The companies of ex-MLB player Yoenis Céspedes—La Potencia, LLC (“La Potencia”) and YC52, LLC (“YC52”) (collectively, “Plaintiffs”)—won game one of the series and obtained a preliminary injunction barring rival bat manufacturer, David Chandler, and related companies in the distribution chain (collectively, “Defendants”), from manufacturing and selling baseball bats using YC52’s proprietary processes and enjoining Defendants from using an allegedly infringing mark, “Authentic by David Chandler.” (La Potencia, LLC v. Chandler, No. 22-80417 (S.D. Fla. Apr. 30, 2024)).

Yoenis Céspedes, a retired big leaguer, understands the importance of a well-constructed baseball bat. The color, the feel, the type of wood, the weight of the bat and the balance are all heavily considered when deciding on the right stick. Players get very attached to the brand they use, and bat makers must think critically about how their bats are constructed. David Chandler recognized this when he switched career paths from furniture maker to baseball bat connoisseur.

In 2008, David Chandler used his expertise as a woodworker to develop durable maple bats. He commercialized the bats through his company, RxSport, LLC (“RxSport”), and sold them under the brand name “Chandler Bats” or “Chandler.” In 2014, he decided to trademark the word mark “Chandler Bats” and the mark/logo “C Chandler and Design” (collectively, “Chandler Marks”) [see image below].

On April 27, 2017 – at what would be the back end of Yoenis Céspedes’ MLB career – La Potencia loaned $700,000 to RxSport so the company could continue its operations. As collateral, La Potencia “received a security interest in RxSport’s assets.” This collateral included RxSport’s trademarks and trade secrets.

In January 2019, David Chandler was down to his last strike with RxSport when the company defaulted on La Potencia’s loan and filed for bankruptcy. As a resolution, RxSport transferred all collateral to La Potencia, which included all “Trademarks, Tradenames, Know-how; trade secrets, . . . Formulas” and physical assets. La Potencia then transferred the physical assets and licensed the intellectual property to YC52 which, like RxSport, sells the bats under the brand name “Chandler Bats” or “Chandler.” In July 2019, YC52 hired David Chandler who worked with the company for a few months until his departure in October 2019.

Instead of joining another company as a free agent, David Chandler decided to take a second crack at bat making, founding defendant Group Authentic, LLC (“Group Authentic”), branded with the logo “Authentic by David Chandler.” 

Group Authentic partnered with defendant Maxbat, Incorporated (“Maxbat”) as its manufacturer and defendant Pecos League of Professional Baseball Clubs, LLC (doing business as Bestbatsdeals.com) as a seller and distributor. In response, Plaintiffs sued and moved for a preliminary injunction against David Chandler, his company, the manufacturers, and distributors over claims of trademark infringement and trade secret misappropriation. Plaintiffs claimed the “Authentic by David Chandler” logo has been causing marketplace confusion for players and other baseball personnel due to the Chandler brand’s notability and that, other than slight variations in the ratio of ingredients and application, Group Authentic has been using the same bat-making methods originally used with RxSport and maintained by YC52. For the trademark claim, Defendant’s countered that the Chandler Marks are not valid and enforceable, or in the alternative, the “Authentic by David Chandler” logo is fair use. For the trade secrets claim, Defendants argued that the purported secret bat making processes claims were overbroad or invalid, and Defendants also raised a reverse engineering defense. The court conducted a hearing in July 2023. By April 2024, it was time to play ball, and on April 19, 2024, the court dealt a strike to the Defendants and granted the preliminary injunction request, finding that Plaintiffs established a likelihood of success on the merits and an irreparable injury.

Leading off, the court faced the trademark claims and held that both the Chandler Marks and logo were valid and enforceable. The court explained that for a mark that is a surname to be enforceable, it must be distinctive by having a secondary meaning, or where “in the minds of the relevant consuming public, the ‘primary significance of the term . . . is not the product but the producer.’” The court found that Plaintiffs provided sufficient circumstantial and direct evidence of promotion and market share to establish that the Chandler Marks have acquired secondary meaning, with the meaning being connected “to RxSport’s—and now YC52’s—bats.”

