LOS ANGELES, June 18, 2004 – LAWFUEL – It’s been called a case of “David vs.
Goliath” – or at least that’s how Scott Smith, owner of EntrepreneurPR,
characterized it during his six-year smear campaign. But in the end,
Entrepreneur Media Inc. demonstrated that in order to maintain a 27-year-old
brand in this highly competitive economic environment, you have to fight hard
for it. Even if it means looking like the bad guy – at least for a little
while.
Entrepreneur Media won its infringement trademark case in the 9th Circuit
Court of Appeals, in which the company was awarded a permanent injunction and
over $1 million in damages and fees. A three-judge panel upheld the trial
court’s decision that Smith’s infringement of Entrepreneur Media’s trademark
was deliberate and willful. The panel also agreed that “Smith intended to
confuse consumers” and benefited from the magazine’s trademark and reputation
as the nation’s leading authority on small businesses.
“This decision couldn’t have been more timely,” says Pete Shea, CEO of
Entrepreneur Media. “With entrepreneurs and small businesses fueling the
economic recovery, we are keenly aware that our reputation for providing
outstanding services to this market is more important now than ever. Smith’s
products and services were not of our caliber and we did not want any further
confusion or false association.
“Smith made us out to be some huge media company bearing down on his
little company and it’s unfortunate that some media and organizations bought
into his story. We are not a huge media company – but like any company, we
absolutely know the value of our 27-year-old brand and we will fight tooth-
and-nail to protect it as trademark law requires,” added Shea. “When these
organizations actually checked the facts of the case, they realized how they
had been duped by Smith – just like those customers who thought he was
associated with our company.”
Background of the Case
The ruling is the culmination of six years of litigation. Entrepreneur
Media has used its “Entrepreneur” trademark on its flagship magazine,
Entrepreneur, since 1977 and also uses the trademark on its Web site,
Entrepreneur.com. In addition to the well-established use of the trademark,
Entrepreneur Media has registered its mark, as well as several related marks,
with the U.S. Patent and Trademark Office.
In 1995, Smith started ICON Publications, which focused on providing
public relations services to small businesses, and in 1997 he started a
magazine called Yearbook of Small Business Icons. As part of Entrepreneur
Media’s effort to promote small business, it listed ICON Publications on the
small business links portion of its Web site in 1996. Soon after, Smith
changed the name of his company to EntrepreneurPR, the name of his magazine to
Entrepreneur Illustrated and his domain name to entrepreneurpr.com.
In 1998, Entrepreneur Media filed this lawsuit in federal court against
Scott Smith doing business as EntrepreneurPR, seeking to protect its trademark
from illegal use. In 2000, a federal court granted Entrepreneur Media summary
judgment. Smith appealed and the 9th Circuit Court of Appeals sent the case
back to district court for a trial on questions of fact. In that trial, Judge
Cooper found that there was “substantial evidence of actual confusion,” and
that a significant number of Smith’s clients, whom the Judge found to be “very
credible,” had been misled by Smith into believing that there was an
affiliation between Entrepreneur Media and EntrepreneurPR. Judge Cooper
concluded that these third-party witnesses “were almost uniform in their
position that they never would have paid any money to defendant [Smith] had
they known he was not connected with plaintiff [Entrepreneur Media].”
In her opinion, Judge Cooper noted that Entrepreneur magazine has a paid
circulation in the United States of approximately 550,000 and a total audience
of approximately 2 million readers, and that its Web site at Entrepreneur.com
has approximately 2 to 3 million visitor sessions each month. From this and
other evidence presented at trial, the judge concluded that the “Entrepreneur”
name is “well-known” and “is a strong, distinctive mark, deserving of
significant protection.”
In awarding the permanent injunction, substantial money damages and
attorney fees to Entrepreneur Media, Judge Cooper specifically found that Mr.
Smith had engaged in “deliberate” infringement.
About Entrepreneur Media
Founded in 1973, Entrepreneur Media has over the years become the leading
authority in providing information, products and services about and of
interest to small businesses and their owners. In addition to its flagship
magazine Entrepreneur, Entrepreneur Media publishes such other magazines as
Entrepreneur’s Be Your Own Boss and foreign-language magazines in China,
Mexico and the Philippines, as well as numerous book titles under the
Entrepreneur Press imprint and as part of its series known as Entrepreneur’s
Start-Up Guides. In addition to its Web site at Entrepreneur.com,
Entrepreneur Media also operates Web sites at SmallBizBooks.com, Freebks.com,
and a Spanish-language site at SoyEntrepreneur.com. Entrepreneur Media has
also produced conferences, seminars and trade shows throughout the United
States and, to help small business owners start and grow their businesses,
currently produces market research reports and offers an online learning
center known as Entrepreneur Magazine’s University.
