north face memorandum of law for contempt motion

IN THE UNITED STATES DISTRICT COURTFOR THE EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

THE NORTH FACE APPAREL CORP.,

Plaintiff,

v.

WILLIAMS PHARMACY, INC.,JAMES A. WINKELMANN, JR., andTHE SOUTH BUTT LLC,

Defendants.

)))))))))))

Case No. 4:09-cv-02029-RWS

MEMORANDUM OF LAW IN SUPPORT OFPLAINTIFF’S MOTION FOR AN ORDER OF CIVIL CONTEMPT

On April 12, 2010, this Court entered a consent permanent injunction (the “Injunction”)

prohibiting The South Butt, LLC (“TSB”), its General Manager James A. Winkelmann, Sr.

(“Winkelmann, Sr.”), and member James A. Winkelmann, Jr. (“Winkelmann, Jr.”) (collectively

the “Contempt Respondents”) from, among other actions, using “The South Butt Marks,”

including THE SOUTH BUTT, NEVER STOP RELAXING and the following designs,

“or any other reproduction, counterfeit, copy or colorable imitation of the THE NORTH FACE

Trademarks,” using “any other designation that is confusingly similar . . . in any manner as to be

likely to dilute, cause confusion, deception or mistake,” from “diluting and infringing the THE

NORTH FACE Trademarks, and damaging The North Face’s goodwill” and from “otherwise

competing unfairly with The North Face in any manner.” (Doc. 71).

Case: 4:09-cv-02029-RWS Doc. #: 76 Filed: 08/03/12 Page: 1 of 20 PageID #: 430

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Within two days of entry of the Injunction, and without The North Face’s knowledge or

consent, Winkelmann, Sr.—who has admitted to running TSB—formed a new company, Why

Climb Mountains, LCC. In direct violation of the Injunction, the Winkelmanns began promoting

and selling a new line of apparel under the mark:

It has now become clear that Winkelmann, Sr. and Winkelmann, Jr. never intended to

abide by this Court’s Injunction. As displayed on their new company’s retail website selling

goods in violation of the Injunction:

Hi I am Jimmy Winkelmann – after we put a smile oneveryone’s face with our The South Butt brand a few years agowe thought there was some more smiling to do . . . .

Within recent months, a user identified as jwinkelmann posted the following response in a thread

discussing The South Butt and Contempt Respondents’ new venture on social news website

Reddit.com:

IamsacdaddyHow are u planning not to get into legal trouble again?

jwinkelmannMy goal is to make money...

This motion follows.

I.

STATEMENT OF RELEVANT FACTS

In 2009, The North Face Apparel Corp. (“Plaintiff” or “The North Face”) filed suit

against TSB, Winkelmann, Jr. and others after TSB refused to cease selling knock-off apparel

that infringed and diluted The North Face’s famous marks, including THE NORTH FACE,


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NEVER STOP EXPLORING and the following design mark:

(the “THE NORTH FACE Trademarks”). See Declaration of Christopher M. Turk (“Turk

Decl.”), ¶¶15-16.

TSB used publicity regarding the lawsuit to drive its sales and marketing exposure

even higher. Indeed, as the Court may recall, TSB’s counsel frequently issued press releases

and appeared in the media to stir up publicity about the case. See, e.g., Turk Decl., ¶17.

TSB’s carefully orchestrated publicity and use of the lawsuit as a marketing campaign

is detailed in Winkelmann, Sr.’s sworn deposition testimony, wherein he described how—

even before The North Face filed its lawsuit against TSB—TSB devised a plan to increase

sales by “stir[ring] up a lot of publicity.” Declaration of G. Roxanne Elings (“Elings Decl.”),

Exh. I., Tr. at 231:18-232:6. Winkelmann, Sr. viewed the lawsuit as an “unbelievable

publicity opportunity” and was particularly drawn to the idea of a “7 billion apparel

powerhouse against Jimmy.” Elings Decl., Exh. I, Tr. at 202:11-203:4. While Winkelmann,

Sr. admitted he was running the business, he described how he kept Winkelmann, Jr. involved

to drive sales and to further the David & Goliath story – make it a “19 year old versus North

Face.” Elings Decl., Exh. I, Tr. at 232:2-23. On receiving the initial letter from The North

Face requesting that TSB desist from infringing on THE NORTH FACE Trademarks,

Winkelmann, Sr. explained that he did two things: (1) he added a multitude of new products

to meet the expected increased demand; and (2) rather than engage “litigation counsel,” he

retained Albert Watkins for purposes of managing publicity. Elings Decl., Exh. I, Tr. at

93:24-94:14, 248:8-249:5.


