Athleta sued Pitbull d/b/a Athletica.net, a competing sports
apparel maker, for infringing the Athleta trademark. The court granted a limited preliminary
injunction. Athleta’s been using its
mark since 1998, while Pitbull and its predecessor in interest used Athletica
as a service mark through athletica.net since 2003. Pitbull operates other websites selling its
InTouch and SF City Lights brands.
Athleta argued that, as its brand grew in strength, the
athletica.net website changed to resemble the look and feel of Athleta’s
website. In September 2010, Athleta
first contacted Pitbull about this, and Pitbull responded that, since it wasn’t
selling any clothing under the Athletica brand name, there was no problem. In early 2012, Pitbull contemplated expanding
Athletica for use directly on women’s apparel, and according to its account
innocently selected a design similar to Athleta’s stylized mark and pinwheel
design.
Late in 2012, Athleta discovered
this use, and some other objectionable acts: Pitbull engaged in multiple sales
using Groupon and Living Social, marketing its clothing as “Women's Yoga
Leggings by Athletica,” “Athletica InTouch Organic Yoga Leggings,” “Athletica
Set of Two Organic Yoga Leggings,” “InTouch Organic Yoga Leggings from
Athletica,” or “Athletica Women's Organic Yoga Leggings.”
Athleta provided evidence that numerous consumers contacted
Athleta thinking that it had run those promotions. It received complaints that consumers hadn’t
received order status confirmation emails from Athleta, that ordered products
hadn’t arrived, or that their purchased Living Social discount codes weren’t
accepted by Athleta's website.
In addition, Pitbull apparently copied portions of Athleta’s
website, including copying consumer reviews verbatim. Athleta’s fabric trademarks VELOCITEK and
PILAYO were listed on athletica.net; a description of yoga pants on plaintiff's
site also appeared verbatim on defendants' website; and Pitbull used a “free
shipping” image to promote its shipping policy that was identical to one used
on plaintiff's site until October 2012.
There were also other features that made the recent athletica.net
website more similar to Athleta’s than previous iterations, including the
background/menu options, a large graphic in the center of the page, and “1–2–3”
off to the left side.
Defendants’ counsel wisely represented that Pitbull had no
remaining inventory with Athletica on it; that it would discontinue use of the
spiral design; that it would remove all customer reviews from its website
pending a thorough review, remove all references to Athleta’s proprietary
fabrics, make “significant changes” to the site to avoid confusion, and remove
the disputed “free shipping” image; and that it wouldn’t use the term Athletica
in any promotions in a way that could be construed as a term for apparel. Pitbull also offered to sell the domain name
or partner with Athleta to make Athleta-brand clothes.
Despite these representations, a paralegal was able to order
and get apparel from Pitbull bearing the Athletica mark and spiral design the
next day. Defendants’ counsel (who
appear to have had a thankless task here) wrote that the order was fulfilled by
a new CSR and that Pitbull had reviewed its website to eliminate any possible
doubt about whether it sold Athletica brand apparel. Pitbull offered to provide an accounting, a
return of unused tags bearing the Athletica name and spiral design, and
disgorgement of profits about the roughly 1900 items sold under the Athletica
brand. However, it refused to
discontinue use of Athletica as a service mark for its online store or the use
of athletica.net for its website.
Unsurprisingly, the court granted a preliminary injunction;
I’ll only mention a couple of points about the analysis. The court began with the proposition that
close cases should be resolved in favor of a senior user. As for strength, the court rejected the
argument that Athleta’s strength was limited because of its suggestion of “athletics.” It was still a coined term, and Pitbull didn’t
show that lots of other sellers are actually
using Athlet- prefixed marks for athletic apparel or goods. Even Lululemon Athletica wasn’t a problem
because of the distinctive Lululemon.
Other marks identified by Pitbull were pending applications and even ITU
applications.
The marks currently used by the parties were still highly
similar, even if not as nearly identical as the spiral design ones. “The
lettering of the marks differs only by inclusion of the ‘ic’ in defendants'
mark, and the ‘c’ is partially obscured by the three-petal leaf design that
defendants have adopted. This leaf design shares minimal elements of
plaintiff's pinwheel design, including the use of a purple color with
petal-shapes anchored at the center. Even viewing these marks in isolation, the
marks bear significant similarity.”
Also, the marks were only part of the inquiry: they were in
the context of “a marketplace that has changed as a result of defendants'
gradual encroachment on plaintiff's marks, culminating in defendants' use of
the ATHLETICA mark with a spiral design on women's athletic clothing.” The use of Athletica on the Groupon/Living
Social promotions; copying of customer reviews, product descriptions, free
shipping banner, and fabric names; and the general look and feel of the website
were all part of the context. Before
2010, the marks might have been able to coexist, but the gradual encroachment “greatly
increased the similarity of the marks as they are encountered in the
marketplace by consumers.” The question
of whether this confusion would persist was more difficult. If Pitbull reverted to prior practices, then “presumably
both websites could coexist without future instances of confusion. But
hypothetical coexistence in the future is not the issue presented here.”
The court found many of Pitbull’s explanations lacking in
credibility (especially as to the copying of customer reviews and use of
Athleta’s fabric names, and the discontinuance of Athletica clothing). “Whatever the motivations for their actions,
the fact of the matter is that defendants did sell clothing bearing this
confusingly similar design, both before and after they represented to plaintiff
that they would cease doing so.” Even recent
screen captures shown at the PI hearing showed that Pitbull recently adopted a
homepage picture similar to Athleta’s homepage picture. Intent thus favored
Athleta and justified the granting of a preliminary injunction, because of the
likelihood of repetition and continuing harm.
Given the likely success on the merits, Athleta was also
able to show irreparable harm. Even
after eBay and Winter, courts have found that losing control of one’s reputation
and goodwill counts as irreparable harm.
(I have less of a problem with this when there’s evidence that consumers
are actually contacting the wrong party to ask/complain about the status of
their orders.) Confused consumers may
blame Athleta for inferior Athletica products; also, Athleta was likely
suffering from lost sales due to confusion. Defendants’s corrective actions
couldn’t undo that confusion.
In addition, given the progressive encroachment, Athleta
didn’t unreasonably delay, especially because Pitbull’s bad faith deprived it
of a laches defense.
Interestingly, despite the fact that Pitbull has numerous
other websites where it sells substantially the same merchandise, the court
declined to order the transfer or discontinuance of the domain name. Pitbull would “presumably” suffer some harm
from an injunction against the athletica.net website. A preliminary injunction should preserve the
status quo—the last uncontested status preceding the controversy. That status quo was that both parties
operated their respective websites. It
was the look and feel copying, the Groupon/Living Social promotions, etc. that
went too far.
Athleta argued that defendants “poisoned the well” for
athletica.net, but the court wasn’t willing to go that far. Instead, defendants were enoined from “utilizing
any graphic, textual, or other design elements on athletica.net that are
similar to plaintiff's website or likely to cause continued consumer confusion
as to the source of defendants' goods.”
They could not “offer any goods that bear a strong resemblance to
Athleta goods [not clear why this is justified if the goods themselves do not
have a protectable trade dress, except as limited to a bar on using
Athleta-type symbols/brands], … advertise or use trade dress on its website
that looks like Athleta, nor do anything that suggests any affiliation with
Athleta or that Athleta in any way sponsors defendants' products.”
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