Internetshopsinc.com v. Six C Consulting, Inc. et al

Filing 34

ORDER and OPINION GRANTING IN PART AND DENYING IN PART Plaintiff's 15 Motion for Summary Judgment; GRANTING IN PART AND DENYING IN PART Defendants' 16 Motion for Partial Summary Judgment and DENYING without prejudice Defendant Walker� 39;s 16 Motion for Summary Judgment. The Court DIRECTS Plaintiff to submit a bill of costs and proposed injunction to the Court by 4/22/11. If defendant chooses to respond to either filing, it should submit its response by 5/6/11. Signed by Judge Julie E. Carnes on 3/24/11. (jlm)

, . . IN CHAMBERS

t;,':~!'J).C

Atl/\;it

c;

. '",1'. R 2 'i 20 11 '
IN THE UNITED STATES DISTRICT COURT JAM. FOR THE NORTHERN DISTRICT OF GEORGI~: ATLANTA DIVISION

INTERNETSHOPSINC.COM, Plair.tiff, CIVIL ACTION NO.

v.
SIX C CONSULTING, INC., and JIMMIE D. WALKER, JR.,

1:09-CV-00698-JEC

Defe:1da:1ts. ORDER & OPINION This case is presently before the Court on plaintiff's Motion for Summary Judgment [15] a:1d defendants' Motion for Partial Summary Judgment and defendant Walker's Motion for Summary Judgment [16].

The Court has reviewed the record and the arguments of the parties a:1d, for the reasons set out below, concludes that plaintiff's Motion for Summary Judgment [15] should be GRANTED IN PART and DENIED IN

PART, defenda:1ts' Motion for Partial Summary Judgment [16-1] should be GRANTED IN PART and DENIED IN PART, and defe:1dant Walker's Motion for Summary Judgment [16-2] should be DENIED w:i.thout prejud:i.ce. '

See :1.1 infra.

BACKGROUND

This is a Lanham Act case arising from defendant's internet advertising campaign for practice golf mats. (Complo
[lJ . )
(PI. ' s

Plaintiff is in the business of selling golf equipment. Statement of Undisputed Material Facts ("PI.'s Facts")
4. )

[15] at 'il'iI 3
(Id. )

One of plaintiff's products is a practice golf mat.

Since February, 2002, plaintiff has used the trademark "Dura Pro" to advertise the golf mats that it offers for sale over the internet.
(Id.

at 'iI'iI 14-15.) Defendant Six C Consulting, Inc. ("Six C n
(Id.
)

is

also

in

the
Like

business of selling

golf equipment.'

at

n

11-12.)

plaintiff, defendant offers a practice golf mat for sale over the internet. term "Dura
(Id.

at 'iI 12.) in a

In early 2008, defendant began using the ("PPC") internet advertising 24.)

Pro"

pay-per-click

campaign for its golf mats.'

(PI.'s Facts [15J at 'iI'iI 2

Defendant Walker is the sale officer of Six C, and owns 100% of its stock. (Pl.' s Facts [15J at 'iI'iI 8, 10.) Plaintiff's action against Walker has been stayed, pending the disposition of his bankruptcy. (Crder [32].) As a result, the Court denied without prejudice defendant Walker's motion for summary judgment. The Court thus uses the term "defendant" to refer solely to Six C.
2

3 In a PPC campaign, the seller bids on keywords and phrases in a search engine so that when potential customers search on those terms the seller's ads are displayed. (Defs.' Statement of Material Undisputed Facts [16] at 'iI 3.) If the customer clicks on the ad, he is directed to a website where he can purchase defendant's products. (Id. )

2

Plaintiff discovered defendant's use of the term "Dura Pro" in January,
2009,

and immediately notified defendant of its superior
(Id.

rights in the mark.

at

~~

35-37.)

Within 48 hours, defendant

ordered Channel Advisor, the company then managing the PPC campaign, to stop using the term "Dura Pro." Undisputed Facts Channel Advisor ("Defs.' failed to Facts") (Defs.'
[16]

Statement of Material
~

at

20.)

Unfortunately, term, and it

completely

suppress

the

remained in use in connection with defendant's campaign on an MSN search engine.
(Id.

at

~~

21-24.)

