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Waiver in PTO Trademark Appeals Applies “Per Decision, Not Per Case”

Addressing a “narrow question of statutory interpretation,” the US Court of Appeals for the Fourth Circuit reversed the district court’s dismissal of a trademark case for lack of subject matter jurisdiction, holding that a party that appeals a Trademark Trial & Appeal Board (TTAB) decision to the US Court of Appeals for the Federal Circuit may, after remand to and issuance of a new decision by the TTAB, seek review of the new decision in federal district court. Snyder’s-Lance, Inc. v. Frito-Lay N.A., Inc., Case No. 19-2316 (4th Cir. Mar. 17, 2021) (Wynn, J.)

Princeton Vanguard, a snack food producer, applied to register its mark “Pretzel Crisps” on the principal register. Frito-Lay opposed. The TTAB denied Princeton Vanguard’s application, concluding that the mark was generic.

Under the Lanham Act, Princeton Vanguard could appeal the TTAB’s original decision to either the Federal Circuit under 15 USC § 1071(a) or federal district court under § 1071(b). Princeton Vanguard elected a direct appeal to the Federal Circuit pursuant to § 1071(a), thus waiving its right to district court review. The Federal Circuit concluded that the TTAB applied the wrong legal standard in evaluating whether Princeton Vanguard’s mark was generic and remanded the case to the TTAB. The TTAB again concluded that Princeton Vanguard’s mark was generic. This time, Princeton Vanguard appealed to a federal district court pursuant to § 1071(b).

The district court sua sponte dismissed the case for lack of subject matter jurisdiction, concluding that Princeton Vanguard’s appeal of the original decision to the Federal Circuit pursuant to § 1071(a) precluded Princeton Vanguard from appealing the second decision to a district court pursuant to § 1071(b). Princeton Vanguard appealed.

On appeal, the Fourth Circuit concluded that the statutory text of the Lanham Act supported Princeton Vanguard’s argument in favor of jurisdiction. The Court explained that Princeton Vanguard’s waiver of its right to district court review of the original TTAB decision pursuant to § 1071(a) did not apply to any subsequent decisions in the same case, and that the waiver applied “per decision, but not per case.”

The Court rejected Frito-Lay’s argument that Princeton Vanguard was taking a second bite at the apple by seeking re-review in federal district court of issues already decided by the Federal Circuit, reasoning that Princeton Vanguard was seeking district court review of the second, separate decision that had not been reviewed by the Federal Circuit. The Court stressed, however, that the Federal Circuit’s review of the TTAB’s original decision was binding as to issues it decided.

Practice Note: If the TTAB issues multiple decisions in the same proceeding, each decision is considered a separate decision for purposes of waiver under §§ 1071(a) (b), even if the decisions implicate similar issues.




A Primer on Practice at the Trademark Trial & Appeal Board

In a precedential decision rendered in an opposition proceeding, the Trademark Trial & Appeal Board (Board) took the lawyers for each side to task for ignoring Board rules in presentation of their case, but ultimately decided the case on a likelihood of confusion analysis. The Board found that the parties’ marks and goods were “highly similar” and sustained the opposition. Made in Nature, LLC v. Pharmavite LLC, Opposition Nos. 91223352; 91223683; 91227387 (June 15, 2022, TTAB) (Wellington, Heasley and Hudis, ALJs) (precedential).

Pharmavite sought registration of the standard character mark NATURE MADE for various foods and beverages based on allegations of bone fide intent to use in commerce. Made in Nature (MIN) opposed on the ground that Pharmavite’s mark so resembled MIN’s registered and common law “Made In Nature” marks as to cause a likelihood of confusion when used on the goods for which registration was sought.

In its brief to the Board, Pharmavite raised, for the first time, the Morehouse (or prior registration) defense. MIN objected to the Morehouse defense as untimely. The Board agreed, noting that defense is “an equitable defense, to the effect that if the opposer cannot be further injured because there already exists an injurious registration, the opposer cannot object to an additional registration that does not add to the injury.” The party asserting a Morehouse defense must show that it “has an existing registration [or registrations] of the same mark[s] for the same goods” (emphasis in original).

