STANLEY J. PANIKOWSKI (Bar No. 224232) DLA...

DLA PIPER LLP (US) SA N D IEG O

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WEST\266942259 14-CV-0872 JAH NLS

STANLEY J. PANIKOWSKI (Bar No. 224232) [email protected] DLA PIPER LLP (US) 401 B Street, Suite 1700 San Diego, CA 92101-4297 Tel: 619.699.2700 Fax: 619.699.2701 GINA L. DURHAM (Bar No. 295910) [email protected] DLA PIPER LLP (US) 555 Mission Street, Suite 2400 San Francisco, CA 94105 Tel: 415.836.2500 Fax: 415.836.2501 FRANK W. RYAN (pro hac vice) [email protected] DLA PIPER LLP (US) 1251 Avenue of the Americas New York, NY 10020-1104 Tel: 212.335.4500 Fax: 212.335.4501

Attorneys for Defendant NIKE, INC.

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

LIGHTS OUT HOLDINGS, LLC, a California limited liability company, SHAWNE MERRIMAN,

Plaintiffs,

vs.

NIKE, INC., an Oregon corporation,

Defendant.

Case No. 14-cv-0872 JAH NLS

DEFENDANT NIKE, INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT

Date: February 29, 2016 Time: 2:30 p.m. Courtroom: 13B Judge: Honorable John A. Houston Complaint Filed: April 13, 2014 No Trial Date Assigned

Case 3:14-cv-00872-JAH-NLS Document 94-1 Filed 01/08/16 of 30


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TABLE OF CONTENTS

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I. INTRODUCTION ........................................................................................... 1

II. BACKGROUND ............................................................................................. 4

A. Survey Evidence and Other Evidence Relating to “Lights Out” .......... 4

1. Nike’s and Plaintiffs’ Nickname Recognition Surveys .............. 4

2. Nike’s Survey Showing No Consumer Confusion ..................... 6

3. Plaintiffs’ “Association” Survey Showing No Consumer Confusion .................................................................................... 6

4. Additional Expert Analysis Showing History, Usage, and Third-Party Commercial Applications of “Lights Out” ............. 7

B. Deposition of Plaintiffs. ........................................................................ 7

C. Plaintiffs’ Stipulation Not to Pursue Lost Profits. ................................ 8

III. ARGUMENT .................................................................................................. 9

A. Plaintiffs Cannot Prove Use in Commerce for Nearly All Brick-and-Mortar Retail Sales. ....................................................................... 9

B. Plaintiffs Cannot Prove False Endorsement. ...................................... 10

C. Plaintiffs Cannot Prove Trademark Infringement. ............................. 14

D. Fair Use Is An Alternative Ground for Summary Judgment. ............. 19

E. Plaintiffs Cannot Recover Any Damages. .......................................... 21

1. Plaintiffs’ Stipulation Waived Any Measure of Damages Based on Lost Profits ................................................................ 21

2. Plaintiffs’ Other Damages Theories Fail as a Matter of Law ........................................................................................... 22

IV. CONCLUSION ............................................................................................. 25



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TABLE OF AUTHORITIES

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CASES

Adray v. Adry-Mart, Inc.,

76 F.3d 984 (9th Cir. 1995) .......................................................................... 22, 24

Audemars Piguet Holding S.A. v. Swiss Watch Int’l, Inc.,

2015 WL 150756 (S.D.N.Y. Jan. 12, 2015) ....................................................... 24

Bell v. Harley-Davidson Motor Co.,

539 F. Supp. 2d 1249 (S.D. Cal. 2008) .............................................................. 20

Cairns v. Franklin Mint Co.,

292 F.3d 1139 (9th Cir. 2002) ............................................................................ 19

Cohn v. Petsmart, Inc.,

281 F.3d 837 (9th Cir. 2002) .............................................................................. 19

Downing v. Abercrombie & Fitch,

265 F.3d 994 (9th Cir. 2001) .............................................................................. 12

Entrepreneur Media, Inc. v. Smith,

279 F.3d 1135 (9th Cir. 2002) ............................................................................ 16

Gucci America, Inc. v. Guess?, Inc.,

868 F. Supp. 2d 207 (S.D.N.Y. 2012) ................................................................ 24

Hero Nutritionals LLC v. Nutraceutical Corp.,

2013 WL 4480674 (C.D. Cal. Aug. 16, 2013) ................................................... 16

Hornady Mfg. Co., Inc. v. Doubletap, Inc.,

746 F.3d 995 (10th Cir. 2014) ............................................................................ 14

KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc.,

543 U.S. 111 (2004) ........................................................................................... 19

Levi Strauss & Co. v. Blue Bell, Inc.,

778 F.2d 1352 (9th Cir. 1985) (en banc) ............................................................ 15

Lindy Pen Co. v. Bic Pen Corp.,

725 F.2d 1240 (9th Cir. 1984) ............................................................................ 11



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(continued)

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Lindy Pen Co. v. Bic Pen Corp.,

982 F.2d 1400 (9th Cir. 1993) ...................................................................... 22, 23

Marketquest Group, Inc. v. BIC Corp.,

2015 WL 1757766 (S.D. Cal. Apr. 27, 2015) .................................................... 20

Network Automation, Inc. v. Advanced Sys. Concepts,

638 F.3d 1137 (9th Cir. 2011) ............................................................................ 19

One Indus., LLC v. Jim O’Neal Distrib., Inc.,

578 F.3d 1154 (9th Cir. 2009) ............................................................................ 16

Playboy Enters., Inc. v. Baccarat Clothing Co., Inc.,

692 F.2d 1272 (9th Cir. 1982) ............................................................................ 22

QS Wholesale, Inc. v. World Marketing, Inc.,

2013 WL 1953719 (C.D. Cal. May 9, 2013) ...................................................... 21

Quia Corp. v. Mattel, Inc.,

2011 WL 2749576 (N.D. Cal. July 14, 2011) .................................................... 21

Rearden LLC v. Rearden Commerce, Inc.,

683 F.3d 1190 (9th Cir. 2012) ............................................................................ 14

Surfvivor Media, Inc. v. Survivor Productions,

406 F.3d 625 (9th Cir. 2005) ........................................................................ 13, 14

Therma-Scan, Inc. v. Thermoscan, Inc.,

295 F.3d 623 (6th Cir. 2002) .............................................................................. 18

Tovey v. Nike, Inc.,

2014 WL 3510975 (N.D. Ohio July 10, 2014) ................................................... 20

Union Carbide Corp. v. Ever-Ready, Inc.,

531 F.2d 366 (7th Cir. 1976) ................................................................................ 6

Walter v. Mattel, Inc.,

210 F.3d 1108 (9th Cir. 2000) ...................................................................... 15, 18



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(continued)

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STATUTES

15 U.S.C. § 1115(b)(4) ............................................................................................ 19

15 U.S.C. § 1125(a) ................................................................................................. 10

OTHER AUTHORITIES

1 McCarthy on Trademarks and Unfair Competition § 2:10 (4th ed.) .............. 14, 25

2 McCarthy on Trademarks and Unfair Competition § 11:45 (4th ed.) .................. 19



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I. INTRODUCTION

The parties agree that likelihood of confusion should be decided on summary

judgment. Plaintiffs moved for summary judgment last April, and Nike now moves

for summary judgment based on the complete fact and expert discovery record.

