TTAB's Loufrani v. Wal-Mart "SMILEY" Case Lands In Chicago Federal Court

Ryan Gile, at his Las Vegas Trademark Attorney blog, reports (here) on Franklin Loufrani's civil action under 15 U.S.C. § 1071(b)(1) seeking judicial review of the TTAB's March 2009 decision in Wal-Mart Stores, Inc. v. Franklin Loufrani, Oppositions Nos. 91150278, 91154632, and 91152145 (March 20, 2009) [not precedential]. [TTABlogged here]. The Board sustained Wal-Mart's opposition to registration of the SMILEY & design mark shown below left, and dismissed Loufrani's opposition to Wal-Mart's version shown below right.


Plaintiffs (Loufrani and his assignee, The Smiley Company SPRL), ask the U.S District Court for the Northern District of Illinois to (1) declare its mark to be distinctive, (2) reverse and vacate the portion of the TTAB’s order finding a likelihood of confusion, (3) direct the PTO to issue a Notice of Allowance for Plaintiff’s applications, and (4) reverse and vacate the portion of the TTAB’s decision that found that Wal-Mart's mark had acquired distinctiveness.

Wal-Mart responded with a six-count counterclaim. Count I seeks a declaratory judgment pursuant to 28 U.S.C. § 2201(a) that the TTAB’s decision was correct. Additionally, Wal-Mart seeks declaratory judgments that any use or licensing of the Loufrani Mark would constitute trademark infringement under Section 43(a) of the Lanham Act (Count II), Section 32 of the Lanham Act (Count III), and the common law (Count IV), and would violate the Illinois Uniform Deceptive Trade Practices Act (Count V) and the Illinois Consumer Fraud and Deceptive Business Practices Act (Count VI).

Plaintiff ("Smiley") unsuccessfully moved to dismiss five of the six counts:

"Smiley moves to dismiss Counts II-VI of Wal-Mart’s Counterclaim on three grounds. First, Smiley alleges that these Counts present no case or controversy as required by the Declaratory Judgment Act, 28 U.S.C § 2201, and Article III, Section 2 of the United States Constitution. Second, Smiley moves to dismiss Counts II through IV based on the limited scope of this Court’s review of the TTAB decision, arguing that for this Court to decide the issue of trademark infringement would constitute an advisory opinion. Finally, Smiley moves to dismiss Count VI because Wal-Mart failed to plead that it suffered actual damages as required by the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILL. COMP. STAT. 505/1 et seq. (2007)."

On November 12, 2009, Judge Virginia M. Kendall denied Plaintiff's motion to dismiss five of the six counts of Wal-Mart's counterclaim. (Memorandum and Opinion here). As more fully explained in Ryan Gile's post, the Court concluded that the case presents a substantial controversy as to the issue of likelihood of confusion underlying all counts of Wal-Mart’s Counterclaim, that court has jurisdiction to hear Wal-Mart's infringement claims, and that Wal-Mart need not plead actual damages for purposes of a claim for declaratory judgment under the Illinois statute.

Text Copyright John L. Welch 2009.