Arizona trademark watch: A big win for a local furniture designer; “poop-themed dog toy” decision still to come
An Arizona designer of high-end furniture earned an important victory this past Tuesday as the Ninth Circuit upheld an award of more than $100,000 against a maker of “blatant” knockoffs. The decision comes as the trademark community continues to await the Supreme Court’s decision on yet another prominent case involving an Arizona company.
The furniture case has some decidedly colorful facts—and makes important law as well. Phoenix resident Jason Scott designs and sells heirloom pieces of furniture through exclusive relationships with select retailers. A Texas company knocked off his designs and started honing on the same retailers. Scott learned about this when one of those retailers told his brother. But the owner of that retailer didn’t want to be seen as a “snitch.” So with typical Texan bravado, he told Scott’s brother that “if you mention my name I’ll kick your ass and stop buying Jason Scott and no more Tex mex tacos at the race car shop!” But Scott wasn’t going to be deterred—he filed his lawsuit anyway. And true to his word, the “snitch” stopped selling his furniture as a result.
So here’s where things get interesting, legally speaking. Scott won his case. He collected the infringer’s profits from the knockoffs—standard fare in intellectual property cases. But Scott also lost business when the “snitch” stopped buying his furniture. Could Scott collect damages for that as well? In other words, should it have been “reasonably foreseeable” to the knockoff maker that the knockoffs would require Scott to file a lawsuit, the lawsuit in turn would cause Scott to lose business from an aggrieved source, and the lost business would cause Scott financial harm? A federal judge in Phoenix said yes. And the Ninth Circuit agreed. After all, the court of appeals reasoned, “damaged business relationships are a reasonably foreseeable consequence of trademark infringement.”
The decision comes as the trademark world is waiting for the Supreme Court to decide another case involving an Arizona company. In this case, a company operating as MyDogToy.com put out a dog toy called the Silly Squeaker Liquor Bottle. The dog toy was an obvious takeoff of the classic Jack Daniels bottle, except that the label read Bad Spaniels and the words “Old No. 7 Tennessee Sour Mash Whiskey” were replaced with “The Old No. 2 on your Tennessee carpet.” Not surprisingly, Jack Daniels did not see the humor. The whiskey maker saw it as naked trademark infringement; the dog toy maker saw it as free speech. Inevitably, the parties wound up in court. A federal judge in Phoenix ruled for Jack Daniels, but the Ninth Circuit reversed. The case then went to the Supreme Court—which could decide it any time. We’ll report the news as soon as we have it.
Links, links, links:
The Ninth Circuit decision in the Jason Scott case is here.
A full writeup of the Jason Scott case in the Intellectual Property Law Daily, by our counsel Matt Hersh, is here.
The Supreme Court docket for the Jack Daniels case (with all the briefs) is here.