Entrepreneur magazine wins at trial after losing summary judgment appeal

In Entrepreneur Media Inc v Smith (CV98-3607 FMC (CTx)), the US District Court for the Central District of California has issued a permanent injunction restraining the defendant from using the term 'entrepreneur' as a trademark or trade name. This decision comes in spite of a prior Court of Appeals ruling against the plaintiff in which it was held that its ENTREPRENEUR mark was descriptive and therefore weak.

Entrepreneur Media has published Entrepreneur magazine, a monthly publication featuring small businesses, since 1978, and is the owner of federal registrations for ENTREPRENEUR for magazines, books and published reports. The defendant, an individual called Scott Smith, started a public relations company in 1995 under the name ICON Publications and distributed a publication that was initially entitled Yearbook of Small Business Icons. In 1997 after receiving favourable publicity in Entrepreneur, Smith changed the name of his company to Entrepreneur PR and the name of his yearbook to Entrepreneur Illustrated. Entrepreneur Media sued for, among other things, trademark infringement and unfair competition.

The case was decided on motions for summary judgment by both parties. The District Court for the Central District of California granted Entrepreneur Media's motion on its trademark infringement and unfair competition claims, awarded damages, and granted a broad injunction preventing Smith from using the term 'entrepreneur' for his goods and services.

On appeal, however, the Court of Appeals for the Ninth Circuit ruled that ENTREPRENEUR was descriptive and was therefore entitled to only limited protection. The appellate court reversed the lower court's decision of trademark infringement and its damages award. It remanded the case and recommended that the district court impose only a very limited injunction.

After the bench trial on remand, the district court reinforced its previous conclusions and found in favour of Entrepreneur Media. It held that extensive advertising and public recognition over 25 years have established ENTREPRENUER as a strong mark in the industry, deserving significant protection. The court also reasoned that Smith's uses were in an overlapping field and that he had deliberately infringed Entrepreneur Media's mark. It based this latter finding on evidence that Smith had:

  • prior knowledge of Entrepreneur magazine;

  • made representations that he was affiliated or associated with the magazine;

  • used Entrepreneur Media's masthead in his press releases; and

  • made unauthorized use of Entrepreneur Media's registered design mark on his website.

The court concluded that there was substantial evidence of actual confusion based upon the testimony of several credible witnesses, as well as a likelihood of confusion based upon expert testimony from a linguistic perspective.

Accordingly, the district court found the case to be exceptional and awarded all of Smith's profits from his infringing use of the ENTREPRENEUR mark and reasonable attorneys' fees to Entrepreneur Media.

Reports suggest that Smith plans to appeal.

Thomas M Small, Birch Stewart Kolasch & Birch LLP, Los Angeles

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