IP Law Daily San Diego Comic-Con operator granted injunction against rival, $3.9M attorney fee award
Monday, August 27, 2018

San Diego Comic-Con operator granted injunction against rival, $3.9M attorney fee award

By Thomas Long, J.D.

The operator of the well-known San Diego Comic Convention has been granted a permanent injunction by the federal district court in San Diego, barring a competitor from using the service marks "Comic Con," "Comic-Con," "Comicon," or phonetic equivalents, after a jury determined that the competitor infringed the San Diego convention operator’s registered marks in connection with a convention in Salt Lake City. The competitor also was ordered to pay the complaining convention operator’s attorney fees of more than $3.9 million. The court rejected the competitor’s post-trial motions for judgment as a matter of law and a new trial, finding that the marks at issue were not generic and that the jury had sufficient evidence to find that there was a likelihood of confusion between the parties’ respective marks. The court declined, however, to enjoin the competitor from using the phrase "Comic Convention," deeming that term to be generic and necessary for competitors in the industry to describe their events (San Diego Comic Convention v. Dan Farr Productions, August 23, 2018, Battaglia, A.).

The San Diego Comic Convention (SDCC) was a non-profit corporation, formed in 1975, that was dedicated to the awareness and appreciation of comics and related popular art forms. Since 1970, SDCC had operated a regularly recurring and popular convention in San Diego, known as the "Comic-Con." SDCC held incontestable trademark registrations for: (1) the word mark "Comic-Con"; (2) "Comic Con International"; and (3) a combined logo and word mark featuring the literal portion "San Diego Comic Con International."

In 2013, Dan Farr Productions (DFP) began to advertise and promote its own popular arts convention named "Salt Lake Comic Con" (SLCC). In August 2014, SDCC sued DFP, claiming federal trademark infringement, unfair competition, and false designation of origin. DFP filed an answer and counterclaims, alleging that SDCC abandoned the trademarks and that the trademarks were generic and descriptive. On December 8, 2017, after an eight-day jury trial, the jury found that DFP had infringed SDCC’s family of service marks. However, the jury found in favor of DFP on the unfair competition and false designation of origin claims. The jury awarded corrective advertising damages to SDCC in the amount of $20,000.

DFP’s post-trial motions. After trial, DFP moved for judgment as a matter of law (JMOL) and for a new trial. The court denied both motions. In its motion for JMOL, DFP contended that the asserted marks were generic and that SDCC had failed to show that there was a likelihood of confusion between the parties’ respective marks.

Genericness. DFP contended that SDCC’s failure to police its mark had resulted in over one hundred competitors using the term "Comic-Con," which was strong evidence that the term had undergone "genericide"—that is, that it had lost its capability to function as a trademark. However, in the court’s view, there was still adequate evidence to support the conclusion that "Comic-Con" was not generic, including extensive evidence that the media used the term to refer specifically to SDCC’s event. The court also rejected DFP’s contention that a survey introduced into evidence by SDCC—which found that 80% of consumers believed Comic-Con to be a brand name rather than a generic name—was flawed. The jury had been presented with testimony criticizing the survey and was free to accept or disregard that testimony. The court determined that the evidence was more than sufficient to support the jury’s finding that the marks were not generic, and it denied the motion for JMOL on this ground.

Likelihood of confusion. The second half of DFP’s motion for JMOL asked the court to rule that SDCC had failed to establish the requisite likelihood of confusion. DFP argued that confusion was disproven by SDCC’s failure to offer survey evidence showing actual confusion. The court disagreed, explaining that survey evidence of actual confusion, while it would have been helpful, was not mandatory to establish the existence of a likelihood of confusion. In addition, there was testimony regarding several specific instances of consumers being confused as to whether DFP’s event was affiliated or associated with SDCC. The court also disagreed with DFP’s contention that an analysis of the Sleekcraft factors required judgment in its favor, concluding instead that the jury’s verdict was supported by substantial evidence. SDCC provided evidence that its "Comic-Con" mark was commercially strong, and it was "unquestionable," the court said, that the parties offered similar services. Although there was some evidence that the marks were displayed in different manners in the marketplace, the jury had enough evidence to conclude that the marks were similar. There was adequate evidence to support the conclusion that DFP intended to select SDCC’s mark, including evidence that DFP had conducted research making it aware of SDCC’s mark before it chose its own brand name. The remaining factors were neutral. Weighing the factors, the court determined that DFP failed to show that the only reasonable conclusion was that there was no likelihood of confusion between its "Salt Lake Comic Con" mark and SDCC’s "Comic-Con" mark. The court also found that that there was a legally sufficient basis for a reasonable jury to find for SDCC as to likelihood of confusion in relation to SDCC’s other marks.

