Petition for Rehearing — M2 Software, Inc. v. Viacom, Inc. (No. 07-202)

h

In the Susciene Court of the Anited States

FILED

@) DEC 21 2007

a No. 07- 202 2 OFFICE OF lal ERK

A

v

M2 SOFTWARE, INC.,

Petitioner,

Vv.

VIACOM, INC., VIACOM INTERNATIONAL, INC.,

MTV NETWORKS COMPANY,

Respondents

ee

-

On Petition for a Writ of Certiorari to the United

States Court of Appeals for the Ninth Circuit

t

PETITION FOR REHEARING OF A DENIAL OF

CERTIORARI

MARK L. PETTINARI

Counsel of Record

LAW OFFICES OF MARK L. PETTINARI

Stock Exchange Tower

155 Sansome Street, Suite 400

San Francisco, CA 94104

Tel (415) 240-4200

Counsel for Petitioner

:

QUESTION PRESENTED

The Lanham Trademark Act of 1946, 15 U.S.C. §

1051 et seq., provides a variety of remedies for

infringement, including injunctive relief, damages

and lost profits. It also authorizes courts to award

the plaintiff some portion of the infringer’s profits

attributable to the infringement. The question

presented is:

Whether a_ trademark owner alleging

infringement of a registered mark must show

willfulness as a precondition to recovering a portion

of the’ infringer’s profits attributable to

infringement.

li

TABLE OF CONTENTS

REASONS FOR GRANTING REHEARING ................... 1

I. STATUTORY BACKGROUND........... 3

es, eet IN I IOI... -ccvncorvvcesusenchecsoovcnncdecs 3

B. The Current 15 U.S.C. § 1117(a), As

Amended in 1999, May Clarify the

EE aM ee oe nO ee ea 4

C. The Ninth Circuit Requires An

Opportunity to Examine the Clarifying

Effect of the Statute ..............cccccccssseees 7

II. A GVR WILL ALLOW THE NINTH

CIRCUIT TO CONSIDER THE CURRENT

STATUTE, 15 U.S.C. § 1117(a), AS AMENDED.9

PETES aE 13

CERTIFICATION OF COUNSEL (RULE 44).............. 14

iii

TABLE OF AUTHORITIES

CASES

ABKCO Music, Inc. v. LaVere, 217 F.3d 684 (9th

<A RES ERARSE Bue ree ses are Meck eee alc Eee 8

Banjo Buddies, Inc. v. Renosky, 399 F.3d 168 (3d

I A I i OO 11

Blau v. YMI Jeanswear, Inc., 129 Fed. Appx. 385

(9th Cir. 2005), cert. denied, 126 S. Ct. 660 (2005)

send teeclendibiendipcigtianiicaiadeidintappnialaticslbie saiaisaiitadatinataneliiniiaaiatiaed: 11

Braxton v. U.S., 500 U.S. 344 (1991) .......... ee 1

Cartier v. Aaron Faber, Inc., 512 F.Supp.2d 165

S.D.IN. 5. SORE. BT, BOGOF) ..ccsvcccssecccscencovseccees passim

Contessa Food Products Inc. v. Lockpur Fish

Processing Co. Ltd., 123 Fed. Appx. 747 (9th Cir.