Next up to bat, the court found that there is an appreciable likelihood that Defendants’ use of the “Authentic by David Chandler” mark created a likelihood of confusion with YC52’s “Chandler Bats” mark. Applying a multifactor test, the court found that, amongst other things, the word “authentic” is insufficient to distinguish the conflicting marks and Plaintiffs had provided overpowering evidence of actual confusion.

In their final argument to rebut the substantial likelihood of success prong, Defendants brought a bat off the bench, attempting to make a fair use defense. The court stated that this defense requires a showing that Defendants used the allegedly infringing term “(1) other than as a mark, (2) in a descriptive sense, and (3) in good faith.” The court quickly dismissed this argument after determining that the Defendants used the Chandler surname as a mark (“Given that ‘by David Chandler’ is emblazoned on all of Defendants’ bats, they simply cannot show that the surname is being used other than as a mark.”).

Defendants’ arguments against the trade secret claim mostly whiffed as well. First, the court ruled that Plaintiffs adequately established a valid trade secret. Although the court found the contours of Plaintiffs’ trade secret claims slightly overbroad, it stated that Plaintiffs sufficiently demonstrated that the brand-specific combination of materials to make the bat’s coating and finish possessed independent economic value that is not readily ascertainable and not generally known. Moreover, pursuant to the Loan Agreement and transfer of collateral, it was shown that the trade secret was lawfully owned and confidential. The court noted that David Chandler stated at a hearing how the collateral handed over in bankruptcy included all intellectual property and trade secrets (“Yes, everything was handed over to fulfill the obligation of the loan.”). Further, for a trade secret to have merit, it must be kept “secret.” Defendants argued that the alleged trade secrets were not kept secret when David Chandler owned the company and had therefore been “extinguished.” However, the court examined the evidence and recounted that security measures were put in place at RxSport’s facility to ensure confidentiality (e.g., product labels for certain proprietary ingredients were “relabeled with colors or ‘A’ and ‘B’—the meanings of which [were] known only to certain employees”) and employees were required to sign non-disclosure agreements.

Next, the court found that Plaintiffs adequately demonstrated a likelihood that Defendants misappropriated the trade secret, with both Group Authentic and MaxBat admitting to using the bat making combination at issue, perhaps only with differences in ratios and application techniques. The court stated that there is sufficient evidence to show that David Chandler continued to use the combination after his tenure with RxSport and that MaxBat also used the specified combination that is encompassed by the trade secret. The court also found that David Chandler knew or had reason to know of a duty to maintain the secrecy of the trade secrets that were transferred to La Potencia in the RxSport bankruptcy. In a final attempt to persuade the court and foul off the Plaintiffs’ claims, Defendants brought a reverse engineering defense but failed to execute. Defendants’ expert only opined that it was possible to reverse engineer the bat making and finishing formulas, not that they had done so.

In the remaining innings, the court found that both the trademark infringement and trade secret misappropriation would cause irreparable injury, the injury to Plaintiffs would outweigh any injury to Defendants, and that the injunction would not be adverse to the public interest.

Plaintiffs won game one in a rout, with the court granting its motion for a preliminary injunction. As a result, Defendants were enjoined from using the confidential combination of ingredients and applications in making a competing baseball bat, disclosing the trade secret to third parties, and using the “Authentic by David Chandler” mark or any mark that contains the term or name “Chandler.” Given the adverse ruling, it appears that Defendants will be the underdog for the remainder of the lawsuit. Be on the lookout for game two, as Defendants filed a notice of appeal to the Eleventh Circuit.

In May, the Colorado Supreme Court reminded ski resorts that with great powder, comes great responsibility. A recent tort dispute over a dreadful accident at a ski resort pitted two seemingly conflicting aspects of Colorado consumer protection laws: the long-running Colorado ski safety scheme versus another Colorado provision that generally allows a parent to release negligence claims of a child participating in sporting and recreational activities. Last month, the Colorado Supreme Court declared a winner in the race, finding that a ski resort cannot use signed waivers to absolve itself of liability for per se negligence based on violations of statutory duties imposed by ski safety laws, as allowing ski resorts to escape liability from negligence claims based on violations of such laws ultimately frustrates lawmakers’ intent. (Miller v. Crested Butte, LLC, No. 23SA186, 2024 CO 30 (Colo. May 20, 2024)). 

