M'Otto Enterprises, Inc. v. Redsand, Inc.

• Decision Date: 16 July 1993
• Docket Number: No. C92-954GW.,C92-954GW.
• Citation: 831 F. Supp. 1491
• Court: U.S. District Court — Western District of Washington
• Parties: M'OTTO ENTERPRISES, INC., Plaintiff, v. REDSAND, INC., a California Corporation, Defendant.

831 F. Supp. 1491

M'OTTO ENTERPRISES, INC., Plaintiff, v. REDSAND, INC., a California Corporation, Defendant.

No. C92-954GW.

United States District Court, W.D. Washington, at Seattle.

July 16, 1993.

Rex B. Stratton of Stratton Ballew Richardson, Seattle, WA, for plaintiff.

Darrell L. Olson and Joseph R. Re of Knobbe, Martens, Olson & Bear, Newport Beach, CA, for defendant.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

WILSON, United States Magistrate Judge.

INTRODUCTION

Pursuant to Rule 52(a) of the Federal Rules of Civil Procedure, the Court hereby makes the following Findings of Fact and Conclusions of Law:

I. JURISDICTION AND VENUE

1. This is a declaratory judgment action brought by M'Otto Enterprises, Inc. ("M'Otto") against Redsand, Inc. ("Redsand"), seeking a judgment that M'Otto's "Red Eraser" caricature does not infringe Redsand's marks or images. PreTrial Order ("PTO") at ¶ 2.

2. Redsand counterclaimed against M'Otto for trademark infringement under 15 U.S.C. § 1114, and for unfair competition under 15 U.S.C. § 1125(a) and Washington state and common laws. PTO at ¶ 3.

3. The Court has subject matter jurisdiction by virtue of 28 U.S.C. §§ 1331 and 1338(a), and 15 U.S.C. § 1121. The Court has original and pendent jurisdiction over the state claims pursuant to 28 U.S.C. §§ 1332(a), 1338(b) and 1367(a). PTO at ¶ 1.1.

4. Venue is proper in this District pursuant to 28 U.S.C. §§ 1391(b), 1391(c), and 1400. PTO at ¶ 1.2.

PROCEDURAL POSTURE OF THE CASE

This matter came on for a bench trial April 26 and 27, 1993 before United States Magistrate Judge David E. Wilson, sitting with the consent of the parties pursuant to 28 U.S.C. § 636(c), and Magistrate Rule (M.R.) 13 of the Local Rules for the United States District Court for the Western District of Washington. Plaintiff M'Otto Enterprises, Inc. was represented by Rex B. Stratton of Stratton Ballew Richardson (Seattle, Washington), and Defendant Redsand, Inc. was represented by Darrel L. Olson and Joseph R. Re of Knobbe, Martens, Olson and Bear (Newport Beach, California).

The Pretrial Order sets forth numerous, detailed statements of admitted facts and exhibits. Due to the detail set forth in the Pretrial Order, counsel, by agreement, sought to provide the Court with evidence with respect to matters not already admitted, or which went toward supporting a party's contested factual contentions.

At the conclusion of the trial, the Court declined to rule on the case from the bench, took the matter under advisement, and requested that both sides prepare proposed findings of fact and conclusions of law and submit them to the Court. The Court, having had an opportunity to review the parties proposed findings and conclusions, hereby enters its findings of fact and conclusions of law. In doing so, the Court has, in addition to the respective proposed findings of fact and conclusions of law presented by each side, carefully considered the case from the standpoint of the totality of the evidence, and based its conclusions on a review of the transcript of the record of trial; the exhibits; the Court's trial notes; the Court's appraisal of the demeanor of the witnesses; and a review of the authorities cited by the respective parties.

FINDINGS OF FACT

Ultimate Issue Before the Court

This case concerns whether Plaintiff M'Otto's adoption and use of the RED ERASER and graphic design mark, either alone or in combination with the RED ERASER® mark, is likely to cause confusion, or to cause mistake, or to deceive the public with regard to Defendant Redsand's REDSAND® character marks or the likeness of Steve Timmons, and if so, what appropriate remedies may be fashioned to rectify the situation?

The specific images at issue are Plaintiff's Red Eraser caricature (Exhibit A, hereto), Defendant Redsand's caricature of Steve Timmons (Exhibit B, hereto), Plaintiff Red Eraser work mark (Exhibit C, hereto), and Defendant Redsand's work mark (Exhibit D, hereto).

The Plaintiff

M'Otto is a Washington corporation, formed in 1983, and having its principal place of business in Seattle, Washington. Since as early as March 1983, M'Otto has sold wearing apparel and related accessories under the M'OTTO®, M'OTTO RED DOT®, M'OTTOKIDS®, and M'OTTO INTERNATIONAL® trademarks, as well as other trademarks, including DESPERADO®, SARA JEAN®, ONLY STUFF® AND CREDO®, depending upon the style and design of the line of clothing.

