Justia U.S. 7th Circuit Court of Appeals Opinion Summaries

Quincy develops and sells dietary supplements. Its Prevagen® product is sold through brick‐and‐mortar stores and online. Quincy registered its Prevagen® trademark in 2007. Ellishbooks, which was not authorized to sell Prevagen® products, sold dietary supplements identified as Prevagen® on Amazon.com, including items that were in altered or damaged packaging; lacked the appropriate purchase codes or other markings that identify the authorized retail seller of the product; and contained Radio Frequency Identification tags and security tags from retail stores. Quincy sued under the Lanham Act, 15 U.S.C. 1114. Ellishbooks did not answer the complaint. Ellishbooks opposed Quincy’s motion for default judgment, arguing that it had not been served properly and its Amazon.com products were “different and distinct” from the Quincy products The court entered default judgment, finding that Quincy had effected “legally adequate service.” Ellishbooks identified no circumstances capable of establishing good cause for default. Quincy had subpoenaed and submitted documents from Amazon.com establishing that Ellishbooks had received $480,968.13 in sales from products sold as Prevagen®.The district court entered a $480,968.13 judgment in favor of Quincy, plus costs, and permanently enjoined Ellishbooks from infringing upon the PREVAGEN® trademark and selling stolen products bearing the PREVAGEN® trademark. The Seventh Circuit affirmed, rejecting arguments that the district court failed to make “factual findings on decisive issues” and erred in holding that Ellishbook knew or had reason to know that a portion of the Prevagen® products were stolen. View "Quincy Bioscience, LLC v. Ellishbooks" on Justia Law

Flexco sued for trade dress infringement and unfair competition, alleging that CAI infringed its registered and common law trade dress by promoting and selling conveyor belt fasteners with a product design that is confusingly similar to the product design of Flexco’s fasteners. Flexco cited the Lanham Act, 15 U.S.C. 1114 and 1125(a), and the Illinois Uniform Deceptive Trade Practices Act, 815 ILCS 510/2. CAI sought cancellation of Flexco’s registered trademarks and a declaratory judgment of invalidity, unenforceability, and noninfringement.The district court granted CAI summary judgment, holding that Flexco’s trade dress was functional. The Seventh Circuit affirmed. Flexco’s utility patent discloses the utilitarian benefits of the beveled center scallop and is strong evidence of the functionality of Flexco’s trade dress; that evidence is bolstered by Flexco’s own advertisements, internal communications, and statements to the Patent Office. Where functionality is established, there is no need to consider alternative design possibilities. View "Flexible Steel Lacing Co. v. Conveyor Accessories, Inc." on Justia Law

Curry, the founder of “Get Diesel Nutrition,” has paid for advertising for his products, including "Diesel Test," in national fitness magazines since 2002. In 2016, the defendants began selling a sports nutritional supplement, "Diesel Test Red Series." Like Curry’s product, the defendants’ product comes in red and white packaging with right-slanted all-caps typeface bearing the words “Diesel Test.” Curry alleges that he received messages indicating that customers were confused. The defendants concocted a fake ESPN webpage touting their product and conducted all their marketing online. In about seven months, they received more than $1.6 million in gross sales. At least 767 sales were to consumers in Illinois. After Curry demanded that the defendants cease and desist, both parties filed trademark applications for "Diesel Test." The Patent Office suspended both applications. Curry filed suit, alleging violation of the Illinois Consumer Fraud and Deceptive Practices Act, violations of the Lanham Act, 15 U.S.C. 1125, violation of the Anti-Cybersquatting Consumer Protection Act, filing a fraudulent trademark application, and violation of common law trademark protections. The district court dismissed for lack of personal jurisdiction.The Seventh Circuit reversed. Revolution’s activity can be characterized as purposefully directed at Illinois, the forum state, and related to Curry's claims. Physical presence is not necessary for a defendant to have sufficient minimum contacts with a forum state. Illinois has a strong interest in providing a forum for its residents to seek redress for harms suffered within the state by an out-of-state actor. View "Curry v. Revolution Laboratories, LLC" on Justia Law

