13 February 2019Trademarks

Court orders Walmart to pay $95.5 million for TM infringement

Walmart has been ordered to pay $95.5 million in royalties and profits after a jury found it had infringed a smaller retail chain’s ‘Backyard’ trademark.

The judgement, issued by the US District Court for the Eastern District of North Carolina yesterday, February 12, comes at the end of a five year legal battle with Variety Stores.

Walmart had initially been ordered to pay just over $30 million for infringing the mark following the court’s summary judgment in 2016. That figure, however, has now almost tripled after the Federal Circuit remanded the case back to the lower court for a jury trial.

Variety sued Walmart in 2014, accusing it of infringing its trademark for ‘The Backyard’ (US number 1,847,503), a department in Variety stores which sells lawn and garden supplies.

According to the complaint, since the mark’s registration in 1993, Variety has expanded its ‘backyard’ section department to include goods such as barbecues and outdoor grills, and used variations of the mark including “The Backyard + Design” and “The Backyard BBQ”.

In July 2012, a Variety employee discovered Walmart using the phrase “The Backyard Grill + Design” to promote its grill products, the complaint said. That month, the chain filed an opposition to Walmart’s application to trademark this phrase for products relating to barbecues and smokers.

The opposition proceedings, filed with the Trademark Trial and Appeal Board, were pending the conclusion of Variety’s court action against Walmart.

In 2016, the court ruled that Walmart had infringed the mark, and awarded $32 million to Variety in profits derived from the infringement, but denied its request for additional damages.

Variety appealed against the court’s calculation of Walmart’s profits resulting from the infringing activity and denial of a jury trial to determine damages to the Court of Appeals for the Fourth Circuit. The Federal Circuit overturned the district court’s previous decision in April 2018, and remanded the case back to the lower court for a jury trial.

The jury reached its verdict in the case on October 24, 2018, finding that Walmart had wilfully infringed Variety’s trademark. Yesterday, the court awarded Variety royalties of $45,536,846.71 as a result of the infringement. Walmart was also ordered to pay an additional $50 million in profits earned from its use of the mark.

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