Tabberone's Hall of Shame - M3Girl Designs ~ lawsuits

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Last updated - July 15, 2012

3:09-cv-02390-F
M3Girl Designs LLC v. Blue Brownies LLC et al

DAY 3 : Wednesday, June 20, 2012

Time 9 am Continuation of Cross of Diane Bradshaw
Hanor began by displaying more of the Plaaintiffs' exhibits that the Plaintiffs had used to tout their business using celebrities and supposedly well-known people. #85 and #86 - are any of these people wearing bottle cap choker necklaces? Most are holding them in their hands. Is Miss Sophia wearing a bottle cap choker necklace? She's holding one in her hand. Is anyone wearing a bottle cap choker necklace? No. Adults are not their target audience. When Maddie was on the Nate Burkis Show, was she wearing a choker necklace? They are on display on the table beside her.
Hanor wanted to read from the transcript from the show, page 149. The judge was reluctant to allow it as it could not be verified. Hanor pointed out that Diane Bradshaw was at the show in the audience. The judge told him to show the part to Hemingway before reading it. There were two parts. Hemingway objects to the second part. Do you recall: Nate asks Maddie, what is the business all about? She replies, interchangeable magnetic jewelry. "I don't remember", replies Diane Bradshaw. The judge would not let Hanor show Diane Bradshaw the transcript.
Exhibit #133, patent files, are admitted into evidence. May I approach the witness? Hanor refers her to paragraph 35 which is a block diagram and a description of how a necklace is made. Does this accurately describe how to make an m3 girl designs necklace? "They denied our patent, Sir." (She did not answer the question.)
He asked he to read another part of the patent file. She responded that the claims were withdrawn and that they had re-filed the patent application and it was denied claiming non-functionality. Hanor referred her to the letter from the Patent Office, dated August 30, 2011, and asked her to read part of it. The part that referred to the patent application being for software for a chat room. "Neither the product or the chat room affects the functionality of the system". Wasn't this about the software and not the choker necklace? She responded, all I know is the patent was denied as I stated earlier.
Hanor then proposed Claim 1 and Claim 2 of the patent application as an exhibit. The judge said he would allow it for demonstration purposes but not as an exhibit for the jury. Diane Bradshaw stated, with all due respect (this expression usually means put it where the sun does not shine) our patent came back as denied for non-functionality. Could you explain the claims made in the patent application? That's why I hired a patent attorney (who happened to be Hemingway). May I approach the witness? Would you agree that Claim 1 is the same as what is on the patent application? I don't know, it's a big document. (Same song and dance by witness).
The claim rejection letter was put on the projection screen. The letter from the Patent Office says the claim was rejected under 35 USC 103a, 11, 15 and 16, does it not? Our patent was denied for non-functionality. Next heading. This paragraph says the claim was rejected under 35 USC 103a, 17? Our patent was denied for non-functionality. I do not see the word "functionality" in this sentence. Do you? Next heading. This paragraph says the claim was rejected under 35 USC 103a, 18? Our patent was denied for non-functionality. Let us look at original claim 11 - the chat room where members could talk about their jewelry. Our patent was denied for non-functionality. (This was her constant answer to questions about the patent application. Over and over and over.) Original Claim 11 - read the first two sentences. It was a system for providing marketing. Is that correct? I do not believe that is accurate, Sir.
Back to demonstration. Hanor read the trade dress description in the patent application: slim choker necklace, an attachment, bottle cap, art work and magnet. Our trade dress is a raised projection on the back of the bottle cap. Exhibit #3 was admitted and handed to Diane Bradshaw. It was the trademark registration for FUN-CAP-U-LOUS. Exhibit #4 was admitted and handed to her as well. How did FUN-CAP-U-LOUS come about? She admitted that FUN-CAP-U-LOUS was them. They were licensed to make SNAP CAPS in 2009. And where were these products made? Overseas. She was instructed to look at the package and read the country of origin. Made in China. Is it a lower end product line? Yes. Much lower priced? I believe so. Where is it sold? Toys R Us, Claire's. Did it have any effect on your sales? It is intended for a different clientele. Demographically not the same users. Is FUN-CAP-U-LOUS in competition with m3 girl designs? No.
Hanor opens the package and shows her and the jury the necklace. Does this necklace have a clasp? Yes. I have never seen it before. This is the first time I have seen a clasp. Did the necklace with the clasp sold by FUN-CAP-U-LOUS come from m3 girl designs? We are FUN-CAP-U-LOUS. (That's not an answer. That is in-your-face defiance. And, she has never seen a product that she owns and licenses? Really?)
Exhibit #6 was introduced. It was Maddie Bardshaw's book, You Can Start A Business Too. It was about the creative process. The name SNAP CAPS doesn't appear in the book? Exhibit #81, approached the witness and had her identify the document. The was the application to appear on the television show, Shark Tank. Did you and your daughter fill out this application? I believe we did. (Believe? How many network television shows do they fill out applications for where she can't say, Yes, we did?) We did not apply. They came to us. After they approached you, you filled out this application? Yes. They contacted us. We were trying to produce a new line because of competition from Blue Brownies. The new line is Spark Of Life Jewelry. They had requested $300,000 in return for 15% of the company. After due diligence, they said "No" because of the lawsuit and Blue Brownies. What did you intend to do with the money? Invest it in the new line.
Continuing with the application, reading some of the questions from the application displayed on the projection screen. Questions like, "Describe the market", etc. On page two, "What is your current cash flow situation?" Not very good because of the high cost of CSPS (Consumer Product Safety Commission) testing and the high cost of US production. "What is the basic design?" The answer was children's jewelry. "Describe the circumstances around the business getting started." The answer mentioned Spark Of Life Jewelry.