In Miller, Michael Miller (“Miller”) and his daughter hit the slopes at Crested Butte Mountain Resort in March 2022, but the trip soon turned heartbreaking. At one point while Miller and his daughter were skiing, his daughter attempted to board the chair lift but couldn’t get seated. Miller, and others in the lift line, screamed for someone to stop the lift, but to no avail. Miller, who was seated, tried to hold onto his daughter as the lift continued to go up the mountain but ultimately neither could hold on any longer, and his daughter fell approximately 30 feet to the ground. The accident rendered Annie a quadriplegic. As a result, Miller sued Crested Butte, LLC (d/b/a Crested Butte Mountain Resort) (“Crested Butte”), alleging 1) negligence-highest duty of care of ski lift operator; 2) negligence per se based on violations of the Colorado Ski Safety Act (“SSA”), the Passenger Tramway Safety Act (“PTSA”), and other specifically identified regulations put into effect by these Acts; and 3) gross negligence.

In its defense, Crested Butte, among other things, pointed to the terms of the Millers’ ski passes which contained multiple liability waivers. Miller had bought himself and his daughter a three-day “Epic Pass” to ski at the Colorado resort that required the purchaser to sign a Release of Liability, Waiver of Claims, Assumption of Risks and Indemnity Agreement. 

The Agreement included language such as:

I expressly acknowledge and assume all additional risks and dangers that may result in property damage, physical injury and/or death, which may be above and beyond the inherent dangers and risks of the Activity, including but not limited to: … the negligence or failure of Participant, Ski Area employees, or other guests to act safely…; misloading, entanglements, or falls from ski lifts…

and,

I agree, to the greatest extent permitted by law, TO WAIVE ANY AND ALL CLAIMS AGAINST AND TO HOLD HARMLESS, RELEASE, INDEMNIFY, AND AGREE NOT TO SUE Vail Resorts, Inc., ….

In April 2023, a state district court granted Crested Butte’s motion to dismiss the negligence-highest duty of care and negligence per se claims but denied the motion to dismiss the Millers’ gross negligence claim. The lower court found the negligence per se claims insufficient, ruling that the statutory duties under the Colorado ski safety laws cited by the Millers imposed no more than a reasonable duty of care, and that the contractual waivers signed by Miller were enforceable and barred the ordinary negligence claims. On appeal, the negligence claims took a slalom course through the judicial system before arriving at the Colorado Supreme Court.

The Colorado Supreme Court affirmed in part and reversed in part, ruling first that a violation of certain statutory and regulatory ski lift safety provisions that cause an injury to a consumer can form the basis of a plausible negligence per se claim. It next ruled that Crested Butte’s contractual waivers cannot absolve the resort from the Millers’ negligence per se claim for violations of the state ski safety provisions, but affirmed the lower court’s holding that the signed releases at issue were enforceable and barred Miller’s cause of action for negligence-highest duty of care. In so holding, the court did not take a position as to the merits of plaintiffs’ claims.

To determine the enforceability of Crested Butte’s private release agreements, the court first had to consider whether Miller stated a plausible negligence per se claim. As the court stated, negligence per se arises when the defendant’s violation of a public safety law proximately causes the plaintiff’s injury. However, for a plaintiff to prevail on this claim, the court noted that a plaintiff must demonstrate that the statute was intended to protect against this type of injury, and that they are a member of the class the statute was designed to protect. As summarized by the court, the Colorado ski safety scheme, the SSA and PTSA, when read together with precedent, “provide a comprehensive Colorado framework which preserves ski lift common law negligence actions, while at the same time limiting skier suits for inherent dangers on the slopes and defining per se negligence for violation of statutory and regulatory requirements.” As the court noted, the SSA states that a violation of any requirement of the SSA or related PTSA rule constitutes negligence per se. While the SSA insulates ski resort operators from injuries “resulting from any of the inherent dangers and risks of skiing” (See C.R.S. § 33-44-103(3.5)), the statute also states that “nothing in this section shall be construed to limit the liability of the ski area operator for injury caused by the use or operation of ski lifts.” The court also pointed to certain state ski safety regulations, including Rule 3.3.2.3.3, which requires lift attendants to monitor passengers’ use of chair lifts, including stopping the lift if necessary and responding to unusual occurrences. The court concluded that the aforementioned statutory and regulatory provisions establish that a violation of the lift attendant safety regulation that causes injury constitutes negligence per se. Thus, the court found that the Millers had plausibly asserted a viable negligence per se claim and that Crested Butte’s alleged violation was plausibly the proximate cause of the injuries.

