Internetshopsinc.com v. Six C Consulting, Inc. et al, No. 1:2009cv00698 - Document 34 (N.D. Ga. 2011)
Court Description: ORDER and OPINION GRANTING IN PART AND DENYING IN PART Plaintiff's 15 Motion for Summary Judgment; GRANTING IN PART AND DENYING IN PART Defendants' 16 Motion for Partial Summary Judgment and DENYING without prejudice Defendant Walker� 39;s 16 Motion for Summary Judgment. The Court DIRECTS Plaintiff to submit a bill of costs and proposed injunction to the Court by 4/22/11. If defendant chooses to respond to either filing, it should submit its response by 5/6/11. Signed by Judge Julie E. Carnes on 3/24/11. (jlm)
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, . . IN CHAMBERS Atl/\;it c; . '",1'. R 2 'i 20 11 ' IN THE UNITED STATES DISTRICT COURT JAM. FOR THE NORTHERN DISTRICT OF ATLANTA DIVISION INTERNETSHOPSINC.COM, Plair.tiff, CIVIL ACTION NO. v. 1:09-CV-00698-JEC SIX C CONSULTING, INC., and JIMMIE D. WALKER, JR., Defe:1da:1ts. ORDER & OPINION This case is presently before the Court on plaintiff's Motion for Summary Judgment [15] a:1d defendants' Motion for Partial Summary Judgment and defendant Walker's Motion for Summary Judgment [16]. The Court has reviewed the record and the arguments of the parties a:1d, for the reasons set out below, concludes that plaintiff's Motion for Summary Judgment [15] should be GRANTED IN PART and DENIED IN PART, defenda:1ts' Motion for Partial Summary Judgment [16-1] should be GRANTED IN PART and DENIED IN PART, and defe:1dant Walker's Motion for Summary Judgment [16-2] should be DENIED w:i.thout prejud:i.ce. ' See :1.1 infra. Dockets.Justia BACKGROUND This is a Lanham Act case arising from defendant's internet advertising campaign for practice golf mats. (Complo Plaintiff is in the business of selling golf equipment. (PI. ' s [15] at 'il'iI 3- Statement of Undisputed Material Facts ("PI.'s Facts") 4. ) [lJ . ) One of plaintiff's products is a practice golf mat. (Id. ) Since February, 2002, plaintiff has used the trademark "Dura Pro" to advertise the golf mats that it offers for sale over the internet. (Id. at 'iI'iI 14-15.) Defendant Six C Consulting, business of selling Inc. golf equipment.' ("Six C n (Id. at is ) n also 11-12.) in the Like plaintiff, defendant offers a practice golf mat for sale over the internet. term "Dura (Id. Pro" at 'iI 12.) in a In early 2008, defendant began using the pay-per-click campaign for its golf mats.' ("PPC") internet (PI.'s Facts [15J at 'iI'iI 2 advertising 24.) Defendant Walker is the sale officer of Six C, and owns 100% of its stock. (Pl.' s Facts [15J at 'iI'iI 8, 10.) Plaintiff's action against Walker has been stayed, pending the disposition of his bankruptcy. (Crder [32].) As a result, the Court denied without prejudice defendant Walker's motion for summary judgment. The Court thus uses the term "defendant" to refer solely to Six C. 2 3 In a PPC campaign, the seller bids on keywords and phrases in a search engine so that when potential customers search on those terms the seller's ads are displayed. (Defs.' Statement of Material Undisputed Facts [16] at 'iI 3.) If the customer clicks on the ad, he is directed to a website where he can purchase defendant's products. (Id. ) 2 Plaintiff discovered defendant's use of the term "Dura Pro" in January, and immediately notified defendant of its superior 2009, rights in the mark. at (Id. 35-37.) Within 48 hours, defendant ordered Channel Advisor, the company then managing the PPC campaign, to stop using the term "Dura Pro." Undisputed Facts Channel ("Defs.' Advisor failed Facts") to (Defs.' [16] completely at Statement of Material 20.) suppress Unfortunately, the term, and it remained in use in connection with defendant's campaign on an MSN search engine. (Id. Plaintiff filed at 21-24.) this action on March 13, 2009, asserting a federal claim for trademark infringement and a state claim for unfair (Compl. competition. [lJ at 27-41.) Upon its receipt of service in the action, defendant again contacted Channel Advisor and ordered it to stop using the term "Dura Pro." (Defs.' Facts [16J at Channel Advisor finally suppressed the term on April 2, 2009. 