Lovely Skin, Inc. v. Ishtar Skin Care Products, LLC

Filing 138

MEMORANDUM AND ORDER - Ishtar's motion for summary judgment (Filing No. 89 )is denied. Lovely Skin's motion for summary judgment (Filing No. 103 ) is denied. Ishtar's motion to strike jury demand (Filing No. 98 ) is granted. Ishtar 's motion to exclude the expert report and testimony of James T. Berger (Filing No. 92 ) is denied. Ishtar's motion to exclude the expert report and testimony of Megan Driscoll (Filing No. 95 ) is denied. Lovely Skin's motion t o clarify (Filing No. 131 ) is granted. This Court's previous order granting Ishtar's motion to compel (Filing No. 109 ) is affirmed, with the exception that Lovely Skin must now comply with the order by February 17, 2012. A second ame nded progression order setting the date for trial will be issued by the Court forthwith. Lovely Skin's responses to Ishtar's Requests for Production of Documents 32 and 37 are subject to a Protective Order and shall be disclosed only in designated ways as listed in this Memorandum and Order. Ordered by Senior Judge Lyle E. Strom. (AOA)

IN THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF NEBRASKA
LOVELY SKIN, INC.,

)
)
Plaintiff,
)
)
v.
)
)
ISHTAR SKIN CARE PRODUCTS,
)
LLC.,
)
)
Defendant.
)
______________________________)

8:10CV87

MEMORANDUM AND ORDER

This matter is before the Court on the motions for
summary judgment of defendant Ishtar Skin Products, LLC
(“Ishtar”) (Filing No. 89) and plaintiff Lovely Skin, Inc.
(“Lovely Skin”) (Filing No. 103), both filed pursuant to Federal
Rule of Civil Procedure 56.

Also before the Court are Ishtar’s

motion to strike jury demand (Filing No. 98), Ishtar’s motion to
exclude the expert report and testimony of James T. Berger
(Filing No. 92), Ishtar’s motion to exclude the expert report and
testimony of Megan Driscoll (Filing No. 95), and Lovely Skin’s
motion to clarify (Filing No. 131).
briefed with submissions of evidence.
was held on January 17, 2012.

The motions have been fully
A hearing on the motions

After reviewing the briefs,

evidence, and relevant law, and taking into account the parties’
oral arguments, the Court makes the following findings and
rulings.

I.

Factual Background and Procedural History.1
Lovely Skin and Ishtar both engage in the business of

selling skin care products via an internet website.

Lovely Skin

is a Nebraska corporation with its principal place of business in
Omaha, Nebraska.

Lovely Skin has marketed and sold its products

through its internet website, “LovelySkin.com,” since 2003, the
year of its incorporation (Filing No. 1, at ¶ 6).

Dr. Joel

Schlessinger (“Dr. Schlessinger”) and his wife, Nancy
Schlessinger, are Lovely Skin’s only stockholders, directors, and
officers.
Dr. Schlessinger’s medical practice, Skin Specialists,
P.C. (“Skin Specialists”), first attempted to register the terms
LOVELYSKIN (STYLIZED) and LOVELYSKIN.COM (STYLIZED) with the
United States Patent and Trademark Office (the “PTO”) in late
1999-early 2000 (Ex. 3, Filing No. 91, at 78-88).

The PTO

rejected the applications on November 8, 1999, and February 24,
With regard to both terms, the PTO stated, “MARK IS MERELY

2000.

DESCRIPTIVE The examining attorney refuses registration on the

1

In this case, Ishtar filed a brief in support of its
motion for summary judgment that included a “statement of
undisputed material facts,” but Lovely Skin did not comply with
Nebraska Civil Rule 56(b)(1) in its brief in opposition. Lovely
Skin included its own statement of facts, but did not refer by
numbered paragraph to Ishtar’s statement of facts, aside from
Ishtar’s paragraphs numbered 3, 31, and 37. Pursuant to Nebraska
Civil Rule 56(b)(1), the Court will consider Ishtar’s statement
of undisputed material facts, excluding paragraphs 3, 31, and 37,
as admitted by Lovely Skin.
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Principal Register because the proposed mark merely describes the
services” (Ex. 3, Filing No. 91, at 78 and 83).

