Sustainable Sourcing, LLC v. Brandstorm, Inc. et al
Filing
133
Judge Michael A. Ponsor: MEMORANDUM AND ORDER entered. As follows: For the reasons stated, Defendants motion for summary judgment (Dkt. No. 112 ) is hereby ALLOWED as to Plaintiffs claims for injunctive relief regarding Counts I and II, and ALLOWED as to statutory damages and attorneys fees regarding Count I. Defendants motion is otherwise DENIED. Plaintiffs motion for summary judgment (Dkt. No. 114 ) is ALLOWED as to liability on Count I, is ALLOWED as to Count I and Count V of the counterclaim, and is DENIED as to Counts II, III, and IV of the counterclaim. Further proceedings will unfold in accordance with the agreed schedule. It is So Ordered. See the attached memo and order for complete details. (Lindsay, Maurice)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
SUSTAINABLE SOURCING, LLC,
Plaintiff,
v.
BRANDSTORM, INC.,
BRANDSTORM HBC, INC.,
and THEIRRY OLLIVIER,
Defendants.
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C.A. No. 12-cv-30093-MAP
MEMORANDUM AND ORDER REGARDING PLAINTIFF’S
AND DEFENDANTS’ MOTIONS FOR SUMMARY JUDGMENT
(Dkt. Nos. 112 & 114)
May 31, 2016
PONSOR, U.S.D.J.
I. INTRODUCTION
This case centers on the competing intellectual
property claims of two companies that sell Himalayan pink
salt.
Defendants have moved for summary judgment on Count I
(copyright infringement) and Count II (false advertising) of
Plaintiff’s Amended Complaint. (Dkt. No. 112.)
Plaintiff
has moved for summary judgment on Count I and on all five
counts of Defendants’ counterclaim.
(Dkt. No. 114.)
For the reasons set forth below, both parties each
deserve partial success on their motions.
The court’s
rulings will leave portions of the case for further
proceedings, and a schedule for this final stage is included
at the conclusion of this memorandum.
II. DISCUSSION
A.
Count I - Copyright Infringement
Plaintiff alleges in Count I that Defendants violated
17 U.S.C. § 501 when they copied and used Plaintiff’s
registered work.
The background may be summarized as
follows.
In 2006, Plaintiff created the photograph at the core
of the copyright dispute (the “Image”) and used it in its
marketing efforts.
The Image shows a box of Plaintiff’s
pink salt, surrounded by bowls of berries and salt.
One of
Defendants’ employees (not surprisingly, no longer employed
by
them) foolishly copied the Image, mostly leaving the
photograph unchanged, but replacing Plaintiff’s product with
a depiction of Defendants’ product (the “Altered Image”).
Defendants thereafter used the Altered Image in their online
and print catalogues.
It was only after Plaintiff learned
of Defendants’ blatant copying that Plaintiff obtained a
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copyright registration of the Image (Registration VA
0001812255) on May 1, 2012.
Based on these undisputed facts, which Defendants
concede, Plaintiff is entitled to judgment as to liability
on Count I of its amended complaint, the copyright claim.
Yankee Candle Co. v. Bridgewater Candle Co., 259 F.3d 25, 33
(1st Cir. 2001) (stating that “[t]o prevail on a claim of
copyright infringement, the plaintiff must show both
ownership of a valid copyright and illicit copying.”).
Defendants’ cross motion for summary judgment on Count
I argues that, despite Plaintiff’s success on the liability
issue, they are entitled to judgment on this count because
Plaintiff can show no damages flowing from the infringement.
Defendants emphasize, in particular, that Plaintiff’s
damages are limited because Plaintiff registered the Image
only after Defendants’ copying occurred.
means that
This omission
Plaintiff is precluded from an award of
statutory damages or attorney’s fees.
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See 17 U.S.C. § 412.1
“[N]o award of statutory damages or attorney’s fees
... shall be made for ... (2) any infringement of copyright
commenced after first publication of the work and before the
effective date of its registration, unless such registration
is made within three months after the first publication of
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On the broader question of non-statutory damages,
however, the court agrees with Plaintiff that further
discovery is required.