Objection The application was filled out by Maddie. Overruled.

More questions from the Shark Tank application. "Do you own any Patent, Copyright, Trademark, or have applied for one? Spark Of Life Jewelry trademark application was filed on February 3, 2011. Did Shark Tank verbally ask you about your new business? They were already familiar with our success with the bottle cap choker necklaces.

Time 10:20 am 10 minute break

Before resuming the questioning of Diane Bradshaw, Hemingway informed the judge that the Defendants wanted to exclude CSPS testing testimony. Hanor replied that he did not intend to open that door in his questioning. The judge replied that it seemed like an impeachment issue because she said that Blue Brownies was the cause of no profit. He will allow the questioning.

Time 10:30 am Cross of Diane Bradshaw Continues.

Exhibit #175b was introduced. It was an m3 girl designs document paid February 24, 2007. Was this your first invoice? I don't know. It shows 12 necklaces and 27 bottle caps. Was this the first written invoice for your company? I don't know. The orders were coming on the telephone. My bookkeeping skills were not the best. Another invoice. From December 12, 2007, for the Learning Express store in Southlake. It was for 199 bottle caps and another 25 bottle caps. There are only bottle caps on this invoice? I don't know. Another invoice. Dated November 26, 2007. It shows 50 necklaces and 134 bottle caps? Diane Bradshaw replied that the store manager could have bought more bottle cap choker necklaces. The only had nine stores at the time. They would drive to the store with boxes of product and the store managers would pick through them and get what they wanted. They were being sold as bottle cap choker necklaces. Everything was happening so fast. They were writing orders down on whatever piece of paper was handy.

(Going back to Day 1, when Diane Bradshaw first testified. Her background. She graduated from SMU with a degree in Psychology. She had been a manager for an apparel company and then a regional manager, a buyer, opened stores and re-merchandised the stores. This is a savvy business woman, not some dolt who just happened to start a company. By her own admission she knew how to take, fill orders and distribute merchandise. Her description of their failure to use order forms sound like a total fabrication.)

