August 11, 2020

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August 11, 2020

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August 10, 2020

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Jury Awards $95.5M in Trademark Infringement Case

$95.5M in damages has been awarded by a jury in the ongoing trademark infringement battle between Walmart Stores, Inc. (Walmart) and Variety Stores, Inc. (Variety) over the use of the trademark “BACKYARD.” A federal judge approved a jury verdict that determined Walmart must pay Variety for infringing on Variety’s trademarks “The Backyard,” “Backyard,” and “Backyard BBQ.” This decision comes after Variety appealed a lower court’s decision to award Variety a $31.5M summary judgment. Walmart issued a statement calling the $95M verdict excessive and indicated that it is evaluating its options, including post-trial motions and an appeal. We have provided more details below, but stay tuned, as we suspect we have not heard the last of this dispute.

Background of the Case

In April 2014, Variety filed a civil action in federal district court (for trademark infringement, unfair competition, and deceptive practices) against Walmart for its adoption and use of the trademark “Backyard Grill” in connection with grills and grilling supplies. Variety owns a federal trademark registration for the mark “The Backyard” for “lawn and garden supplies and equipment” and has common law rights in the marks “Backyard” and “Backyard BBQ” in connection with “lawn and garden equipment, grills, and grilling products.”

In December 2015, a District Court granted partial summary judgement in Variety’s favor, concluding that Variety’s trademarks were strong, its rights went beyond just the sale of lawn and garden products protected by its federal registration, and that Walmart’s use of the mark “Backyard Grill” created a likelihood of confusion. Of particular note in the District Court’s decision is the commentary that (i) Walmart ignored its own counsel’s advice and proceeded with adoption of “Backyard Grill” despite Variety’s use, and that such behavior exhibited an intent by Walmart to confuse consumers; and (ii) this case was about a large corporation trying to outlast a smaller company in competition or litigation.

The District Court ordered Walmart to pay Variety $32.5 million in profits, which was based on a calculation of sales from the jurisdictions in which the parties directly competed minus Walmart’s costs of the goods and overhead. Variety moved for a separate jury trial to determine additional non-disgorgement damages. The District Court denied the request and Variety appealed. The U.S. Court of Appeals for the Fourth Circuit vacated the District Court’s original $32.5 million summary judgment, deciding that a jury, not a judge, should have decided several disputed infringement factors.

On February 12, 2019, a jury determined that Variety proved by a preponderance of the evidence that Walmart’s use of the mark “Backyard Grill” was likely to cause consumer confusion and therefore was infringing, and also found Walmart’s use was willful. Walmart was ordered to pay Variety a total of $95.5M for its infringement of the trademark “BACKYARD.” The award was calculated as $45M for Walmart’s trademark infringement and $50M for sales of the infringed goods.

For more on this case, see Variety Stores, Inc. v. Wal-Mart Stores, Inc., E.D.N.C. No. 5:14-CV-217.

Copyright © 2020 Robinson & Cole LLP. All rights reserved.National Law Review, Volume IX, Number 71

TRENDING LEGAL ANALYSIS


About this Author

Julianna M. Charpentier Real estate attorney Robinson Cole
Associate

Julie Charpentier focuses her practice on business and real estate litigation. She is a member of the firm’s Business Litigation Group and its Real Estate and Title Insurance Team.  

Business Litigation

Julie assists clients in handling complex business disputes, including claims for breach of contract and business torts such as fraud, misrepresentation, and unfair and deceptive trade practices. In addition to helping clients in traditional litigation, she also assists with alternative dispute resolution, such as arbitration.  

Real Estate...

617.557.5930
William Egan Commercial Litigator
Partner

William Egan has over twenty-five years of commercial litigation and business law experience. He handles trials at the state and federal level, along with arbitrations and mediations, involving both domestic and international matters.

In addition to his litigation practice, Bill counsels businesses on the negotiation and drafting of contracts and business agreements.

He also counsels clients on issues related to franchises and distributorships, technology, and commercial business matters, as well as real estate and leasing-related matters. Bill is a lecturer on the topics of commercial litigation, commercial lease law, and commercial contract law.

Bill focuses on three main areas of client representation: franchise and distributorship advice and litigation; commercial, business and technology advice, and litigation; as well as real estate and leasing litigation. For all three areas, his work also includes arbitrations, mediations, and business advice to minimize litigation exposure.

Franchise and Distributorship Litigation

Bill represents companies in franchise and distributorship disputes, including lawsuits, contract negotiations, and dispute resolutions. The United States District Court of Massachusetts’ decision in C.N. Wood Company, Inc. v. Labrie Environmental Group, Case No. 1:12-cv-11778 (D. Mass. 2013) is an example of a decisive ruling for our client. The ruling confirmed that as a manufacturer, our client was not liable to the plaintiff, who asserted claims under Massachusetts franchise law.

Commercial, Business and Technology Litigation

Bill has advised clients in a wide range of business disputes, including lawsuits and negotiations involving technology vendors, health care and medical organizations, an international cruise line, as well as other domestic, foreign, and international companies in their general commercial contract and business litigation. His experience includes trials in Massachusetts and Connecticut, where he is admitted in both the state and federal courts. He has also won arbitrations for clients including complex issues between medical entities, mediated a successful resolution of a real estate matter for a rapidly expanding and well-known national company, and settled two class action claims at very low cost for clients who had significant potential statutory exposure.

Real Estate Litigation

Bill represents clients with regard to commercial real estate disputes including leasing disputes for commercial, retail and industrial property. He has handled lease litigation and dispute resolution for national and international retailers, commercial landlords, and banking institutions. His representation in lease litigation matters includes successfully defending a large internet retailer against an overreaching landlord in an arbitration proceeding.

Pro Bono and Community Involvement

Bill regularly represents veterans who are threatened with eviction and facing the possibility of homelessness. He received the firm’s 2011 Pro Bono Award for his efforts.

EDUCATION

University of Connecticut School of Law 
J.D. 

Harvard University 
B.A., History

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