More generous access to financial
information and expert discovery may reveal a basis for
Plaintiff’s damage claim.
In sum, Plaintiff’s motion for
summary judgment on Count I as to liability will be allowed,
Defendants’ motion on the same count as to statutory damages
and attorney’s fees will likewise be allowed, and discovery
on non-statutory damages may proceed in accordance with the
schedule set forth below.
B.
Count II - False Advertising
Under Count II, Plaintiff alleges that Defendants have
made false and misleading statements on their Facebook page
to the effect that their Pakistani salt is from Tibet, which
allegedly deceived customers and damaged Plaintiff’s sales.
Defendants seek summary judgment, stating the 2013 Facebook
post is not a violation of the Lanham Act and, further, that
Plaintiff cannot show the Facebook post actually harmed
Plaintiff’s business.
The summary judgment record provides
the work.” 17 U.S.C. § 412. It is undisputed that
Plaintiff registered the Image outside the three month
period.
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sufficient evidence that Defendants have indeed made a false
or misleading statement about their salt’s origin, which is
a violation of the Lanham Act.
1125(a)(1)(B).
See 15 U.S.C. §
Therefore, Defendants’ motion for summary
judgment on Count II of the complaint must be denied.
As
with Count I, discovery on damages may proceed on this
claim.
C.
Counterclaim
Defendants’ counterclaim brings claims under the Lanham
Act and common law.
The counterclaim alleges that Plaintiff
engaged in trademark infringement (Count I), trade dress
infringement (Count II), unfair competition (Count III),
false designation of origin (Count IV), and false
advertising (Count V).
Defendants sell their pink salt products under the
brand name “HIMALANIA.”
They hold a standard character
(block letter) trademark registration for the word
“HIMALANIA” (the “Mark”), but only covering goods from the
fruits and snacks classes (International Classes 29, 31, and
32).
For reasons that are not clear, Defendants’ mark does
not cover salt and salt-related products (International
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Class 30), which are the subject of this litigation.
Plaintiff, for its part, sells products under the brand name
“HimalaSalt,” but does not have a trademark registration.
The Lanham Act provides protection against the use of
“any word, term, name, symbol, or device” that “is likely to
cause confusion, or to cause mistake, or to deceive” as to
the source of a product.
15 U.S.C. § 1125(a)(1)(A).
“The
Lanham Act extends protection not only to words and symbols,
but also to ‘trade dress,’ defined as ‘the design and
appearance of a product together with the elements making up
the overall image that serves to identify the product
presented to the consumer.’”
Yankee Candle, 259 F.3d at 38
(quoting Chrysler Corp. v. Silva, 118 F.3d 56, 58 (1st Cir.
1997)).
As a preliminary matter, Plaintiff asserts an
affirmative defense of laches against all five counts.
Plaintiff points out that Defendants have known since 2006
(when Plaintiff entered the pink salt market) that
Plaintiff’s HimalaSalt was competing with Defendants’
HIMALANIA product, but they failed to pursue legal action
until 2014.
According to Plaintiff, Defendants simply
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waited too long to assert their rights, and Plaintiffs are
therefore entitled to summary judgment.
Defendants respond
that they needed time to assess whether to pursue their
claims, and that they were forced to assert their claims
when the filing of the Amended Complaint triggered their
obligation to raise their claims as a compulsory
counterclaim.
To succeed in asserting its laches defense, Plaintiff
“must prove by a preponderance of the evidence (1) that
[Defendants] inexcusably and unreasonably delayed in
bringing this action; and (2) that the delay has prejudiced
[Plaintiff].”
Lotus Dev. Corp. v. Paperback Software
Intn’l, 740 F. Supp. 37, 82 (D. Mass. 1990).
On the
question of improper delay, the record is not sufficiently
strong to justify summary judgment for Plaintiff.
Defendants’ argument that they were justified in taking a
wait-and-see approach to assess market conditions before
suing, as well as the fact that they were required to assert
the counterclaim by the commencement of suit by Plaintiff,
undercut Plaintiff’s laches argument.
