Boink Systems, Incorporated et al v. Las Vegas Sands Corporation, No. 2:2008cv00089 - Document 238 (D. Nev. 2011)
Court Description: ORDER Denying 219 LVS' Petition for An Order to Show Cause. Signed by Magistrate Judge Peggy A. Leen on 8/3/11. (Copies have been distributed pursuant to the NEF - EDS)
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Boink Systems, Incorporated et al v. Las Vegas Sands Corporation Doc. 238 1 2 3 4 5 UNITED STATES DISTRICT COURT 6 DISTRICT OF NEVADA 7 8 9 10 11 12 BOINK SYSTEMS, INCORPORATED, et al., ) ) Plaintiffs, ) ) vs. ) ) LAS VEGAS SANDS CORPORATION, ) ) Defendant. ) __________________________________________) Case No. 2:08-cv-00089-RLH-PAL ORDER (Pet. for OSC - Dkt. #219) 13 14 Before the court is Las Vegas Sands Corp.’s Petition for an Order to Show Cause why Boink 15 Systems, Incorporated, and its President Should Not be Held in Contempt (Dkt. #219). The court has 16 considered the Motion, Boink System Inc.’s Opposition (Dkt. #224), and Las Vegas Sands Corp.’s 17 Reply (Dkt. #27). 18 19 BACKGROUND The parties’ claims and counterclaims were tried before a jury February 22 through March 1, 20 2011. A Clerk’s Judgment (Dkt. #203) was entered March 2, 2011. After post-trial motions, the court 21 entered an Amended Judgment (Dkt. #226) on May 20, 2011. On February 22, 2011, the first day of 22 trial, counsel for the parties advised the court that they had agreed to a permanent injunction resolving 23 Las Vegas Sands’ (“LVS”) trademark claims. The Order (Dkt. #205) on the stipulated permanent 24 injunction was approved by the court and signed February 22, 2011, and docketed, but not entered on 25 the public record until March 8, 2011, after the jury returned its verdict. 26 In the current petition, LVS seeks an order to show cause why Boink Systems and its president 27 should not be held in contempt for violating the terms of the injunction. The petition, which is 28 supported by the declaration of Christopher Matthews asserts that Plaintiff Boink Systems, Inc. (“BSI”) Dockets.Justia.com 1 violated the terms of the permanent injunction by displaying an image of a kiosk similar in appearance 2 to the kiosk at issue in this case, bearing the LVS Trademark Logo “THE VENETIAN” on its side. Mr. 3 Matthews attests that on April 14, 2011, he used his office computer to view the BSI website. 4 Matthews Declaration ¶ 7. He used the same internet address (http://www.boink.com) that he used 5 previously when viewing the BSI website when corresponding with Plaintiff’s counsel, Larry Washor. 6 Id. The “News and Events” section of the BSI website displayed an image of a kiosk similar in 7 appearance to the kiosk at issue in this case, bearing the LVS Trademark Logo “THE VENETIAN” on 8 its side. Id. ¶ 8. He attached a copy of the screen capture depicting the web page containing the image 9 as Exhibit “B” to the petition. 10 Based on these representations, LVS argues that BSI has violated the court’s permanent 11 injunction and should be held in contempt. LVS contends it has established by clear and convincing 12 evidence that the order has been violated, with sufficient proof to reasonably satisfy the court that it is 13 highly probable that a violation occurred. As such, the burden shifts to BSI to demonstrate it was 14 somehow unable to comply with the permanent injunction. LVS cites authority for the proposition that 15 the party resisting a finding of contempt must show that it has “made in good faith all reasonable efforts 16 to meet the terms of the court order.” Commodity Futures Trading Comm’n v. Wellington Precious 17 Metals, 950 F.2d 1525, 1529 (11th Cir. 1992); S.E.C. v. Showalter, 227 F.Supp 2d 110, 120 (D. D.C. 18 2002). LVS argues that BSI cannot make this showing because it has repeatedly represented to the 19 court and opposing counsel in the past that it has removed images depicting LVS logos and trade names 20 from its website. The permanent injunction specifically binds not only the Plaintiff, but its officers, 21 agents, servant, employees, representatives, attorneys and assigns. Under these circumstances, the court 22 has jurisdiction over non-party William Toro, the President of BSI to hold him in contempt, and should 23 do so. LVS requests that the court require Boink and its President, William Toro, to appear and show 24 cause why it should not be held in contempt, an award of additional injunctive relief, attorney’s fees and 25 costs for the necessity of filing this petition, and any other relief the court deems just and proper. 