[00:00:07] Speaker 01:
Good morning, your honors.

[00:00:09] Speaker 01:
May it please the court?

[00:00:09] Speaker 01:
My name is Roger Bailey.

[00:00:11] Speaker 01:
I'm here on behalf of the Appellant and Cross-Appellee Global Apogee.

[00:00:16] Speaker 01:
I'd like to optimistically reserve five minutes of my time.

[00:00:20] Speaker 00:
All right.

[00:00:21] Speaker 00:
I'll try to help you out.

[00:00:22] Speaker 01:
Thank you.

[00:00:25] Speaker 01:
We're up on appeal from an order granting summary judgment on a trademark case.

[00:00:34] Speaker 01:
And the trademarked issue

[00:00:36] Speaker 01:
is the trademark candy gram.

[00:00:40] Speaker 01:
Importantly, though, for this appeal, the registered mark that has been registered, it will be 30 years next year, includes a hyphen.

[00:00:52] Speaker 01:
That mark is an incontestable mark, which is a status that can be obtained after five years of continuous use.

[00:01:02] Speaker 01:
The appellant has maintained

[00:01:06] Speaker 01:
the incontestable status of that mark.

[00:01:08] Speaker 01:
And as I said, next year will be 30 years.

[00:01:12] Speaker 01:
Also importantly is that that registration is a registration that covers goods, not services, not the delivery of candy.

[00:01:23] Speaker 01:
It covers candy in class 30, and it covers greeting cards in class 16.

[00:01:33] Speaker 01:
At the district court level, the court

[00:01:36] Speaker 01:
was confronted with the question as to whether the Mark Candygram was generic and therefore not eligible for protection.

[00:01:45] Speaker 01:
The court concluded.

[00:01:46] Speaker 00:
The district court said that the question of whether the Candygram with hyphen really came up for the first time in your opposition to summary judgment.

[00:01:58] Speaker 00:
So there was a notice problem from the district court's point of view.

[00:02:02] Speaker 00:
How do you respond to that?

[00:02:04] Speaker 01:
Well, we alleged in all of the complaints included in the operative complaint, second amended complaint, infringement of the registered mark candy hyphen gram.

[00:02:16] Speaker 01:
That's in and is identified by the registration.

[00:02:18] Speaker 01:
We also alleged, though, infringement of the unhyphenated, what we refer to as common law, trademark, candy no hyphen.

[00:02:28] Speaker 01:
And the interesting thing about the district court's decision on the issue of genericness was,

[00:02:33] Speaker 01:
The court concluded with all the evidence presented by the appellee that candy hyphen gram was not generic.

[00:02:41] Speaker 01:
They didn't make a showing.

[00:02:42] Speaker 00:
Let me, let me go to page 15 of the complaint, which, um, has been submitted to us as excerpts of record 39 17 paragraph 41.

[00:02:52] Speaker 00:
Uh, you said defendants use of the registered candy dash gram trademark and then open print without the hyphen.

[00:03:02] Speaker 00:
to advertise, promote, and sell without the consent.

[00:03:06] Speaker 00:
So the way I read it is that you're alleging that the conduct that violates your trademark is the use of candy gram without the hyphen.

[00:03:16] Speaker 00:
That's a pretty compelling disclaimer there.

[00:03:21] Speaker 00:
So it seemed to me this is, I think from what I gathered, the district court's perspective is that there was that disclaimer in the complaint.

[00:03:29] Speaker 00:
The case then proceeded through the discovery

[00:03:32] Speaker 00:
they filed a motion for summary judgment, making the argument of the generic nature of Candy Graham, and then in opposition, then you raise this argument.

[00:03:45] Speaker 00:
Am I misreading the record somehow?

[00:03:49] Speaker 01:
Well, I would say this, and I'm going to stick with the operative complaint, and we took the trouble to actually paste into the complaint images from the defendant's website.

[00:04:01] Speaker 01:
And on page eight of the second amended complaint, you can see a screenshot of the defendant's website and displayed clearly.

[00:04:13] Speaker 04:
3910?

[00:04:15] Speaker 01:
Yes.

[00:04:16] Speaker 01:
Yeah.

[00:04:17] Speaker 01:
You can see at the bottom that there is a screenshot of candy gram, which appears very clearly with the word candy separated by what we argue is the visual equivalent of a hyphen.

[00:04:31] Speaker 01:
right there in the complaint showing this was the use.

[00:04:34] Speaker 00:
All right, so is the argument then the candy and the gram with an envelope in the middle somehow negates the disclaimer in paragraph 41?

[00:04:47] Speaker 01:
Yes, because there were both uses.

[00:04:49] Speaker 01:
We tried to visually display what we consider to be the visual equivalent of a hyphen.

[00:04:55] Speaker 01:
And then also, there were repeated uses also on that same page

[00:05:00] Speaker 01:
There is a menu bar that shows the word candy gram without the visual equivalent of a hyphen.

[00:05:06] Speaker 00:
So, again, attempting to use- I just want to make sure I understand the argument before we proceed to the next point.

