Fuel Clothing Co. v. Nike, Inc.

7 F.Supp.3d 594

FUEL CLOTHING COMPANY, INC., Plaintiff,

v.NIKE, INC., Defendant.

C/A No. 3:12–00555–MBS.

United States District Court,

D. South Carolina,

Columbia Division.

Signed March 20, 2014.

John E. Schmidt, III, Melissa J. Copeland, Schmidt and Copeland, Columbia, SC, for Plaintiff.

Steve Allen Matthews, Haynsworth Sinkler Boyd, Columbia, SC, Audra Eidem Heinze, Christopher J. Renk, Erik S. Maurer, Michael Harris, Banner and Witcoff, Chicago, IL, for Defendant.

ORDER AND OPINION

MARGARET B. SEYMOUR, Senior District Judge.

On February 27, 2012, Fuel Clothing Company, Inc. (“Plaintiff” or “Fuel”) filed the within action against Nike, Inc. (“Defendant” or “Nike”), asserting causes of actions for federal trademark infringement, common law trademark infringement and unfair competition, federal unfair competition and false designation of origin, federal trademark dilution, and violations of the South Carolina Unfair Trade Practices Act (“SCUTPA”). ECF No. 1. On May 7, 2012, Nike filed its answer, in which it denied all allegations and asserted counterclaims for declaratory relief. ECF No. 10. Fuel answered Nike's counterclaims on May 23, 2012. ECF No. 19. On May 23, 2013, Nike filed a motion for summary judgment, ECF No. 68, to which Fuel filed a response on June 10, 2013. ECF No. 83. Nike filed a reply on June 20, 2013. ECF No. 96. The court held a hearing on Nike's motion for summary judgment on November 4, 2013.

I. RELEVANT FACTUAL AND PROCEDURAL BACKGROUND

Fuel manufactures and markets apparel and accessories for the actions sports industry, which includes skateboarding, snowboarding, surfing, motocross, auto racing, mountain biking, and BMX biking. ECF No. 1 at 2, ECF No. 69–2 at 6–7. Fuel's products are sold across the United States through Fuel's own retail store in Hilton Head Island, South Carolina; through retail stores across the country; and through the Internet. ECF No. 83 at 3. Fuel's current sole-owner and president, Shane Gould (“Mr. Gould”), co-founded the company in 1992. Id. Since its beginnings, Fuel's products have borne the “Fuel” mark, which is protected by Fuel's trademark, U.S. Trademark Registration No. 2,290,931 (“the '931 Registration”). ECF No. 83–1 at 1. Fuel applied for this trademark in 1998, and the United States Patent and Trademark Office placed the “Fuel” mark on the Principal Register for clothing goods in November 1999. Id. Specifically, the “Fuel” mark is registered in International Class 25 for use in connection with “clothing, namely coats, hats, shirts, skirts, dresses, swim wear, sweaters, T-shirts, tank tops, socks, belts and pants.” Id.

With regard to the format of the “Fuel” mark, Mr. Gould indicated in his deposition testimony that his company “[has] a thousand different [uses]” for the “Fuel” mark. ECF No. 69–2 at 131. These multiple formats include various colors, designs, shapes, and fonts displaying the “Fuel” mark. See ECF Nos. 70–10, 70–11. In some instances, the “Fuel” mark is accompanied by an additional image, such as a flame or a skull. See id. Additionally, some uses of the mark include phrases, such as “Fuel Station Ride Shop” and “Powered by Fuel.” See ECF No. 70–11.

Since its beginnings in 1992, Fuel has taken steps to protect its mark against numerous companies that have allegedly sought to infringe on its mark, including litigation proceedings with five separate companies and agreements with almost twenty other companies. ECF No. 83–1. These steps have included litigation proceedings against Fuel TV, Inc. and Safari Shirt Company, both of which were resolved by settlement agreements. Fuel has also negotiated an agreement with Fuel Helmets, Inc. regarding each party's respective use of “Fuel.” ECF No. 68–1 at 12.

The within action arose following Nike's use of the term “Fuel” in connection with the sale of sports products and related apparel, including electronic wristbands and promotional t-shirts. Nike is a global marketer of athletic footwear, apparel, and equipment. ECF No. 68–1 at 15. In furtherance of its mission to “bring motivation and inspiration to every athlete[ ] in the world,” Nike “invented a new metric” to measure a person's daily physical activity, including calories expended and steps taken. ECF No. 68–1 at 15. Nike named this new metric “NikeFuel” to convey the nature of the metric to consumers. Id. To measure “NikeFuel” points earned, Nike created the NIKE+FUELBAND, an electronic wristband that tracks physical activity metrics including calories expended, steps taken, and “NikeFuel” points earned. Id. The name of the NIKE+FUELBAND derives from the “NikeFuel” point system, with “Fuel” referring to the “NikeFuel points” obtained through daily physical activity and “Band” indicating that the product is worn on the wrist. Id. at 16.

