By Peter Reap, J.D., LL.M.
RotaTHEAM, a French company that sells conveyors for use on mixer trucks, and its U.S. distributor, Shumaker, which sells products sold by RotaTHEAM in the United States under the brand RotaBELT, were fined $10,000 for violating a consent judgment they entered into with plaintiff THEAM USA, the federal district court in Portland, Maine, has decided. The consent judgment prohibited the defendants from using the plaintiff’s THEAM mark in the U.S., and the defendants violated the judgment by admittedly making improper references on a website, along with other, assorted unintentional violations. THEAM USA’s motion for attorney fees or costs, however, was denied (Westcon Mfg., Inc. v. RotaTHEAM SAS, December 29, 2017, Rich, J.).
The plaintiff, Westcon Manufacturing, dba THEAM USA, moved to enforce the consent judgment entered in this case on October 21, 2016. THEAM USA is the owner of the federal trademark registration for THEAM, for conveyors mounted onto mixer trucks. The consent judgment provides that the defendants will cease all use of the term THEAM in the United States, including use of the name RotaTHEAM, rebrand to a different mark (RotaBELT), and educate their employees on the terms of the settlement. The consent judgment permits Shumaker to use the term "THEAM" solely to inform customers that it repairs and sells replacement parts intended for THEAM conveyors in the United States, subject to a disclaimer that Shumaker and/or RotaTHEAM "is not an authorized distributor of genuine THEAM replacement parts" and that "THEAM is a registered trademark of Westcon Mfg., Inc. d/b/a Theam USA."
On April 7, 2016, the plaintiff discovered English webpages on RotaTHEAM’s website that improperly contained references to RotaBELT and Shumaker, including videos featuring RotaBELT conveyors, photographs of RotaBELT conveyors, and text that commingled RotaBELT and THEAM. Studio Plune, which was hired by RotaTHEAM to create websites at www.rotabelt.com and www.theam.com, published the prohibited content on the English-language version of RotaTHEAM’s website without its knowledge or authorization.
Studio Plune was responsible for translating www.theam.com into various languages. For the English version, Studio Plune was instructed to take the English text from the www.rotabelt.com website that was then under construction and to replace all references to RotaBELT with THEAM. Studio Plune reviewed the website host statistics to determine the number of IP addresses that visited www.theam.com/en between April 1 and April 12, 2016. After eliminating IP addresses associated with Studio Plune and RotaTHEAM, Studio Plune determined that six additional, unknown IP addresses visited the www.theam.con/en website between April 1 and April 12, 2016.
On April 12, 2016, the defendants discovered the improper references and took down the website less than an hour after the discovery. On April 13, 2016, the plaintiff filed the instant motion.
A party seeking to have its opponent held in contempt must establish (1) that the alleged contemnor had notice that it was within the order’s ambit; (2) that the order was clear and unambiguous; (3) that the alleged contemnor had the ability to comply; and (4) that the order was indeed violated. The first and third prongs of the test are not at issue in this case, the court noted.
The defendants conceded that the English version of www.theam.com violated the consent judgment from April 1, 2016 through April 12, 2016. They argued, however, that they made "‘diligent efforts’" that resulted "‘in substantial compliance with’" the consent judgment "by discovering the violation through timely vigilance and self-policing as well as the immediate correction of the webmaster’s error within minutes of discovery[.]"
The plaintiff saw this brief period in a different light, characterizing it, along with other alleged violations, as "bad faith efforts to skirt compliance with the Consent Judgment[.]" It asserted that the defendants have "devised new ways to associate RotaBELT with THEAM and RotaTHEAM and to misinform their employees and customers about the origins of THEAM USA conveyors and conveyor parts in an effort to portray RotaBELT as the true source of THEAM conveyors and part in the U.S."
The plaintiff asked the court to find that a "pattern . . . emerges from the testimony and documentary evidence" demonstrating that the defendants "have not taken compliance with the Consent Judgment seriously and, to the contrary, have instead devised new ways to associate RotaBELT with THEAM and RotaTHEAM (the ‘French company’) and to misinform their employees and customers about the origins of THEAM USA conveyors and conveyor parts in an effort to portray RotaBELT as the true source of THEAM conveyors and parts in the U.S."
With the exception of the admitted 12-day violation, the testimony and evidence submitted at the hearing demonstrated an unfortunate sloppiness on the defendants’ part, at times, but no pattern of attempts to avoid compliance with the consent judgment, the court determined. The plaintiff did not demonstrate any loss of goodwill and reputation as a result of the violations of the consent judgment.
Further, the scale of the proven violations did not justify the extreme relief requested by the plaintiff. There was no evidence of bad faith by the defendants in any of the proven violations. However, the defendants were not entitled to judgment in their favor because they made "diligent efforts" that have resulted "in substantial compliance with the underlying order," the court reasoned. With respect to certain alleged violations, the defendants did not make diligent efforts to avoid them, and compliance with the consent judgment, particularly in the case of the 12-day website violation, was not substantial. Accordingly, the court declined the defendants’ invitation to reject the request to find them in contempt.
Some coercive relief was appropriate here, if only to ensure that the defendants do not in the future act first and think about the consent judgment later, the court held. A sanction in the amount of $10,000 was sufficient to coerce future compliance with the consent judgment in this case, the court ruled.
The court declined, however, to award the plaintiff attorney fees or costs. The primary violation in this case was corrected prior to the time the plaintiff filed the motion at issue, and the plaintiff showed no resultant injury from any violation. In the circumstances, an award of attorney fees and costs was inappropriate.
The case is No. 2:14-cv-00214-JHR.
Attorneys: Margaret K. Minister (Pierce Atwood LLP) for Westcon Mfg. Inc. d/b/a THEAM USA. James G. Goggin (Verrill Dana LLP) and Harvey Freedenberg (McNees Wallace & Nurick, LLC) for RotaTHEAM SAS and Shumaker Industries Inc.
Companies: Westcon Mfg. Inc. d/b/a THEAM USA; RotaTHEAM SAS; Shumaker Industries Inc.
MainStory: TopStory Trademark MaineNews
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