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Once the lawsuit was filed, Winkelmann, Sr. explained how he often posted under a

pseudonym to appear unbiased about The South Butt line of apparel and The North Face and

wrote blog entries to enflame the controversy. Winkelmann, Sr. also explained how he took

advantage of a charity media opportunity of Winkelmann, Jr. by trading The South Butt

clothing to inner city kids to “jam at the NF blank holes.” Elings Decl., Exh. I, Tr. at 244:15-

245:17.

Ultimately, the parties agreed to settle with entry of the Injunction and execution of a

separate settlement agreement. The Injunction enjoins the Winkelmanns and TSB from,

among other things:

[using] The South Butt Marks or any other reproduction, counterfeit, copy orcolorable imitation of the THE NORTH FACE Trademarks . . . in connection withany advertising, marketing, promoting, distribution, offer for sale or sale ofservices or goods . . .

[using] any other designation that is confusingly similar to any of the THENORTH FACE Trademarks, including, but not limited to the THE SOUTHBUTT Trademarks, in any matter as to be likely to dilute, cause confusion,deception or mistake on or in connection with manufacturing, advertising,distributing, offering for sale or selling of any product not The North Face’s . . .

diluting and infringing the THE NORTH FACE Trademarks, and damaging TheNorth Face’s goodwill . . .

otherwise competing unfairly with The North Face in any manner . . . [and]

conspiring with, aiding, assisting or abetting any other person or business entity inengaging in or performing any of the activities referred to above.

(Doc. 71) (emphasis added).

As stated above, within two days of entry of the Injunction, and without The North

Face’s knowledge or consent, Winkelmann, Sr. formed a new company, “Why Climb

Mountains, LCC.” Elings Decl. Exh. A; Turk Decl., ¶19. Since dissolution of TSB in 2011,

the Winkelmanns and Why Climb Mountains, LLC (hereinafter, the “Contempt


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Respondents”) have embarked on an ever-expanding course of conduct that threatens

irreparable harm to THE NORTH FACE Trademarks. Turk Decl., ¶¶20-23. In direct violation

of the Injunction, the Contempt Respondents began promoting a new line of apparel using the

mark:

(the “THE BUTT FACE Trademark”). A survey conducted by Plaintiff shows that

approximately thirty-five percent of respondents identify The North Face as being associated

with THE BUTT FACE Trademark when shown a sample of Contempt Respondents’ t-shirts.

Not only are Contempt Respondents now engaged in the widespread sale and promotion of THE

BUTT FACE branded goods, but Why Climb Mountains, LLC also has filed for registration of

THE BUTT FACE Trademark with the United States Patent and Trademark Office. Elings

Decl.,Exhs. C-H; Turk Decl., ¶20.

II.

ARGUMENT

The Court has the inherent power to enforce compliance with its lawful orders through

civil contempt. Shillitani v. United States, 384 U.S. 364, 370 (1966). The Court may punish a

party for disregarding or violating a court order. 18 U.S.C. § 401; United States ex rel. Shell Oil

Co. v. Barco Corp., 430 F.2d 998, 1000 (8th Cir. 1970). “Civil contempt may be employed

either to coerce the defendant into compliance with a court order or to compensate the

complainant for losses sustained, or both.” Chicago Truck Drivers v. Brotherhood Labor

Leasing, 207 F.3d 500, 505 (8th Cir. 2000) (citing United States v. United Mine Workers of

America, 330 U.S. 258, 303-04 (1947)).


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An injunction binds not only the parties to an action, but also "their officers, agents,

servants, employees, and attorneys, and . . . persons in active concert or participation with them”

who receive actual notice of the court's order. FRCP 65(d). Here, the Injunction binds the two

Winkelmanns and “their agents, servants, employees, representatives, confederates, affiliates

and any other persons or entities acting in concert or participation with them.” (Doc. 71 at 2.) A

nonparty with actual notice may be held in contempt where the nonparty aids or abets a named

party in violation of a court order. Independent Fed’n of Flight Attendants v. Cooper, 134 F.3d

917, 920 (8th Cir. 1998). The binding effect of FRCP 65(d) applies to individuals and corporate

entities alike. See, e.g., State Industrial Prods. Corp. v. Beta Tech. Inc., 573 F.3d 450, 458 (8th

Cir. 2009). “The ‘essence’ of this rule ‘is that defendants may not nullify a decree by carrying

out prohibited acts through aiders and abettors, although they were not parties to the original

proceeding.’” Id. (citing Regal Knitwear Co. v. NLRB, 324 U.S. 9, 14, 65 S. Ct. 478 (1945).