Having confirmed that Crested Butte’s alleged violation of the ski lift safety regulation could form the basis of a plausible negligence per se claim, the court considered and rejected Crested Butte’s argument that it could use private release agreements to absolve itself of liability for the Millers’ negligence per se claim. Notably, the court pointed to Section 33-44-114 of the Colorado Revised Statutes (“Article 44”), which provides that—in situations where provisions or statutes are inconsistent with Article 44 (i.e., the SSA or ski safety law)—Article 44 controls. (See C.R.S. § 33-44-114). Crested Butte’s waiver defense rested on certain state provisions allowing a parent to waive his child’s negligence claims. However, the court rejected this defense and found that such waivers would be inconsistent with the ski safety laws and regulations, which are controlling in this case (“we are unconvinced that the legislature would have tacitly authorized ski area operators to absolve themselves of their statutory and regulatory duties by private contract, in contravention of longstanding case law establishing that they may not do so”).

Concurrently, the court considered whether the district court improperly dismissed Miller’s negligence-highest duty claim. The court ended up affirming the lower court on this issue, finding the releases were enforceable, barring Miller’s negligence-highest duty of care claim.

Ultimately, the court’s conclusion that Miller’s negligence per se claim is not barred remands the case to the trial court. More broadly, this case demonstrates that, in certain circumstances, liability waivers are not unassailable under Colorado law for certain statutory and regulatory obligations delineated by state ski safety laws. The Colorado Supreme Court’s decision is a potentially landmark decision for future ski-related tort cases in the state and might usher in a new era for the slopes of liability at Colorado ski resorts.

A Florida federal jury returned a verdict in favor of Argentine polo star, Adolfo Cambiaso (“Cambiaso”), and La Dolfina S.A., LLC (“La Dolfina”) (collectively, the “Plaintiffs”), who sued Alan Meeker (“Meeker”), the owner of Crestview Farms, LLC (“Crestview Farms”), and Crestview Genetics, LLC (“Crestview Genetics”) (collectively “Crestview” or the “Defendants”) over a failed horse cloning venture between the owner of certain prized polo horses and an entity involved in the production and sale of cloned horses (La Dolfina S.A., LLC v. Meeker, No. 20-82231 (S.D. Fla. Jury Verdict May 6, 2024)). In December 2020, Cambiaso sued Meeker and Crestview for claims of breach of contract, unjust enrichment and violations of federal and state trade secrets law, claiming that the Defendants overstepped the bounds of certain agreements by unilaterally selling three cloned polo ponies to another competitor (La Dolfina S.A., LLC v. Meeker, No. 20-82231 (S.D. Fla. Filed Dec. 2020) (Third Amended Complaint Filed Sept. 2, 2022)).

In 1996, Cambiaso founded La Dolfina, a title-winning polo organization that competes internationally. Cambiaso is an Argentine professional polo player and has won multiple Argentine and international polo tournaments (in a 2018 60 Minutes story, Cambiaso was aptly termed “the Tom Brady of polo”). Polo is a competitive sport that originated in Central Asia over 2000 years ago. Two teams, each comprised of four players mounted on horseback, attempt to hit a small wooden ball through their respective goalposts using a long-handled mallet. The genetic and physical characteristics of each horse are a huge determinative factor in the success of any polo player or team.

In 2006, while participating in a professional polo tournament, one of Cambiaso’s prized polo ponies, a stallion named Aiken Cura, suffered a mortal injury requiring it be euthanized. Devastated by the loss of one of his favorite horses, Cambiaso instructed the veterinarians to obtain and store a skin sample from Aiken Cura. Hoping to preserve Aiken Cura’s pristine and effective genetic makeup, Cambiaso asked veterinarians to put the sample in deep freeze in a laboratory.

