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A federal judge on Wednesday threatened to sanction a large Chicago real estate investment trust for bringing a trademark infringement suit against a West Palm Beach, Fla., law firm whose clients are suing the trust in a class action. The threat from U.S. District Judge Daniel T.K. Hurley followed his order granting summary judgment to the defendant, Babbitt Johnson Osborne & LeClainche of West Palm Beach, which had been sued for the alleged infringement by Equity Residential Properties Trust. The judge said that in his 10 years on the bench he had “never seen a more clear example of a vindictive lawsuit.” Babbitt Johnson has been litigating a state class action against Equity Residential, the nation’s largest landlord with apartment complexes throughout South Florida, over alleged improper rent collection practices. Former tenants sued the trust in Palm Beach Circuit Court in November 2002. Class certification was granted last October. That same month in a lawsuit filed in U.S. District Court in West Palm Beach, Equity Residential alleged that Babbitt Johnson infringed the company’s trademark by reproducing it on the law firm’s Internet site as part of an announcement soliciting potential class members. The announcement bearing the real estate trust’s trademark was posted when the class action was filed. The trademark was removed from the Internet site when the federal suit was filed by the Chicago trust. Equity Residential alleged that the firm’s use of the trademark was likely to cause confusion about the relationship between Equity Residential and the law firm, such as possible “sponsorship, endorsement, or other approval.” Damages sought by Equity Residential included triple “all profits wrongfully derived” by Babbitt Johnson from its alleged infringement, including the firm’s fees in the state class action. Those fees could exceed $1 million, according to Rod Tennyson, co-counsel to Babbitt Johnson in both the state and federal cases. In its motion for summary judgment, Babbitt Johnson argued that the trademark was reproduced only “to fully describe the entity being sued” in the class action and that, in the context of the Web page no confusion was possible. Comparing Equity Residential’s federal suit to that brought by Fox News against satirist Al Franken over his use of the network’s trademark phrase “fair and balanced” in a book title, the firm called trademark litigation “the new weapon of choice by large corporate interests to retaliate against persons who are critical of their interests.” Equity Residential is represented in the federal suit by Seipp Flick & Kissane, a Coral Gables product liability defense boutique. Name partner John Seipp argued for the company. In addition to Tennyson, a West Palm Beach solo practitioner, Babbitt Johnson is represented by name partner Ted Babbitt. Tennyson appeared before Hurley in West Palm Beach on Wednesday; Babbitt participated by telephone. In oral arguments on the motion for summary judgment, Tennyson reiterated that the firm’s reproduction of the Equity Residential trademark “obviously” couldn’t confuse the public. And since the trademark had been removed from the Internet site, he said “No harm; no foul.” The “real issue,” he said, was retaliation for the class action. “It is not the function of the federal courts to be a big club,” he argued. Seipp responded that the law firm’s removal of the trademark from its Internet site was a “passive admission” of infringement. And he argued that the standard of proof in infringement claims — “the likelihood of confusion” — was an issue of fact that could only be determined at trial. In response to Hurley’s questions, Seipp stated that mere unauthorized use of another’s trademark presents a “prima facie case” of infringement. But in a flurry of questions, Hurley expressed extreme skepticism that a reasonable person would be confused by the appearance of the trademark on the law firm’s Internet site. “This is a classic example of a ‘You sue me. I sue you.’ lawsuit,” Hurley concluded. “Trademarks are terribly valuable. But litigation is terribly expensive.” Hurley then ruled in favor of the motion for summary judgment and, unexpectedly, denounced the company for bringing the suit. Calling the claim “patently baseless,” he said he would bring sanctions against the company and its lawyers under federal Rule 11, which prohibits lawsuits brought for purposes of harassment. Hurley said he would hold a hearing on the sanctions, which could include fines against the company and its attorneys. No date has yet been set for the hearing. An exultant Tennyson expressed great relief. “They were going to run Ted and I all over the country with this [infringement] suit,” he said. “That isn’t going to happen now.”

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