By Scott A. Andresen, Esq.
Though imitation may be the sincerest form of flattery, it can also be an actionable infringement of intellectual property rights. Hours before the Cubs would beat the St. Louis Cardinals on September 22nd to increase their record to 98-55 on their way to winning their first World Series title since Henry Ford developed the Model T, Major League Baseball Properties and the Chicago Cubs initiated Major League Baseball Properties, Inc. et al v. Stevens et al[1]in the United States District Court for the Northern District of Illinois against a number of named and “Doe” merchandise vendors. The first iteration of the Complaint[2] begins by stating, accurately in this die-hard Cubs fan’s opinion, that “The Chicago Cubs are among the most famous and beloved clubs in all of baseball; indeed, in all of American sports.” The Complaint then goes on to describe the Defendants as a group of vendors who are deliberately free riding on the success of the Cubs and trading- without a license or permission- on the substantial goodwill associated with the famous marks of the Cubs and Major League Baseball. Adding additional flavor to the allegations against the named Defendants were a number of photos of their infringing activities and merchandise. The Complaint sought relief under the Lanham (Trademark) Act for counterfeiting (§1116(d)), trademark infringement (§1114), unfair competition (§1125(a)) and trademark dilution (§1125(c)). The Complaint also sought relief under Illinois state law for trademark infringement, trademark dilution, unfair and deceptive trade practices, as well as common law trademark infringement and unfair competition.
By one account, Major League Baseball has filed 56 trademark-related federal court cases since 1987.[3] The Lanham (Trademark) Act provides a vital tool to MLB as it looks to protect its approximately $3 Billion (in 2015) in annual merchandise sales,[4] and is particularly important when it is in connection with a Chicago Cubs postseason run complete with a long-suffering fan base that has been saving its World Series merchandise money for 108 years.
A key component of the Plaintiffs’ proactive enforcement regimen for the 2016 MLB postseason was Section 1116(d) of the Lanham Act.[5] Section 1116(d) allows for an ex parte application to a federal court for an order allowing the seizure of counterfeit merchandise–rather than waiting to seek redress for infringements after the harm has been completed. To that end, the Court entered under seal an Ex Parte Temporary Restraining Order and Seizure and Impoundment Order that was converted to a preliminary injunction on October 6, 2016 based on a finding that the Plaintiffs established that they were likely to succeed on the merits of their claims, that they would suffer irreparable harm, that the balance of equities tipped decidedly in their favor, and that the requested relief was in the public interest. The Court further found that injunctive relief was appropriate as the Plaintiffs would have no other adequate remedy at law and would suffer immediate and irreparable harm in the form of counterfeiting and infringement of the Plaintiffs’ trademarks, injury to the Plaintiffs’ reputation and property rights, harm to the goodwill associated with the Plaintiffs’ trademarks, loss of quality control over the trademarks and brands of the Plaintiffs, and decreased sales of licensed merchandise.
As part of the Court’s Order of October 6th, the Court further stated that:
The Defendants were preliminarily enjoined from manufacturing, distributing, offering for sale, selling, and/or advertising any articles of merchandise bearing the Plaintiffs’ marks, or any substantially indistinguishable or substantially similar imitations thereof;
The Defendants were to deliver to Plaintiffs’ counsel for impoundment all signs, products, packaging, promotional material, advertising material any other item that bears, contains or incorporates any of the Plaintiffs’ marks or colorable imitations thereof;
Agents of any duly-authorized law enforcement agency, along with Plaintiffs’ representatives, were authorized to seize and impound any counterfeit goods that any Defendants attempted to manufacture or sell, including any containers in which the counterfeit goods were stored, carried, displayed, or transported, or any devices used to produce such counterfeit goods, including silk screens, molds, printers or heat transfers, in the possession, custody or control of Defendants; and
Seizures and impoundments were to take place at all locations within a 5-mile radius of Wrigley Field, along any parade route established for a victory parade or celebration, or within a 1-mile radius of the United Center, Soldier Field and U.S. Cellular Field where counterfeit goods were sold, offered for sale, distributed, transported, manufactured and/or stored for the period commencing on October 6 and terminating on November 10, 2016.
While it would seem logical that the legal “shot across the bow” undertaken by Major League Baseball and the Chicago Cubs would have prevented any subsequent infringing activities by unlicensed vendors during the postseason, such was not the case. On November 4th, the Court granted the Plaintiffs’ request to issue 60 additional summonses, taking the total number of “Doe” summonses to 90—a substantial number of which were utilized for Defendants subsequently named in the sixth and seventh amended complaints filed by the Plaintiffs. Apparently, Albert Einstein’s quote that “three great forces rule the world: stupidity, fear and greed” was only two-thirds correct as fear of litigation was noticeably absent or rendered irrelevant by the other two forces.
So, what’s next? Based on the law of litigation averages (as determined solely from anecdotal evidence gathered by the author), one can expect two primary paths for the Defendants. The first group of Defendants will likely choose the Ostrich Approach and bury their heads in the sand and/or attempt to hide from the litigation- likely resulting in the entering of default judgments and subsequent enforcement and collection measures by the deep-pocketed Plaintiffs. The second group of Defendants will take the more advisable approach and seek prompt settlement complete with prostrating mea culpas. Regardless of any defenses that some of the Defendants may believe are available to them, the costs in time, expense and emotional energy associated with litigation frequently make settlement a far less bitter pill to swallow even in situations far more favorable to a defendant than is seen here.
In conclusion, the lesson to be learned by unlicensed vendors in Chicago is one that should have been gleaned from the experiences of the San Francisco Giants, Los Angeles Dodgers and Cleveland Indians: its unwise to tangle with the Chicago Cubs.
For more on Andresen, visit his bio here: http://www.andresenlawfirm.com/our-founder
[1] Case No. 1:16-cv-09140 (Filed September 22, 2016)
[2] On December 8, 2016, MLBP and the Chicago Cubs filed a motion for leave to file a Seventh Amended Complaint
[3] See Cubs, MLB Suit Up to Catch Unauthorized Vendors (Chicago Tribune, September 23, 2016) (http://www.chicagotribune.com/business/ct-cubs-mlb-trademark-suit-0924-biz-20160923-story.html)
[4] See MLB Sees Record Revenues For 2015, Up $500 Million And Approaching $9.5 Billion (Forbes/Sports Money, December 4, 2015) (http://www.forbes.com/sites/maurybrown/2015/12/04/mlb-sees-record-revenues-for-2015-up-500-million-and-approaching-9-5-billion/#1c18891c2307)
[5] 15 U.S.C. §1116(d)