Both then and now, the record establishes that summary judgment should be

entered against Plaintiffs on their false endorsement and trademark infringement

claims because Plaintiffs cannot prove likelihood of confusion on either claim. If

the Court grants something less than summary judgment for Nike on all claims,

then summary adjudication of no damages should be entered against Plaintiffs

because, as a matter of law, they cannot get damages under any theory of recovery.

First, for the approximately 99% of accused Nike products where the words

“lights out” appeared only in a style name, there is no evidence that “lights out”

was ever displayed with these products in brick-and-mortar stores. If consumers

never encountered the phrase in connection with the products, they could not

possibly have been confused. Because there is no evidence that end consumers

who purchased the accused products in brick-and-mortar stores encountered the

phrase “lights out” in connection with those products, Plaintiffs cannot prove the

threshold “use in commerce” requirement for those sales. Brick-and-mortar sales

thus must be excluded from this case as a matter of law at the threshold.

Second, Plaintiffs cannot prove false endorsement as a matter of law.

Plaintiffs based their summary judgment motion on the premises that (1) Merriman

was universally known as “Lights Out,” (2) the nickname “Lights Out” was

uniquely associated with Merriman, and (3) consumers encountering “lights out” in

on-line style names for the accused Nike products would believe that Merriman was

endorsing the Nike products. Even then, Plaintiffs had nothing to support these

claims beyond a handful of cherry-picked articles and Merriman’s own claims

about his fame. As it turns out, fact and expert discovery have completely refuted

each of Plaintiffs’ speculative assertions.



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Most notably, the surveys conducted by both sides in this case established

that (1) very few consumers recognize “lights out” as a nickname for Merriman, (2)

among the small percentage of consumers who recognize “lights out” as a

nickname for any athlete, the majority of these consumers associated it with athletes

other than Merriman, and (3) not a single consumer believes that the use of “lights

out” in product style names for the accused Nike products implies that Merriman is

endorsing those products. The uniformity of the results across both Plaintiffs’ and

Nike’s surveys makes this claim especially suitable for summary judgment. As a

matter of law, Plaintiffs cannot show that an appreciable number of reasonably

prudent consumers would believe Merriman endorsed the accused Nike products.

Third, Plaintiffs cannot prove trademark infringement as a matter of law.

The Sleekcraft likelihood of confusion factors tilted heavily against Plaintiffs in last

spring’s summary judgment briefing. Fact and expert discovery made the balance

even more lopsided in Nike’s favor. For example:

The surveys conducted by both Plaintiffs’ and Nike’s expert showed

no consumer confusion about whether Plaintiffs were the source or sponsor of

Nike’s accused products. This cements the absence of any likelihood of confusion.

Plaintiff Lights Out Holdings, LLC (“LOH”) is merely a trademark

licensing company that has never sold any products.

At deposition, key claims in Plaintiffs’ summary judgment papers

concerning Merriman’s and LOH’s licensee’s sales were proven false. The

evidence showed that only three brick-and-mortar retailers ever sold these products,

and in very limited volumes, in very limited geographies, over limited periods of

time. The evidence also shows hardly any Internet sales.

The complete discovery record also confirms the extreme weakness of

Plaintiffs’ alleged trademark and absence of any likely confusion in other ways.

The record is filled with hundreds of additional examples of third-party uses of

“lights out” as a common phrase to mean an exceptional performance or performer.



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These include many third-party commercial uses of “lights out,” including in

connection with apparel. Under Ninth Circuit law, Plaintiffs’ inability to stand out

in this crowded conceptual and commercial arena confirms their mark is weak.

It also remains the case that, despite repeatedly trumpeting Nike’s alleged

$30 million in sales over the course of nearly a decade of alleged coexistence with

their own products, Plaintiffs have failed to produce even a single example of actual

consumer confusion. Under Ninth Circuit precedent, the absence of actual

confusion weighs heavily against Plaintiffs in light of this long period of alleged

overlap in sales. Discovery also sharpened the differences between Nike’s accused

products and Plaintiffs’ purported goods, reinforced the lack of overlap in the

parties’ marketing channels, and confirmed the absence of any intent to confuse

consumers. On this record, no reasonable trier of fact could conclude that Plaintiffs

have met their burden of proving trademark infringement.

Fourth, if the Court even needs to reach this defense, fair use is an

appropriate alternative ground for summary judgment. The undisputed evidence

shows that Nike used the phrase “lights out” in product style descriptions in a non-

trademark way, in its primary descriptive sense, and in good faith.

Fifth, even if any part of Plaintiffs’ liability claims could survive summary

judgment, the record warrants summary adjudication of no damages. Earlier in this

case, the Court (per Magistrate Judge Stormes) granted Nike’s motion to compel

the production of certain financial documents and gave Plaintiffs a choice: either

produce the documents or stipulate to a waiver of any measure of damages based on

lost profits. Plaintiffs chose to stipulate to the waiver of lost-profits-based theories

of recovery. Despite this waiver, they still asserted a “reasonable royalty” theory to

recover allegedly lost licensing revenue. In trademark law, a “reasonable royalty”

is a form of “lost profits” damages. Plaintiffs waived this theory. Plaintiffs also

waived any recovery of Nike’s profits as a proxy for their own lost profits, as this

too is a “lost profits” damages theory under Ninth Circuit law.



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Plaintiffs’ remaining damages theories fail as a matter of law for other

reasons. Plaintiffs’ “unjust enrichment” theory fails because Ninth Circuit

precedent requires a deliberate intent to deceive consumers, and Plaintiffs cannot

raise a triable issue on willfulness. Plaintiffs’ “corrective advertising” theory fails

because they cannot show actual harm. And Plaintiffs’ statutory damages theory

fails because they cannot meet the very high burden of showing counterfeiting.

II. BACKGROUND

Nike set forth the background of this case in greater detail in its opposition to

Plaintiffs’ summary judgment motion. Nike respectfully refers to the Court to all

the facts set forth in its earlier opposition brief and supporting papers. This section

summarizes some of the most significant developments in the case since that time.

A. Survey Evidence and Other Evidence Relating to “Lights Out”

Three experts (two for Nike and one for Plaintiffs) conducted surveys

relating to Plaintiffs’ false endorsement and trademark infringement claims. The

results from all three experts refuted the speculative assertions that Plaintiffs had

made about consumer recognition of “lights out” as a nickname for Merriman and

the likelihood of consumer confusion. Additional expert discovery further refuted

Plaintiffs’ assertions that the common sports phrase “lights out” is universally and

uniquely associated with Merriman and his trademark licensing company.

