S Industries, Inc. v. Stone Age Equipment, Inc.

12 F. Supp. 2d 796, 49 U.S.P.Q. 2d (BNA) 1071, 1998 U.S. Dist. LEXIS 9562, 1998 WL 345074
CourtDistrict Court, N.D. Illinois
DecidedJune 23, 1998
Docket96 C 4951
StatusPublished
Cited by22 cases

This text of 12 F. Supp. 2d 796 (S Industries, Inc. v. Stone Age Equipment, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
S Industries, Inc. v. Stone Age Equipment, Inc., 12 F. Supp. 2d 796, 49 U.S.P.Q. 2d (BNA) 1071, 1998 U.S. Dist. LEXIS 9562, 1998 WL 345074 (N.D. Ill. 1998).

Opinion

MEMORANDUM OPINION AND ORDER

CASTILLO, District Judge.

This lawsuit presents serious issues about the ethics of the plaintiffs principal and his counsel. “S Industries, Inc..., appears to have entered into a new industry — that of instituting federal litigation.” S Indus., Inc. v. Hobbico, Inc., 940 F.Supp. 210, 211 (N.D.Ill.1996) (Shadur, J.). To this we might add litigation lacking in merit and approaching harassment. Of the five merits-related decisions spawned by S Industries’ (“SI”) 1996 trademark litigation siege, three have entered summary judgment against SI and two have seriously questioned the validity of Si’s complaints. 2 Our decision continues in *799 this vein, and thus signifies a continuing pattern of bad faith litigation by SI, who has been represented by the same counsel in each case.

This suit stems from Si’s claim that it owns the trademark STEALTH for use on various sporting goods and equipment and on athletic shoes and boots. SI contends that defendant Stone Age Equipment’s (denoted here as “Five Ten”) use -of STEALTH on rubber soles for rock-climbing shoes and water-terrain navigation boots (think fly-fishing) infringes these trademarks; defendants REI and Erehwon allegedly infringed Si’s marks by selling Five Ten’s STEALTH-soled products. SI asserts several offenses based on this conduct: infringement of a registered trademark under the Lanham Act, 15’ U.S.C. § 1114 (Count I); unfair competition and false designation of origin under the Lanham Act, 15 U.S.C. 1125 (Counts II and III); and violations of the Illinois Consumer Fraud and Deceptive Trade Practices Act, 815 ILCS 505/1 et seq., and the Illinois Uniform Deceptive Trade Practices Act, 815 ILCS 510/1 et seq. (Count IV). 3

But this Court’s exhaustive review of the pleadings and rather voluminous record demonstrates a striking absence of proof supporting these claims — most notably, Si’s failure to produce any evidence permitting a reasonable jury to find that a STEALTH shoe ever existed, much less reached the public — frequent misrepresentations of the evidence and unsupported legal arguments. Consequently, on the cross-motions for summary-judgment before us, we rule for the defendants and against SI. We also award the defendants reasonable attorneys’ fees and defense costs as prevailing parties, see 15 U.S.C. § 1117(a) and 815 ILCS 505/10a(c), finding that this is just the type of suit that the Seventh Circuit would deem “oppressive.” See Door Sys., Inc. v. Pro-Line Door Sys., Inc., 126 F.3d 1028, 1031-32 (7th Cir.1997).

RELEVANT FACTS 4

A. Leo Stoller and His Companies

SI is in the business of assisting its affiliated companies in importing, marketing, distributing and selling a wide variety of consumer goods, some of which bear the STEALTH trademark. Its current President, CEO and sole shareholder is Leo Stol-ler. Stoller, who began doing business in 1981 as the sole proprietorship Sentra Sporting Goods, U.S.A, incorporated SI in 1985 and founded its affiliated entities around the same time: Sentra Industries (incorporated in 1984), Stealth Industries (1984), and Chestnut Industries (1985) (collectively the “Stoller companies”). All are based in Illinois.

Stoller claims that Sentra Sporting Goods, U.S.A. was the first to use the STEALTH mark “as a trade name, ‘house’ mark, service mark and trademark” on consumer goods— including sporting goods and, allegedly, athletic shoes — and that, through various inter-company license agreements and assignments, SI and the other Stoller companies began to use the mark on those goods as well, with SI retaining ownership rights. 5 Stoller Decl. ¶¶4 -10. Stoller states that under a ten-year marketing and licensing plan he established in 1985, his companies have “spen[t] a great [sic] money promoting [and] building the mark STEALTH into a national brand, recognized by buyers throughout the United States and the entire World.” Stoller Decl. ¶¶ 11-13.

SI currently holds title to seven federal registrations for the STEALTH mark, two of which are relevant here. Registration No. 1,332,378 covers “sporting goods, specifically, *800 tennis rackets, golf clubs, tennis balls, basketballs, baseballs, soccer balls, golf balls, cross bows, tennis racket strings and shuttle cocks.” The Patent and Trademark Office (“PTO”) issued this registration on April 28, 1985, with January 15,1981 listed as the date of the mark’s “first use” in commerce. Registration No. 1,434,642, issued by the PTO on March 31, 1987, encompasses “bicycles, motorcycles, and boats” and lists January 1982 as the date of first use. 6 None of the STEALTH registrations mentions athletic shoes or boots, rubber, or rubber shoe soles. Stoller nevertheless claims that his companies have been using the STEALTH mark on athletic shoes since at least 1985. SI and Stoller do own registrations covering shoes under the trademarks SENTRA, LOVE YOUR BODY, WHITE LINE FEVER, and DARK STAR, but not STEALTH.

The Stoller companies market and sell STEALTH sporting goods products (and, allegedly, STEALTH athletic shoes) directly through catalogs and sales representatives, and wholesale through broad-based retailers such as Wal-Mart and K-Mart. In addition, the Stoller companies have entered into numerous license agreements permitting third parties to use the STEALTH mark on sporting goods. Four license agreements specifically allow third-party use of STEALTH on footwear. Stealth Industries executed the first of these with Puma USA.

In December 1988, one of Puma’s attorneys, Bert Collison, contacted Stealth Industries to ask whether it had used the STEALTH mark on shoes. Stealth Industries’ attorney, John Brezina, replied that the company had been using the mark on shoes since at least 1985. Collison Dep. at 17. He supplied Collison with the following proof; a May 28, 1986 invoice for a black referee shoe, which does not indicate what mark, if any, is on the shoe; two undated. photocopies of catalog pages with four pictures of shoes, none of which visibly bears the STEALTH mark but which are described respectively as STEALTH athletic shoes, STEALTH oxfords, white STEALTH tennis shoes and black STEALTH tennis shoes; an undated photocopy of what looks like a shoe with the word STEALTH on one side of the heel (attorney Brezina states that he made this photocopy from a STEALTH shoe that Stol-ler gave him); and a typed page from a June 3, 1988 Stealth Industries general ledger listing “shoes” as one of the items and displaying the handwritten words “ALL STEALTH BRAND” at the top. Collison Dep. Ex. Ill — 115. Collison does not remember whether he ever saw an actual STEALTH shoe, but “assumes” that he must have.

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12 F. Supp. 2d 796, 49 U.S.P.Q. 2d (BNA) 1071, 1998 U.S. Dist. LEXIS 9562, 1998 WL 345074, Counsel Stack Legal Research, https://law.counselstack.com/opinion/s-industries-inc-v-stone-age-equipment-inc-ilnd-1998.