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Persis International, Inc., and v. Burgett

September 18, 2012

PERSIS INTERNATIONAL, INC., AND EDWARD F. RICHARDS, PLAINTIFFS,
v.
BURGETT, INC., DEFENDANT.



The opinion of the court was delivered by: Judge Ronald A. Guzman

MEMORANDUM OPINION AND ORDER

Persis International, Inc., which sells and distributes pianos, and Edward Richards (collectively, "Persis") filed suit against Burgett, Inc. for contributory trademark infringement and contributory unfair competition under §§ 32 and 43(a) of the Lanham Act, 15 U.S.C. §§ 1114 and 1125(a) (Count I), unfair competition under § 43(a) of the Lanham Act, 25 U.S.C. § 1125(a) (Count II), common law unfair competition (Count III), and violation of the Illinois Deceptive Trade Practices Act (Count IV). Burgett counterclaimed for trademark infringement (Count II) and unfair competition by infringement of common law rights (Count III).*fn1 The parties cross-move for summary judgment as to each of these claims. For the reasons stated below, Persis' motion for summary judgment is granted in part and denied in part and Burgett's motion for summary judgment is granted in part and denied in part.

I. Facts*fn2

Persis is a Nevada corporation with its principal place of business in Chicago, Illinois. (Def.'s LR 56.1(a) Stmt. Fact, Dkt. # 202, ¶ 1.) Edward F. Richards resides in Chicago and is the President and sole shareholder of Persis. (Id. ¶ 2.) Burgett is a California corporation with its principal place of business in California. (Id. ¶ 3.)

A stylized depiction of the trademark SOHMER was first used in connection with the sale of pianos in 1872. (Pls.' LR 56.1(a) Stmt. Fact, Dkt. # 195, ¶ 7.) Prior to May 17, 1996, Mason & Hamlin Corporation was the owner of four SOHMER trademark registrations: (1) U.S. Reg. No. 119,130; (2) U.S. Reg. 137,464; (3) U.S. Reg. No. 1,786,687; and (4) U.S. Reg. No. 85,691. (Id. ¶ 8.) In 1996, Burgett acquired certain assets of Mason & Hamlin in bankruptcy, including the first three of the aforementioned SOHMER trademarks ("Burgett registrations"). (Id. ¶ 10.) The fourth trademark registration was permitted to expire by Mason & Hamlin in 1992. (Id.) Burgett did not maintain its three SOHMER registrations in a timely manner because it failed to file a declaration of continued use and corresponding renewal application. (Id. ¶ 11.) Thus, by the end of 2001, each of the registrations had been canceled by the United States Patent and Trademark Office based on the failure to renew. (Id.) Between 1996 and March 5, 2001, Burgett did not sell, distribute or manufacture any pianos bearing the SOHMER trademark. (Id. ¶ 12.)

Between 1996 and March 11, 2009, Burgett had a sign outside its manufacturing facility in Massachusetts that said "Mason & Hamlin Companies" and underneath in smaller letters stated "Falcone Sohmer."*fn3 (Def.'s Ex. 6, Ex. 1, photograph of sign.) Between 1996 and November 26, 2001, Burgett failed to execute any license or assignment of rights in the SOHMER trademark in connection with the sale of pianos. (Pls.' LR 56.1(a) Stmt. Fact, Dkt. # 195, ¶ 14.) In 1999, Burgett authorized the destruction of the five SOHMER plate patterns used by its predecessors to manufacture cast iron piano plates. (Id. ¶ 15.) In August 2000, an article appeared in the publication Music Trades stating that Burgett was focusing on its most profitable brands of Pianodisc and Mason & Hamlin while sharply curtailing its Knabe and George Steck piano brands. (Id. ¶ 16.) The article makes no mention of Sohmer. (Id.)