As a matter of law,
Plaintiff has not carried its burden on this defense.
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As an alternative to its laches argument, Plaintiff
contends that the record will not substantively support a
trademark infringement claim under the Lanham Act as offered
in Count I.
The record, Plaintiff argues, simply does not
contain sufficient evidence of likely confusion, an
essential element of a Lanham Act claim.
See Boston Duck
Tours, LP v. Super Duck Tours, LLC, 531 F.3d 1, 34 (1st Cir.
2008).
Various factors are relevant to the assessment of
the likelihood of confusion.
See, e.g. Pignons S.A. de
Mecanique de Precision v. Polaroid Corp., 657 F.2d 482, 487
(1st Cir. 1981) (listing eight factors to weigh in
determining likelihood of confusion, including the
similarity of the marks, similarity of the goods, the
relationship between the parties, and evidence of
confusion).
Courts should focus on those factors that are
helpful on the particular facts of a case, because “[t]hese
factors are not to be applied mechanically.”
Beacon Mut.
Ins. Co. v. OneBeacon Ins. Group, 376 F.3d 8, 15 (1st Cir.
2004).
Here, where Defendants assert a likelihood of
confusion based on the similarity of the marks, the analysis
“must be determined by comparing the total effect of each
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mark, not their separate parts.”
Boston Duck Tours, 531
F.3d at 34.
In weighing the effect of the marks, a widely used
term, particularly a geographically descriptive term like
“Himala,” is accorded much less weight than an arbitrary
word.
See id. (noting that “duck tours” is commonly
understood to mean an amphibious sightseeing excursion and,
therefore, should not be considered as a dominant part of
the mark); In re Joint-Stock Co. Baik, 80 U.S.P.Q. 2d 1305
at *4-6 (TTAB 2006) (rejecting applicant’s attempt to
trademark Baikalskaya for its vodka because the reference to
Lake Baikal was primarily geographically descriptive).
Here, because the only overlap between the parties’ marks is
the geographical reference to the Himalayan mountains, this
common feature is not likely to lead to confusion.
Indeed,
the summary judgment record contains evidence of numerous
third parties that have registered trademarks covering
products with the common root “Himala,” making it even less
likely that there will be confusion.
Finally, Defendants’ Mark covers fruit and fruit based
products, which are in an entirely different class of goods
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from salt.
It is therefore very uncertain whether
Defendants’ salt product packaging would be protected by the
Mark.
Based on this, it is clear as a matter of law that
Defendants cannot show a sufficient likelihood of confusion
between HIMALANIA and HimalaSalt to support Count I of their
counterclaim.
Plaintiff’s motion on this count will
therefore be granted.
Plaintiff’s motion for summary judgment, on the other
hand, must be denied as to Counts II, III, and IV of the
counterclaim.
Disputed issues regarding the similarity
between the overall commercial image of the products require
assessment by the factfinder.
For example, resolution of
these counts involves a determination whether the packaging
is “confusingly similar,” or whether recent changes to
Defendants’ packaging amount to abandonment of the
registered mark.
See Jack Wolfskin Ausrustung Fur Draussen
GmbH & Co. KGAA v. New Millennium Sports, S.L.U., 797 F.3d
1363, 1368-69 (Fed. Cir. 2015) (noting a dispute over
whether the new form of the mark “create[s] the same,
continuous commercial impression” as the old form of the
mark).
Such factual issues must be resolved by a jury.
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On Count V of Defendants’ counterclaim for false
advertising, Plaintiff is entitled to summary judgment.
In
Count V, Defendants allege that Plaintiff’s tagline, “the
purest salt on earth,” is literally false and has a strong
tendency to mislead the public into believing that
Plaintiff’s salt is purer than competing brands.
U.S.C. § 1125(a).
See 15
According to Defendants, the word
“purest” may only describe a level of quality that must be,
and in this case is not, supported by objective testing.
