June 23, 2008

Fashion Designer Cannot Use His Own Name On His New Fashion Line – Court Issues Trademark Injunction Against Joseph Abboud

In a case that illustrates the dangers of using your own name as a trademark, a court has issued a permanent injunction preventing fashion designer Joseph Abboud from using his own name to promote a new line of clothing – and all future goods and services. The unfortunate aspect of this ruling that hinders Abboud’s planned return to the fashion industry, is that a more careful drafting of the agreements that were part of the sale of his company in 2000 could have prevented his unintended loss of rights.

fashion-designer-trademark-joseph-abboud.jpgTrademark attorneys for the popular designer apparently believed that when he agreed to sell his company and trademarks – which included the USPTO registered Joseph Abboud trademark – it would not prevent him from later using his own name to promote his affiliation with a new clothing line. The Court disagreed and issued a permanent injunction preventing the designer from using his own name to promote his new “jaz” fashion line. CLICK HERE for the Court's decision.

Use Caution When Assigning Trademark Rights

In 2000, Abboud sold his company, JA Apparel Corp., for $65.5 million. As a condition of the sale, he then worked at the company under a personal services agreement until it expired in 2005, at which point he left the company for good over “creative differences.”

The personal services agreement also contained a non-competition provision, whereby Abboud agreed not to compete with the company for a period of two years after the termination of the agreement. It was after this period had lapsed that Abboud announced the launch of his new “jaz” clothing line, which does not include the Joseph Abboud name.

Abboud testified at the trial that he had only assigned the rights to use “Joseph Abboud” as a trademark and had reserved the right to use his own name to inform the public that he is the designer of the new “jaz” clothing line. The Court did not agree:

[I]f Abboud only intended to convey trademarks, then the Agreement could have and should have said: “Abboud agrees to sell…all of [his] right, title and interest in and to the trademarks identified on Schedule 1.1(a)(A).” But it said more than that, and in order to give the word “names” due meaning and effect, the Court must interpret the Agreement in a manner that provides JA Apparel with that which it expressly purchased – all of Abboud’s rights to use his name for commercial purposes . . . [T]he Court concludes that Abboud’s proposed use, in connection with his new “jaz” clothing line, of the phrases “a new composition by designer Joseph Abboud” and “by the award-winning designer Joseph Abboud,” would constitute a breach of [ ] the Agreement – irrespective of whether these phrases constitute trademark use.

A Permanent Setback

Aside from the breach of contract issue, the court also concluded that “Abboud’s proposed use of his name in connection with the “jaz” line would also constitute trademark infringement” because there would be a likelihood of confusion among consumers, dismissing Abboud’s fair use defense in the process.

Accordingly, the Court concludes that Plaintiff JA Apparel is entitled to a permanent injunction prohibiting Abboud from using his name – personally, through Houndstooth, or through any other entity with which he is affiliated –to market, advertise, promote, sell, offer to sell, or otherwise distribute any goods or services, including, but not limited to, his new “jaz” clothing line, to the consuming public.

The Full Effect of Non-Compete Agreements

It was also revealed that during the non-competition period Abboud and his attorney conducted numerous meetings with third parties in the garment industry and negotiated verbal agreements for Abboud’s return to the fashion industry.

Although the negotiated agreements were not formally executed until shortly after the expiration of the non-compete period, the Court found that Abboud violated the non-compete provision by engaging in “impermissible association with individuals or entities that were proposing to engage in competition with JA Apparel during the Restricted Period.”

The Court, however, refused to grant plaintiff monetary relief, because the new venture lost money, or order return of shipped garments that were already displayed in third-party stores. But the order makes clear that no further sales or promotions may be made using “Joseph Abboud” in any way on the new “jaz” clothing line. The case is titled: JA Apparel Corp. v. Joseph Abboud, et al., No. 07-Civ. 7787 (THK), U.S. District Court for the Southern District of New York.

PRACTICE NOTE: This case illustrates the dangers of using your own name as a trademark or service mark in your business. It also emphasizes the need for careful drafting of assignments and licensing agreements to prevent the unintended loss of rights – e.g. use of your own name in a subsequent business. Also, trademark rights could unintendedly be lost through bankruptcy proceedings because trademarks are an asset of the bankruptcy estate.

Another reason to avoid using names as trademarks or business names is that they are descriptive and not protectable without establishing secondary meaning. Michael Atkins' post discusses how The Christensen Law Firm lost its domain names because they were not protectable trademarks.