[00:05:13] Speaker 00:
You're saying in paragraph 41 that the violated conduct is the use of candy gram without the hyphen.

[00:05:21] Speaker 00:
On page eight, it's candy, gram, candy, envelope, gram, which is, you're saying, is the equivalent of the use of the hyphen.

[00:05:30] Speaker 00:
So your interpretation of the way you want me to look at the complaint is that you're saying both conduct is violative.

[00:05:36] Speaker 01:
Correct.

[00:05:38] Speaker 01:
The intent in using the screenshots was to show, because otherwise we simply could have just printed the word candy, gram, no hyphen, but I think it was important to show how the

[00:05:50] Speaker 01:
Defendant Appellee was using the mark.

[00:05:53] Speaker 01:
It was both in the unhyphenated form, and it was in the hyphenated form.

[00:05:56] Speaker 01:
That at least was the intention in showing visual depictions of how the mark was used.

[00:06:03] Speaker 01:
And admittedly, it was both forms that appeared in their advertising materials and their marketing materials.

[00:06:11] Speaker 01:
And again, we came back to the fact that the registration at issue, which incidentally is phonetically equivalent,

[00:06:19] Speaker 01:
when spoken you can't distinguish between candy hyphen gram and candy gram all one word there still is the issue of phonetic equivalence where even if the spoken candy gram couldn't be detected to use a hyphen when spoken we still have the problem of phonetic equivalence just make sure i know what you're saying it seems to me then you're saying that

[00:06:46] Speaker 04:
Those you sued used the word candy gram without a hyphen.

[00:06:53] Speaker 04:
They also used candy with an envelope gram.

[00:06:59] Speaker 04:
Did they ever use candy hyphen gram?

[00:07:03] Speaker 01:
They had Twitter.

[00:07:06] Speaker 04:
That's what I'm looking.

[00:07:07] Speaker 04:
Is that in the complaint?

[00:07:08] Speaker ?:
No.

[00:07:09] Speaker 01:
No, it came out in discovery.

[00:07:11] Speaker 04:
That isn't in the complaint, right?

[00:07:13] Speaker 01:
It came out in discovery.

[00:07:16] Speaker 04:
So the only thing we really have in the complaint, which is what the district court was really focusing on, are those two types of what you say is infringing on candy hyphen gram, which is your

[00:07:35] Speaker 03:
federally protected mark correct all right correct that's what I understood thank you did I clarify one thing as I understand it we're looking at a summary judgment and not judgment on the pleadings is that true or am I mistaken that's correct so the evidence that came out in discovery

[00:07:59] Speaker 03:
is potentially relevant to some judgment where it would not have been relevant for judgment on the pleadings.

[00:08:07] Speaker 01:
That's also correct.

[00:08:09] Speaker 03:
Okay, thank you.

[00:08:13] Speaker 01:
I suppose to focus on what we believe... Let me clarify because I don't recall offhand.

[00:08:23] Speaker 00:
Is part of the evidence that you're relying on came from the privileged materials?

[00:08:28] Speaker 01:
We did not rely on I'm talking specifically about this evidence that came out about the candy dash Graham No, there there was a Twitter post that we obtained later in discovery on our own And I believe there was an objection to it is presented at the district court I believe the objection to that evidence was sustained on the grounds that it wasn't disclosed early enough

[00:08:53] Speaker 00:
It wasn't part of the package of privilege materials that you were arguing about in the district court?

[00:08:59] Speaker 00:
Correct.

[00:08:59] Speaker 04:
It was not.

[00:09:00] Speaker 04:
So it wasn't in front of the district court as I understood it?

[00:09:02] Speaker 01:
Because the judge again sustained the objection to the use of this Twitter post that included clearly an actual hyphen, not just an envelope, an actual hyphen.

[00:09:13] Speaker 01:
So again, we take issue.

[00:09:14] Speaker 01:
There was evidence of the defendant using candy hyphen gram and

[00:09:22] Speaker 01:
and also visually repeatedly in their marketing and advertising materials using that.

[00:09:28] Speaker 01:
And I suppose the issue for us on summary judgment is, even if you accept the premise that candy gram no hyphen is generic, just for the sake of argument,

[00:09:39] Speaker 01:
Given that the district court concluded that Candy hyphen gram was not generic, we should have had the opportunity at a minimum to go to the jury on whether Candy hyphen gram, as it appears in their advertising materials with the envelope, is that sufficient to create likelihood of confusion?

[00:09:56] Speaker 00:
Well, it's a question of fairness.

[00:09:57] Speaker 00:
I think that from the district court's perspective, it's look, when I'm reading the complaint, and you're saying,

[00:10:06] Speaker 00:
You violated the Lanham Act by taking my candy gram mark and you used it without the hyphen and that's the conduct that violates.

[00:10:16] Speaker 00:
the mark and then later on you have a picture or earlier you have a picture of candy envelope gram and now you're saying that it's either equivalent to a dash which is an argument that was raised I think in the briefing or that it's on top of the use.

[00:10:33] Speaker 00:
I can't really tell that and the district court I think couldn't tell that it informed

[00:10:40] Speaker 00:
the defense that that's what the theory was.