24.) (Id. ) The parties have filed cross-motions for summary judgment, which are presently before the Court. Defs.' Mot. for Summ. J. [16].) (Pl.'s Mot. tor Summ. J. [15] and Detendant concedes that it infringed plaintiff's trademark rights by using the term "Dura Pro" in its PPC campaign. '::'he (Defs.' Br. only dispute claims. damages, (Id. concerns at 9-13.) costs, inSupp. the ofSumm. J. appropriate ("Defs.' Br.") relief [16J.' on plaintitf's Plaintiff argues that it is entitled to and attorney's fees, 3 as well as an accounting of defendant's profits and permanent injunctive relief. Supp. of Sumn. J. ("PI.'s Br.") [15J at 17-22.) {PI.'s Br. in Defendant contends that there is insufficient evidence to support an award of damages or profits, and that injunctive relief and attorney's warranted under the circumstances.' (Defs.' Br. fees are not [16] at 9-13.) DISCUSSION I. Summa.ry Judgment Sta.ndard Summary judgment is appropriate when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. FED. R. elV. P. 56 (c) • A fact's materiality is determined by the controlling substantive law. Lobby, Inc., 477 U.S. 242, 248 (1986). Anderson v. Liberty An issue is genuine when the evidence is such that a reasonable jury could return a verdict for the nonmovant. Id. at 249-50. Summary judgment is not properly viewed as a device that the trial court may, in its discretion, implement in lieu of a tr:'al on the merits. Instead, Rule 56 of the Federal Rules of Civil Procedure mandates the entry of summary judgment against a party who fails to 4 Plaintiff makes additional arguments with respect to defendant Walker. (PI. ' s Br. [15 J at 22-24.) As the action is stayed as to Walker, the Court does not address those arguments. 4 cient to establish the existence of every element make a showing essential to that party's case on which that party will bear the Celotex Corp. burden of proof at trial. 322 (1986). v. Catrett, 477 U.S. 317, In such a situation, there can be no genuine issue as to any material fact, as a complete failure of proof concerning an essential element of the non-moving party's case necessarily renders all other facts immaterial. Id. at 322 23 (quoting FED. R. C:cv. P. 56 (c) ) . The movant bears the initial responsibility of asserting the basis for his IT,otion. Id. at 323. However, required to negate his opponent's claim. his burden by merely "'showing' --that the movant is not The movant may discharge is, pointing out to district court--that there is an absence of evidence to support the non-moving party's case." Id. at 325. After the movant has carried his burden, the non-moving party is then red to "go beyond the pleading" and present competent evidence designating "speci::ic facts showing that there is a genuine issue for Id. at 324. While the court is to view all evidence and factual inferences in a light most favorable to the non-moving party, "the mere existence of some alleged factual dispute between the parties will not otherwise properly supported motion for summary judgment." 477 U.S. at 247-48. issue of material defeat an Anderson, The requirement is that ther·e be "no genuine II Id. 5 II. Liability and Costs As noted above, defendant concedes that its use of the term "Dura Pro H infringed plaintiff's trademark rights. at 2.) (Defs.' Br. [16] The Court thus GRANTS plaintiff's motion for summary judgment as to liability under the Lanham Act. plaintiff's claim for costs under Defendant does not respond to the Lanham Act, and the Act expressly permits a successful plaintiff to recover the costs of an action to enforce Accordingly, a trademark. See 15 U.S.C. § 1117(a). the Court also GRANTS plaintiff's motion for summary judgment on its claim to recover the costs of this action. Pursuant to this ruling, the Court directs plaintiff to submit a bill of costs by Friday, April 22, 2011. U.S.C. § :924. The bill of costs should comply with 28 If defendant chooses to respond to the bill of costs, it should file a response