Another invoice. Dated December 23, 2007, for the Learning Express store in Snyder Plaza. It was for 215 bottle caps and 100 necklaces. The majority of them were ordered together as a bottle cap choker necklace. (She was well-rehearsed, always using full terms like "bottle cap choker necklace".)
Exhibit 133a was introduced Copy of Patent 5806346.

Objection Section 401 and 403 would be hearsay. The judge asked if it was part of Exhibit #133? Hanor stated that Hemingway has cited this patent in the patent application for m3 girl designs. The judge didn't see the relevance for the witness as it was unlikely she would know about it. The judge then addresses the jury about patents.

Hanor then introduces Exhibit #117, the royalty agreement with FUN-CAP-U-LOUS. He has Diane Bradshaw turn to the last page. Who signed this agreement? She did, on May 17, 2012. They were already in production. The merchandise took some three months coming in by boat. When did sales start? I don't know.
Exhibit #211, Summary of Sales Agreement from the Bromley Group, dated January 23, 2009. She pointed out that they had started with Bromley with a verbal agreement in October 2008. (It does seem strange that a large marketing company would begin a national sales promotion with just a verbal agreement. How would they recoup money spent after three months if the verbal client changed its mind?.) The Bromley Group would send activity reports or sometimes just call them up on the telephone.
Exhibit #85 admitted. Hanor referred to what he called copies of threatening letters sent out by m3 girl designs. Diane Bradshaw made a point of stating that those were cease and desist letters. Did any of these letters say anything about trade dress claims? I don't know. Our trade dress is a fabric choker, an attachment with a metallic sheen, a bottle cap with the ridges pointing out with a raised projection on the bottle cap.
Exhibit #233 admitted. Hanor directed Diane Bradshaw to the last letter. It was a letter from Blue Brownies, dated August 26, 2009. The letter was addressed to Hemingway and Blue Brownies wanted proof concerning the patent claim. He then had her go to page one. It was the first cease and desist letter sent to Blue Brownies. Does a trade dress claim appear anywhere in that letter? I don't know. Our trade dress is a fabric choker, an attachment with a metallic sheen, a bottle cap with the ridges pointing out with a raised projection on the bottle cap. Do you see the wording trade dress here? I see the word patent and.....our patent application was denied because of non-functionality.

Your honor? The judge replied that he was sure that Mrs Bradshaw will focus very carefully on [Hanor's] questions.

Our trade dress is the projection. I see the word choker necklace and that is our trade dress. Yes. To the best of my knowledge. That's how I interpret that. We have received returns with the magnets falling off. I look at that as inferior. I threw them away. I received them personally. I opened the boxes . Does trade dress appear in this letter? Heminway pointed out to the court that the witness already did respond. Hanor directed her to the letter dated March 9, 2009. It was the Blue Brownies reply to the first cease and desist letter. Does the Blue Brownies reply say trade dress anywhere?

Objection. . He is asking the witness to interpret what the attorney meant. Overruled.

Is there any reference in that paragraph to trade dress? To the best of my knowledge it refers to the choker bottle cap necklace. (Evasive answer.) Let's go back to the artwork claims in the cease and desist letter.

Objection. . The artwork is not an issue here. We are just going over what they asserted in the original letter. Not going to allow it.

Hanor asks the court reporter to read back his last statement. Is there any reference in that paragraph to trade dress? To the best of my knowledge it refers to the choker bottle cap necklace. Did your attorney ever supply documents to Blue Brownies concerning the patent claims? The Patent Office denied our patents because of non-functionality. The second cease and desist letter was sent to Blue Brownies on May 15, 2009. Do you know when you received your trademark registration? I don't know the registration date. Is that an accurate description in the letter of your product? Our trade dress is a fabric choker, an attachment with a metallic sheen, a bottle cap with the ridges pointing out with a raised projection on the bottle cap. Is that an accurate description in the letter of your product? I have answered the question to the best of my knowledge. Script lettering is not part of our trade dress.
It is your contention that CLICK-IT and SNAP CAPS are confusing? Yes. The stores said so.

