Fifth Circuit Hands WWE Victory in Effort To Body Slam Fly-by-Night Vendors

By Anandashankar Mazumdar

Nov. 5 — The WWE might not be able to identify in advance vendors hawking counterfeit goods who show up at live events, but it can easily identify such fly-by-night operations because it has shown that it does not license third parties to sell branded goods, such as T-shirts and caps, the U.S. Court of Appeals for the Fifth Circuit ruled Nov. 4.

Vacating a federal district court's denial of the WWE's request for an ex parte order for seizure of counterfeit goods, the court said that the WWE had met its burden under federal law to adequately identify parties alleged to be in possession of counterfeit goods.

Experience With Shady Vendors Showing Up 

World Wrestling Entertainment Inc. of Stamford, Conn., is the successor of a wrestling promotion company originally founded in 1952 and which was known as the World Wide Wrestling Federation or World Wrestling Federation from 1963 to 2002.

The current corporation, which was founded in 1983, holds numerous U.S. trademark registrations related to the terms “World Wrestling Entertainment,” “WWE” and “Wrestlemania,” and several logos and other brands.

At live events, the WWE sells branded goods, such as T-shirts and caps. WWE alleged, based on past experience, that several individuals and groups were preparing to sell counterfeit goods at live WWE events scheduled for 2014 and 2015 in New Orleans and other places.

The WWE thus initiated the instant proceeding against hundreds of unidentified individuals and corporations, alleging trademark infringement of registered and unregistered trademarks, false designation of origin, trademark dilution and trafficking in counterfeit goods under federal law, and trademark infringement and unfair competition under Louisiana state law.

The WWE filed an ex parte request for seizure of the goods as well as a temporary restraining order, pursuant to the Trademark Counterfeiting Act of 1984, 15 U.S.C. §1116.

Judge Helen G. Berrigan of the U.S. District Court for the Eastern District of Louisiana denied the requests, after determining that the WWE had failed to established “specific facts” regarding the identities of the individuals against whom such a seizure order could be imposed.

According to the district court, without such information, it could not determine the likelihood of success on the merits of the WWE's claims. The WWE appealed.

Adequate Identification of Counterfeit Vendors

In a per curiam ruling, the appeals court said that the district court had misunderstood the degree of specificity required for a seizure order under Section 1116(d)

The important factor in the instant case, according to the appeals court, is that the WWE had established that it did not license third parties to produce branded goods.

Thus, the court said, “The resulting confined universe of authorized sellers of WWE merchandise necessarily ‘identifies' any non-WWE seller as a counterfeiter.”

Although it was not possible for the WWE to know in advance what fly-by-night vendors would show up outside any particular event, it would be evident that any vender not directly affiliated with the WWE would be “almost certainly a counterfeiter.” Thus, the alleged counterfeiters would be “readily identifiable.”

Thus, the court concluded that the WWE had met its burden under Section 1116(d). The court vacated the denial and remanded the matter for further consideration regarding who exactly would be authorized to patrol WWE live events and identify and seize counterfeit goods.

The appellate panel comprised Judges Patrick E. Higginbotham, Edith Hollan Jones and Stephen A. Higginson. The WWE was represented by K&L Gates LLP, Dallas.

To contact the reporter on this story: Anandashankar Mazumdar in Washington at amazumdar@bna.com.

To contact the editor responsible for this story: Tom Taylor at ttaylor@bna.com.

Full text at http://www.bloomberglaw.com/public/document/WORLD_WRESTLING_ENTERTAINMENT_INCORPORATED_Plaintiff__Appellant_v.