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Salu, Inc. v. Original Skin Store

April 12, 2010

SALU, INC., A DELAWARE CORPORATION, PLAINTIFF,
v.
THE ORIGINAL SKIN STORE, AN ARIZONA LIMITED LIABILITY COMPANY, DEFENDANT.



The opinion of the court was delivered by: Frank C. Damrell, Jr. United States District Judge

MEMORANDUM AND ORDER

This matter comes before the court on defendant The Original Skin Store's ("TOSS") motion to dismiss for partial summary judgment pursuant to Federal Rule of Civil Procedure 56(d) with respect to plaintiff's trademark registration No. 3,087,484 (the "484 trademark") and on defendant's first affirmative defense of fraud on the United States Patent and Trademark Office ("USPTO"). Plaintiff Salu, Inc. ("Salu") opposes the motion. For the reasons set forth below,*fn1 TOSS' motion for partial summary judgment is DENIED.

BACKGROUND*fn2

Plaintiff Salu, dba SkinStore, owns and operates the website www.SkinStore.com, through which it has advertised and sold a variety of skin care and related products since 1997. (Compl., filed May 9, 2008, ¶ 7.) Defendant TOSS has been using THE ORIGINAL SKIN STORE as a trademark continuously since February 2004. (UF ¶ 19.) Plaintiff was not aware of TOSS until January 2008. (UF ¶ 27.)

On August 26, 1998, Brainbow, Inc. ("Brainbow") filed a trademark application for the two-word mark, SKIN STORE. (UF ¶ 1.) In a response dated January 21, 1999, the trademark examiner issued an office action refusing to allow registration upon the Principal Register, in part, because the two-word mark was merely descriptive as it immediately named a feature of the services. (UF ¶ 1.) On July 21, 1999, Brainbow amended the application to register the two-word mark on the Supplemental Register; the mark was registered on May 30, 2000 as Trademark No. 2,354,182. (UF ¶ 1.) In 2001, Salu acquired the rights to the two-word mark, SKIN STORE, by assignment. (UF ¶ 1.)

On May 2, 2005, Salu filed a trademark application for the one-word mark, SKINSTORE. (UF ¶ 2.) The application claimed ownership of the SKINSTORE mark and provided that "[the] mark has become distinctive of the goods/services through applicant's substantially exclusive and continuous use in commerce for at least the five year immediately before the date of this statement." (UF ¶ 2.) The applicant's claim of substantially exclusive use is made under declaration that all statements made on either knowledge or information and belief are true statements. (UF ¶ 2.) Salu's registration for the one-word mark, SKINSTORE, issued on May 2, 2006, Registration No. 3,087,484. (Ex. 2 to UF.)

Prior to its trademark application in 2005, Salu sent communications to Eternal Skin Care, Inc. ("ESC") of Vancouver, British Columbia, regarding its use of ESKINSTORE. (See UF ¶¶ 3-4.) In a letter dated April 10, 2003, Salu claimed a trademark right in the one-word mark, SKINSTORE, and referred to the registration of the two-work mark, SKIN STORE, on the supplemental register. (UF ¶ 3.) Salu asserted that ESC's use of ESKINSTORE was infringement because it was being used in commerce and was confusingly similar to SKINSTORE. (UF ¶ 3.) On July 19 and 20, 2004, Salu sent additional communications via email and federal express, further alleging use in commerce and intentional infringement and demanding a response within two weeks. (UF ¶ 4.) Salu threatened that it would take action if it did not receive a reply. (UF ¶ 4.)

On August 11, 2004, Salu sought recourse against the use of the term ESKINSTORE through the Uniform Domain Name Dispute Resolution Policy ("UDRP"), a method administered by the Internet Corporation for Assigned Names and Numbers ("ICANN"). (UF ¶ 5.)

Salu chose to use the World Intellectual Property Organization ("WIPO") Arbitration and Mediation Center. (UF ¶ 5.) Salu alleged that the use of www.eskinstore.com, which was registered on October 30, 2001, causes consumer confusion. (UF ¶¶ 6-7.)

On October 6, 2004, the WIPO panel issued a decision refusing to find a clear case of cybersquatting. (Ex. 4 to UF at 8.) Specifically, while the panel found "that the Domain name is confusingly similar to a service mark in which the [Salu] has rights," it concluded that there was insufficient evidence of bad faith and actual confusion. (Id. at 5-6.) The panel also noted that ESC "may be infringing" upon Salu's rights, but that the Panel was "not competent to assess the issue under US law." (Id. at 6.) As such, the panel declared that it "is of the view that this is the sort of dispute which would be better decided by a Court rather than by way of the UDRP." (Id. at 8.)

Salu disagreed with the panel's decision and considers ESKINSTORE to be "severely infringing" on its mark. (Ex. 5 to UF at 80:6.) Salu asserts that since the decision of the WIPO panel, it has been continually trying to discern who the owners of ESKINSTORE are and where they are located; it plans to take additional action once it gains this information. (Id. at 78:19-22).

Salu presents evidence that is has continually contacted anyone who it feels is infringing in order to protect its mark. (Id. at 116:23-25.) It has sent out over 300 cease and desist letters to alleged infringers in the last couple of years alone. (Id. at 116:14-15.) Salu claims that with the exception of ESKINSTORE, this litigation, and one other case that settled out of court, "every other infringer receives [the] letter and stops infringing on [the] trademark." (UF ¶ 17.)

Salu claims that it was not required, nor asked, by the USPTO, to submit evidences of uses that were either inconsequential or infringing. (UF ¶ 21.) The USPTO never requested additional evidence of acquired distinctiveness during the prosecution of Salu's May 2, 2005 application for the one-word mark, SKINSTORE. (UF ¶ 28.) Salu maintains that it is a senior user of the SKINSTORE term above all others. (UF ¶ 21.)

On May 9, 2008, plaintiff filed a complaint against TOSS in the Eastern District of California, alleging federal claims for trademark infringement and cybersquatting and a state law unfair business practice claim ...


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