Objection. That is hearsay. Overruled. I will leave it to the jury to determine.

It is the same concept. It is the same idea. That makes it confusing.

Time 11:30 am 10 minute break During the break the judge read the patent application.

Time 11:42 am Cross of Diane Bradshaw Continues.

Exhibit #174a, a Manufacturing Sales Agreement with the Kline Group. Diane Bradshaw stated the they started with a verbal agreement for representation in October 2007 and signed that contract January 25, 2008. Does the Kline Group have an office in Little Rock? No. How many stores did the Learning Express have? 144. (For someone who was answering a lot of questions with "I don't know", Diane Bradshaw, without notes, quickly rattled off the exact revenue numbers, to the penny, for 2007 and 2008 for m3 girl designs. Could it be that she remembers only that which she wants to remember?)
Exhibit #133, the response by her attorney to the Patent Office. They denied the patent because of non-functionality. The patent claims were for a web site? They were for a web site and a choker bottle cap necklace. When the Patent Office rejected your first application you elected to proceed with claims 11 through 20, the web site only. We filed a patent and it was denied for non-functionality. Look at paragraph 24, "A marketing and web site...". Our patent was denied for non-functionality. Hanor read four other excerpts and four more times her answer was the same: Our patent was denied for non-functionality.

Permission to approach witness? Hanor hands Diane Bradshaw five boxes. Exhibits #11, #12, #13, #14 and #16. Look at #11. What is the name on the box? Alex. Cap It Off Jewelry. Are you familiar with this company? Yes. They are a huge company. This jewelry kit, the girl on the kit is wearing a choker necklace that looks just like yours? There is no projection on the back replied Bradshaw.

The next exhibit. Alex. Similar design but a different girl who is also wearing a choker. That is not our trade dress. Look at the next exhibit. Also Alex. She knows the owners. Those are choker necklaces. m3 girl designs is selling bottle cap choker necklaces with a raised projection on the back. That is not our trade dress. (Do we see a pattern in her rehearsed answers?) How many different languages are there on the box? Several. The next exhibit. Also similar. That is not our trade dress. Exhibit #16, Cool Bottle Cap Art. This one also is similar. It looks to be a low level market. Box says 2010 on it.

The witness is passed for re-cross.
Hemingway referred to the last five exhibits. Those boxes, what year did they come out? 2009 and 2010. And they are not our trade dress. Why didn't you file a Schedule C in those early years? The dollar amount was under $20,000 and there were three of them. (The flaw with this statement is that she, being a savvy businesswoman, could not deduct business expenses from the business income. They must have had business expenses - inventory, advertising, travel, etc. Why not deduct them?)
FUN-U-CAP-ULOUS is in whose names? m3 girl designs. SNAP CAPS was registered in 2009? Yes. And you started using the circled "R" [®] immediately to show that it was registered? Yes. And CPSC testing is expensive? There is a lot of cost involved. While at trade shows? At every trade show people were asking how did you do that. And Shark Tank, wasn't the majority of the application done verbally? Yes.

Objection. The form of the questions.. Overruled.

Hemingway then went to the royalty report from FUN-U-CAP-ULOUS.

Time 12:22 pm Lunch Break To resume at 1:40 pm..

Time 1:40 pm Maddie Bradshaw is next witness.