by Friday, May 6, 2011. III. Additional Relief In addition to the costs of the action, the Lanham Act provides for a prevailing plaintiff's recovery of (1) any damages sustained as a result of defendant's infringement and (2) defendant's profits from the infringement.' circumstances, a See 15 U.S.C. plaintiff may also § 1117(a). recover Under treble certain damages and The Court need not separately discuss plaintiff's state law claims, as the relief available is the same as under the Lanham Act. 6 Id. reasonable attorney's fees, may impose a U.S.C. § permanent l116(a). Finally, if equity permits, a Co',ut inj unction upon the In its motion for infringing party. summary judgment, plaintiff argues that it is entitled to each of these forms of relief. Br. 15 (Pl.'s [15] at 22.) A. Damages In order to recover damages under the Lanham Act, plaintiff must show that it has actually suffered harm as a result of defendant's Babbit Elec., Inc. infringement. 1182 (11th Cir. 1994). v. Dynascan Corp., 38 F.3d 1161, v. Gadsden Motel See also Ramada Inns, Inc. Co., 804 F.2d 1562, 1564 (11th CiL 1986) (explaining that there must be "some evidence of harm arising from the [trademark] violation" for a plaintiff to recover damages). Although the calculation of darr.ages need demonstrated not be exact, specificity. it must Ramada Inns, be Inc., with some 804 F. 2d at 1565-66. degree of Generally, actual damages are established through evidence of lost sales caused Babbit Elec., by defendant's infringement. Plaintiff claims that it suffered 38 F.3d at 1182. damages in the $123,784.80 as a result of defendant's infringement. at 18.) is the amount of (Pl.'s Br. [15; The only evidence plaintiff offers i:1 support of that clairE states in her of its President and CEO, Ava Quail. (Id. ) Quail that plaintiff's average monthly golf mat sales prior to and after the infringement was 306, 7 while average monthly sales during the infringement period was 166. [15] at 'll'Il She further 32-33.) (Quail Aff. states that plaintiff's average profit on each golf mat sale during the relevant time period was $63.13. (Id. at 36.) Quail arrives at the $123,784.80 figure by multiplying the decrease in average monthly sales (140) by the number of months that the infringement continued (14) and the average profit on each sale ($63.13). The Quail awarding, damages. or (Id. at affidavit a does reasonable 37.) not provide methodology a for rational basis calculating, for actual As an initial matter, Quail's affidavit is not supported by any underlying sales data or business records. See Ramada Inns, Inc., 804 F.2d at 1564 ("a trademark infringement award must be based on proof of actual damages") (emphasis added). Indeed, the only document that is referenced by Quail, or that appears in the record, is a spreadsheet that purports to show plaintiff's monthly sales of golf mats between January, 2007 and August, 2009. [24].) (Sales Spreadsheet Like Quail's testimony, the spreadsheet is not based on any underlying sales documents. Apparently Quail simply generated the spreadsheet "personal business. based on her knowledge" of plaintiff's (Pl.'s Reply [25] at 6.) Moreover, even a cursory review of the spreadsheet shows that Quail's "analysis" is too seriously flawed to raise an issue of fact as to damages. For some unspecified reason, 8 Quail used monthly averages (Quail to calculate lost sales during Aff. plaintiff's [15] average infringement was spreadsheet that 'll'll at 32-33.) golf 306. this mat (Id.) number Based sales However, was on prior it her to is calculations, and after apparent the from the inflated es in May, 2007. by an (Sales Conversely, the figure for average sales during the infringement period appears to have been with exceptionally low sales. by a few months (Id. ) are numerous other anomal upon by Quail. infringement period. significantly inexplicably high number of golf mat s Spreadsheet [24].) the in the spreadsheet relied For example, plaintiff's sales in March, 2008, during the infringement period, were significantly higher than