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BSA Seeking $16+ Million from GSUSA regarding dismissed Trademark Suit


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BSA Seeking $16+ Million from GSUSA regarding dismissed Trademark Suit

Below is introductory text of a BSA Motion to recover $16+ Million of attorneys fees and costs incurred by the BSA during the recently-dismissed trademark suit filed by the GSUSA against the BSA.  The link to the full motion document, which provides granular information of what organizational moves GSUA was making proximate to the Scouts BSA announcement, is pasted below.  It is worth the read.

“Preliminary Statement

By any measure, this trademark case is “exceptional” under the fee award provision of the Lanham Act. That is, it “stands out from others.” As the summary judgment evidence showed, Girl Scouts of the United States of America (“GSUSA”) filed this lawsuit for an improper, anticompetitive purpose, with the Court finding that “[i]n truth, Girl Scouts’ complaint is based, not on concern for trademark confusion, but on fear for their competitive position in a market with gender neutral options for scouting.” SJ Order at 21. Under binding Second Circuit precedent, GSUSA’s decision to initiate litigation against the BSA as a competitive ploy satisfies the exceptional case standard under the Lanham Act without more.  But there is more. GSUSA’s claims were substantively meritless, which also makes this an exceptional case. Lacking any evidence of actual confusion, GSUSA nonetheless pressed the absurd argument that the BSA should not be permitted to use its long-standing SCOUT-formative trademarks for programs that included both male and female members, despite having already done so for 50 years. Indeed, on summary judgment, GSUSA failed to persuade the Court that even a single factor weighed in GSUSA’s favor to support a likelihood of confusion finding under the Polaroid test.  After improvidently filing this case for an improper purpose and with baseless claims, GSUSA then pursued it for years in an excessively costly and contentious manner. Examples include the following:

GSUSA designated twenty witnesses to provide 30(b)(6) testimony on two topics concerning instances of alleged consumer confusion, for which none of those witnesses had actual, first-hand knowledge.

GSUSA resisted producing documents until ordered by the Court, as reflected by the parties’ discovery motion practice.

GSUSA improperly redacted hundreds of produced documents on grounds of purported “non-responsiveness” in an attempt to conceal highly relevant information evidencing the meritless nature of GSUSA’s claims.

GSUSA concealed its communications with its PR agency on highly relevant subjects such as GSUSA’s attempts to undermine the BSA’s reputation through an orchestrated smear campaign in the run-up to the filing of this lawsuit, resulting in the BSA’s service of a Rule 11 motion and GSUSA’s voluntary dismissal of its tarnishment claims.

GSUSA submitted a massive 151-page response and counterstatement to the BSA’s 17-page statement of undisputed facts on summary judgment, which failed to comply with the Local Rules and reflected a transparent attempt to manufacture disputed facts where none existed.

Abuse of the legal system for anti-competitive ends – especially against a non-profit entity devoted to youth programs – should not be countenanced. The BSA respectfully requests that the Court find that the BSA is entitled to its reasonable attorneys’ fees and related nontaxable expenses for this exceptional case. Upon the granting of this motion, the BSA will submit a fee application setting forth and supporting its calculations of those fees and expenses and their reasonableness.”

 

Here is the full Motion:  https://www.law360.com/articles/1486390/attachments/0 

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1 hour ago, Cburkhardt said:

 

BSA Seeking $16+ Million from GSUSA regarding dismissed Trademark Suit

Below is introductory text of a BSA Motion to recover $16+ Million of attorneys fees and costs incurred by the BSA during the recently-dismissed trademark suit filed by the GSUSA against the BSA.  The link to the full motion document, which provides granular information of what organizational moves GSUA was making proximate to the Scouts BSA announcement, is pasted below.  It is worth the read.