There was a 5-minute delay because four jurors were late returning from lunch. While the court waited, the date of the consumer survey was debated. Sine it was taken two years after the secondary meaning cutoff of January 2009, Hanor felt the two years would make the survey invalid. According to the Sixth Circuit a survey after the fact is admissible.
Jury enters and Maddie Bradshaw takes the witness stand. (I should state here that Maddie Bradshaw is an intelligent and attractive young woman. The web pages about her and her company are there because of what they were doing - attacking other companies claiming m3 girl designs owned the idea of bottle cap jewelry under copyright law. The trade dress trial came about because the copyright claims failed.)
She began with some background information. She is going into the 11th grade. She was 4 years old when they moved back to Dallas and remembers a little of it. She talked about the "Stationary Sale" in the second grade how it started her interest in business. She started selling water and cookies at their twice-yearly yard sale. She and her mother researched the costs. She started customizing lap desks and got the fabric and other materials from a craft store.
When she was in the fifth grade (2006) she finally got a locker. She decorated it with magnets, about 200 of them. That is when the choker bottle cap necklace was created. She gave out tons of them to friends. All of them were the trade dress shown. She then went over the trade dress which existed in 2006. (Like her mother, Maddie was well rehearsed. And like her mother, she would repeat the trade dress mantra over and over. And like her mother, and her attorney, she was trying to convince the jury that trade dress existed while all of them had to know that it did not.)
Hemingway asked her, she was not claiming magnets as a feature? Yes, not claiming magnets. She started making necklaces for her friends. Then they placed 50 choker necklaces on consignment and they were sold out in two hours. She started with $300 of her own money, which was matched by Mom. Was there some other money? Absolutely not.
Their first operations were not very professional. They were on the telephone a lot. They had no invoices and were taking orders on random pieces of paper. They started a production line. Making bottle caps all night long. There were trays of bottle caps all over. At first everything was by word of mouth. They were placing product in three stores the first year and nine stores the next. And they gave out brochures. How prominently was the trade dress displayed? Extremely. They put their trade dress on everything.
Is SNAP CAPS descriptive? No, it's suggestive. [It is more difficult for a descriptive trademark to attain secondary meaning than for a suggestive trademark.] What did the Kline Group do? Spread the word. Is SNAP CAPS associated with m3 girl designs? Yes. They outgrew home and had to move into an office with their production line. She then described what the offices looked like. She went to 95% of the trade shows. She remembered the 2008 Bromley meetings.
Exhibit #32, News 4 video from Oklahoma City. Still picture. The choker bottle cap necklace was on a display on the table beside her. She created the first web site. Was the trade dress prominently displayed on the web site? Yes.
Exhibit #60, Spirit Of Toys advertisement. They sold four bottle cap choker necklaces a minute. How often were they sold as a set? Very often. She then emphasized that their product was an impulse purchase item. It was usually near the check-out in stores.
Hemingway then took her through a series of exhibits of interviews and advertising, most of which he had shown to Diane Bradshaw. Exhibit #130, her appearance on the television show, "The View". Maddie described the experience as "really great". (She readily joined in the using of celebrities as though it really mattered to the trade dress issue.) Was the trade dress prominently displayed on the set? Yes it was.
Exhibit #149, the Nate Berkus Show. He's really great. Exhibit #69, Time Magazine For Kids. An important interview. Was the trade dress prominently displayed? Yes it was. Exhibit #78, an advertising brochure from March 18, 2010. A signing in the Bahamas. Exhibit #85, Teen Choice Awards. Was the trade dress prominently displayed? Exhibit #27b, still picture from the television show, Shark Tank. They got "such a positive response". Sales after the show skyrocketed. They made more that weekend than they has in the year leading up to the show. Exhibit #127, Inc.com, from October 2010. Basically, really cool.
What is non-functional? It means it doesn't perform a function. Was her mother using her [Maddie] as a front? No. Was her mother using Margo as a front? No. Could you do all this by yourself? No.

Time 2:32 pm The witness is passed for cross by the defense.