April 18, 2008

Los Angeles Franchising Attorneys Sue Orange County Sizzler Franchisee For Trademark Infringement And Breach Of Franchise/License Agreement

Los Angeles, CA – Franchising law attorneys sue an Orange County Sizzler franchisee, in Los Angeles Federal District Court, for allegedly breaching the franchising agreement and for trademark infringement. Franchisor, Sizzler USA Franchise, Inc. has registered numerous trademarks with the USPTO which it licenses to franchisees under a franchising agreement. Under the franchising agreement, the franchisee is to pay the franchisor a royalty and advertising fees. The franchisee is also required to comply with quality standards in food and cleanliness. The complaint alleges that the Defendants have failed to pay any royalties or advertising fees since they acquired the franchised location in May of 2006. Also, the complaint continues, the Defendants were sent a notice of default stating that the location’s “level of cleanliness and quality in service and products failed to meet minimums set by Sizzler.”

The first cause of action is for trademark infringement of Sizzler’s USPTO registered trademarks because under the franchise/license agreement, the franchisee was granted a limited license to use the trademarks so long as the franchisee complied with the agreement: “The Defendant’s use of the [trademarks] post-termination constitutes service mark and trademark infringement within the meaning of 15 U.S.C. § 1114." The second cause of action is for breach of the license/franchise agreement for Defendants’ alleged refusal to pay royalties and advertising fees and for refusing to cease use of the trademarks post termination. The third cause of action is for breach of written guaranty against the individual that is the shareholder of the corporation. The case is titled Sizzler USA Franchise, Inc., v. Advanced Home Care Medical Supply, Inc., CV08-01856 PSG (Central District of California).

April 17, 2008

Los Angeles Garment Industry Copyright Attorneys File Copyright Infringement Lawsuit To Protect Copyrighted Fabric/Textile Designs From Copying

Los Angeles, CA – Garment industry copyright attorneys sought protection for United Fabrics’ copyrighted fabric/textile designs by filing a copyright infringement lawsuit in Los Angeles Federal District Court to prevent the copying of its copyrighted fabric/textile designs by others. Plaintiff alleges that two of its copyrighted designs are being copied. The first design was purchased from an Italian art studio and the multi-element floral design was converted for printing on textiles. After plaintiff applied for and received copyright registration for this first design with the U.S. Copyright Office, it provided samples of fabric to defendant Wraps. The complaint alleges that Wraps even ordered and received one shipment of fabric bearing the first design. But instead of purchasing additional fabric from United Fabrics, Wraps is alleged to have copied the fabric design through third parties and sold garments bearing the copyrighted design to numerous retailers.

Plaintiff also purchased source artwork from an Italian art studio and created a second design for printing on textiles. Once again plaintiff received a copyright registration from the U.S. Copyright Office and provided samples of the fabric to defendant Swat. Defendant Swat allegedly did not order any fabric from Plaintiff, but instead copied the design through third parties and manufactured and sold garments to various retailers. The complaint alleges a cause of action for copyright infringement for each of the copyrighted fabric designs. It also alleges a cause of action for vicarious and/or contributory copyright infringement. Finally, a breach of contract claim is alleged against Wraps and Swat because they agreed that they were receiving Plaintiffs copyrighted designs “with the express understanding and agreement that they were proprietary to Plaintiff, and if [either] wished to create product bearing said designs, it would have to do so through Plaintiff.” The case is titled United Fabrics International, Inc. v. J.C. Penney Corp., Inc. et al., CV08-01936 MMM (Central District Of California).

April 9, 2008

Copyright Attorneys Sue Redondo Beach Restaurant For Public Performances Of Copyrighted Music Not Licensed Through ASCAP, BMI, Or SESAC

A Redondo Beach, CA restaurant was sued for copyright infringement by copyright attorneys for several recording companies for publicly playing copyrighted music at the restaurant without a license from ASCAP, BMI, or SESAC. The complaint lists five songs which are copyrighted by their individual authors with the U.S. Copyright Office, and the rights are owned by the record companies. The complaint alleges that on one night, presumably when their investigator was at Paulie’s Upper Deck Sports Grill, the five copyrighted musical compositions were publicly performed “for the entertainment and amusement of the patrons attending said premises, and defendants threaten to continue such infringing performances.”

