July 11, 2011, 12:34 PM

A religious group wins a $6 million e-commerce trademark case

The ruling involved online sales of products tied to the Royal Rangers youth group.

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An online retailer of religious goods has won a $6.1 million judgment against the operator of several retail web sites in a trademark infringement case. The General Council of the Assemblies of God also won the rights to 32 web domains used by the defendants to sell such products at T-shirts, backpacks and club badges.

The Assemblies of God sells the trademarked items on its Gospel Publishing House web site, at GospelPublishing.com/store, including products carrying the “Royal Ranger” label; Royal Rangers is a church-backed youth group similar to scouting organizations. The Assemblies of God filed a complaint in the U.S. District Court for the Northern District of Illinois, Eastern Division against a group of defendants that included California residents Robert Bole and his wife, Linda Bole, and businesses they operated, The Ranger Supply Store Inc. and Valley Homebuyer Services Inc., according to court documents.

The $6.1 million awarded by Judge Amy J. St. Eve late last month includes $4.5 million in damages for trademark infringement related to six products identified in the case as being sold by the defendants—including Royal Rangers club badges that can be sewn onto shirts, a T-shirt and a backpack—according to lawyers for the Assemblies of God organization. Those damages amounted to $750,000 per product; the rest of the damages stemmed from the defendants’ use of the domain names, which the court ordered transfered to the plaintiff, and covering the cost of plaintiff's attorney's fees. The defendants used domain names, or URL addresses, that included terms used by the Assemblies of God. The domains include Royalrangersupplystore.com, Therangersupply.com and Westernrangersupplystore.com. The religious group based its complaint on the Lanham Act, a federal law that protects intellectual property rights.

The religious group’s lawyers had requested damages of $12 million, or $2 million per product, according to Julianne Marie Hartzell of the Chicago law firm of Marshall, Gerstein & Borun, the trial lawyer who represented the Assemblies of God. The products involved in the case generally sold for between $10 and $30 each.

Evidence that the defendants built their entire business on stolen intellectual property warranted an award of higher damages, Hartzell says. “There was significant evidence of the willingness on the part defendants to take intellectual property that they knew was protected and belonged to someone else, then copied it and built their entire business model based on taking our client’s property,” she says.

Nonetheless, the total $6.1 million awarded in the case represents a relatively large amount considering the monetary value of the products sold, and underscores the scope of federal trademark protection, says Maureen B. Gorman, another attorney at Marshall, Gerstein who represented the Assemblies of God. “The U.S. Government is very concerned about counterfeit products and intellectual property rights,” she says. The Anti-Cybersquatting Consumer Protection Act, for example, provides for damages of up to $100,000 per web domain in cases where defendants are found guilty of using web sites to infringe on the intellectual property rights of others.

Lawyers for the Assemblies of God requested the transfer of the domain names to the plaintiff to prevent those web addresses from being made available to the public and to avoid their potential use in future trademark infringement, Hartzell says.

The court ruling was technically a “default judgment” because the defendants failed to respond to the plaintiff’s complaint. The defendants, who did not appear in court and were not represented by an attorney, could not be reached for comment. Robert and Linda Bole submitted a letter to the judge stating that they “had nothing to do with the counterfeiting of GPH [Gospel Publishing House] product,” according to a copy of the letter obtained by Internet Retailer. But the judge declined to allow the letter as court evidence after accepting the argument of plaintiff’s attorneys that the letter did not adequately address the complaint filed by the Assemblies of God, according to the plaintiff attorneys and court documents.

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