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Lorillard Tobacco Company v. Hamden

October 21, 2011

LORILLARD TOBACCO COMPANY,
PLAINTIFF,
v.
HAMDEN, INC. D/B/A DOWNTOWN CHECK CASHING AND MY MARKET,
DEFENDANT.



The opinion of the court was delivered by: Judge John R. Adams

ORDER AND DECISION

This matter is before the Court on Plaintiff Lorillard Tobacco Company's Motion for Summary Judgment. Doc. 32. The Court has reviewed the motions, responses, pleadings, and applicable law. For the reasons set forth below, Plaintiff's motion for summary judgment is GRANTED. There is evidence before the court sufficient to award damages. However, the Court will entertain oral argument from both parties on the appropriate amount of damages. The final pretrial will be converted into an oral argument on this issue on November 7, 2011 at 1:30 p.m. No evidence outside of that which is included in the motions will be entertained.

I. FACTS AND PROCEDURAL HISTORY

The facts that gave rise to the complaint are largely undisputed. Lorillard manufactures and sells various brands of cigarettes. Doc. 32 at 3. One of Lorillard's most popular brands is "Newport." Id. For its Newport brand, Lorillard has a number of registered federal trademarks, including NEWPORT, NEWPORT (stylized), Spinnaker Design, Design Only, LORILLARD, Lorillard (stylized), Newport Box with Striations, and Newport Menthol Box. Id. Lorillard has committed substantial resources to promoting and marketing the Newport brand. Id. Michael Hamden is the principle of Hamden, Inc. ("Hamden"). Doc. 33 at 2. In 2010, Hamden operated two convenience stores that sold, among other things, the Newport brand of Lorillard cigarettes.

Doc. 32 at 2.

Lisa Williams is a sales representative for Lorillard responsible for calling on stores, including My Market and Downtown Check Cashing. Doc. 32-4 at 2. On August 13, 2010, while calling on My Market, Ms. Williams observed approximately two cartons and sixteen packages of Newport cigarettes she believed were counterfeit. Id. Ms. Williams sent the suspected cigarettes to Lorillard's corporate headquarters for further inspection. Id. On August 16, 2010, while calling on Downtown Check Cashing, Ms. Williams observed approximately twenty additional packages she believed were counterfeit. Id. Ms. Williams again sent the suspected cigarettes to Lorillard's corporate headquarters for further inspection. Id. Lorillard's Manager for Sales Planning, Edward O'Brien, received both sets of cigarettes. Doc. 32 at 4. Mr. O'Brien confirmed the cigarettes were counterfeit based upon the clarity of the printing on the packages, the lack of elasticity in the tear tape, and the presence of out-of-date product codes. Id. O'Brien indicated the printing on the authentic cigarettes is typically not as sharp as that found on the counterfeit packages. Id. Additionally, unlike the counterfeit cigarettes, the authentic cigarettes have a tear tape with no elasticity. Id. Finally, the presence of out-of-date product codes is indicative of counterfeit cigarettes. Id.

Lorillard contacted the Ohio Department of Transportation. Doc. 32 at 5. The ODT conducted a seizure and ultimately retrieved an additional 222 packages of counterfeit cigarettes from My Market and Downtown Check Cashing. Id.

On August 25, 2010, Lorillard filed this action. Doc. 1. The first count of Lorillard's complaint alleges trademark counterfeiting and infringement; the second count alleges federal unfair competition and false designation of origin and false and misleading misrepresentations; the third count alleges trademark dilution; the fourth count alleges trademark infringement and unfair competition under common law; and the fifth count alleges a violation of the Ohio Deceptive Trade Practices Act. Id.

On May 25, 2011, Lorillard moved for summary judgment on all its claims. Doc. 32.

II. LAW AND ANALYSIS

A. Summary Judgment

Pursuant to Federal Rule of Civil Procedure 56(a), summary judgment is proper if the "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R. Civ.P. 56(a). In reviewing summary judgment motions, this Court must view the evidence in the light most favorable to the non-moving party to determine whether a genuine issue of material fact exists. Adickes v. S.H. Kress & Co., 398 U.S. 144, 158 (1970); White v. Turfway Park Racing Ass'n, 909 F.2d 941, 943-44 (6th Cir. 1990). A fact is "material" only if its resolution will affect the outcome of the lawsuit. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Determination of whether a factual issue is "genuine" requires consideration of the applicable evidentiary standards. Id. at 252. The initial burden of showing the absence of any "genuine issues" belongs to the moving party. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

Once the moving party has satisfied its burden of proof, the burden then shifts to the nonmoving party. The non-moving party may not simply rely on its pleadings, but must "produce evidence that results in a conflict of material fact to be resolved by a jury." Cox v. Kentucky Dep't of Transp., 53 F.3d 146, 150 (6th Cir. 1995). The non-movant must show more than a scintilla of evidence to overcome summary judgment; it is not enough for the non-moving party to show that there is some metaphysical doubt as to the material facts. Harrow Products, Inc. v. Liberty Mutual Ins. Co., 64 F.3d 1015, 1019 (6th Cir. 1995). Moreover, Fed.R. Civ.P. 56(e) states:

If a party fails to properly support an assertion of fact or fails to properly address another party's assertion of fact as required by Rule 56(c), the court may:

(2) consider the fact undisputed for purposes of the motion; [or]

(3) grant summary judgment if the motion and supporting materials-including the facts considered undisputed-show that the movant is entitled to it[.]

Hence, a ruling at summary judgment determines whether a trial is necessary and summary judgment is, therefore, appropriately granted when there are no genuine issues of fact. Anderson, 477 U.S. at 250.

B. Trademark Counterfeiting & Infringement

The Lanham Act protects trademark owners from counterfeit uses of trademarks in commerce that are likely to cause confusion, mistake, or deception. 15 U.S.C. § 1114(1) (emphasis added). The Sixth Circuit has held that when determining whether the use of a mark is likely to cause confusion eight factors should be weighed: (1) the strength of the plaintiff's mark; (2) the relatedness of the goods; (3) the similarity of the marks; (4) any evidence of actual confusion; (5) the marketing channels used; (6) the likely degree of purchaser care; (7) the defendant's intent in selecting the mark; and (8) the likelihood of expansion of the product lines. Frisch's Restaurant v. Elby's Big Boy of Steubenville, Inc., 670 F.2d 642, 648 (6th Cir. 1982). A plaintiff need not establish each factor to prevail. Wynn Oil Co. v. Thomas, 839 F.2d 1183, 1186 (6th Cir. 1988).

(1) Strength of the Plaintiff's Mark.

"The strength of a mark is a factual determination of the mark's distinctiveness. The more distinct the mark, the more likely it is that use of the mark will result in confusion." Daddy's Junky Music Stores, Inc. v. Big Daddy's Family Music Center, 109 F.3d 275, 280 (6th Cir. 1997). Once the mark has been registered there is a "rebuttable presumption that a trademark is valid, that is, either inherently distinctive or descriptive with secondary meaning, and therefore, protectable under federal trademark law." Leelanau Wine Cellars, Ltd. v. Black & Red, Inc., 502 F.3d 504, 513 (6th Cir. 2007).

In this case, Plaintiff's marks are strong. Importantly, Plaintiff's marks are registered. Additionally, the public readily accepts the marks as belonging to Lorillard. Plaintiff has gone to great lengths to market the NEWPORT brand and as a result has created ...


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