2005), cert. denied, 126 S. Ct. 472 (20085)........... 11

George Basch Co. v. Blue Coral, Inc., 968 F.2d 1532

er iiaticicisceniialsanctunietinedinclebclebiasinanacnctotunii 6

Griffith v. Kentucky, 479 U.S. 314 (1987).............. 12

K and N Engineering, Inc. v. Bulat, 06-55115 (9th

SN 5 I ind ivicicanladacttilicn Sicdenmalbiscdsebaaians 1

K and N Engineering, Inc. v. Bulat,--- F.3d ---, 2007

WL 4394416 (9th Cir. Dec. 18, 2007) .............00.... 2

Lawrence v. Chater, 516 U.S. 163 (1996)..... 9, 11, 12

Lindy Pen Co. v. Bic Pen Corp., 982 F.2d 1400 (9th

Cir.), cert. denied, 510 U.S. 815 (1999)......... 3, 6, 7

Louisiana v. Hays, 512 U.S. 1230 (1994).......0000.... 10

Malletier v. Dooney & Bourke, Inc., 500 F.Supp.2d

a ares hk Se BE, Fe iciniensncvnsitonetnieeveiiets 6, 7

Moseley v. V Secret Catalogue, Inc., 537 U.S. 418

RTE LER eee Ce eke Padre CORLEONE DP en eee MEE a 4

Quick Technologies v. Sage Group, 313 F. 3d 338

SU IE. SHEED lnsictiauseasadsbiscticniacedonciaaiehs a 11

iv

Sands, Taylor & Wood Co. v. Quaker Oats Co., 978

F.2d 947 (7th Cir. 1992), cert denied 113 S Ct

ITE Saditaitidianespticeaidsadidlictdisbstidicncropsseciimentes 4

Schmidt v. Espy, 513 U.S. 801 (1994)................. 10

Sioux Tribe of Indians v. United States, 329 U.S.

RS a i a a 10

Synergistic Intl, LLC v. Korman, 470 F.3d 162 (4th

I tn as salu icbualibes 11

Thomas & Betts Corp. v. Panduit Corp. 108

PB. 20 STS CN.D.1E1. BOO) ocvvcessvsvescvecccsccccsesssee 9

U.S. v. Jannotti, 673 F.2d 578 (3d Cir. 1982).......... 8

Wal-Mart Stores, Inc. v. Samara Bros., Inc., 529

Se Se ID iui tirndciensaibntsindenttiictisanubvonuionabbuseladetens 9

Youngblood v. West Virginia, 126 S.Ct. 2188 (2006)

Fe SEL ec NU Rte Re DS INS RA SI 10

STATUTES

i ie ie. in ssi icipondecdsousbacebelaniitiovtees 3

I a i as taileris eudiesinnimnmnanion 2

ois seals cdiotienigidccseactinosaodions 3, 5, 9

pope SR Lp ESR unmee meee 3, 4, 5

St i cuubciseeuniniobepneuees 10

Trademark Amendments Act of 1999, Pub. L. No.

106-43, § 3(b), 113 Stat. 218, 219 .....................006 5

RULES

Na a llibaneeennnien 2

Supreme Court Rule 29. ..........s0ccccrcercsvesssorseresoseses 1

CG BIN GE oo ccibesevcsccsecvsccccccoceuseseveesseenes 1

Sepwemie Court Bade 46.2 .......cccscssccvccessesscvsvcsscessese 14

OTHER AUTHORITIES

Conway-Jones, D. Remedying Trademark

Infringement: The Role of Bad Faith in Awarding

an Accounting of Defendant’s Profits, 42 Santa

Clara 1. Rev. 86S, SOG (BOOZ) ....ccrecccesseccsscesceeseeses 7

1

Pursuant to Rule 44, Petitioner M2 Software,

Inc. respectfully submits a petition for rehearing

of our Petition for Certiorari (“P-Cert.”)! docketed

August 14, 2007 and denied November 26, 2007.

REASONS FOR GRANTING REHEARING

A rehearing of an order denying certiorari is

available where either: (i) there are “intervening

circumstances of a substantial or controlling

effect,” or: (il) the petition raises “other

substantial grounds not previously presented.”

R. 44.2. Both are presented here. Substantial

grounds not previously presented demonstrate

that a GVR procedure is proper to allow the

Ninth Circuit to examine the current, clarified

statute, 15 U.S.C. § 1117(a), with no

retrospective concerns. Respondents have

changed their position, and now acknowledge the

clarification potential of the 1999 amendment:

“Congress itself can eliminate a conflict

concerning a statutory provision by making

a clarifying amendment to the statute[.]”

Opp. 17, quoting Braxton v. U.S., 500 U.S. 344,

347-49 (1991) (emphasis added). In addition, on

December 18, 2007, the Ninth Circuit addressed

the question presented in the trademark case of

K and N Engineering, Inc. v. Bulat, 06-55115

(9th Cir., Dec. 18, 2007) (R-App. 1r-3r). The

Bulat court determined it was proper to consider

a variety of equitable factors other than a bright-

1 See P-Cert. ii (Rule 29.6 Corporate Disclosure Statement).

Other abbreviations herein: Petition Appendix (“P-App.”),

Brief in Opposition (“Opp.”), Reply of Petitioner (“P-Rep.”);

Rehearing Appendix (attached hereto) (“R-App.”).