[00:10:43] Speaker 00:
And so from the district court's perspective, it's only when they've brought the summary judgment motion to argue the genericness of Candy Graham that then this argument was made for the first time.

[00:10:56] Speaker 00:
And by then they've gone through discovery without realizing what your theory of the case is.

[00:11:01] Speaker 00:
I think that's the problem, right?

[00:11:03] Speaker 01:
I understand and again I go back to the actual pleading and again the reason we visually captured what the defendant was doing was to say when we go to the jury we want to stand in front of the jury when the question is show us the evidence that the defendant used a hyphenated version of the trademark we would stand there with the very same image

[00:11:25] Speaker 01:
that was in the pleading, putting them on notice, this is what the jury's going to see.

[00:11:29] Speaker 01:
So this is what you need to be prepared to defend against.

[00:11:31] Speaker 01:
In addition to, we did allege, use of an unhyphenated version.

[00:11:35] Speaker 01:
But I don't think it's fair to us to say, we didn't say, this is the problem we have.

[00:11:41] Speaker 01:
It appears unhyphenated on the website, and it appears what we consider to be the equivalent to hyphenated on the website.

[00:11:46] Speaker 00:
I understand the argument.

[00:11:47] Speaker 00:
I know you want it to save time.

[00:11:48] Speaker 01:
I did.

[00:11:48] Speaker 01:
Thank you.

[00:11:49] Speaker 01:
So I will reserve it.

[00:11:50] Speaker 04:
Let me ask you one question, which

[00:11:52] Speaker 04:
I want to ask simply because I think the other side needs to think about this as well.

[00:11:59] Speaker 04:
If you failed to introduce any evidence of the likelihood of confusion as to either mark as they allege, why is summary judgment not proper for them?

[00:12:15] Speaker 01:
And I'll answer it this way.

[00:12:17] Speaker 04:
Because I frankly couldn't find any evidence of likelihood of confusion in the record.

[00:12:25] Speaker 04:
And that's why I'm asking the question.

[00:12:29] Speaker 04:
If you failed to introduce any evidence of the likelihood of confusion, that's their argument.

[00:12:37] Speaker 04:
Why shouldn't summary judgment be the proper method in this for the defendants?

[00:12:44] Speaker 04:
Because I know you've got to have some likelihood of confusion here someplace.

[00:12:50] Speaker 04:
And I didn't see any.

[00:12:52] Speaker 04:
So why not get rid of this case?

[00:12:55] Speaker 01:
Understood.

[00:12:56] Speaker 01:
Two reasons.

[00:12:58] Speaker 01:
One is, as the court's aware, under sleek craft, there is an eight factor test.

[00:13:04] Speaker 01:
Strength of the mark, similarity of the goods, the defendant's intent in adopting this mark.

[00:13:12] Speaker 01:
There's a number of factors.

[00:13:14] Speaker 01:
And as this court said in J&J Beverage Company versus Jim Beam Products, that's 828 Federal Third 1098, given the factual nature and the intensity of the factual analysis required for those eight factors.

[00:13:31] Speaker 04:
Well, the district court didn't have to talk about the factors because the district court just

[00:13:39] Speaker 04:
Well, I said, we don't need to examine those factors.

[00:13:42] Speaker 04:
We've already found about generic, so we don't need to get there.

[00:13:47] Speaker 04:
But I looked for what would you have said?

[00:13:50] Speaker 04:
I couldn't find any evidence of any likelihood of confusion on their eyes to either mark in the record.

[00:14:00] Speaker 04:
And so I said to me, why am I even having this case?

[00:14:04] Speaker 04:
Why don't we just issue summary judgment on that alone?

[00:14:08] Speaker 01:
We have evidence in the record of actual confusion where people are calling... Where?

[00:14:12] Speaker 04:
Where?

[00:14:13] Speaker 01:
Tell me where.

[00:14:14] Speaker 04:
In the testimony of... Because as I saw it, or as I saw the record, there was in fact a report given by an expert who went out and looked about whether there would be any confusion or not and said, no, there won't be any.

[00:14:35] Speaker 04:
And nobody came back with anything from your side, contrary to that report.

[00:14:43] Speaker 01:
That report was on genericness, not likelihood of confusion.

[00:14:46] Speaker 01:
It wasn't a likelihood of confusion survey.

[00:14:47] Speaker 04:
It was a genericness test.

[00:14:51] Speaker 04:
OK.

[00:14:51] Speaker 04:
OK.

[00:14:51] Speaker 04:
I'm here to look at it again.

[00:14:53] Speaker 04:
That's not the way I saw it.

[00:14:54] Speaker 04:
But it might be.

[00:14:54] Speaker 01:
You know better than I. I promise it was a genericness report.

[00:14:58] Speaker 01:
OK.

[00:14:59] Speaker 00:
Thank you.

[00:14:59] Speaker 00:
All right.

[00:14:59] Speaker 00:
Thank you.

[00:15:00] Speaker 00:
We ate almost all of your time up.

[00:15:02] Speaker 00:
I know.

