PartyGaming could be liable for $287m in trademark infringement suit
10 Sep 2008
The U.S. Seventh Circuit Court of Appeals released a decision
on Monday stating that PartyGaming may be liable for up to
$287.4 million in damages as a result of a suit filed by WMS
Gaming. The appeal involves a dispute that alleges PartyGaming
"infringed" on WMS trademarks "Jackpot Party" and "Super
Jackpot Party" between the years of 2004 and 2006.
WMS was originally awarded $2.673,422.10 in damages on
July 19, 2007. But WMS appealed the decision on Feb. 25,
2008, asking for the full $287 million it had requested in
damages.
WMS is based in Illinois and manufactures, sells and leases
gaming equipment, including slot machines. WMS used
"Jackpot Party" and "Super Jackpot Party" in connection
with its goods as early as October, 2004 and under U.S.
law has exclusive rights to the "underlying marks." WMS
claims that after several failed attempts to persuade
PartyGaming to voluntarily "cease its infringing uses of
WMS's marks" it filed a suit in federal district court seeking
"injunctive relief, damages and an equitable accounting
of profits" that PartyGaming reaped from its use of "Jackpot
Party" and "Super Jackpot Party" in the U.S.
WMS claimed in the suit that PartyGaming received notice
from the U.S. Patent and Trademark Office (PTO) that
WMS owned the rights to "Jackpot Party." As a result
PartyGaming attempted to register the mark "PartyJackpot."
But it was denied by the PTO because "PartyJackpot" was
"confusingly similar" to WMS's registered mark "Jackpot
Party." But WMS claimed that instead of abandoning use
of "Jackpot Party," PartyGaming expanded its use of the
mark, even after the PTO's action, and with its use, earned
$977.7 million in total revenue in 2005, 84% of which came
from U.S. customers, according to PartyGaming's 2005
Annual Report.
In Monday's decision, Circuit Judges Rovner, Wood and
Williams agreed with WMS's argument that "the district
court made a fundamental error of law by failing to distinguish
between WMS's right to the defendant's profits and its right
to its damages."
The decision went on to say that "while the figure WMS seeks
($287,391,140.70) is considerably larger than the 'damages'
award granted by the district court ($2.673,422.10), the
record shows that in a single year (2005), (PartyGaming)
reported revenues of $977.7 million – nearly $1 billion ...
The record shows persistent, pervasive, knowing and willing
infringement for several years by PartyGaming, as it
repeatedly refused to cease and desist even after receiving
several forms of actual notice of its unlawful activity."
The judges concluded by saying, "We therefore reverse
the judgment of the district court and remand for further
proceedings consistent with this opinion."
Moral: don't steal from or infringe on others and don't ignore requests to stop when you do, even if you do so by accident or non-design.