Wednesday, June 30, 2010

Mystique Wins Appeal of Lanham Act Award for Trademark Infringement

Mystique, Inc. a maker of sandals such as those shown in the photo, won a judgment in the Southern District of Florida of $2.95 million against 138 International, Inc., which was upheld on appeal by the Eleventh Circuit US Court of Appeals.  Mystique, Inc. v. 138 International, Inc., 2010 U.S. App. Lexis 8528 (11th Cir. 2010).   Both companies marketed sandals under the name Mystique.  The District Court found that, although 138 International registered the Mystique mark, Mystique, Inc. had used the Mystique mark in commerce before 138 International registered and used it, that 138 International knowingly infringed Mystique's mark, and that the 138 International registered Mystique mark must be cancelled.

On appeal, 138 International argued that there were genuine issues of fact regarding whether 138 International used the Mystique mark before Mystique, Inc. did so.  The Court  disagreed, finding that even if all of the evidence 138 international cited were taken into account, it was only evidence of 138 international's communications with its suppliers.  The Court explained that not every transport of a good is sufficient to establish ownership rights in a mark, and that while use of a mark need not have gained wide public attention, secret, undisclosed internal shipments are generally inadequate.  Therefore, evidence of communications with suppliers about the mark was insufficient to create an issue as to who used the mark first.  138 International also argued that Mystique should not be awarded damages because it had not registered the trademark.  The Court rejected this, noting that damages may be awarded under section 43(a) of the Lanham Act, and that registration of the mark is not required.  Accordingly, summary judgment was awarded to Mystique, Inc.

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