Boink Systems, Incorporated et al v. Las Vegas Sands Corporation
Filing
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ORDER Denying 219 LVS' Petition for An Order to Show Cause. Signed by Magistrate Judge Peggy A. Leen on 8/3/11. (Copies have been distributed pursuant to the NEF - EDS)
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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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BOINK SYSTEMS, INCORPORATED, et al.,
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Plaintiffs,
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vs.
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LAS VEGAS SANDS CORPORATION,
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Defendant.
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__________________________________________)
Case No. 2:08-cv-00089-RLH-PAL
ORDER
(Pet. for OSC - Dkt. #219)
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Before the court is Las Vegas Sands Corp.’s Petition for an Order to Show Cause why Boink
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Systems, Incorporated, and its President Should Not be Held in Contempt (Dkt. #219). The court has
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considered the Motion, Boink System Inc.’s Opposition (Dkt. #224), and Las Vegas Sands Corp.’s
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Reply (Dkt. #27).
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BACKGROUND
The parties’ claims and counterclaims were tried before a jury February 22 through March 1,
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2011. A Clerk’s Judgment (Dkt. #203) was entered March 2, 2011. After post-trial motions, the court
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entered an Amended Judgment (Dkt. #226) on May 20, 2011. On February 22, 2011, the first day of
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trial, counsel for the parties advised the court that they had agreed to a permanent injunction resolving
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Las Vegas Sands’ (“LVS”) trademark claims. The Order (Dkt. #205) on the stipulated permanent
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injunction was approved by the court and signed February 22, 2011, and docketed, but not entered on
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the public record until March 8, 2011, after the jury returned its verdict.
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In the current petition, LVS seeks an order to show cause why Boink Systems and its president
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should not be held in contempt for violating the terms of the injunction. The petition, which is
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supported by the declaration of Christopher Matthews asserts that Plaintiff Boink Systems, Inc. (“BSI”)
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violated the terms of the permanent injunction by displaying an image of a kiosk similar in appearance
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to the kiosk at issue in this case, bearing the LVS Trademark Logo “THE VENETIAN” on its side. Mr.
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Matthews attests that on April 14, 2011, he used his office computer to view the BSI website.
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Matthews Declaration ¶ 7. He used the same internet address (http://www.boink.com) that he used
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previously when viewing the BSI website when corresponding with Plaintiff’s counsel, Larry Washor.
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Id. The “News and Events” section of the BSI website displayed an image of a kiosk similar in
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appearance to the kiosk at issue in this case, bearing the LVS Trademark Logo “THE VENETIAN” on
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its side. Id. ¶ 8. He attached a copy of the screen capture depicting the web page containing the image
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as Exhibit “B” to the petition.
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Based on these representations, LVS argues that BSI has violated the court’s permanent
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injunction and should be held in contempt. LVS contends it has established by clear and convincing
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evidence that the order has been violated, with sufficient proof to reasonably satisfy the court that it is
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highly probable that a violation occurred. As such, the burden shifts to BSI to demonstrate it was
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somehow unable to comply with the permanent injunction. LVS cites authority for the proposition that
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the party resisting a finding of contempt must show that it has “made in good faith all reasonable efforts
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to meet the terms of the court order.” Commodity Futures Trading Comm’n v. Wellington Precious
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Metals, 950 F.2d 1525, 1529 (11th Cir. 1992); S.E.C. v. Showalter, 227 F.Supp 2d 110, 120 (D. D.C.
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2002). LVS argues that BSI cannot make this showing because it has repeatedly represented to the
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court and opposing counsel in the past that it has removed images depicting LVS logos and trade names
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from its website. The permanent injunction specifically binds not only the Plaintiff, but its officers,
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agents, servant, employees, representatives, attorneys and assigns. Under these circumstances, the court
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has jurisdiction over non-party William Toro, the President of BSI to hold him in contempt, and should
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do so. LVS requests that the court require Boink and its President, William Toro, to appear and show
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cause why it should not be held in contempt, an award of additional injunctive relief, attorney’s fees and
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costs for the necessity of filing this petition, and any other relief the court deems just and proper.
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BSI opposes the motion arguing it is based on the appearance of a single image formerly posted
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on the “News and Events” section of BSI’s website. The picture was removed April 27, 2011, the day
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after Plaintiff’s petition was filed and served. The picture depicted equipment designed by Plaintiff and
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displayed at a public trade show in 2007. BSI argues that only when the picture is viewed with a
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magnifying glass or blown up beyond the ordinary dimensions at which it was displayed, as LVS did in
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its petition, can the word “THE VENETIAN” be seen on the side of the equipment in the picture. BSI
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represents that it was unaware that the picture bearing “THE VENETIAN” name was on its website.
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However, when the petition was filed, Plaintiff immediately acted to remove the picture.
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BSI points out that a simple phone call or letter from the Defendant to its counsel would have
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accomplished the goal of protecting Defendant’s trademark if this was the actual aim. Moreover, either
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LVS was not aware the image was on BSI’s website until Mr. Matthews accessed the website on April
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14, 2011, or LVS deliberately delayed filing this petition for strategic reasons. BSI argues that is has
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substantially complied with the permanent injunction and that substantial compliance purges any
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contempt as a matter of law.
