Before 2017

Trademark Defendant who Lost on Summary Judgment Files Appeal with Eleventh Circuit, but Special Master May Still Assess Monetary Recovery

A defendant whom the U.S. District Court for the Northern District of Florida adjudicated a trademark infringer on summary judgment, and liable for attorneys’ fees as well as profits, filed an appeal from that court’s judgment on February 11, 2013.  However, an order of appointment of a Special Master dated February 20, 2013 suggests that work toward quantifying damages and attorneys’ fees recoverable may proceed even while that appeal is pending.
Illinois-based National Bedding Company, L.L.C. (“National Bedding”) is the named owner of U.S. Trademark Registrations Nos. 3,491,355 and 2,927,140  (“the ’140 Registration”) for the text-only and design variations, respectively, of the service mark AMERICA’S MATTRESS.  National Bedding had sued defendant Snooze Incorporated (“Snooze”) for federal trademark infringement, federal unfair competition, and common law unfair competition, arising from Snooze’s unauthorized use of the mark MATTRESS AMERICA.  In response, Snooze raised various affirmative defenses and asserted counterclaims for declaratory judgments that the asserted marks were invalid for genericness and for being “primarily geographic,” and for cancellation of National Bedding’s registrations.
In the district court, both parties moved for summary judgment on National Bedding’s claims, causing the court to analyze Snooze’s invalidity claims as well as the issue of likelihood of confusion between the asserted and accused marks.  That court granted National Bedding’s motion and denied Snooze’s motion.
In its summary judgment order dated September 20, 2012, the district court first addressed, and ultimately rejected, Snooze’s invalidity arguments.  Snooze contended that the marks lacked distinctiveness, but the court found that Snooze did not present any supporting evidence.  Also, specifically as to the design variation (pictured above), the court observed that the ’140 Registration had attained “incontestable” status, such that this registered mark could not be challenged on the ground that it is merely descriptive.[1]
As a preface to its likelihood-of-confusion analysis, the district court quoted an Eleventh Circuit decision observing: “‘Although likelihood of confusion generally is a question of fact, it may be decided as a matter of law.’”[2]  Ultimately, the district court held that every factor[3] weighed in National Bedding’s favor.  Though the rulings on every factor will not be repeated here for the sake of brevity, notable findings include:
  • As to trademark strength, Snooze’s trademark search reports were not sufficient proof that similar marks were actually in use by third parties.[4]
  • Snooze did not dispute that its owner told a National Bedding representative that “she chose the name Mattress America for a cheap and easy transition that customers wouldn’t notice.” [5]  (Snooze’s licensed right to use National Bedding’s marks had been terminated just days before that transition.)  Thus, the “intent” factor weighed in National Bedding’s favor.
  • National Bedding produced evidence of actual confusion through a log kept by one of its dealers.  The court listed the following as examples of actual confusion experienced by that dealer: “(1) customers asking [him] why he opened another store so close to his other store; (2) long-time customers of his furniture store telling him that they bought a mattress from ‘his other store down the road,’ (3) customers calling with warranty issues on mattresses they bought before his store was open, and (4) customers complaining about the late delivery of mattresses purchase[d] from Mattress America.”[6]
Thus, the district court entered judgment for National Bedding.  In a subsequent order, dated October 25, 2012, the district court denied Snooze’s motion for relief from the September 20 order and judgment, and deferred ruling on National Bedding’s motion for injunctive and monetary relief, allowing the parties to file briefs on those issues.
In an order entered on January 14, 2013, the district court granted National Bedding’s request for a permanent injunction, as Snooze did not oppose that remedy.  The court next held that National Bedding was entitled to an award of profits under the Lanham Act (specifically, 15 U.S.C. § 1117(a)), since its September 20 order concluded that Snooze intended to benefit from the goodwill associated with National Bedding’s marks.  The court likewise held that National Bedding was entitled to attorneys’ fees because the infringement was willful.  It then ordered the parties to nominate a Special Master who would help to determine how much money National Bedding can recover.
On February 20, 2013, after the parties had complied with the nomination ordered, the district court issued an order appointing the Hon. Stanley F. Birch, Jr. as special master to assist the court and the parties with determining the amount of money recoverable by National Bedding.  (Judge Birch, as many know, is a respected retired judge who had served as a Circuit Judge on the Eleventh Circuit.)
The February 20 order issued after Snooze had filed its Notice of Appeal on February 11.  That Notice appealed the district court’s order and judgment of September 20, 2012, the order of October 25, 2012, and the order of January 14, 2013.  The post-appeal timing of the February 20 order suggests that the district court intends for the Special Master to proceed with quantifying the money recoverable despite the appeal of the rulings on liability and entitlement to monetary recovery.  One case has been found with a similar procedural sequence,[7] and as of the time of this writing, the parties have not sought to stay the district court proceedings pending the appeal.

The appeal is Nat’l Bedding Co., LLC v. Snooze, Inc., No. 13-10718, filed 02/11/13, and docketed 02/19/13 in the U.S. Court of Appeals for the Eleventh Circuit.

[1] Nat’l Bedding Co., LLC v. Snooze, Inc., No. 5:11-cv-303-RS-CJK, slip op. at 5-6 (N.D. Fla. Sept. 20, 2012).
[2] Id. at 7 (quoting Alliance Metals, Inc. of Atlanta v. Hinely Indus., Inc., 222 F.3d 895, 907 (11th Cir. 2000)).
[3] “Likelihood of confusion involves a seven-factor inquiry into the: ‘(1) type of mark; (2) similarity of mark; (3) similarity of the products the marks represent; (4) similarity of the parties’ retail outlets (trade channels) and customers; (5) similarity of advertising media; (6) defendant’s intent; and (7) actual confusion.’”  Drew Estate Holding Co., LLC v. Fantasia Distrib., Inc., No. 11-21900, 2012 U.S. Dist. LEXIS 87380, at *23 (S.D. Fla. Jun. 25, 2012) (quoting Planetary Motion, Inc. v. Techsplosion, Inc., 261 F.3d 1188, 1200 n.22 (11th Cir. 2001)).
[4] Nat’l Bedding, slip op. at 8-9.
[5] Id. at 3 & 11.
[6] Id. at 11-12.
[7] World Triathalon Corp. v. Dunbar, 539 F.Supp.2d 1270 (D. Hawaii 2008) (sequence of events included a grant of summary judgment in plaintiff’s favor on its trademark infringement claim, followed by the defendants’ filing of a notice of appeal, followed by a special master’s determination of attorneys’ fees and costs recoverable).

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