Thursday, December 20, 2018

Dead Rabbit Q & A

            A few weeks ago, I wrote a post about a trademark infringement lawsuit involving the Dead Rabbit comic book released by Image Comics. For more information, see the original post here, but basically, a bar in New York named Dead Rabbit (“DRT”) made menus in comic book form, planned to release a book utilizing the comics in 2018, and registered a trademark shortly after Image announced a comic book series named Dead Rabbit in February 2018. DRT then filed a lawsuit for trademark infringement against Image and the comic book store Forbidden Planet.
 Today, I’m going to do a little armchair lawyering in the form of a Q&A.

Why did DRT sue a comic book shop?

I believe there are a few reasons why Forbidden Planet was sued. From the complaint, the most obvious reason is that DRT, which is located in New York, wanted to make sure the lawsuit was heard in New York. Image is a California company. By adding a defendant in New York, the chance of the lawsuit being switched to a different court in a different state is diminished.

Another possible reason Forbidden Planet was included is to put pressure on Image to settle quickly. Retailers and distributors don’t like being caught up in litigation over a product they are selling but do not manufacture or control. By suing a retailer, there’s more pressure on Image to make the case go away quickly. 

Is there any risk to Forbidden Planet?

Yes. Selling a product that infringes a trademark constitutes infringement. Even though Forbidden Planet was unaware the Dead Rabbit comic book infringed upon someone else’s trademark, they could still be liable for the issues they sold.

Why did Image recall the book?
The primary reason to recall the book is to protect itself and retailers. As mentioned above, selling an item that infringes someone’s trademark can make you liable, even if you didn’t make it. Also, continuing to use a trademark after you’ve been made aware of it can increase your liability to the trademark owner. It’s safer to pull the allegedly infringing items until the problem has been resolved.

Will this case go to trial?

Doubtful. From my perspective, there’s not much reason to go to trial. Image has already recalled the book from the marketplace, and it looks like they are agreeing to an injunction against further publications bearing the Dead Rabbit name. The only remaining issue would be monetary compensation, if any.

Due to the fact DRT filed the trademark application after the comic book was announced, and its registration was issued in September, there are bound to be questions about whether DRT can actually enforce the federally-registered trademark against the comic book. A particularly tricky issue will be determining when Image and Forbidden Planet used the Dead Rabbit trademark in commerce. Is it when they began soliciting orders, which was before the trademark was registered, or is it the on-sale date in shops?

The likelihood of a court awarding DRT its requested $2 million in damages also seems unlikely, especially considering the issues surrounding the timing of DRT’s trademark registration. Unless DRT, and its attorneys, are hoping to get legal fees awarded, the amount available to recover doesn’t seem very high.

For instance, in orders sent to comic book shops, issue 1 sold an estimated 19,031 copies[1] to shops, and issue 2 sold an estimated 9,761 to shops[2]. If the shops sold every issue, which is unlikely, at $3.99 an issue, the total sales would be $114,880.08—and not all of that money was pocketed by one entity. Due to the somewhat convoluted flow of money through the comic book distribution system (Consumer to Retailer to Distributor (Diamond) to Publisher), the amount at issue in this case is likely to be less than the amount stated above, unless it sold well through other retail channels. Regardless, while it’s a decent amount of money, it’s a relatively small amount to get into a high-stakes legal battle over.


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