The San Francisco law firm of Lawrence G. Townsend, Intellectual Property Lawyer, represents a range of clients in trademark matters — ranging from protecting distinctive marks or symbols, to preventing wrongful use of trademarks, to asserting trademark infringement claims or defending against them in court.
The judge in a federal case out of Wisconsin found on April 12 in an important opinion that online business SunFrog had infringed Harley-Davidson’s trademarks. While the lengthy opinion resolves several issues, it carefully explains trademark counterfeiting, a kind of infringement particularly frowned upon by federal law. (The link above is to a news article that includes the text of the opinion.)
SunFrog is a Gaylord, Michigan, company that invites customers to upload designs on its website that SunFrog prints on shirts, mugs and other merchandise. The designs are added to a database for other customers to use. SunFrog has been very successful since it began in 2013, bringing in more than $150 million last year and growing into the biggest U.S. T-shirt printer, according to the court.
Motorcycle manufacturer Harley-Davidson, founded over a century ago, needs no introduction. Most people can immediately envision the company’s protected “Bar & Shield” logo, as well as others. The judge notes that Interbrand valued Harley-Davidson’s brand at $5.46 billion in 2015. Harley-Davidson uses its marks widely on apparel and other retail items.
When SunFrog began to regularly sell and advertise merchandise using Harley-Davidson’s trademarks, the motorcycle company protested. After negotiations failed, Harley Davidson sued SunFrog for federal trademark counterfeiting, infringement and dilution; copyright infringement; state and common law violations; and more.
The judge’s main finding is that SunFrog engaged in “fairly straightforward” counterfeiting in violation of the federal Lanham Act. This important law, among other things, forbids the use of “reproduction, counterfeit, copy, or colorable imitation” of registered trademarks when this use is likely to cause confusion about the mark’s origin.
The law defines a counterfeit as a “spurious mark … identical with, or substantially indistinguishable from, a registered mark.”
SunFrog argued that it did not engage in counterfeiting because its products are of such inferior quality as compared to that required by Harley-Davidson’s high standards that people would know, in essence, that SunFrog’s were knockoffs, without any confusion.
The judge rejected this argument, saying, “a counterfeiter cannot escape liability simply by reproducing protected marks on poor products.” While comparison of the product quality is part of the analysis, the focus is on whether the protected mark itself was reproduced. Here, SunFrog used the protected phrase “Harley-Davidson” and others, along with “substantially indistinguishable” reproductions of registered marks.
Part 2 of this post will discuss the damages assessed by the judge for counterfeiting.