Animal cloning, more specifically horse cloning, has grown rapidly over the past two decades, becoming a multi-million-dollar business and a staple of polo where polo ponies must possess unique agility to excel at the sport. In fact, Cambiaso has been using clones of his ponies in competitions for many years. While clones are not permitted in all equestrian sports (such as horseracing), they are used in polo, barrel racing and show jumping.

In 2009, Meeker approached La Dolfina and Cambiaso, offering to enter into a joint business venture that would clone, market and sell La Dolfina’s horses, specifically their best and most famous horse, Dolfina Cuartetera (“Cuartetera”), as well Aiken Cura. By June of 2009, the two sides entered a purported contract, the “Cloning Initiative Agreement,” whereby Cambiaso would allow Meeker to select certain horses from Cambiaso’s stock for the purpose of extracting tissue samples for cloning, subject to Cambiaso’s approval, in exchange for certain consideration and an agreement to negotiate in good faith on a mutually acceptable licensing program if the cloning proved successful. Crestview paid Cambiaso $1 million, and Crestview received tissue samples from five horses. The cloning technology proved successful and produced healthy clones of Cuartetera and other horses. In 2010, a Cuartetera clone was sold to a third party at an auction hosted by Cambiaso in Argentina for $800,000 (note: the parties dispute the legal effect of the sale on their respective rights).

Subsequently, in 2011, the parties entered into a separate agreement, which formed an entity known as Crestview Genetics Argentina SRL, which focused on the breeding of clones and selling the foals that were bred from those clones to third parties for profit. This differed from the initial 2009 agreement which contemplated a commercial venture of cloning Cambiaso’s horses and selling the clones themselves for a profit. The Argentinian venture operated until 2019, when the parties decided to part ways. As a result, Cambiaso and Crestview signed several side agreements: a 2019 Settlement Agreement, which terminated the parties commercial and corporate relationship, and a 2019 Side Letter Agreement between Cambiaso and Meeker that handles the rights of Cambiaso, La Dolfina and Crestview to the cloned horses following the dissolution of their commercial relationship. Among other terms, the 2019 Side Letter Agreement provided that the cloned horses would only play on La Dolfina branded teams and that “any other uses in playing is prohibited.”

By 2020, however, Meeker allegedly entered into an agreement to sell three Cuartetera clones to a competitor of Cambiaso for $800,000 each, with an option for the sale of seven future Cuartetera clones. This arrangement soured the relationship and a lengthy court battle ensued over the Plaintiffs’ breach of contract, unjust enrichment and trade secret claims. Meeker offered a staunch defense (and filed counterclaims against Plaintiffs that they breached the 2009 Cloning Initiative Agreement) and argued that the Cloning Initiative Agreement provided him with the right to sell the clones he produced, and that the subsequent 2019 agreement did not alter that right. In response, Cambiaso argued that he never gave Crestview permission to make additional clones, and besides, the 2009 Cloning Initiative Agreement lacked material terms as to the right and sale of future clones and was not an binding contract. However, Meeker and Crestview would soon find themselves stuck in a deep legal divot while watching their opponent gallop towards the goal.

The 2009 Cloning Initiative Agreement was a major point of contention in this lawsuit, and Cambiaso and La Dolfina’s attorneys were able to score their first point, securing a favorable summary judgement ruling in 2023. After the court denied a December 2020 motion made by La Dolfina that requested an ex parte temporary restraining order to prevent Meeker’s efforts to create and sell more Cuartera clones, Plaintiffs regrouped and subsequently moved for summary judgment seeking, among other things, a declaratory judgment that the 2009 Agreement was illusory, which would mean that Crestview did not have a right to sell clones to any private party, including the Plaintiffs’ competitor, or otherwise sell any clones of La Dolfina’s horses without Cambiaso’s approval on price and terms. At this point, the court blew its whistle and ruled in favor of La Dolfina and Cambiaso.

In late 2023, the court held that the parties’ original 2009 Cloning Initiative Agreement was unenforceable, as it was a “quintessential agreement to agree” that failed to satisfy the requirements of an enforceable contract under Florida law. The court reasoned that the agreement lacked assent to certain essential terms surrounding the production, marketing and sale of cloned horses and that there was no “meeting of the minds” as to the essential component of the ownership rights to the cloned animals or how profit sharing would work (“The parties’ agreement to negotiate the establishment of a ‘mutually acceptable program’ at some future date is a quintessential agreement to agree.”).