Here, the Board found that this defense was not tried by the parties’ express consent and that implied consent “can be found only where the non-offering party (1) raised no objection to the introduction of evidence on the issue, and (2) was fairly apprised that the evidence was being offered in support of the issue.” In this case, Pharmavite did introduce into the record its prior NATURE MADE registrations but only for the purpose of supporting Pharmavite’s “[r]ight to exclude; use and strength of Applicant’s mark.” The Board found that this inclusion did not provide notice of reliance on the Morehouse or prior registration defense at trial.

In sustaining the opposition, the Board commented extensively on the record and how it was used, “[s]o that the parties, their counsel and perhaps other parties in future proceedings can benefit and possibly reduce their litigation costs.”

Over-Designation of the Record as Confidential

The Board criticized the parties for over-designating as confidential large portions of the record, warning that only the specific “exhibits, declaration passages or deposition transcript pages that truly disclosed confidential information should have been filed under seal under a protective order.” If a party over-designates material as confidential, “the Board will not be bound by the party’s designation.”

Duplicative Evidence

The Board criticized the parties for filing “duplicative evidence by different methods of introduction; for example, once by Notice of Reliance and again by way of an exhibit to a testimony declaration or testimony deposition.” The Board noted that such practice is viewed “with disfavor.”

Overuse of [...]

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Alleged Trademark Infringer Remains Hog-Tied after Appeal

The US Court of Appeals for the Tenth Circuit dismissed an appeal of a district court order denying a stay of a federal action for lack of jurisdiction under 28 U.S.C. § 1291 and reversed in part the district court’s grant of a preliminary injunction. The Trial Lawyers College v. Gerry Spence Trial Lawyers College at Thunderhead Ranch, Case No. 20-8038 (10th Cir. Jan. 27, 2022) (Bacharach, Briscoe, Murphy, JJ.).

The dispute between the parties arose out of a program called The Trial Lawyers College at Thunderhead Ranch in Wyoming. The College’s board of directors split into two factions known as the “Spence Group” and the “Sloan Group.” After the split, the two groups sued each other. The Spence Group sued in state court for dissolution of the College and a declaratory judgment regarding control of the board of directors. The Sloan Group sued in federal court claiming trademark infringement under the Lanham Act.

Both groups sought relief in the federal case. The Spence Group filed a motion to stay the federal court proceedings in light of the state court proceedings, and the Sloan Group requested a preliminary injunction. The district court denied the Spence Group’s stay and granted the Sloan Group’s request for a preliminary injunction. The Spence Group appealed both rulings.

The Tenth Circuit found that it lacked jurisdiction to review the district court’s stay denial. First, the state court resolved the dispute concerning board control, rendering part of the requested stay moot. Second, the Court determined that it lacked jurisdiction over the remaining motion for stay because it was not a final order. The Court explained that it needed to decide the appealability of the ruling based on the category of order rather than the particular facts of the case. The Court found that there was no unsettled issue of unique urgency or importance that warranted the Court exercising jurisdiction over the denial of the stay. Specifically, the Court explained that piecemeal litigation was unlikely because the state court already decided the issue of board control, and the Spence Group did not identify an unsettled issue of unique urgency.

The Tenth Circuit did exercise jurisdiction over the district court’s grant of a preliminary injunction. The Spence Group challenged the district court’s finding of irreparable harm, the order to remove sculptures bearing the College’s name, restrictions on what the Spence Group could say and the consideration of evidence presented after the hearing ended. The Court reviewed the district court’s findings under an abuse-of-discretion standard. The Court found that the district court did not abuse its discretion by finding irreparable harm, considering evidence after the hearing and enjoining the Spence Group from using words associated with the College. The Court explained that the district court reasonably found irreparable harm based on the College’s efforts to protect its name, logo and trademarks, as well as evidence of likely confusion among customers of the College based on the Spence Group’s use of those trademarks. As for the sculptures, the Court found [...]

