Maui Jim, Inc. v. Smartbuy Guru Enters.

• Decision Date: 07 February 2020
• Docket Number: No. 1:16 CV 9788,1:16 CV 9788
• Citation: 459 F.Supp.3d 1058
• Parties: MAUI JIM, INC., Plaintiff and Counterclaim Defendant, v. SMARTBUY GURU ENTERPRISES, Motion Global Ltd., SmartBuyGlasses Societa a Responsabilita Limitata, SmartBuyGlasses Optical Limited, Defendants and Counterclaimants.
• Court: U.S. District Court — Northern District of Illinois

459 F.Supp.3d 1058

MAUI JIM, INC., Plaintiff and Counterclaim Defendant,

v.SMARTBUY GURU ENTERPRISES, Motion Global Ltd., SmartBuyGlasses Societa a Responsabilita Limitata, SmartBuyGlasses Optical Limited, Defendants and Counterclaimants.

No. 1:16 CV 9788

United States District Court, N.D. Illinois, Eastern Division.

Signed February 7, 2020

Filed February 24, 2020

Genevieve Elizabeth Charlton, John T. Gabrielides, Barnes & Thornburg LLP, Chicago, IL, Michelle Miller Mikol, Barnes & Thornburg LLP, Washington, DC, for Plaintiff and Counterclaim Defendant.

Stephen J. Rosenfeld, Jacob Daniel Radecki, McDonald Hopkins LLC, Chicago, IL, Dan Leonard Makee, Pro Hac Vice, Jennifer D. Armstrong, McDonald Hopkins LLC, Cleveland, OH, for Defendants and Counterclaimants.

REDACTED PUBLIC VERSION of MEMORANDUM OPINION AND ORDER

MARVIN E. ASPEN, District Judge:

This is a voluminous intellectual property lawsuit with over 500 docket entries to date. Plaintiff Maui Jim, Inc. ("Maui Jim") alleges that the defendants sell non-genuine Maui-Jim-branded sunglasses while using its copyrighted photographs to falsely advertise that they are an authorized retailer. The defendants (collectively "Defendants," "SmartBuyGlasses," "SBG," or "Counterclaimants") counterclaim that Maui Jim's statements about their legitimacy amounts to defamation or, alternatively, warrant damages for unjust enrichment. Presently before us are Maui Jim's motions for summary judgment (Pl.’s Counterclaim MSJ (Dkt. No. 420); Pl.’s Copyright MSJ (Dkt. No. 423); Pl.’s MSJ on Lanham Act and Related State Law Claims ("Lanham MSJ") (Dkt. No. 426)) and Defendants’ motion for summary judgment in their favor on both Maui Jim's claims and their counterclaims. (Defs.’ MSJ (Dkt. No. 412).).¹ Also before us is Defendants’ motion for reconsideration of our ruling on their earlier motion to dismiss. (Mot. for Reconsideration (Dkt. No. 378).) For the reasons stated below, Maui Jim's motions for summary judgment are granted in part and denied in part, Defendants’ motion for summary judgment is granted in part and denied in part, and Defendants’ motion for reconsideration is denied.

BACKGROUND

Unless otherwise stated, the facts described herein are undisputed and culled from the parties’ multiple Local Rule 56.1 submissions.

A. Parties

Maui Jim is a designer, manufacturer, and provider of premium prescription and non-prescription sunglasses. (Defs.’ Resp. to Pl.’s Lanham SOF (Dkt. 459) ¶ 1.) Maui Jim's sunglasses are marketed, offered, and sold globally. (Id. ) Defendants retail designer eyewear and they sell products into the United States through websites like SmartBuyGlasses.com. (Pl.’s Resp. to Defs.’ Amend. SOF (Dkt. No. 466) ¶¶ 1, 45.) These sales include eyewear displaying Maui Jim's marks. (Defs.’ Resp. to Pl.’s Lanham SOF ¶ 35.) Defendants sold approximately [Redacted] non-prescription and [Redacted] prescription pairs of Maui-Jim-branded sunglasses into the United States between 2009 and 2019. (Pl.’s Resp. to Defs.’ Amend. SOF (Dkt. No. 466) ¶ 6.) These prescription sunglasses contained third-party prescription lenses glazed into a Maui-Jim-branded frame. (Id. )

B. Intellectual Property

Maui Jim offers over 125 different sunglasses styles under one or more of its marks. (Id. ¶ 6.) Maui Jim's sunglasses incorporate Maui Jim's patented, color-infused lens technology that wipe out glare and UV rays, and boosts color via lens treatments. (Id. ¶ 7.) Maui Jim's sunglasses all have earned the Skin Cancer Foundation's Seal of Recommendation as an effective UV filter for the eyes and surrounding skin. (Id. ¶ 14.) Since at least the early 1980s, Maui Jim continuously used the following marks in selling sunglasses in U.S. commerce:

(Id. ¶ 2) (sic.) Maui Jim registered these as trademarks with the U.S. Patent & Trademark Office. (Id. ¶ 5.)

