ILC Trademark Corp. v. Aviator Nation, Inc.
| Decision Date | 24 November 2020 |
| Docket Number | Case No. 2:17-cv-07975-MWF(JPRx) |
| Parties | ILC TRADEMARK CORPORATION, a British Virgin Islands corporation, Plaintiff, v. AVIATOR NATION, INC., a California Corporation, and PAIGE MYCOSKIE, an individual, Defendants. AVIATOR NATION, INC., a California Corporation Counter-Claimant v. ILC TRADEMARK CORPORATION, a British Virgin Islands corporation, and ROES 1-10, Inclusive, Counter-Defendant |
| Court | U.S. District Court — Central District of California |
Complaint Filed: October 31, 2017
This matter came on for trial before the Court sitting without a jury on April 23, 2019. The following witnesses were called and examined by the parties in the order recited below:
On April 23, 2019, Scott P. Shaw appeared on behalf of Plaintiff and Counter-Defendant ILC Trademark Corporation and gave an opening statement. Kent M. Walker appeared on behalf of Defendants Aviator Nation, Inc. ("Aviator Nation") and Paige Mycoskie and Counter-Claimant Aviator Nation and gave an opening statement.
On the same day, following opening statements, Mr. Shaw examined Robert Mignogna, owner of a consulting company offering management consulting in the surf industry. Mr. Walker cross-examined Mr. Mignogna.
Next, Samuel G. Brooks, appearing on behalf of ILC Trademark Corporation, examined Paul Epner, the president of ILC Trademark Corporation between 1995 and 2010. Mr. Walker cross-examined Mr. Epner and Mr. Brooks conducted a redirect examination.
Next, Mr. Brooks examined Phillip Reed Thompson, manager of the wholesale department of Aviator Nation. Mr. Walker cross-examined Mr. Thompson and Mr. Brooks conducted a redirect examination.
On April 24, 2019, Mr. Shaw examined Lee Yee Kian, a director of ILC Trademark Corporation and CFO of the Branded Lifestyle Group. Mr. Walker cross-examined Mr. Lee and Mr. Shaw conducted a redirect examination.
Next, Mr. Shaw examined Sylvia Ray Elger Glassman, an employee at the Venice Beach, California location of Aviator Nation. Mr. Walker cross-examined Ms. Glassman and Mr. Shaw conducted a redirect examination.
Next, Mr. Brooks examined Dave Mason, the vice president of finance for Aviator Nation. Mr. Walker cross-examined Mr. Mason and Mr. Brooks conducted a redirect examination.
On April 25, 2019, Mr. Shaw examined Paige Mycoskie, the founder and president of Aviator Nation.
On April 26, 2019, Mr. Brooks examined James Earl Jenks, Jr., a clothing merchandiser in the surf industry. Mr. Walker cross-examined Mr. Jenks; Mr. Brooks conducted a redirect examination; and Mr. Walker conduct a recross examination.
Next, Mr. Walker examined David Drews, the president of IP Metrics, an intellectual property consulting firm that performs valuation of patents, trademarks, and copyrights and damages assessments. Mr. Brooks cross-examined Mr. Drews; Mr. Walker conducted a redirect examination; and Mr. Brooks conduct a recross examination.
Next, Mr. Walker examined Lawrence Maxham, a patent, trademark, and copyright law attorney. Mr. Brooks cross-examined Mr. Maxham.
The Court also reviewed the designations and counter-designations of the deposition transcripts of Michael Colucci, a manager at the Malibu, California location of Aviator Nation, dated January 31, 2019, together with exhibits thereto; Lylah Evenstar, a manager at the Venice, California location of Aviator Nation dated January 31, 2019, together with exhibits thereto; Kevin Harter, vice president of integrated marketing at Bloomingdale's, dated January 31, 2019, together with exhibits thereto; Lyndsey Shryer, director of retail operations at Aviator Nation, dated February 27, 2019, together with exhibits thereto; Lorraine Willis, an employee at the Laguna Beach, California location of Aviator Nation, dated January 31, 2019, together with exhibits thereto; Benjamin Brussell, an independent contractor for TMG USA between 2008 and 2018, dated August 10, 2018, together with exhibits thereto; Neil Boyarsky, CEO of Bandier Holdings ("Bandier"), dated October 26, 2018, together with exhibits thereto; William Cooper, vice president of merchandising for women's contemporary at Saks & Company LLC ("Saks"), dated November 14, 2018, together with exhibits thereto; and Marc P. Beige, president of Rubie's Costume Company, Inc. ("Rubie's Costume"), dated December 10, 2018, together with exhibits thereto.