2

line willfulness rule — the sole grounds for

dismissal of this case below. The Ninth Circuit

affirmed consideration of:

“* * *a wide range of [equitable] factors,

including the defendants’ financial

situation, their naiveté, their failure to

resolve the trademark violation through

settlement, and the extent of the

infringement.”

R-App. 3r. .As Petitioner had argued here, see P-

Cert. 21, 22 n. 11, 23 n.13, the new Ninth Circuit

decision does not treat willfulness as a bright-

line requirement under § 1114(1)(a) and

distinguishes the willfulness requirement under

the “innocent printer” exceptions of § 1114(1)(d)

and § 1114(2).2. The Ninth Circuit’s failure to

make this distinction in prior precedent has been

noted as a plain judicial error from which the

Ninth Circuit's willfulness requirement

originally evolved. See P-Cer. 23 n. 13.

2 The Bulat case corrects that error in distinguishing “use

in commerce” [§ 1114(1)(a)] from mere printing (see P-Cert.

22 n.11): “Because [Defendants] sold decals with K&N

marks * * * they were not engaged solely in the business of

printing the mark or violating matter for others, and thus

were neither innocent infringers nor innocent violators

capable of raising the innocent printer defense under 15

U.S.C. § 1114(2)(A).” R-App. 3r. (emph. added). The Ninth

Circuit decided this issue in a unpublished memorandum

on the same date as it decided the remainder of the issues

on appeal in a published opinion. See K and N

Engineering, Inc. v. Bulat,--- F.3d ---, 2007 WL 4394416, *1

n.1 (9th Cir. Dec. 18, 2007). Nonetheless, the unpublished

decision can be cited. FRAP Rule 32.1(a).

Finally, another’ intervening decision

demonstrates the fatal flaw in the Ninth Circuit’s

decision to overlook the possibility that the

current statute clarifies, rather than changes,

pre-existing law. See Cartier v. Aaron Faber,

Inc., 512 F.Supp.2d 165 (S.D.N.Y. Sept. 27,

2007). Rehearing is appropriate to issue a GVR

to permit the Ninth Circuit the opportunity to

consider 15 U.S.C. § 1117(a), as amended.

I. STATUTORY BACKGROUND

A. The Issue Presented

Under the statute for trademark infringement

(15 U.S.C. § 1114(1)(a)) and monetary recovery

for trademark infringement (15 U.S.C. § 1117(a)),

some Circuit Courts require “willfulness” as a

requirement for monetary relief. Other Circuit

Courts do not. P-Cert. 12-19.

The controlling case in the Ninth Circuit,

Lindy Pen Co. v. Bic Pen Corp., 982 F.2d 1400,

1405 (9th Cir.), cert. denied, 510 U.S. 815 (1993),

see P-App. 3a, defines willfulness as “willfully

calculated to exploit the advantage of an

established mark.” TJd., quoting Playboy

Enterprises, Inc. v. Baccarat Clothing Co., Inc.,

692 F2d 1272, 1274 (9th Cir. 1982) (emphasis

added). That strict and contested requirement

(akin to the original language of a different

dilution section for famous marks)’ creates a

3 Cf. 15 U.S.C. § 1125(c)(2) (prior to October 2006

amendment) (‘willfully intended to trade on the owner's

reputation”).

4

paradox‘ that entirely forecloses relief for many

small and growing companies. It ignores other

deliberate or bad faith infringement of a

registered trademark that, while not “willful”

under this definition, is equally destructive of a

company’s identity. Sands, 978 F.2d at 961.

B. The Current 15 U.S.C. § 1117(a), As

Amended in 1999, May Clarify the Issue

The “dilution” cause of action under § 1125(c)

was created by the Federal Trademark Dilution

Act of 1995, amending the Lanham Act. See

Moseley v. V Secret Catalogue, Inc., 537 U.S. 418,

420 (2003). “Dilution” arises when a junior user’s

similar mark dilutes the commercial

effectiveness of a famous mark even if used in a

completely different industry (like “Kodak

hamburgers’). Jd. This contrasts with trademark

“infringement” (at issue here) applicable to even

non-famous marks, arising when a junior user

causes a likelihood of confusion by adopting a

confusingly similar or identical mark in the same

or related field. 15 U.S.C. § 1114(a).

Since its 1995 inception, the dilution

subsection, § 1125(c), has always required

willfulness for monetary relief. This contrasts

with the infringement subsection, § 1114(1)(a),

which does not specify a willfulness requirement.