[00:15:03] Speaker 00:
So I'll give you a couple of minutes back.

[00:15:23] Speaker 02:
Good morning, Your Honors.

[00:15:24] Speaker 02:
May it please the court, John Dean for the defendants and appellees, Rosie O'Neill and Joshua Resnick.

[00:15:30] Speaker 02:
Candy grams and Valentine grams have been sent by school children, businesses and others for decades.

[00:15:36] Speaker 02:
I'm fairly confident that Your Honors, or perhaps someone you know,

[00:15:39] Speaker 02:
have sent or received a candy gram at some point in time.

[00:15:43] Speaker 02:
Hence, the contention that the individual defendants in this case are liable for trademark infringement because their company utilized a candy gram by Sugarfina program is without basis of law.

[00:15:54] Speaker 02:
The court should therefore affirm the district court's order granting summary judgment for three independent reasons.

[00:16:00] Speaker 03:
First on genericness.

[00:16:02] Speaker 03:
Excuse me.

[00:16:02] Speaker 03:
Excuse me.

[00:16:03] Speaker 03:
Do you challenge the existence of the registered trademark

[00:16:10] Speaker 02:
of the registered term Candy Dash Graham?

[00:16:12] Speaker 02:
No, Your Honor.

[00:16:15] Speaker 03:
OK.

[00:16:17] Speaker 02:
But there is a distinction between the two.

[00:16:20] Speaker 02:
And I would argue a number of points there, Your Honor.

[00:16:23] Speaker 02:
Number one, the utilization, based on the record in this case, is that what was used by Sugarfina, as alleged in the complaint, is Candy Graham.

[00:16:35] Speaker 02:
That's clear.

[00:16:36] Speaker 02:
Paragraphs 41 and 42 of the complaint.

[00:16:38] Speaker 04:
So the fact that... But they also, what about those other allegations?

[00:16:43] Speaker 02:
With respect to the envelope, Your Honor?

[00:16:45] Speaker 04:
Yeah.

[00:16:47] Speaker 02:
Well, Your Honor, first...

[00:16:48] Speaker 04:
I mean, even in the facts, they say Sugarfina continued to use the candy-gram trademark on its website and its retail stores after they were sent a cease and desist order.

[00:17:02] Speaker 04:
And then they go to those places that he pointed out to us, 3910, 3912, 3913, 14, showing where they said otherwise than just candy-gram.

[00:17:16] Speaker 02:
Yes, Your Honor.

[00:17:16] Speaker 02:
Well, there's nothing in the record, actually, other than this Twitter post, which has been excluded, where the utilization of candy hyphen with a gram, the same mark that is the registered mark at issue, was utilized.

[00:17:28] Speaker 03:
Is it a proposition that as a matter of law, the capital letter candy with the envelope in place of a hyphen and the capital gram could not be sufficient to infringe the trademark?

[00:17:44] Speaker 02:
No, that's not our point.

[00:17:45] Speaker 03:
Isn't that a factual question?

[00:17:47] Speaker 03:
So if that is one of the alleged infringements, I don't understand how that's generic.

[00:17:52] Speaker 02:
Twofold, Your Honor.

[00:17:53] Speaker 02:
One goes to genericness, and one goes to likelihood of confusion as to burden shifting.

[00:17:58] Speaker 02:
But even before we get to burden shifting, for both Candy Grant.

[00:18:02] Speaker 03:
Is it correct that the district court didn't

[00:18:04] Speaker 03:
didn't get to the sleep craft factors, right?

[00:18:08] Speaker 03:
It just got off the train at generic.

[00:18:11] Speaker 03:
So if we disagree with generic, doesn't it have to go back to the district court to consider all of the sleep craft factors on whatever record the parties may choose to make on that?

[00:18:25] Speaker 02:
Well, number one, Your Honor, that burden on likelihood of confusion rests with the plaintiff.

[00:18:29] Speaker 03:
So the utter lack of- That's not my question.

[00:18:31] Speaker 03:
That's not my question.

[00:18:32] Speaker 03:
If we disagree with the holding that it is generic, doesn't it have to go back to the district court to do the rest of the analysis that the court didn't do?

[00:18:44] Speaker 02:
No, Your Honor.

[00:18:45] Speaker 02:
Again.

[00:18:46] Speaker 02:
twofold.

[00:18:47] Speaker 02:
Number one, this court can look at the record, and we believe it's utterly ripe in the record.

[00:18:53] Speaker 02:
The Jensen case that we cited in our papers make that clear, that this court can affirm on any ground there is significant evidence in the record as to each and every factor, as we've outlined in pages 33 to 44 of our briefing.

[00:19:05] Speaker 04:
So you're suggesting that this court ought to do the sleek

[00:19:15] Speaker 04:
factors ourselves and make that determination?

[00:19:19] Speaker 04:
Well, my first argument... Sleeve craft factors?

[00:19:22] Speaker 02:
That's correct, Your Honor.

[00:19:22] Speaker 02:
My first argument is it can.

[00:19:24] Speaker 02:
And it is clear from the papers that there is an absolute dearth of evidence presented by the plaintiff to do so.

