IP Law Daily, TRADEMARK—7th Cir.: Amazon seller’s appeal of Prevagen trademark infringement damages award rejected, (Apr 27, 2020)

By Linda O’Brien, J.D., LL.M.

The district court made sufficient findings of fact to support its entry of default judgement, award of damages and grant of injunctive relief in the trademark infringement suit by Prevagen manufacturer against an Amazon.com seller over the unauthorized sale of its products.

In a trademark infringement suit by the maker of the dietary supplement Prevagen against an Internet seller for the unauthorized and unlawful sale of its products, the defendant’s challenges to the district court’s entry of default judgement, award of damages and grant of injunctive relief were rejected as waived, the U.S. Court of Appeals for the Seventh Circuit has held. The defendant had numerous opportunities to contest the fact that it sold stolen products and failed to raise its argument before the district court. Thus, the judgment of the district court was affirmed (Quincy Bioscience, LLC v. Ellishbooks, April 24, 2020, Ripple, K.).

Biotechnology company Quincy Bioscience develops and sells dietary supplements under the brand Prevagen, which its customers use for the support of cognitive function. The products are marketed and sold through brick-and-mortar stores and on Internet websites. Quincy registered its Prevagen® trademark in 2007 and has used it continually since that time. Ellishbooks, which was not authorized to sell Prevagen® products, sold dietary supplements identified as Prevagen® on Amazon.com.

In 2017, Quincy filed suit against Ellishbooks, alleging claims for trademark infringement, false advertising, dilution, and unfair competition under the Lanham Act, for the unauthorized and unlawful sale of Quincy’s products bearing the Prevagen trademark. The complaint alleged that Ellishbooks "knew or had reason to know that at least some of the Prevagen products it sold were at one time stolen from retail outlets across the country." Ellishbooks did not file a responsive pleading to the complaint. After entry of a default judgment, the district court awarded damages of approximately $500,000 and permanent injunctive relief to Quincy. Ellishbooks appealed.

The challenges by Ellishbooks to the district court’s judgment were rejected as waived and meritless by the appellate court. First, the district court made sufficient findings of fact to support its order enjoining Ellishbooks from selling stolen Prevagen products. The district court granted Quincy’s motion for default based on well-pled allegations of the complaint and there was no evidence to the contrary during the prove-up hearing that Ellishbooks sold Prevagen products that they knew or had reason to know were stolen.

Ellishbooks’ argument that the district court erred in holding that it knew or had reason to know some of the Prevagen products it sold were stolen was waived. The appellate court noted that the fact was alleged in Quincy’s complaint and established by Ellishbooks’ default. Further, Ellishbooks failed to raise the argument in response to Quincy’s motion for injunctive relief. Having failed to present the argument to the district court, Ellishbooks waived it for purposes of appeal.

Finally, Ellishbooks’ contention that the district court erred in permanently enjoining it from selling stolen Prevagen products because Quincy failed to establish that Ellishbooks sold stolen products was waived. Ellishbooks had numerous opportunities to contest this fact, counter the evidence, and argue against injunctive relief. Since Ellishbooks failed to present this argument before the district court, it was also waived for purposes of appeal, the appellate court concluded.

This case is No. 19-1799.

Attorneys: Sanjay S. Karnik (Amin Talati Wasserman LLP) for Quincy Bioscience, LLC. Robert M. DeWitty (DeWitty and Associates, Chtd.) for Ellishbooks and Elishbooks Corp.

Companies: Quincy Bioscience, LLC; Ellishbooks; Elishbooks Corp.

Cases: Trademark GCNNews IllinoisNews IndianaNews WisconsinNews