1. Nike’s and Plaintiffs’ Nickname Recognition Surveys

Dr. Carol Scott, an expert witness for Nike, conducted a survey that showed

respondents the phrase “Lights Out” and asked, “What sports(s), athletes(s),

teams(s), activity(ies), or other association(s), if any, come to mind?” (Scott Decl.

at Ex. A, ¶ 14 & Ex. 4.) After the initial response, the survey further probed

respondents by asking, “Anything else?” (Id.) The survey instructions had

previously informed respondents that “you will be shown some nicknames or terms

that may be associated with sports or athletes,” and “Lights Out” was one of 14

nicknames/terms about which all respondents were asked. (Id.)



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Less than one out of every 100 respondents (4 out of 460, or 0.9%) identified

Merriman in response to “Lights Out.” (Scott Decl. at Ex. A, ¶ 17 & Ex. 4.) One

additional respondent stated “[a] player who used to be in the NFL.” By contrast,

hundreds of responses identified concepts, sports, or individuals other than

Merriman. (Scott Decl. at Ex. A, ¶¶ 18-20 & Ex. 5.) In fact, seven respondents

named an athlete other than Merriman in response to “Lights Out”—nearly twice

the very small number that mentioned Merriman. (Scott Decl. at Ex. A, Ex. 5.)

And 3.7% of respondents mentioned “football” or “the NFL” without any reference

to Merriman or anything else that could be construed as an attempt to identify

Merriman. (Scott Decl. at Ex. A, ¶ 17 & Ex. 5.)

Dr. James Berger, an expert witness for Plaintiffs, conducted a survey that

purported to test whether consumers associated the phrase “Lights Out” with Mr.

Merriman. (Scott Decl. at Ex. B, ¶ 2.) Despite the use of leading questions and

other methodological flaws that exaggerated the results in Merriman’s favor, Dr.

Berger’s survey still found very little association of the term “Lights Out” with

Merriman. (Scott Decl. at Ex. B, ¶ 4.) This survey asked respondents the

obviously leading question, “Can you think of a professional athlete who is

associated with the phrase ‘Lights Out?’” (Scott Decl. at Ex. B, ¶ 6.)

Notwithstanding the instruction to focus only on professional athletes and ignore

any other types of associations that may come to mind when consumers see the

term, only 3.9% of respondents (24 out of 616) identified Merriman. (Scott Decl. at

Ex. B, ¶ 4.) In fact, of the small fraction of respondents who identified a

professional athlete at all, a majority named an athlete other than Merriman. (Id.)

Dr. Berger then asked respondents who had not identified any athlete a

flawed multiple choice question that gave “Shawne Merriman” as an option along

with four other athletes. (Scott Decl. at Ex. B, ¶ 6.) Forty respondents picked an

athlete other than Merriman. (Scott Decl. at Ex. B, ¶ 4.) By contrast, only ten

respondents picked Merriman. (Scott Decl. at Ex. B, ¶ 7.) So even when



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respondents were given Merriman’s name as part of a question asking them to

identify professional athletes associated with the phrase “Lights Out,” four times as

many respondents picked an athlete other than Merriman. These results added only

1.6% to the total of respondents identifying Merriman (for a sum of 5.5%), while

adding 6.5% to the total identifying athletes other than Merriman.

Both sides’ surveys demonstrate that very few consumers recognize “lights

out” as a nickname for Merriman. Of course, even a consumer who associates

“lights out” with Merriman would not necessarily perceive the use of this phrase in

on-line product style descriptions as an implied endorsement of the products by

Merriman. But the fact that so few consumers associate the term with Merriman in

the first place makes it inconceivable that an appreciable number of reasonably

prudent consumers would mistakenly infer a Merriman endorsement from the use

of “lights out” in product style descriptions for the accused Nike products.

2. Nike’s Survey Showing No Consumer Confusion

Dr. Itamar Simonson, an expert witness for Nike, conducted a survey that

showed zero percent consumer confusion. (Simonson Decl. at Ex. A, ¶ 13 & Ex.

F.) This survey showed consumers web pages displaying the style descriptions

containing “lights out” in connection with the accused Nike products and asked

them a series of questions pursuant to the standard Eveready protocol approved by

courts on countless occasions to identify any potentially actionable type of

confusion. (Simonson Decl. at Ex. A, ¶¶ 11-12 & Ex. E.) See Union Carbide

Corp. v. Ever-Ready, Inc., 531 F.2d 366, 385-88 (7th Cir. 1976). In response, not a

single consumer mentioned Merriman, any of his companies or purported “brands,”

or anything else associated with Plaintiffs. (Simonson Decl. at Ex. A, ¶ 13.)

3. Plaintiffs’ “Association” Survey Showing No Consumer Confusion

Plaintiffs’ expert Dr. Berger fashioned his own “association” survey that did

not follow the Eveready protocol or any other accepted methodology. This survey



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departed so far from accepted survey principles that it will be subject to exclusion

under Daubert. But the relevant point for summary judgment is that Dr. Berger’s

survey did not uncover a single instance of confusion about whether Plaintiffs were

the source or sponsor of the accused Nike products. (Simonson Decl. at Ex. B, ¶ 3.)

Dr. Berger further admitted that “[o]ther athletes have been known as lights

out. And lights out has just become an almost generic expression among sports

announcers for somebody who really, you know, destroys somebody else in an

athletic contest.” (Kempton MSJ Decl. Ex. A at 140:15-19; emphasis added.) As a

result, Plaintiffs’ own expert acknowledged that “consumers could think of those

other uses when they see lights out.” (Kempton MSJ Decl. Ex. A at 140:20-22.)

4. Additional Expert Analysis Showing History, Usage, and Third-Party Commercial Applications of “Lights Out”

Two additional experts provided unrebutted opinions concerning the long-

standing and widespread use of “lights out” in ways that have nothing to do with

Plaintiffs. A linguist retained by Nike explained the history and evolution of the

term “lights out” as a common phrase used to describe an exceptional performance

or performer. (Butters Decl. at Ex. A, ¶ 1.) The linguist also analyzed a

representative corpus of materials used by linguists that showed relatively very little

association of the term with Plaintiffs. (Butters Decl. at Ex. A, ¶¶ 20-45.) Another

expert on third-party use of “lights out” found extensive use of the term—including

commercial uses with apparel—in contexts unrelated to Plaintiffs. (Butters Decl. at

Ex. A, ¶¶ 39-40.) This expert analysis directly refuted the speculative assertions

based on cherry-picked articles that Plaintiffs submitted with their MSJ.

B. Deposition of Plaintiffs

The deposition of LOH and Merriman, along with Plaintiffs’ documents used

at that deposition, revealed numerous facts that contradict Plaintiffs’ earlier

summary judgment motion and further support granting summary judgment to

Nike. For example, it emerged that LOH is merely a licensing company that has



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never sold any products to consumers. (Kempton MSJ Decl. Ex. F at 305:1-5;

Kempton MSJ Decl. Ex. E at 48:17-50:25; 61:3-61:7.) Nike also uncovered at

deposition that the non-party company formed by Plaintiffs to sell products did not

have anywhere near the degree of success that they claimed.