[00:19:31] Speaker 02:
But I'm not suggesting this court need make an exhausting analysis either of those factors.

[00:19:37] Speaker 02:
As Your Honor was keying into a moment ago, there is no evidence.

[00:19:41] Speaker 02:
And likelihood of confusion is plainly the plaintiff's burden.

[00:19:45] Speaker 03:
I thought, counsel, that there was testimony that there were people who called the wrong entity or called

[00:19:52] Speaker 03:
them thinking they were sugarfina and vice versa.

[00:19:55] Speaker 03:
Was there not some testimony to that effect?

[00:19:58] Speaker 02:
Yes, there were alleged to be two to three vague telephone calls made by folks that supposedly had

[00:20:06] Speaker 03:
Well, all you're doing is trying to, with those adjectives, you're sort of saying they swore to it but don't believe it.

[00:20:15] Speaker 03:
But there is evidence that there is some confusion on the part of customers about who is the source of candy.

[00:20:25] Speaker 02:
Three things, Your Honor.

[00:20:26] Speaker 02:
First, this is inadmissible hearsay evidence that's being proffered by the plaintiff.

[00:20:31] Speaker 02:
And that was made clear down below.

[00:20:33] Speaker 02:
There's not been an argument otherwise in that regard.

[00:20:36] Speaker 02:
Secondly, there hasn't been any demonstration, which is their burden, that these two or three telephone calls were somehow going to be admissible at trial.

[00:20:43] Speaker 02:
So there is utterly no basis for them to be accepted at summary judgment.

[00:20:47] Speaker 02:
But the court did give them the benefit of the doubt on this inadmissible evidence and had found, correctly, which is supported in the McCarthy treatise as well as in the Filipino Yellow Pages case, that a handful of telephone calls is not sufficient enough or a handful of statements of confusion is not enough to meet that factor of actual confusion, which is just one factor, by the way, of the entirety of the eight sleek craft factor test.

[00:21:11] Speaker 03:
Yes, it is open one.

[00:21:13] Speaker 03:
So you're sort of saying it's the only one that matters, but I still don't understand why it's a good idea if we disagree with the generic holding for us to take the first bite at looking at all of these other factors and weighing them.

[00:21:31] Speaker 03:
That seems more appropriate to be done by the district court.

[00:21:37] Speaker 02:
I would just add again, Your Honor, I don't believe it's exhaustive.

[00:21:40] Speaker 02:
And by that, I mean there is no admissible evidence in the record that would change any of the factors.

[00:21:46] Speaker 02:
The case law makes clear, as the court correctly found down below, this is de minimis evidence that is insufficient to change any calculation with respect to the Sleekcraft factors.

[00:21:56] Speaker 02:
And I would add secondarily.

[00:21:57] Speaker 02:
Just more fundamentally, Sleekcraft requires a comparison of the products that are at issue, the infringing products on the one hand and the defendant's supposed product offerings on the other hand.

[00:22:08] Speaker 02:
The only evidence in the record establishes that there is clear luxury boutique items being offered by Sugarfina in the marketplace, very distinctive candies that range anywhere from a four to eight candy box from $50 up to $80.

[00:22:23] Speaker 02:
And there is zero evidence in the record as to what product offerings are being offered by the plaintiff.

[00:22:29] Speaker 02:
It is their burden under likelihood of confusion to establish that there's some likelihood.

[00:22:34] Speaker 02:
And that cannot be done without that comparison of evidence.

[00:22:38] Speaker 02:
And they've proffered none of it.

[00:22:40] Speaker 02:
All there is is inadmissible evidence about a couple of folks, which by the way, I would add for the record,

[00:22:47] Speaker 02:
The declarant in that particular instance, one of the co-founders of the company, could not even remember how many phone calls there were, did not document those calls in any way, couldn't even recall actually what was said with respect to those calls, doesn't even know any of the caller's names, and then at the end of his testimony wasn't even sure exactly when those phone calls took place.

[00:23:05] Speaker 02:
So the idea that that is sufficient to meet a burden of proof on the likelihood of confusion

[00:23:12] Speaker 02:
I would submit is not supported by any case law.

[00:23:15] Speaker 02:
And in this record, therefore, would make a likelihood of confusion analysis by this court very straightforward.

[00:23:21] Speaker 02:
But as to generics.

[00:23:24] Speaker 04:
Let me ask you another question.

[00:23:26] Speaker 04:
Yes, Your Honor.

[00:23:26] Speaker 04:
Before we leave this idea about pleading, if we assume the district court erred in concluding that the plaintiffs had not pled that Surefina used the mark, can we still affirm?

[00:23:43] Speaker 02:
If you if you agree with if we assume the district court aired.

[00:23:49] Speaker 04:
In concluding that the plaintiffs had not played that sugarfina used the Mark Candy Graham.

[00:23:56] Speaker 04:
Can we still affirm?

[00:23:58] Speaker 02:
Well, I believe.

[00:23:59] Speaker 02:
For two reasons, Your Honor, yes.

[00:24:01] Speaker 02:
So as a matter of pleading, if you believed it was sufficient or this court found that the court erred and there was sufficient notice given, there still is a completely undeveloped record factually.

