Spiral Direct, Inc. v. Basic Sports Apparel, Inc. (293 F. Supp. 3d 1334, 2017)

JOHN ANTOON II, United States District Judge

Two families own and manage the apparel companies involved in this trademark infringement lawsuit. Each company sells its garments in the United States under the brand name "Spiral," and the instant action stems from the rights to use that "Spiral" name. The case is now before the Court following a bench trial, and this Order contains the findings of fact and conclusions of law required by Federal Rule of Civil Procedure 52.

I. Background and Procedural History

Plaintiffs Spiral Direct, Inc. (Spiral US), a Florida corporation established in 2013, and Spiral Direct, Ltd. (Spiral UK), a British limited liability company established in 1999 (collectively Spiral Direct), are related companies managed by brothers Sohail and Shoaib Ghayur that manufacture and sell "Gothic" and "heavy metal" style clothing under the name "Spiral." Defendant Basic Sports Apparel (Basic), which is owned by Nadia Chowaiki and managed by her two sons, Hilel and David Chowaiki, manufactures and sells outdoor and athletic apparel under the brand name "Spiral."

In 1997, Basic applied to the United States Patent and Trademark Office (USPTO) for trademark registration of "Spiral" (the Basic Mark), and the USPTO granted that registration on January 19, 1999. At some point, Basic learned of Spiral Direct's use of the Basic Mark, and on January 22, 2015, Basic's attorney sent Spiral Direct a cease-and-desist letter, demanding that Spiral Direct discontinue its use of the Basic Mark and threatening litigation. Spiral Direct then filed this lawsuit against Basic on April 22, 2015.

In its First Amended Complaint, Spiral Direct alleges seven claims. It seeks a declaratory judgment: of non-infringement (Count I); that Basic's assertion of trademark infringement is barred by laches (Count II); and that Basic's trademark is invalid due to abandonment (Count III) and fraud on the USPTO (Count IV).

(First Am. Compl., Doc. 16, at 9-11). Additionally, Spiral Direct asserts several trademark infringement claims rooted in its alleged "prior use" of the Spiral mark: unfair competition under § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (Count V); unfair competition under the Florida Deceptive and Unfair Trade Practices Act (FDUTPA) (Count VI); and Florida common law trademark infringement (Count VII). (Id. at 12-14). Although Spiral Direct originally sought monetary relief, it withdrew any claim for monetary relief during trial. (Trial Tr. Vol. 1 at 249).

In response to Spiral Direct's Amended Complaint, Basic filed four counterclaims: federal trademark infringement (Counts I and II); unfair competition under FDUTPA (Count III); and Florida common law trademark infringement and unfair competition (Count IV). (Answer Doc. 39, at 12-16) Basic sought treble monetary damages, Spiral Direct's profits, and a permanent injunction preventing Spiral Direct from using the Basic Mark. (Id. at 16-17).

Prior to trial, both sides moved for summary judgment. (Doc. 49 & 67). Spiral Direct sought judgment on all of Basic's claims under the doctrine of judicial estoppel, claiming that Basic failed to disclose this lawsuit as an asset in a prior bankruptcy proceeding. (Doc. 49). The Court granted the motion insofar as it sought to prevent Basic from recovering monetary damages against Spiral Direct but denied the motion to the extent it sought judgment on Basic's claims for injunctive relief. (Order, Doc. 99). And the Court granted Basic's motion for summary judgment on Spiral Direct's Count II-laches-but otherwise denied it. (Order, Doc. 124). The case proceeded to a four-day bench trial on the remaining issues.

II. Trial Testimony and Findings of Fact

A. Spiral Direct

In 1990, before Shoaib and Sohail created Spiral UK and Spiral US, they, along with Shoaib's brother-in-law, M.N. Alam, created Spiral Designs Partnership (Spiral Designs), which sold clothing under the name "Spiral." (Trial Tr. Vol. 1 at 25, 29-30). Spiral Designs' first trademark was typed in an oval with a stylized typeface (SD Mark). (Id. at 29-30; Ex. 1). ,

Spiral Designs manufactured several categories of goods, including t-shirts, long-sleeved t-shirts, hooded sweatshirts, women's garments, and accessories. (Trial Tr. Vol. 1 at 24, 27-28, 30). Before Spiral Designs began to sell its goods in the United States, from 1990 to 1993 its products consisted of t-shirts depicting photographs of musical artists-Metallica or Michael Jackson, for example-to which Spiral Designs would affix a "hangtag" bearing the SD Mark to the sewn-in neck label of the t-shirt, which bore a third-party t-shirt manufacturer's name. (Id. at 48-49). Thus, during that time, the hangtag was the only indicator that the shirt was a "Spiral" brand shirt. (Id. at 48).

By the time Spiral Designs began selling in the United States in 1993, it was creating original artwork for its t-shirts. (Id. at 160-61). Also in 1993, Spiral Designs began to import black t-shirts from Pakistan that came with sewn-in labels bearing the SD Mark. (Id. at 48-49, 113, 206). Thus, some but not all of the black t-shirts sold by Spiral Designs had sewn-in labels bearing the SD Mark in addition to hangtags. (Id. at 48-49, 100, 163). But t-shirts in other colors did not have sewn-in SD Mark labels and came only with the hangtag displaying the SD Mark. In 1995, Spiral Designs began to import a "natural" t-shirt with sewn-in tags bearing the SD Mark. (Id. at 206). Eventually, Spiral Designs imported various other products with sewn-in labels bearing the SD Mark. (Id. at 207-08).

B. Spiral Designs' Catalogs

Spiral Designs offered its products for sale through catalogs with the SD Mark displayed on the cover. (Id. at 35-37; see Exs. 50, 51, & 52). Inside the catalog, Spiral Designs offered many products-including t-shirts-in themed groupings, but none of the interior catalog pages introduced in evidence displayed the SD Mark. (See Exs. 50, 51, & 52). The title of each theme-for example, "Alienz," "Tribal," "Tupac Shakur," "Looney Tunes," "Liquid Blue," "Fantasy," or "The Simpsons"-appeared at the top of each product group page with photographs of the related products below. (See id. ). Every other page had Spiral Designs' website address, www.spiral-net.com, at the bottom. (See Ex. 52).

Between 1993 and 1999, the products offered in the Spiral Designs catalog fell into three categories. The first category consisted of garments that depicted original artwork created by Spiral Designs. (Trial Tr. Vol. 1 at 160-61). A "majority" of black t-shirts in this category came with sewn-in labels depicting the SD Mark. (Id. at 163). Sometimes when Spiral Designs ran out of sizes and had to purchase wholesale shirts from third-party manufacturers, black t-shirts did not come with the sewn-in label bearing the SD Mark. (Id. ). The second category was comprised of garments with original Spiral Designs designs licensed from third-party companies, (Id. at 210). For example, third-party brands like Route 66, Tupac Shakur, and Atmosfear would grant Spiral Designs an exclusive license to create original designs that, after approval of the licensor, could be sold by Spiral Designs. (Id. at 160-61, 210). Again, only some shirts under the second category had sewn-in tags bearing the SD Mark because some licensors-like Route 66-did not allow Spiral Designs to attach its own labels. (Id. at 167). The third category was made up of resold third-party products. (Id. at 84-85). This category included products from brands like The Simpsons, South Park, and Looney Tunes. (Id. ). None of the garments in this category came with sewn-in tags depicting the SD Mark.

