Spin Master, Ltd. v. Zobmondo Entertainment, LLC
944 F. Supp. 2d 830
C.D. Cal.2012Background
- Plaintiffs allege federal and common law trademark infringement of “Would You Rather ... ?” against Zobmondo, seeking lost profits, disgorgement of profits, and punitive damages.
- Plaintiffs show Heimberg and Gomberg filed an ITU for the phrase in 1997; they published two books before 2002 and later released board games bearing the mark.
- Zobmondo began using the mark in 1998, licensed Hasbro for distribution 2000–2002, and later repackaged its games with strong mass-market presence; TSW (adult) and Classic (family-friendly) versions generated substantial sales.
- Plaintiffs’ game expansion was hindered by Zobmondo’s early market entry and retailer placement, with Spin Master later acquiring the rights in 2010.
- Plaintiffs rely on Dr. Goedde’s yardstick proxy to estimate damages, arguing that a two-supplier market and first-mover advantages justify lost profits; the court must resolve whether this theory survives summary adjudication.
- The court ultimately denies summary adjudication on lost profits, but grants in part on disgorgement, concluding willfulness and priority affect the availability of disgorgement and punitive damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs’ lost profits can be proved by a yardstick proxy | Goedde’s yardstick shows profits plaintiffs would have earned absent infringement | Proxy theory is inappropriate where diversion is not shown | Triable issue; yardstick proxy admissible for lost profits |
| Whether disgorgement of profits requires willfulness | Willfulness shown by deliberate adoption of the mark | Lindy Pen requires explicit exploitation of an established mark | Disgorgement denied given lack of willfulness for the period at issue |
| Whether common law priority supports punitive damages | Plaintiffs had priority based on pre-2002 use of the mark | Zobmondo’s priority date or continuous use defeats priority | Common law priority found for plaintiffs; punitive damages may go to the jury |
| Whether plaintiffs can pursue punitive damages based on common law claim | Punitive damages allowed if common law claim viable | Punitive damages depend on willfulness and priority findings | Remains viable if common law priority persists and willfulness is established in trial |
| Whether pre-2005 or post-2008 conduct supports disgorgement/punitive damages | Willfulness during those periods supports remedies | Evidence of intent disputed; issues reserved for trial | Reserved for later determination; not resolved on summary adjudication |
Key Cases Cited
- Lindy Pen Co. v. Bic Pen Corp., 982 F.2d 1400 (9th Cir. 1993) (accounting of profits; willfulness required for disgorgement)
- Adray v. Adry-Mart, Inc., 76 F.3d 984 (9th Cir. 1995) (willfulness prerequisites for profits awards; compensation not penalty)
- Maier Brewing Co. v. Fleischmann Distilling Corp., 390 F.2d 117 (9th Cir. 1968) (profits and deterrence considerations in liability damages)
- Taco Cabana Int’l v. Two Pesos, Inc., 932 F.2d 1113 (5th Cir. 1991) (headstart theory for lost profits in franchise context)
- Casual Corner Assocs., Inc. v. Casual Stores of Nev., Inc., 493 F.2d 709 (9th Cir. 1974) (continuous use requirement for priority; abandonment considerations)
- Conversive, Inc. v. Conversagent, Inc., 433 F. Supp. 2d 1079 (C.D. Cal. 2006) (continuous use; priority analysis in common law context)
- Herbko Int’l, Inc. v. Kappa Books, Inc., 308 F.3d 1156 (Fed. Cir. 2002) (series title as source identifier; limits of book-title trademark priority)