[00:24:11] Speaker 02:
There's no expert testimony.

[00:24:12] Speaker 02:
There's no fact discovered.

[00:24:13] Speaker 04:
Can I do that without sending that back to the district court?

[00:24:17] Speaker 02:
It would be their burden in that instance, Your Honor.

[00:24:19] Speaker 02:
And yes, you could find that there is an absolute dearth of evidence to establish that this use of

[00:24:25] Speaker 02:
This envelope somehow equates to a hyphen and therefore equates to infringement and liability as well.

[00:24:30] Speaker 02:
But I would add, secondarily, Your Honor, with respect to this issue, if Your Honor were to conclude, Your Honors, were to conclude that Candy Dash Graham was being used in some manner by the defendants.

[00:24:43] Speaker 02:
And by the way, that Twitter post has been excluded.

[00:24:45] Speaker 02:
All that's left is this envelope issue that they've

[00:24:49] Speaker 02:
created for the first time.

[00:24:51] Speaker 00:
First time.

[00:24:52] Speaker 00:
But they're saying that they're entitled to make the argument to the jury that candy envelope gram is equivalent to candy dash gram.

[00:25:03] Speaker 00:
How do you respond to that?

[00:25:04] Speaker 02:
Well, number one, that would be completely unfair, as the court, I believe, was correctly alluding to in the context of this case.

[00:25:11] Speaker 02:
There was no fact discovery, no expert discovery.

[00:25:14] Speaker 02:
There was not even an expert report

[00:25:16] Speaker 02:
that we proffered, because our expert report, the only one in the case, was Candy Graham All One Word and Candy Dash Graham, because this envelope argument had never been made before.

[00:25:24] Speaker 02:
So it wasn't even a part of that survey evidence.

[00:25:27] Speaker 02:
So the idea that they get to have a jury trial on something that is

[00:25:31] Speaker 02:
listed within a complaint somewhere and not elucidated in any way, shape, or form anywhere else in that pleading, and in fact, it's specifically pleading that we use candygram.

[00:25:40] Speaker 00:
Well, how does that change the contours of your litigation strategy or your discovery strategy in any way?

[00:25:47] Speaker 02:
If this was sent back, Your Honor, and now we're going to have a case about candy envelope gram,

[00:25:54] Speaker 02:
I believe we would have to then consider whether or not there had to be reopening of discovery, expert analysis that would be taken, because this argument was not developed in any way, shape, or form.

[00:26:05] Speaker 00:
That's what I'm asking.

[00:26:06] Speaker 00:
How would it have changed your discovery strategy or preparation of experts?

[00:26:12] Speaker 00:
If you had read this photo of Candy Envelope Graham as equivalent to Candy Dash Graham, how would that have changed?

[00:26:20] Speaker 02:
Most fundamentally, I would have tailored an expert survey specific to Candy Envelope Graham and determined whether or not there was any single source or any brand recognition associated with it, just like we did with Candy Graham, all one word, and Candy Dash Graham, which was a part of the Hal Poran survey evidence that we provided in this case.

[00:26:39] Speaker 02:
We also would have done targeted evidence out in the marketplace itself.

[00:26:43] Speaker 03:
Are there newspaper articles?

[00:26:50] Speaker 03:
at paragraph 30, you know, where it says candy envelope gram after it says it's infringing on the trademark by using this very thing.

[00:27:03] Speaker 03:
So I really don't have, I really don't even understand your we are surprised argument.

[00:27:11] Speaker 03:
There's picture after picture and all these other allegations of infringement.

[00:27:18] Speaker 02:
Well, number one, your honor,

[00:27:20] Speaker 02:
This envelope argument wasn't even raised on summary judgment.

[00:27:23] Speaker 02:
It is appearing for the first time here on appeal.

[00:27:25] Speaker 02:
So the idea that there was notice, and it was plainly in the complaint, and the plaintiff was planning on having this jury trial focused on the envelope is belied by this.

[00:27:34] Speaker 03:
The complaint, whether it was developed, is a different question.

[00:27:37] Speaker 03:
But it's in the complaint visually in living color.

[00:27:42] Speaker 02:
And then the argument is, Your Honor, that we used candy gram, not that we used candy dash gram or candy envelope gram or candy gram all one word.

[00:27:50] Speaker 03:
Well, some of the other paragraphs say they infringed it in the following way.

[00:27:55] Speaker 03:
Here's a picture.

[00:27:57] Speaker 03:
I mean, worth 1,000 words, they say.

[00:28:00] Speaker 03:
But anyway, I'm obviously only speaking for myself.

[00:28:06] Speaker 03:
I don't see this surprise argument as having merit.

[00:28:10] Speaker 02:
Understood, Your Honor, and respectfully, I would just again argue there was no development of this argument in discovery.

[00:28:16] Speaker 02:
I think that speaks 1,000 words and is telling that this was just a representative picture in the complaint.

[00:28:22] Speaker 02:
This was not the thrust of the action, because what they pled was that we infringed and used Candy Graham all in one word.

