The chief district judge for the Southern District of Indiana has granted the NCAA’s motion for a default judgment against Kizzang LLC, a company that provides sweepstakes and fantasy sports entertainment services online, and founder Robert Alexander. The ruling was based on the defendants’ failure to respond in a timely manner to the NCAA’s allegations of trademark infringement, trademark dilution, and unfair competition related to the defendants’ alleged use of the marks “FINAL 3” and “APRIL MADNESS.”
In March 2017, the NCAA sued the defendants, alleging they “are in the business of marketing and providing nationwide Internet-based promotions that award prizes for predicting the results of sporting events, including the results of college basketball games played by and between NCAA member schools, and in particular games played during the NCAA’s Division I Men’s Basketball Championship” and that they used the marks FINAL 3 and APRIL MADNESS in connection with their Final Four-based contests and “continue offering goods and services using the FINAL 3 and APRIL MADNESS marks via webpages and mobile-telephone applications… .”
Specifically, the NCAA set forth claims for: (1) trademark infringement under 15 U.S.C. § 1114; (2) trademark infringement under 15 U.S.C. § 1125(a); (3) trademark dilution under 15 U.S.C. § 1125; and (4) unfair competition. It requested that the court enter judgment in its favor; order that the USPTO deny Kizzang’s application to register the marks Final 3 and April Madness as well as permanently enjoin the defendants from using the NCAA’s Final Four and March Madness marks “and any colorable imitation or simulation of [them],” doing anything likely to induce the belief that Kizzang’s products or services are legitimately connected with or sponsored or approved by the NCAA, and doing anything that is likely to dilute the distinctiveness of the NCAA’s FINAL FOUR and MARCH MADNESS marks or that is likely to “tarnish the goodwill associated with those marks.”
The NCAA also requested that the court order the defendants to recall all products, services, advertising, and promotional materials bearing the NCAA marks and any imitations of them, including FINAL 3 and APRIL MADNESS. Additionally, it sought all actual damages, all profits derived by the defendants from the acts complained of, the greater of three times the damages the NCAA has suffered as a result of the acts complained of or three times the defendants’ profits, exemplary damages, and attorneys’ fees and costs, and requests that the defendants be required to file with the Court a report in writing under oath setting forth the manner and form in which the defendants have complied with the terms of any injunction entered by the court.
The NCAA filed a motion for preliminary injunction on March 9, 2017, requesting that the court preliminarily enjoin the defendants from the acts set forth in the request for relief contained in the complaint.
The July 15, 2017 deadline for the defendants to respond, “came and went without an answer or pleading from the defendants, and on July 21, 2017, the NCAA filed its request for entry of default,” wrote the court.
In the fall of 2017, the NCAA filed a motion for default judgment and for a permanent injunction.
The chief judge noted that “the issue of whether the defendants are liable is separate and apart from whether the NCAA is entitled to certain relief, such as a permanent injunction. The court first addresses whether the defendants are liable for trademark infringement, trademark dilution, and unfair competition.”
Trademark Infringement Under 15 U.S.C. § 1114 and 15 U.S.C. § 1125(a), and Common Law Unfair Competition
The chief judge found that “the NCAA has adequately alleged violations of § 1114 and § 1125 and common law unfair competition, and that the defendants have admitted the allegations in connection with those claims through default. The marks FINAL 3 and APRIL MADNESS are obviously similar to FINAL FOUR and MARCH MADNESS, and the NCAA has alleged that Defendants offer similar contests through the use of the marks FINAL 3 and APRIL MADNESS as the NCAA offers through FINAL FOUR and MARCH MADNESS. The confusion that could result from the defendants’ use of the marks FINAL 3 and APRIL MADNESS is also obvious due to their significant similarity to the NCAA’s marks. Further, the NCAA has alleged that the defendants have used the marks FINAL 3 and APRIL MADNESS ‘with the intention of exploiting the goodwill associated with the NCAA Marks.’ The similarity of the marks also leads to the conclusion that defendants intended to pass their products off as the NCAA’s. Accordingly, the NCAA has established liability on its § 1114 and § 1125 Lanham Act claims and its common law unfair competition claim through its allegations, which the defendants have admitted by virtue of the default.”
Trademark Dilution Under 15 U.S.C. § 1125(c)
The court noted that 15 U.S.C. § 1125(c) provides that:
“The owner of a famous mark that is distinctive inherently or through acquired distinctiveness, shall be entitled to an injunction against another person who at any time after the owner’s mark has become famous, commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark, regardless of the presence or absence of actual or likely confusion, or competition, or of actual economic injury.”
On this point, the NCAA “has adequately alleged trademark dilution both by tarnishing and blurring,” wrote the court. “The NCAA alleges that its marks have been famous for a long period of time, that its marks were famous before the defendants began using the FINAL 3 and APRIL MADNESS marks, that Defendants’ use of the FINAL 3 and APRIL MADNESS marks connects the NCAA’s marks to the defendants (tarnishing the NCAA’s marks) and expands the goods and services associated with the NCAA’s marks (blurring the NCAA’s marks), and that the defendants used the marks in commerce. The defendants have admitted these allegations by virtue of their default, so default judgment on the trademark dilution claim is warranted.”
The chief judge continued: “In sum, the court has already found that entry of default is appropriate in this case because there was not good cause for the defendants’ default, the defendants did not act quickly to correct the default, and the defendants have not asserted a meritorious defense to the complaint. The court further finds that the NCAA has set forth adequate allegations — deemed admitted by the defendants’ default — to support their liability for trademark infringement under § 1114 and 1125, trademark dilution under § 1125(c), and common law unfair competition.”
After siding with the NCAA on the merits of the case and that the NCAA was entitled to default judgment by virtue of the defendants’ unresponsiveness, the court considered whether the NCAA should be entitled to a default judgment.
“In sum, the court finds that the NCAA has shown that it will suffer irreparable injury in the absence of an injunction, that it does not have an adequate remedy at law, that the balance of hardships weighs in favor of issuing an injunction, and that issuing an injunction would serve the public interest.”
National Collegiate Athletic Association v. Kizzang LLC and Robert Alexander; S.D. Ind.; No. 1:17-cv-00712-JMS-MPB, 2018 U.S. Dist. LEXIS 7984; 1/18/18
Attorneys of Record: (for plaintiff) Amie Peele Carter, Daniel E. Pulliam, FAEGRE BAKER DANIELS LLP (Indianapolis), Indianapolis, IN; Douglas N. Masters, LOEB & LOEB LLP, Chicago, IL; Edward K. Lee, PRO HAC VICE, LOEB & LOEB LLP, Los Angeles, CA. (for defendant) Hallie Schneider Borellis, James Papakirk, William S. Wyler, PRO HAC VICE, Flagel & Papakirk LLC, Cincinnati, OH.