Two non-competing Midwestern companies operated by brothers used marks containing the family name, Fabick. The owner of the registered mark (FI), a small manufacturer of sealants, sued JFTCO, a larger distributor of Caterpillar equipment, for trademark infringement. A jury found that JFTCO had violated the Lanham Act but had not committed common law infringement. The district court entered limited injunctive relief requiring that JFTCO issue, for five years, disclaimers clarifying that it is not associated with FI. The Seventh Circuit affirmed, rejecting FI’s claim that it was entitled to a broad permanent injunction and should have been allowed to recover JFTCO’s profits, lacking evidence that the defendants were unjustly enriched by consumers assuming that Fabick’s sealants and coatings business is the same or related to JFTCO’s business. The court also rejected JFTCO’s challenged to a jury instruction: “[D]efendant JFTCO used the FABICK mark in a manner that is likely to cause confusion as to the source or origin of plaintiff’s product or that plaintiff has somehow become connected to JFTCO.” When read in context, the language regarding whether “plaintiff has somehow become connected to JFTCO” clearly refers to the parties’ products and/or services, and is not impermissibly vague. View "Fabick, Inc. v. JFTCO, Inc." on Justia Law

LHO's Chicago hotel underwent a branding change in February 2014 when the establishment became “Hotel Chicago,” a signature Marriott venue. Around May 2016, Perillo and his associated entities opened their own “Hotel Chicago” three miles from LHO’s site. LHO sued for trademark infringement and unfair competition under the Lanham Act, 15 U.S.C. 1125(a), and for trademark infringement and deceptive trade practices under Illinois law. After more than a year, LHO moved to voluntarily dismiss its claims, with prejudice. Defendants made a post‐judgment request for attorney fees, 15 U.S.C. 1117(a), for the prevailing party in “exceptional cases.” The parties identified two distinct standards for exceptionality: the Seventh Circuit’s standard, that a case is exceptional under section 1117(a) if the decision to bring the claim constitutes an “abuse of process” and the more relaxed totality‐of‐the‐circumstances approach under the Patent Act that the Supreme Court announced in Octane Fitness (2014). Other circuits have extended Octane to the Lanham Act. The district judge acknowledged Octane but adhered to the “abuse‐of‐process” standard and declined to award fees. The Seventh Circuit reversed and remanded, holding that Octane’s “exceptional case” standard controls. The court noted the legislative history, the Patent Act’s identical language, and the Supreme Court’s use of trademark law in Oc‐ tane View "LHO Chicago River, L.L.C. v. Perillo" on Justia Law

The dealer had the exclusive right to sell the manufacturer's below-ground storm shelters in Missouri and Arkansas. The dealer created a wordmark—“Life Saver Storm Shelters”— and a logo using that name, which it affixed to the shelters. In 2006, the manufacturer obtained the dealer’s permission to use these marks on shelters marketed in Illinois. The manufacturer violated the limited license by using the marks on products sold throughout the country. The manufacturer's suit for trademark infringement, claiming prior use and ownership of the wordmark, was rejected on summary judgment. The dealer counterclaimed for trademark infringement and false endorsement under the Lanham Act. The district judge found for the dealer on all claims, entered a cease-and-desist order, and awarded $17 million in disgorged profits as damages but denied vexatious-litigation sanctions under 28 U.S.C. 1927 and attorney’s fees under the Lanham Act. The Seventh Circuit affirmed in part, rejecting the manufacturer's argument that the logo violated a statute that makes it a crime to use the American Red Cross emblem. The conclusion that the manufacturer engaged in trademark infringement on a vast scale was supported by the evidence. The court granted a limited remanded; although the judge reasonably concluded that section 1927 sanctions were not warranted, his summary denial of Lanham Act fees cannot be squared with his conclusions on the merits concerning infringement. View "4SEMO.COM, Inc. v. Southern Illinois Storm Shelters, Inc." on Justia Law

Sullivan, a graphic design artist, produced 33 illustrations for Flora, an herbal supplement company, to use in two advertising campaigns. Upon noticing that Flora was using the illustrations in other ads, Sullivan brought suit for copyright infringement and opted to pursue statutory damages to maximize her potential payout by classifying each of her 33 illustrations as “one work” within the meaning of section 504(c)(1) of the Copyright Act. Flora argued that the illustrations were part of two broader compilations. The district court instructed the jury that Sullivan could recover separate awards of statutory damages for 33 acts of infringement on 33 separate illustrations. The jury returned a statutory damages award of $3.6 million. The Seventh Circuit vacated. The district court committed error in permitting separate awards of statutory damages unaccompanied by any finding that each or any of the 33 illustrations constituted “one work” within the meaning and protection of section 504(c)(1). View "Sullivan v. Flora, Inc." on Justia Law