But all three categories came with hangtags that displayed the SD Mark, (id. at 29-30, 47-48, 211), and all goods sold by Spiral Designs-whether original designs or merely resold third-party goods-were packaged in plastic bags with the SD Mark. (Id. at 34). Sohail estimated that ninety percent of Spiral Designs' sales between 1993 and 1997 were of designs created by Spiral Designs. (Id. at 163-64).

C. Spiral Designs' Sales in the United States

In 1993, Spiral Designs began advertising its products in magazines, 50,000 copies of which were circulated in the United States. (Id. at 34-35). Also in 1993, Spiral Designs began sending mail-order catalogs to people who responded to its magazine ads. (Id. at 35). And by 1994, Spiral Designs had begun to make sales in the United States through its mail-order catalogs. (Id. at 34).

Shoaib provided many estimates as to the number of catalogs Spiral Designs sent to the United States and how many sales Spiral Designs made from that catalog distribution. (Id. at 78-79, 80-82, 136-37; 147-48). In 1993, Spiral Designs sent approximately 250 catalogs to individuals in the United States. (Id. at 35). In 1997, that number increased to 2,000; in 1999, 10,000 catalogs were sent. (Id. at 37, 58-59). Shoaib testified that Spiral Designs made 5-10% of its sales from the catalogs it distributed in the United States in 1993 and 1997 and 10-15% in 1999. (Id. at 37, 60). Thus, according to Shoaib's estimates, Spiral Designs made roughly 12 to 25 sales from the 250 catalogs it distributed in 1993; about 100 to 200 sales from the 2,000 catalogs in 1997; and about 1,000 to 1,500 sales from the 10,000 catalogs in 1999. However, Shoaib's testimony as to catalog sales was tenuous. His estimates were not consistent throughout his trial testimony, nor were they consistent with his deposition testimony. (Id. at 79-82). On cross-examination, Shoaib could not recall the percentages he stated during his direct testimony or state a basis for his percentage estimates other than that they were "guesses." (Id. at 79-82, 136-37).

In 1994, Spiral Designs started a retail website that displayed the SD Mark and contained an online version of its catalog where customers could order its goods. (Id. at 43; Ex. 2). The same year, Spiral Designs began making sales through the website, but neither Shoaib nor Sohail offered estimates of website-generated sales. However, Spiral Direct produced records of Spiral Designs' total revenue from 1996 and 1997, which showed that its total revenue in 1996 was £ 793,283-of which Shoaib testified 5-10% was attributable to sales made in the United States. (Trial Tr. Vol. 1 at 41-42; Ex. 61 at 3). Spiral Designs' total revenue in 1997 was £ 535,800-of which Shoaib testified 15% was attributable to sales made in the United States. (Trial Tr. Vol. 1 at 42; Ex. 61 at 3).

Spiral Direct was unable to produce Spiral Designs' full sales records from 1993 to 1997 because either much of the data was not carried over when Spiral Designs began to use new accounting software or the data was otherwise purged in the regular course of business. (Trial Tr. Vol. 1 at 168-73). But Sohail was able to recover some of Spiral Designs' sales data from mail-order catalogs from 1996 and 1997. (Id. at 213; see Ex. 169). The sales data show twenty-three invoices for sales inside the United States between 1996 and 1997. (Exs. 169 & 72). The total amount of these sales combined was at least £ 481.14. (Ex. 169). Those sales were made in twelve states: 6 in California; 3 in Florida; 2 in Virginia, Ohio, Illinois, and Pennsylvania; and 1 in Texas, Minnesota, North Dakota, Georgia, New Hampshire, and New York. (Ex. 73). Sohail stated that the computer records showed that by 2002, Spiral Designs sent catalogs or sold product in all fifty states but that its full records-which were unavailable-would show that Spiral Designs sent catalogs or sold items in all fifty states before 2002. (Trial Tr. Vol. 1 at 211)

Additionally, Spiral Direct produced a data table of Spiral Designs' yearly revenue from sales in the United States from 1998 through 2016. (Ex. 66 at 1). Separated into two columns-one for revenue earned in British pounds and another for revenue earned in U.S. dollars-the table shows that Spiral Designs made no sales in the United States from 1993 to 1997. (Id. ). According to Sohail, that did not mean that Spiral Designs did not make sales for those years but rather that it was unable to produce records of sales during that time. (Trial Tr. Vol. 1 at 213). Sohail testified the earlier years in the chart inaccurately portrayed only a fraction of Spiral Designs' total sales in the United States. (Id. ).

The same table showed that in 1998, Spiral Designs' reported revenue for sales in the United States had increased to £ 245.85. (Ex. 66 at 1). And by 1999, that revenue was £ 1,326.54. (Id.). U.S. sales increased throughout the next several years with notable exceptions in 2005 ($ 732.44) and 2006 (£ 110.17). (Id. ). In 2016-the last year for which data is available-Spiral Direct's revenue from sales in the United States was £112,341.00, the equivalent of $121,284.10. (Id. ).

Based on Shoaib's unrebutted testimony about the number of catalogs Spiral Designs sent between 1993 and 1999, the Court finds that Spiral Designs sent to the United States: 250 catalogs in 1993; 2,000 catalogs in 1997; and 10,000 catalogs in 1999. However, due to Shoaib's wavering testimony regarding the number of Spiral Designs' United States sales as a percentage of the catalogs distributed, the Court credits only his lower-end estimates. Specifically, the Court finds that Spiral Direct made: 12 sales in 1993; 100 sales in 1997; and 1,000 sales in 1999. The Court also finds that Shoaib's estimates regarding Spiral Designs' revenue from sales in the United States for 1996 and 1997 as a percentage of Spiral Designs' overall revenue are unreliable and contradicted by his own estimates of the number of sales Spiral Designs made in the United States. But Sohail's testimony that ninety percent of the goods Spiral Designs sent into the United States were original designs-and not third-party goods-was credible. Sohail's testimony was also credible regarding the reasons Spiral Direct was unable to produce its full sales data from 1993 to 1999. Based on the data Sohail was able to recover, together with Shoaib's estimates of Spiral Designs' sales in the United States, the Court finds that Spiral Designs' revenue from its sales in the United States was greater than the amounts listed in its revenue exhibit. (Ex. 66). However, the Court is unable to make specific findings of revenue based on the evidence in the record.

D. Partnership Voluntary Arrangement

On April 28, 1999, after one of Spiral Designs' business arrangements went awry, Spiral Designs' partners-Sohail, Shoaib, and M.N. Alam-entered into a "Proposal for a Partnership Voluntary Arrangement" (PVA) that allowed Spiral Designs to restructure its debt and pay its creditors over time. (Trial Tr. Vol. 1 at 51-52; Ex. 63). According to the PVA, Spiral UK, which was incorporated on February 15, 1999, (Ex. 26 at 1), purchased Spiral Designs' assets. The PVA states:

The assets of Spiral Designs comprise four licences [sic], stock and office equipment, and book debts. The debts are factored and there is a shortfall to the factoring company. The partners were aware that on the insolvency of the partnership the licences [sic] would be terminated. Therefore the licences [sic] are being transferred to Spiral Direct Limited. The assets of the partnership have recently been sold to Spiral Direct Limited for £ 46,825. Spiral Designs will retain ownership of the assets until paid for in full.

