the trademark of the Plaintiff, an award of compensatory damages, profits of the Defendant, exemplary damages, costs and attorneys' fees, and pre and post judgment interest. Traverse Internet Law Cross-Reference Number 1243.