Virginia Business Litigation Lawyer Blog

"Once You Know, You Newegg." That is the slogan and registered trademark of Newegg, a popular online retailer of consumer electronics and high-tech products. Department-store chain Kohl's recently began using a similar tagline: "The More You Know, the More You Kohl's." On May 14th, Newegg filed a trademark-infringement lawsuit in California seeking to enjoin further use of the similar slogan.

A combination of words used in commerce as a slogan is protectable as a trademark if used to identify and distinguish the source of products or services. Use of a registered slogan by others can be prohibited if there is a likelihood of confusion among the consuming public. Newegg's action essentially claims that Newegg has a property interest in the "Once You Know, You Newegg" slogan, which it built up at great expense, and that the slogan has become associated in the minds of consumers with "an unsurpassed shopping experience, rapid delivery, and stellar customer service." According to the lawsuit, Kohl's, having full knowledge of Newegg's trademarks and intending to siphon off some of the goodwill associated therewith, began using a deceptively similar slogan in a manner likely to cause direct financial harm to Newegg.

As with most trademark and unfair competition cases, the big question is going to be whether Newegg can prove a likelihood of confusion. Among the more questionable allegations of the lawsuit are those claiming that Kohl's "attempted to increase traffic to their website by diverting users looking for Newegg's website" and that confused Newegg customers "visit Kohl's website believing it to be Newegg's website." As suggested by the trademarked slogan itself, Newegg believes its customers are intelligent and savvy -- that is why they shop at Newegg. Are these the same people who are going to wind up at Kohl's website when looking for Newegg, and who are going believe, once they have landed at Kohl's site, that they have indeed found Newegg? What kind of customer wouldn't include the term "Newegg" in an online search for Newegg?

Another weakness is the prominent use of the respective companies' primary marks embedded within the slogans, greatly lessening the likelihood of confusion. In other words, while "the more you know" is undoubtedly similar to "once you know," once you reach the operative word in the slogan (Newegg or Kohl's), it's difficult to remain confused about the identity of the retailer.

Still, Newegg may have a legitimate complaint in that consumers may erroneously assume, due to the similarity of the slogans, that Newegg and Kohl's have formed an affiliation. While primarily known for its electronics, Newegg has been branching out and expanding its offerings to household products such as those found in department stores like Kohl's. Newegg's strongest claim, in my view, is not for infringement but for trademark dilution, a theory that would entitle Newegg to an injunction if Kohl's new slogan would blur or tarnish the strength of Newegg's famous slogan. For dilution claims, actual or likely confusion is not required.

 

In a lawsuit brought last year by the Equal Employment Opportunity Commission against Compare Foods in North Carolina, the EEOC claimed the supermarket fired a white, non-Hispanic meat cutter due to its preference for employing Latino workers.  Compare Foods has now agreed to settle the action, which alleges national-origin and race discrimination, for $30,000 as well as by agreeing to take certain preventative measures such as distributing a written anti-discrimination policy, providing its employees with Title VII anti-discrimination training, and informing its existing employees of the lawsuit and settlement.

According to the allegations of the Complaint, Compare Foods fired Robert Bruce not because of his job performance, but because of his race (white) and national origin (non-Hispanic), and replaced him with a Hispanic worker.

Title VII of the Civil Rights Act of 1964 prohibits harassment of employees on the basis of race or national origin where the conduct is sufficiently severe or pervasive to create a "hostile work environment," or where the harassing conduct results in a tangible change in an employee's employment status or benefits (such as getting fired).  The law protects not just minorities but members of all races.

The settlement also requires Compare Foods to provide a positive letter of reference to any prospective employer of Mr. Bruce, describing him as "a reliable employee who possesses excellent skills as a butcher."  A Spanish-language television commercial for the supermarket chain is below.

Back in 1992, a group of Native American activists challenged the validity of the Washington Redskins trademarks on the ground the trademarks were impermissibly disparaging towards their ethnic group.  After scoring early victories before the Patent and Trademark Office and the Trademark Trial and Appeal Board (TTAB), resulting in a temporary cancellation of the marks (which deprived Pro Football of the ability to go after infringers), the U.S. District Court for the District of Columbia sided with the Washington Redskins about six years ago.  The rationale had nothing to do with whether the term "Redskins" is disparaging to Native Americans, but with the equitable defense of "laches."  The Court of Appeals reversed that ruling due to a faulty application of that defense, but the District Court again ruled in favor of Pro Football (the owner of the Redskins trademarks) last year.  The matter was again appealed.  This time, however, the Court of Appeals affirmed the District Court, solidifying the Redskins' victory and the validity of the marks.   