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The opposition is supported by the declaration of William Toro. Mr. Toro is the President and
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CEO of Plaintiff BSI. Toro Declaration, ¶ 1. He attests that after entering into the permanent
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injunction he reviewed the www.boink.com website to check for any images or contents possibly using
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Defendant’s trademarks as identified in the injunction to ensure BSI was in compliance. Id. ¶ 4. It now
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appears that in his review he inadvertently overlooked the picture that was in the “News and Events”
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page of the website depicting equipment designed by Plaintiff and displayed at a public trade show in
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2007 with “THE VENETIAN” name/mark on the side of the equipment. Id. He does not know
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whether he overlooked the image because of its size (2.25 inches by 1.75 inches on a standard computer
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screen) or because it was part of a loop of pictures that flashed on the screen for less than one second at
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a time. Id. He has attached a true and correct copy of the image as it appeared on a standard computer
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screen as Exhibit “1A” to his declaration. Id. “The image was not up on the website with any intent,
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and the website has not been the source of any revenue since the injunction was entered.” Id. ¶ 5. On
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April 27, 2011, he received a copy of Defendant’s petition. Id. ¶ 6. As quickly as possible, and that
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same day, BSI removed the picture and took down all content from the “News and Events” section of
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the website. Id. As of the date of his declaration, May 12, 2011, no new content had been put up on the
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“News and Events” page of the website. Id.
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LVS replies that BSI has conceded that the permanent injunction was entered on March 8, 2011,
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that BSI and its president were aware of the terms of the injunction, and that LVS’ trademarked “THE
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VENETIAN” logo appeared on the website after March 8, 2011. BSI does not dispute that on April 14,
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2011, it assured the court through its counsel that any unauthorized use of the LVS trademark ceased in
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early 2008. This representation was untrue. Therefore, LVS has made a prima facae case of contempt,
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and BSI’s “incessant claims of inadvertence ring hollow.” LVS also argues that BSI continues to make
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false representations because the screen captures submitted by BSI in its opposition, showing the image
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on its website, bears the date “28/04/2011" in the lower right-hand corner. Thus, Mr. Toro’s claim that
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it was removed on April 27, 2011 is again false. As a result, neither LVS nor this court should be
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expected to take BSI and Mr. Toro at face value any longer.
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DISCUSSION
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LVS asks the court for an order: (1) awarding LVS its costs and fees for bringing this petition;
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(2) finding BSI and its President in contempt; and (3) supplementing and amending the permanent
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injunction to (a) require placement of a corrective notice on the home page of BSI’s website; and (b)
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requiring payments to LVS of $100,000.00, assessed jointly and severally against BSI and its president,
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for each and any further violation of the permanent injunction.
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A. Legal Standard
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It is axiomatic that courts have the inherent authority to compel obedience to their lawful orders.
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Shuffler v. Heritage Bank, 720 F.2d 1141, 1146 (9th Cir. 1983). The standard for finding a party in
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civil contempt is well settled. In re Bennett, 298 F.3d 1059, 1069 (9th Cir. 2002). The moving party
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has the burden of showing by clear and convincing evidence that the party against whom contempt is
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sought violated a specific and definite court order. Id. If the moving party meets this burden, the
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burden shifts “to the contemnors to demonstrate why they were unable to comply.” Id.
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A party may be found in civil contempt for disobedience of a specific and definite court order if
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it fails to take all reasonable steps within its power to comply. In Re Dual-Deck Video Cassette
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AntiTrust Lit., 10 F.3d 693, 695 (9th Cir. 1993). The contempt “need not be willful,” and there is no
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good faith exception to the requirement to obey a court order. Id. However, a party should not be held
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in contempt if its action appears to be based on a good faith and reasonable interpretation of the court’s
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order. Id. Substantial compliance with a court order is a defense to civil contempt. Id. A few
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technical violations do not vitiate substantial compliance if a party has made reasonable efforts to
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comply. Id. Substantial compliance with a court order purges civil contempt. NLRB v. A-Plus
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Roofing, Inc., 39 F.3d 1410, 1418 (9th Cir. 1994) (citing General Signal Corp. v. Donallco, Inc., 787
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F.2d 1376, 1379 (9th Cir. 1986).
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B.
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The parties do not dispute the standard the court should apply in resolving this dispute. BSI does
Analysis
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not dispute that it displayed an image of the LVS name/mark THE VENETIAN” on its website after it
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entered into a permanent injunction which the court approved on February 22, 2011. However, LVS
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does not dispute that the image was approximately 2.25 x 1.75 inches on a standard computer screen
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and was part of a loop of pictures that flashed on the BSI website as part of a loop of pictures displayed
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from a public trade show in 2007 for less than one second at a time.
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LVS initiated this action on January 22, 2008, when it filed this complaint and has been most
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vigilant in enforcing its intellectual property rights. Counsel for LVS went online to the BSI website
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April 14, 2011, to confirm that BSI was not displaying and LVS trademark logo prohibited by the
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permanent injunction the parties stipulated to and the court approved. Counsel found a single image on
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the site and attached an enlarged copy of the screen capture depicting the webpage containing the image
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as an exhibit to the petition. Thus, LVS has established clear and convincing evidence that the court’s
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permanent injunction has been violated. However, the court finds that BSI has demonstrated that it
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made good faith reasonable efforts to comply with the terms of the permanent injunction and has
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substantially complied. Additionally, BSI took prompt corrective action once the violation was brought
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to its attention. Counsel for LVS elected to file this petition twelve days after finding a single image on
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BSI’s website instead of picking up the phone and notifying opposing counsel of the problem. The
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problem could have, and should have, been resolved expeditiously and with minimal expense to both
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sides. For whatever reason, counsel for LVS elected to file this petition with the court. The court finds
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that BSI’s technical violation of the permanent injunction does not warrant civil contempt sanctions,
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and that BSI’s prompt corrective action has purged its technical violation of the court’s order.
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Accordingly,
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IT IS ORDERED that LVS’ Petition For An Order to Show Cause Why Boink Systems, Inc.
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and It’s President Should Not Be Held In Contempt (#219) is DENIED.
Dated this 3rd day of August, 2011.
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______________________________________
Peggy A. Leen
United States Magistrate Judge
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