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"The only thing necessary for the triumph of evil is for good men to do nothing"
Edmund Burke


Dear Ms Deborah J. Gabaree

We are responding to you on behalf of the claim made by the University of Notre Dame in regard to the alleged unauthorized use of the University of Notre Dame trademarks by our company on cornhole bags.

As you correctly noted, we believe the first sale doctrine supports our company's ability to produce and sell the Notre Dame cornhole bags. It is clear that the first sale doctrine does apply to this situation. Your stated position is not supported by case law as you claim. The recent decision in Au-Tomotive Gold Inc v. Volkswagon only applies to the 9th Circuit and while other circuits are free to consult the ruling, we expect none of the other circuits will follow the lead of the 9th Circuit in its reverse-engineering to give trademarks owners control over the use of lawfully acquired trademarked product. While the 9th Circuit Court of Appeals held in that case that the first sale doctrine did not provide a defense in a case such as this because the newly created item creates a likelihood of confusion as to its origin, the Court circumvented the rights of the purchaser in fashioning the decision desired by the 9th Circuit. Indiana is in the 7th Circuit which specifically refuses to follow the 9th Circuit.

Federal trademark law, specifically the Lanham Act, deals with counterfeiting a mark. Placing a false mark on a product, or using a confusingly similar mark, is the basis of the Lanham Act. § 1114 (1)(a) and (1)(b) both distinctively use the words counterfeit and reproduction in the description of what constitutes infringement.

When a licensed product is used as intended by the trademark owner, and then sold, just how does this become infringement? When the University of Notre Dame authorized the printing and release of fabric into the stream of commerce it did so with the intention that that fabric be sewn into items. The trademarked images on the fabric were there when the fabric was sold and those trademarked images have not been altered in any manner. In fact, the use of those trademarked images is wholly consistent with the sale of the fabric. What the University of Notre Dame objects to is the subsequent sale of these items.

Federal courts have declined to protect sales of trademarked items under the first sale doctrine when there has been a material alteration of the product but not when the product has been used as intended by the manufacturer. There has been no material alteration of this fabric. In fact, there has been no alteration at all since the fabric was intended to be cut, shaped and the sewn into items. An alteration to the court is a physical change intended to influence the opinion of the potential consumer.

In Softman Products v Adobe Systems, 171 F. Supp. 2d 1075 (C.D. Cal. 2001), "the sale of software without access to customer support and technical services is a difference that an average consumer would consider relevant to a decision about whether to purchase a product." However, Adobe was unable to prove a lack of support and did not prevail.

In Nitro Leisure v Acushnet, 341 F.3d 1356 (Fed Cir 2003), the difference was the golf balls were refurbished. The court stated: "...consumers do not expect used or refurbished goods to be the same as new goods and that for such goods, 'material differences' do not necessarily measure consumer confusion."

In Societe Des Products Nestle v Casa Helvetia, 982 F.2d 633 (1st Cir 1992), the composition of the imported chocolate was different. The court found "the sale of goods different from, although not necessarily inferior to, the goods that the customer expected to receive" was material.

In Graham Webb Intl v Emporium Drug Mart, 916 F.Supp. 909 (E.D. Ark 1995), product batch codes were obliterated. The court stated, "the product itself did not appear to be compromised in any of the bottles and the minor aesthetic damage, which if anything consisted of almost imperceptible scratches on the bottom of the bottles, did not in any manner create a likelihood that consumers would think that Graham Webb intentionally distributed shoddy goods." Webb lost.

In John Paul Mitchell v Randalls Food Markets, 17 S.W.3d 721 (TX 2000), product batch codes were removed. The court stated: "Here there was no evidence that removal of the batch codes defaced the bottles or compromised the quality of the products. Nor does the removal of batch codes alone establish a material difference due to lack of quality control. " Mitchell lost.

In Iberia Foods v Rolando Romeo,, 150 F.3d 298 (3rd Cir 1998), the issue revolved around quality control. The court of appeals rejected the argument because the quality controls measures appeared to be minimal and ruled for the defendant. The court said: "In contrast, when the differences between the products prove so minimal that consumers who purchase the alleged infringer's goods "get precisely what they believed that they were purchasing," Weil Ceramics, 878 F.2d. at 672, consumers' perceptions of the trademarked goods are not likely to be affected by the alleged infringer's sales. See Casa Helvetia, 982 F.2d at 641. Although consumers may be unaware of the precise avenues that a given product has traveled on its way to the supermarket shelf, the authentic trademark on the alleged infringer's goods is an accurate indicator of their nature and quality. Cf. Prestonettes, Inc. v. Coty, 264 U.S. 359, 368, 44 S.Ct. 350, 351, 68 L.Ed. 731 (1924). Thus, the goods may be considered "genuine." This does not mean that the trademark owner suffers no economic harm from the alleged infringer's sales, but it does mean that § 32 of the Lanham Act does not offer a remedy to the trademark owner. See Weil Ceramics, 878 F.2d. at 672.

In Davidoff v PLD International, 263 F.3d 1297 (11th Cir. 2001), obliteration of batch codes. The court found that the removal of the product codes disfigured the bottles to the point that a consumer would likely conclude there had been tampering.

And there is nothing improper with making a profit from the product of another. From American Footwear Corp. v. General Footwear Co. Ltd., 609 F.2d 655 (2d Cir. 1979), cert. denied: "The only limitation is that the party who takes advantage of the atmosphere the other party has helped create may not achieve a competitive boost by confusing the public into mistakenly purchasing his articles believing it to be that of his competitor."

From New Kids v News America, 971 F.2d 302 (9th Cir 1992): "While the New Kids have a limited property right in their name, that right does not entitle them to control their fans' use of their own money. Where, as here, the use does not imply sponsorship or endorsement, the fact that it is carried on for profit and in competition with the trademark holder's business is beside the point."

From Ty v. Publications International, 292 F.3d 512 (7th 2002): "...by developing or licensing a market for parody, news reporting, educational or other transformative uses of its own creative work, a copyright owner plainly cannot prevent others from entering those fair use markets..."

We are not contaminating the product. The product has not been altered as it is still 100% cotton fabric. We have not counterfeited any logos. And we are careful to let the potential consumer know that while the cornhole bag is not a licensed product it was made from licensed fabric and that there is no affiliation between our company and the University.

Accordingly, we reject the University demands that we immediately cease the production and sale of the cornhole bags which incorporate Notre Dame trademarks. We will not provide you with an accounting of anything.

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