“Preliminary Statement

By any measure, this trademark case is “exceptional” under the fee award provision of the Lanham Act. That is, it “stands out from others.” As the summary judgment evidence showed, Girl Scouts of the United States of America (“GSUSA”) filed this lawsuit for an improper, anticompetitive purpose, with the Court finding that “[i]n truth, Girl Scouts’ complaint is based, not on concern for trademark confusion, but on fear for their competitive position in a market with gender neutral options for scouting.” SJ Order at 21. Under binding Second Circuit precedent, GSUSA’s decision to initiate litigation against the BSA as a competitive ploy satisfies the exceptional case standard under the Lanham Act without more.  But there is more. GSUSA’s claims were substantively meritless, which also makes this an exceptional case. Lacking any evidence of actual confusion, GSUSA nonetheless pressed the absurd argument that the BSA should not be permitted to use its long-standing SCOUT-formative trademarks for programs that included both male and female members, despite having already done so for 50 years. Indeed, on summary judgment, GSUSA failed to persuade the Court that even a single factor weighed in GSUSA’s favor to support a likelihood of confusion finding under the Polaroid test.  After improvidently filing this case for an improper purpose and with baseless claims, GSUSA then pursued it for years in an excessively costly and contentious manner. Examples include the following:

GSUSA designated twenty witnesses to provide 30(b)(6) testimony on two topics concerning instances of alleged consumer confusion, for which none of those witnesses had actual, first-hand knowledge.

GSUSA resisted producing documents until ordered by the Court, as reflected by the parties’ discovery motion practice.

GSUSA improperly redacted hundreds of produced documents on grounds of purported “non-responsiveness” in an attempt to conceal highly relevant information evidencing the meritless nature of GSUSA’s claims.

GSUSA concealed its communications with its PR agency on highly relevant subjects such as GSUSA’s attempts to undermine the BSA’s reputation through an orchestrated smear campaign in the run-up to the filing of this lawsuit, resulting in the BSA’s service of a Rule 11 motion and GSUSA’s voluntary dismissal of its tarnishment claims.

GSUSA submitted a massive 151-page response and counterstatement to the BSA’s 17-page statement of undisputed facts on summary judgment, which failed to comply with the Local Rules and reflected a transparent attempt to manufacture disputed facts where none existed.

Abuse of the legal system for anti-competitive ends – especially against a non-profit entity devoted to youth programs – should not be countenanced. The BSA respectfully requests that the Court find that the BSA is entitled to its reasonable attorneys’ fees and related nontaxable expenses for this exceptional case. Upon the granting of this motion, the BSA will submit a fee application setting forth and supporting its calculations of those fees and expenses and their reasonableness.”

 

Here is the full Motion:  https://www.law360.com/articles/1486390/attachments/0 

Ouch!

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Few lawyers would “bank on” winning a fee petition. That said, I like the BSA’s chances in this case. I read the Complaint when it was first filed, the Dismissal Order and Fee Petition and a few things stick out.

There was an overall lack of evidence of consumer confusion. Only a few copies of mixed-up local church bulletins or unit-produced fliers and some conclusory allegations that misuse of the GSUSA trademark had been encouraged.  In the dismissal order the judge found that after many GSUSA witnesses, no single instance of confusion or brand tarnishment was proven.  Not good.

The judge found that not a single Polaroid factor favored the GSUSA case. My read is that the judge’s calls on these legal factors are well-reasoned.

I can sense no apparent misjudgment on legal or fact issues. There is no apparent abuse of discretion. If anything, the judge appears to have gone to near-unreasonable lengths to allow GSUSA to prove a case. So, I sense there is not a strong basis for the appeal.

Going back to the Fee Petition, it cites internal GSUSA communications produced during discovery (after an attempt to hide them) to the affect that the case was knowingly filed as an anti-competitive move in coordination with a PR effort to smear the BSA program effort.  If the documents are sufficiently supportive on these issues, the case law will favor the fee award – the size of which will only continue to grow during the appeal.  I am not experienced with trademark law and do not know the procedural behavior of the litigants, so I can only wonder of sanctions against the Plaintiff attorneys might apply here as well.

Litigation is a tough game. When the trademark case was filed, uninformed parties thought the BSA’s future was a bit in doubt. If the trademark case is proved to have lacked legal and factual merit, it might be characterized as a calculated effort to insert meritless and expensive litigation to lessen chances of a successful reorganization.  This trademark case interfered with efforts to form our all-girl program units – that was my personal experience during formation of our girl Cub Den and Scouts BSA Troop for Girls.  That might have been a “rational” (but certainly unethical) business wager back then, but it failed because the BSA will be emerging from bankruptcy in reasonable shape. Unless I am missing something significant, it is time for the GSUSA to settle on the fees and move beyond this bitter fight.  I do not see how it benefits them to continue.