P-Cert. 5, 15. The damage provision of the Act,

4 “In a reverse confusion case, of course, the defendant by

definition is not palming off or otherwise attempting to

create confusion as to the source of his product. Thus, the

‘intent’ factor * * * is essentially irrelevant * * *.” Sands,

Taylor & Wood Co. v. Quaker Oats Co., 978 F.2d 947, 961

(7th Cir. 1992), cert denied 113 S Ct 1879 (1993) (emphasis

in original).

0

§ 1117(a), is qualified by the phrase “subject to

the principles of equity.” In 1995, when the

“dilution” provision was added to the Lanham

Act, Congress did not add reference to § 1125(c)

within § 1117(a).

In 1999, Congress amended § 1117(a) to cross-

reference the § 1125(c) dilution subsection added

in 1995.5 P-Cert. 24. In so doing, as a practical

matter Congress ultimately juxtaposed — in the

same single sentence for the first time — the

§ 1125(c) dilution requirement of “a _ willful

violation” (a requirement already present in §

1125(c)) against the § 1114(a) requirement of “a

violation.” The text of § 1117(a) now reads:

When a violation of any right of the

registrant of a mark registered in the

Patent and Trademark Office fe.g. §

1114(1)(a)} , a violation under section

1125(a) or (d) of this title, or a willful

violation under section 1125(c) of this title,

shall have been established in any civil

action arising under this Act, the plaintiff

shall be entitled, subject to the provisions

of sections 1111 and 1114 of this title, and

subject to the principles of equity, to

recover (1) defendant’s profits, (2) any

damages sustained by the plaintiff, and (3)

the costs of the action.

15 U.S.C. § 1117(a) (emphasis added). The

intervening Cartier court determined that the

Second Circuit’s interpretation requiring

2 The 1999 amendment is the Trademark Amendments Act

of 1999, Pub. L. No. 106-43, § 3(b), 113 Stat. 218, 219.

6

willfulness to recover monetary relief is

irreconcilable with the text of the statute. The

district court in Cartier thus discarded the

Second Circuit’s “willfulness” precedent of George

Basch Co. v. Blue Coral, Inc., 968 F.2d 1532 (2d

Cir.1992) — the analog of the Ninth Circuit’s

Lindy Pen precedent at issue here, P-App. 3a.

Petitioner referenced the test microcosm of

the conflict (within district courts in the Second

Circuit) in both the petition and reply. P-Cert.

18; P-Rep. 6. The intervening decision

demonstrates the clarifying effect of the current

statute, not examined below. Cartier effectively

overruled the Malletier decision of April 2007,

cited in the reply. P-Rep. 6-7 (Malletier v. Dooney

& Bourke, Inc., 500 F.Supp.2d 276 (S.D.N.Y. Apr.

24, 2007)). Malletier had found that the Second

Circuit’s prior precedent remained good law. Id.,

500 F.Supp.2d at 280. There, as here (until

Respondents changed their position in opposition

to certiorari, Opp. 17-19), “the parties vigorously

dispute[d] whether, in light of the amendment,

Blue Coral’s willfulness requirement remains

good law.” Id. at 279-80. Malletier found that the

willfulness requirement was still good law

because the 1999 amendment for dilution “did

not alter or even address the relevant

su ion of the federal trademark

infringement statute.” Id, at 280. (emph. added).

What Malletier did not consider is that,

though it found the pre-existing law remained

the same, the Second Circuit’s original

interpretation of that law may have been

incorrect. The original interpretation in the

Ninth Circuit, for example, appears to have

7

evolved from a plain judicial error in the mid-

1990’s_ misreading standards of adjoining

sections.§

C. The Ninth Circuit Requires An

Opportunity to Examine the Clarifying

Effect of the Statute

Petitioner had argued (as Respondents now

do, Opp. 17) that the 1999 amendment clarified

the statute. P-App. 4a (“M2 Software argues that

the 1999 amendments to the Lanham Act “make

clear” that there is no willfulness requirement”)

(emphasis added). The Ninth Circuit, like

Malletier, did not consider this clarifying effect:

Whatever the effects of the 1999

amendments may be, they do not apply to

this suit, which was filed in October 1998.

