Trademark troll strikes out in baseball bat suit

In another defeat for repeat trademark plaintiff Leo Stoller, the US Court of Appeals for the Seventh Circuit has affirmed summary judgment against him in his claim that baseball great George Brett and his company Brett Brothers Sports International Inc infringed alleged rights in the trademark STEALTH for baseballs and other sporting goods (Central Manufacturing Inc v Brett (F3d, 06-2083, July 9 2007)). The appellate court also affirmed the district court's cancellation of the STEALTH registration, which was owned by Stoller's company Central Manufacturing Inc and affirmed the court's award of attorneys' fees to Brett Brothers.

Brett Brothers, through a predecessor, first started using the mark STEALTH for a wood baseball bat in 1999. Since that time Brett Brothers has sold more than 25,000 STEALTH bats worldwide.

Stoller claimed that companies he controls started using the STEALTH mark for a wide range of products as early as 1982. In 1984 Stoller, through a company called Sentra Manufacturing, applied to register the STEALTH mark for various sporting goods, including baseballs. The US Patent and Trademark Office (USPTO) issued the registration in 1985, and in 1997 the registration was transferred to another Stoller company, Central Manufacturing. In 2001, Central Manufacturing applied to register the mark for baseball bats and a registration issued in 2004.

Central Manufacturing sued Brett and Brett Brothers, believing that because it registered the STEALTH mark for baseballs and other sporting goods in 1985, it has priority of use of the mark for baseball bats. The district and appellate courts disagreed because Central Manufacturing could produce no evidence that it ever used the STEALTH mark. The appellate court noted that registration provides prima facie evidence of ownership, but this can be rebutted. It observed that, "[u]ltimately, it is not the fact of registration that matters so much as the use of the mark in commerce".

In defending the claim, Brett Brothers argued that Central Manufacturing's 1985 registration was invalid due to non-use. The district and appellate courts agreed, with the Seventh Circuit making the following comment on Stoller's trademark registration practices:

"Stoller is no stranger to trademark litigation. Indeed, one might say it is the essential part of his business strategy. In fact, were there a 'Hall of Fame' for hyperactive trademark litigators, Stoller would be in it ... Stoller has federally registered scores of trademarks with the USPTO (Central [Manufacturing] lists upwards of 50 that are actual or pending for just the STEALTH mark), many containing everyday words that regularly pop up in commercial enterprise. When other companies or individuals inevitably make use of these words, Stoller issues cease-and-desist letters in the hopes that the user will blanche at the prospect of litigation and either agree to pay him a 'licensing fee' or yield to his claims of ownership and stop using the alleged mark altogether."

Rebuffing Stoller's claims in this case, the Seventh Circuit stated that it was unfathomable that a company claiming to have engaged in thousands of dollars of sales of a product for more than a decade could not produce even a single purchase order or invoice as proof. The appellate court also concluded that the district court had not abused its discretion in cancelling Central Manufacturing's registration of the STEALTH mark, nor in finding that this was an "exceptional case" warranting an award of attorneys' fees under the Lanham Act. In terms of the award of attorneys' fees, it noted that the test was to determine whether the case "lacked merit, had elements of an abuse of process claim, and [whether] plaintiff's conduct unreasonably increased the cost of defending against the suit". The appellate court concluded:

"Central's actions qualify on all counts! It filed an infringement lawsuit without evidence of any sales of baseballs or baseball bats to support its claim to rights in the STEALTH mark for such products. It ignored requests to produce documents to support its claim, forcing the defendants' lawyers to go to court to compel action. Stoller offered confused, misleading deposition testimony with unfulfilled promises of cooperation. And the documents eventually produced effectively made a mockery of the entire proceeding. We have no trouble upholding the award of fees and costs."

David S Fleming, Brinks Hofer Gilson & Lione, Chicago