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North Face Memorandum of Law for Contempt Motion

North Face Memorandum of Law for Contempt Motion

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Published by: nphillips0304 on Aug 07, 2012
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08/07/2012

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IN THE UNITED STATES DISTRICT COURTFOR THE EASTERN DISTRICT OF MISSOURIEASTERN DIVISION
THE NORTH FACE APPAREL CORP.,Plaintiff,v.WILLIAMS PHARMACY, INC.,JAMES A. WINKELMANN, JR., andTHE SOUTH BUTT LLC,Defendants.)))))))))))Case No. 4:09-cv-02029-RWS
MEMORANDUM OF LAW IN SUPPORT OFPLAINTIFF’S MOTION FOR AN ORDER OF CIVIL CONTEMPT
On April 12, 2010, this Court entered a consent permanent injunction (the “Injunction”) prohibiting The South Butt, LLC (“TSB”), its General Manager James A. Winkelmann, Sr.(“Winkelmann, Sr.”), and member James A. Winkelmann, Jr. (“Winkelmann, Jr.”) (collectivelythe “Contempt Respondents”)
from, among other actions, using “The South Butt Marks,”including THE SOUTH BUTT, NEVER STOP RELAXING and the following designs,“or any other reproduction, counterfeit, copy or colorable imitation of the THE NORTH FACETrademarks,” using “any other designation that is confusingly similar . . . in any manner as to belikely to dilute, cause confusion, deception or mistake,” from “diluting and infringing the THE NORTH FACE Trademarks, and damaging The North Face’s goodwill” and from “otherwisecompeting unfairly with The North Face in any manner.”
(Doc. 71).
Case: 4:09-cv-02029-RWS Doc. #: 76 Filed: 08/03/12 Page: 1 of 20 PageID #: 430
 
2Within
two days
of entry of the Injunction, and without The North Face’s knowledge or consent, Winkelmann, Sr.—who has admitted to running TSB—formed a new company, WhyClimb Mountains, LCC. In direct violation of the Injunction, the Winkelmanns began promotingand selling a new line of apparel under the mark:
It has now become clear that Winkelmann, Sr. and Winkelmann, Jr. never intended toabide by this Court’s Injunction. As displayed on their new company’s retail website sellinggoods in violation of the Injunction:Hi I am Jimmy Winkelmann – after we put a smile oneveryone’s face with our The South Butt brand a few years agowe thought there was some more smiling to do . . . .
Within recent months, a user identified as jwinkelmann posted the following response in a threaddiscussing The South Butt and Contempt Respondents’ new venture on social news websiteReddit.com:
Iamsacdaddy
How are u planning not to get into legal trouble again?
 jwinkelmann
My goal is to make money...
This motion follows.
I.STATEMENT OF RELEVANT FACTS
In 2009, The North Face Apparel Corp. (“Plaintiff” or “The North Face”) filed suitagainst TSB, Winkelmann, Jr. and others after TSB refused to cease selling knock-off apparelthat infringed and diluted The North Face’s famous marks, including THE NORTH FACE,
Case: 4:09-cv-02029-RWS Doc. #: 76 Filed: 08/03/12 Page: 2 of 20 PageID #: 431
 
3 NEVER STOP EXPLORING and the following design mark:(the “THE NORTH FACE Trademarks”).
See
Declaration of Christopher M. Turk (“Turk Decl.”), ¶¶15-16.TSB used publicity regarding the lawsuit to drive its sales and marketing exposureeven higher. Indeed, as the Court may recall, TSB’s counsel frequently issued press releasesand appeared in the media to stir up publicity about the case.
See
,
e.g.
, Turk Decl., ¶17.TSB’s carefully orchestrated publicity and use of the lawsuit as a marketing campaignis detailed in Winkelmann, Sr.’s sworn deposition testimony, wherein he described how— even before The North Face filed its lawsuit against TSB—TSB devised a plan to increasesales by “stir[ring] up a lot of publicity.” Declaration of G. Roxanne Elings (“Elings Decl.”),Exh. I., Tr. at 231:18-232:6. Winkelmann, Sr. viewed the lawsuit as an “unbelievable publicity opportunity” and was particularly drawn to the idea of a “7 billion apparel powerhouse against Jimmy.” Elings Decl., Exh. I, Tr. at 202:11-203:4. While Winkelmann,Sr. admitted he was running the business, he described how he kept Winkelmann, Jr. involvedto drive sales and to further the David & Goliath story – make it a “19 year old versus NorthFace.” Elings Decl., Exh. I, Tr. at 232:2-23. On receiving the initial letter from The NorthFace requesting that TSB desist from infringing on THE NORTH FACE Trademarks,Winkelmann, Sr. explained that he did two things: (1) he added a multitude of new productsto meet the expected increased demand; and (2) rather than engage “litigation counsel,” heretained Albert Watkins for purposes of managing publicity. Elings Decl., Exh. I, Tr. at93:24-94:14, 248:8-249:5.
Case: 4:09-cv-02029-RWS Doc. #: 76 Filed: 08/03/12 Page: 3 of 20 PageID #: 432

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