Skin Specialists

then sought registration for both terms on the PTO’s Supplemental
Register (Ex. 3, Filing No. 91, at 127 and 130).
Since that time, Lovely Skin applied for and was
awarded registration of two marks on the PTO Principal Register
that are at issue in this action:

registered trademark number

2,998,098 for “LovelySkin” (stylized), dated September 20, 2005
(Ex. 1, Filing No. 1), and registered service mark number
3,253,791 for “LOVELYSKIN.COM,” dated June 19, 2007 (Ex. 2,
Filing No. 1) (the “Lovely Skin Marks”).2

The Lovely Skin Marks

were registered under 15 U.S.C. § 1052(f).
Ishtar is a California limited liability company with
its principal place of business in Porter Ranch, California.
Ishtar’s sole member and business manager is Sharokin Vardeh
(“Ms. Vardeh”).

Ishtar has marketed and sold its products

through its internet website, “livelyskin.com,” since 2005
(Filing No. 90, at 6).
In March 2010, Lovely Skin brought this action against
Ishtar pursuant to 15 U.S.C. § 1114(1), trademark infringement;

2

The complaint also requests relief regarding a third mark.
However, in a later filing with the Court, Lovely Skin admits
that the registration for this third mark “was intentionally
allowed to be cancelled” (Filing No. 48, at 4). Because the
issue is moot, the Court will disregard the complaint to the
extent that it references the third mark.
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Lovely Skin also alleged common law unfair competition, false
designation of origin under 15 U.S.C. § 1125(a), and injury to
business reputation (Filing No. 1).

In its complaint, Lovely

Skin demands a jury trial.
On September 7, 2010, Ishtar filed a petition for
cancellation of the Lovely Skin Marks with the PTO.

Ishtar

informs the Court that the cancellation proceeding has been
stayed, pending the outcome of this litigation.
On November 24, 2010, Ishtar filed its answer, where it
asserted seven affirmative defenses along with two counterclaims
that request cancellation of the registration of the Lovely Skin
Marks (Filing No. 41).
II.

Motions for Summary Judgment.
A.

Standard of Review.

Summary judgment is

appropriate when, viewing the facts and inferences in the light
most favorable to the nonmoving party, “there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law.”

Fed. R. Civ. P. 56(a); see Celotex

Corp. v. Catrett, 477 U.S. 317, 321–23 (1986).

“The inquiry

performed is the threshold inquiry of determining whether there
is the need for a trial -- whether, in other words, there are any
genuine factual issues that properly can be resolved only by a
finder of fact because they may reasonably be resolved in favor
of either party.”

Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
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250 (1986).

“Where the unresolved issues are primarily legal

rather than factual, summary judgment is particularly
appropriate.”

Koehn v. Indian Hills Cmty. Coll., 371 F.3d 394,

396 (8th Cir. 2004).
B.

Ishtar’s Motion for Summary Judgment.

Ishtar moves

the Court for summary judgment as to all counts of Lovely Skin’s
complaint (Filing No. 89).

Ishtar’s first argument in favor of

summary judgment is that Lovely Skin’s action is barred by the
doctrine of unclean hands.
The guiding doctrine . . . is the
equitable maxim that “he who comes
into equity must come with clean
hands.” This maxim is far more
than a mere banality. It is a
self-imposed ordinance that closes
the doors of a court of equity to
one tainted with inequitableness or
bad faith relative to the matter in
which he seeks relief, however
improper may have been the behavior
of the defendant.
Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S.
806, 814 (1945).

“A court of equity has a duty to consider not

only the nature of the asserted right, but also the conduct of
the plaintiff in seeking to enforce that right . . . . It is
still, even in this modern day of merged practice, a court of
conscience . . . .”

U.S. Jaycees v. Cedar Rapids Jaycees, 794

F.2d 379, 382 (8th Cir. 1986).
The Third Circuit has described the application of the
unclean hands defense in the context of a trademark case:
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Because a central concern in an
unfair competition case is
protection of the public from
confusion, courts require clear,
convincing evidence of “egregious”
misconduct before invoking the
doctrine of unclean hands.
Furthermore, “the extent of actual
harm caused by the conduct in
question, either to the defendant
or to the public interest, is a
highly relevant consideration.”
Citizens Fin. Grp., Inc. v. Citizens Nat. Bank of Evans City, 383
F.3d 110, 129 (3rd Cir. 2004) (citations omitted).

“To sustain

an unclean hands defense in a Lanham Act case, a defendant must
show that the plaintiff has engaged in inequitable conduct or bad
faith and the misconduct must have a material relation to the
equitable relief that the plaintiff seeks.”

Rainbow Play Sys.,

Inc. v. Backyard Adventure, Inc., No. CIV. 06–4166, 2009 WL
3150984, at *6 (D.S.D. Sep. 28, 2009).
Ishtar claims that Lovely Skin purchased “adwords” from
various internet search engines, such as Google, so that a person
who searched for the term “livelyskin” using the Google search
engine would be directed to a web page where the first entry, an
advertisement, was for Lovely Skin.

