Case of the Day: Fleischer Studios v. AVELA

The case of the day is Fleischer Studios, Inc. v. AVELA, Inc. (C.D. Cal. 2016). Fleischer and Hearst Holdings, Inc. sued AVELA for trademark infringement in the English High Court. The court issued an “Interim Award” in favor of the plaintiffs. AVELA sought a stay pending appeal, but the Court of Appeal in the UK denied the motion. AVELA’s appeal was stricken when it failed to post security. Fleischer and Hearst then sought recognition and enforcement in California.

At the same time that Fleischer and Hearst were seeking recognition, there was another action involving the same trademarks pending in an Italian court. The Italian court took the view that it, not the UK court, had jurisdiction over the dispute. AVELA suggested that the English judgment was not final, because under relevant EU law, a second court cannot hear an action for trademark infringement if a first court has already rendered a final decision. Since the Italian court had not dismissed the action before it, AVELA claimed the UK decision could not have been final. This is faulty reasoning on its face, but in addition, as the judge noted, the English court expressly noted the Italian case and held that the two cases did not involve the same cause of action. For essentially the same reason, the judge rejected that argument that the English court had lacked subject-matter jurisdiction in light of the Italian proceeding.

AVELA also argued that the English judgment conflicted with a US judgment in a case involving related trademarks. The judge rejected this argument, noting that trademark rights are territorial, and that nothing in the US judgment bore on the parties’ rights in Europe.

Last, AVELA argued that the English courts had denied it due process. That’s always a tough argument to make, particularly with regard to the UK. The claim was that when AVELA added a copyright counterclaim to the English case, the court bifurcated the proceedings. But AVELA didn’t explain to the court’s satisfaction how the bifurcation (to which, apparently, AVELA had agreed) prejudiced its case in England.

Thus the court granted summary judgment for Fleischer and Hearst.

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