Hanor introduces Exhibit #174. Hemingway objected to it for lack of foundation. It was a spreadsheet that was developed from invoices. Exhibit #132 dated January 27, 2008 was shown to Maddie. The letter seemed to indicate a sale of a bottle cap choker neckalce. The judge asked if Diane Bradshaw had been asked about the letter. She had not. Hanor moved on to the next exhibit. It was a letter to It's A Girl Thing dated February 24, 2007. Who prepared this letter? I don't know. A letter to Try To Top This. Who prepared this letter? I don't know.
Hanor then introduced some documents that had been acquired through discovery. It was a flow chart made by Diane Bradshaw showing how to make bottle cap magnets. Hanor asked Maddie, Step 1, how is this difficult? [the whole jewelry making process?] I Don't know. Step 2 had to do with selecting the artwork. Maddies replied, I don't know. This case is not about the artwork.

Hemingway rose. He had instructed her not to discuss the artwork.. The judge replied that she could discuss the artwork in general terms.

Hanor asked mild question about the steps. Step 3, punch out picture. Step 4, a dab of adhesive? They used super glue or Elmer's. Step 5, place picture in the bottle cap. Step 6, seat the picture with a brush. Step 7, apply glaze. Step 8, apply glitter, or not as needed. Step 8, apply a dab of Amazing Goop. Step 19, attach rhinestones. And then spray image with glaze.
The next part of the flow chart was making the cord necklace. Step 1, cut leg out of adult tights into one inch sections. Loop around a 5/16 inch zinc washer. At this point Maddie claims she does not know what a zinc washer is. She tries to describe the "attachment" using the established trade dress descriprion repeated often by her mother. Step 3, attach finished bottle cap product to the zinc washer.

Time 2:50 pm 10 minute break

Time 3 pm Cross of Maddie Bradshaw Continues.

Hanor refers to archives.org as the "wayback machine". It has archived copies of many web sites. He asked Maddie if her old web site contained all of the advertisements? Yes. And the current web site has videos? Yes. But the old web site did not have videos? No.
Exhibit #2, certificate of registration for the supplemental registry. The Original Interchangeable Bottlecap Necklace. Hanor asked Maddie if she knew the difference between the principle register and the supplemental register? No. They used the mark often. First used it July 15, 2008 according to the registration. No claim was made to the use of the word necklace. We didn't use a slogan. It's a phrase. We use it but I wouldn't call it a slogan.
The Kline Group? They took m3 girl from 9 stores to 845 stores in a year. We also had a good product. They were very helpful. The Bromley Group set up interviews.
Exhibit #81, the Shark Tank application. They accepted us and then they sent out an application. (Really?) It was filmed in the summer of 2011 and aired in early 2012. We "filed the lawsuit to protect our trademark rights". Were you trying to get money for your new business or your old business? "It's all one company". (She appeared to be echoing the comments made by her mother.) Sales have gone down dramatically. They did get a big boost in sales from Shark Tank. Bottle cap jewelry is not a fad. The trademarks and trade dress used by Blue Brownies was infringing. (Maddie has become mercenary. It seems she wants to protect what is hers and she does not seem to care who gets hurt in the process.)

They had a lot of competition in 2008 and 2009. They left some companies alone because they changed their trade dress. So it is all right for someone to sell just necklaces? Or sell just bottle cap magnets? It's not our trade dress. What about BottleCapCompany.com? That's not our trade dress. But they sell the material to make choker necklaces and to make bottle cap magnets? I'm confused. They sell the parts to make what you are selling. It's not our trade dress. (It is surprising that Maddie's nose did not get longer as she testified.)
Hanor then shows Maddie the CAPSTER book. She first saw it at a Learning Express show in 2008. He asked is she was aware that it was first sold in 2005? Maddie challenges the date of that particular copy saying the date it was published might make it a later copy. It was a later copy and she did not dispute his statement that it was very similar to the earlier edition. Do you sell more bottle cap magnets than necklaces? (Maddie's answer was an attempt to answer the question without answering the question, much like her mother did.) Before Maddie finished answering, Hanor asked the next question. Sternly, Maddie told him, let me finish. (She was very well rehearsed.) You claim your first bottle cap jewelry sale was in 2006 but the earlier invoices indicate it was later. The other was our first recorded sale.
What does SNAP CAPS mean to you? She gave him a blank look. What does it suggest to you? She stuttered a little. (She was not prepared for that question.) No. We don't believe that it is a description of anything. Hanor referred her back to Exhibit #6, her book, in which she described the snappy sound the bottle cap jewelry made. That they almost named themselves.