In a proceeding for civil contempt, the moving party must demonstrate violation of a

court order by clear and convincing evidence. See Chicago Truck Drivers v. Bhd. Labor

Leasing, 207 F.3d 500, 505 (8th Cir. 2000). The movant meets its burden by demonstrating that:

“1) there is a specific and definite order of [the court]; and 2) the defendants have violated that

order.” FTC v. Neiswonger, 494 F. Supp. 2d 1067, 1080 (E.D. Mo. 2007). Once contempt has

been shown, the burden shifts to the nonmoving party to show inability to comply. Chicago

Truck Drivers, 207 F.3d at 505.

While absence of willfulness cannot relieve a party from contempt, N.L.R.B v. Ralph

Printing & Lithographing Co., 433 F.2d 1058, 1062 (8th Cir. 1970), Faegre & Benson, LLP v.

Purdy, 367 F. Supp. 2d 1238, 1243-1244 (D. Minn. 2005), if the violation is willful, sanctions

are appropriate. See, e.g., Jones v. Clinton, 57 F. Supp. 2d 719, 726 (E.D. Ark. 1999); U.S. v.


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Dinwiddie, 885 F. Supp. 1299, 1305 (W.D. Mo. 1995) (“intent and willfulness may be

considered on the issue of appropriate compensatory damages” although intent is “immaterial in

considering whether defendant violated the permanent injunction”).

“A consent decree is a judicial act . . . and possesses the same force and character as a

judgment rendered following a contested trial.” Siebring v. Hansen, 346 F.2d 474, 477 (8th Cir.

1965). Litigants “who give up the advantages of a lawsuit in return for obligations contained in a

negotiated decree, rely upon and have a right to expect a fairly literal interpretation of the

bargain that was struck and approved by the court.” AMF, Inc. v. Jewett, 711 F.2d 1096, 1101

(1st Cir. 1983). Here, the Contempt Respondents have engaged in precisely the conduct that the

Injunction prohibits.

A. The Injunction is Clear and Unambiguous

The language in the Injunction is clear and unambiguous: this Court prohibited the

Contempt Respondents from, inter alia, using “The South Butt Marks or any other reproduction,

counterfeit, copy or colorable imitation of the THE NORTH FACE Trademarks,” using “any

other designation that is confusingly similar . . . in any manner as to be likely to dilute, cause

confusion, deception or mistake,” from “diluting and infringing the THE NORTH FACE

Trademarks, and damaging The North Face’s goodwill” and from “otherwise competing unfairly

with The North Face in any manner.” Courts presiding over trademark litigations have

uniformly upheld similar injunctive language. See, e.g., Scandia Down Corp. v. Euroquilt, Inc.,

772 F.2d 1423, 1432 (7th Cir. 1985); Anheuser-Busch Inc. v. Stroh’s Brewery Co., 750 F.2d 631,

643 (8th Cir. 1984); and Stover v. Farmer’s Educ. and Coop. Union, 250 F.2d 809, 812-13 (8th

Cir. 1958).


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B. The Contempt Respondents Are In Contempt ofThis Court’s Injunction

The principle question in trademark infringement contempt proceedings is whether the

new trademark adopted by the enjoined defendants is so similar to the original mark that the

injunction is violated. Wella Corp v. Wella Graphics, Inc., 37 F.3d 46, 48 (2d Cir. 1994).

An enjoined defendant must keep a “safe distance from the margin line – even if that

requirement involves a handicap as compared with those who have not disqualified themselves.”

Wolfard Glassblowing Co. v. Van-Bragt, 118 F.3d. 1320, 1322 (9th Cir. 1997). Consequently, a

party enjoined by court order has “an obligation to ‘do more than show how close it could come

with safety to that which [it was] enjoined from doing.’” AMF, 711 F.2d at 1107 (citation

omitted); see also Stover, 250 F.2d at 812-13 (finding contempt where “slight alterations in the

[trademark] . . . were obviously to circumvent the letter of the injunction while adhering to the

infringement and unfair competition.”). This heavier burden placed on enjoined defendants

applies equally under both infringement and dilution theories (see, e.g., Howard Johnson Co. v.

