what happens when a brand owner and a famous ESports team collide in court over the use of the brand owner’s trademark, and what type of damages the brand owner can seek from the ESports team if infringement is found.
Last week’s blog post detailed the importance of Trademarks, and why every brand owner needs to file an application to register their Trademarks to protect their brand. This week we are going to explore what happens when a brand owner and a famous ESports team collide in court over the use of the brand owner’s trademark, and what type of damages the brand owner can seek from the ESports team if infringement is found. As always nothing in this blog spot should be treated as providing legal advice, and reading the Press Start Legal blog posts does not create an attorney-client relationship.
The Backstory.
FaZe Clan Inc. a California company and E-Sports team is one of the most well know E-Sports organization based on the company’s social media followings. FaZe Clan regularly competes in live events and tournaments for popular games like Call of Duty, Fortnite, Overwatch, and Counterstrike. Faze Apparel is a clothing and accessories brand founded in 2007 in San Francisco California. Faze Apparel uses its Faze brand to create a number of clothing options such as shirts, hats, and other accessories including phone cases. Since 2007, Gaze Apparel prominently featured their registered trademark FAZE and F.A.Z.E as their dominant design element and a source identifier.
The Start of a Battle.
As early as 2008, Faze Apparel filed for a design mark for F.A.Z.E (U.S. Reg. No.: 3680738), and in 2013 Faze Apparel filed for a word mark for FAZE (U.S. Reg. No.: 4550118). Both marks registered by Faze Apparel are in International Class 25, includes most types of clothing, footwear, and headgear. At the same time in 2013, as FaZe Clan’s popularity started growing, and the California E-Sports team looked to file FAZE and Faze Clan Sniping with trademarks in International Class 25. Both applications were rejected by a USPTO examiner citing the that FaZe Clan marks were confusingly similar to Faze Apparel’s registered Faze Marks already in Class 25. In July of 2013, FaZe Clan again applied to register the FAZE CLAN mark in both Class 41 (Video Games) and Class 25 (Clothing). Faze Apparel filed Opposition with the Trademark Trial and Appeal Board which in 2016 entered judgment in favor of FAZE Apparel, that the FAZE CLAN mark is confusingly similar to Faze Apparel’s registered Faze mark in Class 25.
Between 2014 to Present FaZe Clan and Faze Apparel have been embodied in a battle over the rights to use “faze” with clothing. According to a recent lawsuit filed by Faze Apparel, FaZe Clan repeatedly used the Faze mark in a number of clothing items sold on its online store, and through a third party, Electronic Gamers’ League. Now brand owner, Faze Apparel had enough and filed an infringement suit alleging FaZe Clan engaged in Trademark Infringement and Counterfeiting, Unfair Competition and False Designation of Origin.
Trademark Infringement, the Weapon of War.
This case is a textbook example of why it’s so important for brand owners to registered your marks, and protect your brand. An infringement case such as the one discussed above is no joke and can involve serious penalties and statutory damages. What are statutory damages, and why are they so important in trademark cases? Statutory damages are a special situation where a plaintiff in a lawsuit does not have to prove actual damages, but can instead look to a statute or in this case the Lanham Act, for damages.
Section 35 of the Lanham Act, sets forth monetary remedies for trademark infringement, unfair competition, use of a counterfeit mark, and willful trademark dilution. (15 U.S.C. § 1117) While §1117 (a) and (b) focuses on a plaintiff’s actual damages, a plaintiff can elect to seek statutory damages. (15 U.S.C. § 1117(c)) Congress’ reasoning behind §1117(c) reflects situations where infringers and/or counterfeits records of sales are more often nonexistent and makes proving actual damages extremely difficult if not impossible in most cases.
The Fruits of War
Let’s jump forward in time, and let’s assume that Faze Apparel proved FaZe Clan engaged in trademark infringement and counterfeiting as defined by section 15 U.S.C. § 1116(d)(1)(B)(i). What can Faze Apparel recover if they elected for statutory damages under the Lanham Act? Under 15 U.S.C. § 1117(c) statutory damages for counterfeiting are to amount to not less than $1,000 or more than $200,000 per counterfeit mark, per type of goods or services sold, offered for sale, or distributed. Additionally, if the Court finds that the use of the infringing/counterfeit mark was willful, meaning FaZe Clan used Faze Apparel’s registered marks knowing that they did not have the authority to do so, then the damages ceiling is raised to $2,000,000 per counterfeit. That’s a lot of money for each type of good sold in International Class 25 that infringed on Faze Apparels marks.
Now, this is all hypothetical, as this case is still ongoing and we will not know the outcome until the Court makes a ruling. It’s hard to look at the numbers in willful infringement cases, and wrap your head around why a company would take a risk and infringement on someone’s registered marks. This is why brand owners must seek registration on their brands, as just these numbers alone are a deterrent for anyone seeking to infringe on your registered marks.
Press Start Legal’s team of trained attorneys can help assist in every aspect of the registration processes. From the initial search to filing your application you can trust our team to get the job done right. If you have any questions about Trademarks or you're seeking to register a new mark feel free to contact us at [email protected]
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