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Texas Hammer Nails Trademark Infringement Appeal

The US Court of Appeals for the Fifth Circuit reversed a district court’s dismissal of an initial confusion trademark complaint, finding that the plaintiff alleged a plausible claim of trademark infringement under the Lanham Act. Adler v. McNeil Consultants, LLC, Case No. 20-10936 (6th Cir. Aug. 10, 2021) (Southwick, J.)

Jim Adler is a personal injury lawyer who trademarked and used several terms, including JIM ADLER, THE HAMMER and TEXAS HAMMER, to market his business, including via keyword advertisements. McNeil Consultants, a personal injury lawyer referral service, purchased keyword ads using Adler’s trademarked terms, which allowed McNeil’s advertisements to appear at the top of any Google search of Adler’s trademarked terms. McNeil’s advertisements used generic personal injury terms, did not identify any particular law firm and clicking on the ads placed a phone call to McNeil’s call center rather than directing the user to a website. The call center used a generic greeting so consumers did not realize with whom they were speaking.

Adler filed suit against McNeil, asserting Texas state law claims as well as trademark infringement under the Lanham Act. McNeil moved to dismiss, arguing that its keyword ads did not create a likelihood of confusion. The district court agreed and dismissed Adler’s complaint. Adler appealed.

To successfully plead a trademark infringement claim under Fifth Circuit law, the holder of a protectable trademark must establish that the alleged infringing use “creates a likelihood of confusion as to source, affiliation, or sponsorship.” To determine whether a likelihood of confusion exists, the Court weighs a non-exhaustive list of several confusion factors, including the similarity of the marks, the similarity of the products, the defendant’s intent and the care exercised by potential consumers.

The Fifth Circuit explained that Adler alleged initial interest confusion, which exists where the confusion creates consumer interest in the infringing party’s services even where no sale is completed because of the confusion. The Court noted that this case presented the first opportunity for the Fifth Circuit to consider initial interest confusion as it pertains to search engine keyword advertising. Relying on Ninth Circuit precedent and parallel reasoning to its own opinions on initial interest confusion in the context of metatag usage, the Court concluded that Adler’s complaint alleged a plausible claim of trademark infringement under the Lanham Act.

The Fifth Circuit noted that initial interest confusion alone is not enough to raise a Lanham Act claim. The Court explained that if a consumer searches TOYOTA and is directed to search results containing a purchased ad clearly labeled as selling VOLKSWAGEN products, a consumer who clicks on the VOLKSWAGEN ad has been distracted, not confused or misled into purchasing the wrong product. Distraction does not violate the Lanham Act. However, the Court explained that where the use of keyword ads creates confusion as to the source of the advertisement—not mere distraction—an infringement may have occurred. Because McNeil’s advertisements were admittedly generic and could have been associated with any personal injury law firm, the Court found that the keyword [...]

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It Can Take Three Appeals to Make a Claim Construction Go “Right”—or Three Bites by Apple

In a nonprecedential opinion on remand from the US Court of Appeals for the Federal Circuit and a US Patent & Trademark Office (PTO) Director-granted request for review, the Patent Trial & Appeal Board (Board) reconstrued claim terms it had previously construed in consideration of the patent specification, prosecution history and Federal Circuit construction of similar terms in a related case. Apple Inc. v. Personalized Media Communications, LLC, IPR2016-00754, IPR2016-01520 (P.T.A.B. Sept. 8, 2022) (Turner, APJ.)

In March 2016, Apple filed a petition to institute an inter partes review (IPR) against a patent (’635 patent) owned by Personalized Media Communications, LLC (PMC). After PMC filed its Patent Owner Preliminary Response (POPR), the Board instituted the IPR on some, but not all, of Apple’s requested grounds. Per Board procedure, PMC filed its Patent Owner Response (POR) and a contingent motion to amend its patent’s claims. In response, Apple filed a reply and an opposition to the contingent motion, and PMC filed a reply to Apple’s opposition. After oral argument the Board issued a Final Written Decision (754-FWD) finding all challenged claims unpatentable and denying the contingent motion to amend. PMC first sought rehearing of the Board’s decision and, after rehearing was denied, appealed the Board’s decision to the Federal Circuit.