(Ex. 63 at 3). Additionally, the PVA stated that Spiral UK "has purchased the goodwill and customer base of Spiral Designs for the sum of £ 1." (14 at 4). According to Shoaib, the £ 1 sale occurred before the parties entered into the PVA. (Trial Tr. Vol. 1 at 53). Shoaib characterized this purchase as including Spiral Designs' trademarks, designs, and Inventory. (Id. at 52-53). Under the PVA, Spiral Designs became dormant and Spiral UK began to make monthly payments to Spiral Designs' creditors. (Id. at 54). Throughout the period of time in which Spiral Designs' creditors were being paid, Spiral UK was using the SD Mark and continued the business of selling goods to Spiral Designs' customers. (Id. at 53). On March 29, 2004, Spiral UK finished paying Spiral Designs' creditors. (Ex. 62 at 2).

In 2008, Spiral Direct applied for a trademark registration in the United States for the SD Mark but the USPTO issued a refusal to register the mark, in part because there was a likelihood of confusion with the Basic Mark, which was registered in 1999. (Trial Tr. Vol. 1 at 62, 139-40; Ex. 168). Spiral Direct continues to sell its goods through mail-order catalogs, its own website, Amazon.com, and Ebay.com. (Trial Tr. Vol. 3 at 8).

E. Basic

Hilel created Basic in 1992, and David joined the business in 1993. (Trial Tr. Vol. 3 at 103). For several years, Basic only manufactured third-party, "private-label goods"-that is, clothing for wholesale customers who, in turn, sold the garments under their own brand names. (Id. at 185-86). The private-label customers were familiar brands like Eddie Bauer, L.L. Bean, The North Face, and REI. (Id. at 188, 200).

The process of manufacturing private-label goods begins with Basic buying raw materials from countries around the world and shipping those raw materials to its factory in Ciudad Juarez, Mexico. (Id. at 186-89). Once the garments are completed, they are sent to Basic's warehouse in El Paso, Texas, where Basic stores the goods until they are distributed. (Id. at 189, 200-01). By 1997, Basic's annual revenue from private-label sales was $3 million. (Id. at 193).

By 1997, Basic had a large number of excess or "overrun" garments left over from its wholesale customers' orders, (Id. at 191-92). Starting sometime in the spring or summer of 1997, Basic removed the labels from its overrun goods and replaced them with its own mark depicting a large letter "S" and the word "Spiral" to sell directly to retail customers. (Trial Tr. Vol. 2 at 114; Trial Tr. Vol. 3 at 161-62, 196).

(Ex. 7 at 14) About three percent of the goods manufactured for third parties were "overrun goods" that were relabeled with the Basic Mark. (Trial Tr. Vol. 2 at 134-35; Trial Tr. Vol. 3 at 193). Basic also manufactured some goods for its Spiral brand from new fabric. (Trial Tr. Vol. 2 at 177-79;

Trial Tr. Vol. 3 at 165-66, 200; Trial Tr. Vol. 4 at 6).

On April 8, 1997, Basic performed a trademark search for users of the "Spiral" mark, but the search did not reveal Spiral Designs' use of the mark. (Trial Tr. Vol. 2 at 193; Trial Tr. Vol. 3 at 197-98; Ex. 102). On September 17, 1997, Basic filed an application with the USPTO for a trademark registration for use of the word "Spiral" on "[j]ackets, pullovers, hats, jeans, T-shirts, vests, shorts, underwear, shoes, ... socks, gloves, headbands and scarves" (Basic Goods). (Ex. 6 at 1). The application stated that the basis for registration was that Basic was "using the mark in commerce on or in connection with the above-identified goods." (Id. at 2). The application stated that Basic first used the mark in interstate commerce on June 15, 1997. (Id. ). David signed the application and attested in his attached declaration that "the facts set forth in this application are true[ ] and that all statements made of [David's] own knowledge are true and all statements made on information and belief are believed to be true." (Id. at 3-4). On January 19, 1999, the USPTO issued Basic a registration-number 2,218,515-of the Basic Mark for use on the goods listed in its application. (Ex. 8 at 1).

Between 1997 and 2016, Basic sold Basic Goods under the Basic Mark through several brick-and-mortar retail stores operated by Nadia. (Trial Tr. Vol. 2 at 19, 173-74; Trial Tr. Vol. 3 at 103). Basic's first retail store, called "Spiral," opened on November 1, 1997, and was located at 900 North Michigan Avenue in Chicago, Illinois. (Trial Tr. Vol. 2 at 26; Ex. 18 at 3).

F. Basic's Sale of Spiral Goods Before its Application for Trademark Registration

As discussed at length in the conclusions of law section, infra, the relevant question in determining whether a trademark must be cancelled for fraud on the USPTO based on lack of use of a particular good is whether the good was sold in commerce before the trademark application was filed with the USPTO. See Angel Flight of Ga., Inc., v. Angel Flight Am., Inc., 522 F.3d 1200, 1210 (11th Cir. 2008). Although Basic stated in its September 1997 registration application that it began using the Basic Mark in commerce on June 15, 1997, Spiral Direct contests that assertion and maintains that Basic did not use the Basic Mark in commerce until it opened the Michigan Avenue store in November 1997. Each of the Chowaikis testified on this issue at trial.

1. Nadia Chowaiki's Testimony

Nadia was the first member of the Chowaiki family who was called to testify in Spiral Direct's case-in-chief. Early in her testimony, Spiral Direct's counsel began inquiring about the date that Basic first sold slippers. (Trial Tr. Vol. 2 at 24-26). With each question posed by Spiral Direct's counsel to Nadia, David-who was sitting and leaning forward at counsel's table-was nodding his head in the affirmative or shaking his head in the negative. The Court noticed immediately when David began making these not-so-subtle movements, which were in plain view of everyone in the courtroom, including Nadia, who was on the witness stand about fifteen feet away from Basic's counsel table. When Spiral Direct's counsel asked Nadia whether she had personal knowledge of selling slippers before Basic opened its first retail store on Michigan Avenue, Nadia answered, "Not me. I start in the store." (Id. at 26-27). Then, after David's head gesture, Nadia immediately recalled that she sold slippers to her sister's friends in Chicago before the store opened. (Id. at 27). It is clear from the transcript when Nadia responded to David's gesture:

Q Prior to the opening of that store in Chicago, did Basic Sports Apparel sell any slippers?

A Yes.

Q Okay. Describe how.

A I mean, I was not involved in-

Q Let me ask you this question: Do you have any firsthand knowledge of Basic Sports Apparel selling any slipper prior to the opening in November 1997 of that Chicago store?

A Yes.