Ishtar also claims, “Lovely

Skin purchased the following keywords from Google: ‘lively skin
el granada ca;’ ‘lively skin granada hills;’ ‘lively skin granada
hills ca;’ ‘livelyskin rancho cucamonga ca;’ [and] ‘livelyskin
san fernando’” (Filing No. 127, at 8).

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Consequently, Ishtar claims that “it was Lovely Skin,
and not Ishtar, who was the party that intentionally sought to
strengthen the connection between the term “livelyskin” and the
Lovely Skin Site in the minds of consumers” (Filing No. 90, at
12).

Ishtar suggests that “to the extent any consumer confusion

exists, Lovely Skin’s conduct has made it impossible to determine
whether such confusion was caused by the Ishtar Site or Lovely
Skin’s advertising practices” (Id. at 12-13).

In addition,

Ishtar claims that “the fact [that] Lovely Skin had been aware of
Ishtar’s operations for more than two and a half years before it
began using the term ‘livelyskin’ in advertising suggests that
Lovely Skin was intentionally seeking to redirect customers who
were legitimately searching for the Ishtar Site” (Id. at 13).
In its opposing brief, Lovely Skin explains that it
purchased the adword “livelyskin” because it typically “purchases
misspellings of Lovely Skin to maximize its adword search
results” (Filing No. 118, at 7).

Lovely Skin does not explain

how the purchase of adwords that add geographical terms close in
proximity to Ishtar’s place of business in California was an aid
in the correction of potential customers’ spelling or
typographical errors.
To the extent that the purchase of such adwords is
found to be inequitable, Lovely Skin claims that it has “purged”
itself of such conduct because “Lovely Skin no longer purchases

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the adword ‘livelyskin’” (Id. at 10).

However, at oral argument,

Ishtar claimed that the Lovely Skin advertisement still appeared
as recently as January 13, 2012.
The Court has carefully considered Ishtar’s “unclean
hands” argument.

Nevertheless, the Court finds that there are

“genuine factual issues” in this case that must be more fully
developed at trial.

Accordingly, Ishtar’s motion for summary

judgment will be denied as to the issue of unclean hands.
In its second major argument for summary judgment,
Ishtar claims that all four causes of action in Lovely Skin’s
complaint require Lovely Skin to establish that Ishtar has
infringed on the Lovely Skin Marks, and since Lovely Skin has
failed to establish infringement, then summary judgment should be
granted.
Trademark infringement requires the likelihood of
confusion on the part of the public.

See 15 U.S.C. § 1114(1).

The Eighth Circuit set forth the requirements for the likelihood
of confusion in what have become known as the “SquirtCo factors”:
To determine the likelihood of
confusion between the trademarks
and the allegedly infringing marks,
we consider the following factors
set forth in SquirtCo. v. Seven–Up
Co.: 1) the strength of the
trademark owner’s mark; 2) the
similarity between the trademark
owner’s mark and the alleged
infringing mark; 3) the degree to
which the allegedly infringing
services competes with the
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trademark owner’s services; 4) the
alleged infringer’s intent to
confuse the public; 5) the degree
of care reasonably expected of
potential customers; and 6)
evidence of actual confusion.
Cmty. of Christ Copyright Corp. v. Devon Park Restoration Branch
of Jesus Christ's Church, 634 F.3d 1005, 1009 (8th Cir. 2011)
(citing SquirtCo. v. Seven–Up Co., 628 F.2d 1086, 1091 (8th Cir.
1980)).

“[R]esolution of this issue does not hinge on a single

factor but requires a consideration of numerous factors to
determine whether under all the circumstances there is a
likelihood of confusion.”

SquirtCo., 628 F.2d at 1091.

The strength of a trademark is closely associated with
its classification.

“[Trademark] cases, and in some instances

the Lanham Act, identify four different categories of terms with
respect to trademark protection.

Arrayed in an ascending order

which roughly reflects their eligibility to trademark status and
the degree of protection accorded, these classes are (1) generic,
(2) descriptive, (3) suggestive, and (4) arbitrary or fanciful.”
Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9
(2nd Cir. 1976) (the “Abercrombie Spectrum”).

Marks in the first

two classes of the Abercrombie Spectrum are non-distinctive and
are not capable of being registered.3

3

Marks in the second two

Generic terms are forever non-distinctive. Descriptive
terms are non-distinctive unless they subsequently acquire
secondary meaning.
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classes of the Abercrombie Spectrum are distinctive and are
capable of being registered.

Conversely, “[r]egistered marks

. . . are presumed to be distinctive . . . .”

