Nation v. Urban Outfitters, Inc.

• Decision Date: 13 May 2016
• Docket Number: Civ. No. 12-195 BB/LAM
• Parties: THE NAVAJO NATION, et al., Plaintiffs, v. URBAN OUTFITTERS, INC., et al., Defendants.
• Court: U.S. District Court — District of New Mexico

THE NAVAJO NATION, et al., Plaintiffs, v. URBAN OUTFITTERS, INC., et al., Defendants.

Civ. No. 12-195 BB/LAM

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO

May 13, 2016

MEMORANDUM OPINION AND ORDER GRANTING DEFENDANTS' MOTIONS FOR PARTIAL SUMMARY JUDGMENT ON PLAINTIFFS' TRADEMARK DILUTION CLAIMS [DOCS. 239 AND 254] AND DENYING PLAINTIFFS' CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT [DOC. 318] ON THOSE CLAIMS

Defendants Urban Outfitters, Inc.; Urban Outfitters Wholesale, Inc.; Anthropologie, Inc.; and Free People of PA LLC (collectively, "Defendants") move the Court for partial summary judgment against Plaintiffs the Navajo Nation, Navajo Arts and Crafts Enterprise ("NACE"), and Diné Development Corporation (collectively, "Plaintiffs") to dismiss Plaintiffs' claims of federal and state trademark dilution by blurring and tarnishment as alleged in Counts Two and Six of the Third Amended Complaint [Doc. 82]. [Docs. 239 and 254]. Alternatively, Plaintiffs move for partial summary judgment against Defendants on Counts Two and Six. [Doc. 318].

I. Summary Judgment Requirements

Summary judgment is appropriate only if the moving party demonstrates that there is "no genuine dispute as to any material fact...." Fed. R. Civ. P. 56(a). "A dispute is genuine 'if there is sufficient evidence on each side so that a rational trier of fact could resolve the issue either way'...." Varnell v. Dora Consol. School Dist., 756 F.3d 1208, 1212 (10th Cir. 2014) (quoting Becker v. Bateman, 709 F.3d 1019, 1022 (10th Cir. 2013)). "[A] fact is material 'if under the substantive law it is essential to the proper disposition of the claim.'" Id. (quoting Becker, 709 F.3d at 1022).

"[P]ursuant to Rule 56, the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment." Sanchez v. BNSF Ry. Co., 976 F. Supp. 2d 1265, 1268 (D.N.M. 2013) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986)). While facts and reasonable inferences are construed in the light most favorable to the nonmoving party, "[a] party moving for summary judgment is entitled to the benefit of any relevant presumptions that support the motion." Coca-Cola Co. v. Overland, Inc., 692 F.2d 1250, 1254 (9th Cir. 1982). The summary judgment standards apply equally where, as here, opposing parties each move for summary judgment in their favor. Skogen v. City of Overland Park, Kan., 404 Fed. Appx. 327, 328 (10th Cir. 2010).

II. Discussion

A. Count Two: the Federal Trademark Dilution Claims

In Count Two of the Third Amended Complaint, Plaintiffs seek to enjoin the dilution of their trademarks under federal law by alleging:

105. The Navajo Nation's trademark is a famous mark.

106. Defendant's use of the "Navajo" and "Navaho" names and marks to promote, market, and sell its retail items constitutes willful Trademark Dilution by blurring, and willful Trademark Dilution by tarnishment pursuant to 15 U.S.C. 1125(c).

107. Urban Outfitters' intentional and willful dilution and tarnishment of the Navajo Nation's registered NAVAJO trademark has caused, and will continue to cause, damage and irreparable harm to the Navajo Nation, for which there is no adequate remedy otherwise available at law.

[Doc. 82].

The federal Trademark Dilution Revision Act of 2006 ("TDRA") provides that

the owner of a famous mark that is distinctive, inherently or through acquired distinctiveness, shall be entitled to an injunction against another person who, at any time after the owner's mark has become famous, commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark, regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury.

15 U.S.C. § 1125(c)(1) (emphasis added). The requirements for dilution by blurring and tarnishment are:

(B) For purposes of paragraph (1), "dilution by blurring" is association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark. In determining whether a mark or trade name is likely to cause dilution by blurring, the court may consider all relevant factors, including the following:

(i) The degree of similarity between the mark or trade name and the famous mark.

(ii) The degree of inherent or acquired distinctiveness of the famous mark.

(iii) The extent to which the owner of the famous mark is engaging in substantially exclusive use of the mark.

(iv) The degree of recognition of the famous mark.

(v) Whether the user of the mark or trade name intended to create an association with the famous mark.

(vi) Any actual association between the mark or trade name and the famous mark.

(C) For purposes of paragraph (1), "dilution by tarnishment" is association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark.