Plaintiff responds that the word “purest” is, at worst, mere
puffery -- a vague statement of quality that is neither
intended to be technically verifiable, nor likely to be
understood as such.
“A plaintiff can succeed on a false advertising claim
by proving either that an advertisement is false on its face
or that the advertisement is literally true or ambiguous but
likely to mislead and confuse consumers.”
Clorox Co. Puerto
Rico v. Proctor & Gamble Commercial Co., 228 F.3d 24, 33
(1st Cir. 2000).
When claims are merely directed at
“exaggerated advertising or unspecified boasting,
characterized by vague and subjective statements,” it is
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possible to weed them out before trial.
Bern Unlimited,
Inc. v. Burton Corp., 25 F. Supp. 3d 170, 182 (D. Mass.
2014) (quotation omitted).
Defendants’ objection, as set
forth in Count V of their counterclaim to Plaintiff’s use of
the descriptor “purest,” falls in this category.
mere marketing boast.
It is a
Plaintiff’s motion for summary
judgment on Count V of Defendants’ counterclaim will
therefore be allowed.
D.
Injunctive Relief
Finally, Defendants seek summary judgment with regard
to Plaintiff’s request for injunctive relief set forth as
part of Counts I and II.
Defendants argue that an
injunction is unwarranted here because Defendants’ use of
the Altered Image ceased in May 2012, and Defendants have
pledged to make no future use of it.
Likewise, Defendants
contend they updated their marketing through Facebook and
the internet and no longer suggest that their pink salt is
from either Tibet or Nepal.
Defendants therefore contend
that Plaintiff cannot show any potential harm sufficient to
invoke the court’s equitable power.
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It is true, as Plaintiff points out, that some
hypothetical possibility exists of some further use of the
Altered Image, or resumed claim of Tibetan origin for
Defendants’ salt.
an injunction.
This, however, is not enough to justify
Here, the almost absurdly egregious nature
of the copying makes repetition of the problem virtually
inconceivable.
As a matter of law no adequate basis exists
at this time to support injunctive relief in Counts I and
II.
III. SCHEDULING MATTERS
At the end of the hearing, the parties and the court
addressed a schedule for the final stage of this litigation.
Based on counsel’s representations, the court orders as
follows:
On or before June 24, 2016, the parties will report
back to the court in writing regarding their attempts at an
agreed resolution of this dispute.
The report will be
drafted by Plaintiff’s counsel, but will be the product of
joint discussion.
Given the nature of this dispute and the
uncertain basis for damages, the court urges the parties to
make particularly scrupulous efforts at settlement.
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Nonetheless, if efforts at resolution are unsuccessful, then
expert discovery shall begin.
On or before August 24, 2016, the party with the burden
of proof on a claim shall serve its expert report.
On or before September 23, 2016, the party without the
burden of proof on a claim shall serve its expert report.
On or before October 24, 2016, expert depositions shall
be complete.
If Defendants determine that they need to re-depose any
of Plaintiff’s fact witnesses as expert witnesses, then
either the parties will coordinate this, or, if no agreement
can be reached, then Defendants shall file a motion for
further discovery on or before September 30, 2016.
On or before October 31, 2016, the parties shall file
with the court a joint submission suggesting a schedule for
filing further motions for summary judgment or, if none is
contemplated, a date for a final pre-trial conference.
IV. CONCLUSION
To summarize, Defendants’ motion for summary judgment
(Dkt. No. 112) is hereby ALLOWED as to Plaintiff’s claims
for injunctive relief regarding Counts I and II, and ALLOWED
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as to statutory damages and attorney’s fees regarding Count
I.
Defendants’ motion is otherwise DENIED.
Plaintiff’s motion for summary judgment (Dkt. No. 114)
is ALLOWED as to liability on Count I, is ALLOWED as to
Count I and Count V of the counterclaim, and is DENIED as to
Counts II, III, and IV of the counterclaim.
Further proceedings will unfold in accordance with the
agreed schedule.
It is So Ordered.
/s/ Michael A. Ponsor
MICHAEL A. PONSOR
U. S. District Judge
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