George Brett Scores Again As Court Denies Leo Stoller And Company's Motion To Alter Or Amend Judgment

Those in the trademark community have probably heard of Central Mfg. Co, Stealth Industries, Inc., and Leo Stoller.  Those three parties brought an action against Hall of Famer George Brett (formerly of the Kansas City Royals) and his company, Brett Brothers Sports, for trademark infringement and unfair competition under state and federal law based on use of the mark STEALTH for "baseball, softball, t-ball bats."  Summary Judgment motions were filed by both sides and the District Court for the Northern District of Illinois issued an opinion granting judgment to Brett on all claims, cancelling plaintiffs' trademark registration and awarding attorney's fees and costs to Brett.  See John Welch's prior post at The TTABlog for a more complete summary of that Court opinion.

Plaintiffs subsequently filed a "motion for reconsideration" arguing that (1) the Court erred in finding that plaintiffs had abandoned their use of the mark and cancelling the mark, (2) Brett had not established any trademark rights in STEALTH, and (3) the Court committed "clear error and abuse of discretion" when it found plaintiffs' suit to be exceptional, thus awarding attorney's fees to Brett.

The Court first raised a technical issue stating that a "motion for reconsideration does not exist as such under the Federal Rules of Civil Procedure."  Instead, the Court treated the motion as one seeking to alter or amend a judgment under Fed.R.Civ.P. 59(e).  A court may grant such a motion in three circumstances: (1) newly discovered evidence; (2) an intervening change in the law; or (3) the judgment reflects a manifest error in the law.  Plaintiffs alleged the third circumstance in their motion.  However, as the Court pointed out, "situations [of manifest error] rarely occur . . . and the motion to reconsider should likewise be rare."

The Court quickly dismissed plaintiffs' first assertion of error, reiterating that since the record showed that Brett was the senior user of the STEALTH mark on baseball bats, cancellation of plaintiffs' mark was proper.  As to plaintiffs' contention that Brett had not established trademark rights in STEALTH, the Court stated that numerous declarations and authenticated documents show that Brett's use of the mark was widely recognized by the public, while plaintiffs' products were unknown.  Finally, the Court discussed the award of attorney's fees and costs to Brett under both Section 35 of the Lanham Act and the Illinois Consumer Fraud and Deceptive Business Practices Act ("ICFDBPA"), 815 ILCS 505/10a(c).  The ICFDBPA gives a court broad discretion by allowing it to grant "reasonable attorney's fees and costs to the prevailing party."  Section 35 of the Lanham Act is much narrower, requiring a finding of an "exceptional" case before a court can issue an award of attorney fees.  A case is considered "exceptional" when it is "so lacking in merit and so burdensome to defend against that it could fairly be described as oppressive."  The Court cited a laundry-list of factors that lead it to conclude that this case was "exceptional."  For example, plaintiffs included a claim for trademark infringement in their complaint at a time when they owned no registration for the mark (see my "comment" regarding this issue here).  In addition, plaintiffs failed to respond to numerous discovery requests until Brett filed a motion to compel, they gave inconsistent and contradictory testimony, and failed to produce evidence of even one sale.  The court therefore affirmed the award of attorney's fees and costs and denied plaintiffs' Rule 59(e) motion to alter or amend the judgment.

Comment: I am curious how long it normally takes the USPTO to update its records after a federal court cancels a registration.  According to the TARR system, plaintiffs' STEALTH mark is still registered although the District Court cancelled it back on September 30, 2005.

Central Mfg. Co. v. Brett, (Slip Op.) 2006 WL 681058 (N.D. Ill., March 15, 2006).

Comments

[Nancy Dwyer Chapman]

If the District Court does not communicate with the PTO to request entry of the order to cancel, I do not believe that the cancellation will occur, since the one judicial body (the District Court) is not connected to or communicates seamlessly with the federal agency (the PTO).

[Boris]

Although I agree with you that the District Court must somehow communicate with the USPTO in order for an action such as a cancellation to occur, such communication is actually required by the Lanham Act. Furthermore, Local Rule 3.4 in the N.D. of Illinois states, in pertinent part, as follows: "In order to assist the clerk in complying with the requirement to notify the commissioner, any party filing a pleading . . . which raises . . . a claim arising under the patent and trademark laws of the United States . . . shall file with the pleading . . . a separate notice of claims involving patents or trademarks. That notice shall include . . . for each trademark the information required by 15 U.S.C. §1116(c)."

Section 1116(c) in turn requires that "within one month after the judgment is entered or an appeal is taken, the clerk of the court shall give notice thereof to the Director, and it shall be the duty of the Director on receipt of such notice forthwith to endorse the same upon the file wrapper of the said registration or registrations and to incorporate the same as a part of the contents of said file wrapper." Now whether the District Court failed to notify the USPTO, or the USPTO simply has not yet taken any action based on a proper notification is anyone's guess.

[Leo Stoller]

The George Brett Case has been appealed to the 7th Circuit and will not stand. It is the first case in the History of the USPQ that a Judge (Coar) Found "No likelyhood of confusion as between the parties use of the contested mark, then went on to cancel the plaintiff's mark based upon "likelyhood of confusion"!

[Boris Umansky]

Please note that I have allowed the above comment by Leo Stoller to be posted in full and without any editing on my part. For purposes of fairness, if anyone from George Brett's camp, or anyone else with a position regarding this case, has a relevant comment, please feel free to post it.

[Lance Johnson (counsel for Pure Fishing)]

All 35 of Stoller's STEALTH marks were cancelled by Judge Lindberg in the Pure Fishing decision dated October 4, 2006. The USPTO has indicated that they will await the outcome of the 7th Circuit Appeal before they officially cancel the registrations. Stoller's brief on appeal is due January 17, 2007.
The injunction against any new lawsuits or oppositions is, however, in effect against Mr. Stoller.
The bankruptcy trustee has been granted authority to act as the sole shareholder for Stoller's corporate entities and is unlikely to be filing any unsupported oppositions in the near future for those entities. To date, Mr. Stoller has not provided any documents or records that would suggest that any of those companies own, or have owned, any bona fide trademark rights.
In the bankruptcy case, Stoller has asserted a blanket claim of 5th Amendment rights against self incrimination and has refused to provide the trustee or creditors with any information regarding his financial estate.