Magee v. New Balance Athletics Inc

IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
CENTRAL DIVISION
STEVEN MAGEE 	PLAINTIFF
v. 	No. 4:25-cv-265-DPM
NEW BALANCE ATHLETICS, INC. 	DEFENDANT
ORDER
About a decade ago, Steven Magee registered HOOPLIFE® as a
trademark for athletic apparel- shirts, pants, jackets, hats, caps, and
uniforms. 	He's in that business. 	The mark is the term in "standard
characters without claim to any particular font, style, size, or color[,]"
as required by the drawing regulation applicable to this kind of mark.
Doc. 1 at 30; 37 C.F.R. § 2.52(a)(l). 	A few years later Magee registered
the same mark for athletic bags, backpacks, and various other bags.
Doc. 1 at 31. 	In 2023, the "Hooplife Basketball Academy," which is
based in central Arkansas, ordered approximately 900 items of athletic
apparel from BSN Sports, a New Balance entity. 	The company made
and supplied them. 	These jerseys, t-shirts, hoodies, 	and such had
Hooplife, 	Hooplife 	Basketball 	Academy, 	or 	both 	on 	them.
Magee, 	acting 	pro 	se, 	has 	sued 	New 	Balance 	Athletics, 	Inc., 	for
trademark 	infringement. 	He 	makes 	five 	claims, 	one 	of 	which 	is
infringement by counterfeiting. He seeks approximately $18,000,000 in
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damages. 	This case is Magee's third effort at pursuing these claims
against New Balance. 	Magee v. New Balance, Inc., No. 5:23-cv-923-FB
(W.D. 	Tex.); 	Magee 	v. 	Varsity 	Brands 	Holding 	Co., 	Inc., 	No.
3:24-cv-833-E-BK (N.D. Tex.).
New Balance moves to dismiss the counterfeiting claim or strike
Magee' s enhanced-damages requests rooted in that claim. 	15 U.S.C.
§ 	1117(b). 	Magee 	prepared 	his 	response 	using 	generative 	AI.
New Balance moves to strike it. 	By New Balance's count, Magee's
response misstated the holdings of twenty-seven of the thirty cases
cited, invented false quotations from twenty-three cases, and fabricated
two cases. 	Doc. 16 at 17 & Appendix A. 	Magee apologizes. 	He says he
was unaware that generative AI could do such things. 	He promises to
do better in future filings. 	He asks the Court to disregard what his
response says about nine cases, but consider the rest of his response, or
allow a substituted paper. 	Magee also moves for summary judgment
on his counterfeiting claim.
*
New 	Balance's 	motion 	to strike Magee's 	response 	is granted.
The 	Court 	accepts 	Magee' s 	apology. 	That's 	a 	good 	first 	step.
But Magee is an experienced prose litigant. He has pursued this dispute
diligently 	in 	three 	courts 	and 	filed 	other 	similar cases 	about 	his
trademarks. 	E.g., Magee v. 	BSN Sports, 	LLC, No. 3:21-cv-1726-G-BT
(N.D. Tex.); 	Magee v. BSN Sports, LLC, No. 3:25-cv-2485-E-BN (N.D.
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Tex). 	It should not be necessary to do so, but the Court admonishes
him: 	Magee 	must verify all sources he cites 	in his 	court filings,
especially cases, statutes, regulations, rules,* and other legal authorities;
and he must cultivate a healthy skepticism about materials located with
internet 	searches 	and 	especially 	about 	materials 	generated 	by
artificial intelligence.
Magee must also show cause by 9 January 2025 why the Court
should not impose a monetary sanction. 	Magee' s response gummed
up the case. 	It required New Balance to incur unnecessary attorney's
fees. 	The misstatements and false quotations are so interwoven with
the argument that the Court was unable to rely on the document.
Magee' s points about counterfeiting had to be gleaned from his other
filings. 	All this is unacceptable.
*
While the Court is a bit skeptical about Magee' s counterfeiting
claim, as he argues it, New Balance's motion to dismiss this claim with
prejudice now is denied. 	The claim is plausible. 	Magee's motion for
summary judgment on this claim is also denied.
*Another example. 	Magee withdrew his response to New Balance's
motion to strike and filed a substituted version- saying he did so to
comply with 	LOCAL RULE 	7.2(e)'s twenty-five-page limit 	on briefs.
Doc. 19. 	But the Local Rule imposes no page limit. 	All the Local Rules
are 	on this 	Court's 	website. 	https://www.are.uscourts.gov/ court-
info/local-rules-and-orders/local-rules.
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Start with the statute. 	The Lanham Act imposes liability for
nonconsensual commercial use of" any reproduction, counterfeit, copy,
or colorable imitation of a registered mark ... " when the" use is likely
to cause confusion, or to cause mistake, or to deceive[.]" 	15 U.S.C.
§ 1114(1)(a). The statute defines some of its terms. 	"A 'counterfeit' is a
spurious 	mark 	which 	1s 	identical 	with, 	or 	substantially
indistinguishable 	from, 	a 	registered 	mark." 	15 	U.S.C. 	§ 	1127.
