Direct Sound Headphones, LLC, of a Fenton, Missouri has sued Apple for Trademark Infringement over the term “Ear Pods”

Plaintiff, (“Direct Sound” or “Plaintiff”) sued Apple for “violations arising under the Trademark Act of 1946, 15 U.S.C. §1051, et seq., (the “Lanham Act”) and for common law trademark infringement and unfair competition under the laws of the State of Missouri, “based on Direct Sound’s ownership of the trademarks “E.A.R.PODS” and “e.a.r.Pods”; Direct Sound’s use of the trademarks “E.A.R.PODS” and “e.a.r.Pods” in manufacturing and selling audio headphones; Apple’s subsequent, improper, and infringing use of “EarPods” to sell goods including audio headphones; and Apple’s continued improper use of “EarPods” despite Apple’s knowledge of Direct Sound’s prior use and ownership”.

Its an interesting case from the domain point of view as well.

Back in September 2012, we wrote a story about Apple failing to secure the domain names EarPod.com and/or EarPods.com before announcing its Ear Pod product, writing in part:

“The domain name Earpod.com has been registered since 2008 and is being forwarded to a hearing clinic site at myhearpod.com.

The company that owns the domain name earpod.com owns a trademark on the term “hearpod” and maybe in a position to object to Apple’s trademark or sued Apple for infringing on its mark especially since the own Earpod.com.

Certainly it’s an issue Apple should have resolved prior to yesterday’s announcement.

The domain Earpods.com has been registered just since last year under privacy at Name.com.

The domain goes to a page which includes contact information for the domain as an email address at DNSR.Com which stands for Domain Name Sales Report.

This is another domain name that Apple should have acquired prior to the announcement.”

Shortly after our story, Businessinsider following out story, wrote that the domain name Earpods.com could sell for $2 Million.

However now Direct Sound has sued Apple over the Ear Pod term and they have owned the domain name EarPodsHeadphones.com but wasn’t registered until November 2012. The domain name EarPodsHeadphone.com was also registered in September 2012 but does not appear to have been registered by either Apple or Direct Sound.

Also Direct Sounds says in the Complaint that they own the domain name EarPodsHeadphones.com, that domain is being forwarded to ExtremeHeadphones.com which was originally registered back in 2000.

Here are the highlights of the allegations contained in the lawsuit:

Plaintiff Direct Sound was started in November 2000 in Saint Louis, Missouri. Direct Sound is engaged in this business of manufacturing and selling audio headphones and related parts and accessories. Direct Sound owns the trademarks of “E.A.R.PODS” and “e.a.r.Pods.” Direct Sound uses the marks “E.A.R.PODS” and “e.a.r.Pods” on and in connection with its products. On September 8, 2012, Direct Sound filed Application Serial No. 85/724,049 (“‘049 Application”) seeking to federally register on the Principal Register its “E.A.R.PODS” and “e.a.r.Pods” marks. Shortly thereafter, Apple began using “EarPods” and/or “EARPODS” to sell products including audio headphones. On October 1, 2012, Apple filed Application Serial No. 85/743,152 (“‘152 Application”) seeking to federally register on the Principal Register the mark EARPODS for the goods of: “Headphones; microphones; remote control for controlling audio and video players and mobile phones; sound reducing apparatus.” Apple’s trademark registration claims Apple first used EARPODS “as early as 09/12/12.” Direct Sound’s actual use of its “E.A.R.PODS” and “e.a.r.Pods” trademarks pre- dates the date of Apple’s first use, any date of actual first use upon which Apple may properly rely, any date of actual first use which Apple may properly allege, and the date of Apple’s ‘152 Application. Apple spent substantial sums of money advertising its “EarPods” headphones and promoting the “EarPods” name and mark, thereby creating confusion and/or reverse confusion and damage to Direct Sound which had been utilizing its trademarks “e.a.r.Pods” and “E.A.R.PODS” prior to Apple’s improper use of “EarPods” and prior to Apple’s “EarPods” product launch, which occurred on or about September 12, 2012. Apple discovered Direct Sound’s use of the e.a.r.Pods and E.A.R.PODS trademarks at least as early as October 2012. Apple employee, Michael Wong, visited Direct Sound’s exhibit space at the 2012 Audio Engineering Society Convention (“AES”) in San Francisco, California. Direct Sound was displaying its e.a.r.Pods volume-limiting headphone product at the 2012 AES. At the 2012 AES, Mr. Wong inspected the e.a.r.Pods product, and Mr. Wong discussed e.a.r.Pods with Direct Sound co-founder Steve Rois. Mr. Wong informed Mr. Rois that Mr. Wong had personally used Direct Sound’s products for years. After the 2012 AES, Mr. Wong and Mr. Rois exchanged emails about Apple and Direct Sound doing business together, and the emails specifically discussed Direct Sound’s “volume limiting EARPODS.” 25. Apple employee Mr. Wong promised to visit Direct Sound again in January 2013 at the Winter North American Music Merchants show (“NAMM”). As promised, Mr. Wong visited Direct Sound at the January 2013 NAMM show, and he again discussed the e.a.r.Pods product with Mr. Rois of Direct Sound. At the January 2013 NAMM show, Mr. Wong asked to take a photo of the Direct Sound headphones with the e.a.r.Pods trademark clearly visible. Apple did not do business with Direct Sound as Apple first suggested in October 2012. Instead, Apple decided to have its attorneys send a cease and desist letter to Direct Sound shortly after Mr. Wong visited Direct Sound for a second time and after Mr. Wong initiated discussions about Apple and Direct Sound working together. Notwithstanding Apple’s knowledge since as early as October 2012 of Direct Sound’s prior and continued use of the e.a.r.Pods and E.A.R.PODS marks, Apple continued to use and continues to use “EarPods” without Direct Sound’s authorization or permission. Apple’s actions have caused actual confusion and are likely to cause confusion concerning the source of Direct Sound’s e.a.r.Pods and E.A.R.PODS volume-limiting headphone product, Direct Sound’s association with Apple, Direct Sound’s use of marks associated with Apple, and the association of Apple with Direct Sound and Direct Sound’s “e.a.r.Pods” and “E.A.R.PODS” marks. As a result of Direct Sound’s advertising and promotion of its E.A.R.PODS and e.a.r.Pods marks, including its website (www.earpodsheadphones.com) and Internet usage, Direct Sound has acquired a valuable reputation and goodwill in its business and related services. Well after Direct Sound established its rights in its E.A.R.PODS and e.a.r.Pods marks, Apple began using and has continued to use “EarPods” in connection with its business. Apple’s use of “EarPods” is likely to cause confusion, mistake, or deception as to the affiliation, connection, or association of Apple with the E.A.R.PODS and e.a.r.Pods marks or with Direct Sound’s business and products, or as to the origin, sponsorship, or approval of Apple’s products by Direct Sound. Apple’s acts will cause substantial harm to the goodwill, business reputation, profits, and business plans, expectancies, and abilities of Direct Sound unless the relief sought herein is granted. Apple’s acts are in violation of the common law of the various states in which Apple and Direct Sound do business, including the State of Missouri. Direct Sound has no adequate remedy at law inasmuch as money damages alone would not indemnify Direct Sound for the permanent loss of its proprietary rights, established goodwill, business reputation, and business plans, expectancies, and abilities. Unless this Court enjoins Apple, which would serve the public interest, Apple’s actions will continue to cause irreparable damage to Direct Sound’s enterprises, property rights, goodwill, and business reputation that outweighs any possible harm to others. Apple should be required to pay to Direct Sound its damages, including damages for corrective advertising and reverse confusion, all profits derived by Apple from Apple’s wrongful use and display of “EarPods” and damages suffered by Direct Sound as a result of Apple’s wrongful use and display of the “EarPods” name. Apple’s unauthorized use of the “EarPods” name constitutes false designation of origin or false description or representation, and Apple’s use has caused, and is likely to further cause, the E.A.R.PODS and e.a.r.Pods marks to lose their significance as an indicator of origin. Apple’s substantial sums spent on advertising and promotion of “EarPods” has resulted or is likely to result in a saturation in the public awareness of Apple’s unauthorized “EarPods” name. These actions by Apple are in violation of 15 U.S.C. § 1125(a). Apple’s unauthorized use of the E.A.R.PODS and e.a.r.Pods marks and “EarPods” on goods substantially the same as that of Direct Sound was and is being conducted with full knowledge of Direct Sound’s rights. Apple knew that its substantial and continued advertising and promotion would cause confusion and would cause harm to Direct Sound’s business and Direct Sound’s trademarks. Thus, Apple has willfully infringed and willfully violated Direct Sound’s rights in violation of 15 U.S.C. § 1125(a).

WHEREFORE, Plaintiff Direct Sound Headphones, LLC demands judgment against Defendant Apple, Inc., as follows: That Apple, its officers, agents, sales representatives, servants, employees, associates, successors and assigns, and all persons acting under its control, by, through, under, or in active concert or in participation with them, be permanently enjoined from: i. Using any mark, including “EarPods,” that is likely to cause confusion with the E.A.R.PODS and e.a.r.Pods Marks; ii. Using any mark, including “EarPods,” or doing any act or thing likely to induce the belief on the part of the public or Direct Sound’s customers or potential customers that Apple and/or Apple’s goods or services are in any way connected with Direct Sound and/or Direct Sound’s goods and services; and iii. Printing, publishing, promoting, lending, or distributing any advertisement, whether written, audio, or visually portrayed, which use or refer to the E.A.R.PODS and e.a.r.Pods Marks, or any confusingly similar mark including “EarPods.” B. That Apple deliver up for destruction all advertising, literature, and other forms of promotional material bearing the word “EarPods” including, but not limited to, removing all such words from Apple’s websites; C. That Apple be required to pay Direct Sound such damage as Direct Sound has sustained as a result of Apple’s infringement of the E.A.R.PODS and e.a.r.Pods Marks, including payment for corrective advertising and reverse confusion damages, and that Apple account for and pay over to Direct Sound all gains, profits, and advantages derived by Apple from such infringement; D. That Apple make a full report to this Court of its compliance of the foregoing within thirty (30) days of judgment; E. For a fair and just amount of actual damages; F. For punitive damages; G. For prejudgment and post-judgment interest, costs and attorney fees; and H. For such other and further relief which may be deemed just and proper.

The lawsuit was filed in The United States District Court for the Eastern District of Missouri, Eastern division, Case No. 4:15-CV-1407