Aromatique, Inc.

v. Gold Seal, Inc., 28 F.3d 863, 869 (8th Cir. 1994).
“The general rule regarding distinctiveness is clear:
An identifying mark is distinctive and capable of being protected
if it either (1) is inherently distinctive or (2) has acquired
distinctiveness through secondary meaning.”

Two Pesos, Inc. v.

Taco Cabana, Inc., 505 U.S. 763, 769 (1992).

Thus, there are two

paths that lead to the designation of “distinctiveness.”

The

first path is for marks that are either suggestive, arbitrary, or
fanciful; those marks are inherently distinctive.

“A term is

suggestive if it requires imagination, thought and perception to
reach a conclusion as to the nature of goods.”

Abercrombie, 537

F.2d at 11.
The Lanham Act generally prohibits the registration of
a mark that is “merely descriptive.”

15 U.S.C. § 1052(e).

“A

term is descriptive if it forthwith conveys an immediate idea of
the ingredients, qualities or characteristics of the goods.”
Abercrombie, 537 F.2d at 11.

However, as delineated in 15 U.S.C.

§ 1052(f), a second path to distinctiveness exists for a
descriptive mark that, by virtue of acquiring secondary meaning,
becomes distinctive, while still retaining its status as
“descriptive” on the Abercrombie Spectrum.
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“Marks which are

merely descriptive of a product are not inherently distinctive.
When used to describe a product, they do not inherently identify
a particular source, and hence cannot be protected.

However,

descriptive marks may acquire the distinctiveness which will
allow them to be protected under the Act.”

Two Pesos, Inc. v.

Taco Cabana, Inc., 505 U.S. 763, 769 (1992).
Specifically, 15 U.S.C. § 1052(f) allows for “the
registration of a mark used by the applicant which has become
distinctive of the applicant’s goods in commerce,” established by
“proof of substantially exclusive and continuous use thereof as a
mark by the applicant in commerce for the five years before the
date on which the claim of distinctiveness is made.”
§ 1052(f).

15 U.S.C.

Therefore, it follows that a mark registered under

§ 1052(f) “cannot be inherently distinctive as a matter of law.”
Aromatique, 28 F.3d at 869.

However, registration under

§ 1052(f) also means that a mark is entitled to the “presumption
. . . that the mark [has] acquired distinctiveness.”

Aromatique,

28 F.3d at 870.
Both of the Lovely Skin Marks were originally declared
“merely descriptive” by the PTO.

In addition, both marks were

subsequently registered under 15 U.S.C. § 1052(f).

Based on the

foregoing discussion, the Court concludes that the Lovely Skin
Marks are merely descriptive, not suggestive.

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In addition, the very definition of “suggestive” cannot
apply to “Lovely Skin” as a moniker for skin care products.

Like

the PTO, the Court finds that no “imagination, thought, or
perception” is needed to “reach a conclusion as to the nature of
goods” sold under the name “Lovely Skin.”
at 11.

Abercrombie, 537 F.2d

The goods sold by Lovely Skin under the Lovely Skin Marks

are designed to produce lovely skin; that is, the goods are
designed to produce exactly what the name describes.
However, there still exists the presumption that the
Lovely Skin Marks, descriptive though they may be, have
nonetheless acquired secondary meaning and, thereby, have
acquired distinctiveness.

Whether this presumption holds will be

better determined by the Court after a more expansive airing of
the evidence at trial.
With respect to the remaining SquirtCo factors,

The

Court has reviewed the briefs and evidentiary submissions, and
has considered the parties’ oral arguments.

Viewing the facts

and inferences in the light most favorable to the nonmoving
party, Lovely Skin, the Court finds that the remaining SquirtCo
factors (with the exception of “the alleged infringer’s intent to
confuse the public,” see below) present numerous unresolved,
material issues of fact that are not amenable to summary
judgment.

Ishtar’s motion for summary judgment will be denied.

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C.

Lovely Skin’s Motion for Summary Judgment.

In its

answer, Ishtar asserted two counterclaims requesting cancellation
of the Lovely Skin Marks.

Lovely Skin moves the Court for

summary judgment denying Ishtar’s requests for cancellation
(Filing No. 103).
“In any action involving a registered mark the court
may determine the right to registration, order the cancellation
of registrations, in whole or in part, restore canceled
registrations, and otherwise rectify the register with respect to
the registrations of any party to the action.”

15 U.S.C. § 1119.

“This provision has been held to be concurrent with the authority
of the Patent Office to conduct cancellation proceedings . . . .”
D. M. & Antique Import Corp. v. Royal Saxe Corp., 311 F. Supp.
1261, 1268 (D.C.N.Y. 1969).