The complaint alleges that plaintiff warned the defendant that a copyright license was needed in order to publicly perform the copyrighted music at the restaurant. Because the defendant allegedly refused to pay for the license, the defendant’s copyright infringement was intentional and willful. Plaintiffs request statutory damages under 17 U.S.C. § 504(c)(1), of not more than $ 30,000.00 and not less than $ 750.00 for each copyrighted song. Plaintiffs also request that the court order the defendants to pay the costs of the lawsuit and reasonable attorneys’ fees pursuant to 17 U.S.C. § 505. The case is titled: Far Out Music v. Fratelli Brothers, Inc., CV08-01975 GPS (C.D. California).

PRACTICE NOTE: 17 U.S.C. 504(c)(2) allows the statutory damages to be raised to $150,000.00 per infringement if it is deemed to be knowingly conducted. Also, if a restaurant or public establishment unreasonably believed that it was exempt from licensing requirements under 17 U.S.C. § 110(5), the copyright plaintiff, in addition to other damages under section 504, will be entitled to two times the license fee which it should have paid for the preceding period of up to 3 years. Because of the varying affiliations between record companies and the licensing society, a license from each of the following licensing societies must be obtained to cover the music owned by the various recording companies:
ASCAP: 1-800-505-4052
BMI: 1-800-925-8451
SESAC: 1-800-826-9996

April 1, 2008

Los Angeles Trademark Attorneys File Trademark Infringement And Lanham Act 43(a) Lawsuit Over Infringement Of Dell’s USPTO Registered Trademarks Against Unauthorized Resellers

Los Angeles, CA – Trademark attorneys file trademark infringement and Lanham Act 43(a) unfair competition lawsuit, on behalf of Dell, in Los Angeles Federal District Court, alleging infringement of Dell’s USPTO registered trademarks against resellers. Dell has been selling personal computers since 1984 and has registered its Dell trademark and variations thereof in more than 180 countries worldwide, and has more than thirty United States federal trademark registrations containing the term Dell. Since its inception, Dell has primarily used a direct sales model to sell directly to consumers rather than through retail outlets, first through telephone and also the Internet. Dell, however, permits a limited number of authorized resellers, which have to abide by Dell’s reseller terms and conditions.

Dell-trademark-logo.bmpDell alleges that the four individual defendants enrolled in Dell’s reseller program and became bound by the resale terms, where “defendants agreed (1) to refrain from unauthorized use of Dell’s trademarks; (2) not to resell Dell product without first adding value through the addition of hardware, software, or services; (3) not to resell Dell product on auction-type websites [such as eBay]; and (4) to resell their Dell product to small and medium businesses.” The complaint alleges that the defendants have used aliases to purchase Dell products and sold them through unauthorized trade channels and on eBay in violation of the reseller agreement and have made misrepresentations and misused Dell’s trademarks. For example, the defendants have allegedly sold products on eBay as “new” when they were, in fact, refurbished. The complaint asserts that “Defendants have, through their scheme of deliberate misrepresentation and concealment, purchased millions of dollars worth of Dell products from Dell and resold such product in breach of their contractual obligations to Dell and in violation of Dell’s trademark rights.” The complaint alleges the following causes of action: (1) Trademark counterfeiting and infringement 15 U.S.C. §§ 1114; (2) Unfair competition and false advertising under section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); (3) Trademark dilution under the Lanham Act section 43, 15 U.S.C. § 1125(c); (4) Unfair competition and false advertising under Cal. Bus. & Prof. Code §§ 17200 and 17500; (5) Unjust enrichment; (6) Breach of contract; (7) Fraud; and, (8) Civil conspiracy. The case is titled Dell, Inc. v. Kizun, et al., CV08-01821 JSL (C.D. California)

March 31, 2008

Costa Mesa Trademark Attorneys Filed Trademark And Breach Of Sponsorship Agreement On Behalf Of NASCAR Driver Robby Gordon’s Company

Los Angeles, CA – Costa Mesa trademark attorneys filed breach of sponsorship agreement on behalf of NASCAR driver’s team Robby Gordon Motorsports and seek declaratory relief regarding the defendant’s trademark rights. Because of Robby Gordon’s successful NASCAR racing career, companies are willing to pay significant amounts of money for sponsorship and licensing opportunities. The complaint alleges that in 2007, Gordon and Camping World entered into a sponsorship agreement by which Camping World sponsored Robby Gordon Motorsports in connection with several NASCAR races.