Motion for new trial. In rejecting DFP’s motion for a new trial, the court disagreed with DFP’s contention that it was not given the chance to assert a "naked licensing" defense. DFP had raised the defense in a motion for summary judgment, and the court had found that DFP failed to meet the stringent standard required to prove abandonment of trademark rights through a naked license. DFP was given another chance to assert its abandonment defense in the context of a motion in limine, but in a formal proffer document submitted to the court before the motion in limine hearing, DFP failed to persuade this court that their naked license defense should be brought before the jury. The court also rejected DFP’s argument that the jury had received incorrect instructions on the issue of genericness. The jury was properly instructed that third-party use was only one factor to consider in determining whether a mark was generic. The court concluded that the jury’s verdict on validity of the "Comic-Con" mark was not against the weight of the evidence, and that DFP was not entitled to a new trial.

Injunction. SDCC sought an injunction barring DFP from using any mark that consists of or incorporates the specific word combinations "Comic Con," "Comic-Con," "Comicon," or "Comic Convention," or the phonetic equivalents of them, in the name of any comic or popular arts convention or in connection with the promotion or advertisement of such a convention. DFP opposed the request for injunctive relief, asserting that an injunction would serve no purpose because they had already rebranded their event as "FanX Salt Lake Comic Convention," and they did not intend to use "Salt Lake Comic Con" in the future. DFP also argued that the requested relief was too broad. The court was unpersuaded that DFP’s conduct indicated that there was no risk of future infringement. According to the court, injunctions were the primary and most favored form of relief for trademark infringement cases, and DFP’s purported "good faith intent" not to resume use of their infringing brand name was not one of the factors to be considered in determining whether to issue an injunction.

The court first concluded that the ordinary factors all favored enjoining DFP from use of "Comic-Con" and "Comic Con" in the name of any comic or popular arts event. The jury had found that SDCC’s trademarks were valid and that DFP had infringed them. SDCC demonstrated that it will suffer irreparable harm if DFP used "Comic-Con" or "Comic Con" in the name of any present or future comic arts or popular fiction events. At trial, SDCC produced evidence that demonstrated that DFP’s use of "Comic Con" had resulted in SDCC suffering from loss of goodwill and a potential inability to control its reputation. The balance of hardships tipped in SDCC’s favor because there would be no harm to DFP from an injunction that merely required DFP to comply with the law. Finally, the public had an interest in preventing consumer confusion. Therefore, the court concluded that DFP should be enjoined from using these phrases in the name of any comic arts or popular fiction events they produced. In order to provide SDCC with a safe margin of protection, the injunction should extend to phonetic equivalents of those marks, the court said.

However, the court agreed with DFP that it should not be enjoined against using the phrase "Comic Convention." In the court’s view, that phrase was generic, and SDCC could not show that it would sustain harm from DFP’s use of it. Enjoining DFP from using "Comic Convention" would be improperly broad because it would prevent DFP from lawful conduct. SDCC did not own the trademark to "Comic Convention," and competitors should be allowed to use the word "convention," the court explained.

The court also decided that DFP was not required to destroy all of their merchandise and all marketing materials bearing the specific word combinations "Comic Con," "Comic-Con," or any phonetic equivalents, as long as DFP simply wished to maintain their "historical archive," but it would not be permitted to sell, distribute, display, or make any commercial use of any of them.

Attorney fees. SDCC moved for an award of its attorney fees under Section 35(a) of the Lanham Act. The jury verdict in favor of SDCC for trademark infringement made SDCC the prevailing party for Section 35(a) purposes, even though DFP prevailed on the unfair competition and false designation claims. The court found that the case was "exceptional," for purposes of the Lanham Act’s fee-shifting provision, and grantedfees of over $3.9 million. Although the jury found that DFP’s infringement was not willful, in the court’s view the case was not "dime a dozen" but instead was a trademark infringement lawsuit that stood out from others based on the unreasonable manner it was litigated. DFP had failed to comply with court rules on the length and timeliness of filings. In one motion, DFP referenced testimony that had been designated as confidential and was covered by a protective order. DFP persistently relitigated issues that had already been decided, such as the purported genericness of SDCC’s marks, and DFP had pressed objectively unreasonable legal arguments.

This case is No. 3:14-cv-01865-AJB-JMA.

Attorneys: Callie A. Bjurstrom (Pillsbury Winthrop Shaw Pittman LLP) for San Diego Comic Convention. Charles James Veverka (Maschoff Brennan) for Dan Farr Productions.

Companies: San Diego Comic Convention; Dan Farr Productions

MainStory: TopStory Trademark CaliforniaNews

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