For instance, in Merriman’s summary judgment declaration, Plaintiffs stated

that “[f]rom 2006 to 2008, the apparel was sold in at least 20 Walmart stores across

California, from San Diego to Los Angeles.” (Dkt. No. 36-26 at ¶ 11.) But at

deposition, it was shown that the Walmart sales occurred only in the fall of 2010,

and consisted of 816 total t-shirts sold in no more than 17 San Diego-area Walmart

stores. (Kempton MSJ Decl. Ex. F at 273:2-274:3; 278:25-279:8.)

More broadly, Plaintiffs stated in Merriman’s summary judgment declaration

that “[f]rom 2005 to present, LIGHTS OUT apparel has been sold by a number of

brick-and-mortar stores, such as Walmart, Sports Fever, Metro-Goldwyn Meyer

(MGM) casino stores, and specialty stores in New York.” (Dkt. No. 36-26 at ¶ 11.)

But at deposition, it was shown that the earliest brick-and-mortar sales occurred in

the fall of 2009 and consisted of 780 total t-shirts, tank tops, and hats at local Sports

Fever stores. (Kempton MSJ Decl. Ex. F at 342:6-20; 347:24-348:16.) Likewise, it

was shown that the only other brick-and-mortar sales were at one Las Vegas MGM

Grand Hotel store in 2013-14. (Kempton MSJ Decl. Ex. F at 353:5-9; 359:3-6;

372:4-375:11.) Finally, Plaintiffs claim to have made substantial Internet sales of

“Lights Out” products since 2005. (E.g., Dkt. No. 36-26 at ¶ 11.) But the only

evidence of Internet sales consists of minimal amounts occurring much later in

time. (Kempton MSJ Decl. Ex. H at 518:21-525:12; Kempton MSJ Decl. Ex. I.)

C. Plaintiffs’ Stipulation Not to Pursue Lost Profits

Plaintiffs expressly waived any damages theory based on lost profits in

response to the Court’s order compelling them to produce certain financial

documents. After Plaintiffs balked at Nike’s discovery requests seeking

information on their profits, Nike filed a motion to compel this information. (Dkt.



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No. 48; Dkt. No. 65 at 8-9.) The Court (per Magistrate Judge Stormes) granted

Nike’s motion to compel on May 28, 2015. (Dkt. No. 65 at 8-9.) In doing so, the

Court gave Plaintiffs a choice: “Accordingly, the Court ORDERS that Plaintiffs

produce documents responsive to RFP No. 27 by June 12, 2015. Alternatively,

Plaintiffs may stipulate, by the same date, to a limitation on damages measures to

exclude lost profits.” (Dkt. No. 65 at 9, emphasis in original.)

Plaintiffs chose not to produce the documents. They instead stipulated to the

waiver that the Court had offered as an alternative. Plaintiffs thus “stipulate[d] to

limit their damages measures to exclude lost profits.” (Kempton MSJ Decl. Ex. B.)

As a result, Nike did not obtain basic discovery that would be relevant to any

lost-profits-based theories of recovery that Plaintiffs might try to pursue. For

example, Nike was unable to discover Plaintiffs’ present and historical licensing

revenues (if any), the costs associated with Plaintiffs’ licensing efforts (to subtract

from revenues to calculate actual profits), and the profit margin on the products

allegedly sold by Merriman or LOH’s licensee. In exchange, Plaintiffs promised

the Court they would limit their damages measures to exclude lost profits.

However, after assuring the Court that Nike would not have to defend against

any lost profits measure of damages, Plaintiffs asserted a lost profits theory in their

damages expert report in the form of a royalty for lost licensing revenue. Plaintiffs’

damages expert report also sought recovery of Nike’s profits, but it did not specify

whether it sought Nike’s profits as a proxy for Plaintiffs’ lost profits (waived by the

stipulation) or under an unjust enrichment theory (requiring willfulness).

III. ARGUMENT

A. Plaintiffs Cannot Prove Use in Commerce for Nearly All Brick-and-Mortar Retail Sales.

As a threshold matter of law, Plaintiffs cannot meet the “use in commerce”

element of their claims for nearly all products that retailers sold to consumers in

brick-and-mortar stores. Plaintiffs’ claims require them to meet their burden of



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proving, among other things, that Nike “use[d] in commerce” the alleged mark or

persona in a way that is likely to confuse consumers. See 15 U.S.C. § 1125(a).

Plaintiffs understandably have not alleged that third-party retailers (e.g., Macy’s,

Sports Authority) or other sophisticated professional buyers were confused. Rather,

Plaintiffs’ claims are based solely on a theory of end consumer confusion. (See,

e.g., Dkt. No. 36-2 at 11-12, 15 [Plaintiffs’ interrogatory responses]; Dkt. No. 36 at

16-18, 20-21 [Plaintiffs’ Opening MSJ brief] (exclusive focus on alleged confusion

by end consumer).) But end consumers cannot be confused, of course, if they never

even encountered the alleged mark in connection with the accused products.

Here, for the approximately 99% of accused Nike products where the words

“lights out” never appeared on the product, label, or hangtag, Plaintiffs have no

evidence that consumers in brick-and-mortar stores ever encountered the words

“lights out” in connection with the products. The record shows only that “lights

out” appeared in product style names in wholesale catalogues for professional

buyers (not end consumers), Nike Team catalogues for team buyers (e.g., high

school, college), and web pages offering these products for sale. Despite bearing

the burden, Plaintiffs have not provided a shred of evidence that a consumer who

purchased the Nike products in a retail store ever saw “lights out” in connection

with these products (e.g., in any kind of in-store advertising or promotional

materials). Plaintiffs cannot therefore establish a “use in commerce” that could

have resulted in end consumer confusion when the products were purchased in

retail stores. Accordingly, brick-and-mortar sales must be excluded from this case

as a matter of law. See 15 U.S.C. § 1125(a).

B. Plaintiffs Cannot Prove False Endorsement.

In addition to the other reasons set forth in Nike’s opposition to Plaintiffs’

summary judgment motion, the survey evidence shuts the door on Merriman’s false

endorsement claim. Merriman must prove, among other things, that a reasonable

consumer likely would believe that Merriman is endorsing the accused products in



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light of how the common sports phrase “lights out” is used in the on-line product

style descriptions. See Lindy Pen Co. v. Bic Pen Corp., 725 F.2d 1240, 1245 (9th

Cir. 1984) (the likelihood of confusion analysis centers on “the way the marks are

encountered in the marketplace and the circumstances surrounding the purchase of

the [products]”). Merriman’s claim, of course, cannot even get off the ground if

consumers do not recognize “lights out” as his nickname in the first place. And that

is exactly what the survey evidence showed. As explained in detail in Section II.A

above, Nike’s recognition survey shows that less than 1%–less than one out of

every 100–consumers in the relevant population even associates Shawne Merriman

with the nickname “Lights Out.” (Scott Decl. at Ex. A, ¶ 17& Ex. 4.) This fact

directly refutes the speculative assertions Plaintiffs made in their summary

judgment motion to support the false endorsement claim.