Q You have firsthand knowledge?

A Yeah, but-

Q Describe for us what firsthand knowledge you have, and to be clear, when I say "firsthand knowledge," I'm not saying something that somebody else told you. I'm saying you actually either did it yourself or you saw it.

A Not me. I start in the store.

Q Okay. So you started your work selling Basic Sports Apparel goods in the store?

A Yes.

Q And the store didn't open until November of 1997?

A I sold some now that I recall. My sister lived in Chicago. So I sold a lot to her friends before because I was showing them if they like the product before I entered the store, and they bought some, you know, products from me.

(Id. at 26-27 (emphasis added) ). The Court, after noticing Nadia's responsiveness to David's head movements, admonished David for signaling answers:

THE COURT: Let me take-let me interrupt you for a minute.

MR. CANNELLA: Yes, sir.

THE COURT: When the witness is on the witness stand, it's the witness'[s] answers and the witness'[s] answers only that are called for. Anything else is inappropriate. And if other people signal to the witness what answer to give, that is a serious matter that require-will require court action. Now, what's happening here is the-particularly with regard to Mr. David Chowaiki, he is responding to the questions himself with a shake of the head or a nod of the head. That will not be tolerated. I'm not suggesting that it is a deliberate effort to signal the response to the witness, but it has that effect. So maybe if you sit back in the chair and just relax, it won't come automatically. You may proceed.

(Id. at 27-28). Immediately thereafter, Nadia abandoned the story that she had previously sold products to her sister's friends in Chicago. In a confusing back-and-forth between Spiral Direct's counsel and Nadia, she admitted that she never made such a sale:

Q Ms. Chowaiki, you told me that at the beginning that you are responsible for managing the retail stores, correct?

A Yeah.

Q And the first retail store was in Chicago?

A Yes.

Q And that first retail store opened in November of 1997?

A Yes.

Q Okay. And you also told me that the slippers were sold in the retail store?

A Yes.

Q And I asked you if you had any firsthand knowledge of sales of any slippers, and you started to tell me about your sister lived in Chicago, and she had some friends-

A Yeah, okay.

Q So I'm-

A It's okay.

Q I'm confused. Were those-were those retail transactions?

A Where?

Q With your sister and her friends where, you know, you showed them some slippers?

A No, no slippers for them.

Q Okay. So they didn't get any slippers?

A No, not from me.

Q No slippers for them?

A Yes.

Q So the first slipper that you would have sold in commerce would have been at the retail store-

A Yes, yes.

Q I'm sorry. If you could, just let me finish the question, and I'll try to-I'll extend the same courtesy to you and let you finish the answer.

A Okay. Yeah.

Q Okay. So the first slipper that you sold in commerce would have been at the retail store, which did not open until November of 1997. Is that correct-

A Yes, yes.

Q All right. And prior-so that means prior to November of 1997, you didn't sell any slippers?

A No, not me.

Q And do you have firsthand knowledge of anyone-by firsthand, I mean it's not something somebody told you, but do you have firsthand knowledge of anyone selling a Basic Sports Apparel slipper prior to November of 1997?

A Not really.

(Id. at 28-30). Later, Nadia again testified that she "maybe [sold] a few little things to ... the neighbors of my sister[ ]." (Id. at 63).

Nadia also testified that in the summer of 1997-before the Michigan Avenue retail store opened-Basic operated a retail store in the corner of its El Paso, Texas warehouse. (Id. at 49-50, 52). Nadia described one sale in particular that she observed when she visited the warehouse in the summer of 1997. (Id. at 51). She specifically recalled that during her visit a delivery driver bought one or more of every item listed in Basic's trademark application for the driver's son, who was going to attend a university in Minneapolis. (Id. ). From memory, Nadia recalled that the driver bought two or three jackets, long underwear, khakis, a hat, two headbands, scarves, vests, pullovers, boxers, fleece pants, gloves, socks, slippers, a long-sleeve t-shirt, and shorts. (Id. at 51-57).

Throughout the remainder of her testimony, however, Nadia mentioned three times that it was difficult for her to remember details from many years ago and that she often confused dates: "I'm mixing the years now. I don't-I don't know what you're-I don't remember very well the years," (id. at 43); "You know, I cannot recall really very well, and you want me in 20 years to tell you what every detail, you know," (id. at 63); "[Y]ou know, for me dates and months and this, they're very difficult for me to remember, you know, details," (id. at 69).

Based on Nadia's inconsistent and contradictory testimony, the Court finds that her testimony regarding sales made before Basic filed its trademark application in September 1997 was not credible.

2. David's and Hilel's Testimony

David and Hilel testified that Basic sold all the goods listed in its trademark application from Basic's El Paso, Texas warehouse before filing the application in September 1997. (Id. at 113-123; Trial Tr. Vol. 3 at 189-90; Trial Tr. Vol. 4 at 9, 12-13). Specifically, they described that a 1,000 to 1,250 square-foot section of Basic's El Paso warehouse operated as a retail store where customers could purchase Basic Goods. (Trial Tr. Vol. 2 at 127). They explained that the retail space in the warehouse had ten to fifteen racks of clothing and several baskets and tables that displayed accessories. (Id. at 185; Trial Tr. Vol. 3 at 189; Trial Tr. Vol. 4 at 135). David estimated that in the summer of 1997 Basic sold 50 to 100 Basic Goods out of the warehouse. (Trial Tr. Vol. 2 at 119, 126). David further stated that Basic shipped 25 to 30 orders to customers outside of Texas, but he only produced mailing receipts dating back to 1999. (Id. at 128; Trial Tr. Vol. 4 at 136-38).

Basic produced no photographs of the retail section of the warehouse and no documentary evidence of any sales before September 1997 because Basic's computer systems did not track its inventory or produce itemized receipts. (Trial Tr. Vol. 2 at 22-23, 120-121, 130; Trial Tr. Vol. 3 at 107; Trial Tr. Vol. 4 at 19-20, 91, 154-55). David testified that Basic continues to operate a retail section in its current warehouse. (Trial Tr. Vol. 2 at 157; Trial Tr. Vol. 4 at 139).

Hilel testified that in the summer of 1997 he once packed his car with 50 to 100 Basic Goods-including all items listed in the trademark registration-to sell to rock climbers in New Mexico who had placed orders with him. (Trial Tr. Vol. 4 at 10-11). Hilel additionally recounted an instance where he sold Basic Goods to a couple while he was on a bike tour in France. (Id. at 14-15). He specifically remembered that the couple lived in Boston, Massachusetts, and owned a large liquor store. (Id. at 14). Hilel further recalled that Todd Skinner, "the Michael Jordan of rock climbing," came to the warehouse on multiple occasions to buy large amounts of Basic Goods. (Id. at 12-13).

