BENTON – The U.S. District Court for the Southern District of Illinois issued a ruling that Southern Illinois Storm Shelters Inc. and others must pay $17.3 million in damages involving a trademark infringement case to a Missouri residential construction company.
Southern Illinois Storm Shelters (SISS) had sued construction company 4SEMO in 2013 for allegedly using the trademarked name for a storm shelter, but then 4SEMO counter-sued stating that a "LifeSaver Storm Shelter" was in fact theirs, and SISS had been using its name to make sales.
Brothers Scott Ingoldsby and Robert Ingoldsby were also defendants in the case.
District Judge David R. Herndon granted injunctive relief for 4SEMO and ordered SISS to stop any advertisements, references or marketing using the trademarked name, and advise any third parties they authorized to use the name to stop as well. Herndon denied 4SEMO’s claim for attorney’s fees, noting that the case was not deemed “exceptional.”
As to the large award, Herndon noted that “the vast amount of the revenue received by defendants from sales in conjunction with their unauthorized use of the marks, $11,266,011 of the $17,371,003 of such total revenue, was received after the defendants were confronted by 4SEMO and after the defendants agreed to buy the marks from 4SEMO, only to withdraw from and refuse to follow through on that agreement.”
According to the order, 4SEMO, a home renovation and repair business located in Missouri, bought a storm shelter from a dealership in 2004 for a customer’s home remodeling job. The storm shelter was manufactured by SISS. 4SEMO arranged to buy more shelters from the dealership, and eventually purchased the dealership itself. 4SEMO President Ray Fielack created the name LifeSaver Storm Shelters along with a logo and used that on marketing materials going forward. After initially just using the old dealership’s brochures with SISS listed as the manufacturer, Fielack was aware of the potential for confusion with both names listed. In 2005, SISS signed a contract for 4SEMO to be the dealer for the shelters SISS manufactured.
The order states in 2006, SISS asked if it could use the LifeSaver logo for local retail sales and installations in Southern Illinois, which 4SEMO agreed to. However, 4SEMO did not find out until 2011 that SISS had been using its logo for nationwide sales and installations, ads in newspapers and magazines and to procure more deals with other dealerships. SISS even registered the domain name www.lifesaverstormshelter, and the order states that the defendants wanted to buy the name from 4SEMO, “if and when 4SEMO discovered the improper use and complained.”
SISS sued 4SEMO in 2013, claiming trademark infringement and other claims, and 4SEMO counterclaimed, claiming not only was the trademark and logo theirs, but SISS had breached their contract, along with other related claims. The trial court granted summary judgment to 4SEMO, and the parties amended their complaints and switched places to 4SEMO now being the plaintiff and SISS the defendant.
Herndon wrote that both Ingoldsby brothers’ testimonies were “suspect” after they said they couldn’t remember details of some issues, but then could “claim certitude with respect to other matters when helpful to their cause.
“The court specifically finds that the testimony of Ray Fielack and the former 4SEMO employees that such a limited use agreement was all that was requested and all that was granted is credible, and that the attempts of the defendants to characterize the agreement as something other than this limited use agreement are not credible.”
Herndon stated that SISS had no documentation regarding the use of the trademark, or evidence that the LifeSaver name had been previously used, and that using the trademark and logo for LifeSaver caused confusion, deceiving the public.
Herndon noted that allowing SISS to keep the $17 million it gained by using the logo would be unjust enrichment, stating that the amount they earned “was received after the defendants were confronted by 4SEMO and after the defendants agreed to buy the marks from 4SEMO, only to withdraw from and refuse to follow through on that agreement…. The loss of those sales is a direct and proximate result of defendants’ breach of their obligations under the dealer agreement.”
U.S. District Court for the Southern District of Illinois case number 3:13-cv-00297 DRH/SCW