The story began in August, 2011, when Walmart began selling grills under the name "Backyard Grills" and soon applied for a Trademark Registration for the same. However, Variety Stores Inc. acquired the trademark "The Backyard" for services in the field of lawn and garden supplies since the year 1997. At such time the company applied to register the mark with the US Patent and Trademark Office (USPTO), and the same was granted. At a later point after acquiring the mark "The Backyard", Variety began using the marks "Backyard" and "Backyard BBQ" for selling grills as well. As per the facts of the case, the usage and registration of the mark "Backyard" was known to Walmart during their due diligence however, the same was ignored before launching the grills branded as "Backyard Grills" by Walmart.
Variety Inc. filed an opposition to Walmart's trademark application and also filed a suit against Walmart at the District Court claiming trademark infringement and unfair competition. The District Court found that Variety was the true proprietor of the registered trademark and that Walmart's use of "Backyard Grill" is likely to cause confusion amongst the public at large. The District Court ordered Walmart to pay USD32.5 million towards Variety. Walmart appealed.
The Appellate Court raised 3 issues with the registered mark "Backyard" viz. (1) the strength of Variety's mark, (2) the similarity between the marks to consumers, (3) Walmart's intent to confuse. The court concluded that the District Court inappropriately rejected Walmart's survey evidence and improperly weighed the evidence at the District Court. As a result, the Court vacated the grant of summary judgment and the monetary awards and also remanded the case for further proceedings.
In February, 2019, the Court assessed the facts and evidences of the case. The Jury stated that that Walmart's "Backyard Grill" was likely to cause confusion among the public at large with Variety Stores Inc.'s "Backyard" and "Backyard BBQ" trademarks. The Jury further ruled that Walmart willfully infringed on Variety's trademarks. Based on the abovementioned conclusions, the Jury awarded Variety a "reasonable royalty" worth USD 45.5 million and USD 50 million for profits Walmart earned from sales under the infringing trademark, adding up to a total of USD 95.5 million.
Compiled by: Adv. Sachi Kapoor | Concept & Edited by: Dr. Mohan Dewan
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