The U.S. Copyright Office issued Certificates of Registration for the ninety-three professional photographs ("93 Photographs") at issue in this case. (Defs.’ Resp. to Pl.’s Copyright SOF (Dkt. No. 461) ¶¶ 7–9.) Maui Jim published its 93 Photographs either on its website or in print between March 2015 and April 2016. (Id. ¶¶ 20–21.) Each registration was issued within five years of Maui Jim's first publication of the photograph. (Id. ¶ 8.) Twenty-two of those photographs ("22 Photographs") were taken between March 27 and October 22, 2015. (Pl.’s Resp. to Defs.’ Amend. SOF (Dkt. No. 466) ¶ 108.) Those 22 Photographs were registered on August 8, 2016. (Id. )

Since 2009, Maui Jim invested nearly [Redacted] in marketing its Maui Jim sunglasses, including its marks, as a high-quality premium product. (Id. ¶ 10.) For example, Maui Jim prominently uses these marks in TV commercials, print advertisements, brochures, social media, and other digital advertising, marketing, and promotional campaigns. (Id. ¶ 11.) Maui Jim's TV commercials have aired on major networks like NBC, CBS, ABC, HGTV, Discovery Channel, Food Network, and ESPN. (Id. ) Maui Jim also promotes its sunglasses on its website, www.mauijim.com, where it publicly displays photographs of the sunglasses. (Defs.’ Resp. to Pl.’s Copyright SOF (Dkt. No. 461) ¶ 7.)

Maui Jim's website contains the following notice at the bottom of each page: "© [applicable year] MAUI JIM, INC." (Defs.’ Resp. to Pl.’s Copyright SOF (Dkt. No. 461) ¶¶ 9.) Additionally, the "Intellectual Property Notice" section of Maui Jim's Terms of Use webpage states:

Unless otherwise noted, all materials, including text, illustrations, photographs , designs, graphics, logos, button icons, images , audio clips, software, written and other material (collectively, the "Contents") are copyrights ... owned, controlled or licensed by Maui Jim, Inc.

(Id. ¶ 10) (emphasis added.) But the parties dispute whether these notices are expressly associated with any of the 93 Photographs. (Id. )

Defendants had access to Maui Jim's 93 Photographs. (Id. ¶ 21.) Although Defendants did not independently take or create any of the relevant Maui Jim-branded sunglasses that it displayed on its website,² they dispute whether their website displayed Maui Jim's 93 Photographs. (Id. ¶¶ 14–16, 18–19, 28.)³ The parties dispute whether Maui Jim's purported acquiescence granted Defendants a license to use Maui Jim's 93 Photographs. (Id. ¶¶ 29–31.)

C. Retail

Maui Jim and its wholly-owned distributors sell Maui Jim sunglasses through an authorized retailer program. (Pl.’s Resp. to Defs.’ Amend. SOF (Dkt. No. 466) ¶ 17.) Each authorized retailer enters into a written agreement with Maui Jim and/or Maui Jim USA, Inc. that governs the business relationship, outlines Maui Jim's terms and conditions, and references its U.S. General Policies. (Id. ¶ 21.) Defendants do not dispute that Maui Jim purports to have a policy governing its business relationships with authorized retailers. (Id. ) That authorized retailer program permits certain retail establishments to sell Maui Jim sunglasses to consumers. (Id. ) The parties dispute whether Maui Jim's authorized U.S. retailers purchase Maui Jim sunglasses exclusively from Maui Jim or whether they obtain Maui-Jim-branded sunglasses from additional sources. (Id. ¶ 20.) It is undisputed that SmartBuyGlasses is not within Maui Jim's authorized retailer program. (Id. ¶ 31.) But Defendants do dispute whether they are authorized to sell Maui Jim sunglasses as a matter of law.

Maui Jim states that it requires all Maui Jim sunglasses be sold with authentic Maui Jim lenses, frames, and parts, and not modified in any manner. (Id. ¶ 22.) Defendants dispute that averment, citing to the fact that nothing in Maui Jim's European authorized retailer agreements stated that its warranty would be voided if an authorized retailer sold Maui Jim sunglasses to third parties or if third-party lenses were glazed into its frames. (Id. ) Defendants also dispute this fact by claiming that Maui Jim authorized retailers in the U.S. had glazed third-party lenses into Maui Jim's frames without consequence. (Id. )

Maui Jim states that authorized retailers are required to direct all consumer repair requests to Maui Jim's trained repair technicians. (Id. ¶ 26.) Defendants dispute that fact because of a small font general policy attached to Maui Jim's CFO Paul Lippens’ declaration that states "We recommend that you or your customer call us on our toll-free number ... regarding any repair questions." (Id. ¶ 26 (citing Lippens Dec. (Dkt. No. 428-4) at 9) (emphasis added).)

It is undisputed that Maui Jim provides warranty protection for its sunglasses. (Defs.’ Resp. to Pl.’s Lanham SOF (Dkt. 459) ¶ 27.) But the parties dispute whether Maui Jim's warranty only covers those Maui Jim sunglasses sold by Maui Jim and its authorized retailers. (Id. ) Maui Jim believes that Defendants’ warranty is different from its own. (Id. ¶ 63.) Defendants disagree and contend that their own warranty provides identical coverage. (Id. ) The parties dispute whether Maui Jim's warranty is an integral part of its customer service offering that consumers have come to expect and enjoy from the Maui Jim brand. (Id. ¶ 30.) Defendants’ dispute is premised on the fact that [Redacted] According to Maui Jim's head of Customer Care, Lynn Campen, customers do use Maui Jim's repair department, at average, three to four non-Maui Jim prescription lenses per week between 2015 and 2018. (Pl.’s Resp. to Defs.’ SOF (Dkt. 466) ¶ 70(f).)

Defendants ship all their Maui-Jim-branded sunglasses sold to the United States from Hong Kong, so international shipping regulations and procedures govern their shipments. (Id. ¶ 48.) Defendants create commercial invoices for the products they ship. (Id. ¶ 49.) An uncertain number of Defendants’ shipments of Maui-Jim-branded sunglasses contained a packaging slip that identified [Redacted] as the manufacturer. (Id. 51.) [Redacted] does not manufacture Maui-Jim-branded sunglasses, and Defendants know that. (Id. ¶ 47.) Defendants blame the [Redacted] identification mishap on faulty computer coding...