Monday, June 20, 2022

TM laches where a band broke up "for now" but its music remained on Spotify etc.

Satan Wears Suspenders, Inc. v. Jaar, 2022 WL 2181449, 21 Civ. 812 (ER) (S.D.N.Y. Jun. 16, 2022)

Where a musical group’s music remains publicly available, the fact that they stopped touring may not avoid laches if you sue only when they get back together! Laches can bar both injunctive relief and damages in trademark cases, and here the court grants a motion to dismiss based on laches.

As alleged: Plaintiff is a hardcore punk-rock band/record label operating under the name Darkside. Defendants are a musical duo that also operates as Darkside and their record label.

SWS has performed and produced sound recordings under the names “Darkside” or “Darkside NYC” continuously since at least August 1992. It has a 2014 registration for “Darkside NYC” for live musical performances by a band; the production of musical sound recordings; and websites with information about music or entertainment. Fans often call it “Darkside.”

Defendants, also based in New York formed their own Darkside in 2011, featuring an electronic, psychedelic musical style; their first album was self-titled. In December 2011, they performed as “Darkside” at the Music Hall of Williamsburg in Brooklyn, New York—a venue at which SWS has also played, and they have played at at least three other overlapping venues.

From 2011 to now, defendants continued to sell music and merchandise and to promote music videos and other media under the Darkside name, including creating a website to advertise their music and distributing sound recordings through Spotify, YouTube, and SoundCloud.

As early as 2013, SWS became aware of defendants and “made repeated objections to it via two email exchanges and three letters from Plaintiff’s then-counsel in 2013 and 2014.” In 2013, defendants’ band manager responded that the bands occupy “different enough space[s]” to “avoid confusion,” emphasizing their different musical styles, target audiences, and ticket prices. SWS rejected defendants’ offer to “demonstrate [their] best efforts to ensure that all online listings are clearly labeled: DARKSIDE (Nicolas Jaar + Dave Harrington),” and then wrote again ten months later that defendants “must either cease use of the word ‘DARKSIDE’ ... or ... amend[ ] use of the DARKSIDE mark that is sufficiently distinguishable[.]”

Defendants nonetheless continued to operate as “Darkside” through the present, and released a new song on December 21, 2020 and announced a forthcoming spring 2021 album, Spiral.

Meanwhile, in 2013 or earlier, the Matador record label signed the Jaar/Harrington Darkside and allegedly supported the band in various ways, including by coordinating tours, distributing music, promoting the band’s brand, and arranging live appearances under its label. Defendants have allegedly “garnered a significant following and have established a strong online presence,” causing confusion and harm to SWS’s goodwill given the “apparently contrasting, electronic-psychedelic musical style.”

This case was filed in early 2021. Sure sounds like laches, right? Now some additional facts: On August 17, 2014, Defendants posted on Twitter that “darkside is coming to an end, for now” and that the band “[will] be playing [its] last show in [B]rooklyn on sept 12.” But defendants continued to “conduct business” by publishing a clip of a live performance in 2015, participating in an interview with the music site Pitchfork in 2016, and continuing to list their music on Spotify.

To prevail on a laches defense, a defendant must show: “(1) that plaintiff had knowledge of defendant’s use of its marks, (2) that plaintiff inexcusably delayed in taking action with respect thereto, and (3) that defendant will be prejudiced by permitting plaintiff inequitably to assert its rights at this time.” It’s usually not appropriate on a motion to dismiss, but it can be clear on the face of the complaint.

Laches is measured by reference to the most relevant state statute of limitations for trademark claims, which in NY is six years (three for NY dilution).

SWS argued that laches is only available against equitable claims, not legal claims. The governing case law teaches otherwise: all trademark claims, both for injunctive relief and damages, can be lached. And a presumption of laches applied given the timing here; the burden is on the plaintiff to plead circumstances showing laches didn’t apply.

Did SWS reasonably and excusably delay? There was no progressive encroachment here; both bands were in NY as of 2013 with the same name and same services. SWS argued that “plaintiffs may legitimately put off filing suit when pursuing settlement negotiations with the alleged infringer.” However, such “negotiations must ordinarily be continuous and bilaterally progressing, with a fair chance of success[.]” The complaint showed otherwise: negotiations stopped in 2014.

SWS argued that its conduct was reasonable because defendants held out to the world that they dissolved the band (making their hands unclean when they argued otherwise to the court), pointing to the “darkside is coming to an end, for now. we’ll be playing our last show in [B]rooklyn on sept 12” tweet and various replies reflecting fans’ belief that the band had dissolved.

But the tweet wasn’t a final dissolution: it announced an end “for now.” Moreover, “the dispositive question for the Court is not whether Plaintiff thought Defendants had stopped performing; rather, it’s whether Plaintiff knew that Defendants were continuing to exploit the Trademark (e.g., by selling music or merchandise and publishing videos).” And the complaint conceded just that. The music on Spotify between 2014 and 2020 held “the same potential to confuse Plaintiff’s fans as it does now.”

Prejudice: “Where there is no excuse for delay ... defendants need show little prejudice” to prevail on a laches defense. The complaint didn’t rebut the presumption of prejudice. The complaint expressly alleged that defendants invested actively and constantly in their Darkside brand, which investment by itself sufficed to show that “Defendants may have branded themselves differently had Plaintiff brought forth this action sooner.” The fact that Plaintiff has chosen “to resurface ... on the cusp of [Defendants’] new album release two years in the making,” “a vulnerable time for any artist,” rendered the prejudice even stronger.

Could laches bar only the old claims but allow new ones? “The relevant authorities that have addressed this question in the context of a trademark dispute expressly reject Plaintiff’s theory of continuous infringement.” SWS’s argument was inconsistent with the policy underlying laches. All the claims (including state dilution claims and unfair competition claims) were kicked out.

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