On February 15, 2001, Richards filed with the USPTO United States Trademark Application No. 76/210,248 for the mark SOHMER on an intent to use basis in association with pianos. (Id. ¶ 17.) On February 23, 2001, Richards filed United States Trademark Application No. 76/214,968 for the mark SOHMER on an intent to use basis in association with pianos. (Id. ¶ 18.) On March 5, 2001, Burgett sold one piano to one of its employees, Daniel Mattson-Boze, for $600.00. (Id. ¶ 19.) Burgett's counsel described the sale to Mattson-Boze as a "special sale" and an "odd bird." (Id. ¶ 21.) Gary Burgett testified that, with respect to the piano sold to Mattson-Boze, Burgett (the company) stenciled the SOHMER name on a piano manufactured by Knabe because of advice from their attorney that it needed to "show evidence that you have sold a Sohmer piano." (Id. ¶ 22; Burgett Dep. Tr., Pl.'s Ex. 5, at 60.)*fn4

On November 26, 2001, Burgett executed a Trademark License and Assignment Agreement with Alliance Music Group, Inc., K.H. Chu, and Robert Jones whereby Burgett granted them an exclusive license of its SOHMER trademark rights. (Pls.' LR 56.1(a) Stmt. Fact, Dkt. # 195, ¶ 27.) In 2002, Alliance Music Group, Inc., K.H. Chu, and Robert Jones were aware that Richards had filed a trademark application for and had commenced use of the SOHMER trademark. (Id. ¶ 28.) According to Gary Burgett, Burgett had entered into the Agreement in order to sell more PianoDisc player systems. (Id. ¶ 29.) The rights acquired by Alliance Music Group, Inc. under the Trademark License and Assignment Agreement were assigned to Samick Music Corporation on March 24, 2003. (Id. ¶ 30.) Burgett claims that Samick's sales of SOHMER branded pianos totaled $8,384,032.00 between 2003 and 2009 and that it received approximately $83,000.00 in royalties during that period. (Id. ¶ 33.)

At all times between November 26, 2001 and March 17, 2009, Burgett was aware that Persis was using the SOHMER trademark in interstate commerce. (Id. ¶ 39.) At all times between December 4, 2001 and December 28, 2009, Samick was aware that Persis was using the SOHMER trademark in interstate commerce. (Id. ¶ 40.) Between 2003 and 2009, piano dealers were aware that the SOHMER trademark was being used by both Persis and Burgett (via Samick) in connection with the pianos. (Id. ¶ 41.)

On July 25, 2003, Burgett filed United States Trademark Application No. 76/535,595 with the USPTO for the mark SOHMER on an intent to use basis in association with pianos. (Id. ¶ 43.) On September 8, 2003, Burgett filed United States Trademark Application No. 76/546,304 for the mark SOHMER & CO. on an intent to use basis in association with pianos with the USPTO. (Id. ¶ 44.)

On March 11, 2009, Burgett assigned all of its purported rights in and to the SOHMER trademark, including trademark application Serial Nos. 76/214,968, 76/535,595, and 76/546,304 to Samick Music Corporation and recorded it with the USPTO on March 17, 2009. (Id. ¶ 45.) The assignment between Burgett and Samick contains a transfer from Burgett to Samick and its successors of all rights to sue for past, present, and future acts of infringement related to the SOHMER trademark. (Id. ¶ 46.) On December 28, 2009, Samick assigned the Burgett Sohmer Application to Persis; thus, an ongoing proceeding between the parties before the Trademark Trial and Appeal Board was dismissed as moot in January 2010. (Id. ¶ 47.)

Persis expressly abandoned the Burgett Sohmer Application on May 4, 2010. (Id. ¶ 48.) The Persis Sohmer Application matured to Registration No. 3,843,417 on September 7, 2010. (Id. ¶ 49.) As a result, Persis currently owns all right, title and interest to the common law and federal trademark rights in the SOHMER mark. (Id. ¶ 50.)

II. Summary Judgment Standard

Summary judgment is proper "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed R. Civ. P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Thus, in order to withstand a motion for summary judgment, the nonmoving party must show that a dispute about a genuine issue of material fact exists. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The nonmoving party may not merely rest upon the allegations or details in his pleading, but instead, must set forth specific facts showing there is a genuine issue for trial. See Celotex, 477 U.S. at 322; Anderson, 477 U.S. at 248. To succeed on a summary judgment motion, the evidence must be such "that [no] reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S at 248.

III. Analysis

A. Persis' ...


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