Similarly, in July 2016, Apple filed another petition against the same PMC patent. After considering PMC’s POPR, the Board instituted an IPR on some of Apple’s requested grounds. PMC again filed a POR and a contingent motion to amend, to which Apple filed a reply and opposition (to which PMC filed its reply and Apple a sur-reply). Again, the Board held an oral hearing and issued a Final Written Decision (FWD) finding all challenged claims unpatentable and denying the contingent motion to amend. PMC again sought rehearing of the Board’s decision and, after rehearing was denied, appealed the Board’s decision to the Federal Circuit.

On appeal of each proceeding, PMC moved, and the Federal Circuit granted remand in light of and consistent with the 2021 Supreme Court decision in U.S. v. Arthrex, Inc., where a five-justice majority found that the appointment of Board administrative patent judges was unconstitutional and a seven-justice majority concluded that the remedy was to vest the PTO Director with authority to overrule Board decisions.

On remand to the PTO, PMC filed a request for director review, which the Commissioner for Patents (performing the functions and duties of the PTO Director) granted. The Commissioner’s Granting Order agreed with PMC’s argument that the Board, in these two cases, had construed the claim terms “encrypted” and “decrypted” in a manner that could include “scrambling and descrambling operations on digital information, but could also include … on analog information” and was inconsistent with the Federal Circuit’s partial reversal of the Board’s construction in yet another IPR proceeding (755-IPR regarding another related PMC patent) between Apple and PMC. As to the related patent IPR, the Federal Circuit ultimately construed “encrypted digital information transmission including encrypted information” as “… limited [...]

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Oh, Fudge. TTAB Finds Curse Word Fails to Function as Trademark

The US Patent & Trademark Office (PTO) denied registration of several US trademark applications for the mark FUCK, even though the applicant had overcome a prohibition on the registration of “immoral or scandalous” trademarks as a violation of the First Amendment in the Supreme Court’s 2019 decision in Iancu v. Brunetti. The applicant also had previously secured registration of the mark FUCT. The PTO nevertheless denied registration on grounds that the familiar curse word did not function as a trademark. In re: Brunetti, Ser. Nos. 88308426; 88308434; 88308451; 88310900 (TTAB Aug. 22, 2022) (Bergsman, Dunn, Lebow, Administrative Trademark Judges).

The Trademark Trial & Appeal Board (Board) issued a precedential decision affirming the PTO’s refusal to register the FUCK mark for a variety of goods and related services, including cellphone cases, sunglasses, jewelry, watches, bags and wallets. The Board found that the word FUCK expresses well-recognized sentiments and that consumers are accustomed to seeing the word in widespread use by many different sources. As a result, the word failed to create the commercial impression of a source indicator and therefore failed to function as a trademark to distinguish the goods from others.

BACKGROUND

Artist and entrepreneur Erik Brunetti applied to register the mark FUCK in relation to a wide variety of wearable goods, electronics accessories and related retail, marketing and business services in 2019 while his appeal to the Supreme Court regarding the FUCT mark was still pending. When the Supreme Court issued its decision, the FUCK applications were removed from suspension and could no longer be refused on grounds that the mark comprised “immoral or scandalous” material. The PTO examining attorney re-examined the applications and refused registration on the so-called “failure to function” ground, finding that the mark was a term that did not function as a trademark to indicate the source of the applicant’s goods or services and to identify and distinguish them from others. Brunetti appealed to the Board.

In response to Brunetti’s argument that there was no statutory basis for a failure to function refusal, the Board made clear that the PTO is statutorily constrained to register a mark on the Principal Register “if and only if it functions as a mark.” Matter that does not operate to indicate the source or origin of the identified goods or services and distinguish them from those of others does not meet the statutory definition of a trademark and may not be registered. The Board reminded applicants that not every designation adopted with the intention that it perform a trademark function necessarily accomplishes that purpose.

