A recent opinion from the Southern District of California highlights the difficulties that a trademark owner can face when seeking summary judgment on a claim that a defendant infringed its design trademarks. HIT Entertainment, Inc., et al., v. National Discount Costume Co., Inc., et al., (“NDC”) stems from a case filed in the mid-1990s against NDC, a manufacturer and distributor of costumes. The plaintiffs then and in the current litigation alleged, in part, that NDC had engaged in the creation and sale of costumes based on their trademarked designs in certain children’s characters, such as Barney the Dinosaur. (In the current litigation, additional plaintiffs allege that NDC more recently infringed trademarked designs in Bob the Builder and Thomas the Tank Engine.) Though the parties to the older case settled out of court and stipulated to a permanent injunction, the current plaintiffs’ investigation revealed that NDC continued to make and distribute costumes based on Barney and the other characters. The plaintiffs sought and obtained a preliminary injunction and contempt sanctions against the defendants in the amount of $29,689.75, and they then moved for summary judgment on their claims of trademark and copyright infringement.
In its opinion, the court granted that part of the plaintiffs’ motion regarding claims that the defendants were liable for infringing the plaintiffs’ word trademarks in the names of the characters at issue. However, the fact-intensive nature of the infringement inquiry with regard to trademarked designs led the court to deny that part of the plaintiffs’ motion. While the plaintiffs attached evidence regarding the strength of the marks at issue; the similarity between the allegedly infringing costumes and the marks; and the defendants’ intent to allege the marks, the court noted that no compelling evidence was presented regarding the proximity of the costumes to the products and services sold under the marks; the presence of any actual confusion in the marketplace; any similarity in the marketing channels used for the allegedly competing products; the degree of care likely to be exercised by potential purchasers; or the likelihood of expansion of the relevant product lines. Courts typically look to all of the above factors in determining whether there is a likelihood of confusion sufficient to support a claim of infringement. In the absence of compelling evidence regarding so many of the factors, the court deferred to the Ninth Circuit’s admonishment that “district courts should grant summary judgment motions regarding the likelihood of confusion sparingly, as careful assessment of the pertinent factors that go into determining likelihood of confusion usually requires a full record.”
Trademark litigation can be littered with potential pitfalls for parties on wither side of the aisle. It is important to consider all of the factors relevant to an infringement inquiry, both when making the decision to file a claim and when making strategic decision during the course of the lawsuit.