robby-gordon-trademark.jpgFor the 2008 racing season, Camping World and Robby Gordon Motorsports entered into another sponsorship agreement where “Camping World agreed to provide two motor coaches and pay [Gordon] $200,000 per race for primary car sponsorship for four NASCAR Sprint Cup races.” The complaint alleges that Camping world has partially performed its obligations by providing one of the two motor coaches, but is now refusing to provide the second motor coach. The complaint continues that Camping World sought to renege the sponsorship agreement by demanding that Robby Gordon “ensure that Camping World’s colors and logos do not appear on [Gordon’s] car...and Gordon does not have [Camping World’s] permission to bear [Camping World’s] trademarks.” Also, Camping World has allegedly failed to pay at least $250,000 due under the sponsorship agreement. Robby Gordon Motorsports requests monetary damages for the alleged breach of contract and the Court’s determination of the rights of the parties with respect to the trademarks. The case is titled Team Gordon, Inc. v. Camping World, Inc., CV08-01731 MMM (C.D. California).

March 14, 2008

Santa Monica Copyright Attorney Files Lawsuit Against Anna Kournikova For Infringing Music Copyrights In Los Angeles District Court

Los Angeles, CA – Santa Monica copyright attorney files a copyright infringement, contributory copyright infringement, and vicarious copyright infringement lawsuit on behalf of musician Christopher Swann against Anna Kournikova for using his music on her entertainment DVD titled “A Date With Anna.” Swann alleges that in 1999 he wrote, produced and recorded a full-length music album and in February of 2003 the United States Copyright Office issued a copyright registration for the compositions. In April of 2003, Swann learned that score/soundtrack music was need for the Kournikova project and Swann submitted his copyrighted music for synchronization with the “A Date With Ana” video. Swann was provided a licensing agreement by a production company involved in the project which Swann rejected after meeting with his copyright attorney. The copyright licensing agreement was not executed and Swann believed that his music was not going to be used on the Kournikova project.

anna-copyright-lawsuit-music.jpgIn February of 2006, Swann purchased a DVD of “A Date With Anna” and discovered that twenty two minutes of his copyrighted music was used in Kournikova’s DVD. Swann alleges that because he expressly rejected the licensing agreement offer, no agreement was ever reached and the use of the copyrighted material without license, or other consideration constitutes copyright infringement. Swann alleges that “as early as April 2003, defendants, and each of them, without Plaintiff’s permission, license, and without remuneration to Plaintiff, adapted, used, reproduced, marketed, distributed and sold Plaintiff’s copyrighted material in the defendants’ video production, a digital video disc (DVD) entitled, ‘A DATE WITH ANNA.’” Swann continues that the infringement by the defendants was intentional and knowing and seeks preliminary and permanent injunctions against the distribution of the video. The case is titled Christopher Jerry Swann v. Anna Kournikova et al., CV08-01477 R (C.D. California).

PRACTICE NOTE: In order to recover statutory damages, attorneys’ fees, and costs, the copyright in the work must have been registered before the commencement of the infringement. 17 U.S.C. § 412.

March 8, 2008

Industry Newsletter, Proprietary Analysis, And Information Provider Sues Subscriber For Copyright Infringement

Los Angeles, CA – Attorney files copyright infringement lawsuit on behalf of Forestweb – an information and industry intelligence provider – for infringement of its copyrights in its published newsletter. Forestweb uses proprietary software and technology to collect and analyze data regarding the wood, pulp, paper and forest product industries worldwide. Subscribers are provided access to its newsletter pursuant to a written license agreement, where the licensing fee is based upon the number of readers employed by the business. Forestweb routinely registers its copyright with the U.S. Copyright Office.

Defendant Stora Enso Timber entered into a license agreement and identified ten users with a corresponding annual license fee. Forestweb alleges that Stora breached the license agreement by distributing electronic copies of the copyrighted content to a larger number of its employees without paying the increased licensing fee. The unauthorized distribution of the copyrighted newsletters is the basis for the copyright infringement claim under 17 U.S.C. §§ 106 and 501. Forestweb also asserts a cause of action for the breach of the licensing agreement. Forestweb asks for attorneys’ fees and costs, as provided for in the licensing agreement, and also under 17 U.S.C. § 505. The case is titled: Forestweb, Inc. v. Stora Enso Timber, CV08-01306 SVW (C.D. California).