Khimani, 892 F.2d 1512, 1517 (11th Cir. 1990) (“[T]he legal posture of this case places a heavier

burden upon defendants of avoiding a colorable imitation of or diluting [plaintiff’s] trademarks

than upon a party not already preliminarily enjoined from engaging in such activity.”)); and it

applies equally to both an injunction entered after trial and an injunction entered on consent. See,

e.g., Badger Meter, Inc. v. Grinnell Corp., 13 F.3d 1145, 1155-56 (7th Cir. 1994) (applying the

burden where injunction was entered after trial and verdict); Bear U.S.A., Inc. v. Kim, 71 F.

Supp. 2d 237, 247 (S.D.N.Y. 1999) (same); Wolfard Glassblowing Co. v. Van-Bragt, 118 F.3d.

1320, 1322 (9th Cir. 1997) (applying the burden where parties entered into injunction on


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consent); Premium Nutritional Products, Inc. v. Ducote, No. 07-cv-2098, 2008 WL 2020390, at

*3 (D. Kans. May 9, 2008) (same); Polo Ralph Lauren L.P. v. Schuman, No. Civ.A. H97-1855,

1998 WL 110059, at *6 (S.D. Tex. Feb. 9, 1998) (same).

Moreover, any doubts are resolved against the enjoined defendant. ClearOne

Communications, Inc. v. Chiang, 608 F. Supp. 2d 1270, 1283 (D. Utah 2009) (quoting A & H

Sportswear Co., Inc. v. Victoria's Secret Stores, Inc., 967 F. Supp. 1457, 1469–70

(E.D.Pa.1997)); see also Polo Fashions, Inc. v. Dick Bruhn, Inc., 793 F.2d 1132, 1135 (9th

Cir.1986) (“[A] trademark plaintiff ‘entitled to relief, is entitled to effective relief; and any doubt

in respect of the extent thereof must be resolved in its favor as the innocent producer and

against the [defendant], which has shown by its conduct that it is not to be trusted.’ ” (quoting

William R. Warner & Co. v. Eli Lilly & Co., 265 U.S. 526, 532 (1924)).

The trademarks that were the subject of this Court’s Injunction included the following

trademarks:

THE SOUTH BUTT NEVER STOP RELAXING

Despite that Injunction, The Winkelmanns recently began using the following trademark:

Whereas the prior litigation concerned THE SOUTH BUTT versus THE NORTH FACE,

Contempt Respondents took the exact same word—BUTT—and simply moved it up a spot in


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their trademark so that now it is THE BUTT FACE versus THE NORTH FACE. In addition, as

in the prior dispute, the marks share a similar arrangement of elements. THE BUTT FACE

Trademark uses a halved and grooved image beside stacked, capitalized text similar to the

composite THE NORTH FACE Trademark that combines THE NORTH FACE word mark and

Half-Dome logo.

The prior litigation also involved Contempt Respondents’ NEVER STOP RELAXING

mark versus The North Face’s NEVER STOP EXPLORING trademark. Contempt Respondents

merely substituted “SMILING” in place of “RELAXING” to come up with their current tag line

“NEVER STOP SMILING.”

Contempt Respondents are fully aware that they have not maintained a safe distance from

the enjoined activity. Their self-professed “goal” to “make money” (Elings Decl., ¶2 and Exh.

H), makes clear their intention is to engage The North Face in legal battle and abuse this Court’s

resources for their personal goals of driving sales and making money. Contempt Respondents do

so with total disregard for their prior agreement with The North Face and the integrity of this

Court’s authority and Injunction.

C. Contempt Respondents May Not Avoid Contempt With A Claim of Parody

Contempt Respondents’ thinly-veiled attempt to mask their disregard for this Court’s

Order by wrapping themselves in the “parody” banner is evident on their website:

Hi I am Jimmy Winkelmann – after we put a smile on everyone’s face with ourThe South Butt brand a few years ago we thought there was some moresmiling to do. So we put together Why Climb Mountains – a parody clothingcompany for people who just want to enjoy life and maybe laugh a little atourselves, after all don’t we all need to smile more?

Elings Decl., Exh. D.

Even were the parody defense valid, which it is not (see discussion below), Contempt

Respondents have already effectively waived this defense by consenting to the Injunction after


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having asserted it in the prior court filings. Having subsequently conceded in the Injunction

that THE SOUTH BUTT is not a parody, they cannot now argue that THE BUTT FACE is a

parody. Indeed, the Injunction makes no exceptions for parodies.