Moreover, Plaintiffs’ own survey shows that, even when biased and leading

questions were asked, very few consumers recognized “Lights Out” as a nickname

for Merriman. (Scott Decl. at Ex. B, ¶ 4.) In fact, among the small percentage of

survey respondents who associated the nickname “Lights Out” with any

professional athlete at all, most of them associated the nickname with professional

athletes other than Shawne Merriman. (Id.)

Also, neither Nike’s confusion survey nor Plaintiffs’ “association” survey

yielded a single instance in which any consumer believed that Merriman was

endorsing the accused Nike products. (Simonson Decl. at Ex. A, ¶ 13; Simonson

Decl. at Ex. B, ¶ 3; Kempton MSJ Decl. Ex. C, ¶ 28.) Hence, not only do very few

consumers recognize “lights out” as a nickname for Merriman in the first place, not

a single consumer believes Merriman is endorsing the accused Nike products based

on the presence of the words “lights out” in the product style descriptions. Indeed,

there has not been a single instance of confusion about whether Merriman endorsed

the accused Nike products despite accused sales as far back as 2005.

/////



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The widespread use of “lights out” as a common sports phrase, and its use as

a nickname for highly successful athletes in the sports of baseball (World Series

champion pitcher Brad “Lights Out” Lidge), boxing (three-weight world champion

James “Lights Out” Toney), and mixed martial arts (Chris “Lights Out” Lytle), also

weigh heavily against Plaintiffs. In light of these facts and the overwhelming

survey evidence, Plaintiffs’ suggestion that anyone seeing “lights out” in the on-line

product style names will believe Merriman is endorsing those products fails as a

matter of law. Even for those few consumers who may know that Merriman has

used “lights out” as a nickname, there is nothing in these limited, plain-text, on-line

uses that would lead a reasonable consumer to believe that Merriman is endorsing

the accused Nike products (mostly baseball-related and youth performance

apparel). And even when Merriman was at the peak of his football career (2005-

2007) and had a Nike endorsement contract (2005-2010), Nike never used the

words “lights out” for a Nike product—not even a Nike football product—to

identify it as endorsed by Merriman. No reasonable trier of fact could conclude that

an appreciable number of reasonably prudent consumers would draw such an

inference with respect to the accused products, sold mostly from 2011 onward.

Applying the first three elements of the modified Sleekcraft test for false

endorsement claims, see Downing v. Abercrombie & Fitch, 265 F.3d 994, 1007-08

(9th Cir. 2001), to this record confirms that Plaintiffs cannot meet their burden.

Level of Recognition of “Lights Out” as a Nickname for Merriman.

Because the only asserted basis for the false endorsement claim is the mere use of

the words “lights out” in connection with the accused products, the issue for the

first element is not the level of recognition of Merriman himself. Rather, the issue

is to what extent the relevant consumers recognize “lights out” as a nickname for

Merriman—versus a common sports phrase, other athletes’ nickname, some other

association, or no association at all. As discussed above, the evidence shows the

level of recognition of “lights out” as a nickname for Merriman is extremely low.



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Similarity of Alleged Persona to Defendant’s Use of Term. The accused

uses of “lights out” (mostly in plain text as part of a broader on-line product style

description) do not suggest any connection to Merriman’s alleged persona. “In

considering the degree of similarity between the two marks, courts should analyze

each mark within the context of other identifying features.” Surfvivor Media, Inc.

v. Survivor Productions, 406 F.3d 625, 633 (9th Cir. 2005). Merriman’s image

does not appear with any of these uses. His proper name does not appear with these

uses. Nor does anything else that consumers might recognize as Merriman’s

“persona”—e.g., “former San Diego Chargers linebacker”—appear with the

accused uses. Given the undisputed evidence of other (and far stronger)

associations of the term “lights out” with concepts and people other than Merriman,

any similarity is weak or non-existent here.

Relatedness of Alleged Persona to Accused Goods. Merriman is a former

professional football player. The accused goods are mostly baseball pants worn

while playing baseball, basic youth performance apparel (e.g., pants and shorts),

and glow-in-the-dark apparel featuring logos of Major League Baseball teams:



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(Dkt. No. 53-8 [Leeper Decl. Ex. B] at 41; Dkt. No. 53-7 [Leeper Decl. Ex. A] at

21; Dkt. No. 53-11 [Minto Decl. Ex. B] at 9.) None of the goods even relates to

football, much less anything in football consumers might connect to Merriman.

C. Plaintiffs Cannot Prove Trademark Infringement.

No reasonable trier of fact could find likelihood of confusion on LOH’s

trademark infringement claim. LOH must prove, among other things, that an

appreciable number of reasonably prudent consumers would be confused into

believing LOH is the source or sponsor of the accused Nike products based on how

they encounter the accused uses and LOH’s alleged mark in the marketplace. See,

e.g., Rearden LLC v. Rearden Commerce, Inc., 683 F.3d 1190, 1209-10 (9th Cir.

2012). LOH cannot rely on its purported trademark registration to excuse its failure

to meet its burden, as “‘[a] standard character registration does not override the

requirement that likelihood of confusion be measured by the perceptions of

consumers in the marketplace, including the effect of packaging.’” 1 McCarthy on

Trademarks and Unfair Competition § 2:10 (4th ed.) (quoting Hornady Mfg. Co.,

Inc. v. Doubletap, Inc., 746 F.3d 995, 1002 n.2 (10th Cir. 2014)). In addition to all

the reasons in Nike’s opposition to Plaintiffs’ summary judgment motion, the full

record confirms that summary judgment should be entered against this claim.

Survey Evidence. Nike tested Plaintiffs’ speculative assertions about the

likelihood of confusion with a survey that applied the standard Eveready protocol.

This survey showed consumers representative web pages offering the accused Nike

products—precisely the uses that Plaintiffs have alleged to be infringing here—and

probed for every possible type of consumer confusion that Plaintiffs might contend.

The survey results showed that there was zero percent consumer confusion. (See

Section II.A, supra.) Not a single consumer thought that LOH or Merriman was

the source or sponsor of the accused Nike products. This result is strong, unrefuted

evidence supporting the absence of any likelihood of confusion. See, e.g., Surfvivor

Media, Inc. v. Survivor Productions, 406 F.3d 625, 633 (9th Cir. 2005) (granting



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summary judgment of no likelihood of confusion to defendant because, among

other things, “[a] survey commissioned by [defendant] showed an absence of

significant confusion”); Levi Strauss & Co. v. Blue Bell, Inc., 778 F.2d 1352, 1360-

61 (9th Cir. 1985) (en banc) (approving district court’s conclusion that survey

evidence showed no reasonable likelihood of consumer confusion).