There is no need to rule explicitly on the objections in the deposition transcripts or stated in the Final Pretrial Conference Order. To the extent an exhibit is discussed herein, any objection was overruled. To the extent that an exhibit is not discussed, it was not viewed as particularly probative and therefore any objection may be viewed as overruled as moot. The Court did not sustain any objection to any particular evidence, be it an exhibit or testimony, that would have changed the outcome here.
During and after testimony, exhibits were marked and received into evidence. (See Amended Joint Exhibit List (Docket No. 147)). Following the presentation of evidence and the parties' closing arguments and subsequent memoranda of law, the matter was taken under submission.
Having carefully reviewed the record and the arguments of counsel, as presented at the trial and in their written submissions, the Court now makes the following Findings of Fact and reaches the following Conclusions of Law under Rule 52 of the Federal Rules of Civil Procedure. Any finding of fact that constitutes a conclusion of law is also hereby adopted as a conclusion of law, and any conclusion of law that constitutes a finding of fact is also hereby adopted as a finding of fact.
Let me drop the third person for a moment and summarize what follows. Defendants prevail because of the congeries of affirmative defenses relating to delay, namely acquiescence, laches, statute of limitations, waiver, estoppel, and failure to mitigate. The elements of all these affirmative defenses run together. To the extent that a showing as to one defense in particular is necessary, laches is established by the evidence and the law. Plaintiff - barely - establishes the elements of its claims for relief, although I could easily have found for Defendants under the Sleekcraft factors. It is also a close call whether the disputed mark here was merely ornamental, as Defendants argued, and whether Defendants are entitled to fair use.
However, the delay here was unjustified. In addition, the remedies of an injunction or disgorgement would be unjust. The value of a lightning bolt on certain clothing in a certain chain of stores is, in large part, divorced from whatever hazy and nostalgic associations still exist of 1970's surf culture in Hawai'i.
As a technical matter, do the affirmative defenses defeat Plaintiff's claims for relief as such or only prevent awarding any relief? I haven't discovered much guidance on that, as Plaintiff's caselaw is unconvining. Plaintiff might not care as much as it argues - Plaintiff doesn't get any relief either way - but perhaps it matters on appeal. I've decidedthat the fair thing to the parties and the Ninth Circuit, if it comes to that, is to state clearly what I'm doing and why, and then enter judgment accordingly.
Therefore, the Court FINDS and RULES that Defendants successfully proved their affirmative defenses based on delay, which defeats any verdict or entry of judgment on Plaintiff's claims for relief. In the absence of the affirmative defenses, Plaintiff did prove the elements of its claims for relief. Were it ever determined as a matter of law that the affirmative defenses are addressed to the remedies only, then the Court additionally FINDS and RULES that the affirmative defenses deny to Plaintiff its requested remedies of an injunction or disgorgement.
1. Plaintiff and Counter-Defendant ILC Trademark Corporation is a British Virgin Islands corporation. (See Final Pretrial Conference Order (Docket No. 124)). ILC Trademark Corporation owns intellectual property which it licenses to licensees, who then make and sell products. ILC Trademark Corporation does not itself make or sell products. ILC Trademark Corporation is the registered owner of United States Trademark Registration Number 4,384,212 (the "'212 Registration"), issued April 13, 2013. (Id.).
2. Defendant and Counter-Claimant Aviator Nation is a California corporation with its principal place of business in California. Defendant Paige Mycoskie is the founder and president of Aviator Nation.
3. The Lightning Bolt brand started as a surfboard brand in the early 1970s, and later expanded to include clothing and other goods.
4. Lightning Bolt was associated with several of the most popular surfers in the 1970s, including Gerry Lopez, Rory Russell, and Shaun Tomson.
5. Lightning Bolt became one of the most well-known surf brands of the 1970s.
6. Lightning Bolt surfboards and products have been advertised and featured in Surfer and Surfing magazines beginning in the 1970s and continuing through the 2000s.However, Lightning Bolt was not advertised in either of these magazines between 1978 and 1990, as well as intermittent years in the 1990s and 2000s. (Ex. 84).
7. On August 15, 1978, the United States Patent and Trademark Office ("USPTO") registered a lightning bolt symbol (the "Bolt Mark") as United States Registration Number 1099609 (the "'609 Registration") for clothing, with a priority date of July 1973, and surfboards, with a priority date of December 1972. (Ex. 101). The registration named the Bolt Corporation as the owner. (Id.).
8. In September 1983, Bolt Corporation filed in the USPTO a combined declaration under Sections 8 and 15 confirming that the Bolt Mark (as registered in the '609 Registration) was in use. (Ex. 102).
9. On February 25, 1985, the Bolt Corporation assigned the entire interest and goodwill associated with various Lightning Bolt trademarks (including, inter alia, the Bolt ...
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