Moreover, the defense fails as a matter of law by the Contempt Respondents’ own

actions. A parody cannot be a defense in a trademark dilution case if the trademarks are used as

a designation of source for the competing products themselves. See 15 U.S.C. § 1125(c) (3);

Starbucks Corporation v. Wolfe’s Borough Coffee, Inc., 588 F.3d 97, 112 (2d Cir. 2009)

(rejecting defendant’s parody defense to the claim that its use of CHARBUCKS diluted

plaintiff’s STARBUCKS marks where CHARBUCKS was “used as a designation for

[defendant’s] own goods”). Here, the Contempt Respondents’ filing of a trademark application

for registration of THE BUTT FACE Trademark clearly demonstrates an intent to use THE

BUTT FACE Trademark as a designation of source. Accordingly, a parody defense to dilution

is precluded.

So, too, a purported parody that creates a likelihood of confusion constitutes trademark

infringement. Anheuser Busch, Inc. v. Balducci Publ’ns, 28 F.3d 769, 776 (8th Cir. 1994).

Indeed, in finding that a parody Michelob ad nonetheless infringed the brewer’s trademarks, the

Balducci court, 28 F.3d at 774, relied upon appellate decisions across the nation upholding

trademark infringement judgments notwithstanding parody arguments far more viable than

Contempt Respondents’, including the “Mutant of Omaha” decision in Mutual of Omaha Ins.

Co. v. Novak, 836 F.2d 397 (8th Cir. 1987) and the “Debbie Does Dallas” decision in Dallas

Cowboy Cheerleaders, Inc. v. Pussycat Cinema Ltd., 604 F.2d 200 (2d Cir. 1979).

Further, as Judge Mummert explained in entering a preliminary injunction halting the

promotion and sale of “Buttwiper” dog chew toys: “[T]he cry of ‘parody!’ does not magically

fend off otherwise legitimate claims of trademark infringement or dilution. There are confusing


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parodies and non-confusing parodies. All they have in common is an attempt at humor through

the use of someone else’s trademark. A non-infringing parody is merely amusing, not confusing.”

Anheuser-Busch, Inc. v. VIP Products, LLC, 666 F. Supp. 2d 974, 985 (E.D. Mo. 2008) (quoting

Dr. Seuss Enters., L.P. v. Penguin Books, USA, 109 F.3d 1394, 1406 (9th Cir. 1997)).

Accordingly, Judge Mummert rejected the defendant’s position that its “Buttwiper” dog toy was a

non-confusing parody of plaintiff’s BUDWEISER trademark. Judge Mummert observed that

Anheuser-Busch also sold pet-related items under its BUDWEISER trademark, and sold them

within a similar price range. In language fully applicable here, the Court held that “courts are

most vigilant to guard against a likelihood of confusion when the plaintiff and the defendant use

their marks on directly competing products.” Id. at *9 (quoting Tommy Hilfiger Licensing, Inc. v.

Nature Labs, LLC, 221 F. Supp. 2d 410, 412 (S.D.N.Y. 2002) (emphasis added). In clear violation

of the Injunction, Contempt Respondents’ products, including t-shirts, caps, and sweatshirts,

directly compete with Plaintiff’s products under THE NORTH FACE Trademarks.

D. The Contempt Respondents’ Acts of Dilution and Infringement Violate theInjunction

Even if this Court were to engage in a full analysis of dilution or infringement, which

Plaintiff does not believe is warranted under the relevant case law, the result would be the same.

Contempt Respondents are in contempt of the Injunction.

A dilution plaintiff has the burden of proving only that: (a) it has a valid mark, (b) its mark

is famous and distinctive, and (c) defendant’s use of the mark is likely to dilute plaintiff’s mark.

See, e.g., Viacom, Inc. v. Ingram Enters., Inc., 141 F.3d 886, 888 (8th Cir. 1998).1 Here,

Plaintiff’s trademark registrations are prima facie evidence of the marks’ validity. 15 U.S.C. §

1 The Missouri statute does not require proof of fame. Otherwise, however, it is subject to the same analysis as thefederal statute. See Archdiocese of St. Louis v. Internet Entertainment Group, Inc., 99 CV 27 SNL, 1999 WL 66022,at *6 (E.D. Mo. Feb. 12, 1999).


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1057(6).

