By Russell Romriell
A district judge in the Southern District of New York has granted a permanent injunction against Smack Apparel Company for breaching a settlement agreement with The Heisman Trophy Trust, and for continuing to infringe the trademarks registered to the Heisman Trust.
Background
The Heisman Trust currently owns all of the intellectual property rights relating to the Heisman Trophy after receiving them from The Downtown Athletic Club of New York City, Inc. Any registered trademark relating to the Heisman Trophy is owned by The Heisman Trust, and any use of the Heisman Marks must be licensed by The Heisman Trust.
Smack Apparel sells clothing through its own website and to other retailers. In 1999, Smack Apparel produced a T-shirt with the word “Heistman” on it and a picture of the Heisman Trophy statuette carrying a shopping bag in reference to a Heisman Trophy candidate who had been arrested for shoplifting. This was the first unlawful use of the Heisman Marks. In 2000, Smack Apparel agreed to a settlement agreement with the Downtown Athletic Club, the then owner of Heisman Marks. Smack Apparel agreed to “cease and permanently refrain from manufacturing, displaying, selling or offering for sale any clothing or other merchandise bearing the [Heisman] Marks, or confusingly similar marks, and from displaying or otherwise using the [Heisman] Marks, or confusingly similar marks, on or in connection with any website.” The agreement further stated that a breach of the agreement would result in material and irreparable harm, and the holder of the Heisman Marks would be entitled to injunctive relief “because it would be difficult or impossible to establish full monetary value of such damage.”
In 2002 and again in 2007, Smack Apparel produced T-shirts promoting Heisman Trophy candidates. In 2008, thirteen varieties of Heisman Trophy-related T-shirts were produced, and The Heisman Trust was granted a preliminary injunction against Smack for trademark infringement. This suit was then filed requesting a permanent injunction for breach of contract as well as trademark infringement.
The 2008 T-shirts included several variations of the word “Heisman” including “HEI5MAN”, “HE15MAN”, and “HE.IS.the.MAN”. In creating these variations, Smack Apparel used a font that is virtually identical to the font used on licensed T-shirts.
The Court’s Decision
The Heisman Trust moved for partial summary judgment on the claim for breach of contract, arguing that there was no issue of material fact presented in the case, and that no rational jury could find in favor of Smack Apparel. Smack Apparel argues that the Settlement Agreement in question was between Smack Apparel and the Downtown Athletic Club, and The Heisman Trust was not a party to the agreement. But Smack Apparel offered no evidence showing that The Heisman Trust is not the successor-in-interest to the Downtown Athletic Club. The court stated that as the successor-in-interest, The Heisman Trust has standing to enforce an agreement entered into by the Downtown Athletic Club.
Although primarily a contracts case, the judge admitted that trademark law was relevant in deciding the case, because the details of the contract included an agreement by Smack Apparel to avoid infringing on or diluting the Heisman Marks. Because The Heisman Trust alleges that Smack Apparel breached the contract by using the same or “confusingly similar” marks, the court had to use trademark law to determine whether Smack Apparel was in violation.
The court used the likelihood of confusion analysis which uses the “Polaroid Factors.” Although useful in the analysis of a trademark case, these factors make up “a non-exhaustive . . . [list] . . . to be considered in determining the likelihood of confusion.” The Polaroid Factors include the following:
1)the strength of the plaintiff’s mark; 2) the similarity of the plaintiff’s mark and defendant’s mark; 3) the competitive proximity of their products; 4) the likelihood that plaintiff will “bridge the gap” and offer a product like defendant’s; 5) actual confusion between products; 6) defendant’s good or bad faith; 7) the quality of defendant’s product as compared to plaintiff’s; and 8) and the sophistication of the purchasers.
See Polaroid Corp. v. Polorad Elecs. Corp. 287 F.2d 492, 495 (2d Cir. 1961).
The court determined that each factor either presented no issue of material fact or favored The Heisman Trust. The second factor was the most important. The court found that Smack Apparel’s marks were confusingly similar because they used a font similar to the licensed marks, and the variations on the word “HEISMAN” were not sufficiently distinct from the licensed marks. An overall view of the marks showed that a consumer in the market would likely “get the false impression that Smack Apparel’s T-shirts are manufactured, licensed, or approved by The Heisman Trust.” Smack Apparel presented no evidence suggesting that the market conditions where the T-shirts are sold would lessen the confusion.
Besides the Polaroid Factors, the court rejected Smack Apparel’s other arguments as well. The media publicity about Smack Apparel’s T-shirts was insufficient to clear up consumer confusion, as well as the disclaimers and Smack Apparel’s own logo present on the T-shirts. Among other reasons, the presence of the logo would actually cause more confusion since licensed manufacturers include their logos on Heisman T-shirts as well.
Smack Apparel’s parody defense also failed, because the confusion persists. A successful parody clearly portrays that it is not the actual product that is being parodied, which Smack Apparel’s T-shirts failed to do.
The court held that The Heisman Trust was entitled to a permanent injunction against Smack Apparel, because The Heisman Trust showed actual success on the merits and irreparable harm.
Heisman Trophy Trust v. Smack Apparel Co., S.D.N.Y., No. 08 Civ. 9152(VM), 2009 WL 2170352 7/17/09
Russell Romriell is a third year law student at the University of Texas School of Law.