sales in January, 2008 or October, 2007, before the infringement began. (Id. ) In addition, plaintiff's March, 2008 sales were similar to its sales in August, September and November, 2007. (Id.) These figures do not comport with plaintiff's theory or with Quail's assessment of damages in her affidavit. Even assuming that the spreadsheet shows some unquantifiable decline in plaintiff's sales during the infringement , there is no evidence to suggest that the decline occurred as a result of defendant's infringerr,ent. The Quail a::::idavi t is not very help::ul on this point, because Quail offers no reasonable basis whether any decline in sales was caused by defendant's 9 determining as opposed to some other or mUltiple other factors. Nor could she, as she admittedly is not an expert in the market factors that could cause such a decline. (Pl.'s Reply [25] at 8.) Rather, Quail simply assumes that a decline in sales was caused by defendant's activities because it coincided with them. In the absence of any other evidence on damages, Quail's assumption insufficient to withstand summary judgment. Cir. See Cordoba v. Dillard's, Inc., 419 F.3d 1169, 1181 (11th 2005) ("unsupported speculation burden of producing some defense does not meet a party's to summary a judgment notion") (internal citations omitted). It is axiomatic that in order to be awarded damages, plaintiff must 969 prove them. F.2d 410, 415 Schi (7th Cir. damages have to prove them, & Schmidt, Inc. v. Nordisco Corp., 1992) (Posner, J.) ("people who want using methodologies that need not be intellectually sophisticated but must not insult the intelligence") . An award of damages based on the proof that plaintiff offers would be entirely speculative, and is therefore precluded. at 1181. claim for Cordoba, 419 F.3d Accordingly, plaintiff's motion for summary judgment on its damages is DENIED and defendants' motion judgment on plaintiff's claim for damages is GRANTED. for summary As the Court finds that plaintiff is not entitled to actual damages, it DENIES plaintiff's request for treble damages and GRANTS defendants' motion for judgment as to treble damages. 10 B. Defendant's Profits An alternative ground for recovery under the Lanham Act is based In order to See 15 U.S.C. § 1117(a). on the defendant's profits. recover under this theory, plaintiff must present some evidence of defendant's sales. Id. See also Wesco Mfg., Inc. v. Tropical Attractions of Palm Beach, Inc., 833 F.2d 1484, 1487-1488 (11th Cir. 1987) (noting that the plaintiff must prove an infringer's sales in order to be entitled to an accounting of profits under the Lanham Act) . Again, plaintiff has not presented sufficient evidence to withstand summary judgment on this issue. Plaintiff concedes that it "does not currently possess any facts that show the extent of Defendants' profits, if any, reSUlting from its infringing activities." plaintiff even (Pl.'s Resp. [20] at 15). Nor does to present any evidence of defendant's sales. At this stage in the litigation, plaintiff's admission that it lacks any facts on the issue, and the absence of any other evidence in the record concerning defendant's sales, which to grant summary judgment. are a sufficient basis upon Anderson, 477 U.S. at 247-48 and Cordoba, 419 F.3d at 1181. Moreover, the available evidence on the issue suggests that defendant did not realize any profits as a result of its use of the term "Dura Pro. H As mentioned, defendant used the term solely in connection with a PPC internet advertising campaign. 11 (Def.'s Facts [16J One of the features of a at 'lI 2.) PPC campaign is that it allows a seller to track how many times its website appeared as a a search for a keyword result (called "impressions"), how many times a potential customer clicked on the seller's website following a search (called anything "clicks"), the from "conversions"). and following website (Id. at Sl 4.) whether the customer the purchased (called search In the internet advertising industry I it is standard practice to rely on this type of search data, which is generated by search engines such as Google. 