Plaintiffs’ survey, notwithstanding its many methodological flaws, also did

not find a single consumer who believed that LOH was the source or sponsor of the

accused Nike products. Plaintiffs instead used highly leading questions and an

artificial juxtaposition of images to coax some consumers into saying that “lights

out” was a “brand” for the accused Nike products. This statement, however, does

not amount to confusion about whether LOH is actually the source or sponsor of the

accused Nike products. See, e.g., Walter v. Mattel, Inc., 210 F.3d 1108, 1110 (9th

Cir. 2000) (approving district court’s rejection of “somehow associated with”

theory of confusion). Whatever other disputes may exist relating to the experts’

surveys, they are unanimous in showing that no consumer—much less an

appreciable number of reasonably prudent consumers—likely would be confused

about whether LOH is the source or sponsor of the accused Nike products.

Weakness of Asserted Mark. The full record shows even more strongly that

LOH’s purported “lights out” mark is conceptually very weak. In discovery, the

parties adduced hundreds more examples of third-party uses of “lights out” as a

common sports phrase long pre-dating LOH’s alleged uses and continuing to the

present. (Butters Decl. at Ex. A, ¶¶ 12-15; Frank Decl. at Ex. A, pp. 3-4.) These

uses included many third-party commercial uses, including uses with apparel.

(Butters Decl. at Ex. A, ¶¶ 48-50; Frank Decl. at Ex. A, pp. 26-39.) Plaintiffs’ own

expert called “lights out” an “almost generic expression,” and Merriman himself

admitted in 2011 that it is “one of the most common phrases in the world,” (Dkt.

No. 53-37 [Kempton Decl.] Ex. U at p. LO04939). All of this evidence establishes

the extreme weakness of the asserted mark.



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Nor can LOH rely on the allegedly incontestable status of the registration it

purchased from an intimate apparel company to compensate for the conceptual

weakness of its mark. The Ninth Circuit has held that “the incontestable status of [a

plaintiff’s] mark does not require a finding that the mark is strong.” Entrepreneur

Media, Inc. v. Smith, 279 F.3d 1135, 1143 n.3 (9th Cir. 2002); see also Hero

Nutritionals LLC v. Nutraceutical Corp., 2013 WL 4480674, at *4 (C.D. Cal. Aug.

16, 2013) (“Although two of Hero’s trademark registrations are incontestable, [a]n

incontestable mark may ... still be relatively weak for likelihood of confusion

purposes[.]” (alterations in original) (citation and internal quotations omitted)).

Discovery also showed that LOH’s asserted mark is commercially far weaker

than Plaintiffs had represented in their MSJ. The record shows only small,

sporadic, and localized sales in retail stores: San Diego-area Sports Fevers in fall

2009, San Diego-area Walmarts in fall 2010, and one MGM Grand Hotel store in

Las Vegas in 2013-14. (See Section II.B, supra.) The record likewise shows only a

few thousand dollars of recent LOH Internet sales. (See id.) Meanwhile, the record

is replete with legions of other uses of “lights out,” including third-party

commercial uses. (Butters Decl. at Ex. A, ¶¶ 27-53; Frank Decl. at Ex. A, pp. 16-

38; Kempton MSJ Decl. Ex. G at 606:17-607:22.) See, e.g., Entrepreneur Media,

279 F.3d at 1144 (“[T]hat the marketplace is replete with products using a

particular trademarked word indicates not only the difficulty in avoiding its use but

also, and directly, the likelihood that consumers will not be confused by its use.”);

See One Indus., LLC v. Jim O’Neal Distrib., Inc., 578 F.3d 1154, 1164 (9th Cir.

2009) (“When similar marks permeate the marketplace, the strength of the mark

decreases.”). Hence, there is no support for Plaintiffs’ claim that consumers will

associate the term “lights out” with LOH as opposed to its other very common

conceptual and commercial uses. The extreme weakness of LOH’s asserted mark

favors summary judgment against its trademark infringement claim.

/////



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Dissimilarity of Alleged Marks. The appearance of the alleged marks in the

marketplace is highly dissimilar. Here are examples of Plaintiffs’ asserted mark as

allegedly encountered in the marketplace (Docket No. 53-34 [Kempton Decl.] Ex.

R at LO00218):

And here are examples of the accused uses of style names with Nike products:



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(Dkt. No. 36-24 & 36-21.)

Further, although Plaintiffs expressly disclaimed reverse confusion in this

case, their alleged forward confusion story is remarkably similar to a theory that the

Ninth Circuit rejected in Walter, 210 F.3d at 1108. Like the plaintiff in Walter,

LOH argues that Nike’s use of “lights out” in product style names “implies that [the

plaintiff] licensed the product.” Id. at 1111 (emphasis added). Here, as in Walter,

“[t]he appearance of the respective marks, however, negates any similarity.” Id.

For example, Plaintiffs’ stylized uses on products differ significantly from the

accused plain-text, on-line uses as part of product style descriptions. Moreover, just

as the Ninth Circuit concluded in Walter, the accused portion of the style name

“never appears alone; rather, it is invariably accompanied by a reference to Barbie

[in this case, Nike], which is clearly the salient part of the mark indicative of the

product’s origin.” Id. (citation and internal quotation marks omitted). Notably,

Plaintiffs’ own expert agrees with this assessment, acknowledging that “‘Nike’ is

the overpowering primary brand for its products” and “when people are asked to

identify a brand, they will always focus on the dominating brand, which in this case

is Nike.” (Kempton MSJ Decl. Ex. D at 8-9.)

Dissimilarity of Goods and Consumer Care. Discovery confirmed that

Nike’s accused products have specific performance features and—especially in the

case of the Nike baseball pants—functional uses that make them dissimilar from

Plaintiffs’ “luxury lifestyle” t-shirts and hats. Reasonable consumers will be

attuned to these differences, and one cannot dismiss the marketplace realities by

treating all apparel as the same. See Therma-Scan, Inc. v. Thermoscan, Inc., 295

F.3d 623, 633 (6th Cir. 2002) (“Goods or services are not necessarily related,

however, simply because they coexist in the same broad industry.”).

Lack of Overlap of Marketing Channels. Discovery showed there was zero

overlap of the accused sales with Plaintiffs’ sales in any retail store at any time,

much less at the same time. In fact, retail stores have barely ever sold Plaintiffs’



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goods at all—again, the record shows only three relatively brief instances of retail

sales in limited quantities, in very limited geographies. And the Ninth Circuit has

rejected the notion that merely offering products on the Internet is enough to show

overlap. See Network Automation, Inc. v. Advanced Sys. Concepts, 638 F.3d 1137,

1151 (9th Cir. 2011) (“Today, it would be the rare commercial retailer that did not

advertise online, and the shared use of a ubiquitous marketing channel does not

shed much light on the likelihood of consumer confusion.”).