"Laches" is a doctrine which, like a statute of limitations, serves as a defense to legal proceedings when the plaintiff has waited too long before bringing the claim.  It applies where there is (1) lack of diligence by the party against whom the defense is asserted; and (2) prejudice (i.e., harm) to the party asserting the defense.  

The first time the question was presented to the District Court, it applied the laches defense because the TTAB proceeding was not brought until 25 years after the marks were first registered.  The Court of Appeals reversed that ruling because the defense is intended to apply where there has been unjustified delay by a particular person.  One of the plaintiffs was only a year old when the Redskins trademark was first registered.  So on remand, the District Court focused only on whether that particular individual, Mateo Romero, delayed in asserting his rights, beginning the analysis with the date of his eighteenth birthday (the legal age of majority).  From that perspective, the alleged delay was not 25 years but less than 8.

Still, the District Court found that Mr. Romero should not have waited nearly eight years before asserting that the term "Redskins" is disparaging towards Native Americans and that the delay caused prejudice to Pro Football.  In particular, the court reasoned, former Redskins president Edward Bennett Williams had met with various Native American leaders at or around the time the marks were registered (which is the relevant time for determining whether a mark is disparaging towards racial or ethnic groups) to ascertain and consider their views.  He passed away prior to the TTAB proceeding.  Had Mr. Romero made his complaint earlier, Mr. Williams might have been available to testify regarding his knowledge of 1967 attitudes towards the Redskins name.  

The second major reason for the district court's rejection of the trademark challenge was the fact that Pro Football had stepped up its merchandising efforts in recent years, making a huge investment to protect its trademarks.  Had Mr. Romero not "slumbered on his rights," as the equity saying goes, Pro Football likely would not have made these expenditures.

The Court of Appeals, while observing that Mr. Romero's legal position was "not without merit," deferred to the district court's holding, finding no abuse of discretion.  

Is this the end of the saga?  According to Philip J. Mause, one of the activists' attorneys, they are still considering whether to appeal.  

Filing a lawsuit against another company or individual in Virginia is not always about money. Sometimes, it is necessary to get a court order compelling the defendant to take some desired action (like perform a contractual obligation to purchase real estate) or restraining the defendant from acting in a manner that would harm your business (like sharing trade secrets with a competitor).  The injunction remedy does not award money damages to the injured party, but protects property and other rights from irreparable injury by prohibiting or commanding acts that would (or are likely to) result in such injuries.

When time is of the essence, Virginia courts will allow a plaintiff to move for a temporary, preliminary injunction to restrain or compel the conduct at issue at the outset of a case, pending further investigation and trial. The purpose of a preliminary injunction is to preserve the relative positions of the parties (i.e., the "status quo") either while the suit is pending or for some shorter period of time determined by the court.  In certain emergency situations, it may be possible to obtain an injunction at a hearing of which the defendant is not notified.  This is sometimes necessary when there is a legitimate fear that the defendant would take the feared action (or inaction) upon learning of the lawsuit or motion.

An injunction is considered an "extraordinary" remedy and is generally more difficult to obtain than an award of money damages.  Of the different types of injunctions available, the form that compels another party to perform an act (as opposed to merely preserving the status quo and prohibiting certain actions) is considered the most extraordinary and is the most difficult to obtain in court.

Whether you are in United States District Court (i.e., "federal court") or Virginia Circuit Court (i.e., "state court"), the requirements for obtaining injunctive relief are generally the same.  The touchstone for obtaining an injunction, a form of equitable relief, is the existence of an imminent threat of "irreparable harm," that is, harm that is of such a nature that it cannot adequately be compensated with money damages.  

To obtain a preliminary injunction, it will also be necessary to convince the court that the "balance of hardships" should be decided in your favor.  This generally means a showing that the irreparable harm to be suffered by the plaintiff if an injunction is not granted outweighs the harm that the defendant would suffer if the injunction is granted.  Courts generally examine the following factors when balancing the hardships: (i) the likelihood of irreparable harm to the plaintiff if the preliminary injunction is not granted; (ii) the likelihood of harm to the defendant if the preliminary injunction is granted; (iii) the likelihood that the plaintiff will succeed on the merits when the case goes to trial; and (iv) whether the public interest would be served by granting the preliminary injunction.

