BATTLING A TRADEMARK INFRINGEMENT LAWSUIT

What is trademark infringement? In a nutshell, trademark infringement is the unlawful use of an established trademark or a confusingly similar one with the same or similar goods or services.

Depending on the circumstances, a trademark owner who believes its mark is being infringed may file a civil lawsuit in either state or federal court. For a variety of reasons, most trademark infringement matters arise in federal court.

Proving Allegations of Trademark Infringement

How does a trademark owner prove infringement? A plaintiff alleging trademark infringement must prove (1) that it owns a valid mark, (2) that it has priority (its rights in the mark(s) are “senior” to the defendant’s), and (3) that the defendant’s mark is likely to cause confusion in the minds of consumers about the source or sponsorship of the goods or services offered under the parties’ marks. When a plaintiff owns a federal trademark registration, there is a legal presumption of the validity and ownership of the mark, as well as of the exclusive right to use the mark nationwide on or in connection with the goods or services listed in the registration. These presumptions may be rebutted in the court proceedings.

What type of evidence will the courts consider?  Courts will consider evidence addressing various factors to determine whether there is a likelihood of confusion among consumers. The key factors typically considered include the degree of similarity between the marks at issue and whether the parties’ goods and/or services are sufficiently related that consumers are likely to assume (mistakenly) that they come from a common source. Other factors that courts will often consider include how and where the parties’ goods or services are advertised, marketed, and sold; the purchasing conditions; the range of prospective purchasers of the goods or services; whether there is any evidence of actual confusion caused by the allegedly infringing mark; the defendant’s intent in adopting its mark; and the strength of the plaintiff’s mark.

Defenses to Allegations of Trademark Infringement

A defendant can use descriptive words to accurately convey information about its goods or services regardless of the plaintiff’s trademark rights. This is a form of “fair use”, and is readily recognized in the law.  Another limitation on a trademark owner’s rights is geographic remoteness, meaning that if an unregistered trademark is only used in a single state, for example, the trademark owner has no rights to assert claims against a competing trademark owner in another state.  Other possible defenses include: a) that no likelihood of confusion exists because the parties’ marks are different; b) the goods/services sold with the marks are different; c) the target consumers are different; d) the parties advertise and sell through different marketing channels; and e) the parties have coexisted for a long period of time without consumers being actually confused.

Remedies for Unlawful Trademark Infringement

If the trademark owner is able to prove infringement, available remedies they may obtain include the following: (1) a court order (injunction) that the defendant stop using the accused mark; (2) an order requiring the destruction or forfeiture of infringing articles; (3) monetary relief, including defendant’ profits, any damages sustained by the plaintiff, and the costs of the action; and, (4) in appropriate cases, an order that the defendant pay the plaintiffs’ attorneys’ fees. Given these broad remedies, the cost of losing a trademark infringement matter are often enormous.

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If you are involved in a trademark infringement matter, contact the dedicated and trusted trademark attorneys at Gehres Law Group today for a free evaluation. Our experienced trademark attorneys can provide you with an opinion as to the validity and strength of each claim and help you achieve the best possible outcome in your case.

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Are Class Action Waivers Enforceable in California?

While there is no doubt California courts have openly expressed hostility toward the enforcement of class action waivers, state court and ninth circuit court decisions finding such waivers unenforceable have been consistently reversed on appeal to the United States Supreme Court, where the waivers are contained in an agreement to arbitrate pursuant to the Federal Arbitration Act (“FAA”), which makes agreements to arbitrate “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U. S. C. §2. The natural result of these decisions has been for more businesses and their attorneys to include such waivers as part of an agreement to arbitrate. This article provides a brief history of such rulings and discusses the current state of the law in California with regard to certain class action waivers.

A Brief History of Class Action Waivers

In previous cases, the U.S. Supreme Court ruled that in the event there is a state statute preventing waiver of class action suits, that state statute is superseded by the FAA where the waiver is contained as part of an agreement to arbitrate, thus allowing for enforcement of such class action waivers. In 2011, the Supreme Court expanded its earlier holdings to include not only state statutes which are now superseded, but also generally applied contract doctrines. In AT&T Mobility LLC v. Concepcion,[1] the Court was asked to determine whether the FAA preempts generally held contract doctrines, such as the unconscionability doctrine and California’s policy against exculpation. While acknowledging that the analysis required to reach its conclusion was more complex than in earlier cases, the Supreme Court ultimately found that the waivers were enforceable and instructed litigants to look to the language and history of the FAA, not generally applied state doctrines. Id.