4, (Hill Decl. [21] at 'lI'lI 9.) The search data from defendant's PPC campaign shows that during the infringement period there were :,3:9 impressions resulting from searches the term "Dura Pro." 6 and Ex. A.) (Second Walker Decl. [21] at 'lI'l1 4, Only 95 of those impressions resulted in a click, after which a potential customer was directed to defendant's (Id.) However, not one of those clicks a sale, of anything. resulted in a conversion, or (Defs.' Facts [16] at 'lI 14.) Given the evidence that defendant did not sell anything as a result of its infringement, and plaintiff's admitted lack of any evidence to the contrary, there is no basis in this case of profits under the Lanham Act. 1487-88. summary Accordingly, judgment on its the See NescD Mfg., Court claim for 12 DENIES an an award Inc., 833 F.2d at plaintiff's accounting of motion for defendant's profits and GRANTS defendant's motion for summary judgment as to an award of profits. C. Injunctive Relief Permanent injunctive relief against an infringer is generally 15 U.S.C. § 1116. available under the Lanham Act. against an infringing party are trademark infringement actions, Inc., 522 granted in ordinary a plaintiff is never automatically See Angel Flight of Georgia, Inc. v. Angel Flight entitled to one. Am., frequently While injunctions F. 3d 1200, 1208 (llth Cir. 2008) and eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 394 (2006) (rejecting categorical approaches to equitable relief). Rather, in order to obtain injunctive relief, a plaintiff must demonstrate that: (1) it has suffered an irreparable injury; (2) remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) the public interest would not be disserved by a permanent injunction. Angel Flight, 522 F.3d at 1208. Defendant does not contest the last three elements, nor could it reasonably do so. (::Jefs.' Br. [16] evidenced by the abo'7e discussion, and Defs.' Resp. [21J.) As the business damage caused by defendant's unauthorized use of plaintiff's trademark is difficult, if not impossible, ColI. Dist., to quantify. 889 F.2d 1018, 1029 See Tally-Ho, (llth Cir. 13 Inc. v. Coast Cmty. 1989) ("It is generally recognized in trademark infringement cases that . [anj adequate citations remedy at omitted). law The to redress balance of . there is not infringement") (internal hardships clearly favors plaintiff, as defendant admit.s that its use of the term "Dura Pro" was unlawful. (Defs.' Br. [16] at 2.) As for the public, it "deserves not to be led astray by the use of inevitably confusing marks." Id. Nevertheless, defendant argues that an injunction is not warranted because plaintiff has failed to show that it. suffered an (Defs.' Resp. irreparable injury. argument, In support of its [21) at 13.) defendant correctly notes that the Court cannot presurr.e irreparable harm based on a finding of infringement. (Id. ) See N. Am. Med. Corp. v. Axiom Worldwide, Inc., 522 F.3d 1211, 1227-28 (11th Cir. 2008). However, the Court. need not rely on a presumption to award injunctive relief in this case, as there is sufficient record evidence of irreparable harm. It is undisputed that plaintiff has used its "Dura trademark in commerce for the sale of golf mats since 2002. Facts [15J at plaintiff has n a significant amount of time advertising its golf mats over many different media, internet. (Id. at in the industry, (Plo ' s In connection with its use of the mark, 15-16.) invested Pro" 17-18.) and money including the As a result, plaintiff is well known and has established a certain amount. of goodwill 14 amongst the public, "Dura Pro" mark. for selling high quality golf mats under the (Id. at 19, 39.) Defendant's unauthorized use of the -Dura Pro" mark for over a year inevitably diluted the goodwill that plaintiff established in See Ferrellgas Partners, L.P. v. Barrow, connection with the mark. 143 Fed. Appx. 180, 190 (11th Cir. 2005) (explaining that "irreparable injury" includes -loss of control of reputation, loss of trade, and loss of goodwill"). This is true