A local online retailer said he has learned an expensive lesson about trademark law after reaching a settlement with the state tourism office in a dispute over the use of its “Virginia is for Lovers” slogan.
Andrew Newell, whose Recovered Gold LLC was sued for infringement in May for its use of the variation “Virginia is for Gun Lovers,” said in an interview Monday he has learned several lessons since reaching a settlement with Virginia Tourism Corp., the state office whose lawsuit in federal district court was abated and dismissed in September.
Newell, who buys and sells items primarily on eBay from his home in Glen Allen, said he never considered the ramifications of naming what he describes as a one-off GoDaddy store with the gun-lover phrase – and the URL VirginiaIsForGunLovers.com – to attract customers and coordinate sales of an inventory of bullets he has yet to fully unload.
“I had created it on a whim for a little niche hobby of mine back in September 2017,” Newell said. “I just wanted to create a small website to see if I could generate some traffic for selling the bullets. Not ammo; just the bullet that you load into the cartridge.
“It was just one night I made up this name, I thought it was funny, I was surprised it wasn’t taken,” he said. “The website in and of itself was a failure.”
Newell, 28, said he sold about $450 worth of inventory from 10 sales on the one and only day he sold through the site, which he said he neglected to focus on his eBay store and didn’t mess with again until he was served with the lawsuit in May.
Newell said he removed the site and all mentions of the phrase from Facebook and other channels as he would have done if he’d received the cease-and-desist letters he said the state mailed to an out-of-date address – the one still listed as his principal office in his LLC filing with the State Corporation Commission.
Where he thought the whole matter could be resolved quickly with an email from his lawyer and a few hours of work, Newell said he was faced with legal expenses that climbed over weeks’ worth of negotiations to bring down an initial settlement offer of $10,000 to what he said he ended up paying: $500.
Add to that a $3,000 deposit he paid for his attorney and $1,200 billed on top of that, and Newell said the whole ordeal ended up costing him $4,700 – the $1,200 of which he’s still trying to pay his attorney, Eric Howlett of Sands Anderson, who Newell said he was referred to for its intellectual property practice.
Howlett did not return a call inquiring about the case a week ago.
“You know how people tell you to have savings for medical emergencies? They never tell you to have savings for suing emergencies,” Newell said.
“The cease-and-desist letters were a kindness; they’re not required. People can just sue you, and that never occurred to me,” he said. “It never occurred to me that I would ever have a legal issue. That would be my biggest takeaway, is just: tread carefully, especially with names – business names and product names.’`
‘Just wipe it’
Virginia Tourism Corp. (VTC), the business entity of Virginia Tourism Authority, alleged in its suit that Recovered Gold used and continued to use the gun-lover phrase on its website and Facebook page, as well as in connection with merchandise sales, despite requests from the agency to cease and desist.
Newell said he never received those requests after moving to Glen Allen from the city’s Northside late last year. While his new address is listed in his SCC filing under his name as the LLC’s registered agent, his old address still appears as its principal office in the SCC’s online business entity search.
Newell maintains the state could have tried harder to reach him, through contact info that was posted on the website at issue, before involving lawyers whose fees, according to Newell, drove and would have been covered by the $10,000 settlement offer.
“USPS forwards your mail, but UPS doesn’t, and that’s how they send their cease-and-desist letters, else it would have forwarded to my address,” Newell said.
“Had I gotten the cease-and-desist letters … the moment I learned about the lawsuit I deleted everything,” he said.
The authority argued that Recovered Gold’s actions had “deceived and caused confusion among the relevant purchasing public” and that the public was likely to believe the business’s products were connected or affiliated with the state or VTC.
Through the years, VTC has used its own variations of the slogan, such as “Virginia is for Beach Lovers,” “Virginia is for Wine Lovers” and “Virginia is for Craft Beer Lovers.” Its online store sells merchandise with those slogans and others highlighting such tourism topics as music, mountains, history and oysters.
Next year marks the 50th anniversary of “Virginia is for Lovers,” which was created by local ad agency Martin & Woltz, a predecessor of Richmond ad giant The Martin Agency. Martin is in the midst of an 18-month, multimillion-dollar contract with VTC, which named Martin its lead media agency last December.
A merchandising page on VTC’s website states the agency “cannot grant permission for you to produce merchandise with the Virginia is for lovers logo or any variation of the slogan.” It adds that VTC has an exclusive contract with Ashland-based Target Marketing for all merchandise bearing the slogan and associated logos.
The lawsuit argued that VTC suffered damages from Recovered Gold’s use of “Virginia is for Gun Lovers” and requested that the court put a stop to the business’s activities. It sought payment of up to $1,000 per day for each day that the business used the slogan and payment of profits the business made from merchandise sales.
The suit alleged five counts, including infringement of federally registered service mark, federal unfair competition and false designation of origin, trademark dilution, trademark infringement and violation of Virginia code.
In an abatement order filed Sept. 24, the U.S. District Court for the Eastern District of Virginia abated and dismissed the suit without prejudice after finding Recovered Gold had not been served with the suit within 90 days of the May 30 filing.
VTC was represented in the case by Christian & Barton attorneys Belinda Jones and Noelle James. A call to Jones last week was not returned. James is no longer with the firm.
An email to VTC spokeswoman Caroline Logan was not returned Monday, when state offices were closed due to snowfall.
Newell said the lawsuit took a bite out of his bottom line for the year, as he put his eBay store on hold during the summer and stopped buying inventory for months to keep cash on hand for the settlement or potential court costs.
He said he had been on track to bring in close to $300,000 in gross sales this year, having averaged about $200,000 the past three years from about 2,500 sales a year. He said the $4,700 cost from the lawsuit represents about three months’ worth of lost profit.
He primarily sells household items such as video games and electronics from his eBay store under the user name “msubadminton.” His eBay store has a 98.5 percent positive feedback score from nearly 3,600 ratings from other users.
Originally from Pennsylvania, Newell said he followed his parents to Richmond and started online retail after a job prospect fell through. Eventually he sold enough to sell full time, essentially flipping items he bought in thrift stores, flea markets and auction houses. He said he now is able to buy and sell items solely online.
A graduate of Millersville University of Pennsylvania, where he got a bachelor’s degree in computer science, Newell said he’s continuing on with his online retail business as he did before the lawsuit – just $5,000 poorer, more or less, than before he created the gun-lover domain.
“All in all, it was just a big misunderstanding. I didn’t care about the ‘Virginia is for Gun Lovers’ name. I didn’t realize someone could own ‘Virginia is for Lovers’ and then any word before ‘Lovers’ … I never even thought about trademark infringement when I came up with this little tiny GoDaddy store, to sell to a few guys here and there,” he said.
“That’s what sucks, is that it wasn’t like a big project,” he said. “I just made it up one night. It was just a bad experiment.”
Correction: VTC’s merchandising contract is with Ashland-based Target Marketing. An earlier version of this story incorrectly referred to the national retail chain.