The Chicago Cubs and Major League Baseball are suing more than 30 Wrigleyville vendors, accusing them of selling counterfeit merchandise, infringing on trademarks and “deliberately free riding on the success of the Cubs.”
In a 32-page complaint filed in federal court on Sept. 22, the plaintiffs accuse seven individual defendants and 30 other unidentified parties of selling knock-off merchandise without a license or permit.
The Cubs and the National League are seeking preliminary and permanent injunctive relief to stop the defendants from selling the merchandise. The plaintiffs are also pushing for the defendants to surrender any profits, and pay the plaintiffs damages for “willful and intentional” use of the trademarked logos.
The Cubs’ legal team is working quickly, evidenced by the photos included in the complaint being taken only a week prior to the filing. For the defendants, the cost of litigation and resources the plaintiffs have will likely supersede their chances of arguing a successful defense, even though it took years for the Cubs to take action.
The photos in the complaint show defendants’ unlicensed merchandise like T-shirts, hats and flags in suitcases and at make-shift tables on the streets outside Wrigley Field. The Cubs allege that the use of “identical, substantially indistinguishable, and/or confusingly similar” images of the marks may deceive or mislead purchasers who believe they are buying goods manufactured and licensed by the Cubs or MLB.
The complaint lists the marks and indicia at issue, including the Cubs “C” logo, the “W” flag, the Cubs face, the Cubs bear inside the “C” and “Chicago” logo, as well as the words “Cub,” “Cubs” and “Cubbies.”
The Cubs also claim rights to references in team history (“1908”), geographic references, traditions like “Go Cubs Go,” names or images of past and present Cubs players and imagery or references related to Wrigley Field.
One of the defendants identified in the complaint has been doing business online as “Chi Apparel.” One party with Chi Apparel responded to the allegations, stating the Cubs never asked that he remove the apparel from his website and stated he would be willing to take down any merchandise deemed protectable intellectual property.
Of course, all of the defendants involved in the lawsuit will have the option to challenge the suit in court, but the legal fees relative to profits derived may not make it worthwhile, particularly given the strength of the plaintiffs’ case. The defendant operating the website Chi Apparel stated he only made about $100 per month from shirt sales.
Assuming at least some defendants challenge the lawsuit, the defenses may vary depending on the nature of the items and marks at issue.
In the past, defendants have been successful in challenging trademark violation claims brought by MLB relying on a parody defense protected under the First Amendment. Cardtoons L.C. v. Major League Baseball Players Association, 95 F.3d 959 (10th Cir. 1996). In order for a parody defense to be successful, it must clearly make fun or mention the original trademark, and the parody must not cause any financial loss to the value of the original trademark.
While some of the merchandise sold by the Wrigleyville vendors might meet the first element of a parody defense, it is very unlikely they can prove they did not cause any financial loss to the value of the original trademark. Unlike the trading cards at issue in Cardtoons, the counterfeit merchandise does not have disclaimers stating it is not licensed by MLB, nor is the sole purpose of the merchandise humor or entertainment.
Further, in the instant case, the vendors are using the trademarked logos and indicia in the same way as the original trademarks were intended, dooming a possible parody defense.
Another possible defense might be that the trademark owners waived their right to sue for infringement because they waited so long to take action. Unaffiliated vendors are certainly not a new sight outside Wrigley Field. The three basic doctrines that result in the loss of the ability to enforce, if proved successfully, include acquiescence, laches and waiver.
The laches doctrine might be the most successful because it does not require proof of implied consent or a relinquishment of rights. Recent cases have reinforced the importance of laches in trademark litigation. See e.g. Fitbug Ltd. v. Fitbit Inc., 78 F. Supp. 3d 1180 (N.D. Cal. 2015). To prove laches, a defendant must show an unreasonable lack of diligence by the plaintiff and prejudice arising therefrom.
The Cubs did not take action against the Wrigleyville vendors for years, and it would be difficult to prove that they did not know it was taking place right outside the gates during every home game. On the other hand, the defendants might have a difficult time overcoming the “clean hands” requirement needed to successfully assert the defense of laches.
A defendant that intentionally infringes a trademark in bad faith will be unable to prevail with a laches defense. Ultimately, it will likely be very difficult for defendants in this case to show they were not aware of the illegal use of the MLB and Cubs trademarks on their own merchandise and show that they were acting in good faith.
While the defendants have options in court, their best bet might be to agree to stop sales and pay a nominal settlement.
The 30 unidentified vendors should proceed with caution as well, because the Cubs are also seeking a court order allowing them to work with law enforcement to seize any counterfeit goods being sold during games. This may allow room to amend the complaint later with alleged counterfeiters found.
Regardless of the final result in court, the Cubs will likely be able to discourage many of the unlicensed Wrigleyville vendors for the upcoming playoffs and secure higher profits from merchandise sold in the coming weeks.