March 7, 2008

Restaurant Sued For Copyright Infringement By Music Recording Companies For Playing Music Without A Copyright License

Los Angeles, CA – A copyright infringement lawsuit was filed by attorneys on behalf of several recording companies against a restaurant for having a band perform live music without obtaining a copyright license. The complaint lists five songs which are copyrighted by their individual authors with the U.S. Copyright Office, and the rights are owned by the record companies. The complaint alleges that on one night, presumably when their investigator was at the restaurant, the five copyrighted musical compositions were publicly performed “for the entertainment and amusement of the patrons attending said premises, and defendants threaten to continue such infringing performances.”

The complaint alleges that the defendants’ copyright infringement was intentional and willful because, despite numerous letters and contacts about the required copyright licenses, “defendants have not sought or obtained a license agreement from plaintiffs or the American Society of Composers, Authors and Publishers (ASCAP).” Plaintiffs request statutory damages under 17 U.S.C. § 504(c)(1), of not more than $ 30,000.00 and not less than $ 750.00 for each copyrighted song. Plaintiffs also request that the court order the defendants to pay the costs of the lawsuit and reasonable attorneys’ fees pursuant to 17 U.S.C. § 505. The case is titled: Warner Bros. Inc., v. Gagner Corporation, SACV08-00215 JVS (C.D. California).

PRACTICE NOTE: 17 U.S.C. 504(c)(2) allows the statutory damages to be raised to $150,000.00 per infringement if it is deemed to be intentional. Also, if a restaurant or public establishment unreasonably believed that it was exempt from licensing requirements under 17 U.S.C. § 110(5), the copyright plaintiff, in addition to other damages under section 504, will be entitled to two times the license fee which it should have paid for the preceding period of up to 3 years. In some cases, business establishments that play hold music on their telephone system need to obtain copyright licenses. To obtain a music licensing agreement, and to cover all your bases, you should obtain a license from each of the following licensing societies:
ASCAP: 1-800-505-4052
BMI: 1-800-925-8451
SESAC: 1-800-826-9996

March 6, 2008

Fox's Copyright Attorneys File Copyright Infringement Lawsuit Against Warner Bros In Los Angeles Over The Watchmen Movie

Los Angeles, CA – Copyright infringement and breach of contract lawsuit was filed by Fox against Warner Bros over “The Watchmen” motion picture that is currently under production. Fox alleges that it has “exclusive copyright and contract rights in the motion picture property entitled ‘The Watchmen,’ including Fox’s exclusive rights to produce and develop the picture and to distribute the work throughout the world.” Fox acquired all motion picture rights to The Watchmen, between 1986 to 1990, through a series of contracts with the author of the comic book or graphic novel, and subsequent screenplays by authors Charles McKeown and Sam Hamm. Certificates of Registration for the Copyrighted work were received from the U.S. Copyright Office. The case is titled Twentieth Century Fox Film Corp. v. Warner Bros. Entertainment, Inc., CV08-889DDP (C.D. California).

watchmen-pic.jpgIn 1991, Fox entered into an agreement with Largo International, whereby Fox quitclaimed certain of its rights in The Watchmen, but “expressly preserved, reserved and/or granted to Fox various rights, including exclusive rights to distribute the first motion picture based on The Watchmen.” Producer Lawrence Gordon was a joint venturer in Largo, and when he withdrew in 1993, Largo assigned, transferred and conveyed to Golar all of its rights in The Watchmen. In 1994, Fox and Gordon entered another agreement which required Fox to be paid a buy-out amount if The Watchmen movie was produced, in addition for profit participation of 2.5 percent of 100 percent of net profits on each motion picture, remake or sequel.

Fox’s lawsuit alleges that neither Gordon nor Warner Bros has paid Fox the buy-out amount, nor advised Fox of additional terms required under the contract. Fox also alleges that it had a separate agreement with Warner Bros regarding The Watchmen motion picture, which is also being breached, and that Warner Bros is fully aware that it does not have clear title to the work. Warner Bros is denying that Fox has any rights in The Watchmen project and refused to cease development of the motion picture. The complaint sets for the following five causes of action: (a) Copyright Infringement, 17 U.S.C. §§ 101 et seq., (b) tortious interference with contract, (c) breach of contract, (d) accounting, and (e) declaratory relief.