Plaintiff filed

this action

on March

13,

2009,

asserting

a

federal claim for trademark infringement and a state claim for unfair competition. (Compl.

[lJ at

~~

27-41.)

Upon its receipt of service

in the action, defendant again contacted Channel Advisor and ordered it to stop using the term "Dura Pro." (Defs.' Facts [16J at
~

24.)
(Id. )

Channel Advisor finally suppressed the term on April 2, 2009.

The parties have filed cross-motions for summary judgment, which are presently before the Court. Defs.' Mot. for Summ. J. [16].) (Pl.'s Mot. tor Summ. J.
[15]

and

Detendant concedes that it infringed

plaintiff's trademark rights by using the term "Dura Pro" in its PPC campaign. '::'he (Defs.' Br. inSupp. the ofSumm. J. ("Defs.' Br.") relief
[16J.'

only dispute
(Id.

concerns

appropriate

on plaintitf's

claims. damages,

at 9-13.)

Plaintiff argues that it is entitled to as well as an accounting of

costs,

and attorney's fees,
3

defendant's profits and permanent injunctive relief. Supp. of Sumn. J. ("PI.'s Br.") [15J at 17-22.)

{PI.'s Br. in

Defendant contends

that there is insufficient evidence to support an award of damages or profits, and that injunctive relief and attorney's (Defs.' Br. fees are not

warranted under the circumstances.'

[16] at 9-13.)

DISCUSSION
I.

Summa.ry Judgment Sta.ndard

Summary judgment is appropriate when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to a judgment as a matter of law.
FED. R. elV. P. 56 (c) ·

A fact's materiality is Anderson v. Liberty

determined by the controlling substantive law. Lobby, Inc., 477 U.S. 242, 248 (1986).

An issue is genuine when the

evidence is such that a reasonable jury could return a verdict for the nonmovant.

Id. at 249-50.

Summary judgment is not properly viewed as a device that the trial court may, in its discretion, implement in lieu of a tr:'al on the merits. Instead, Rule 56 of the Federal Rules of Civil Procedure

mandates the entry of summary judgment against a party who fails to

4 Plaintiff makes additional arguments with respect to defendant Walker. (PI. ' s Br. [15 J at 22-24.) As the action is stayed as to Walker, the Court does not address those arguments.

4

make a showing

cient to establish the existence of every element

essential to that party's case on which that party will bear the burden of proof at trial. 322 (1986). any material

Celotex Corp.

v. Catrett,

477 U.S.

317,

In such a situation, there can be no genuine issue as to fact, as a complete failure of proof concerning an

essential element of the non-moving party's case necessarily renders all other facts immaterial.
56 (c) ) .

Id.

at 322 23

(quoting FED. R. C:cv. P.

The movant bears the initial responsibility of asserting the basis for his IT,otion. Id. at 323. However, the movant is not

required to negate his opponent's claim. his burden by merely "'showing' --that

The movant may discharge is, pointing out to

district court--that there is an absence of evidence to support the non-moving party's case." Id. at 325. After the movant has carried red to "go beyond the

his burden, the non-moving party is then

pleading" and present competent evidence designating "speci::ic facts showing that there is a genuine issue for Id. at 324. While

the court is to view all evidence and factual inferences in a light most favorable to the non-moving party, "the mere existence of some alleged factual dispute between the parties will not defeat an

otherwise properly supported motion for summary judgment." 477 U.S. at 247-48.

Anderson,

The requirement is that ther·e be "no genuine
II

issue of material

Id.
5

II.

Liability and Costs As noted above, defendant concedes that its use of the term (Defs.' Br. [16]

"Dura Pro H infringed plaintiff's trademark rights. at 2.)

The Court thus GRANTS plaintiff's motion for summary judgment Defendant does not respond to the Lanham Act, and the Act

as to liability under the Lanham Act. plaintiff's claim for costs under

expressly permits a successful plaintiff to recover the costs of an action to enforce a trademark.
See

15

U.S.C.

§

1117(a).