With regard to fame, a “court may consider all relevant factors, including: (i) The

duration, extent, and geographic reach of advertising and publicity of the mark . . . (ii) The

amount, volume, and geographic extent of sales of goods or services offered under the mark. (iii)

The extent of actual recognition of the mark. [and] (iv) Whether the mark was registered . . . on

the principal register.” 15 U.S.C. § 1125(c) (2) (A). THE NORTH FACE Trademarks are

registered on the Principal Register, have been in use since 1966, and have been the subject of

hundreds of millions of dollars of nationwide advertising and promotion. Turk Decl., ¶¶ 6, 9.

Plaintiff has generated billions in sales of products bearing these trademarks. Turk Decl., ¶6. In

addition, a survey conducted by Plaintiff shows that approximately thirty-five percent (34.50%)

of respondents identify The North Face as being associated with THE BUTT FACE Trademark

when shown a sample of Contempt Respondents’ t-shirts. See Declaration of Dr. Gerald L. Ford,

sworn to on August 1, 2012 at ¶¶ 4, 16. Given these facts, there is no question as to the fame of

THE NORTH FACE Trademarks. See, e.g., Nissan Motor Co. v.. Nissan Computer Corp., 2007

U.S. Dist. LEXIS 90487 (C.D. Cal. 2007); Century 21 Real Estate v. New Century Servs., 2007

T.T.A.B. LEXIS 149 (TTAB 2007).

As for the third element—likelihood of dilution—a plaintiff meets its burden by showing

that a defendant’s use of a trademark will likely “blur” the plaintiff’s mark or that such use will

likely “tarnish” the mark. See Anheuser-Busch, Inc. v. Balducci Publications, 28 F.3d 769, 777

(8th Cir. 1994). Here, both blurring and tarnishment exist.

1. Likelihood of Dilution by Blurring

In 15 U.S.C. § 1125(c) (2) (b), Congress provided the courts with a set of factors

to consider in determining the likelihood of dilution by blurring:


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(i) The degree of similarity between the mark or trade name and thefamous mark.

(ii) The degree of inherent or acquired distinctiveness of the famousmark.

(iii) The extent to which the owner of the famous mark is engaging insubstantially exclusive use of the mark.

(iii) The degree of recognition of the famous mark.

(v) Whether the user of the mark or trade name intended to create anassociation with the famous mark.

(vi) Any actual association between the mark or trade name and thefamous mark.

Here, both intent and similarity weigh strongly in The North Face’s favor. An

inference of intent arises where defendants, with knowledge of a competitor’s marks, choose

a similar mark from an infinite number of possibilities. Empi, Inc. v. Iomed, Inc., 923 F.

Supp. 1159, 1167 (D. Minn. 1996); Aveda Corp. v. Evita Marketing, Inc., 706 F. Supp. 1419,

1429 (D. Minn. 1989). There can be no legitimate dispute that the Contempt Respondents’

selection of THE BUTT FACE Trademark was to trade upon the fame of THE NORTH

FACE Trademarks.

Significantly, the first “blurring” factor renders unnecessary any finding that marks be

substantially similar; instead, courts should treat “‘degree of similarity’ as one of several

factors in determining blurring …, which must ultimately focus on whether an association,

arising from the similarity between the subject marks, ‘impairs the distinctiveness of the

famous mark.’” Starbucks Corporation v. Wolfe’s Borough Coffee, Inc., 588 F.3d 97, 108-

109 (2d Cir. 2009) (emphasis in original; citations omitted).

Second, THE NORTH FACE Trademarks are not only inherently distinctive (as

either arbitrary or suggestive trademarks), see Two Pesos, Inc. v. Taco Cabana, Inc., 505


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U.S. 763 (1992), but they have tremendous acquired distinctiveness by virtue of Plaintiff’s

longstanding and exclusive use, sales success, media coverage, and advertising expenditures.

See, e.g., Centaur Communications, Ltd. v. A/S/M Communications, Inc., 830 F.2d 1217 (2d

Cir. 1987).

Third, Plaintiff regularly enforces its trademark rights and therefore has been and is

engaged in substantially exclusive use of THE NORTH FACE Trademarks since 1966. Turk

Decl. ¶¶ 6, 13-14.

