Cautionary Tale for Settling Trademark Cases–Tormented Souls v. Tormented Souls Motorcycle Club
By Eric Goldman
Tormented Souls Inc. v. Tormented Souls Motorcycle Club Inc., 2012 WL 1314128 (E.D.N.Y. April 17, 2012)
The parties settled a trademark litigation. The settlement agreement required the defendants to “take all the steps necessary to remove all advertisements, promotional publications, internet website, and other media wherein the public would encounter or view the use of the ‘Tormented Soul’ mark.” I believe this is pretty standard language for trademark settlement agreements.
The trademark owner protested that it could subsequently find a MySpace profile (those still exist???) named “Tormented Souls MC” that contained seven photos of the “Tormented Souls” name and mark. The defendants’ principal explained that his webhost set up the page for them, and the host hadn’t given the password to the principal despite repeated requests. The court says that the principal’s effort didn’t satisfy the requirement to take “all the steps necessary to remove” the trademark references, and therefore the judge sanctioned the defendants for breaching the settlement agreement. The court only fines the defendants $500 (apparently liquidated in the settlement agreement) and doesn’t award any extra attorneys’ fees, so it turns out to be a relatively inexpensive mistake.
The court also excuses two other remaining trademark references because the plaintiff didn’t show that the defendants controlled, or had the ability to remove posts from, the sites. The court further excuses the defendants from not putting a disclaimer on their current site because it was operating under a new domain name, and the settlement agreement applied only to the sites in the defendants’ possession at the time of the settlement agreement.
Although the requirement that the defendants “take all the steps necessary to remove all advertisements, promotional publications, internet website, and other media wherein the public would encounter or view the use of the ‘Tormented Soul’ mark” may be standard for trademark settlement agreements, defendants should think carefully about committing to such an unbounded promise. Preferably, the defendants would represent exactly which sites they own and control and commit only to fix those and no others. If that’s not possible, defendants should enumerate situations where they can’t take down content, either because they can’t access it or because the website prevents editing/deleting (e.g., Ripoff Report). In other words, defendants should not rubber-stamp this particular settlement agreement “boilerplate.”