Accordingly,

the Court also GRANTS plaintiff's motion for summary Pursuant

judgment on its claim to recover the costs of this action.

to this ruling, the Court directs plaintiff to submit a bill of costs by Friday, April 22, 2011. U.S.C. § :924. The bill of costs should comply with 28

If defendant chooses to respond to the bill of costs,

it should file a response by Friday, May 6, 2011. III. Additional Relief In addition to the costs of the action, the Lanham Act provides for a prevailing plaintiff's recovery of (1) any damages sustained as a result of defendant's infringement and (2) defendant's profits from the infringement.' a
See

15

U.S.C. also

§

1117(a).

Under

certain and

circumstances,

plaintiff may

recover

treble

damages

The Court need not separately discuss plaintiff's state law

claims, as the relief available is the same as under the Lanham Act.
6

reasonable attorney's fees, may impose a U.S.C.
§

Id.

Finally, if equity permits, a Co',ut infringing party. 15

permanent

inj unction upon the

l116(a).

In its motion for

summary judgment,

plaintiff (Pl.'s

argues that it is entitled to each of these forms of relief. Br. [15] at 22.)

A.

AQtua~

Damages

In order to recover damages under the Lanham Act, plaintiff must show that it has actually suffered harm as a result of defendant's infringement.

Babbit Elec., Inc.

v. Dynascan Corp.,

38 F.3d 1161,

1182 (11th Cir. 1994).

See also Ramada Inns, Inc.

v. Gadsden Motel

Co., 804 F.2d 1562, 1564 (11th CiL 1986) (explaining that there must
be "some evidence of harm arising from the [trademark] violation" for a plaintiff to recover damages). need not be exact, it must be Although the calculation of darr.ages demonstrated with some degree of

specificity.

Ramada Inns,

Inc.,

804 F. 2d at 1565-66.

Generally,

actual damages are established through evidence of lost sales caused by defendant's infringement. Plaintiff claims that

Babbit Elec.,
it suffered

38 F.3d at 1182. in the amount of

damages

$123,784.80 as a result of defendant's infringement. at 18.) is the

(Pl.'s Br. [15;

The only evidence plaintiff offers i:1 support of that clairE
affidav~t

of its President and CEO, Ava Quail.

(Id. )

Quail

states in her

aff~davit

that plaintiff's average monthly golf mat infringement was 306,
7

sales prior to and after the

while average

monthly sales during the infringement period was 166. [15] at 'll'Il 32-33.) She further

(Quail Aff.

states that plaintiff's average

profit on each golf mat sale during the relevant time period was $63.13. (Id. at
~

36.)

Quail arrives at the $123,784.80 figure by

multiplying the decrease in average monthly sales (140) by the number of months that the infringement continued (14) and the average profit on each sale ($63.13). The awarding, damages. Quail or a (Id. at does
~

37.) provide for a rational basis for

affidavit

not

reasonable

methodology

calculating,

actual

As an initial matter, Quail's affidavit is not supported by
See Ramada

any underlying sales data or business records.

Inns,

Inc., 804 F.2d at 1564 ("a trademark infringement award must be based

on proof of actual

damages") (emphasis added).

Indeed,

the only

document that is referenced by Quail, or that appears in the record, is a spreadsheet that purports to show plaintiff's monthly sales of golf mats between January, 2007 and August, 2009. [24].) (Sales Spreadsheet

Like Quail's testimony, the spreadsheet is not based on any Apparently Quail simply generated the "personal knowledge" of plaintiff's

underlying sales documents. spreadsheet business. based on her

(Pl.'s Reply [25] at 6.)

Moreover, even a cursory review of the spreadsheet shows that Quail's "analysis" is too seriously flawed to raise an issue of fact as to damages. For some unspecified reason,
8

Quail used monthly

averages (Quail

to calculate lost sales during Aff. [15] at

the

infringement period. on her to is calculations, after the

'll'll
golf

32-33.) mat sales

Based

plaintiff's

average 306.

prior it

and

infringement was spreadsheet that

(Id.)