Even on the shaky assumption that the

1999 amendments did expand the remedies

available for violations of § 1114 by

negating the willfulness requirement, these

expansions would not be retroactive.

P-App. at 4a-5a (emph. added). By addressing

whether it could consider a change in law

without considering the potential of a

clarification, the Ninth Circuit committed the

§ “In citing to [Lindy Pen] * * * the Ninth Circuit started in

1995 to offend its own precedents * * * by misreading the

standards set for trademark infringement actions under §

1114(1)(a), which do not make willful infringement a

prerequisite * * *.” Conway-Jones, D. Remedying

Trademark Infringement: The Role of Bad Faith in

Awarding an Accounting of Defendant’s Profits, 42 Santa

Clara L. Rev. 863, 898 (2002).

8

same error of Malletier, now effectively overruled

by Cartier. 1

The Ninth Circuit instead posed what it

characterized as a “shaky” assumption that the

law had changed, finding retroactivity concerns.

P-App. 4a-5a. That “assumption” is either true

or false. If false, as the “shaky” qualifier

suggests, with no new law there can be no

retroactivity concerns. The Ninth Circuit should

be allowed to consider whether the statute, as

amended, clarifies pre-existing law.

The Ninth Circuit “[has] long recognized that

clarifying legislation is not subject to any

presumption against retroactivity and is applied

to all cases pending as of the date of its

enactment[.]” ABKCO Music, Inc. v. LaVere, 217

F.3d 684, 691 (9th Cir. 2000). While a new

inference may supersede the interpretation of a

Circuit, it does not supersede the pre-existing

law (that here, other Circuits already interpreted

not to require willfulness). P-Cert. 13. By failing

to examine the current statute for its clarifying

effect, the Ninth Circuit failed to “apply the law

in effect at the time it renders its decision.”

Bradley v. Richmond School Bd., 416 U.S. 696,

7 The Ninth Circuit thus accepted Respondents’ “change of

law” answer to the “clarification” question, detouring into

the logic error of ignoratio elenchi. See U.S. v. Jannotti,

673 F.2d 578, 622 (3d Cir. 1982) (Aldisert, J., dissenting)

(“{iJnstead of proving point A * * *, argument proves

unrelated point B * * *”).

9

714 (1974). This failure extended even to

prospective application. P-Rep. 7-8.

The Ninth Circuit must be given the same

opportunity as Cartier and the Ninth Circuit’s

peer Courts of Appeal to consider the clarifying

effect of the current statute. Even if the Ninth

Circuit finds that retroactivity concerns would

prevent application, it must at minimum be

allowed to consider the statute for any clarifying

effects. This Court should grant rehearing so

that it may invoke GVR to grant, vacate, and

remand to the Ninth Circuit for consideration of

15 U.S.C. § 1117(a), as amended.

II. AGVR WILL ALLOW THE NINTH CIRCUIT

TO CONSIDER THE CURRENT STATUTE, 15

U.S.C. § 1117(a), AS AMENDED

The GVR mechanism allows this Court to

grant certiorari, vacate the decision below, and

remand to a Court of Appeals for consideration of

a recent legal development it did not consider.

The procedural option “conserves the scarce

resources of [the] Court” while promoting

effective judicial resolution. Lawrence v. Chater,

516 U.S. 163, 167 (1996). GVR is appropriate

where there have been “intervening

developments, or recent developments [the Court

has] reason to believe the court below did not

§ In Wal-Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S.

205 (2000), this Court referenced other sections of the 1999

amendment for a case “filed years before the Amendment

was enacted.” Thomas & Betts Corp. v. Panduit Corp. 108

F.Supp.2d 976, 9°1 (N.D.IIl. 2000). Two of the Courts of

Appeal that have addressed the issue also did so in cases

filed before the 1999 amendment. Infra, n. 9, 10.

10

fully consider [that] reveal a_ reasonable

probability that the decision below rests on a

premise that the lower court would reject if given

the opportunity for further consideration.”

Lawrence, 516 U.S. at 167 (emphasis added).

This Court has GVR’d in light of “new federal

statutes,” Jd., citing, e.g., Sioux Tribe of Indians

v. United States, 329 U.S. 685 (1946), in light of

“administrative reinterpretations of federal

statutes,” 516 U.S. at 167, citing, e.g., Schmidt v.

