Internet Trademark Case Summaries
Silpada Designs, Inc. v. O’Malley
2006 WL 2989235 (D. Kan. Oct. 19, 2006)
Plaintiff sold jewelry under the marks SILPADA and SILPADA DESIGNS through independent sales representatives. Defendants sold jewelry, including plaintiff’s, on eBay and through their website. Defendants used the terms "Slipada," "Silpada Savings," "Silpadastyle," and "Pilsada" on their website and in metatags to attract Internet users. Defendants also used the domain name "silpadastyle.com" to sell jewelry. And defendants made false statements indicating that certain non-Silpada jewelry was "identical" or "exactly identical" to Silpada jewelry or that the jewelry came "from the same designers and manufacturers" as plaintiff’s jewelry. Plaintiff sued for trademark infringement, false advertising, unfair competition, and cybersquatting. The court previously granted default judgment against defendants on liability. In this decision, which resulted from a hearing attended by all parties, the court held that plaintiff was entitled to monetary and injunctive relief. The court first held that plaintiff was entitled to an award of defendant’s profits. Despite defendants "repeatedly fail[ing] to participate" in the case proceedings and thereby "den[ying] plaintiff the opportunity for discovery on profits," the court declined to award all of defendant’s $14,908 in profits. Although defendant had the burden of showing deductible expenses, the court held that awarding the entire amount would be "excessive," especially since it found defendants’ claim that they made no profit "partially credible." The court, exercising its discretion, awarded plaintiff’s $7,500 of defendant’s profits. Plaintiff also requested damages for the loss of four of its independent sales representatives who allegedly "would have stayed active but for defendants’ conduct." But the court found no causation between defendant’s actions and the resignation of plaintiff’s representatives. The court also awarded $10,000 in statutory damages for cybersquatting, noting that "where the defendant has been a competitor or sold competitive goods, courts have awarded significant statutory damage awards." Moreover, defendants registered the "silpadastyle.com" domain name after receiving a demand letter from plaintiff’s counsel. The court next found that this case was "exceptional" and awarded attorney’s fees under the Lanham Act because defendants’ infringement was willful and deliberate and defendant failed to comply with court orders, cooperate with plaintiff’s counsel, or "meaningfully participate" in this case. Attorney’s fees were also appropriate under the ACPA because defendant acted willfully and in bad faith in registering and using the domain name. Finally, the court permanently enjoined defendants from using the Silpada mark in connection with the sale of jewelry or "as part of a domain name" and from making false statements.