The panel affirmed in part and reversed in part the district court’s judgment, after a bench trial, in favor of the defendant in a trademark infringement action under the Lanham Act.
Defendant Omnia Italian Design, Inc., copied and began selling the same goods branded with the mark of its (now ex) business partner, retail furniture company Stone Creek, Inc. Reversing in part, the panel held that Omnia’s use of Stone Creek’s mark was likely to cause confusion. The panel rejected Omnia’s invocation of the common law defense, known as the Tea Rose-Rectanus doctrine, that protects the use of a mark in a remote geographic area when the use is in good faith. Agreeing with the Seventh and Eighth Circuits, the panel held that Omnia’s knowledge of Stone Creek’s prior use defeated any claim of good faith. Accordingly, Omnia was liable for infringement of the Stone Creek mark.
Agreeing with the Federal Circuit, the panel confirmed that a 1999 amendment to the trademark statutes did not sweep away precedent requiring that a plaintiff prove willfulness to justify an award of the defendant’s profits. The panel remanded for a determination of whether Stone Creek had the requisite intent.
The panel affirmed in part and reversed in part the district court’s imposition of sanctions under 28 U.S.C. § 1927.