Four years later, the Court returned to the issue in DirecTV Inc. v. Imburgia[2] and thwarted another attempt to evade the mandates of the FAA under the guise of state law contract interpretation. The California Court of Appeals reasoned that “because arbitration agreements containing class-arbitration waivers are unenforceable under California contract law, the entire arbitration agreement is unenforceable according to the express terms of the customer agreement.” Id.  In again reversing the lower court, the Supreme Court opined that, absent any federal statute to the contrary, bilateral arbitration clauses with express class action waivers will be enforced. Id. While the majority opinion assumed the California court correctly applied state law in interpreting the agreement, its decision was based on its finding that the California court’s interpretation of the agreement discriminated against arbitration clauses in violation of the FAA. Id.
A New Circuit Split

Since the Supreme Court’s Imburgia decision, there has developed a split in authority among the federal courts of appeals concerning the enforceability of employment arbitration agreements containing class action waivers. Not surprisingly, the Ninth Circuit has sided with employees and held that certain sections of the National Labor Relations Act (“NLRA”), providing for and protecting collective action by employees, render such waivers unenforceable under the FAA. So comes the argument that there is a federal statute which is contrary to the precepts of the FAA.

As sometimes occurs where opinions diverge between the federal circuit courts, the U.S. Supreme Court has agreed to hear three cases involving the enforceability of class action waivers on a consolidated basis.[3] Two of the three cases come to the Court following decisions by the federal circuit courts that the waivers are not enforceable, while the third comes out of a decision finding such waivers are indeed enforceable. While it remains to be seen how the Court will rule, if recent precedent provides instruction, the waivers are likely to be held enforceable since the Court has repeatedly acknowledged that the congressional mandate to enforce arbitration agreements strictly and consistently with their terms is not easily overcome.

Conclusion

There is little doubt that California state courts and the ninth circuit courts will remain hostile toward the enforcement of class action waivers not contained in an arbitration provision. However, because the FAA is a federal law which favors strict enforcement of arbitration agreements across the nation, every court in the United States is bound by well-settled law as decided by the U.S. Supreme Court. Therefore, arbitration agreements containing bilateral class action waivers will continue to gain increasing favor among business attorneys and others who wish to guard against the proliferation of such lawsuits. While it is important to note that certain state law claims cannot be included as part of a class action waiver, such as claims brought pursuant to California’s Private Attorneys General Act (“PAGA”), since such claims are brought by individuals on behalf of the State of California, which courts have reasoned did not sign an agreement to waive its right to be represented collectively or pursue class action lawsuits, businesses and their lawyers are encouraged to consider including a class action waiver in their arbitration agreements in appropriate circumstances. Even though the enforceability of such provisions may be affected by future Court decisions, given the current state of the law and broad reach of the FAA, as interpreted by the U.S. Supreme Court, such waivers will be found enforceable in a majority of cases.

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If you would like to learn more about class action waivers or other business-related legal issues, contact the knowledgeable business attorneys at Gehres Law Group for your complementary evaluation. We’re here to support California businesses navigate legal complexities so they can grow and thrive in any climate.

[1] AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339-52 (2011).

[2] DIRECTV, Inc. v. Imburgia, — U.S. —, 136 S. Ct. 463, 468-71 (2015).

[3] See Epic Systems Corp. v. Lewis, 823 F.3d 1147 (7th Cir. 2016), cert. granted, No. 16-285 (U.S. Jan. 13, 2017); Ernst & Young LLP et al. v. Stephen Morris et al., 834 F.3d 975 (9th Cir. 2016), cert. granted, No. 16-300 (U.S. Jan. 13, 2017); and NLRB v. Murphy Oil USA Inc., 808 F.3d 1013 (5th Cir. 2015), cert. granted, No. 16-307 (U.S. Jan. 13, 2017).