“Cancellation is a discretionary

matter for the district court.”

Gilbert/Robinson, Inc. v. Carrie

Beverage-Missouri, Inc., 989 F.2d 985, 993 (8th Cir. 1993).
In addition to the power of the district court to order
the cancellation of a trademark, an aggrieved party may initiate
a cancellation proceeding itself with the PTO:
A petition to cancel a registration
of a mark, stating the grounds
relied upon, may . . . be filed as
follows by any person who believes
that he is or will be damaged . . .
by the registration of a mark on
the principal register established
by this chapter . . . : (1) Within
five years from the date of the

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registration of the mark under this
chapter.
15 U.S.C. § 1064(1) (emphasis added).
The Lovely Skin Marks were registered on September 20,
2005, and June 19, 2007.

Ishtar filed a petition to cancel the

registration of the Lovely Skin Marks with the PTO on September
7, 2010, within five years of their registration (Ex. 3, Filing
No. 91, at 132).
Lovely Skin’s first argument in favor of summary
judgment is that Ishtar neglected to plead fraud.

Unlike 15

U.S.C. § 1064(3), neither 15 U.S.C. §§ 1119 nor 1064(1) requires
that Ishtar plead fraud under these circumstances.

Therefore,

this argument must be rejected.
Lovely Skin’s second argument is that Ishtar has not
been damaged by the registration of the Lovely Skin Marks, as
required by 15 U.S.C. § 1064(1).

Ishtar states that it has been

damaged inasmuch as it is defending itself in this lawsuit, and
that the likelihood of damage exists in the future because Ishtar
may be precluded from registering its own marks due to the
registration of the Lovely Skin Marks (Filing 120 at 15-16).

The

Court finds that Ishtar has presented evidence that it has been
or will be damaged by the Lovely Skin Marks in the context of 15
U.S.C.

§ 1064(1).
Viewing the facts and inferences in the light most

favorable to the nonmoving party, Ishtar, the Court finds that
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there remains a genuine dispute as to the material facts
surrounding Ishtar’s request for cancellation of the Lovely Skin
Marks.

In particular, the Court finds that whether Lovely Skin

had “substantially exclusive and continuous use” of the Lovely
Skin Marks “in commerce for the five years before the date on
which the claim of distinctiveness [was] made” is an unresolved,
genuine factual issue that must be further developed.
§ 1052(f).

15 U.S.C.

Lovely Skin’s motion for summary judgment as to

Ishtar’s counterclaims will be denied.
III.

Ishtar’s Motion to Strike Jury Demand.
“Determining which actions belong to law and which to

equity for the purpose of delimiting the jury trial right
continues to be one of the most perplexing questions of trial
administration.”

9 Charles Alan Wright & Arthur R. Miller,

Federal Practice and Procedure § 2302 (3d ed. 2008).

The Supreme

Court has described the process as a two-step historical test.
In resolving the issue,
we ask, first, whether we are
dealing with a cause of action that
either was tried at law at the time
of the founding or is at least
analogous to one that was. . . .
If the action in question belongs
in the law category, we then ask
whether the particular trial
decision must fall to the jury in
order to preserve the substance of
the common-law right as it existed
in 1791.

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Markman v. Westview Instruments, Inc., 517 U.S. 370, 376 (1996)
(citation omitted).

So, from a practical point of view,

prior to trial, the attorneys for
both parties and the trial court
must atomize the issues raised by
the action and determine whether
they are purely legal, purely
equitable, or common to both. The
federal jury decides the purely
legal issues and any common to the
legal and equitable claims; the
court decides any purely equitable
issues.
9 Wright & Miller, supra, § 2302.1.

Consequently, the Court will

evaluate each of the five remedies requested by Lovely Skin.
1.

Declaratory Judgment.

“[A]n order” that the Lovely

Skin Marks “are valid and the property of [Lovely Skin]” (Filing
No. 1, at 4).
2.

Declaratory Judgment.

“An order that [Ishtar] has

infringed upon [Lovely Skin’s] Trademark, . . . has competed
unfairly with [Lovely Skin], has diluted the distinctiveness of
the trademark and has injured [Lovely Skin’s] business reputation
. . . .” (Filing No. 1, at 4).
“[D]eclaratory judgments were utterly unknown in 1791
and thus the present right to a jury in an action for a
declaratory judgment cannot be resolved by a glance at history.”
10B Charles Alan Wright, Arthur R. Miller & Mary Kay Kane,
Federal Practice and Procedure § 2769 (3d ed. 1998).