Fourth, survey results indicating that 34.5% of respondents associate THE BUTT

FACE Trademark with The North Face show both extremely high recognition of THE

NORTH FACE Trademarks as well as a high level of association with THE BUTT FACE

Trademark. See, e.g., Starbucks, 588 F.3d at 109 (survey in which 30.5% of consumers

associated “Starbucks” with “Charbucks” actionable); Nat’l Pork Bd. v. Supreme Lobster and

Seafood Co., 2010 T.T.A.B. LEXIS 225 at *35 (TTAB 2010) (THE OTHER RED MEAT held

likely to dilute THE OTHER WHITE MEAT; 35% level of association between marks

demonstrates they are “highly similar”).

In short, each of the likelihood of dilution by blurring factors weighs against the

Contempt Respondents.

2. Likelihood of Dilution by Tarnishment

The Lanham Act defines dilution by tarnishment as an “association arising from the

similarity between a mark or trade name and a famous mark that harms the reputation of the

famous mark.” 15 U.S.C. § 1125(c) (2) (b). Here, Contempt Respondents’ clear intent is to

trade off of THE NORTH FACE Trademarks by denigrating THE NORTH FACE Trademarks

through use of the word BUTT in place of the term NORTH “in an ‘unwholesome or

degrading context’.” Archdiocese of St. Louis, supra, 1999 WL 66022, at *8. Indeed, use of


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the term “butt” has already been held to constitute dilution by tarnishment. See, e.g.,

Anheuser-Busch, Inc. v. Andy’s Sportswear, Inc., 40 U.S.P.Q.2d 1542 (N.D. Cal. 1996)

(“buttwiser” t-shirts constitute dilution by tarnishment of BUDWEISER mark).

3. Infringement

In analyzing likelihood of success on infringement claims, courts in the Eighth Circuit

consider the six SquirtCo factors: (a) the strength of the trademark; (b) the degree of similarity

between the two marks; (c) the competitive proximity of the products; (d) the alleged infringer’s

intent to confuse; (e) actual confusion; and (f) the degree of care reasonably expected of potential

consumers. SquirtCo v. Seven-Up Co., 628 F.2d 1086, 1091 (8th Cir. 1980).

Strength, similarity, and intent have already been addressed herein and “[w]here products

are closely related, less similarity in trademarks is necessary to support a finding of

infringement.” SquirtCo, 628 F.2d at 1091. The factors not previously discussed— proximity,

actual confusion, and degree of care—also weigh in Plaintiff’s favor or are neutral. Defendants

are selling directly-competitive items of apparel on the Internet, thus making them available

throughout the United States and the world. In addition, a plaintiff need not prove actual

confusion in order to obtain relief. It is enough that plaintiff proves a likelihood of confusion. 15

U.S.C. § 1114(1). Lastly, although likelihood-of-confusion analysis, including the “degree of

care” factor is often focused at the point of sale, it is well-established that the Lanham Act

protects post-sale as well as point-of-sale confusion. Insty*Bit, Inc. v. Poly-Tech Indus., Inc., 95

F.3d 663, 672 (8th Cir. 1996). “An action for trademark infringement may be based on confusion

of consumers other than direct purchasers, including observers of an allegedly infringing product

in use by a direct purchaser.” Id. (citing Payless Shoesource, Inc. v. Reebok Intern. Ltd., 998 F.

2d 985 (Fed. Cir. 1993) (emphasizing the “widespread recognition by so many other circuits of

the importance of post-sale confusion” and citing several decisions that “recognized that an action


17

for trademark infringement may be based on confusion of consumers other than direct purchasers,

including observers of those wearing an accused article” Id. at 989)).

“Under SquirtCo, no one factor controls, and because the inquiry is inherently case-

specific, different factors may be entitled to more weight in different cases.” Kemp v. Bumble

Bee Seafoods, Inc., 398 F.3d 1049, 1054 (8th Cir. 2005). In the matter before this Court, the high

degree of similarity and the Contempt Respondents’ willful intent to trade upon THE NORTH

FACE Trademarks, despite being previously enjoined, strongly support a finding of likelihood of

confusion.

E. Sanctions Should Be Imposed Against the Contempt Respondents

It is well-settled that a court may sanction a party held in civil contempt. Harris v. Wrob,

2012 WL 666735 at *4 (E.D. Mo. Feb 29, 2012) (Webber, J.) (sanctions: disgorgement of

defendants’ infringement-related profits and an award of plaintiff’s attorneys’ fees and costs);

Hunter Engineering Co. v. Hennessy Industries, Inc., 2010 WL 1186454, at *6 (E.D. Mo. March

29, 2010). The purpose of civil contempt sanctions is to “compensate parties aggrieved by

contumacious conduct or to coerce compliance with the court’s orders.” Katoch v. Mediq/PRN

Life Support Servs., 2007 WL 4365734 (E.D. Mo. Dec. 11, 2007) at *1 (citing United States v.