During cross-examination, Spiral Direct's counsel challenged David's and Hilel's credibility by introducing declarations that they filed in a previous trademark infringement case. (Exs. 7 & 25). In that case, a shoe company called Spira Footwear, Inc. sued Basic and alleged in a motion for summary judgment that Basic "committ[ed] fraud against the USPTO for knowingly submitting a trademark request on an undeveloped product." Spira Footwear, Inc., v. Basic Sports Apparel, Inc., 545 F.Supp.2d 591, 594 (W.D. Tex. 2008). Specifically, Spira Footwear contended that Basic never sold a shoe despite representations that it had done so in its trademark application and subsequent declarations to the USPTO. Id. ; see Spira Footwear, Inc.'s Mot. Summ. J., Doc. 26 at 12 in Case No. 3:07-cv-129 (W.D. Tex.) ("In this case, on three separate occasions, Defendant [Basic] represented to the [USPTO] that it had sold 'shoes' using the trademark 'Spiral'...."); id. ("Defendant has NO documents to support any contention that it has at any point ordered material for shoes, delivered shoe material to its maquiladora plant, assembled material into a shoe, brought an assembled shoe back into the United States, or sold a shoe to anyone.").

In support of Basic's position that it manufactured shoes and sold them before it filed its trademark application, Hilel and David submitted sworn declarations in the Spira Footwear case on December 21, 2007. (Exs. 7 & 25). Hilel's declaration stated in pertinent part:

15. The first store location where SPIRAL brand products were sold was located at 900 N. Michigan Avenue in Chicago, and that store opened in 1997.

....

18. Other store locations where the SPIRAL brand products were sold by [Basic] in the years since 1997 and through 2007 include: Oakbrook Mall, Oakbrook, IL, Fox Valley Mall, Aurora, IL, Woodfield Mall, Schaumburg, IL, Sunland Park Mall, El Paso, TX, Grapevine Mills Mall, Grapevine, TX, The Galleria, Houston, TX, St. Louis Mills Mall, Hazelwood, MO, Colorado Mills Mall, Lakewood, CO. These store locations were managed on site by either Nadia Chowaiki or David Chowaiki.

....

20. At each store location, including at the original store at 900 N. Michigan Avenue, there were numerous displays identifying and promoting the SPIRAL brand name as the brand of the finished product.

....

23. To stock the SPIRAL stores, we simply loaded a truck with a large volume of clothing articles from our storage warehouse and sent it to the retail location where it was to be sold.

....

25. Similarly, at the store receiving end, since all of the clothing articles were coming from the [Basic] warehouse, and all were to be put up for sale at the retail location, no written records were made of how many of each type of product were being received, or how many of each product were being sold.

....

28. As the inventory in a store was sold, telephone calls were placed from the store locations to the factory/warehouse location with a request that more products be sent to the store for sale.

....

43. All of the SPIRAL brand products were simply placed into their own area in the warehouse until it was time to send a shipment of articles to a retail store for sale.

44. I have personally seen the cut fabric pieces for the slipper shoes.

45. I have personally seen the assembled slipper shoes move into inventory at the [Basic] factory warehouse.

46. I have personally seen the slipper shoes loaded for shipment to the retail stores.

47. I have personally seen the slipper shoes displayed for sale in various of the retail stores that I have visited ....

(Ex. 25). David's declaration contained many of the same statements, with the addition of the following:

2. In 1997, since we had a large supply of clothing articles on hand and in storage that were not needed by our wholesale customers, [Basic] decided to launch its own brand of clothing under the brand name SPIRAL which we sold through stores that we owned and operated ourselves.

3. I have been the on-site manager for several of the SPIRAL stores owned by [Basic] since 1997 ....

4. Beginning in 1997, with the opening of the Spiral store at 900 N. Michigan Avenue, I have worked at several different SPIRAL stores, including: Oakbrook Mall, Oakbrook, IL, Fox Valley Mall, Aurora, IL, Woodfield Mall, Schaumburg, IL, Sunland Park Mall, El Paso, TX, and The Galleria, Houston, TX.

5. In each of the Spiral stores where I worked, I personally sold each of the clothing items listed in the trademark registration of SPIRAL, namely, jackets, pullovers, hats, jeans, T-shirts, vests, shorts, underwear, shoes, socks, gloves, headbands and scarves.

6. To stock the SPIRAL stores, we simply loaded a truck with a large volume of clothing articles from our storage warehouse and sent it to the retail location where the clothing was to be sold.

....

11. At each store location, including at the original store at 900 N. Michigan Avenue, there were numerous displays identifying and promoting the SPIRAL brand name as the brand of the clothing products we were selling.

....

24. The declaration that I signed on September 10, 1997 ... was true and correct in that I had been involved in setting up the store at 900 N. Michigan Avenue in Chicago with all of the items listed as being sold in association with the SPIRAL mark by the time I signed that declaration.

(Ex. 7).

It is clear that David and Hilel submitted their declarations in part to establish that Basic sold slippers before filing its trademark application. See Basic's Resp. to Mot. Summ. J., Doc. 29 at 6 in Case No. 3:07-cv-129 (W.D. Tex.) ("In both the depositions and in the current declarations, each of these witnesses confirms that the slippers (and all of the other listed goods) were made and sold by [Basic] in connection with the SPIRAL trademark since prior to the filing of the trademark application , and every year since that time." (emphasis added) (citing David and Hilel's declarations) ). However, at no point in their Spira Footwear declarations did David or Hilel mention that Basic operated a store within its warehouse or that they sold Spiral goods out of the warehouse. On the contrary, they referred to the warehouse as a place for storing inventory and called it a "storage warehouse." The declarations further fail to mention that Hilel made sales to members of the rock climbing community in New Mexico, that he sold Spiral goods to a couple in France, or that Basic shipped its Spiral products directly to customers from the warehouse. Most significantly, nowhere in their declarations did David or Hilel notify the Spira Footwear court that the Michigan Avenue store did not open until November 1, 1997-after Basic had filed its trademark application.

Paragraph 24 of David's declaration is particularly troubling. It states that the trademark application was "true and correct" because David "had been involved in setting up the store at 900 N. Michigan Avenue in Chicago with all of the items listed as being sold in association with the SPIRAL mark by the time [he] signed the [September 10, 1997] declaration." (Ex. 7 ¶ 24). However, because the Michigan Avenue store did not open until November 1997-after the trademark application was filed-any "setting up" of that store was either impossible (because Basic's lease term had not yet started) or completely irrelevant to the issue whether Basic was selling its goods in commerce. David acknowledged at trial that he understood "in commerce" to mean "going across state lines or across the country lines." (Trial Tr. Vol. 2 at 96).

David's explanation at trial for paragraph 24 was puzzling: "[Paragraph 24] doesn't say that I was selling from the 900 Michigan store. I mean, I was setting up. It takes months to set up a store. But I had already sold all the items from the warehouse." (Id. at 104-05). But this does not account for why David volunteered in his declaration that he was "setting up" the Michigan Avenue store in the same breath as stating that Basic had sold all of the Basic Goods in commerce before it filed the trademark application. If Basic had truly been operating a store out of its warehouse and making numerous sales across state lines, David's declaration would have read something like: The declaration that I signed on September 10, 1997, was true and correct in that I had sold out of Basic's warehouse located in El Paso, Texas, all of the items listed as being sold in association with the SPIRAL mark by the time I signed that declaration. But it did not. The declarations of David and Hilel in the Spira Footwear case are contradictory to the testimony each offered at trial in this case.