Nor can a

request for declaratory judgment “be decided on the supposition

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that there is something inherently ‘legal’ or ‘equitable’ about
this kind of action.”

Id.

[T]he solution that has been worked
out to this problem is to look to
the kind of action in which the
issue involved would have been
decided if there were no
declaratory-judgment procedure and
to see whether the issue would have
been triable of right to a jury in
that action. If there would have
been a right to jury trial on the
issue if it had arisen in an action
other than for a declaratory
judgment, it must be tried to a
jury on demand in the declaratory
action. There is no right to jury
trial if, absent the declaratory
procedure, the issue would have
arisen in a proceeding in equity
. . . .”
Id.

“[A] plaintiff who is seeking equitable relief and not

damages cannot wrest an entitlement to a jury trial by the facile
expedient of attaching a claim for declaratory judgment.
Otherwise anyone seeking an injunction could obtain a jury
trial.”

Marseilles Hydro Power, LLC v. Marseilles Land and Water

Co., 299 F.3d 643, 648 (7th Cir. 2002).

Thus Lovely Skin’s pleas

for declaratory judgment do not carry with them the right to a
jury trial unless Lovely Skin is otherwise afforded the right to
a jury trial as to damages.
3.

Permanent Injunction.

“[Ishtar] . . . be

permanently enjoined and restrained from . . .” using the address
LivelySkin.com or any other imitation of LovelySkin.com;

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otherwise infringing on the Lovely Skin Marks; and “[u]nfairly
competing with [Lovely Skin], diluting the distinctiveness of the
trademarks and [Lovely Skin’s] distinctive packaging, or injuring
[Lovely Skin’s] business reputation in any manner” (Filing No. 1,
at 4).
4.

Mandatory Injunction.

“[Ishtar] be directed to

file with this Court and serve on [Lovely Skin] . . . a report
. . . setting forth the manner and form in which [Ishtar] has
complied with the injunction,” as provided in 15 U.S.C. § 1116(a)
(Filing No. 1, at 4-5).
An injunction is a classic form of equitable relief.
Actions for injunctions are
equitable in nature and were
unknown to the common law courts of
England or the United States until
the merger of law and equity.
Because of this history, there is
no constitutional right to a jury
trial on a claim for an injunction.
A statute will not be read as
having created a right to jury
trial on a claim for an injunction
unless Congress expressly has
provided for one in the language of
the statute.
9 Wright & Miller, supra, § 2308.

The Lanham Act does not

include an express provision for a jury trial for a party who is
seeking an injunction.

Absent such an express provision, Lovely

Skin’s requests for injunction lie in equity and do not support a
demand for a jury trial.

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5.

Damages / Profits / Attorney Fees.

“An accounting

be held and judgment rendered against [Ishtar] for [Lovely
Skin’s] attorney fees for: i.

All profits received . . . by the

use of the trade name LivelySkin.com.

ii.

All damages sustained

by [Lovely Skin] . . . and that such damage be trebled” (Filing
No. 1, at 5).
The Lanham Act provides the district court with
considerable latitude in awarding damages or profits in a
trademark action.
When a violation of any right of
the registrant of a mark registered
in the Patent and Trademark Office
. . . shall have been established
in any civil action arising under
this chapter, the plaintiff shall
be entitled, subject to the
provisions of sections 1111 and
1114 of this title, and subject to
the principles of equity, to
recover (1) defendant’s profits,
(2) any damages sustained by the
plaintiff, and (3) the costs of the
action. The court shall assess
such profits and damages or cause
the same to be assessed under its
direction.
15 U.S.C. § 1117(a) (emphasis added).
In Dairy Queen v. Wood, 369 U.S. 469 (1962), the United
States Supreme Court established that a request for damages on a
trademark infringement claim was a legal claim that must be
afforded a trial by jury.

“After Dairy Queen it is clear that

there is a right to jury trial whenever damages are claimed in a

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trademark action, even though the damage claim may be considered
incidental to an equitable suit for an injunction.”

Oxford

Indus., Inc. v. Hartmarx Corp., No. 88 C 0322, 1990 WL 65792, at
*5 (N.D. Ill. May 2, 1990).
Although the discovery period in this case ended on
October 31, 2011, Lovely Skin has not submitted any evidence to
the Court as to actual, monetary damages that it has suffered due
to the alleged infringement by Ishtar.

On the contrary, during

Dr. Schlessinger’s deposition, in response to the question “So as
you sit here today, you are not aware of any revenue that flowed
to my client that should have flowed to you?” Dr. Schlessinger
replied, “Actually, I would restate the question in a different
manner.