[00:28:29] Speaker 02:
But we would win otherwise, I would submit, Your Honor, to get back to the question, Your Honor, that you were asking.

[00:28:35] Speaker 04:
I'm glad we got back, but that's OK.

[00:28:37] Speaker 04:
I want to hear what your answer is.

[00:28:39] Speaker 02:
Yes, because in this case, the only evidence that candy-gram is generic, the only evidence that there's no confusion about candy-gram is proffered by the defendants.

[00:28:49] Speaker 02:
But we don't even have the burden on likelihood of confusion, yet we are the only ones with a survey that establishes that candy-gram, if that is as they've argued, is the functional equivalent of candy-gram, is in fact

[00:29:01] Speaker 02:
not confused in any way, shape, or form in the community and by not a single respondent in that 600 respondent survey is not associated in any way, shape, or form with the plaintiff global apogee in this case.

[00:29:16] Speaker 02:
So I believe the evidence would demonstrate we would win otherwise.

[00:29:20] Speaker 02:
But I would also contend

[00:29:22] Speaker 02:
Now, while that's true with respect to likelihood confusion, it is equally true with genericness, if somehow the burden was shifted, because that meant that we used candy dash gram all one word.

[00:29:32] Speaker 02:
So the burden is on us for genericness.

[00:29:35] Speaker 02:
Same again.

[00:29:35] Speaker 02:
The only evidence that's been proffered in this case about candy dash gram having identification in the community with the plaintiff, which is that it has none,

[00:29:45] Speaker 02:
is from the defense.

[00:29:46] Speaker 02:
And there's no evidence proffered from the plaintiff as to how Candy Dash Graham in any way, shape, or form is not generic.

[00:29:53] Speaker 02:
So even if we had the burden, even if that burden was ours, there's no evidence otherwise to contravene the seven articles submitted within the 50 exhibits we've submitted about its common usage out in the industry.

[00:30:05] Speaker 02:
And again, a survey

[00:30:07] Speaker 02:
which, even though the thrust of the action was only candy dash gram, and I'm going to take credit for it, that I asked for our expert to also do candy dash gram just in case, and I'm glad I have that while I'm standing here today, the overwhelming evidence was, again, as I noted before, it has no reference whatsoever in association with the plaintiff in this particular action.

[00:30:29] Speaker 02:
I would submit, Your Honors, that for those

[00:30:31] Speaker 02:
Two reasons, genericness and likelihood of confusion we should prevail on summary judgment.

[00:30:36] Speaker 02:
I would further submit that the court was correct on damages as the court had found that there was no evidence proffered timely with respect to experts and that that was promised as a part of their damages theory in this case.

[00:30:48] Speaker 02:
In addition to that, that there was no connection between the alleged infringing sales at issue in this action and how that number would represent an appropriate discouragement theory with any reasonable certainty whatsoever.

[00:30:59] Speaker 02:
So the damages theory should be affirmed as well.

[00:31:02] Speaker 02:
With respect to our cross-appeal, just briefly.

[00:31:05] Speaker 00:
over time so we can wrap up.

[00:31:07] Speaker 02:
And I apologize.

[00:31:08] Speaker 02:
Just briefly, with respect to the cross-appeal, I'll submit on the disqualification issue.

[00:31:12] Speaker 02:
But I would further argue, though, under octane fitness that here we have a case where there is no evidence whatsoever, even if we accepted, Your Honor, the pleading argument that they're advancing now with respect to this envelope issue, that they utterly failed to provide for any evidence with respect to genericness, any evidence with respect to likelihood of confusion,

[00:31:31] Speaker 02:
And in this particular action, failed to properly and timely produce an expert report on damages.

[00:31:37] Speaker 02:
But not only that, for all of the reasons identified in the disqualification motion, there were privileged documents that were reviewed.

[00:31:43] Speaker 02:
There was a moving target strategy that was utilized.

[00:31:46] Speaker 02:
And again, there were blown deadlines with respect to expert issues that, on the second prong of octane fitness, unreasonable litigation tactics, we believe, would fundamentally warrant

[00:31:55] Speaker 02:
an award of attorney's fees in this action, and that it should be remanded to determine what that amount is as listed in our initial moving papers.

[00:32:01] Speaker 04:
But an attorney's fees award is, under the standard review, the attorney's fees award is an abuse of discretion, and it's also may award to the prevailing in cases that are exceptional in the totality of the circumstances.

[00:32:20] Speaker 04:
So I've got a district court who says, using their best discretion, this does not need attorney's fees.

[00:32:28] Speaker 04:
And evidently, it isn't exceptional, and therefore doesn't award fees.

[00:32:34] Speaker 04:
Where have I got the idea that I can undo that?

[00:32:37] Speaker 02:
So a couple of things, Your Honor.

[00:32:38] Speaker 02:
With respect to abuse of discretion, if the court were to ignore a particular factor and push it aside, then that would be a reason as to why it abused its discretion.

[00:32:46] Speaker 02:
Here, the court did not take into account a couple of things.

