ILC trademark claims against Aviator Nation failed in District Court of California citing descriptiveness of marks
Date Published: Jun 21, 2021
ILC Trademark Corporation is a company based out of British Virgin Islands. ILC Trademark Corporation owns several IP rights which they license to other companies who then use the IP to make and sell the related product. Paige Mycoskie is the founder and president of Aviator Nation which is a California based corporation. ILC Trademark Corporation owned a Lightning Bolt Trademark which it used to license to several other companies for its use on clothing and other related things. Aviator Nation also used the Bolt Mark which was very similar to the Bolt Mark which was a registered Trademark of ILC Trademark Corporation. It was so similar that that confusion was caused among the customers as some people had walked into Aviator Nations Showroom and had asked if it had any affiliations with the “Bolt Mark” clothing under ILC Trademarks lightning bolt symbol. ILC Trademark came to know about Aviator Nations use of the Lightning Bolt Mark and asked Aviator Nation to stop using it. Aviator Nation declined. ILC Trademark Corporation filed a complaint against Aviator Nation and Ms. Mycoskie for trademark infringement and unfair competition in United States District Court Central District of California (“The Court”) (ILC Trademark Corp. vs. Aviator Nation Inc. Case No. 2:17-cv-07975-MWF(JPRx) (C.D. Cal. Nov. 24, 2020) which held that the Bolt Mark is a descriptive mark and said that Aviator Nation and Ms. Mycoskie successfully proved their affirmative defenses based on delay, which defeats any verdict or entry of judgment on ILC Trademark’s claims for relief and ruled that their request for injunction is rejected.
A brand named Lightning Bolt which was a surfboard brand was started in 1970s, which later expanded its area of business to clothing and other Goods also.The United States Patent and Trademark Office (“USPTO”) registered a lightning bolt trademark (“Bolt Mark”) on 15th August 1978 for clothing and surfboards with Bolt Corporation as the owner. Bolt Corporation filed a combined declaration in USPTO confirming that the Bolt Mark was in use. Bolt Corporation later assigned the rights related to the Bolt Mark to Bolt International on 25th February 1985.
Bolt International changed its name to International Licensing Corporation on 15th March 1990. International Licensing Corporation then proceeded to assign the rights of the Bolt Mark to ILC Licensing Corporation, S.A in 1996. Both International Licensing Corporation and ILC Licensing Corporation, S.A are affiliate companies of Ernst&Young and KPMG created to take advantage of royalty treaties between various countries around the world. In 2004, the rights to the Bolt Mark were assigned to ILC Trademark Corporation.
The Bolt Mark was cancelled in 2009 due to expiry as ILC Trademark failed to renew it because of oversight. ILC Trademark Corporation filed a trademark application for the Bolt Mark. However, it had great difficulty obtaining the required proofs and kept requesting the USPTO for extensions of time. After receiving four extensions ILC Trademark filed the required proofs. The USPTO issued the Bolt Mark again to ILC Trademark in 2013.
In 2008, ICL Trademark granted HTIL Corporation B.V the exclusive right to manage ILC Trademark Corporation's trademarks associated with the Lightning Bolt brand in the United States of America and Canada. HTIL then proceeded to enter into an agreement with TMG granting TMG the right to manufacture and sell licensed goods using trademarks associated with the Lightning Bolt brand in the United States and Canada. This license agreement which was granted to TMG with the Bolt Mark rights was terminated on 31st December 2014. However, TMG continued to manufacture Lightning Bolt-branded products pursuant to the rights it owns in Portugal, and imported the products into the United States for sale without authorization from ILC Trademark Corporation from 2015 to 2018.
ILC Trademark proceeded to file a complaint against TMG for trademark infringement, unfair competition and breach of contract based on TMG's continued importation and sale of goods after the termination.
Aviator Nation under Paige Mycoskie began selling clothing products which feature a lightning bolt symbol (the "AN Bolt Design"). Aviator Nation has continuously and consistently sold clothing featuring the AN Bolt Design from 2006 to the present. Ms Mycoskie did not run a trademark search for the lightning bolt when she first started selling clothing in August 2006. Ms. Mycoskie viewed the lightning bolt symbol as an ornamental design that anyone could use. However, Ms. Mycoskie discovered the Lightning Bolt brand when she observed a Lightning Bolt branded surfboard.
There was confusion between products of Aviation Nation’s product and the Bolt Mark as customers in Aviator Nation's retail stores have asked whether Aviator Nation was associated with Lightning Bolt. On another occasion, Sylvie Ray Elger Glassman, an employee at the Venice Beach, California location of Aviator Nation since September 2017, testified that at the beginning of her employment with Aviator Nation, approximately five customers would come into the store per month and ask questions about any affiliation between Aviator Nation and Lightning Bolt. Moreover, Michael Colucci, a manager at the Malibu, California location of Aviator Nation, testified that he has been personally asked by customers on approximately five to ten occasions whether Aviator Nation is owned or affiliated with Lightning Bolt, usually after the customer sees merchandise with the AN Bolt Design.
ILC Trademark Corporation demanded that Aviator Nation stop using the AN Bolt Design on clothing in 2016. Aviator Nation declined. In 2017, ILC Trademark Corporation filed a complaint against Aviator Nation and Ms. Mycoskie for trademark infringement and unfair competition.
United States District Court Central District of California after hearing the case went on to hold that the Bolt Mark is a descriptive mark, the court relied on Wiley v. American Greetings Corp., 762 F.2d 139 that held that the Bolt Mark is a common, basic shape, and its use as ornamentation in clothing is not unusual. The Court held that the evidence adduced at trial establishes that the Bolt Mark has acquired secondary meaning in the surf-related apparel industry.
The Court further said that the “Bolt Mark” and “AN Bolt Design” are sufficiently similar. Moreover, the evidence at trial does not establish that Ms. Mycoskie or Aviator Nation knowingly adopted a mark similar to the Bolt Mark. The Court found credible Ms. Mycoskie's testimony that she was not aware of any Lightning Bolt clothing products when she first started the Aviator Nation brand in 2006, and that she genuinely believed that the "Lightning Bolt" brand was dead. The Court said that Aviator Nation and Ms. Mycoskie successfully proved their affirmative defenses based on delay, which defeats any verdict or entry of judgment on ILC Trademark’s claims for relief and ruled that their request for injunction is rejected.