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Tyler Ochoa, a professor at Santa Clara University School of Law, discusses the Boy Scouts defeating a trademark lawsuit brought by the Girl Scouts. She brought up the issue of trademark dilution and that the judge did not use the federal 6 factor test .

https://www.bloomberg.com/news/audio/2022-04-18/judge-tosses-girl-scouts-suit-against-boy-scouts-podcast

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Ochoa's main point is that the court did not hold National BSA vicariously liable for instances when local units or councils errantly used the term "girl scout" during the early weeks implementing the new program.  He thinks that is a potentially appealable legal issue.  GSUSA would have to prove that the local actors were acting as employees of National when they took the actions, that the actions  were a requirement of employment and that a tort occurred.  I think it is fairly weak, in that the employment link is very distant, the action was not a condition of any employment and the facts alleged, if true, did not give rise to a tortious injury or harm (because GSUSA was not able to prove harm -- consumer confusion).  The offered "proof" of confusion turned out to be inadmissible hearsay.    

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Other than getting Bankruptcy Court permission to pursue their trademark case, I think the only connection to the bankruptcy was that they filed a claim.

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4 hours ago, Cburkhardt said:

... knowingly filed as an anti-competitive move in coordination with a PR effort to smear the BSA program effort. ...

As long as I've had scouts in scouting ... Dale vs BSA ... CSA ... bankruptcy ... there has been a unhealthy relationship between BSA and GSA; mostly from GSA to BSA.  ... I'd say more, but it's hard without accusations.  But, it does feel like GSA has lifted themselves by pointing out issues and enjoying BSA be a target.  

Seeing an explicit reference to GSA lawsuit even tangentially related to a PR effort to smear BSA ... that really does make me sad.  

Perhaps the real issues is GSA sees it's own days as numbered when BSA emerges from bankruptcy. 

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Fred8033:

I am similarly sad to read the documents revealing the actions GSUSA was taking at the time of our most-extreme peril.  I recall the ferocious things their national leadership said publically about volunteers in the BSA (like the posters on this site).  Most regretfully, I am troubled by how these attitudes were directly transmitted to their professionals and volunteers at the local level.  Despite the bad behavior displayed and harshest words spoken to us nationally and locally, I have not heard one anti-GSUSA peep from anyone on this site, on my Scoutmaster Staff or around our local council.  

One important thing has changed though.  Our Scouts BSA Troop for Girls was once thought to be an "alternate" program for young women.  Parents and their daughters would visit our open houses and directly contemplate whether they would join GUSUA or Scouts BSA for Girls.  No longer.  Three years on Scouts BSA for Girls is now a very normal and broadly-accepted activity for girls in the District of Columbia metropolitan area.  They now come to us and gladly join without any mention of other youth services programs.  This is only a limited observation of one Scoutmaster in one Troop, but I'll note the difference is significant.

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15 hours ago, Cburkhardt said:

Other than getting Bankruptcy Court permission to pursue their trademark case, I think the only connection to the bankruptcy was that they filed a claim.

The GSUSA was arguing that they were not treated fairly in the BSA bankruptcy.  The GSUSA was claiming that they have a good case and think they will win in appeal (or at least could win).  Then they will seek a fees, etc.  GSUSA estimated $17M impact but BSA only offered insurance that would pay a very small fraction of that possible outcome.  The BSA's argument was that GSUSA is very unlikely to get $17M.  The judge didn't buy BSA's argument.

So ... GSUSA's main ask is that post bankrupt BSA backstops the plan.  If GSUSA wins $15M and bankrupt BSA plan only gives them $500K, post bankrupt BSA pays $14.5M.  

I'm not sure if the judge will agree to that, but she didn't like BSA's argument against the request.  She did lean a bit on the fact that GSUSA's case was dismissed, so that helped.  Not sure where she will land on this.

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Just now, Eagle1993 said:

I'm not sure if the judge will agree to that, but she didn't like BSA's argument against the request.  She did lean a bit on the fact that GSUSA's case was dismissed, so that helped.  Not sure where she will land on this.

Part of me is a bit suspicious of the BSA court case here.  I wonder if this is a method to try and get GSUSA to drop their own case and remove their claim in bankruptcy court.  The $16M is nearly identical to the $16-$17M GSUSA is seeking in bankruptcy.

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