SportFuel registered its first “SportFuel” trademark for “food nutrition consultation, nutrition counseling, and providing information about dietary supplements and nutrition,” which became “incontestable” in 2013 (15 U.S.C. 1065). SportFuel later registered the trademark for “goods and services related to dietary supplements and sports drinks enhanced with vitamins.” Gatorade, created in 1965, is more widely known and is the official sports drink of the NBA, PGA, MLB, MLS, and other organizations. In addition to its traditional sports drinks, Gatorade now customizes its sports drinks by selling formulas that are tailored to the nutritional needs of individual professional athletes and sells other sports nutrition products. It began to publicly describe its products as sports fuels in 2013. In 2016 it registered the trademark “Gatorade The Sports Fuel Company.” Gatorade disclaimed the exclusive use of “The Sports Fuel Company” after being advised that the phrase was merely descriptive of its products. SportFuel sued for trademark infringement, unfair competition, and false designation of origin in violation of the Lanham Act. Gatorade sought cancellation of SportFuel’s trademark, moved to exclude SportFuel’s expert’s testimony and survey evidence concerning the likelihood of consumer confusion from Gatorade’s use of the slogan. The Sixth Circuit affirmed summary judgment for Gatorade, finding that SportFuel failed to produce evidence that demonstrated a factual dispute on any of the three elements of Gatorade’s fair use defense. Gatorade descriptively used the term “Sports Fuel” in its slogan fairly and in good faith. View "SportFuel, Inc. v. PepsiCo, Inc." on Justia Law

Narkiewicz‐Laine, an artist, rented space from the defendants in 2004. About six years later, the defendants cleared the rental space and discarded most of his property, including his only records of the stored property. Narkiewicz‐Laine filed suit, citing the Visual Artists Rights Act, 17 U.S.C. 106A. For certain visual art, the Act confers upon artists rights to attribution and integrity, including the right to prevent the work’s destruction. Narkiewicz‐Laine added claims for trespass, conversion, and negligence under Illinois law. He sought $11 million for his losses. The defendants presented evidence that Narkiewicz‐Laine had missed multiple rent payments and stopped paying for the property's utilities, and testified that, before emptying the space, they saw nothing resembling art or valuable personal property. The defendants introduced Narkiewicz‐Laine's prior conviction for lying to an FBI agent. The jury awarded $120,000 in damages under the Act plus $300,000 on the state law claims, reflecting the loss of all the belongings stored at the unit. The court reduced the total award to $300,000 to avoid an improper double recovery, reasoning that Narkiewicz‐Laine’s common law claims necessarily included the loss of his artwork. The court concluded did not award Narkiewicz‐Laine attorneys’ fees under the Copyright Act. The Seventh Circuit affirmed, first upholding the decision to allow Narkiewicz‐Laine’s 2003 conviction into evidence. Narkiewicz‐Laine is not entitled to recover twice for the same property, so the actual damages attributed to specific art must be subtracted from the jury’s award of actual damages for all destroyed property. View "Narkiewicz-Laine v. Doyle" on Justia Law

Bodum produces and sells what design magazines and art museums have recognized as an iconically designed houseware product—the Chambord French press coffee maker. Bodum sued Top for selling a French press that Bodum claimed infringes on its unregistered trade dress in the Chambord, 15 U.S.C. 1125(a)(1)(A). The court excluded evidence of various utility patents covering French press coffee makers and rejected Top’s argument that Bodum failed to prove the Chambord design was nonfunctional. A jury awarded Bodum $2 million in damages. The Seventh Circuit affirmed. Bodum presented sufficient evidence for the jury to have found Bodum’s claimed trade dress was non‐functional. The district court did not abuse its discretion in excluding evidence of utility patents that do not claim any of the features that comprise the claimed Chambord trade dress. View "Bodum USA, Inc. v. A Top New Casting Inc." on Justia Law