26 BSI opposes the motion arguing it is based on the appearance of a single image formerly posted 27 on the “News and Events” section of BSI’s website. The picture was removed April 27, 2011, the day 28 after Plaintiff’s petition was filed and served. The picture depicted equipment designed by Plaintiff and 2 1 displayed at a public trade show in 2007. BSI argues that only when the picture is viewed with a 2 magnifying glass or blown up beyond the ordinary dimensions at which it was displayed, as LVS did in 3 its petition, can the word “THE VENETIAN” be seen on the side of the equipment in the picture. BSI 4 represents that it was unaware that the picture bearing “THE VENETIAN” name was on its website. 5 However, when the petition was filed, Plaintiff immediately acted to remove the picture. 6 BSI points out that a simple phone call or letter from the Defendant to its counsel would have 7 accomplished the goal of protecting Defendant’s trademark if this was the actual aim. Moreover, either 8 LVS was not aware the image was on BSI’s website until Mr. Matthews accessed the website on April 9 14, 2011, or LVS deliberately delayed filing this petition for strategic reasons. BSI argues that is has 10 substantially complied with the permanent injunction and that substantial compliance purges any 11 contempt as a matter of law. 12 The opposition is supported by the declaration of William Toro. Mr. Toro is the President and 13 CEO of Plaintiff BSI. Toro Declaration, ¶ 1. He attests that after entering into the permanent 14 injunction he reviewed the www.boink.com website to check for any images or contents possibly using 15 Defendant’s trademarks as identified in the injunction to ensure BSI was in compliance. Id. ¶ 4. It now 16 appears that in his review he inadvertently overlooked the picture that was in the “News and Events” 17 page of the website depicting equipment designed by Plaintiff and displayed at a public trade show in 18 2007 with “THE VENETIAN” name/mark on the side of the equipment. Id. He does not know 19 whether he overlooked the image because of its size (2.25 inches by 1.75 inches on a standard computer 20 screen) or because it was part of a loop of pictures that flashed on the screen for less than one second at 21 a time. Id. He has attached a true and correct copy of the image as it appeared on a standard computer 22 screen as Exhibit “1A” to his declaration. Id. “The image was not up on the website with any intent, 23 and the website has not been the source of any revenue since the injunction was entered.” Id. ¶ 5. On 24 April 27, 2011, he received a copy of Defendant’s petition. Id. ¶ 6. As quickly as possible, and that 25 same day, BSI removed the picture and took down all content from the “News and Events” section of 26 the website. Id. As of the date of his declaration, May 12, 2011, no new content had been put up on the 27 “News and Events” page of the website. Id. 28 /// 3 1 LVS replies that BSI has conceded that the permanent injunction was entered on March 8, 2011, 2 that BSI and its president were aware of the terms of the injunction, and that LVS’ trademarked “THE 3 VENETIAN” logo appeared on the website after March 8, 2011. BSI does not dispute that on April 14, 4 2011, it assured the court through its counsel that any unauthorized use of the LVS trademark ceased in 5 early 2008. This representation was untrue. Therefore, LVS has made a prima facae case of contempt, 6 and BSI’s “incessant claims of inadvertence ring hollow.” LVS also argues that BSI continues to make 7 false representations because the screen captures submitted by BSI in its opposition, showing the image 8 on its website, bears the date “28/04/2011" in the lower right-hand corner. Thus, Mr. Toro’s claim that 9 it was removed on April 27, 2011 is again false. As a result, neither LVS nor this court should be 10 expected to take BSI and Mr. Toro at face value any longer. 11 DISCUSSION 12 LVS asks the court for an order: (1) awarding LVS its costs and fees for bringing this petition; 13 (2) finding BSI and its President in contempt; and (3) supplementing and amending the permanent 14 injunction to (a) require placement of a corrective notice on the home page of BSI’s website; and (b) 15 requiring payments to LVS of $100,000.00, assessed jointly and severally against BSI and its president, 16 for each and any further violation of the permanent injunction. 17 A. Legal Standard 18 It is axiomatic that courts have the inherent authority to compel obedience to their lawful orders. 19 Shuffler v. Heritage Bank, 720 F.2d 1141, 1146 (9th Cir. 1983). The standard for finding a party in 20 civil contempt is well settled. In re Bennett, 298 F.3d 1059, 1069 (9th Cir. 2002). The moving party 21 has the burden of showing by clear and convincing evidence that the party against whom contempt is 22 sought violated a specific and definite court order. Id. If the moving party meets this burden, the 23 burden shifts “to the contemnors to demonstrate why they were unable to comply.” Id. 24 A party may be found in civil contempt for disobedience of a specific and definite court order if 25 it fails to take all reasonable steps within its power to comply. In Re Dual-Deck Video Cassette 26 AntiTrust Lit., 10 F.3d 693, 695 (9th Cir. 1993). The contempt “need not be willful,” and there is no 27 good faith exception to the requirement to obey a court order. Id. However, a party should not be held 28 in contempt if its action appears to be based on a good faith and reasonable interpretation of the court’s 4 1 order. Id. Substantial compliance with a court order is a defense to civil contempt. Id. A few 2 technical violations do not vitiate substantial compliance if a party has made reasonable efforts to 3 comply. Id. Substantial compliance with a court order purges civil contempt. NLRB v. A-Plus 4 Roofing, Inc., 39 F.3d 1410, 1418 (9th Cir. 1994) (citing General Signal Corp. v. Donallco, Inc., 787 5 F.2d 1376, 1379 (9th Cir. 1986). 6 B. 7 The parties do not dispute the standard the court should apply in resolving this dispute. BSI does Analysis 8 not dispute that it displayed an image of the LVS name/mark THE VENETIAN” on its website after it 9 entered into a permanent injunction which the court approved on February 22, 2011. However, LVS 10 does not dispute that the image was approximately 2.25 x 1.75 inches on a standard computer screen 11 and was part of a loop of pictures that flashed on the BSI website as part of a loop of pictures displayed 12 from a public trade show in 2007 for less than one second at a time. 13 LVS initiated this action on January 22, 2008, when it filed this complaint and has been most 14 vigilant in enforcing its intellectual property rights. Counsel for LVS went online to the BSI website 15 April 14, 2011, to confirm that BSI was not displaying and LVS trademark logo prohibited by the 16 permanent injunction the parties stipulated to and the court approved. Counsel found a single image on 17 the site and attached an enlarged copy of the screen capture depicting the webpage containing the image 18 as an exhibit to the petition. Thus, LVS has established clear and convincing evidence that the court’s 19 permanent injunction has been violated. However, the court finds that BSI has demonstrated that it 20 made good faith reasonable efforts to comply with the terms of the permanent injunction and has 21 substantially complied. Additionally, BSI took prompt corrective action once the violation was brought 22 to its attention. Counsel for LVS elected to file this petition twelve days after finding a single image on 23 BSI’s website instead of picking up the phone and notifying opposing counsel of the problem. The 24 problem could have, and should have, been resolved expeditiously and with minimal expense to both 25 sides. For whatever reason, counsel for LVS elected to file this petition with the court. The court finds 26 that BSI’s technical violation of the permanent injunction does not warrant civil contempt sanctions, 27 and that BSI’s prompt corrective action has purged its technical violation of the court’s order. 28 /// 5 1 Accordingly, 2 IT IS ORDERED that LVS’ Petition For An Order to Show Cause Why Boink Systems, Inc. 3 4 and It’s President Should Not Be Held In Contempt (#219) is DENIED. Dated this 3rd day of August, 2011. 5 6 7 ______________________________________ Peggy A. Leen United States Magistrate Judge 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6
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