Entrepreneur Wins Trademark Dispute

Judge finds competitor deliberately infringed the 'Entrepreneur' name and awards Entrepreneur Media approximately $670,000 in damages, permanent injunction and attorney fees

Los Angeles, June 25, 2003. Entrepreneur Media won a federal trademark case against Scott Smith doing business as EntrepreneurPR and was awarded $669,656 in damages, a permanent injunction and its attorney fees to be determined upon fee application. U.S. District Court Judge Florence-Marie Cooper in the Central District of California presided over the trial and found that Scott Smith, owner of EntrepreneurPR, intentionally infringed Entrepreneur Media's "Entrepreneur" trademark and committed unfair competition under federal and California laws.

"We are extremely pleased with this ruling," said Peter Shea, CEO of Entrepreneur Media. "We are committed to meeting the needs of small business owners and providing outstanding service to them. Scott Smith sought to trade on our reputation and goodwill built over more than 25 years. Many customers wrongly believed that Smith was associated with our company. Now we can ensure there is no confusion over our company and Smith's and can continue to provide the service our customers have to come to expect from us. This is a complete victory for our customers."

Mark Finkelstein, a partner in the Orange County office of Latham & Watkins LLP, has represented Entrepreneur Media throughout this litigation, including the trial. "This decision will send a message that there are serious repercussions for intentionally infringing someone else's trademark," said Finkelstein. "Justice has finally been served."

Background of the Case
The ruling is the culmination of more than five years of litigation. Entrepreneur Media has used its "Entrepreneur" trademark on its flagship magazine, Entrepreneur, since 1978 and also uses the trademark on its Web site, entrepreneur.com. In addition to the well-established use of the trademark, Entrepreneur Media has registered its mark, as well as several related marks, with the U.S. Patent and Trademark Office.

In 1995, Smith started ICON Publications, which focused on providing public relations services to small businesses, and in 1997, he started a magazine called Yearbook of Small Business Icons. As part of Entrepreneur Media's effort to promote small business, it listed ICON Publications on the small business links portion of its Web site in 1996. Soon after, Smith changed the name of his company to EntrepreneurPR, the name of his magazine to Entrepreneur Illustrated and his domain name to entrpreneurpr.com.

In 1998, Entrepreneur Media filed this lawsuit in federal court against Scott Smith doing business as EntreprenuerPR, seeking to protect its trademark from illegal use. In 2000, a federal court granted Entrepreneur Media summary judgment, awarding a broad injunction prohibiting Smith from continued use of the "Entrepreneur" mark and $337,280 in damages. Smith appealed and the 9th Circuit Court of Appeals upheld part of the trial court's injunction against Smith and sent the case back to district court for a trial on questions of fact. In the trial, Judge Cooper found that there was "substantial evidence of actual confusion", and that a significant number of Smith's clients, whom the Judge found to be "very credible," had been misled by Smith into believing that there was an affiliation between Entrepreneur Media and EntrepreneurPR. Judge Cooper concluded that these third-party witnesses "were almost uniform in their position that they never would have paid any money to defendant [Smith] had they known he was not connected with plaintiff [Entrepreneur Media]."

In her opinion, Judge Cooper noted that Entrepreneur magazine has a paid circulation in the United States of approximately 550,000 and a total audience of approximately 2 million readers, and that its Web site at entrepreneur.com has approximately 2 to 3 million visitor sessions each month. From this and other evidence presented at trial, the judge concluded that the "Entrepreneur" name is "well-known" and "is a strong, distinctive mark, deserving of significant protection."

In awarding the permanent injunction, substantial money damages and attorney fees to Entrepreneur Media, Judge Cooper specifically found that Mr. Smith had engaged in "deliberate" infringement.

About Entrepreneur Media
Founded in 1973, Entrepreneur Media has over the years become the leading authority in providing information, products and services about and of interest to small businesses and their owners. In addition to its flagship magazine Entrepreneur, Entrepreneur Media publishes such other magazines as Entrepreneur's Be Your Own Boss and foreign-language magazines in China, Mexico, Japan and the Philippines, as well as numerous book titles under the Entrepreneur Press imprint and as part of its series known as Entrepreneur's Start-Up Guides. In addition to its Web site at entrepreneur.com, Entrepreneur Media also operates Web sites at SmallBizBooks.com, Freebks.com, and a Spanish-language site at Soyentrepreneur.com. Entrepreneur Media has also produced conferences, seminars and trade shows throughout the United States and, to help small business owners start and grow their businesses, currently produces market research reports and offers an online learning center known as Entrepreneur Magazine's University.

Ronald Young, Entrepreneur Media, 949-622-5279 Mark Finkelstein, Latham & Watkins, 714-540-1235

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