Ty, Inc. v. Perryman
a. Facts: D had a second hand store that sold beanie babies. The store's site was bargainbeanies.com. Ty, the maker of beanie babies, sues D.
i. D's first argument was that it was generic. It didn't really work too well, but it was ok to make the weak argument.
b. Procedural History: the district court granted summary judgment in favor of Ty and entered an injunction that forbids the D to use beanie or beanies or any colorable imitation thereof w/in any business name, internet domain name, or trademark, or in connection w/ any non-Ty products. Perryman (D) appeals.
c. Rule: There are three possibilities for dilution in this case:
i. There is concern that consumer search costs will rise if a trademark becomes associated w/ a variety of unrelated products.
ii. Tarnishment is a subset of blurring, since it reduces the distinctness of the trademark as a signifier of the trademarked product or service
iii. There is a possible concern w/ situations in which, though there is neither blurring nor tarnishment, someone is still taking a free ride on the investment of the trademark owner in the trademark. (free riding)
d. Reason: D is not producing a product or service, rather she is selling the very product to which the trademark sought to be defended against her infringement is attached. You can't sell a branded product w/o using its brand name, that is, its trademark.
i. There can be no aftermarket w/o an original market, and in that sense sellers in a trademarked good's aftermarket are free riding on the trademark.
ii. D's principal merchandise is beanie babies, so to forbid the use of beanies is like forbidding a used car dealer who specializes in selling Chevys to mention the name in his advertising.
iii. If it's a famous mark, D shouldn't ride on the goodwill of the mark.
e. Held: given D's status as a seller in the secondary market created as a result of Ty's marketing strategy, we cannot imagine a state of facts consistent w/ the extensive record compiled in the summary judgment proceeding that could possibly justify an injunction against D's representing in her business name and internet and web addresses that she is doing what she has a perfect right to do, sell beanie babies. Vacated and remanded.
a. Facts: D had a second hand store that sold beanie babies. The store's site was bargainbeanies.com. Ty, the maker of beanie babies, sues D.
i. D's first argument was that it was generic. It didn't really work too well, but it was ok to make the weak argument.
b. Procedural History: the district court granted summary judgment in favor of Ty and entered an injunction that forbids the D to use beanie or beanies or any colorable imitation thereof w/in any business name, internet domain name, or trademark, or in connection w/ any non-Ty products. Perryman (D) appeals.
c. Rule: There are three possibilities for dilution in this case:
i. There is concern that consumer search costs will rise if a trademark becomes associated w/ a variety of unrelated products.
ii. Tarnishment is a subset of blurring, since it reduces the distinctness of the trademark as a signifier of the trademarked product or service
iii. There is a possible concern w/ situations in which, though there is neither blurring nor tarnishment, someone is still taking a free ride on the investment of the trademark owner in the trademark. (free riding)
d. Reason: D is not producing a product or service, rather she is selling the very product to which the trademark sought to be defended against her infringement is attached. You can't sell a branded product w/o using its brand name, that is, its trademark.
i. There can be no aftermarket w/o an original market, and in that sense sellers in a trademarked good's aftermarket are free riding on the trademark.
ii. D's principal merchandise is beanie babies, so to forbid the use of beanies is like forbidding a used car dealer who specializes in selling Chevys to mention the name in his advertising.
iii. If it's a famous mark, D shouldn't ride on the goodwill of the mark.
e. Held: given D's status as a seller in the secondary market created as a result of Ty's marketing strategy, we cannot imagine a state of facts consistent w/ the extensive record compiled in the summary judgment proceeding that could possibly justify an injunction against D's representing in her business name and internet and web addresses that she is doing what she has a perfect right to do, sell beanie babies. Vacated and remanded.