Poneman v. Nike, Inc.

• Decision Date: 09 February 2016
• Docket Number: No. 13 CV 8809,13 CV 8809
• Citation: 161 F.Supp.3d 619
• Parties: Daniel Poneman, Plaintiff, v. Nike, Inc., et al., Defendants.
• Court: U.S. District Court — Northern District of Illinois

161 F.Supp.3d 619

Daniel Poneman, Plaintiff,

v.Nike, Inc., et al., Defendants.

No. 13 CV 8809

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

Signed February 9, 2016

Alejandro Menchaca, Gregory Joseph Vogler, McAndrews, Held & Malloy, P.C., Chicago, IL, Moustapha Bakri El-Hakam, Brian D. Melton, Susman Godfrey, L.L.P., Houston, TX, for Plaintiff.

David Stewart Fleming, Christopher Michael Dolan, Joshua S. Frick, Brinks, Gilson & Lione, Chicago, IL, for Defendants.

OPINION AND ORDER

CHARLES RONALD NORGLE

, Judge, United States District Court

Daniel Poneman (“Plaintiff”) brings suit against Nike, Inc. (“Nike”), and Footlocker, Inc. (“Foot Locker”), (collectively “Defendants”) for trademark infringement related to his “SwagAir” mark pursuant to 15 U.S.C. § 1121

. Plaintiff also asserts common law trademark infringement and claims under the Illinois Uniform Deceptive Trade Practices Act, 815 Ill. Comp. Stat. 510/1 et seq., and The Illinois Consumer Fraud and Deceptive Trade Practices Act, 815 Ill. Comp. Stat. 505/1 et seq. Before the Court is Defendants' motion for summary judgment. For the following reasons, the motion is granted.

I. BACKGROUND¹

In 2006, while still a high school student himself, Plaintiff began scouting high school basketball players for collegiate programs. Plaintiff continued his activities through high school until, in his senior year, he left school to pursue his career full time. From 2006 until 2010 Plaintiff conducted his online operations through IllinoisHSbasketball.com and DPBball.blogspot.com. In March 2010, Plaintiff sought to rebrand himself, in order to remove limits imposed by such specific and regional names. Plaintiff was looking for a moniker that would allow him to expand into other areas such as national scouting, scouting for other sports, music management, apparel production, et cetera. Eventually Plaintiff settled on the name “SwagAir” meant to be a play on the word “swag,” a term only “the cool kids were using” and “swagger.” Defs.' Reply Mem. Supp. Mot. Summ. J., Ex. 1, Dep. Daniel Poneman, pp. 101:12-103:3. At no time did Plaintiff register the name “SwagAir” with the U.S. Patent and Trademark Office, or any other office.

Plaintiff began using his new name in conjunction with his scouting activities and to brand many of his 539 YouTube videos. On March 28, 2010, Plaintiff held the first of his basketball showcases and called the event the “SwagAir Showcase,” over one year later Plaintiff held his second showcase, again calling it “SwagAir Showcase.” Def.'s Mot. Summ. J. Pl.'s Claims, Ex. A 4, p. 9. At the showcases Plaintiff sold each player-participant a t-shirt, the cost of which was included in their registration fee, and also offered the same t-shirts for sale to those in attendance. Over the course of both showcases, Plaintiff distributed 296 t-shirts in total.

However, Plaintiff's scouting business was not blooming as he had hoped. In an effort to expand his business and brand nationally, he began producing a documentary film chronicling the struggle of several high school basketball players. Beginning in 2012 and for the three years following, Plaintiff took a step back from producing YouTube videos and hosting basketball showcases. While he retained the moniker SwagAir as his social media handle, the name does not appear on any other materials, such as promotional material for the film, from 2012-2014.

In August 2012, Foot Locker representatives approached Nike and requested that they design and produce a t-shirt that included the word “swag.” Nike designers immediately began experimenting with designs and slogans, eventually settling on SWAG AIR in the traditional Nike font. During the course of the design process Nike completed a trademark search for “swag air” and its variations; because Plaintiff's mark was never registered, it did not appear. Nike also reviewed the results of internet searches and discovered only Plaintiff's social media presence. By March 2013, Nike had produced the t-shirt in question and began selling them in Nike retail stores, Foot Locker stores, Foot Locker's affiliated stores, and online.

On December 10, 2013, Plaintiff filed a complaint, alleging that Defendants are liable for trademark infringement under 15 U.S.C. § 1125(a)

. Lhe Court has original jurisdiction pursuant to 15 U.S.C. § 1121. Plaintiff also alleges common law trademark infringement and violations of the Illinois Uniform Deceptive Trade Practices Act, 815 Ill. Comp. Stat. 510/2(a), and The Illinois Consumer Fraud and Deceptive Trade Practices Act, 815 Ill. Comp. Stat. 505/2. The Court has supplemental jurisdiction for the state law claims pursuant to 28 U.S.C. § 1367(a).