I’m not aware of any revenue that went to [Ishtar] that

shouldn’t have come to Lovely Skin” (Ex. 2, Filing No. 100, at
17).

Dr. Schlessinger is apparently suggesting that all of

Ishtar’s revenue should have come to Lovely Skin, which is
indistinguishable from a theory of disgorgement of profits.

The

Court finds that without an articulated claim for damages, Lovely
Skin’s jury demand on that basis cannot stand.
A significant difference exists between requesting
relief in the form of damages and in the form of profits:

“To

obtain an accounting of profits, the courts almost always require
that defendant’s infringement imply some connotation of ‘intent,’
or a knowing act denoting an intent, to infringe or reap the

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harvest of another’s mark and advertising.”

5 J. Thomas

McCarthy, McCarthy on Trademarks and Unfair Competition § 30:62
(4th ed. 2011) (collecting cases).4

“The property rights of

trademark owners and the interests of the public are advanced
neither by withholding monetary relief when equity requires such,
nor by the award of arbitrary monetary compensation where no
actual damages have been shown and defendant’s behavior evidences
no wrongful intent.”

Bandag, Inc. v. Al Bolser’s Tire Stores,

Inc., 750 F.2d 903, 921 (Fed. Cir. 1984).
The Eighth Circuit recently discussed the requirement
of willfulness for an infraction of 15 U.S.C. § 1125(a), the
third allegation in Lovely Skin’s complaint, in Masters v. UHS of
Delaware, Inc. 631 F.3d 464 (8th Cir. 2011).

In Masters, the

Eighth Circuit was primarily addressing the issue of whether
proof of actual confusion was required for an award of money
damages.

In its discussion, the Eighth Circuit stated, “For

purposes of adjudicating this appeal, we assume, without
deciding, that willful infringement is a prerequisite of monetary
relief.”

Masters, 631 F.3d at 471 n.2.

In addition, the Eighth

Circuit approvingly cited the Ninth Circuit: “See Gracie v.
Gracie, 217 F.3d 1060, 1068 (9th Cir. 2000) (holding that
eligibility for monetary relief under 15 U.S.C. § 1114 of the

4

In the Oxford case, finding that a jury trial was proper,
the court noted that the jury had found that the party that
infringed trademarks “did so willfully.” Id. at *1.
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Lanham Act ‘requires only a likelihood of confusion combined with
willful infringement’) (emphasis in original) . . . .”

Masters,

631 F.3d at 474.
Lovely Skin did not address the issue of intent in its
brief in opposition to Ishtar’s motion to strike the jury demand.
However, in its brief in opposition to Ishtar’s motion for
summary judgment, Lovely Skin addressed the issue in the context
of the SquirtCo factors.

In support of its allegation of intent,

Lovely Skin described the actions of Ms. Vardeh’s husband in an
apparently unrelated case, but did not indicate how his actions
might be attributed to Ishtar (Filing No. 118, at 22-23).

In

addition, Lovely Skin named several of Ishtar’s business
practices of which Lovely Skin disapproves, but did not tell the
Court what the nexus is between these activities and Lovely Skin
(Id. at 23-24).
Ishtar claims that it “did not have knowledge of Lovely
Skin’s name or website when it adopted the url
www.livelyskin.com” (Filing No. 122, at 3, citing deposition
testimony by Ms. Vardeh).

If anything, the evidence suggests

that Ms. Vardeh was interested in the concept of “lively skin” as
opposed to trying to mimic the words “lovely skin,” since she
registered both the domain names “livelyskin.com” and
“energeticskin.com” during the same transaction (Ex. 3, Filing
91, at 65).

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The Court finds that Lovely Skin has not submitted
evidence that would establish that Ishtar intentionally infringed
on the Lovely Skin Marks.

Therefore, absent intent, the

“principles of equity” require that Lovely Skin not be allowed to
seek disgorgement of profits and that Lovely Skin be limited to
non-legal remedies only.
“Under the [Lanham Act], the decision to award fees is
committed to the district court,

not the jury.”

Tamko Roofing

Products, Inc. v. Ideal Roofing Co., Ltd., 282 F.3d 23, 31 (1st
Cir. 2002) (citing 5 J. Thomas McCarthy, McCarthy on Trademarks
and Unfair Competition § 30:99 (4th ed. 2001)).

Since Lovely

Skin’s requests for damages, disgorgement of profits, and
attorney fees do not meet the given requirements to establish the
right to a trial by jury, Lovely Skin’s jury demand will be
denied, and Ishtar’s motion to strike jury demand will be
granted.
IV. Motion to Exclude Expert Report and Testimony of James T.
Berger and of Megan Driscoll.
Ishtar seeks to exclude both the testimony of James T.
Berger and the report that he has prepared, as well as the
testimony of Megan Driscoll and the report she has prepared,
under Federal Rule of Evidence 702 and Daubert v. Merrell Dow
Pharmaceuticals, Inc., 509 U.S. 579 (1993).