regardless of the fact that defendant's unauthorized use appears to have been unintentional, and that it did not result in any readily quantifiable harm to plaintiff. Id. at 190-91 (" , [T] he most corrosive and irreparable harm attributable to trademark infringement is the inability of the victim to control the nature and quality of the defendants' goods. the infringer's products are of high quality, the Even if plaintiff can properly insist that its reputation should not be imperiled by the acts of another.") (quoting Int'l Kennel Club of Chicago, Inc. v. Mighty Star, Inc., 846 F.2d 1079, 1092 (7th Cir. 1988)). Moreover, defendant has previously failed to ensure that its use of plaintiff's IT"ark ceased afte.r being notified of the infringement. (Defs.' Facts [16] at 21-24.) particularly warranted here. Given that fact, an injunction is The injunction will properly place the onus on defendant to take whatever steps are required to ensure that it does not infr:nge plaintiff's trademark right:s 15 in the :'uture, rather than requiring plaintiff to constantly monitor defendant's actions. In short, there is no reasonable basis for defendant to resist an injunction preventing it from engaging conduct. See J. in admittedly unlawful MCCARTHY ON TRADEMARKS § 30.11 (4th ed. 2004) ("If the defendants sincerely intend not to infringe, the injunction harms them little; if they do, it gives [plaintiff] substantial protection of its trademark. H) • Accordingly, the Court GRANTS plaintiff's motion for summary judgment to the extent that it seeks a permanent injunction and DENIES defendant's motion as to injunctive relief. Plaintiff should submit a proposed injunction to the Court by Friday, 22, 2011. If defendant chooses to respond to the proposed injunction, it should file a response by Friday, May 6, 2011. Attorney's Fees D. Finally, the Lanham Act permits an award of attorney's fees to a prevailing party in "exceptional cases. H See 15 U.S.C. § 1117(a). An exceptional case is one in which "the infringing party acts in a malicious, Corp. v. fraudulent, deliberate, or willful manner." Burger King Pilgrim's Pride Corp., (internal quotations omitted). 15 F.3d 166, 168 (11th Cir. 1994) Even if a case is exceptional, "the decision to grant attorney fees remains within the discretion of the trial court. D• Id. There is no evidence in the record to suggest that defendant acted in a "malicious, fraudulent, deliberate, or willful manner.D While defendant admits to direct infringement of plaintiff's mark, it credibly argues and presents substantial (Defs.' infringement was unintentional. Facts evidence that the at 'll'lI 20-24.) [16] Defendant was not aware of plaintiff's rights to the "Dura ProD mark (Id. at 'lI 14.) until it was contacted by plaintiff in January, 2009. Within 48 hours of plaintiff's contact, defendant acted, albeit not entirely effectively, to eliminate the ter:r, "Dura ProD from the PPC campaign. that (Id. at 'lI 20.) Under the an award of attorney's fees the Court finds is not warranted. Plaintiff's motion for summary judgment as to attorney's fees is thus DENIED and defendant's motion for summary judgment as to attorney's fees is GRANTED. CONCLUSION For the foregoing reasons, the Court GRANTS IN PART and DENIES IN PART Plaintiff's Motion for Summary Judgment [15], GRANTS IN PART and DENIES IN PART Defendants' Motion for Partial Summary Judgment • The parties have submitted evidence and thoroughly briefed the Court on the attorney's fees issue. Plaintiff's request for leave to file a detailed motion or conduct a hearing to put forth additional evidence as to attorney's fees is thus DENIED as unnecessary. 17 [16-1), and DENIES WITHOUT PREJUDICE Defendant Walker's Motion for Summary Judgment [16-2J. The Court directs plaintiff to submit a bill of costs and a proposed injunction to the Court by Friday, 22, 2011. If defendant chooses to respond to either filing, it should submit its response by Friday, May 6, 2011. SO ORDERED, this day of March, 2011. 18
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