[00:32:49] Speaker 02:
Number one, the court didn't take into account the utter dearth of any evidence with respect to likelihood of confusion in analyzing attorney's fees.

[00:32:56] Speaker 02:
The second thing the court did was find the disqualification motion is moot and therefore did not go through an analysis of the types of materials that plaintiffs' counsel,

[00:33:04] Speaker 02:
And he's not arguing that his law firm didn't go through them, that plaintiff's counsels utilized, included on its exhibit list, and in fact included six of those exhibits, plainly privileged documents, in opposition to summary judgment.

[00:33:16] Speaker 02:
Those two important factors were not considered by the court.

[00:33:18] Speaker 02:
We would argue, with all due respect, I understand the deference that should be given in instances like this.

[00:33:23] Speaker 02:
But this is an unusual and exceptional case because of those kinds of circumstances.

[00:33:28] Speaker 02:
And that's why he moved for attorney's fees.

[00:33:30] Speaker 02:
There was just simply zero evidence in unreasonable tactics in this case, Your Honor.

[00:33:33] Speaker 00:
All right.

[00:33:34] Speaker 00:
Thank you, counsel.

[00:33:35] Speaker 02:
Thank you, your honors.

[00:33:43] Speaker 01:
Thank you for the two minutes.

[00:33:48] Speaker 01:
What do I think should be done here?

[00:33:49] Speaker 01:
I think that we should have an analysis of the sleep craft factors on the evidence in the record.

[00:33:58] Speaker 01:
Why us?

[00:33:59] Speaker 01:
No, no, no, by the district court.

[00:34:01] Speaker 01:
I'm sorry, by remand, but by the district court.

[00:34:04] Speaker 01:
I believe this should be remanded down to the district court.

[00:34:08] Speaker 01:
And I think this issue of surprise and unawareness that the candy envelope hyphen gram was, it's been in the case from inception.

[00:34:20] Speaker 01:
So it's disingenuous to say this wasn't

[00:34:24] Speaker 04:
something we provided notice of and it's going to be interesting for me i've been a district judge i've had my rulings set above and the case gets up there and they do all this argument and then after they get through they come back on a case that i did not even understand and my worry is

[00:34:46] Speaker 04:
that this envelope stuff has not been very well explained to the district court anyplace that the summary judgment motions nothing really got to that now I know how to look at pleading

[00:35:01] Speaker 04:
And I know what a Rule 8 standard is, and I know when I can throw them out and when I can't.

[00:35:08] Speaker 04:
And that envelope stuff is there, and there's no way to get around it.

[00:35:12] Speaker 04:
But if you're never going to argue it, the district court's going to say, what did Graber Smith and Wynn do with this case?

[00:35:20] Speaker 04:
This is a different case than we ever saw.

[00:35:24] Speaker 04:
Is that what they're going to say?

[00:35:26] Speaker 04:
Because you didn't put it to them the way you're putting it to us?

[00:35:30] Speaker 04:
I mean, that's the worry that I have, just to be very fair with you, and having sat below and had the court give me the business about something I never got argued about.

[00:35:43] Speaker 01:
We have another unusual fact in this case.

[00:35:47] Speaker 01:
Our district judge that was with the case from inception passed away unexpectedly.

[00:35:51] Speaker 01:
Judge Gutierrez inherited the case and I think had the case for only a few weeks before granting the summary judgment.

[00:35:58] Speaker 01:
So in fairness to Judge Gutierrez and his staff, this was something that they inherited with very little time.

[00:36:05] Speaker 01:
And it may have been that there was plenty of

[00:36:08] Speaker 01:
evidence on the motions to dismiss in front of our original district judge.

[00:36:12] Speaker 01:
We did have a changing of judges, and I don't think.

[00:36:15] Speaker 00:
I'm not sure what that has to do with anything.

[00:36:18] Speaker 00:
You were in front of a good district judge, very experienced, and I'm sure he thoroughly worked up the summary judgment motion.

[00:36:24] Speaker 01:
Excellent judge.

[00:36:25] Speaker 01:
No criticism of Judge Gutierrez.

[00:36:27] Speaker 01:
My only point was in response to Judge Smith's comment that Judge Gutierrez had the case and did

[00:36:33] Speaker 01:
the best he could under the circuitous.

[00:36:35] Speaker 01:
No criticism at all, but we did have a change where we had years of litigation and then a changing of the judges.

[00:36:41] Speaker 01:
It's only to say that we believe that this was in the record and it was litigated and we should have the opportunity to have that factual issue determined under Sleekcraft by the district court.

[00:36:51] Speaker 00:
All right.

[00:36:52] Speaker 00:
Thank you very much to both sides for your helpful argument today.

[00:36:55] Speaker 00:
The matter is submitted.

[00:36:56] Speaker 00:
Thank you.

[00:36:57] Speaker 00:
The last case Yichao versus Zhang and California Investment Migration Fund has already been submitted on the briefs and the records.

[00:37:06] Speaker 00:
That concludes our argument calendar for this morning.

[00:37:08] Speaker 00:
We'll be in recess until tomorrow morning.

[00:37:28] Speaker 03:
This court for this session stands adjourned.