Stoller Strikes Out.....Again!

David Kozman, DePaul University College of Law Technology/Intellectual Property Clinic, October 23, 2005

Abstract: Leo Stoller and his corporate entities were thrown out at the plate when the U.S. District Court for the Northern District of Illinois, Eastern Division, issued a recent decision in Central Mfg Co. v. Brett, granting summary judgment to Baseball Hall of Fame inductee George Brett and Brett Brothers Sports International, Inc. against Central Mfg. Co., Stealth Industries, Inc., and Leo Stoller and cancelling Central’s Trademark Registration No. 2,892,249 for the mark “Stealth” for use on baseball, softball, and T-ball bats. The Court also ordered Stoller and his companies to pay Brett’s attorney fees and costs as provided for under the Lanham Act and pursuant to Illinois statute.

Leo Stoller has made a business out of litigation; but not as a lawyer. His attempts to protect the word “stealth,” from use by almost anyone for almost any goods or services have contributed in large part to (at last count) 47 cases involving him or his corporate entities in the Northern District of Illinois alone. His latest attack has been waged against a company partly-owned by George Brett, the hall of fame baseball player. The case, Central Mfg. Co.et al. v. George Brett et al. was decided on September 30, 2005 by the Northern District of Illinois, Eastern Division. Not surprisingly, the court balked at all of Stoller’s arguments.

The product in question was a line of baseball bats sold by Brett’s company, Brett Brothers, and referred to as the “Stealth Bat.” Since 1999, over 25,000 of these bats have been sold. Stoller argued that his companies used the mark “Stealth” on bats and similar goods prior to the Brett Bros.’ use and therefore the Brett Bros.’ use was infringing. The case centered primarily on two of Stoller’s registrations: one in 1985, (the ‘378 Registration) which included the word “Stealth” for use with a number of sporting goods including baseballs, but not including baseball bats; and one in 2004 (the ‘249 Registration) which included the same mark for use with baseball, softball, and T-ball bats.

In response to Stoller's allegations, Brett Bros. argued: (1)Stoller could not produce evidence to support the claim that his company was the senior user of the mark “Stealth” on baseballs or baseball bats; (2)In reference to the ‘378 Registration, even if Stoller’s company does have trademark rights for the mark “Stealth” for baseball goods, it abandoned the mark with no intent to resume use; (3)Even if the mark is not found to be abandoned, there is no likelihood of confusion between Stoller’s products and Brett Bros. products; and(4)the '249 Registration should be canceled because Brett Bros. used the mark “Stealth” for baseball bats prior to any alleged use by Stoller or his companies.

Conversely, Stoller argued that because his company registered the “Stealth” mark in 1985 and re-registered it in 1993, his company is the senior user of the mark for baseball-related products. Therefore,priority of use of the mark for sporting goods for baseballs should extend priority protection to baseball bats as well. Stoller also argued that Brett Bros. used the “Stealth” mark in false designation of origin under Section 1125(a) of the Lanham Act.

With respect to baseball bats, the court found that Brett Bros.’ had first used the “Stealth” mark with bats in 1999, prior to Stoller’s company’s ‘249 registration stating 2001 as the date of first use in commerce. Based on this finding, the court cancelled the ‘249 Registration.

Likewise, Stoller’s argument that his 1985 registration of the mark “Stealth” for use with baseballs extended protection to bats as well because the products were closely related, never made it to first base. The court (quoting Sands, Taylor & Wood Co. v. Quaker Oats Co., 978 F.2d 947 958 (7th Cir. 1992), stated that “‘Modern trademark law prohibits a senior user’s mark... on products that are considered ‘closely related’ to the senior user’s,’” and a “‘closely related’ product is one which could ‘reasonably be thought by the buying public’ to come from the same source or an affiliated source with the owner of the trademark.” After reviewing sworn statements from several people involved in the sporting world indicating no awareness of Stoller’s products, and analyzing the Seventh Circuit’s likelihood of confusion factors, the court found that the buying public would not confuse Stoller’s company’s products with those of Brett Bros. The Court found that the marks were not similar in the way they were used on bats; were used on dissimilar products and areas of use; and did not cause actual confusion.

Furthermore, the court agreed with the Brett Bros.’ claim that Stoller’s mark for use with baseballs had been abandoned. Despite Stoller’s offers of proof, the court ruled that the evidence to support Stoller’s usage was not sufficient and that he had “merely attempted to hold the mark in order to further ‘baseless, harassing litigation.’” As such, the court ruled that Stoller had abandoned the “Stealth” mark for baseballs prior to the Brett Bros.’ use of the mark for bats and therefore was not a senior user of the mark.

Finally, the court awarded Brett Bros.’ attorney fees under both the Lanham Act and the Illinois statutes. The court noted that “Under the Lanham Act, the case must be 'exceptional' and both the Illinois courts and the Seventh Circuit have construed the Illinois Consumer Act to allow fees when ‘special circumstances’ exist. See Door Sys., Inc. v. Pro-Line Door Sys., 126 F.3d 1028, 1030-32 (7th Cir. 1997).” In this case, the court found that Leo Stoller and his companies “engage in a pattern and practice of harassing legitimate actors for the purpose of extracting a settlement amount. The judicial system is not to be used as a [sic] aid in such deliberate, malicious, and fraudulent conduct. …Leo Stoller and his companies present paradigmatic examples of litigants in the business of bringing oppressive litigation designed to extract settlement.”

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