Based on David's and Hilel's inconsistent and contradictory statements, their complete lack of documentary evidence of sales before September 1997, and David's lack of candor with the Spira Footwear court regarding the opening date of the Michigan Avenue store, the Court finds that David's and Hilel's testimony regarding sales made before September 17, 1997, is not credible and will be accorded no weight.

3. Basic's Advertising in 1997

With regard to Basic's methods of advertising before it filed its trademark application, Hilel and David each testified that Basic advertised through word of mouth and by passing out flyers. (Trial Tr. Vol. 2 at 114-15, 117-18, 120; Trial Tr. Vol. 4 at 9). But David answered differently when his own counsel asked a more pointed question:

Q: ... During your direct testimony, you indicated that Basic Sports Apparel had done some marketing during the spring and summer of 1997?

A: Yes.

Q: Do you recall any event during that period of time before the trademark filing when Basic Sports sponsored anything?

A: There was a rock-climbing event that-that we had sponsored.

Q: Were you present for that?

A: Yes.

Q: Can you describe how Basic Sports sponsored it and what it did.

A: I mean, we took fl[y]ers. We took some-some product. We put it for display. And we sold some. And we-we were basically-a lot of the rock-climbing community that was there at the time.

(Trial Tr. Vol. 2 at 175-76). Additionally, Hilel testified that the rock-climbing event was a competition and Basic gave Basic Goods to the winners of the event. (Trial Tr. Vol. 4 at 9). However, in two earlier trademark infringement cases in 2007 and 2014, Hilel stated in his depositions that Basic only advertised through flyers and word of mouth. (Trial Tr. Vol. 4 at 107-08; Ex. 108 at 142-144; Ex. 104 at 38-41, 110-12). Indeed, even in Hilel's deposition in this case, when asked about the type of advertising that would encourage customers to visit Basic's warehouse, Hilel answered "word of mouth." (Trial Tr. Vol. 4 at 108). Additionally, in a declaration submitted in this case Hilel stated that "[w]e primarily marketed in our local area using fl[y]ers and word of mouth." (Doc. 67-12 ¶ 15). Although Basic was a relatively large and sophisticated business and David and Hilel were diversified, successful businessmen, Basic failed to preserve copies of the flyers it says it circulated.

Based on David's and Hilel's inconsistent statements, the Court finds that David's and Hilel's testimony that Basic sponsored a rock-climbing event before it filed its trademark application in September 1997 is not credible.

G. Sale of Basic Goods from 1997 to 2007

1. Operation of "Spiral" Stores

Basic's first retail store opened on November 1, 1997, and operated for three and a half years under the name "Spiral." (Trial Tr. Vol. 2 at 91, 102-03). Thereafter, Basic operated numerous stores under the name "Spiral" between 1997 and 2007, many of which were operated seasonally and managed by Nadia and David. (Trial Tr. Vol. 2 at 91-92; Trial Tr. Vol. 3 at 103; Trial Tr. Vol. 4 at 15; Ex. 110 at 5). Nadia testified that starting at the Michigan Avenue store, Basic sold all of the Basic Goods listed in the trademark registration: jackets, pullovers, vests, pants, khaki jeans, long underwear, boxers, shorts, hats, headbands, gloves, scarves, slippers, t-shirts, and socks. (Trial Tr. Vol. 2 at 30-31; Trial Tr. Vol. 3 at 105-06). She testified that all of these garments, with the exception of slippers, came with sewn-in tags depicting the Basic Mark. (Trial Tr. Vol. 2 at 24-26, 33, 58; Trial Tr. Vol. 3 at 106). Nadia also stated that these items came with attached hangtags depicting the Basic Mark. (Trial Tr. Vol. 3 at 106). She also testified that slippers, socks, gloves, and other accessories were sold in baskets or on display tables with hangtags that displayed the Basic Mark, and they were placed in proximity to signs that displayed the Basic Mark. (Trial Tr. Vol. 2 at 59, 88-89).

According to Nadia, every item in the trademark registration was sold at each Basic store, even though the stores would sometimes run out of certain items. (Trial Tr. Vol. 3 at 109-10). David testified that running out of Spiral-branded items was possible because there could be inconsistency in manufacturing due to varying demand for third-party goods in Basic's factory. (Trial Tr. Vol. 2 at 133-34). David stated that Basic "would run out of stuff all the time" but that in all stores Basic sold all of the Basic Goods. (Trial Tr. Vol. 4 at 141). Additionally, both Jaime Alonso, the employee in charge of garment design in Basic's factory, and Enrique Saucedo, the factory manager, testified that all Basic Goods came with sewn-in labels depicting the Basic Mark, with the exception of slippers. (Trial Tr. Vol. 3 at 147, 156, 161-62, 165-66). All of Basic's witnesses agreed that starting in 2008, all of Basic's Goods, including slippers, had sewn-in labels depicting the Basic Mark.

With regard to "jeans"-a category listed in Basic's trademark-Alonso testified that Basic produced denim jeans starting in 1997. (Trial Tr. Vol. 3 at 162-63). Additionally, Nadia testified that Basic sold denim khakis, (Trial Tr. Vol. 2 at 49), and David testified that khaki was a "twill cotton material," which he characterized as "denim," (Id. at 125). During Hilel's direct examination, he was shown photographs of Basic's stores from 1997 to 2016 and in several of the photographs he identified a "camouflage pant," (Trial Tr. Vol. 4 at 35-36, 44, 46, 122), which he characterized as a "Dakota jean," (id. at 21, 35, 36,46). Alonso testified that the Dakota jean was made out of a heavy fabric that required special machinery. (Trial Tr. Vol 3 at 163-64).

2. Nadia's 2007 Deposition

In 2007, when Nadia was deposed in the Spira Footwear case, she brought several exemplars of Basic Goods to the deposition that did not have sewn-in labels with the Basic Mark. (Trial Tr. Vol. 2 at 47; see Ex. 122). Specifically, the Basic Mark did not appear on the scarves, hats, gloves, or socks. (Trial Tr. Vol. 2 at 47). At trial, Nadia explained that the Basic Goods she brought to the 2007 deposition did not have sewn-in labels depicting the Basic Mark because she ordered them directly from the factory, which was unusual because her sons typically placed the orders. (Id. at 31). Nadia testified that she placed the order with the factory manager, Saucedo, whom she informed that she was running out of certain Basic Goods. (Id. at 31, 86-87). Nadia testified that Saucedo then sent her Spiral goods, but some of them did not have sewn-in labels with the Basic Mark. (Id. at 86-87).

Nadia offered an alternative explanation: that the exemplars she took to the deposition "were returns ... so maybe that's the one that I grabbed. I don't remember, but normally everything has had labels but the slippers." (Id. at 47). Nadia also offered a third explanation: that the exemplars were personal items from her house that did not have labels because "they would send me things without [a] label." (Id. at 84-85).

