Verdict Near in 'Exceptional' Trademark Dispute

, The National Law Journal

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Update: The jury issued a verdict for Classmates and United Online on Wednesday, Feb. 19, according to court records.

Jurors in California are set to decide whether social networking company Classmates.com infringed on the trademark of sports memorabilia dealer Memory Lane Inc.

Jurors began deliberating on Tuesday in the case, which pins the small online dealer and auction house, based in Tustin, Calif., against Classmates.com, a site that aims to reunite fellow high school pals.

According to the suit, filed in 2011, Memory Lane began receiving emails from irate customers of Classmates.com complaining about unauthorized credit card charges. At the time, Classmates.com had expanded into selling nostalgic videos, changing its name to Memory Lane Inc., which operated at www.memorylane.com. The auction house’s Web site is www.memorylaneinc.com.

Classmates.com, based in Renton, Wash., and its parent company’s “questionable business practices concurrent with the actual confusion caused by defendants’ use of plaintiff’s marks has damaged the goodwill of plaintiff’s marks,” wrote Memory Lane attorney Keith Wesley, a partner at Browne George Ross in Los Angeles. He did not return a call for comment.

Memory Lane seeks actual and punitive damages under California’s unfair-competition law and the Lanham Act, the federal trademark law.

Classmates.com and its parent company, United Online Inc., a public company that also owns NetZero and Juno, argued that Memory Lane’s trademark is limited to its distinctive logo, which features a baseball player. Furthermore, it argues, the auction house lost no sales due to Classmates.com’s Memory Lane business, which no longer exists.

“Their sales went up,” Classmates.com attorney William Robinson, a partner in the Los Angeles office of Foley & Lardner, told The National Law Journal. Classmates.com, meanwhile, lost $10 million on its Memory Lane venture.

In a Feb. 7 court filing, Robinson called the suit “an exceptional case.”

“Indeed, this action is nothing more than an attempted shake-down by a corporation run by an ex-con of a public corporation perceived to be a deep pocket,” he wrote, referring to Memory Lane president Jonathan Cohen, who pleaded guilty in 2002 to charges related to a $27 million telemarketing fraud scheme that purportedly raised money for charities. He was ordered to pay $2 million and sentenced to prison; he was released in 2004.

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