However, was

apparent

from the by an

this

number

significantly

inflated 2007.

inexplicably high number of golf mat s Spreadsheet [24].)

es in May,

(Sales

Conversely, the figure for average sales during
def~ated

the infringement period appears to have been with exceptionally low sales.
(Id. )

by a few months

are numerous other anomal upon by Quail.

in the spreadsheet relied

For example, plaintiff's sales in March, 2008, during were significantly higher than sales in
(Id. )

the infringement period,

January, 2008 or October, 2007, before the infringement began.

In addition, plaintiff's March, 2008 sales were similar to its sales in August, September and November, 2007.
(Id.)

These figures do not

comport with plaintiff's theory or with Quail's assessment of damages
in her affidavit.

Even assuming that the spreadsheet shows some unquantifiable decline in plaintiff's sales during the infringement no evidence to suggest that the decline occurred as a defendant's infringerr,ent. , there is result of

The Quail a::::idavi t is not very help::ul on determining
infringe~ent,

this point, because Quail offers no reasonable basis whether any decline in sales was caused by defendant's
9

as opposed to some other or mUltiple other factors.

Nor could she,

as she admittedly is not an expert in the market factors that could cause such a decline. (Pl.'s Reply [25] at 8.) Rather, Quail simply

assumes that a decline in sales was caused by defendant's activities because it coincided with them. on damages, Quail's assumption judgment. Cir. In the absence of any other evidence insufficient to withstand summary

See Cordoba v. Dillard's, Inc., 419 F.3d 1169, 1181 (11th

2005) ("unsupported speculation of producing
some

does not meet a party's to

burden

defense

a

summary

judgment

notion") (internal citations omitted). It is axiomatic that in order to be awarded damages, plaintiff must 969 F.2d prove them. 410, 415
Schi

& Schmidt, Inc. v. Nordisco Corp.,
1992) (Posner,
J.)

(7th

Cir.

("people

who

want

damages have to prove them,

using methodologies that need not be

intellectually sophisticated but must not insult the intelligence") . An award of damages based on the proof that plaintiff offers would be entirely speculative, and is therefore precluded. at 1181. claim for
Cordoba, 419 F.3d

Accordingly, plaintiff's motion for summary judgment on its damages is DENIED and defendants' motion for summary

judgment on plaintiff's claim for damages is GRANTED.

As the Court it DENIES

finds that plaintiff is not entitled to actual damages,

plaintiff's request for treble damages and GRANTS defendants' motion for
su~mary

judgment as to treble damages. 10

B.

Defendant's Profits

An alternative ground for recovery under the Lanham Act is based on the defendant's profits.
See 15 U.S.C. § 1117(a).

In order to

recover under this theory, plaintiff must present some evidence of defendant's sales. Id. See also Wesco Mfg., Inc.

v.

Tropical

Attractions of Palm Beach, Inc., 833 F.2d 1484, 1487-1488 (11th Cir.
1987) (noting that the plaintiff must prove an infringer's sales in

order to be entitled to an accounting of profits under the Lanham Act) . Again, plaintiff has not presented sufficient evidence to

withstand summary judgment on this issue. Plaintiff concedes that it "does not currently possess any facts that show the extent of Defendants' profits, if any, reSUlting from its infringing activities." plaintiff even
atte~pt

(Pl.'s Resp.

[20]

at 15).

Nor does

to present any evidence of defendant's sales.

At this stage in the litigation, plaintiff's admission that it lacks any facts on the issue, and the absence of any other evidence in the record concerning defendant's sales, which to grant summary judgment. Cordoba, 419 F.3d at 1181. Moreover, the available evidence on the issue suggests that are a sufficient basis upon

Anderson, 477 U.S. at 247-48 and

defendant did not realize any profits as a result of its use of the term "Dura Pro.
H

As mentioned, defendant used the term solely in (Def.'s Facts

connection with a PPC internet advertising campaign.
11

[16J

at 'lI 2.)

One of the features of a

PPC campaign is that it

allows a seller to track how many times its website appeared as a result a search for a keyword (called "impressions"), how many

times a potential customer clicked on the seller's website following a search (called from "clicks"), the website and whether following the the customer search purchased (called

anything

"conversions").

(Id. at Sl 4.)

In the internet advertising industry I

it is standard practice to rely on this type of search data, which is generated by search engines such as Google.
4, 9.)

