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

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

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

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

The U.S. Patent and Trademark Office has, on a few occasions, found that “capsule” was “merely descriptive” of cellphone cases, a finding that precludes registration on the Principal Register. The Office has also found otherwise and allowed Uncommon to register “capsule.” Rival case manufacturers still use the term. Uncommon sued Spigen for trademark infringement and unfair competition, 15 U.S.C. 1114, 1125(a). Spigen sought cancellation of the mark. In discovery, Spigen produced a survey to prove that consumers did not associate “capsule” with Uncommon’s cases, and disclosed the person who conducted the survey as a “non-testifying expert,” but without foundational expert testimony to explain the survey’s methodology, it was inadmissible, FRCP 26(a). The district court excused Spigen’s error and granted Spigen summary judgment on the merits. The Seventh Circuit affirmed. Spigen’s disclosure was inaccurate but harmless. Spigen carried its burden to defeat Uncommon’s presumption of inherent distinctiveness. Spigen demonstrated that there is no issue of material fact regarding the descriptiveness of the “capsule” mark. With the survey, there was no genuine issue of material fact as to the mark’s invalid registration. Nor was there an issue of fact regarding the unlikelihood of consumer confusion. View "Uncommon, LLC v. Spigen, Inc." on Justia Law

Guitar Center, which sells musical instruments, created a new brand of woodwind and brass instruments produced by Eastman, “Ventus.” Barrington owns the trademark “Vento,” which is used in relation to instruments it sells. Barrington began using its mark in commerce in 2009 and achieved gross sales just under $700,000. Barrington filed for registration of its “Vento” mark in January 2010. In March 2011, Guitar Center began selling instruments using the “Ventus” mark, with gross sales totaling about $5 million. Barrington filed suit against Eastman, Music & Arts, Guitar Center, and Woodwind. A jury found that only Guitar Center's sales infringed and awarded Barrington the total amount of Guitar Center sales—$3,228. Barrington later discovered that Music & Arts and Woodwind were divisions of Guitar Center. Barrington moved the court to amend the damages award to $4,947,200, the total sales for the “Ventus” mark by all of the Guitar Center owned stores. The district court denied the Rule 59(e) motion. The Seventh Circuit affirmed. Barrington gave no reason to conclude that the jury’s verdict would be different if it were aware Music & Arts and Woodwind were merely divisions of Guitar Center; it found Music & Arts and Woodwind did not infringe on the “Ventus” mark and there was no basis to award Barrington their “Ventus” related sales. View "Barrington Music Products, Inc v. Music & Arts Center" on Justia Law

Ariel Investments, based in Illinois and doing business nationally, and Ariel Capital, based in Florida, both manage money for clients. Investments has used its name since 1983; Capital only since 2014. In a suit under the Lanham Act, 15 U.S.C. 1125(a), the district court found that Capital was infringing Investments’ trademarks. The Seventh Circuit reversed, finding that the court lacked jurisdiction. Capital does not have a client, property, or staff in Illinois, does not advertise in Illinois, and never has had an agent even visit Illinois. The Lanham Act does not authorize nationwide service of process, so personal jurisdiction depends on state law. A defendant’s knowledge and intent concerning a resident of a state do not justify compelling that person to defend himself there. A state may assert specific jurisdiction, based on a particular transaction, only if the defendant has “a substantial connection with the forum State” that is of the defendant’s creation. ”No matter how one might characterize the relation between Ariel Investments and Ariel Capital, it is easy to describe the relation between Illinois and Ariel Capital: none.” If infringement happened, it occurred in Florida, or some state where people who wanted to do business with Investments ended up dealing with Capital because of the similar names. View "Ariel Investments, LLC v. Ariel Capital Advisors LLC" on Justia Law

Wine & Canvas (W&C) hosts “painting nights.” Patrons, following a teacher’s instructions, create a painting while enjoying wine. W&C operated in Indianapolis, Bloomington, and Oklahoma City. Muylle signed a license agreement, moved to San Francisco, and opened a W&C operation. W&C’s executives were present and taught the first class, worked with Muylle to approve paintings for use, gave Muylle company email addresses, and advertised the San Francisco operation on the W&C website. Disagreements arose. Muylle gave notice to terminate the agreement, changed the business name to “Art Uncorked,” and ceased using the W&C name and marks. W&C alleged trademark infringement, 15 U.S.C. 1051. Muylle’s counterclaims invoked California franchise law, federal trademark cancellation. and Indiana abuse of process law. Plaintiffs failed to meet discovery deadlines, despite being sanctioned three times. The Seventh Circuit affirmed: dismissal of the California law counterclaims; W&C's summary judgment on Muylle’s trademark cancellation counterclaim; Muylle's summary judgment on trademark dilution, sale of counterfeit items, unfair competition, bad faith, tortious conduct, abuse of process, breach of contract, fraud, and a claim under the Indiana Crime Victims Act; and Muylle's partial summary judgment on trademark infringement. Through November 18, 2011, W&C impliedly consented to Muylle’s using the marks. On claims of trademark infringement and false designation of origin (for any use after November 18, 2011), and Muylle’s abuse of process counterclaim, the court affirmed awards to Muylle of $270,000 on his counterclaim and $175,882.68 in fees. View "Wine & Canvas Development, LLC v. Muylle" on Justia Law

Plaintiff sells personal care kits. Plaintiff’s products include a line of “Minimergency Kits,” which come in small fabric bags designed to look like men’s Dopp Kits (a now-cancelled trademark for travel kits, originally for men’s shaving gear, used widely by the military in World War II). Urban Aid also sells personal care kits. It agreed to create a custom kit for a shoe distributor, for use in a sales promotion. The distributor wanted the kits to come in a bag similar to plaintiff’s bag and gave Urban Aid a picture of plaintiff’s bag to work from. After the distributor began its sales promotion, plaintiff filed suit, alleging that the shape and design of its bag were protected trade dress, that Urban Aid’s bag violated the Lanham Act, the Illinois Uniform Deceptive Trade Practices Act, and the Illinois Consumer Fraud and Deceptive Business Practices Act, and that Urban Aid’s bag tortiously interfered with plaintiff’s prospective business relations. The district court found that plaintiff’s claimed trade dress was functional as a matter of law and granted Urban Aid summary judgment on the Lanham Act and the related state-law claims. The Seventh Circuit affirmed; the undisputed evidence shows that the claimed design features affect product quality. View "Arlington Specialties, Inc. v. Urban Aid, Inc." on Justia Law