Espy, 513 U.S. 801 (1994), and in light of “new

state statutes.” 516 U.S. at 167, citing, e.g.,

Louisiana v. Hays, 512 U.S. 1230 (1994). The

Lanham Act, as amended, has a sufficiently

substantial impact on the national issue to

warrant a remand for consideration.

GVR is proper where the previously-enacted

statute not examined is central to the case. See

Youngblood v. West Virginia, 126 S.Ct. 2188

(2006) (GVR wkere dissent noted Brady

violation, but majority did not examine). While

most GVR decisions arise from an intervening

decision or statute, the underlying authority

giving rise to the GVR procedure, 28 U.S.C. §

2106, does not impose a temporal limitation on

an applicable statute deserving consideration.

Id. (Court “may remand the cause * * * or

require such further proceedings to be had as

may be just under the circumstances.”) The

particular layout of this case calls for GVR here:

First, the practical application of the 1999

amendment is a recent development. Only one

Court of Appeals, the Fifth Circuit, had

considered the amendment when opening briefs

were prepared for the Ninth Circuit, and the

11

Fifth Circuit only reaffirmed its _ prior

interpretation.2 Since that time, the Third and

Fourth Circuits have weighed in, considering the

amendment as a clarification of pre-existing law

to adopt. new intra-circuit rules rejecting a

willfulness requirement.12

Second, the issue presented is recurring and

the subject of a long-standing Circuit split. P-

_ Cert. 12-20. Despite the relative rarity of

trademark cases proceeding through an entire

appeal, including the present case there have

been three petitions for certiorari from the Ninth

Circuit since 2005 on the issue of whether willful

trademark infringement is necessary _for

monetary relief.'. The GVR _ procedure is

designed in part to aid the Court by “procuring

the benefit of the lower court’s insight before we

rule on the merits...” Lawrence, 516 U.S. at 167.

Similarly, this Court can benefit from the Ninth

2 Quick Technologies v. Sage Group, 313 F. 3d 338, 348-49

(5th Cir. 2002) (lawsuits filed May 22, 1998 and April 22

1999, rejecting per se willfulness “[i]n accordance with our

previous decisions, and in light of the plain language of §

1117(a)’).

19 Banjo Buddies, Inc. v. Renosky, 399 F.3d 168 (3d Cir.

Feb. 22, 2005) involved an action first instituted April 1999

[Id. at 172], decided (but not available on databases) two

days prior to the appellant’s brief. Synergistic Intl, LLC v.

Korman, 470 F.3d 162 (4th Cir. Nov. 30, 2006) was not yet

decided when the Ninth Circuit heard oral argument on

October 16, 2006.

11 Contessa Food Products Inc. v. Lockpur Fish Processing

Co. Ltd., 123 Fed. Appx. 747 (9th Cir. 2005), cert. denied,

126 S. Ct. 472 (2005); Blau v. YMI Jeanswear, Inc., 129

Fed. Appx. 385 (9th Cir. 2005), cert. denied, 126 S. Ct. 660

(2005).

12

Circuit’s insight on the issue before it rules on

the merits.

Third, to the extent that Congress clarified

pre-existing law, the GVR procedure “conserves

the scarce resources of this Court” while

effectively allowing the current law to apply as

broadly as possible to pending cases. Lawrence,

516 at 167, citing Griffith v. Kentucky, 479 U.S.

314, 323 (1987) (“[W]e fulfill our judicial

responsibility by instructing the lower courts to

apply the new rule retroactively to cases not yet

final”).

Finally, Respondents have changed their

position, and now concede that courts now find

the Lanham Act does not intend a per se

willfulness requirement for monetary relief — the

very premise of dismissal of this case below. See

e.g., Cartier, 512 F.Supp.2d at 172. See Opp. 17,

18, 19 n.6. P-App. 3a. Thus, there is a

“reasonable probability that the decision below

rests on a premise that the lower court would

reject if given the opportunity for further

consideration.” Lawrence, 516 U.S. at 166.

A GVR will aid in the resolution of a long-

standing Circuit split. It allows the Court to ask

the Ninth Circuit, without the finding of any

error, to consider the current statute to

determine what, if any, clarifying effects are

presented. In the event the Ninth Circuit

adheres to prior precedent after completing such

examination, the Court will have before it a more

fully defined issue should that issue be presented

for certiorari.