Matter may be merely informational and fail to function as a trademark if it is a common term or phrase that consumers are accustomed to seeing used by various sources to convey ordinary, familiar or generally understood concepts or sentiments. The critical inquiry in determining whether a proposed mark functions as a trademark is how the relevant public perceives it.

The Board described the Examining Attorney’s evidence supporting the failure to function [...]

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Rebuttal Presumption of Irreparable Harm Still Alive When Assessing Trademark Preliminary Injunctions

In one of the first decisions to construe the Trademark Modernization Act of 2020 (TMA), the US Court of Appeals for the Third Circuit found that a district court properly applied the TMA’s rebuttal presumption of irreparable harm when it denied a trademark owner’s motion for a preliminary injunction. Nichino America, Inc. v. Valent U.S.A., LLC, Case No. 21-1850 (3rd Cir. Aug. 12, 2022) (Bibas, Matey, Phipps, JJ.)

Nichino and Valent sell pesticides for farming. Since 2004, Nichino has offered a trademarked product known as CENTAUR. Valent trademarked a competing product called SENSTAR in 2019, giving it a logo resembling CENTAUR’s colors, fonts and arrow artwork. Both pesticides are used in the same geographic areas against many of the same insects, and both are sold to farmers through distributors. SENSTAR is a liquid and uses a unique combination of two active chemicals. It costs $425 per gallon and ships in cases containing four one-gallon containers. CENTAUR is manufactured as a solid and sold by the pallet, with each pallet containing 622 pounds of pesticide packed into bags and cases. CENTAUR costs $24 per pound.

Nichino sued Valent for trademark infringement and sought a preliminary injunction against SENSTAR’s launch, arguing that Valent’s use of the SENSTAR mark would create confusion among consumers. The district court found that Nichino narrowly demonstrated that its infringement claim would likely succeed but explained that “there is not an abundance of evidence of likelihood of confusion” between the products. As part of its injunction analysis, the district court applied the TMA to presume Nichino would suffer irreparable harm without an injunction. However, the court noted that the presumption was rebuttable. The court credited Valent’s evidence of a sophisticated consumer class that makes careful purchases and noted the lack of any evidence of actual consumer confusion. The court also found that Nichino failed to proffer any affirmative evidence that it would suffer irreparable harm. Accordingly, the district court found that the presumption of irreparable harm was rebutted, and therefore denied the injunction request. Nichino appealed.

Nichino argued that the TMA precluded the district court from finding no irreparable harm. The Third Circuit, however, found that the district court “admirably navigated” the TMA’s rebuttable presumption by finding that Valent rebutted the presumption and Nichino did not independently show irreparable harm. The Court explained that the three-step process for applying the TMA’s rebuttable presumption requires the following:

  1. The court must assess the plaintiff’s evidence only as it relates to a likelihood of success on the merits.
  2. If the plaintiff’s evidence establishes likely trademark infringement, the TMA is triggered, and the burden of production shifts to the defendant to introduce evidence sufficient for a reasonable factfinder to conclude that the consumer confusion is unlikely to cause irreparable harm.
  3. If a defendant successfully rebuts the TMA’s presumption by making this slight evidentiary showing, the presumption has no further effect.

The Third Circuit found that the district court correctly followed this three-step analysis in finding that Valent rebutted the TMA’s [...]

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Holdover Trademark Licensee Status Can’t Do Heavy Lifting on “Exceptionality”

The US Court of Appeals for the Sixth Circuit addressed issues of enhanced remedies in a dispute regarding the sale of weightlifting equipment beyond the expiration of a licensing agreement between the involved parties. Pointing to the different standard required to prove a violation and damages, the Court ultimately reduced a trademark infringement award to about a quarter of the amount initially awarded. Max Rack, Inc. v. Core Health & Fitness, LLC, et al., Case No. 20-3598 (6th Cir. July 14, 2022) (Cole, Rogers, Murphy, JJ.)

