Update: that’s not actually the latest in B&B!

My mistake. The latest is that after the ruling I just wrote about, there was a jury trial, which produced findings that (1) Hargis infringed the federally registered mark, (2) there were no damages/profits awardable from the infringement and the infringement was not willful, (3) the registration/incontestability was procured by fraud, and (4) Hargis prevailed on its false advertising/false designation of origin counterclaims.  Because of (3), the judge granted judgment as a matter of law to Hargis on (1), since fraud on the PTO invalidates the entire registration.

B&B Hardware Inc. v. Hargis Indus.
Inc., 06-cv-01654 (E.D. Ark. Jun. 26, 2016)
The court explained that, absent the
benefits of incontestability, Hargis could’ve shown that the Sealtight mark was
descriptive without secondary meaning. 
Indeed, it did so in a 2000 trial, but then B&B renewed and filed for
incontestability.  Then B&B sued
again in 2006, and the court of appeals found that preclusion didn’t apply
because of the change in the registration’s circumstances from contestable to
incontestable.  (Should that affidavit
even have been filed?  How could it
possibly be correct to say there were no final determinations adverse to
B&B’s ownership of a valid mark?  The
2000 trial sounds an awful lot like a final judgment that the mark wasn’t
valid.  Something has gone very wrong
with incontestability.)   Hargis thus couldn’t repeat its mere
descriptiveness argument, but it did prove fraud on the PTO, which removed the
conclusiveness provided by incontestability. 
“Without incontestability, B&B does not have a change in
circumstances that allows it to escape claim preclusion because the jury in
2000 found that ‘Sealtight’ lacks secondary meaning.” 
Anyway, B&B wasn’t entitled to a
remedy.  No injunction, because protecting
B&B’s registration in the future was no longer possible; Sealtight wasn’t
registered any more.  (This seems to skip
over some issues surrounding likely confusion, but I find it hard to blame the
court.)  Disgorgement was unavailable
because it was subject to the principles of equity, which did not favor
B&B.  There was no intentional
infringement; there were no diverted sales because the parties don’t compete;
and there was no palming off.  True,
B&B was without another remedy, but that was its own fault for failing to
renew; B&B didn’t delay in asserting rights and filed 43 days after its
mark became incontestable; and the public interest was served by enforcing
valid trademarks. But it would be “unfair to disgorge Hargis of its profits
under unjust enrichment or 
deterrence rationales when B&B did not
lose a single sale as a result of Hargis’s actions and Hargis’s infringement
was unintentional.”  Even if the fraud on
the PTO claim didn’t survive the (inevitable) appeal, there’d be no
justification for disgorgement.

from Blogger http://ift.tt/29W5zKA

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