David confirmed Nadia's first explanation-that Nadia called the factory directly to order the garments that were sent without sewn-in labels. (Id. at 124). David testified that Nadia's order from the factory was not typical and ordinarily when David or Hilel placed an order they would specify how they wanted the goods to be made. (Id. ). Saucedo confirmed that in response to Nadia's unusual order in 2007 he sent some Basic Goods without sewn-in labels. (Trial Tr. Vol. 3 at 147).

3. Findings of Fact

Even though Nadia equivocated in her explanation about why the exemplars from 2007 did not have sewn-in labels with the Basic Mark, the Court finds based on the testimony of David, Saucedo, and Alonso that all of the goods listed in Basic's trademark registration, with the exception of slippers, had sewn-in labels displaying the Basic Mark from 1997 through 2007. The Court finds that, from 1997 through 2007, Basic sold all items listed in its trademark registration with sewn-in labels depicting the Basic Mark, with the exception of slippers, which did not have sewn-in labels. The Court further finds that, from 1997 through 2007, Basic sold slippers that were bound with a hangtag depicting the Basic Mark and that Basic sold slippers in proximity to display signs that depicted the Basic Mark. Finally, the Court finds that from 1997 through 2007, Basic sold khaki pants, camouflage pants, and Dakota jeans made out of a denim material.

H. Sale of Basic Goods from 2008 to 2017

1. Operation of "Spira" Stores

In 2008, Basic did not operate a retail store or sell Basic Goods, (Trial Tr. Vol. 2 at 165), but it acquired the rights to sell clothing under the name "Spira" and started to sell Spira-branded clothing in retail stores named "Spira." (Id. at 35-36; 147-48; Ex. 99). Basic acquired these rights after Basic and Spira Footwear settled their dispute in the Spira Footwear case. (Ex. 99). Over the next several years, Basic operated several stores under the "Spira" name and three stores under the "Spiral" name. (Trial Tr. Vol. 2 at 36, 68, 140-41; Trial Tr. Vol. 3 at 111). David testified that under the Spira brand, Basic sold jackets, pullovers, hats, trousers, t-shirts, vests, shorts, underwear, shoes, and headbands. (Trial Tr. Vol. 2 at 149-51). These goods had sewn-in labels that depicted the word "Spira." (Id. at 70).

David, Hilel, and Nadia each testified that Basic sold Basic Goods with sewn-in tags depicting the Basic Mark at the stores operated under the Spira name. (Id. at 151; Trial Tr. Vol. 3 at 111-12; Trial Tr. Vol. 4 at 20-53, 122-29). Nadia testified that the Spira and Spiral brands were given equal treatment in the stores, but she could not provide a breakdown of the percentage of sales of the Spira versus Spiral brands. (Trial Tr. Vol. 2 at 78-79).

This is because Basic does not maintain a regular inventory management system and thus Basic is unable to provide detailed reports of sales by the type of garment or brand. (Trial Tr. Vol. 2 at 147, 154; Trial Tr. Vol. 4 at 19-20). However, David estimated that sales from Spira stores were split fifty-fifty between Spira goods and Basic Goods. (Trial Tr. Vol. 2 at 166).

During Hilel's direct examination, he viewed interior photographs of Basic's retail stores operating from 1997 to 2016. In those photographs, Hilel identified all of the Basic Goods listed in the trademark registration. (Trial Tr. Vol. 4 at 20-53, 122-29; Ex. 160). Many of the stores depicted in the photographs had large "Spiral" signs over the front entrances, but the rest of the signs displayed throughout the stores advertised that the products were made out of Polartec fabric. (Ex. 160 at 1-42).

Although Basic does not maintain its own website, in 2014 it began selling Basic Goods on a third-party online retailer, Overstock.com. (Trial Tr. Vol. 2 at 168, 201; Trial Tr. Vol. 4 at 111). As of December 2016, Basic sold only certain Basic Goods on Overstock.com: fleece vests, jackets, pants, and pullovers. (Trial Tr. Vol. 2 at 138-39; Ex. 20). Through Overstock.com, Basic sold its Basic Goods in many states, including Florida. (Trial Tr. Vol. 4 at 114).

2. Dr. Frank's Expert Testimony

During its case-in-chief, Spiral Direct called Robert Frank, Ph.D., to testify as an expert on trademark research. (Trial Tr. Vol. 2 at 210). In 2014 and 2016, Dr. Frank conducted extensive research on Basic and its sale of Basic Goods in online databases, which included print and online news media. (Id. at 216-39). While researching, he did an Internet search for "Spiral clothing" on Google.com. That search revealed that all but one of the listings on the first page of Google's search results were for Spiral Direct's goods rather than Basic's Goods. (Ex. 152; Trial Tr. Vol. 3 at 37-45). Dr. Frank further testified that 95% of customers stop their search after viewing the first page of search results. (Trial Tr. Vol. 3 at 45).

Dr. Frank found no evidence that in 2014 or 2016 Basic sold pullovers, hats, t-shirts, jeans, shorts, underwear, slippers, socks, gloves, headbands, or scarves. (Trial Tr. Vol. 2 at 246-49). He also opined that based on his online research, Basic had not marketed those goods under the Basic Mark from 2014 to 2016. (Id. at 248).

Additionally, in February 2016, Dr. Frank conducted an undercover visit of a store operated by Basic under the name "Spira" at the Cherry Creek Mall in Cherry Hills, Colorado, to see what Basic sold and how it branded its goods, (Id. at 249-50). During that visit, Dr. Frank took photographs of the merchandise in the store and observed that Basic had fifteen to twenty-five racks of clothing. (Id. at 249-51). On direct examination, Dr. Frank testified that the only garments with sewn-in labels depicting the Basic Mark were jackets that occupied only two racks in the store. (Id. at 253-54; see Ex. 177). Dr. Frank testified that he did not see any vests, shorts, or headbands for sale under the Basic Mark. (Trial Tr. Vol. 2 at 261). Dr. Frank estimated that about 50 out of 400 or 500 garments in the store had sewn-in labels depicting the Basic Mark. (Id. at 262-63). Dr. Frank also testified that all garments in the store had hangtags depicting only the "Spira" brand name. (Id. at 252-54; Exs. 175 & 176). Dr. Frank noted that there were no display signs advertising Basic Goods in the store. (Trial Tr. Vol. 2 at 254).

Dr. Frank stated that during his visit to the store he asked Nadia if the store sold boots, gloves, socks, scarves, jeans, or underwear under the Basic Mark. (Id. at 259-60). He recalled that Nadia told him that she sold none of those items except for scarves and that gloves were out of stock. (Id. at 260). Dr. Frank's findings from his visit to the Cherry Creek Mall store were consistent with his online research, which was the foundation for his opinion that, since 2014, Basic has not sold a majority of the goods listed on its trademark registration under the Basic Mark. (Id. at 261-63).