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HEARSAY – WHAT IT IS AND WHAT IT ISN’T

Introduction

to the other side’s claims (if you are a defendant). How exactly you and your attorney will go about doing so will be governed by the applicable rules of evidence.

The rules of evidence will make presenting your claims or defenses akin to running an obstacle course, since they present a myriad of weapons for the other side to keep out evidence helpful to you. We will discuss one of those obstacles in this and subsequent articles — the hearsay rule.

Definition of Hearsay

What exactly is hearsay? It is generally defined as a statement made out-of-court that is introduced to prove the truth of its contents.[1] Consider this statement: “I saw the defendant run through a red light and hit the plaintiff’s car.” If that statement is made by an eyewitness while testifying under oath in court, it is not hearsay, because it is not an “out-of-court” statement. On the other hand, if you are the plaintiff whose car was hit by the defendant, and a witness at the scene says to you, “I saw him (the defendant) run through a red light and hit your car,” and you seek to testify that you heard the witness say that at the scene, the statement would be hearsay, because it was made “out-of-court.”

One of the reasons for the hearsay rule is that, in the above example, if the witness is not in court to testify, he is not subject to cross-examination by the defendant. The defendant has a right to test the witness’s ability to perceive, his bias or prejudice against the defendant, and any other matter that might cast doubt on the truthfulness or accuracy of the witness’s testimony.

Statements That Are Not Hearsay

Some out-of-court statements, however, are not hearsay, because they are not introduced to prove the truth of their contents. Consider this example: You offer to sell your car to Bob Buyer for $10,000, and Bob Buyer says: “I accept your offer and will pay you $10,000 for your car.” Bob Buyer later reneges on the deal, and you sue him for breach of contract.

You would be permitted to testify that Bob Buyer accepted your offer and agreed to pay you $10,000 for your car. That is because Bob Buyer’s statement, although made out-of-court, would not be offered to prove that he would in fact buy your car. Obviously, he has chosen not to buy your car. Instead, you are offering his agreement to pay you $10,000, because those very words spoken, whether Bob Buyer meant them or not, created a contract. In other words, Bob Buyer’s statement that he would pay you $10,000 for your car had “independent legal significance,” regardless of its truth or non-truth.

Similarly, a defamatory statement (libel for a printed falsehood, or slander for an oral falsehood) would not be offered to prove the truth of its contents. In fact, just the opposite. If someone said, for instance, that you were a criminal or a felon, and that was not true, you could sue the person who said that about you, and introduce the statement in evidence, despite the fact it was made out-of-court. That is because you would not be introducing it to prove that you were in fact a criminal or a felon, but simply to prove that the statement was made.

As your business litigation attorney can advise you, the giving of notice is also admissible in evidence, because it is not offered to prove the truth of its contents. For instance, if parties enter into a three-year contract, but the contract also provides that either party may cancel the contract before its expiration by giving the other side 30 days’ notice, the giving of 30 days’ notice by one party to the other (e.g., “I am canceling this contract effective April 30, 2017”) is not hearsay. As in the Bob Buyer example above, the statement “I am canceling this contract” has “independent legal significance” (i.e., it causes cancellation of the contract effective April 30, 2017), regardless of whether the canceling party meant what he said.

Solicitations similarly do not constitute hearsay. For instance, a newspaper or TV ad which touts the quality, durability or benefits of a product, which the product does not in fact have, would not be hearsay if offered in a lawsuit against the seller for unfair business practices. Again, the plaintiff would not be introducing the solicitation to prove it was true. Indeed, he would be seeking to prove that the statement was not true.

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Even when a statement made out-of-court is offered to prove the truth of its contents, it may be accepted into evidence if it meets one of the many exceptions to the hearsay rule. Look for a discussion of these exceptions in future installments on our blog posts by our AV-rated business and employment litigation attorney, William Tucker.

[1] For the Definition of Hearsay pursuant to the Federal Rules of Evidence, see http://ift.tt/1FMyo9y; For the Definition of Hearsay pursuant to the California Rules of Evidence, see http://ift.tt/2n7zfy5.

 

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