In 2006, Max Rack exclusively licensed its patents and trademarks relating to weightlifting racks to Star Trac Strength. Core Health subsequently acquired Star Trac and its licensing agreements. The final patent covering the Max Rack equipment expired on November 21, 2015, thereby terminating the licensing agreements between Max Rack and Core Health. The agreements permitted Core Health to sell any remaining Max Rack units for six months following expiration of the license.

Following expiration of the licensing agreements, Max Rack learned that Core Health failed to update web pages, marketing materials and owner’s manuals to reflect the termination of Core Health’s affiliation with Max Rack. Core Health’s failure to scrub references to “Max Rack” extended to third-party sellers’ websites advertising Core Health’s competing “Freedom Rack” product using the Max Rack name. Core Health also sold 271 more units manufactured as Max Racks after the license expired, 238 of which were sold during the six-month grace period. Of the remaining 33 units, 24 were sold after the six-month window had closed, and nine were alleged to have had their labels changed from Max Rack to Core Health’s Freedom Rack. Core Health further failed to pay Max Rack royalties for any of the 271 sales made after the license expired.

Max Rack brought two federal claims under 15 U.S.C. §§ 1114(1)(a) and 1125(a)(1)(A), alleging trademark infringement and unfair competition. Max Rack also brought three claims under Ohio’s Deceptive Trade Practices Act, alleging that Core Health passed off the Max Rack as its own machine and caused a likelihood of confusion regarding the source of the machine and regarding Core Health’s affiliation with the Max Rack trademark. The jury awarded Max Rack $1 million in damages and $250,000 in Core Health’s profits. Ruling on post-trial motions, the district court overturned the $1 million damages award for lack of evidence of any consumer confusion but enhanced the $250,000 award to $500,000 and further awarded Max Rack attorneys’ fees. Both parties appealed.

The Sixth Circuit sidestepped the fact-laden analysis to determine whether Core Health’s actions created a likelihood of consumer confusion, reasoning that the dispute related to the “holdover licensee.” Citing its own precedent and precedent from the Third, Fifth, Seventh and Eleventh Circuits, the Court applied a much more objective standard, finding that unauthorized use of a licensed trademark by a licensee after the license has expired is by itself sufficient to establish a likelihood of confusion in the mind of the consumer.

Although the Sixth Circuit used [...]

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Counterfeit Dealer Gets Smoked in Trademark Preliminary Injunction Proceeding

The US Court of Appeals for the Ninth Circuit affirmed a preliminary injunction barring the defendant from selling counterfeit e-cigarette and vaping products bearing the plaintiff’s logo because the plaintiff’s psychoactive products were legal and could support a valid trademark. AK Futures LLC v. Boyd St. Distro, LLC, Case No. 21-56133 (9th Cir. May 19, 2022) (Kleinfeld, Fisher, Bennett, JJ.)

AK Futures manufactures e-cigarettes and vaping products, including delta-8 THC goods marketed under its “Cake” brand. Delta-8 THC is a psychoactive compound found in the Cannabis sativa plant, which encompasses both hemp and marijuana. The compound is similar in effect to delta-9 THC, the primary psychoactive agent in marijuana, but delta-8 THC is typically manufactured from hemp-derived cannabidiol (CBD). The cultivation and possession of hemp was legalized by the Farm Act in 2018.

AK Futures sued Boyd Street Distro, a Los Angeles purveyor of smoke products, for trademark and copyright infringement. Boyd Street sold virtually identical counterfeit Cake-branded e-cigarettes and vaping products containing delta-8 THC. At the time of suit, AK Futures had a registered copyright protecting its Cake logo—a stylized “C” overlaying a two-tier cake—and pending trademark applications for six marks incorporating the word “Cake” or the Cake logo for use in connection with e-cigarette products. The district court granted AK Futures’ motion for preliminary injunction. Boyd Street appealed.

On appeal, Boyd Street conceded the copyright claim, but argued that AK Futures could not own a valid trademark in connection with its e-cigarettes and vaping products because the sale of delta-8 THC was prohibited under federal law. In response, AK Futures argued that the 2018 Farm Act legalized delta-8 THC and products containing the compound.