Lack of Actual Confusion. Despite a nearly decade-long alleged overlap in

the products’ sales, Plaintiffs still have not shown a single instance of actual

confusion. Under Ninth Circuit precedent, this failure weighs heavily against the

notion that there was any likelihood of confusion: “some evidence of actual

confusion should have become available if [defendant’s] coexisting use had created

a genuine likelihood of confusion.” Cohn v. Petsmart, Inc., 281 F.3d 837, 842-43

(9th Cir. 2002) (six years of alleged overlap).

Lack of Intent to Confuse. As discussed below and in Nike’s earlier MSJ

opposition, there is no evidence that anyone at Nike intended to confuse consumers

into believing LOH or Merriman was the source or sponsor of the accused products.

D. Fair Use Is An Alternative Ground for Summary Judgment.

If the Court even needs to reach it, Nike’s affirmative defense of fair use is

an alternative ground for summary judgment in its favor. Summarized generally,

the rule of the fair use defense is that “‘[a] junior user is always entitled use a

descriptive term in good faith in its primary, descriptive sense other than as a

trademark.’” Cairns v. Franklin Mint Co., 292 F.3d 1139, 1150-51 (9th Cir. 2002)

(quoting 2 McCarthy on Trademarks and Unfair Competition § 11:45 (4th ed.)); see

also 15 U.S.C. § 1115(b)(4) (codifying fair use defense).

The fair use defense recognizes “the undesirability of allowing anyone to

obtain a complete monopoly on use of a descriptive term simply by grabbing it first

as a registered trademark.” KP Permanent Make-Up, Inc. v. Lasting Impression I,



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Inc., 543 U.S. 111, 124 (2004). When Plaintiffs picked the common sports phrase

“lights out” as a purported mark, they “assume[d] the risk that another organization

in the same business sphere will use that phrase for its common meaning.”

Marketquest Group, Inc. v. BIC Corp., 2015 WL 1757766, at *3 (S.D. Cal. Apr. 27,

2015). An expert linguist explained the history and evolution of the term “lights

out” as a common phrase describing an exceptional performance or performer.

(Butters Decl. at Ex. A, ¶¶ 54-56.) An additional study of public third-party use

revealed hundreds of examples of the use of “lights out” in sports-related contexts.

(Frank Decl. at Ex. A, pp. 21-26.) The study also located numerous third-party

apparel products with which “lights out” is used. (Frank Decl. at Ex. A, pp. 26-39.)

All three of elements of the fair use defense are met here. Fair use exists

when a defendant shows it is “(1) not using the term as a trademark, (2) us[ing] the

term only to describe [its] own goods and services, and (3) us[ing] the term fairly

and in good faith.” Marketquest, 2015 WL 1757766, at *3. Here, Nike did not try

to protect or promote the term as a trademark in any way. (Dkt. No. 53-6 [Leeper

Decl.] at ¶¶ 4-5, 10-12; Dkt. No. 53-9 [Minto Decl.] at ¶¶ 3-4, 7-8; Dkt. No. 53-12

[Morris Decl.] at ¶¶ 6-8, 10-11.) For around 99% of the accused products, it did not

even use the words “lights out” (much less as a trademark) on the products, labels,

or hangtags. (Id.) Rather, Nike used the common sports phrase in textual product

style descriptions primarily as an administrative matter. (Id.; Kempton MSJ Decl.

Ex. H at 126:18-129:18; 157:1-5.) And courts have ruled that, in the fair use

context, “the descriptive sense of a mark is broader than merely referring to the

physical characteristics, function, purpose or intended uses of the product on which

it appears.” Tovey v. Nike, Inc., 2014 WL 3510975, at *13 (N.D. Ohio July 10,

2014); accord Bell v. Harley-Davidson Motor Co., 539 F. Supp. 2d 1249, 1258

(S.D. Cal. 2008). Finally, the undisputed evidence shows that Nike used the term

in good faith because it is a common sports phrase widely used to describe an

exceptional performance or performer (and, in the case of the MLB-licensed



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products, to describe their glow-in-the-dark features). (Dkt. No. 53-6 [Leeper

Decl.] at ¶¶ 4-5, 10-12; Dkt. No. 53-9 [Minto Decl.] at ¶¶ 3-4, 7-8; Dkt. No. 53-12

[Morris Decl.] at ¶¶ 6-8, 10-11; Kempton MSJ Decl. Ex. H at 126:18-129:18;

157:1-5.) The record shows that Nike used the term “lights out” because of its

pre-existing and widespread common meaning, and not to capitalize on any

purported goodwill that Plaintiffs claim to have built in the term on their own.

E. Plaintiffs Cannot Recover Any Damages.

As a matter of law, Plaintiffs cannot recover any damages even if they could

prevail on their liability claims. Accordingly, if the Court grants something less

than a complete summary judgment against Plaintiffs’ liability claims, summary

adjudication of no damages should be entered.

1. Plaintiffs’ Stipulation Waived Any Measure of Damages Based on Lost Profits

Plaintiffs stipulated to limit their damages measures to exclude lost profits.

(See Section II.C, supra.) Plaintiffs elected to waive these theories, rather than

produce documents, in response to the Court’s order granting Nike’s motion to

compel. This means they cannot recover actual damages based on lost profits and

cannot recover any portion of Nike’s profits as a proxy for Plaintiffs’ lost profits.

Plaintiffs are thus precluded from pursuing their “reasonable royalty” theory

for lost licensing revenues that Plaintiffs claim Nike should have paid. Plaintiffs’

stipulation waived this theory because, in trademark law, a “reasonable royalty”

theory is a lost profits measure of damages. See Quia Corp. v. Mattel, Inc., 2011

WL 2749576, at *6 (N.D. Cal. July 14, 2011) (“lost royalty payments are a form of

damages for lost profits”); QS Wholesale, Inc. v. World Marketing, Inc., 2013 WL

1953719, at *4 (C.D. Cal. May 9, 2013) (reasonable royalties “are a form of

damages for lost profits, since they focus on the licensing fees that were never

paid”). Because “lost royalty payments are a form of damages for lost profits,”

Quia, 2011 WL 2749576, at *6, Plaintiffs’ stipulation bars any royalty damages.



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Plaintiffs’ stipulation likewise precludes them from pursuing Nike’s lost

profits as a proxy for Plaintiffs’ lost profits. There are two theories under which a

plaintiff may seek to recover a defendant’s profits in a trademark infringement case:

(1) as a measure of the plaintiff’s own lost profits; and (2) as unjust enrichment for

willful infringement. See Adray v. Adry-Mart, Inc., 76 F.3d 984, 988 (9th Cir.

1995). Under Ninth Circuit law, when a plaintiff waives recovery based on lost

profits, it cannot seek defendant’s profits as a measure of its own lost profits. See

id. (“Adray conceded that he did not seek to recover Adry-Mart’s profits as a

measure of his own lost sales, since he disclaimed any intent to seek damages based

on lost sales. See October 2, 1992 Transcript at 170. In these circumstances, Adray

could recover Adry-Mart’s profits only if the infringement was willful.”).

Accordingly, because Plaintiffs waived any measure of damages based on lost

profits, they cannot pursue Nike’s profits as a measure of their own lost profits.