In another provision, the statute requires that the registered mark be
"in use" and that the "counterfeit mark" be "for such goods or services
sold, offered for sale, or distributed .... " 15 U.S.C. § 1116(d)(l)(B)(i).
In the only binding precedent on this issue, the Court of Appeals
explained the statute. 	"A counterfeit is thus far more similar to the
registered 	mark 	than 	a 	mark 	that 	barely 	infringes 	it, 	and 	so 	an
infringing mark is not necessarily also a counterfeit." Sturgis Motorcycle
Rally, Inc. v. Rushmore Photo & Gifts, Inc., 908 F.3d 313, 340 (8th Cir.
2018). The Sturgis Court addressed the counterfeit issue as to a design
mark (the Monahan mark), not Sturgis Bike Week®or Take the Ride to
Sturgis®, the word marks in that case. 	908 F.3d at 320, 338, & 339-40.
The explanation, though, faithfully applies the statute's definition and
helpfully illuminates a deep issue: 	Whether the average person would
be confused about the product. 	Kelly-Brown v. Winfrey, 717 F.3d 295,
314-15 (2d Cir. 2013). "The more fundamental point is that the purpose
of 	trademark 	law 	is 	not 	to 	guarantee 	genuine 	trademarks 	but 	to
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guarantee 	that 	every 	item 	sold 	under 	the 	mark 	is 	the 	genuine
trademarked product, and not a substitute." 	General 	Electric Co. v.
Speicher, 877 F.2d 531,534 (7th Cir. 1989) (Posner, J.)
HOOPLIFE® is a fanciful term and, the Court assumes, therefore
distinctive. 	RESTATEMENT (THIRD) OF UNFAIR COMPETITION§ 13 cmt. b
& c (AM. L. INST. 1995). 	It is a standard character or word mark:
"The 	mark 	consists 	of 	standard 	characters 	without 	claim 	to 	any
particular font, style, size, 	or color." 	Doc. 	1 at 30. 	This required
definition is sweeping. 	But the mark's breadth also contains the seeds
of 	difficulty, 	or 	perhaps 	opportunity, 	for 	a 	counterfeiting 	claim.
Comparison is the usual way to determine whether the challenged
mark is identical or substantially indistinguishable from the registered
mark. 	Sturgis, 908 F.3d at 339-40; 	Kelly-Brown, 717 F.3d at 314-15.
New 	Balance encourages 	the 	Court 	to 	do 	some 	comparing 	now,
deploying the color copies Magee used in his Texas litigation plus the
black-and-white copies attached to his complaint. Magee responds that
there's no need: All the athletic apparel ordered by Hooplife Basketball
Academy 	included 	the 	term 	Hooplife, 	so 	New 	Balance 	is
a counterfeiter.
Magee' s argument seems to prove too much. 	It would collapse
the statute's distinction between a counterfeit mark and any infringing
mark. Magee has a plausible infringement claim. 	New Balance hasn't
argued otherwise. 	While his counterfeiting claim appears overbroad,
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perhaps this is simply a function of the word-mark context. The Court's
mind is not at rest on this.
As the parties know, and this Court is coming to appreciate, the
fighting issue is vexed. 	"Confusion abounds in the existing case law
regarding 	counterfeiting." 	Jessica 	Bromall 	Sparkman 	and 	Rod 	S.
Berman, 	Inconsistency 	and 	Confusion 	in 	the 	Judicial 	Treatment 	of
Counterfeiting Claims, 113 TRADEMARK REP. 553,586 (2023). 	If confusion
is too strong a conclusion, lack of clarity is not. The Court concludes it
can do a better job deciding this important issue in due course-with
clearer photographs for comparison, facts about potential confusion,
and focused briefing about allegedly counterfeit word marks such as
HOOPLIFE®. This is a punt, but sometimes a punt is the best one can
do. The Court concludes that the first question is infringement. If there
was, 	then 	the 	counterfeiting 	question 	and 	the 	related 	damages
questions (treble and statutory) will arise. For now, it is enough to hold
that Magee's request for enhanced damages stays in the case because
he has plausibly alleged counterfeit marks. 	New Balance is probably
correct on the number of types-of-goods issue. 	15 U.S.C. § 1117(c).
Discovery will clarify the list.
*
Motion to dismiss in part, Doc. 11, denied. 	Motion for partial
summary 	judgment, 	Doc. 	21, 	denied. 	Both 	denials 	are 	without
prejudice. 	Motion to strike, Doc. 16, granted. 	Magee's response, Doc.
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13, is stricken. Magee must show cause about further sanctions for his
generative-AI-infected response by 9 January 2025. 	The Court regrets
its delay in addressing all these motions. 	For good cause, the Court
extends 	the 	due 	date 	for 	the 	parties' 	Rule 	26(£) 	report 	to
19 December 2025.
So Ordered.
D.P. Marshall Jr.
United States District Judge
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