In March 2014, Plaintiff resumed his SwagAir Showcase activities and on March 30, 2014, and March 29, 2015, hosted his third and fourth showcases. These showcases, like the two that preceded them, were Chicago area events that hosted approximately 100 player-participants. However, Plaintiff does not state that he has sold any merchandise at the two most recent showcases.

II. DISCUSSION

A. Standard of Decision

“Summary judgment is appropriate if there is no genuine dispute as to any material fact, and the moving party is entitled to judgment as a matter of law.” Dunderdale v. United Airlines, Inc. , 807 F.3d 849, 853 (7th Cir.2015)

(citing Fed. R. Civ. P. 56(a) ); see also Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). “A genuine issue of material fact exists when the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Wells v. Coker , 707 F.3d 756, 760 (7th Cir.2013) (internal quotation marks and citation omitted). The Court views the evidence, and may draw all reasonable inferences, in the light most favorable to the nonmoving party. Id. The Court does not “assess the credibility of witnesses, choose between competing reasonable inferences, or balance the relative weight of conflicting evidence.” Stokes v. Bd. of Educ. of the City of Chi. , 599 F.3d 617, 619 (7th Cir.2010).

But before the nonmoving party “can benefit from a favorable view of evidence, he must first actually place evidence before the courts.” Montgomery v. Am. Airlines, Inc. , 626 F.3d 382, 389 (7th Cir.2010)

. Simply showing that there is “some metaphysical doubt as to the material facts” will not defeat a motion for summary judgment. Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citations omitted); see also Argyropoulos v. City of Alton , 539 F.3d 724, 732 (7th Cir.2008). And “[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). “Summary judgment is appropriate if the nonmoving party ‘fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.’ ” Majors v. Gen. Elec. Co. , 714 F.3d 527, 532 (7th Cir.2013) (quoting Celotex Corp. , 477 U.S. at 322, 106 S.Ct. 2548 ).

B. Trademark Infringement Under 11 U.S.C. § 1125(a)

In order to prevail under 15 U.S.C. § 1125(a)

, a plaintiff “must demonstrate that (1) [his] mark is protectable and (2) the defendants' use of the mark is likely to cause confusion among consumers.” Anago Franchising, Inc. v. IMTN, Inc. , 477 Fed.Appx. 383, 385 (7th Cir.2012) ; see also Packman v. Chicago Tribune Co. , 267 F.3d 628, 638 (7th Cir.2001). Before examining whether the mark is protectable the Court first turns to the likelihood of confusion.

1. Likely to Cause Confusion.

Plaintiff alleges that the appearance of Nike's t-shirt bearing the words “SWAG AIR” is likely to result in—if it has not already—reverse confusion, and that such confusion will devalue his mark. Reverse confusion occurs when a “senior user's products are mistaken as originating from (or being affiliated with or sponsored by) the junior user .”² Fortres Grand Corp. v. Warner Bros. Entm't Inc. , 763 F.3d 696, 701 (7th Cir.2014)

(emphasis in original). “The harm from this kind of confusion is that the senior user loses the value of the trademark—its product identity, corporate identity, control over its goodwill and reputation, and ability to move into new markets.” Id . (internal citations and quotations omitted). Here, Plaintiff is the senior user because he began using his “SwagAir” mark in March 2010, while Defendants did not begin until three years later in March 2013.

To determine if allegations of confusion are plausible the Seventh Circuit has employed a seven-factor test. The test examines:

(1) the similarity between the marks in appearance and suggestion; (2) the similarity of the products; (3) the area and manner of concurrent use; (4) the degree of care likely to be exercised by consumers; (5) the strength of the plaintiff's mark; (6) any evidence of actual confusion; and (7) the intent of the defendant to ‘palm off’ his product as that of another.

Sorensen v. WD–40 Co. , 792 F.3d 712, 726 (7th Cir.2015)

cert. denied, ––– U.S ––––, 136 S.Ct. 801, 193 L.Ed.2d 712 (2016). Consumer confusion is ultimately a question of fact, but can be resolved on summary judgment “ ‘if the evidence is so one-sided that there can be no doubt about how the question should be answered.’ ” Packman , 267 F.3d at 637 (quoting Door Sys., Inc. v. Pro–Line Door Systems, Inc. , 83 F.3d 169, 171 (7th Cir.1996) ); see also Sorensen , 792 F.3d at 726 (affirming the district court's ruling on summary judgment that no reasonable jury could find a likelihood of confusion).

a.) Degree of Similarity between the Marks in Appearance.

In evaluating the appearance of the marks, the Court must take the marks in the broader context, examining not only their appearance but “in light of what happens in the marketplace[.]” Sorensen , 792 F.3d at 726

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