M'Otto, together with its affiliated companies, designs, manufactures, and sells its own label as well as private label clothing through numerous stores in the United States, Canada, and many foreign countries. M'Otto markets its own brand of men's, women's, and children's clothing and accessories through independent sales representatives and agents with offices in Los Angeles, New York, Dallas, Chicago, Seattle, Puerto Rico, and Vancouver, Canada.

Since its inception in the United States, M'Otto has sold, at wholesale, over $80 million in clothing and has current annual wholesale sales in excess of $15 million.

M'Otto's clothing designs and styles vary from casual to dress up. For example, DESPERADO® and SARA JEAN®, supra, are western or blue jean concept labels, while M'OTTO INTERNATIONAL® and CREDO® are more upscale sportswear lines. Since 1987, M'Otto has developed a line of children's wear under the mark M'OTTOKIDS® and M'OTTO RED DOT®.

M'Otto identifies its corporate image and trademark recognition with the color red. (Tr. 52).¹ M'Otto owns the trademark M'OTTO RED DOT®, Registration No. 1,559081 issued October 3, 1989. M'Otto also owns a registered trademark for a RED button, as the last button on a shirt, Miscellaneous Design Registration No. 1,588,975 issued March 27, 1990. The red dot has always been a part of M'Otto's trademark. (Plaintiff's Exhibit 1).

M'Otto markets its products primarily through specialty shops, specialty chain stores, such as Ron Robinson and Jay Jacobs, and department stores such as The Broadway, Dayton-Hudson, Bon Marche, Dillards, Kohls, Macy's, Nordstrom and Liberty House.

M'Otto also manufactures and sells under private label to Eddie Bauer, J.C. Penney, Costco, Pace, and Sam's.

The Defendant

Redsand, Inc. was founded by Steve Timmons ("Timmons") in late 1985, and has marketed a line of sportswear since 1986. Timmons, an Olympian and professional volleyball player, stands 6'6" tall, is nicknamed "Red," and has distinctive red hair worn in a high flat-top haircut. Timmons was a star on the United States men's volleyball team in its win over Brazil for the gold medal in the 1984 Olympics. He also participated on the United States volleyball team which won the gold medal in the 1988 Olympics, and also played on the 1992 Olympic Volleyball Team which won the Bronze medal.

Timmons is the recipient of substantial national media coverage including major network Olympic coverage, major network and cable coverage of the beach volleyball circuit, major network interviews and competition, and substantial national press coverage. This media coverage includes frequent reference to Timmons' red, high, flattop haircut. As an example, Timmons and his flattop hairstyle received worldwide notoriety in the 1992 Olympics when he and the rest of the U.S. Volleyball team shaved their heads in support of a team member whose head is bald for medical reasons and whose technical foul cost the U.S. team a victory. Exhibits A-82 to A-84.

Since at least 1986, Redsand's sportswear has carried a stylized likeness of Timmons complete with sunglasses and flattop, as shown in Exhibit B hereto ("Timmons Caricature").

Timmons filed for and received a U.S. trademark registration to his caricature, U.S. Registration No. 1,505,035, issued September 27, 1988. Timmons assigned the registration to Redsand in June 1989.

Since 1986, along with Timmons caricature, Redsand has employed the image of Timmons in a variety of ways on its sportswear, including loop labels, hangtags and screen printed patterns on the garments.

Timmons' image is also used in point-of-purchase promotional materials such as decals, posters and banners. Timmons' image is also used in print advertising. In addition, Timmons testified that he acts as the promotional goodwill ambassador for Redsand, hosting in-store clinics where he signs autographs and instructional clinics where he teaches volleyball.

Due to Timmons' notoriety, Redsand also receives substantial unsolicited media coverage.

Redsand also employs the word REDSAND in a variety of logo styles in the sale of its sportswear. One of the styles used on hang tags, decals and signs since at least 1990, is shown in Exhibit D hereto.

Redsand has licensed the likeness of Timmons to C & C Partners for the manufacture and distribution of its sportswear. Redsand has also licensed the likeness of Timmons to Wilson Sporting Goods for the manufacture and sale of volleyballs.

For the first few years of its existence, Redsand sportswear was essentially a line of beachwear. Now, Redsand offers a more complete line of activewear, including T-shirts, tank tops, fleece sweatshirts, walking shorts, pants, woven shirts and hats. Tr. 237. Recent print ads show Timmons in non-volleyball settings. Tr. 239-40; Exs. A-97, A-98.

Redsand's target customers are young, active males, aged 18 to 24. However, there is some evidence that the line appeals to a broad range of buyers, including women. Tr. 242.

Redsand's major sales regions are the Pacific Northwest, Florida and California. Tr. 242. Redsand's sportswear ranges in retail price from $15 for T-shirts, with the bulk of the products averaging about $35-40, retail. Tr. 242.

Redsand sportswear is distributed through specialty stores and department stores such as Nordstrom, Dayton-Hudson, and Macy's. Redsand sells its sportswear nationwide.

Since March, 1986, Redsand has sold over $15 million worth of its sportswear. In 1992, Redsand sold over $6 million worth of its sportswear. Since March 1986,...