Damages Slashed in mySimon Case

CNET Networks Inc. said today that a federal district court
judge in Indianapolis has reduced a jury verdict against its mySimon
e-shopping comparison subsidiary from $26.8 million to $50,010.

The
original damages award
was made last August by a federal court jury that
found that mySimon had infringed the trademark of Simon Property Group
, a real estate investment trust based in Indianapolis.

mySimon appealed, asking that the trial court grant the company relief from
the jury’s verdict.

Simon Property filed the infringement suit in August 1999 in the Southern
District of Indiana. In October 1999, Simon Property moved for a temporary
restraining order prohibiting MySimon from operating using the ‘Simon’ mark.
However, that motion was denied. Since then,
mySimon has become a
subsidiary of CNET, which competes with the parent of this Web site,
internet.com.

The URL simon.com takes one to a “shopsimon” site maintained
by SPG that offers a real-world mall directory and links to various online
shopping options, including a whole list of department stores. Interestingly,
we got a pop-up ad for mySimon when we typed in the URL for shopsimon.

SPG on its site says
it is “engaged primarily in the ownership, development, management, leasing,
acquisition and expansion of income-producing, market-dominant retail
properties, primarily regional malls, community shopping centers and
specialty retail centers.”

CNET said in a press release that the jury’s original award of $26.8 million
in damages contained three components:

First, the court eliminated the award of $11.5 million of mySimon’s profits.

Secondly, the court found that the jury’s award of $5.3 million to SPG for
“corrective advertising” was unsupported by the evidence. The court offered
SPG a reduced award $10 dollars in exchange for immediate entry of the
judgment. If SPG does not accept the award, the court will grant mySimon’s
request for a new trial on the matter.

Lastly, the court reduced the punitive damages award rendered by the
jury from $10 million to $50,000, subject to SPG’s acceptance of the reduced
corrective advertising award. If SPG does not accept that solution, then the
amount of any punitive damages will not be known until a new trial is
conducted. The court denied SPG’s request that mySimon be required to pay
SPG’s legal fees.

The court also ruled that if the jury’s verdict on trademark infringement is
upheld on appeal, mySimon will be required to change its name and Web
address, but ruled that no changes are required until after all appeals are
exhausted.

“We are pleased that the judge recognized that the damages award was
excessive and that he has elected to allow us to continue with our business
as usual pending appeal,” said Josh Goldman, president of mySimon.

“While we are very appreciative of this ruling, we still believe that the fundamental
determination by the jury that we infringed SPG’s trademark is not supported
by the law or the facts, and accordingly plan to appeal that aspect of the
decision as well as the requirement that we change our name.”

SPG issued a statement of its own, noting that the ruling imposed a permanent injunction “ordering
mySimon to cease the use of its name, its ‘Simon’ character and its
mySimon.com Web site.”

“We intend to vigorously pursue an appeal of those portions of the judgment
relating to damages,” SPG said.

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