Regardless of whether you succeed in obtaining a preliminary injunction on an expedited basis, you can ask for a permanent injunction at trial.  Permanent injunctions are available on the same proof required to obtain preliminary injunctions, but the test is applied more strictly due to the permanency of the remedy and the fact that usually more evidence is available.  

In some cases, your job is made easier by the Virginia Code.  When a specific statute provides for the availability of injunctive relief, the standards are relaxed significantly.  Most importantly, a showing of irreparable harm is unnecessary when such a statute applies.  

An injunction can be a powerful remedy, but difficult to secure in court.  Businesses would be well advised to include clauses in their contracts containing express agreements to allow future breaches or threatened breaches to be enjoined by injunctive relief.

Like it or not, if you are 40 years old or older, your employer or coworkers may consider you downright geriatric and mistakenly assume that you are no longer able to perform the requirements of your position as well as a younger person.  When you turn 40, you officially join the ranks of "old people" against whom discrimination is prohibited by law.  The Age Discrimination in Employment Act of 1967 (ADEA) protects employees and job applicants aged 40 and older from discrimination in employment.  The ADEA makes it unlawful for employers with 20 or more employees to discriminate on the basis of age with respect to any term, condition, or privilege of employment.  This includes hiring, termination, promotions, salary, benefits, job assignments, and training.

According to a new class-action lawsuit filed in federal court in California against 3M Company, 3M engaged in a pattern of discrimination against employees older than 46 by giving them negative performance reviews, inferior training, lower pay, and fewer opportunities for promotion. The suit claims 3M discriminates against older workers throughout the entire United States, effectively shutting them out of top management positions.  The Plaintiffs estimate over 2000 workers have been the victims of 3M's discriminatory employment practices.

The crux of the allegations apears to be that 3M singled out younger workers for inclusion in their intentsive "Six Sigma" management training program, virtually assuring that 3M leadership would be comprised entirely of younger workers.  The suit also claims that workers were asked to sign releases upon departing the company that contained misrepresentations of their legal rights.  The plaintiffs are asking the court to declare the releases unenforceable as a matter of law.

If the plaintiffs' allegations are true, they may be entitled to back pay, front pay, reinstatement, and even reimbursement of their attorneys' fees.

Maryland-based Marriage Savers, Inc., a non-profit marriage counseling service and operator of www.marriagesavers.com, has filed a trademark action in the Eastern District of Virginia against Lovepath International, Inc., another marriage counseling organization, which allegedly has been conducting business using the confusingly similar domain name marriagesaver.com.  As of this writing, www.marriagesaver.com has been taken down.

According to the complaint, Marriage Savers owns the federally registered trademark "MARRIAGE SAVERS" and has used the mark since the early 1990's in connection with a wide variety of products and services, including writing printed materials and publications in the field of marriage, conducting workshops and seminars to community leaders, and offering counseling to couples.  

Lovepath, according to the suit, also offers seminars, books, and online resources geared to marriage counseling and markets them using the name "Marriage Saver."  Marriage Savers contends that Joe Beam, Lovepath's founder and president, is not only familiar with Marriage Savers and its trademarks but has actually been a speaker at its conferences.  

Marriage Savers filed the lawsuit on April 20, 2009, and brings claims of trademark infringement, false designation of origin and false advertising, cybersquatting, and related common-law claims.  It is asking the court to award an injunction to stop the infringing activity and prevent future infringment, to order the destruction of any infringing materials, to order that Lovepath transfer its domain names to Marriage Savers, and to award compensatory, statutory, and punitive damages.

While regrettable that these marriage-counseling services can't seem to exist together in blissful harmony, the case looks like a strong one.  Under 15 U.S.C. § 1114(1), trademark infringement exists where (1) the mark is distinctive and has been used in commerce; (2) the plaintiff is the legal or equitable owner of the mark; and (3) the defendant is using a similar mark which is likely to cause confusion among consumers as to the source of the goods and services.  While one might think Lovepath could escape liability by arguing the MARRIAGE SAVERS mark lacks "distinctiveness," in this particular case, the mark was registered over five years ago and has been used continuously ever since, resulting in "incontestable" status under 15 U.S.C. § 1065.  Once a mark becomes incontestable, it may no longer be attacked for lack of distinctiveness.