Time 3:34 pm The witness is passed for re-cross .

In 2008, she did the web site? Yes. Did she post videos? She believed so. Hemingway asked about their registered trademark, The Original Interchangeable Bottlecap Necklace.

Objection. Not qualified.. Overruled.

The Original Interchangeable Bottlecap Necklace? What is your understanding of this?

Objection. Sustained.

Time 3:37 pm Plaintiff calls witness Christa Dudte.

Did you start a business and LLC? Yes. Blue Brownies in January 2009. And you had internet sales in 2009? Yes. Did you have a partner in this business? Yes. Her friend, Charlotte Liles. And your friend Liles was a buyer? Yes. At the Dallas Marketplace? I don't know. Hemingway then introduced Exibit #289, answers to interrogatories.

Objection. Not admissible. Previous testimony? The judge said he would allow it but it was not to go to the jury.

According to earlier statements, Blue Brownies knew of m3 girl designs as early as December 2008? Hemingway showed some exhibits to Hanor. Exhibit #234 was her tax return for 2009. He noted the revenue for Blue Brownies. Exhibit #3d. Hemingway puts up the display board. He points at the example of her necklace. You sold choker necklaces and bottle cap magnets separately? Yes. Exhibit #234, the 2010 tax return showing her partnership and the revenue. Exhibit #236, the 2011 tax return for Blue Brownies and revenue. Exhibit #237, financial data for Blue Brownies for 2011. For each exhibit, he asked if they were accurate and correct? Christa Dudte answered yes to all.
New exhibits were admitted. No objections by Hanor. Exhibit #218 showed when they formed their LLC, Blue Brownies. Filed January 6, 2009. Exhibit #219, State of Arkansas certificate of LLC. Exhibit #220. Certificate of Amendments to Articles of LLC. August 25, 2009. Who was making the decisions for the LLC? Both of them were [Dudte and Liles]. Do you recall getting a cease and desist letter during this time? Yes. Exhibit #232, the cease and desist letter. Is this an accurate description of the cease and desist letter? Yes. Dated February 27, 2009. A discussion of the letter. They decided to continue their operations. What about the second letter? May 15, 2009. Discussion. She made a conscious decision to continue their business? Yes.

Time 2:50 pm 10 minute break

Time 4:21p m Testimony of Christa Dudte Continues.

Side bar.
The judge announced to the jury that Christa Dudte had some issues with her eyes. She admitted she had an eye disorder from birth. The judge reminded the jury her eye disorder was not to be considered to be held against her.
Hemingway asked her for an estimate of revenue for Blue Brownies for 2012? Zero. We have not shipped anything out. Why that decision? The market has completely dies out. Have you received orders? Blue Brownies dot com is still out there. Does your lawyer know that you have stopped shipping?

Objection. Sustained.