The NIKE+FUELBAND includes the Nike “swoosh” mark on the clasp of the product. Id. The display screen of the NIKE+FUELBAND is scrolling, meaning it displays different images at different times, including Nike's “swoosh” mark and the “Fuel” mark. Id. The packaging of the NIKE+FUELBAND includes the “swoosh” mark, the “NIKE+FUELBAND” symbol in all capital letters, and an image of the word “FUEL” displayed on the digital screen of the band. Id. The NIKE+FUELBAND launched to consumers in January 2012. Id.

In conjunction with the launch of the NIKE+FUELBAND, Nike sold promotional t-shirts bearing descriptive phrases such as “Fuel it up,” “Fuel the people,” and “Fuel this.” Id. at 17. These promotional t-shirts also contained the Nike “swoosh” symbol on the lower front and the “NIKE+FUELBAND” mark on the back of the shirts. Id. at 17–18. Nike contends that “these shirts amount to less than one-percent of all [NIKE+FUELBAND] sales.” Id. at 18. To further promote the NIKE+FUELBAND, Nike released a video featuring three famous athletes, with one athlete running (soccer star Hope Solo), one athlete weightlifting and playing basketball (football star Ndamukong Suh), and one athlete skateboarding (professional skateboarder Paul Rodriguez). Id. In the video, each of the athletes is wearing the NIKE+FUELBAND. Id.

Following the launch of the NIKE+FUELBAND, the United States Patent and Trademark Office allowed “NIKE + FUELBAND” to be registered as a trademark in International Class 9 for electronic monitoring devices, International Class 10 for health monitoring devices, and International Class 14 for watches and bracelets. ECF No. 72–10. The United States Patent and Trademark Office also allowed “NIKEFUEL” to be registered as a trademark in International Class 9 for electronic monitoring devices, International Class 38 as a website featuring information regarding fitness and training, International Class 41 for providing access to on-line live workouts and fitness instructions, and International Class 42 as an interactive website allowing users to monitor fitness. Id. Nike did not seek trademark registration in International Class 25 for apparel, the class in which the “Fuel” mark is registered. Id.

Fuel alleges in its complaint that Nike's use of the “Fuel” mark is likely to cause confusion among consumers and is infringing on Fuel's mark. ECF No. 1. Nike denies any infringement on Fuel's mark and moves for summary judgment as to all of Fuel's claims.

II. STANDARD OF REVIEW

Summary judgment should be granted “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). A fact is “material” if proof of its existence or non-existence would affect the disposition of the case under the applicable law. Anderson v. Liberty Lobby Inc., 477 U.S. 242, 248–49, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A genuine question of material fact exists where, after reviewing the record as a whole, the court finds that a reasonable jury could return a verdict for the non-moving party. Newport News Holdings Corp. v. Virtual City Vision, 650 F.3d 423, 434 (4th Cir.2011). Summary judgment “is as appropriate in a trademark case as in any other case and should be granted or denied on the same principles.” George & Co., LLC v. Imagination Entm't Ltd. (George I ), No. 1:07CV498 (LMB/TRJ), 2008 WL 2883771, at *2 (E.D.Va. July 25, 2008), aff'd,575 F.3d 383 (4th Cir.2009).

In ruling on a motion for summary judgment, a court must view the evidence in the light most favorable to the non-moving party. Perini Corp. v. Perini Constr., Inc., 915 F.2d 121, 123–24 (4th Cir.1990). The non-moving party may not oppose a motion for summary judgment with mere allegations or denials of the movant's pleading, but instead must “set forth specific facts” demonstrating a genuine issue for trial. Fed.R.Civ.P. 56(e); see Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson, 477 U.S. at 252, 106 S.Ct. 2505; Shealy v. Winston, 929 F.2d 1009, 1012 (4th Cir.1991). All that is required is that “sufficient evidence supporting the claimed factual dispute be shown to require a jury or judge to resolve the parties' differing versions of the truth at trial.” Anderson, 477 U.S. at 249, 106 S.Ct. 2505. “Mere unsupported speculation ... is not enough to defeat a summary judgment motion.” Ennis v. Nat'l Ass'n of Bus. & Educ. Radio, Inc., 53 F.3d 55, 62 (4th Cir.1995). A party cannot create a genuine issue of material fact solely with conclusions in his or her own affidavit or deposition that are not based on personal knowledge. See Latif v. Cmty. Coll. of Baltimore, 354 Fed.Appx. 828, 830 (4th Cir.2009).

III. DISCUSSION

Nike moves for summary judgment on two separate grounds. First, Nike contends that all of Fuel's claims fail as a matter of law because Fuel has abandoned its mark through naked licensing. Second, Nike contends that Fuel's federal trademark infringement, common law trademark infringement and unfair competition, federal unfair competition and false designation of origin, and SCUTPA claims fail as a matter of law because...