Crestview’s attorneys had argued that “both parties intended to enter into a valid and enforceable agreement, not an illusory one” and that a provision giving Crestview “complete and exclusive licensing rights in and to the mare and all cloned foals” allowed the company to unilaterally sell the cloned foals. However, in dismissing the Defendants’ counterclaims based on the 2009 agreement, the court hooked the Defendants’ mallet and explained that such an “expansive” reading of the term “licensing rights,” even if plausible, was limited by other provisions that require a joint determination on final sales terms. The summary judgment ruling did not mark the end of the case, as the court denied other motions for summary judgment, finding issues of fact related to the terms of the 2019 Side Agreement. The court also allowed Plaintiffs’ trade secret claims to go to trial and stated that the question of whether equine genetic material could constitute a trade secret was an issue for the jury.

At trial, Plaintiffs argued that the 2019 Side Agreement strictly limited Defendants’ right of action over future sales of clones and codified Plaintiffs’ custody and control over the clones. Further, they claimed that the Defendants’ decision to sell clones to a La Dolfina competitor breached the 2019 Side Agreement. In May 2024, the jury rejected Meeker and Crestview’s affirmative defenses and counterclaims and ruled in favor of Plaintiffs on all claims, finding that the Defendants breached the 2019 Side Letter Agreement. Once again, Cambiaso and La Dolfina scored a pivotal goal as the jury ruled in their favor.

In addition to winning on the breach of contract claims concerning the 2019 Side Agreement, the jury also found in favor of Plaintiffs on their trade secrets misappropriation claims. In previous papers, the Defendants had argued that genetic tissues are “a naturally occurring raw biological material” that could not constitute a trade secret and were not a protectable IP asset, such as “financial, business, scientific, technical, economic, or engineering information.” Defendants had also argued that the prior 2010 auction sale of a clone of Cuartetera, which “necessarily included its genetic material,” invalidated any trade secret claim in the genetic material as it was no longer secret. The jury verdict on the trade secret issue perhaps helps to answer the question as to whether equine genetic material can constitute a trade secret under certain circumstances. Interestingly, this type of issue has come up in other IP cases. For example, in 2014, a federal appeals court held that because Dolly the Sheep, the first genetically cloned mammal, is an exact replica of her predecessor, the animal clone is not patentable subject matter (In re Roslin Institute (Edinburgh), 750 F.3d 1333 (Fed. Cir. 2014)). With a significant increase in polo pony cloning operations, particularly in Argentina, this case may provide an entirely new gameplan for geneticists, animal breeders and attorneys to protect the valuable cloning rights of certain highly prized animals, if the verdict withstands any future legal challenges.

Given the lengthy journey of this litigation, it would not be surprising if there were further developments (as of publication, a check of the district court’s docket did not reveal any relevant filings by either party). However, it remains possible that a final settlement of all claims and explicit outline of each party’s rights and responsibilities – this time reduced to a binding agreement – will be the result of this long judicial match.

As we detailed in the November 2022 issue of Three Point Shot, Adidas America, Inc. brought a trademark complaint against luxury fashion brand Thom Browne Inc. arguing that Thom Browne’s apparel features stripes “in a manner that is confusingly similar to Adidas’ three-stripe mark.” At that time, the court dismissed Thom Browne’s counterclaim seeking cancellation of Adidas’s three-stripe mark on the grounds that it was aesthetically functional and therefore ineligible for trademark protection. Following a January 2023 trial, the jury reached a verdict finding Thom Browne was not liable for trademark infringement or dilution (prompting an appeal by Adidas).

On May 3, 2024, the Second Circuit affirmed the jury verdict in favor of the defense, rejecting Adidas’s challenge to the district court’s jury instructions as to one of the Polaroid factors that guide a factfinder in determining the likelihood of confusion issue. (Adidas America, Inc. v. Thom Browne, Inc., No. 23-166 (2d Cir. May 3, 2024) (summary order)). At the same time, the trial court denied Adidas’s motion for a new trial, prompting Adidas to file a notice of appeal on this issue to the Second Circuit.