You are still taking orders? I don't man the web site. There's been no decision to take down the web site? No. Have you offered other products on the web site? Yes. So you could sell other items? Yes.
The judge interrupted and asked Christa Dudte, I thought you only sold bottle caps? We added some new items later. Hemingway asked, it's not essential to use the trade dress to sell children's jewelry? (During this part, Hemingway tried to push the availability of alternative products. It was an attempt to fit the issues into a trade dress infringement. He also asked redundant questions.
Charlotte Liles settled out of this case? Yes. The judge told the jury that the decision by Charlotte Liles to settle could not be used as an indication that she agreed with the claims of the Plaintiffs. Is Liles still selling bottle cap necklaces? I don't believe she is. Exhibit #221, transfer of of membership in the LLC from Liles to her husband, Robert Dudte. Exhibit #222, Articles of Amendment. Exhibit #223, statement of LLC In Good Standing. They both showed Robert Dudte replacing Charlotte Liles as part of the LLC.
Hemingway shows several documents to Hanor. No objection. Exhibits 217, 224, 225, 226, 227, 228, and 317 admitted into evidence. Exhibits #217 was a printed copy of the Blue Brownies web site showing them selling bottle caps and choker necklaces. The necklaces were made with a washer versus a metallic decice. Christa pointed out that they offered four necklaces and many bottle caps magnets. Exhibit #224 was a printed copy of the web site at an earlier date. Hemingway directed her attention to the wording CLICK-IT(7trade;) CAPS. Hemingway asked who put the "TM" after CLICK-IT. Christa Dudte replied that she did not now, that she had not put it on there. Hemingway keep pushing her for an answer saying that someone must have felt that Blue Brownies had a proprietary interest in the name to have put the "TM" there? He attempted to link the use of the "TM" to confusion with SNAP CAPS. Wouldn't she agree that it causes confusion when two companies use the same name? She agreed, sure. (But the use of SNAP CAPS and CLICK-IT CAPS are not the same name.)
Hemingway then asked a lengthy question.

Objection. Compound questions. Sustained.

So you agree that using the exact same name is against trademark law?

Objection. Asking a legal question. Sustained.

Would you agree that offering a product under a name that means the same thing is not right? (Since he had a weak case, Hemingway was attempting to plant the idea in the minds of the jury that the Defendants agreed that they were infringing. When you cannot presents facts then fabricate an alternative.)

The judge told Hemingway to take the word "agree" from the question

Did you understand why you were getting these letters? [The cease and desist letters.] No. We did not feel we were doing anything wrong.
Hemingway then tries to introduce jurisdictional discovery from the Liles defendant and the judge says it has no bearing on the case.

Time 5:06 pm The witness is passed to Dendants for cross .

Hanor started with the income for Blue Brownies. Exhibit #234, their 2009 gross income was $36,275, with a business cost of $12,955, and a profit of $6,235 each? Yes. Exhibit #235, 2010 income showing a gross of $23,265, resulting in a profit of $6,212? Yes. Exhibit #236, 2011 income showing a gross of $3,543 for a loss of $1,616? Yes. (The math here is a little confusing. The end result is a three-year profit of about $17,000 for Blue Brownies.)
Hanor then went over her background. Christa Dudte said she was employed as a part-time pastor, working about 25 hours a week. When did she first see bottle cap jewelry? In 2008 at a school get together. Moms from the PTA. Dis you make the same number of necklaces and bottle cap magnets? No.

Time 5:22 pm The jury was excused until the next morning.

After the jury left, the judge asked Hemingway how he calculated choker sales?
Hemingway replied they multiplied total revenue times 99% for the trade dress numbers.
Judge: suppose I want ten bottle caps? You are assuming I want a choker necklace. How do you know?
Hemingway: It is a very rare event where someone buys just ten bottle caps.
Judge: is there a computer printout supporting thes 99% numbers?
Hemingway: The company books show 99% of the time one choker necklace and one bottle cap.
Hanor: the invoices show that rarely are there the same number of each sold.
Hanor ask the judge about one of his witnesses. Since the judge had announced that because of scheduling commitments, there might be a two-hour session Friday morning and possibly no court at all on Friday. If defense witness Josh Kinney had to stay in Dallas over the weekend it would place a difficult burden on him. Hanor wanted to have Kinney testify out of order so he could return to Utah.
Judge told the two attorneys to talk it over.
Hemingway objected to the out of order stating that Kinney does not produce a product that competes with the trade dress of the Plaintiffs.
The judge said the testimony by Kinney may go to damages.

Time 5:39 pm Adjourned until the next morning.

To Be Continued

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