Opinion ID: 577151
Heading Depth: 2
Heading Rank: 1

Heading: The Parties and Their Practices

Text: 5
6 In the summer of 1989, CSI owned and operated three Swap-O-Rama flea markets in the Chicago area: the Tri-State, in Alsip, Illinois; the Melrose Park, in Melrose Park, Illinois; and the Brighton Park, in Chicago itself. Although Parvez sold counterfeits at the Tri-State Swap-O-Rama and at Melrose Park, testimony at trial concentrated on the operations at the Tri-State. We too will refer mainly to the Tri-State Swap-O-Rama, although CSI's operations are apparently similar at all three flea markets. 7 CSI generates revenue from a flea market in four ways. First, it rents space to vendors for flat fees that vary by the day of the week and the location of the space. Second, CSI charges a reservation and storage fee to those vendors who want to reserve the same space on a month-to-month basis. Third, CSI charges shoppers a nominal 75cents admission charge. Fourth, CSI runs concession stands inside the market. To promote its business, CSI advertises the markets, announcing BARGAINS to be had, but does not advertise the presence of any individual vendors or any particular goods. 8 Supervision of the flea markets is minimal. CSI posts a sign at the Tri-State prohibiting vendors from selling illegal goods. It also has Rules For Sellers which prohibit the sale of food or beverages, 1 alcohol, weapons, fireworks, live animals, drugs and drug paraphernalia and subversive or un-American literature. Other than these limitations, vendors can, and do, sell almost any conceivable item. Two off-duty police officers provide security and crowd control (an arrangement that does not apply to the other markets). These officers also have some duty to ensure that the vendors obey the Sellers' Rules. The manager of the Tri-State, Albert Barelli, walks around the flea market about five times a day, looking for problems and violations of the rules. No one looks over the vendors' wares before they enter the market and set up their stalls, and any examination after that is cursory. Moreover, Barelli does not keep records of the names and addresses of the vendors. The only penalty for violating the Seller's Rules is expulsion from the market. 9 James Pierski, the vice president in charge of CSI's flea markets, testified that CSI has a policy of cooperating with any trademark owner that notifies CSI of possible infringing activity. But there is no evidence that this policy has ever been carried into effect. Before this case, there have been a few seizures of counterfeit goods at Swap-O-Rama flea markets. In no case was CSI informed of a pending seizure, involved in a seizure or notified as to the ultimate disposition of the seized goods. On the other hand, CSI did not investigate any of the seizures, though it knew they had occurred.
10 Harry's is a small store in Darien, Illinois, owned and operated by Harry Spatero. The store sells athletic shoes, t-shirts, jackets with the names of professional sports teams and the like. Spatero testified that the store contains over 20,000 different items. When buying t-shirts, Harry's is somewhat indiscriminate. The store buys seconds, overruns and closeouts from a variety of sources. Harry's buys most of its t-shirts from Supply Brokers of Pennsylvania, a firm which specializes in buying up stocks from stores going out of business. Spatero testified that Supply Brokers sends him largely unidentified boxes of shirts which he may choose to return after looking them over. But Spatero testified that Harry's also bought shirts from people who came around in unmarked vans, offering shirts at a discount. The store kept no records of the sources of its inventory. 11
12 Hard Rock owns the rights to a variety of Hard Rock trademarks. The corporation grants licenses to use its trademarks to the limited partnerships that own and operate the various Hard Rock Cafe restaurants. These restaurants are the only authorized distributors of Hard Rock Cafe merchandise, but apparently this practice of exclusivity is neither publicized nor widely known. The shirts themselves are produced by Winterland Productions, which prints logos on blank, first quality t-shirts that it buys from Hanes, Fruit-of-the-Loom and Anvil. According to the manager of the Chicago Hard Rock Cafe, Scott Floersheimer, Winterland has an agreement with Hard Rock to retain all defective Hard Rock shirts. 2 Thus, if Winterland performs as agreed, all legitimate Hard Rock shirts sold to the public are well-made and cleanly printed. 13 The Chicago Hard Rock Cafe has done very well from its business. Since 1986, it has sold over 500,000 t-shirts at an average gross profit of $10.12 per shirt.