13

CONCLUSION

This Court should grant rehearing to invoke

GVR to grant, vacate, and remand to the Ninth

Circuit for consideration of the current statute,

15 U.S.C. § 1117(a), as amended, and all

intervening decisions.

Respectfully submitted,

MARK L. PETTINARI

Counsel of Record

LAW OFFICES OF

MARK L. PETTINARI

Stock Exchange Tower

155 Sansome Street, Suite 400

San Francisco, CA 94104

(415) 240-4200

Counsel for Petitioner

December 2007

14

CERTIFICATION OF COUNSEL (RULE 44)

I certify that the Petition for Rehearing of a

Denial of Certiorari is restricted to the grounds

specified in Supreme Court Rule 44.2 and is

presented in good faith and not for delay.

December 2007

Mark L. Pettinari

Counsel for Petitioner

APPENDIX

lr

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 06-55115

D.C. No. CV-98-08734-AHM

K AND N ENGINEERING, INC., a California cor-

poration,

Plaintiff — Appellee,

¥V.

SARAH BULAT, individually, d/b/a Incline Design,

a/k/a Incdesign; et al,

Defendants - Appellants

Appeal from the United States District Court

for the Central District of California

A. Howard Matz, District Judge, Presiding

ARGUED AND SUBMITTED SEPTEMBER 24,

2007, PASADENA, CALIFORNIA

FILED DECEMBER 18, 2007

MEMORANDUM*

Before: T.G. NELSON, IKUTA, and N.R. SMITH,

Circuit Judges.

* This disposition is not appropriate for publication and is not

precedent except as provided by 9th Cir. R. 36-3.

2r

The district court granted K&N's motion for

summary judgment on trademark infringement un-

der 15 U.S.C §§ 1114(1) and 1125(a), trademark

counterfeiting under § 1114(1)(a), trademark dilution

under § 1125(c), and related state law statutory and

common law causes of action. Pursuant to 15 U.S.C.

§§ 1116 and 1117(c), the district court awarded

$20,000 in statutory damages and injunctive relief.1

We affirm.

Based on our de novo review, the evidence is

clear that Bulat and Wandel's intentional use of the

K&N mark was likely to cause confusion among con-

sumers and post-purchase observers of the counter-

feit goods. 15 U.S.C. § I 114(1)(a); AuTomotive Gold v.

Volkswagen of Am., Inc., 457 F.3d 1062, 1075-76 (9th

Cir. 2006). The evidence introduced by Bulat and

Wandel that their decals differed in size and color

from K&N's decals, and that one consumer was not

confused as to the source of the decals, is insufficient

to raise a material issue of disputed fact regarding

likelihood of confusion. Because the K&N mark does

not serve an aesthetic purpose wholly independent

from its function of identifying K&N, Bulat and

Wandel's aesthetic functionality defense fails. Au-

Tomotive Gold, 457 F.3d at 1073. Bulat and Wan-

del's nominative fair use defense fails because they

used more of K&N's mark than was necessary to de-

scribe their own product or service. New Kids on the

Block v. News Am. Publ'g, Inc., 971 F.2d 302, 308 &

n.7 (9th Cir. 1992). K&N's trademark rights do not

depend on whether or not it has copyright protection

for the same marks. Polar Bear Prods. v. Timex

Corp., 384 F.3d 700, 721 (9th Cir. 2004). Therefore,

‘In a published opinion filed this date, we reverse the district

court's award of attorney's fees under 15 U.S.C. § 1117(b).

3r

we affirm the district court's grant of summary judg-

ment.

In light of the district court's broad discretion

to award statutory damages under 15 U.S.C.

§ 1117(c)(1), the district court did not abuse its dis-

cretion in awarding statutory damages of $20,000.

Rolex Watch, U.S.A., Inc. v. Michel Co., 179 F.3d 704,

712 (9th Cir. 1999). Nor did the district court abuse

its discretion in considering a wide range of factors,

including the defendants’ financial situation, their

naivete, their failure to resolve the trademark viola-

tions through settlement, and the extent of the in-

fringement, in setting the statutory damage award.

Because Bulat and Wandel advertised and sold decals

with K&N marks (rather than advertising and selling

printing services), they were not engaged solely in the

business of printing the mark or violating matter

for others, and thus were neither innocent infring-

ers nor innocent violators capable of raising the in-

nocent printer defense under 15 U.S.C.

§ 1114(2)(A). :

Affirmed.