Norwood Promotional Products v. Kustomkoozies and Liddle

The continued use of a trademarked image after a failed attempt to terminate a licensing agreement does not constitute trademark infringement.

Norwood was a large promotional products company which sold imprinted promotional products through various distributors. Kustom was an internet retailer that sold insulated beverage can and bottle holders with customizable promotional imprinting, directly to end-customers in quantities as small as a dozen. On May 15, 2007, the USPTO issued a trademark registration to Old Norwood for the mark "KOOZIE®." On May 6, 2008, Old Norwood sent a letter to Kustom indicating that it had come to Old Norwood's attention that Kustom was in violation of the licensing agreement the parties had previously discussed because Kustom failed to set out KOOZIE in all capital letters and set forth the appropriate subscript following the term. In response to the May 6, 2008, letter, Robert Liddle reviewed the agreement and Kustom's website pages, making changes that he believed cured any noncompliance issues, but he did not succeed in making all necessary changes. Norwood sued for breach of contract and trademark infringement. After the lawsuit was filed, Kustom did not attempt to make any changes to its website in order to avoid the trademark infringement claim, but it did attempt to terminate the licensing agreement with Norwood. However, the attempt to terminate was unsuccessful. The court found that the mere use of the claimed mark after the failed attempt to terminate the license agreement did not constitute trademark infringement and GRANTED summary judgment to Kustom.