Fuel Clothing Co. v. Nike, Inc.

Full title: FUEL CLOTHING COMPANY, INC., Plaintiff, v. NIKE, INC., Defendant.

Court: United States District Court, D. South Carolina, Columbia Division.

Date published: Mar 20, 2014

Facts

Fuel manufactures and markets apparel and accessories for the action sports industry, which includes skateboarding, snowboarding, surfing, motocross, auto racing, mountain biking, and BMX biking. ECF No. 1 at 2, ECF No. 69–2 at 6–7. Fuel’s products are sold across the United States through Fuel’s retail store in Hilton Head Island, South Carolina; through retail stores across the country; and the Internet. ECF No. 83 at 3. Fuel’s current sole owner and president, Shane Gould (“Mr. Gould”), co-founded the company in 1992. Id. Since its beginnings, Fuel’s products have borne the “Fuel” mark, which is protected by Fuel’s trademark, U.S. Trademark Registration No. 2,290,931 (“the ‘931 Registration”). ECF No. 83–1 at 1. Fuel applied for this trademark in 1998, and the United States Patent and Trademark Office placed the “Fuel” mark on the Principal Register for clothing goods in November 1999. Id. Specifically, the “Fuel” mark is registered in International Class 25 for use in connection with “clothing, namely coats, hats, shirts, skirts, dresses, swimwear, sweaters, T-shirts, tank tops, socks, belts, and pants.” Id.

With regard to the format of the “Fuel” mark, Mr. Gould indicated in his deposition testimony that his company “[has] a thousand different [uses]” for the “Fuel” mark. ECF No. 69–2 at 131. These multiple formats include various colors, designs, shapes, and fonts displaying the “Fuel” mark. See ECF Nos. 70–10, 70–11. In some instances, the “Fuel” mark is accompanied by an additional image, such as a flame or a skull. See id. Additionally, some uses of the mark include phrases, such as “Fuel Station Ride Shop” and “Powered by Fuel.” See ECF No. 70–11.

Since its beginnings in 1992, Fuel has taken steps to protect its mark against numerous companies that have allegedly sought to infringe on its mark, including litigation proceedings with five separate companies and agreements with almost twenty other companies. ECF No. 83–1. These steps have included litigation proceedings against Fuel TV, Inc. and Safari Shirt Company, both of which were resolved by settlement agreements. Fuel has also negotiated an agreement with Fuel Helmets, Inc. regarding each party’s respective use of “Fuel.” ECF No. 68–1 at 12.

The within action arose following Nike’s use of the term “Fuel” in connection with the sale of sports products and related apparel, including electronic wristbands and promotional t-shirts. Nike is a global marketer of athletic footwear, apparel, and equipment. ECF No. 68–1 at 15. In furtherance of its mission to “bring motivation and inspiration to every athlete[ ] in the world,” Nike “invented a new metric” to measure a person’s daily physical activity, including calories expended and steps taken. ECF No. 68–1 at 15. Nike named this new metric “NikeFuel” to convey the nature of the metric to consumers. Id. To measure “NikeFuel” points earned, Nike created the NIKE+FUELBAND, an electronic wristband that tracks physical activity metrics including calories expended, steps taken, and “NikeFuel” points earned. Id. The name of the NIKE+FUELBAND derives from the “NikeFuel” point system, with “Fuel” referring to the “NikeFuel points” obtained through daily physical activity and “Band” indicating that the product is worn on the wrist. Id. at 16.

The NIKE+FUELBAND includes the Nike “swoosh” mark on the clasp of the product. Id. The display screen of the NIKE+FUELBAND is scrolling, meaning it displays different images at different times, including Nike’s “swoosh” mark and the “Fuel” mark. Id. The packaging of the NIKE+FUELBAND includes the “swoosh” mark, the “NIKE+FUELBAND” symbol in all capital letters, and an image of the word “FUEL” displayed on the digital screen of the band. Id. The NIKE+FUELBAND was launched to consumers in January 2012. Id.

In conjunction with the launch of the NIKE+FUELBAND, Nike sold promotional t-shirts bearing descriptive phrases such as “Fuel it up,” “Fuel the people,” and “Fuel this.” Id. at 17. These promotional t-shirts also contained the Nike “swoosh” symbol on the lower front and the “NIKE+FUELBAND” mark on the back of the shirts. Id. at 17–18. Nike contends that “these shirts amount to less than one percent of all [NIKE+FUELBAND] sales.” Id. at 18. To further promote the NIKE+FUELBAND, Nike released a video featuring three famous athletes, with one athlete running (soccer star Hope Solo), one athlete weightlifting and playing basketball (football star Ndamukong Suh), and one athlete skateboarding (professional skateboarder Paul Rodriguez). Id. In the video, each of the athletes is wearing the NIKE+FUELBAND. Id.

Following the launch of the NIKE+FUELBAND, the United States Patent and Trademark Office allowed “NIKE + FUELBAND” to be registered as a trademark in International Class 9 for electronic monitoring devices, International Class 10 for health monitoring devices, and International Class 14 for watches and bracelets. ECF No. 72–10. The United States Patent and Trademark Office also allowed “NIKEFUEL” to be registered as a trademark in International Class 9 for electronic monitoring devices, International Class 38 as a website featuring information regarding fitness and training, International Class 41 for providing access to online live workouts and fitness instructions, and International Class 42 as an interactive website allowing users to monitor fitness. Id. Nike did not seek trademark registration in International Class 25 for apparel, the class in which the “Fuel” mark is registered. Id.

Fuel alleges in its complaint that Nike’s use of the “Fuel” mark is likely to confuse consumers and is infringing on Fuel’s mark. ECF No. 1. Nike denies any infringement on Fuel’s mark and moves for summary judgment as to all of Fuel’s claims.

Issue

Decision

Nike’s motion for summary judgment, ECF No. 68, is GRANTED IN PART and DENIED IN PART. Specifically, Nike’s motion for summary judgment is GRANTED as to Fuel’s claims for federal trademark infringement, common law trademark infringement, and unfair competition, federal unfair competition and false designation of origin, and violations of the South Carolina Unfair Trade Practices Act. Nike’s motion for summary judgment as to Fuel’s federal trademark dilution claim is DENIED WITHOUT PREJUDICE to Nike filing a renewed motion for summary judgment addressing the merits of Fuel’s federal trademark dilution claim within thirty (30) days from the date of this order.

IT IS SO ORDERED.

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