Sunday, March 19, 2006

The Trademark Infringement Diaries

Basketball Marketing Company, Inc. v. FX Digital Media, Inc., 2006 WL 616284 (E.D. Pa.)

Plaintiff, known as And 1, sued the promoters of a rival street basketball tour (a gentleman named Woodruff and his company, FX) and a player (Tim Gittens). And 1 makes and sells street basketball merchandise, including shoes, clothes and accessories, bearing its marks. It also sponsors the Mix Tape Tour, street basketball games featuring professional street players – in 2003, more than 150,000 people in 30 cities attended tour games.

Gittens was formerly with the Mix Tape Tour. He signed endorsement agreements requiring him to wear and use And 1 products exclusively, including any time he was wearing athletic gear or posing for pictures. He was allowed to participate in basketball games sponsored by other companies, but required to notify And 1 if any third party asked him to use the And 1 name or logos. Though his contract didn’t let him allow others to use the And 1 marks, it explicitly relieved him of responsibility for third parties’ uses.

FX sponsored Streetball Legends basketball games in cities the Mix Tape Tour didn’t visit; Gittens played in 6 of the 8 games at issue. The first game was organized with the help of a “sometime marketing consultant” to And 1, whom Woodruff believed to be an And 1 employee. This fellow promoted the games and arranged for and paid the players for the first few games. The second game was marketed as “featuring players from the And 1 Mix Tape,” and an And 1 employee attended. He told Woodruff not to call the games “And 1 Games” but otherwise complimented him. After the third game, FX and Woodruff stopped working with the marketing consultant, and Gittens arranged for and paid the players.

FX’s marketing materials stated that Streetball Legends “featured players from the And 1 Mix Tapes.” Other claims included: “You have seen the mixtapes, banging commercials and videos and now come see them live in person. The Hottest Street Basketball Team Ever!!!” (Note: This is an example of the dangers of nominative fair use. The first statement is true, but the second sounds awfully like a claim that this is the And 1 team.) Gittens provided FX with images of himself for T-shirts and flyers, but didn’t tell And 1 about the flyers or any of FX’s use of the And 1 trademarks in promoting the Streetball Legends games.

In addition, Gittens designed an autograph card featuring a picture of himself wearing And 1 apparel in order to promote himself and his businesses. And 1 knew about the cards, but Gitten handed them out at both Streetball Legends and official And 1 events.

And 1 alleged trademark infringement and false advertising, along with associated common law torts, as well as contributory infringement and breach of contract against Gittens.

Since the other defendants defaulted, the court only evaluated the claims against Gittens. It found no likelihood of confusion, largely because Gittens was entitled to use the And 1 logo on his autograph card, uniform, and photo. The court refused to attribute the use of the marks on the ad flyers to Gittens, and thus held they didn’t contribute to likely confusion based on Gittens’ use. (I’m not sure that’s entirely correct, since context matters, but given Gittens’ contractual entitlement – nay, mandate – to use the marks, the overall point seems right.) There was also no evidence of actual confusion for the two years during which Gittens worked with Streetball Legends.

The court refused to hold Gittens jointly and severally liable for FX and Woodruff’s infringement, because he didn’t provide substantial assistance to the infringement. Likewise, there was no contributory infringement since Gitten didn’t promote or facilitate the infringement and there was no evidence he even knew the use was infringing.

The court dismissed And 1’s false advertising claim separately: there was no evidence that any message Gittens conveyed was false. Even if the ad flyers made false claims, Gittens’ participation in handing out flyers isn’t the same thing as “presenting the message contained in them.” (Is the court treating Gittens like a newspaper or other disseminator?) His autograph card wasn’t false, since the picture of him in his And 1 uniform was contractually required, and there was no evidence of any deception.

As might be expected, And 1’s state-law claims also failed: it wasn’t a purchaser protected by the unfair competition statute; there wasn’t evidence of any contracts with third parties, so there could be no interference with existing and prospective contractual relations; and there was no unjust enrichment because And 1 didn’t confer relevant benefits on Gittens. And 1’s contract claims failed because the contract put Gittens under no obligation to inform And 1 of any third-party uses of And 1 marks; he was only obliged to inform And 1 if he was asked for permission to use the marks, which he wasn’t.

And 1 even failed to recover profits from Woodruff, based on his credible testimony that his profits were minimal. Given that Woodruff thought that And 1 knew of the use of the name, and thought he was working with an And 1 employee, the court also refused to award attorneys’ fees to And 1.

In fact, Gittens was entitled to fees from And 1, based on the court’s finding that the claims against him were brought in retaliation for a complaint he filed against it for breach of contract. And 1 knew that Gittens was playing for FX at the time, and it didn’t sue any other player in the games. It sued a month after Gittens brought his breach of contract claim. Thus Gittens, as a prevailing party, was entitled to a fee award.

No comments: