Prepared by Cislo & Thomas LLP Attorney Mark D. Nielsen, Ph.D.
1. In a recent decision from the Southern District of California, the parent entity that owns the San Diego Padres baseball team sued a former concessionaire in the Padres’ stadium {Petco Park) for trademark infringement and unfair competition where the concessionaire did not cease using certain of the Padres’ trademarks on its website once the sponsorship agreement with the concessionaire expired. The defendant moved for summary judgment based on the absence of a likelihood of confusion and also fair use. The defendant asserted that because it was in the restaurant business and the Padres were a baseball team, there was no possibility of confusion among the consuming public. The Court disagreed finding that the prior relationship between the parties could lead customers to mistakenly believe that there was an ongoing connection, sponsorship, or affiliation with the parties because of the presence of the Padres’ trademarks on the defendant’s website. The Court also noted that continued use of another’s trademarks after an agreement permitting such usage is terminated is essentially dispositive on the infringement issue because the trademark owner loses the ability to control its trademarks. Thus, the Court denied the summary judgment on likelihood of confusion issue. As to fair use, a non-trademark usage was acknowledged, but there remained an issue of fact as to whether the defendant’s ongoing usage was fair and in good faith. The takeaway here is that clients need to be careful to monitor their websites and social media accounts to make sure they are not, even accidentally, using marks, previously licensed or otherwise authorized for use, that are no longer permitted to be used.
2. In a recent decision from the Central District of California, Judge Selna denied a motion to dismiss trademark claims by Playboy against a company selling knockoffs of Playboy’s iconic “Bunny Costume.” The interesting argument made by the defendant was that Playboy had failed to adequately plead a likelihood of confusion (or dilution) because Playboy’s registered marks were directed to services, whereas the defendant was selling clothing (i.e., there was not sufficient similarity in the goods vs. services to support a likelihood confusion). If a plaintiff did not have such long-standing and iconic trademark rights, this argument may work better. In this case, however, the Court indicated, and the takeaway to keep in mind is, that the scope of goods or services in a registration does not necessarily dictate the scope of goods or services that might be considered infringing.
3. In a recent, well-reasoned decision out of the San Francisco County Superior Court, the Court overruled a demurrer to a trade secret misappropriation claim that arose out of a failed partnership related to a new type of beauty products. The Court found that the complaint sufficiently alleged the nature of the trade secrets. One interesting issue was whether the absence of a non-disclosure agreement between the parties should be dispositive of whether reasonable efforts were made to maintain secrecy. The Court declined to enter such a ruling, and noted that the parties had a long-term relationship prior to their partnership effort. The Court further noted that when the partnership dealt with third parties, it did secure non-disclosure agreements. The takeaway here is that strict care must be taken to protect the confidentiality of one’s trade secrets, and not just rely on friendship or the like.