15 U.S.C. § 1125(c)(2)(B) and (C) (emphasis added). As one can see from the TDRA language, although the dilution doctrines of blurring and tarnishment are distinct types of trademark dilution, they share a common requirement that the senior mark be "famous." Miss Universe,L.P., LLLP v. Villegas, 672 F.Supp.2d 575, 592, (S.D.N.Y. 2009); Kellogg Co. v. Exxon Mobil Corp., 192 F.Supp.2d 790, 797 (W.D. Tenn. 2001).

The TDRA defines "famous" as follows: "a mark is famous if it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark's owner." 15 U.S.C. § 1125(c)(2)(A).

1. Positions of the Parties

Defendants argue that Plaintiffs' Navajo mark is neither famous nor distinctive as required by the TDRA. Defendants explain that "under the current federal statute and its predecessor, a plaintiff asserting a dilution claim must meet a stringent evidentiary burden to show that its mark is 'famous' (i.e., that the mark is widely recognized by the general consuming public as a designation indicating a unique or single source of goods or services)." [Doc. 239] at 4.

Plaintiffs, on the other hand, respond that "the 'Navajo' mark is well-known across the country as a brand of authentic Indian-made goods." [Doc. 292] at 14. Plaintiffs argue that evidence of the fame of the "Navajo" mark "was already available (1) publicly, (2) in Plaintiffs' expert reports, or (3) if Defendants had inquired about it at deposition...." Id. at 6. Plaintiffs note the "Navajo Nation, through its tribal members, instrumentalities and enterprises, has been selling goods and services under the Navajo mark for over 150 years." Id. at 9.

In support of their argument, Plaintiffs maintain that they sell or offer numerous goods and services under the "Navajo" trademark umbrella, and spend more than $3.8 million annuallyto promote those goods and services.¹ For instance, Plaintiffs indicate that, under license from the Navajo Nation, Pendleton Woolen Mills has advertised in its widely distributed catalog, inter alia, a "Navajo Water blanket."

The other area where Plaintiffs maintain their mark is famous is "arts and crafts."² Plaintiffs offer evidence that Navajo blankets were sold before the turn of the twentieth century and that as early as 1915 the value of sold Navajo blankets was $17,000,000 (in 2014 dollars). Also, Plaintiff NACE is authorized to license the "Navajo" mark for arts, crafts, jewelry, clothing, accessories, silverware, and rugs. NACE first opened a retail store at Fort Wingate, New Mexico in 1941 and it currently operates five retail stores in Arizona and one retail store in New Mexico. NACE maintains a current registry of about 800 members whose goods it purchases and offers for sale bearing the "Navajo" mark. Additionally, under the auspices of the Indian Arts and Crafts Act and the Indian Arts and Crafts Board, the Nation has been publicizing its "Navajo" marks since at least 1944, when the Indian Arts and Crafts Board registered eight Navajo trademarks. Finally, any enrolled member of the Navajo Nation is authorized to use the Navajo mark.

2. To Prevail on a Federal Dilution Claim, Plaintiffs' Mark Must be Famous

a. "Navajo" is not nationally recognized as a household name

The TDRA provides that famous marks are eligible for federal protection where a third party's commercial use might blur a more senior famous mark's distinctiveness. Charles E. McKenney and George F. Long III, 1 Federal Unfair Competition: Lanham Act 43(a) § 3:36 (2015). "Dilution by blurring ... occurs when consumers see the plaintiff's mark used on a plethora of different goods and services ... raising the possibility that the mark will lose its ability to serve as a unique identifier of the plaintiff's product." Eli Lilly & Co. v. Natural Answers, Inc., 233 F.3d 456, 466 (7th Cir. 2000) (internal quotation marks omitted).

"Tarnishment occurs where a trademark is linked to products of shoddy quality, or is portrayed in an unwholesome or unsavory context, with the result that the public will associate the lack of quality or lack of prestige in the defendant's goods with the plaintiff's unrelated goods." New York Stock Exchange, Inc. v. New York, New York Hotel, LLC, 293 F.3d 550, 558 (2d Cir. 2002) (internal quotation marks omitted). Tarnishment often arises when a famous mark is placed in the context of satirical or questionable activity. Hormel Foods Corp. v. Jim Henson Productions, Inc., 73 F.3d 497, 507 (2d Cir. 1996) (collecting cases); Tommy Hilfiger Licensing, Inc. v. Nature Labs, LLC, 221 F. Supp. 2d 410, 423 (S.D. N.Y. 2002).

The TDRA language and caselaw, make a "famous mark" the threshold requirement to maintain either a successful blurring or tarnishment claim. Charles E. McKenney and George F. Long III, 1 Federal Unfair Competition: Lanham Act 43(a) § 3:36 (2015). "By definition, all 'trademarks' are 'distinctive'—very few are 'famous."' 4 McCarthy on Trademarks and Unfair Competition § 24:104 ...