United Mine Workers, 330 U.S. 258, 303 (1947)).

Plaintiff has provided clear and convincing evidence that the Contempt Respondents have

violated the Injunction, and have done so willfully and knowingly, with complete disregard for

this Court’s authority. Consequently, Plaintiff is entitled to attorneys’ fees and costs incurred in

prosecuting the motion. See Faegre & Benson, 367 F. Supp. 2d 1238, 1243-1244; Jake's, Ltd.,

Inc., v. City of Coates, 356 F.3d 896, 900 (8th Cir. 2004) (award of reasonable attorneys' fees

and expenses incurred by the party seeking to enforce court-ordered injunction was within

district court's remedial discretion in civil contempt proceedings); Kehm v. Procter & Gamble


18

Mfg. Co., 724 F.2d 630, 630-631 (8th Cir. 1984) (per curium) (affirming award of $10,000 in

attorneys’ fees for litigating contempt motion); Ford Motor Co. v. B&H Supply, Inc., 646 F.

Supp. 975, 1001-1002 (D. Minn. 1986) (awarding attorneys’ fees and costs incurred in

enforcement of preliminary injunction in trademark infringement action).

In addition, an award of the Contempt Respondents’ profits is warranted. “Judicial

sanctions in civil contempt proceedings may, in a proper case, be employed for either or both of

two purposes: to coerce the defendant into compliance with the court's order and to compensate

the complainant for losses sustained.” Spindelfabrik Suessen-Schurr v. Schubert & Salzer

Maschinenfabrik Aktiengesellschaft, 903 F.2d 1568, 1578 (Fed. Cir. 1990). “Civil contempt may

also be punished by a remedial fine, which compensates the party who won the injunction for the

effects of his opponent's noncompliance.” Hutto v. Finney, 437 U.S. 678, 691, 98 S.Ct. 2565, 57

L.Ed.2d 522 (1978). In trademark actions, sanctions may include an award of the contemnor’s

profits made during the period in which the contemnor was in contempt of the consent judgment.

See, e.g., Manhattan Indus. v. Sweater Bee by Banff, Ltd., 885 F.2d 1, cert denied, 494 U.S.

1029, 110 S.Ct. 1477 (1990); Chanel Indus., Inc. v. Pierre Marche, Inc., 1964 U.S. Dist. LEXIS

7874 at *7 (E.D. Mo. Sept. 4, 1964).

III.

CONCLUSION

Without the relief requested by Plaintiff, further violation of the Injunction will continue

unabated and, as a result, Plaintiff will suffer further irreparable harm to its trademarks’ goodwill

and reputation. For the foregoing reasons, Plaintiff respectfully urges the Court to grant its

motion.


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Respectfully submitted,

/s/ Michael A. KahnMichael A. Kahn, #35411MOBRICKHOUSE LAW GROUP1006 Olive Street, Suite 303St. Louis, MO 63101-2034Telephone: (314) 932-1076Facsimile: (314) [email protected]

G. Roxanne Elings (pro hac vice)Charles A. LeGrandDAVIS WRIGHT TREMAINE LLP1633 Broadway, 27th FloorNew York, NY 10019-6708Telephone: (212) 603-6416Facsimile: (212) 379-5226

Attorneys for Plaintiff The North FaceApparel Corp.


mailto:[email protected]

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CERTIFICATE OF SERVICE

The undersigned certifies that on this 3rd day of August, 2012, a true copy of thisMemorandum of Law, along with true copies of the Declaration of Dr. Gerald L. Ford (withExhibits A through D), the Declaration of Christopher M. Turk, and the Declaration of G.Roxanne Elings (with Exhibits A through I) were served:

(a) via the Court’s electronic filing system on all counsel of record, which includesAlbert Watkins, who is counsel of record for Defendant James A. Winkelmann, Jr.and James A. Winkelmann, Sr. (who is a party to the Injunction and the RegisteredAgent of Why Climb Mountains, LLC) and who has informed Plaintiff in writing thathe is the attorney for Why Climb Mountains, LLC; and

(b) by hand delivery to the address of the Registered Agent of Why Climb Mountains,LLC, James A. Winkelmann, at 21 N. Meramec, 2nd Floor, Clayton, MO 63105.

/s/ Michael A. Kahn


north face memorandum of law for contempt motion

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