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It never pays to use what is not yours: Variety sues Walmart for Trade mark infringement

Written by Fatima Amedu on 15 February 2019

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The American multinational retail corporation Walmart Inc (‘Walmart’) has been ordered to pay a smaller retailer Variety stores (‘Variety’) (a retail store that sales a wide range of inexpensive household goods) $95.5 million (consisting of royalties and profits). A US jury found that Walmart had infringed Variety’s ‘The Backyard’ (US number 1,847,503) trade mark.

In 2012, it was discovered that Walmart was using the trade mark ‘The Backyard’ by using the phrase “The Backyard Grill + Design” to promote its grill products. Consequently, in July 2012, Variety filed a trade mark opposition to Walmart’s application to trade mark a phrase in relation to barbeque and smoker goods.

Variety stated that since the registration of its trade mark in 1993, it had expanded its ‘backyard’ section department to include barbeques and outdoor grills in a variety of trade marks. The opposition proceedings filed with the Trademark Trial and Appeal Board were left pending as the case had not yet concluded.

In 2016, Walmart was ordered to pay over $30 million for infringing the trade mark. This amount of damages reflected Walmart’s profits derived from the infringement, but the court denied Variety an award of additional damages. Furthermore, the court denied Variety a jury trial and refused a determination of damages by the Court of Appeals for the Fourth Circuit.

Variety made an appeal against the court’s calculation of Walmart’s profits. On appeal, the amount was tripled after the Federal Circuit remanded (sent back) the case to the lower court to have a jury trial. In October 2018, the jury found that Walmart had wilfully infringed Variety’s trade mark. As a result, Walmart was ordered to pay an additional $50 million reflecting the profits earned from its infringing use of the mark.

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