What’s Trending In Trademarks October 2024: T.I. and Tiny Win $71.5M for OMG Girlz; Second Circuit Holds against 1-800 Contacts In Keyword Ads Case
The Third Time’s a charm for OMG Girlz with $71.5M Verdict
A U.S. District Court jury in the Southern District of California awarded $71.5 million in recent days to the former teen pop band OMG Girlz for allegations of trade dress infringement and appropriation by MGA Entertainment (the maker of L.O.L.). Surprise! O.M.G. Dolls.
In the year 2020, MGA filed an declaratory action following a cease-and desist letter received from OMG Girlz. The group, along Xscape singer Tameka ‘Tiny’ Harris and rapper Clifford ‘T.I. Harris, counterclaimed. The Harrises, who are also the mother and stepfather to group member Zonnique Pulins, are co-founders with OMG Girlz. In a second trial, the jury found in favor of MGA. The jury was instructed in that matter that MGA’s dolls were expressive works and instructed on the elements of the Rogers v. Grimaldi test as to whether expressive works should receive First Amendment protection.
Shortly after the second trial, the Supreme Court issued its decision in Jack Daniel’s Props., Inc. v. VIP Prods. The Rogers test is only applicable to non-trademark purposes, according to LLC. The Supreme Court stated in the Jack Daniel case that Rogers does not apply to the challenged use of a trademark as a brand. In a decision dated September 2023, ordering a new case, the judge wrote: “The jury had to decide whether the dolls violated the alleged trade dress for the OMG Girlz in a way that consumers were misled about the origin of L.O.L. Surprise! O.M.G. The Supreme Court held that in such a case of source identification, the Rogers test does not apply” (citations omitted). The Supreme Court held that the Rogers test did not apply in this case of source identification (citations omitted).
Another year later, on September 30, 2024, a third jury found that MGA had infringed OMG Girlz trade dress, and misappropriated the OMG Girlz name, likeness or identity. It also found that MGA was willful in its infringement and misappropriation, and that MGA dolls were not protected under the First Amendment in regard to misappropriation The jury awarded around $17.9 million in real damages and $53.6 million in punitive damages.
Second Circuit Holds Against 1-800 Contacts in Another Keyword Ad Case
Google AdWords were introduced in 2000, setting off a flurry of trademark lawsuits over whether the purchase and use of a competitor’s trademarks as AdWords constituted infringement. Those lawsuits were largely unsuccessful for the plaintiffs, though courts differed in their opinions over whether purchasing competitors’ keywords was not trademark use at all or there simply was no likelihood of confusion.
Within the Second Circuit, some courts sided with the position that keyword use wasn’t use in commerce. In its 2009 decision in Rescuecom V. Google, Second Circuit clarified Google’s sales to competitors of Rescuecom trademarks for keyword use did qualify as use in commerce enough to overcome a dismissal motion. Com, Inc., which had held that advertising service WhenU’s display of popup ads in response to searches for plaintiff’s website did not constitute use in commerce. Com, Inc., that had held that advertising service WhenU’s display of popup ads in response to searches for plaintiff’s website did not constitute use in commerce.
More than two decades since the introduction of AdWords and many iterations of internet advertising later, 1-800 Contacts again appeared before the Second Circuit on another version of the issue.
1-800 Contacts sued competing contact lens provider Warby Parker in the Southern District of New York, alleging that Warby Parker’s purchase of keywords related to 1-800 Contacts marks constituted trademark infringement. Warby Parker didn’t display the 1-800 contacts marks in the search results listings or landing page. 1-800 Contacts, however, argued that consumers would be confused by Warby Parker’s landing page. The court noted that 1-800 contacts failed to show that Warby Parker used 1-800 contact’s protectable marks anywhere on the search results page, landing page, or URL linked to the search results. The court noted that 1-800 Contacts did not show that Warby Parker used 1-800 Contacts’ protectable marks anywhere in the search results page, landing page, or URL linked to the search results.
The Second Circuit considered the case through the lens of initial interest confusion, holding that the district court erred in “substituting 1-800’s plausible theory of initial-interest confusion with point-of-sale confusion in its assessment of the consumer-sophistication factor.” That is, the lower court had noted that consumers will take the time to consider Warby Parker’s website before making a purchasing decision, when initial interest confusion requires only deceptive diversion even if consumers realize that they have not landed at the trademark owner’s site.
Initial interest confusion has been disputed but is still alive and well in many circuits. In 2021, the adjustable air bed maker Dires filed a certiori petition in its case against Select Comfort. Select Comfort had alleged Dires had infringed on its marks in search results. Dires argued the Supreme Court should hear the case in order to resolve the circuit split over initial interest confusion. The petition stated that the Second Circuit standard, which requires deliberate deception, was more strict than the standard adopted by the Eighth Circuit. The Supreme Court declined that case.
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