After review of the

reports and the parties’ briefs, and in light of the fact that
the jury demand is denied, the Court finds it more appropriate to
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evaluate the admissibility and the weight to be given to the
reports in the context of the bench trial.

Accordingly, the

Court will reserve ruling on whether the reports will be received
into evidence and whether the witnesses will testify as experts
until the issues present themselves at trial, and Ishtar’s motion
to exclude will be denied.
V.

Motion to Clarify.
On December 6, 2011, this Court granted Ishtar’s motion

to compel Lovely Skin’s responses to Ishtar’s Requests for
Production of Documents 32 and 37 (Filing No. 109).

Part of the

deficiency in Lovely Skin’s previous discovery responses had been
the lack of dates, by year, that certain keywords were purchased.
Now Lovely Skin moves the Court to clarify its order to “prevent
the disclosure or discovery of information sought by [Ishtar]
regarding the date, by year, Lovely Skin purchased its adwords on
Google as such information is proprietary and confidential
subject to protection from disclosure” (Filing No. 131, at 2).
In the alternative, Lovely Skin also requests a protective order
in this matter (Id.).
As explained in the previous order, the Court finds
that Ishtar’s discovery requests are directly relevant, at a
minimum, to Ishtar’s affirmative defenses.

To the extent that

clarification is needed, the Court affirms its previous order
(albeit with a new compliance date, February 17, 2012) and

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directs Lovely Skin to comply with Ishtar’s discovery requests as
previously ordered, including the breakdown of keyword purchases
by year.

In addition, this Court will enter a Protective Order

to protect any confidential information that may be included in
Lovely Skin’s responses to Ishtar’s Requests for Production of
Documents 32 and 37.

Accordingly,

IT IS ORDERED:
1) Ishtar’s motion for summary judgment (Filing No. 89)
is denied;
2) Lovely Skin’s motion for summary judgment (Filing
No. 103) is denied;
3) Ishtar’s motion to strike jury demand (Filing No.
98) is granted;
4) Ishtar’s motion to exclude the expert report and
testimony of James T. Berger (Filing No. 92) is denied;
5) Ishtar’s motion to exclude the expert report and
testimony of Megan Driscoll (Filing No. 95) is denied;
6) Lovely Skin’s motion to clarify (Filing No. 131) is
granted.

This Court’s previous order granting Ishtar’s motion to

compel (Filing No. 109) is affirmed, with the exception that
Lovely Skin must now comply with the order by February 17, 2012;
7) A second amended progression order setting the date
for trial will be issued by the Court forthwith; and

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8) Lovely Skin’s responses to Ishtar’s Requests for
Production of Documents 32 and 37 are subject to a Protective
Order and shall be disclosed only in designated ways:
a)

As used in this Protective Order, these terms

have the following meanings:
“Attorneys” means any counsel of
the parties; and
“Confidential Documents” are Lovely
Skin’s responses to Ishtar’s
Requests for Production of
Documents 32 and 37, including any
exhibits thereto.
b)

All Confidential Documents, along with the

information contained in the documents, shall be used solely for
the purpose of this action, and no person receiving such
documents shall, directly or indirectly, use, transfer, disclose,
or communicate in any way the documents or their contents to any
person other than those specified in paragraph c).

Any other use

is prohibited.
c)

Access to any Confidential Document shall be

limited to:
(i) the Court and its staff;
(ii) Attorneys;
(iii)persons shown on the face of
the document to have authored
or received it;
(iv) court reporters retained to
transcribe testimony;
(v) the parties; and
(vi) Sharokin Vardeh.

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d)

Within 60 days of the termination of this

action, including any appeals, Ishtar shall either destroy or
return to Lovely Skin all Confidential Documents, including any
copies thereof.
e)

Any party may apply to the Court for a

modification of this Protective Order, and nothing in this
Protective Order shall be construed to prevent a party from
seeking such further provisions enhancing or limiting
confidentiality as may be appropriate.
f)

No action taken in accordance with the

Protective Order shall be construed as a waiver of any claim or
defense in the action or of any position to discoverability or
admissibility of evidence.
g)

The obligations imposed by this Protective

Order shall survive the termination of this action.
DATED this 6th day of February, 2012.
BY THE COURT:
/s/ Lyle E. Strom
____________________________
LYLE E. STROM, Senior Judge
United States District Court

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