(Hill Decl.

[21] at 'lI'lI

The search data from defendant's PPC campaign shows that during the infringement period there were :,3:9 impressions resulting from searches the term "Dura Pro." (Second Walker Decl. [21] at 'lI'l1 4,

6 and Ex. A.)

Only 95 of those impressions resulted in a click,

after which a potential customer was directed to defendant's (Id.) However, not one of those clicks resulted in a conversion, or

a sale, of anything.

(Defs.' Facts [16] at 'lI 14.)

Given the evidence that defendant did not sell anything as a result of its infringement, and plaintiff's admitted lack of any an award

evidence to the contrary, there is no basis in this case of profits under the Lanham Act. 1487-88. summary Accordingly, judgment on its the
See NescD Mfg.,

Inc., 833 F.2d at

Court for
12

DENIES

plaintiff's of

motion

for

claim

an

accounting

defendant's

profits and GRANTS defendant's motion for summary judgment as to an award of profits.

C.

Injunctive Relief

Permanent injunctive relief against an infringer is generally available under the Lanham Act. against an infringing party 15 U.S.C. § 1116. are frequently While injunctions in ordinary

granted

trademark infringement actions, entitled to one.
Am.,

a plaintiff is never automatically

See Angel Flight of Georgia, Inc. v. Angel Flight
F. 3d

Inc.,

522

1200,

1208

(llth Cir.

2008)

and eBay Inc.

v.

MercExchange, L.L.C., 547 U.S. 388, 394 (2006) (rejecting categorical
approaches to equitable relief). Rather, in order to obtain

injunctive relief, a plaintiff must demonstrate that:

(1) it has suffered an irreparable injury; (2) remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) the public interest would not be disserved by a permanent injunction.
Angel Flight, 522 F.3d at 1208.
Defendant does not contest the last three elements, nor could it reasonably do so. (::Jefs.' Br. [16] and Defs.' Resp. [21J.) As

evidenced by the abo'7e discussion,

the business damage caused by

defendant's unauthorized use of plaintiff's trademark is difficult, if not impossible, to quantify.

See Tally-Ho,
(llth Cir.

Inc.

v.

Coast Cmty.

ColI. Dist.,

889 F.2d 1018, 1029

1989) ("It is generally

13

recognized in trademark infringement cases that . [anj adequate remedy at The law to redress of

. there is not

infringement") (internal clearly favors

citations

omitted).

balance

hardships

plaintiff, as defendant admit.s that its use of the term "Dura Pro" was unlawful. (Defs.' Br. [16] at 2.) As for the public, it

"deserves not to be led astray by the use of inevitably confusing marks."
Id.

Nevertheless,

defendant

argues

that

an

injunction

is

not

warranted because plaintiff has failed to show that it. suffered an irreparable injury. argument, (Defs.' Resp. [21) at 13.) In support of its

defendant correctly notes that the Court cannot presurr.e
(Id. )

irreparable harm based on a finding of infringement.

See N.

Am. Med. Corp. v. Axiom Worldwide, Inc., 522 F.3d 1211, 1227-28 (11th
Cir. 2008). However, the Court. need not rely on a presumption to

award injunctive relief in this case, as there is sufficient record evidence of irreparable harm. It is undisputed that plaintiff has used its "Dura Pro"
(Plo ' s

trademark in commerce for the sale of golf mats since 2002. Facts [15J at has

n

15-16.) a

In connection with its use of the mark, significant amount of time and money

plaintiff

invested

advertising its golf mats over many different media, internet.
(Id. at
~~

including the

17-18.)

As a result, plaintiff is well known

in the industry,

and has established a certain amount. of goodwill
14

amongst the public,
"Dura Pro" mark.

for selling high quality golf mats under the
~~

(Id. at

19, 39.)