Plaintiffs’ attempt to pursue lost profits measures of damages despite their

stipulation conflicts directly with the Court’s discovery order. Plaintiffs waived

these theories in order to avoid the otherwise-compulsory production of financial

documents that would show licensing revenues, costs associated with licensing

efforts, and other information relating to profitability. Having used the stipulation

as a shield, they cannot now wield the sword of lost profits as a measure of

damages. Summary adjudication is warranted to enforce the Court’s order.

2. Plaintiffs’ Other Damages Theories Fail as a Matter of Law

Plaintiffs cannot recover any portion of Nike’s profits based on an unjust

enrichment theory because they cannot raise a triable issue of fact on willfulness.

Under Ninth Circuit law, unjust enrichment requires proof that the infringement

was “‘willfully calculated to exploit the advantage of an established mark.’” Lindy

Pen Co. v. Bic Pen Corp., 982 F.2d 1400, 1405 (9th Cir. 1993) (quoting Playboy

Enters., Inc. v. Baccarat Clothing Co., Inc., 692 F.2d 1272, 1274 (9th Cir. 1982).

/////



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Here, Plaintiffs cannot raise a triable issue of fact on willfulness. Plaintiffs

have no evidence that anyone at Nike intended to confuse consumers by trading on

Plaintiffs’ purported goodwill. Moreover, Nike’s witnesses affirmatively showed

that the decisions to use “lights out” as part of broader product style descriptions for

products like baseball pants and kids’ performance apparel had nothing to do with

Plaintiffs or anything associated with them. (Dkt. No. 53-6 [Leeper Decl.] at ¶¶ 4-

5, 10-12; Dkt. No. 53-9 [Minto Decl.] at ¶¶ 3-4, 7-8; Dkt. No. 53-12 [Morris Decl.]

at ¶¶ 6-8, 10-11; Kempton MSJ Decl. Ex. H at 126:18-129:18; 157:1-5.)

Viewing the record through the prism of common sense also confirms there

is no triable issue on willfulness. It makes no sense to suppose that Nike, with its

own famous marks prominently displayed on and used with the accused products,

would intentionally try to exploit any “advantage” that Plaintiffs’ alleged mark and

persona might confer. See Lindy Pen, 982 F.2d at 1406 (affirming ruling of no

willfulness because, among other things, “Bic’s major position in the pen industry

makes it clear that it was not trading on Lindy’s relatively obscure name”).

Underscoring this point, MGM Grand’s corporate representative testified that

LOH’s proposed price points were too high “[b]ecause it was not a brand that was

really highly recognizable.” (Dkt. No. 53-44 [Kempton Decl.] Ex. BB at 31:11-14.)

It also makes no sense to suppose that Nike might intentionally try to exploit

purported rights associated with Merriman at any time with non-football products

(no accused products are football products). There is no evidence that Merriman is,

or ever was, anywhere near the type of transcendent athlete that Nike might engage

to endorse a product that is outside the realm of the athlete’s particular sport. It is

undisputed that, during Merriman’s entire endorsement relationship with Nike, the

company never even sold a football product that was uniquely associated with

Merriman. Moreover, it is also undisputed that Nike did not use “lights out” to

associate Merriman with a product during their endorsement relationship.

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The fact that about 99% of accused sales occurred after Nike’s termination of

Merriman’s contract further confirms there is no triable issue on willfulness.

Plaintiffs have no explanation for why Nike would try to trade on Plaintiffs’

purported goodwill for baseball pants and kids’ apparel around the same time that

Merriman’s career had so declined that Nike no longer wanted him to endorse Nike

football equipment. Nike’s recent expert study also showed that “use of the phrase

‘Lights Out’ in a product style description near the product resulted in no increase

in consumers’ interest in purchasing the product above that which would have been

achieved with the Nike name alone or with ‘Longball’ or ‘Game Time’ in the

product style description, and thus sales of these products cannot be attributed to

the use of ‘Lights Out’ in style descriptions.” (Scott Decl. at Ex. B, ¶¶ 15-16.)

Next, Plaintiffs’ “corrective advertising” damages theory fails as a matter of

law. Corrective advertising damages require a showing of actual harm. See Adray,

76 F.3d at 989 (“The instruction should direct the jury to award such damages only

to the extent that the amount of money needed for corrective advertising does not

exceed the damage to the value of Lou Adray’s mark.”). Here, in addition to

waiving lost profits, Plaintiffs have no evidence that they suffered any actual harm.

Finally, Plaintiffs cannot recover statutory damages because they cannot

show counterfeiting. Even a superficial comparison of the accused uses with

Plaintiffs’ alleged rights shows that Nike’s uses could not be considered a

“counterfeit” even if there were a triable issue on infringement. See, e.g.,

Audemars Piguet Holding S.A. v. Swiss Watch Int’l, Inc., 2015 WL 150756, at *2-3

(S.D.N.Y. Jan. 12, 2015) (counterfeiting “is essentially an extreme case of

trademark infringement” that requires a showing that “the use of the infringing

mark ‘seeks to trick the consumer into believing he or she is getting the genuine

article, rather than a ‘colorable imitation’” (quoting Gucci America, Inc. v. Guess?,

Inc., 868 F. Supp. 2d 207, 242 (S.D.N.Y. 2012))).

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IV. CONCLUSION

“[T]he legal scope of protection of a trademark against infringement by

others is defined by the ‘likelihood of confusion’ test.” 1 McCarthy on Trademarks

and Unfair Competition § 2:10 (4th ed.). It is not defined by the scope of a

registration—whether valid or not, and whether incontestable or not. Here, the

parties agree that likelihood of confusion can be decided as a matter of law on

summary judgment. The only question is whether that legal determination should

be against Plaintiffs’ claims (thus ending the case) or for Plaintiffs’ claims (thus

leaving the other elements of Plaintiffs’ claims and Nike’s defenses and

counterclaims to be decided). The record of this case includes comprehensive

survey evidence showing no likelihood of confusion; extensive evidence showing

the conceptual and commercial weakness of the asserted mark and nickname; ample

other evidence showing the dissimilarity of marks and goods, and the lack of

overlapping marketing channels; and conclusive evidence showing no actual

confusion and no intent to confuse consumers. Plaintiffs thus cannot show that an

appreciable number of reasonably prudent consumers would probably be confused

into believing Plaintiffs are the source or sponsor of the accused Nike products.

Summary judgment is warranted against all Plaintiffs’ claims—including the

state-law unfair competition claims that simply mirror their Lanham Act claims—

because likelihood of confusion is an essential element of each of those claims.

Fair use also supplies an alternative ground for summary judgment. Finally, unless

there is a complete summary judgment against Plaintiffs’ claims, the record

warrants summary adjudication of no damages. Dated: January 8, 2016

Respectfully submitted, By /s/ Stanley J. Panikowski

STANLEY J. PANIKOWSKI DLA Piper LLP (US)

Attorneys for Defendant NIKE, Inc.


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