During cross-examination, Basic's counsel elicited testimony from Dr. Frank that cast significant doubt on the accuracy of his online research methods. Specifically, Dr. Frank's online research did not reveal: that Basic operated numerous retail stores under the Spiral name; that Basic was exclusively a brick-and-mortar retailer between the years 1997 and 2013; or the date that Basic started selling its products on Overstock.com. (Trial Tr. Vol. 3 at 12-15, 18). Most significantly, Dr. Frank acknowledged that his extensive online research did not negate the possibility that Basic was selling all of the goods listed in its trademark registration in physical stores between 1997 and 2016. (Id. at 19). Further, Dr. Frank was unable to recall whether particular items of clothing shown in his own photographs from inside the Cherry Creek Mall store had sewn-in labels depicting the Basic Mark. (Id. at 22-27). And Dr. Frank expounded on his previous testimony, stating that in the Cherry Creek Mall store he observed-in addition to jackets-pullovers, pants, and vests sold under the Basic Mark. (Id. at 28-29).

Nadia testified that she did not recall a conversation with Dr. Frank but recalled being upset by Dr. Frank's investigative presence in the store and repeatedly answering "no" to each of his questions about whether Basic sold certain categories of Basic Goods simply to shoo him out of the store. (Id. at 117-20, 131-32). Nadia stated that Basic sold all of the items Dr. Frank inquired about because she had a "huge table full of accessories and behind the counter, all over the store." (Id. at 119). Nadia testified she sold Basic Goods in the following categories at the Cherry Creek Mall store: pullovers, hats, Dakota jeans, t-shirts, vests, underwear, slippers, socks, gloves, headbands, and scarves, although she noted that she had run out of gloves. (Id. at 113-15). Hilel further identified in Dr. Frank's photographs of the Cherry Creek Mall store: camouflage jeans, scarves, hats, pullovers, pants, and underwear sold under the Basic Mark. (Trial Tr. Vol. 4 at 122-26; Exs. 173, 174, 178, 179, & 180).

3. Closing of Basic's Last Retail Store and Intent to Open New Store

Basic stopped manufacturing Basic Goods late in 2015 and for a few months in early 2016 due to Basic's obligations to private-label customers. (Trial Tr. Vol. 2 at 81-82, 135-36; Trial Tr. Vol. 4 at 66). In May 2016, Basic's Cherry Creek Mall store closed and Basic sold its rights to the Spira brand; since then, Basic has not operated a retail store under either the "Spira" or "Spiral" names. (Trial Tr. Vol. 2 at 64-66, 82, 156; Ex. 138 at 2). Basic obtained a new retail space in 2016, but because Nadia suffered an injury and her husband suffered a stroke, Basic was unable to open seasonal stores. (Trial Tr. Vol. 3 at 115-16; Trial Tr. Vol. 4 at 62). Hilel testified that at no point did Basic intend to abandon its mark. (Trial Tr. Vol. 4 at 65).

By the time of trial in early June 2017, Basic had added several categories of Basic Goods to its listing on Overstock.com. (Trial Tr. Vol. 2 at 139-40). And Basic is presently manufacturing Spiral goods in the following categories: jackets, vests, underwear, shorts, technical t-shirts, pullovers, hoodies, bottoms, hats, shorts, sun sleeves, arm warmers, and headbands. (Trial Tr. Vol. 2 at 137; Trial Tr. Vol. 4 at 67). Hilel testified that Basic is currently planning to open a Spiral store in Colorado. (Trial Tr. Vol. 4 at 64).

4. Findings of Fact

Based on the consistent testimony of Nadia, Hilel, David, Alonso, and Saucedo, the Court finds that all Basic Goods manufactured after 2007 came with sewn-in labels depicting the Basic Mark. The Court finds that Dr. Frank's online research, which involved surveying various print and online media, is unreliable to the extent it formed the basis for his opinion that Basic did not sell certain categories of Basic Goods between 2014 and 2016. The Court finds that Basic sold at least some categories of Basic Goods in each of the stores it operated under the "Spira" name.

I. Trademark Renewal and Incontestability

On January 19, 2005, Basic filed a declaration with the USPTO stating that it continued to use the Basic mark in commerce on the goods listed in its registration. (Ex. 8). On June 27, 2005, Basic filed a "declaration of incontestability" of the Basic Mark with the USPTO, declaring that "[t]he mark has been in continuous use in commerce for five consecutive years after the date of registration ... and is still in use in commerce on or in connection with all goods and/or services as identified above." (Ex. 10 at 4). And on December 17, 2008, Basic filed a "combined declaration of use in commerce and application for renewal of registration of mark" with the USPTO. (Ex. 12). Each of these declarations represented to the USPTO that Basic was using its Basic Mark in commerce on the goods listed in its trademark registration.

III. Conclusions of Law

A. Basic's Claims of Trademark Infringement

Basic alleges in its counterclaims that Spiral Direct is infringing the Basic Mark under federal and Florida law. "A person is liable for infringement if he uses a mark in commerce that is confusingly similar to a registered mark." Sovereign Military Hospitaller Order of Saint John of Jerusalem of Rhodes & of Malta v. Fla. Priory of the Knights Hospitallers of the Sovereign Order of Saint John of Jerusalem, Knights of Malta, The Ecumenical Order. 809 F.3d 1171, 1183 (11th Cir. 2015) (hereinafter " Sovereign Military II") (citing 15 U.S.C. § 1114(1)(a) (providing a trademark infringement cause of action for owners of registered trademarks) ). "A plaintiff bringing an infringement action must prove 'first, that its mark is valid and, second, that the defendant's use of the contested mark is likely to cause confusion.' " Id. (quoting Dieter v. B & H Indus., of Sw. Fla., Inc., 880 F.2d 322, 326 (11th Cir. 1989) ).

Once a trademark owner registers its mark with the USPTO and thereafter uses the mark continuously for five years, "the Lanham Act allows the owner of [the] registered trademark to obtain incontestable status by filing an affidavit affirming that certain statutory requirements have been met." Wilhelm Pudenz, GmbH v. Littlefuse, Inc., 177 F.3d 1204, 1208 (11th Cir. 1999) (citing 15 U.S.C. § 1065 ). In 2005, Basic fulfilled these requirements and the Basic Mark obtained "incontestable status." (See Ex. 10).

"Incontestability offers ... benefits for plaintiffs complaining about an infringement." Sovereign Military II, 809 F.3d at 1183. "With respect to the first element of infringement-validity-incontestability provides 'conclusive evidence of the validity of the registered mark and of the registration of the mark, of the registrant's ownership of the mark, and of the registrant's exclusive right to use the registered mark in commerce.' " Id. (emphasis added) (quoting 15 U.S.C. § 1115(b) ).

However, "the term 'incontestable' is itself somewhat confusing and misleading because the Lanham Act expressly identifies over 20 situations in which infringement of an allegedly incontestable mark is permitted." Park 'N Fly, Inc., v. Dollar Park & Fly, Inc., 469 U.S. 189, 206, 105 S.Ct. 658, 83 L.Ed.2d 582 (1985) (Stevens, J. dissenting). In its claims for declaratory relief and in its affirmative defenses to Basic's claims of trademark infringement, Spiral Direct asserts three enumerated defenses to an incontestable trademark: (1) "[t]hat the registration or the incontestable right to use the mark was obtained fraudulently," 15 U.S.C. § 1115(b)(1) ; (2) "[t]hat the mark has been abandoned by the registrant," id. § 1115(b)(2) ; and (3) that "the use of the mark registered ... infringes a valid right acqu