The Ninth Circuit agreed that AK Futures’ use of the marks in commerce was lawful and could give rise to trademark priority. The Court found that the “plain and unambiguous” text of the Farm Act indicated that delta-8 THC products were lawful. The Farm Act removed “hemp” and “tetrahydrocannabinols in hemp” from Schedule I in the Controlled Substances Act, where “hemp” is defined as “the plant Cannabis sativa L. and any part of that plant, including . . . all derivatives, extracts, [and] cannabinoids . . . with a delta-9 concentration of not more than .3 percent.” The Court noted that the delta-9 THC concentration level was the only statutory metric for distinguishing marijuana from hemp, and that the terms “derivative, extract, or cannabinoid” were substantially broad. The Court thus concluded that “hemp” encompasses delta-8 THC products that contain no more than 0.3% delta-9 THC.

Boyd Street argued that the US Drug Enforcement Agency had interpreted the Farm Act as not applicable to delta-8 THC because it is “synthetically derived” and argued that US Congress never intended the Farm Act to legalize psychoactive substances. The Ninth Circuit perfunctorily dismissed these arguments based on the clear and unambiguous statutory language. Since the Cake-branded products allegedly contained less than 0.3% delta-9 THC, the Court held that AK Futures was likely to succeed in demonstrating that its [...]

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Delay in Enforcing Trademark Measured from When Infringement Became Actionable

Addressing laches and progressive encroachment, the US Court of Appeals for the Eighth Circuit reversed and remanded a district court’s grant of summary judgment based on laches because the district court failed to “conduct a meaningful analysis” as to when the trademark infringement first became actionable. A.I.G. Agency, Inc. v American International Group, Inc., Case No. 21-1948 (8th Cir. May 13, 2022) (Loken, Gruender, Grasz, JJ.)

A.I.G. Agency (Agency) is a family-owned insurance broker in Missouri and American International Group, Inc. (International) is a large insurance company. Each company has used its version of an AIG trademark for decades. Agency first adopted the mark in 1958 while International began using AIG sometime between 1968 and 1970. In 1995, International sent a demand letter to Agency notifying it of International’s trademark registration and requesting that Agency cease use of the AIG mark. Agency responded that it had the right to use AIG in Missouri and Illinois because it had been using the trademark in those states long before International obtained its registration. In 2008, International again reached out to Agency demanding that it stop using AIG as a mark. Agency again asserted that it had the right to use the mark in Missouri and Illinois. International responded that it did not object to Agency’s use of AIG in St. Charles and St. Louis Counties in Missouri, but it would contest Agency’s use beyond that limited geographic scope.

Nearly a decade later, in 2017, Agency sued International for common law trademark infringement and unfair competition. International asserted that Agency’s claims were barred by laches and counterclaimed for trademark infringement, trademark dilution and unfair competition. Both parties moved for summary judgment, and the district court granted summary judgment for International, finding that Agency’s claims were barred by the doctrine of laches. Agency appealed.

The Eighth Circuit explained the difference between the equitable affirmative defense of laches (which is meant to bar claimants from bringing unreasonably delayed claims) and the doctrine of progressive encroachment (under which the period of delay in a trademark infringement case is measured not from when a claimant first learned of the allegedly infringing mark, but from when that infringement first became actionable). The Court explained that “[t]he doctrine [of progressive encroachment] saves trademark holders from being hoisted upon the horns of an inequitable dilemma—sue immediately and lose because the alleged infringer is insufficiently competitive to create a likelihood of confusion, or wait and be dismissed for unreasonable delay.” Here, Agency argued that it did not have an actionable and provable claim for infringement until 2012 when International changed its marketing strategy.

The Eighth Circuit found that the district court failed to “conduct a meaningful analysis” to determine when the infringement became actionable, noting that the district court found that laches barred the claims because “both parties have been using ‘AIG’ in the same markets for decades, each with full knowledge of the other’s activities.” The Court further criticized the district court for not employing a specific test to determine [...]

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