Oct 13, 2015
SPSK's Intellectual Property and Appellate Practice Groups Successfully Defend Trademark Owners' State Court Judgment on Appeal
On Friday, September 4, 2015, the Appellate Division issued an opinion reaffirming Hackensack University Medical Center’s (“HUMC”) trial court judgment and injunction as well as the applicability of the Lanham Act in New Jersey state court actions involving trademarks. Ira Hammer and John D. McCarthy briefed and argued the appeal.
At trial, HUMC, which had opened a spa in 2000 under the name BEYOND and had obtained a state trademark registration for its mark, obtained an injunction against Beyond Organic Spa, Inc. (“BOSI”) to stop it from using the mark Beyond Organic for spa services in a neighboring community. HUMC spent considerable money and effort in marketing its BEYOND spa services over a period of eight years before BOSI started its use of Beyond Organic. BOSI, however, applied for and obtained a federal registration for its mark Beyond Organic. BOSI not only refused to stop using its mark but also sought to enjoin HUMC’s use of BEYOND.
The Appellate Division found that HUMC had proven that its mark was valid and legally protectable, that it owned the mark and that defendant BOSI’s use of Beyond Organic was likely to cause confusion. The Appellate Division agreed that the record fully supported the trial court’s conclusion that HUMC had established its rights before BOSI had commenced its use. The Appellate Division upheld the trial court’s determination that HUMC’s use of BEYOND was arbitrary, one of the most protected forms of trademarks, and not descriptive, as BOSI claimed. The Appellate Division also upheld the trial court and rejected BOSI’s argument that it was entitled to use BEYOND because BEYOND was “descriptive” of BOSI’s products and services. The Appellate Division agreed with the trial court’s holding that BOSI was using BEYOND as a trademark and source designation, and not as a descriptor. Finally, the Appellate Division found that there was a likelihood of confusion regardless of whether the Lanham Act test set forth in Interpace Corp. v. Lapp, Inc. or the New Jersey requirements set forth in Edison Electric vs. Edison Contracting were applied.
Addressing BOSI’s various procedural and evidentiary challenges to the trial court’s actions, the Appellate Division affirmed the sufficiency of the trial court’s fact finding, the appropriateness of admitting certain summary documents offered by HUMC regarding sales, the danger (to a defendant such as BOSI) in waiting more than two years to seek to file counterclaims and defenses, and the need to move to compel a deposition witness to attend deposition before seeking to bar the witness at trial.
Should you have any questions regarding the trademark aspects of this case, contact Ira Hammer, or the evidentiary or procedural aspects of this case, contact John D. McCarthy.View Attachment