Defendant's unauthorized use of the -Dura Pro" mark for over a year inevitably diluted the goodwill that plaintiff established in connection with the mark. See Ferrellgas Partners, L.P. v. Barrow,

143 Fed. Appx. 180, 190 (11th Cir. 2005) (explaining that "irreparable injury" includes -loss of control of reputation, loss of trade, and loss of goodwill"). This is true regardless of the fact that

defendant's unauthorized use appears to have been unintentional, and that it did not result in any readily quantifiable harm to plaintiff. Id. at 190-91 (" , [T] he most corrosive and irreparable harm

attributable to trademark infringement is the inability of the victim to control the nature and quality of the defendants' goods. the infringer's products are of high quality, the Even if

plaintiff can

properly insist that its reputation should not be imperiled by the acts of another.") (quoting Int'l Kennel Club of Chicago,
Mighty Star, Inc., 846 F.2d 1079, 1092 (7th Cir. 1988)). Inc. v.

Moreover, defendant has previously failed to ensure that its use of plaintiff's IT"ark ceased afte.r being notified of the infringement. (Defs.' Facts [16] at
~~

21-24.)

Given that fact, an injunction is

particularly warranted here.

The injunction will properly place the

onus on defendant to take whatever steps are required to ensure that it does not infr:nge plaintiff's trademark right:s in the :'uture,

15

rather than requiring plaintiff to constantly monitor defendant's actions. In short, there is no reasonable basis for defendant to resist an injunction preventing it from engaging
See J.
THO~lAS

in admittedly unlawful

conduct.

MCCARTHY ON TRADEMARKS § 30.11 (4th ed. 2004) ("If

the defendants sincerely intend not to infringe, the injunction harms them little; if they do, it gives [plaintiff] substantial protection of its trademark.
H) ·

Accordingly,

the

Court

GRANTS

plaintiff's

motion for summary judgment to the extent that it seeks a permanent injunction and DENIES defendant's motion as to injunctive relief. Plaintiff should submit a proposed injunction to the Court by Friday,
Apri~

22,

2011.

If defendant chooses to respond to the proposed

injunction, it should file a response by Friday, May 6, 2011.
D.

Attorney's Fees

Finally, the Lanham Act permits an award of attorney's fees to a prevailing party in "exceptional cases. H See 15 U.S.C. § 1117(a).

An exceptional case is one in which "the infringing party acts in a malicious, fraudulent, deliberate, or willful manner." Burger King 15 F.3d 166, 168 (11th Cir. 1994)

Corp.

v.

Pilgrim's Pride Corp.,

(internal quotations omitted).

Even if a case is exceptional, "the

decision to grant attorney fees remains within the discretion of the

trial court. D·

Id.

There is no evidence in the record to suggest that defendant acted in a "malicious, fraudulent, deliberate, or willful manner.D

While defendant admits to direct infringement of plaintiff's mark, it credibly argues and presents substantial (Defs.' Facts evidence [16] that the

infringement was unintentional.

at 'll'lI 20-24.)

Defendant was not aware of plaintiff's rights to the "Dura ProD mark until it was contacted by plaintiff in January, 2009.

(Id. at 'lI 14.)

Within 48 hours of plaintiff's contact, defendant acted, albeit not entirely effectively, to eliminate the ter:r, "Dura ProD from the PPC campaign. that

(Id. at 'lI 20.)

Under the fees

circ~~stances,

the Court finds Plaintiff's

an award of attorney's

is

not warranted.

motion for summary judgment as to attorney's fees is thus DENIED and defendant's motion for summary judgment as to attorney's fees is

GRANTED. CONCLUSION
For the foregoing reasons, the Court GRANTS IN PART and DENIES

IN PART Plaintiff's Motion for Summary Judgment [15], GRANTS IN PART
and DENIES IN PART Defendants' Motion for Partial Summary Judgment

· The parties have submitted evidence and thoroughly briefed the Court on the attorney's fees issue. Plaintiff's request for leave to file a detailed motion or conduct a hearing to put forth additional evidence as to attorney's fees is thus DENIED as unnecessary. 17

[16-1), and DENIES WITHOUT PREJUDICE Defendant Walker's Motion for
Summary Judgment [16-2J. The Court directs plaintiff to submit a bill of costs and a proposed injunction to the Court by Friday,
Apri~

22,

2011.

If

defendant chooses to respond to either filing, it should submit its response by Friday, May 6, 2011.

SO ORDERED, this

~

day of March, 2011.

18