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Fabick, Inc. v. JFTCO, Inc.

United States District Court, W.D. Wisconsin

March 22, 2019

FABICK, INC., Plaintiff,
v.
JFTCO, INC., Defendant.

          OPINION AND ORDER

          WILLIAM M. CONLEY, DISTRICT JUDGE

         In this trademark infringement lawsuit, the jury found in favor of plaintiff Fabick, Inc., on its Lanham Act trademark infringement claim, found against it on a common law infringement claim, and rejected defendant JFTCO, Inc.'s affirmative defenses. (Dkt. #365.)[1] During the trial, the court further barred plaintiff from pursuing monetary damages, limiting it to equitable relief. (12/13/17 Op. & Order (dkt. #352).) With that brief overview, this opinion and order addresses the following, post-trial motions: (1) defendant's request for judgment in its favor, positing various grounds for relief; and (2) plaintiff's motions for injunctive relief, corrective advertising, attorney's fees and costs (dkt. ##376-77).

         For the reasons that follow, the court will: (1) deny defendant's motion for judgment as a matter of law or for a new trial and enter judgment in its favor on the common law infringement claim consistent with the jury's verdict; (2) order defendant to provide notice and disclaimers, rather than enjoin defendant's use of the FABICK trademark; (3) deny plaintiff's motion for attorney's fees under Federal Rule of Civil Procedure 37(c)(2); and (4) award plaintiff costs.

         OPINION

         I. Defendant's Motion for Judgment against Plaintiff

         A. Jury verdict as advisory opinion

         As an initial matter, defendant argues that the court is not bound by the jury verdict, because “[w]hen the court eliminated all claims for monetary relief the day before sending this case to the jury, the only remedy was equitable-rendering the jury's verdict advisory.” (Def.'s Br. (dkt. #379) 8.) As such, defendant contends that the court is required to make its own findings of facts and conclusions of law as required under Federal Rule of Civil Procedure 52(a)(1). While the court agrees that the elimination of a damages claim also eliminated the parties' right to a jury trial, see, e.g., Kramer v. Banc of Am. Sec., LLC, 355 F.3d 961, 966 (7th Cir. 2004), the court rejects defendant's argument that this renders the jury verdict advisory.

         In support of its argument, defendant cites to a single Sixth Circuit case from 1974. See Hyde Props. v. McCoy, 507 F.2d 301, 306 (6th Cir. 1974). While the case has been cited a handful of times in the Sixth Circuit for this proposition, the holding has not been embraced more broadly, and, critically, the court could find no support in the Seventh Circuit for such an approach. Indeed, as plaintiff points out in its opposition brief, more recent Sixth Circuit cases have even rejected this approach. See, e.g., Thompson v. Parkes, 963 F.2d 885, 888 (6th Cir. 1992).[2]

         Even if the holding in Hyde Properties had merit under the specific facts of that case, the facts are different here. In its decision, the Sixth Circuit cited to Federal Rule of Civil Procedure 39(c) as the sole support for its holding. That rule provides in pertinent part:

(c) Advisory Jury; Jury Trial by Consent.
In an action not triable of right by a jury, the court, on motion or on its own:
(1) may try any issue with an advisory jury; or
(2) may, with the parties' consent, try any issue by a jury whose verdict has the same effect as if a jury trial had been a matter of right, unless the action is against the United States and a federal statute provides for a nonjury trial.

         In Hyde Properties, the defendant moved to strike the jury trial demand before the case proceeded to a jury trial. 507 F.2d at 304.

         Here, in contrast, both defendants did not just consent to but demanded a jury trial in their respective answers (dkt. ##23, 24), and the remaining defendant JFTCO implicitly consented to the case proceeding to a jury even after the court barred plaintiff from pursuing monetary damages. Nevertheless, suddenly, just hours after the jury returned a liability verdict against it, defendant for the first time raised its objection to the issues tried to a jury being binding. (Dkt. #357.) Too late. Defendant JFTCO consented to being bound by a jury verdict both explicitly and implicitly under Fed.R.Civ.P. 39(c)(2). JFTCO cannot now withdraw its consent because it is unhappy with the outcome. Cf. Kramer, 355 F.3d at 967 (noting that defendant can consent to jury trial even where no right exists, but affirming district court's striking of jury trial where defendant, who had originally consented to a jury trial, moved to strike the demand before trial). Accordingly, the court rejects defendant's argument that the court should treat the jury's verdict as advisory.[3]

         B. Challenges to the jury verdict itself

         Setting that initial issue aside, defendant raises three essential challenges to the jury's verdict under Federal Rules of Civil Procedure 50 and 59(a). Rule 50 permits the court to grant judgment to a non-prevailing party as a matter of law where there is no “legally sufficient evidentiary basis” to uphold the jury's verdict on that issue. In reviewing a Rule 50 motion, the court will “examine the evidence presented, combined with any reasonably drawn inferences, and determine whether the combination sufficiently supports the verdict when viewed in the light most favorable to the non-moving party.” E.E.O.C. v. AutoZone, Inc., 707 F.3d 824, 835 (7th Cir. 2013). The court does not make credibility determinations or weigh the evidence, though it must assure that more than “a mere scintilla of evidence” supports the verdict. Hossack v. Floor Covering Assocs. of Joliet, Inc., 492 F.3d 853, 859 (7th Cir. 2007). The court may “reverse the verdict only if no rational jury could have found for the prevailing party.” AutoZone, Inc., 707 F.3d at 835.

         Under Rule 59(a), a court may grant a new trial “if the verdict is against the clear weight of the evidence or the trial was unfair to the moving party.” Whitehead v. Bond, 680 F.3d 919, 927 (7th Cir. 2012). “A new trial should be granted only when the record shows that the jury's verdict resulted in a miscarriage of justice or where the verdict, on the record, cries out to be overturned or shocks [the] conscience.” Davis v. Wis. Dep't of Corr., 445 F.3d 971, 979 (7th Cir. 2006) (internal quotation marks omitted). “Although the court examines the evidence to determine whether the jury's verdict was based on that evidence, the court does not make credibility determinations or weigh the evidence.” Whitehead, 680 F.3d at 925.

         i. continuous prior use defense

         The bulk of defendant's motion concerns the jury's rejection of its continuous prior use defense. The jury was instructed to find in defendant's favor on this defense provided it proved by a preponderance of the evidence the following five elements:

1. the consuming public views the John Fabick Tractor Company and JFTCO as one entity;
2. JFTCO's parent corporation, the John Fabick Tractor Company, used the FABICK mark in Wisconsin and the Upper Peninsula of Michigan in a way sufficiently public to identify or distinguish the marked goods in an appropriate segment of the public mind as that of the John Fabick Tractor Company;
3. that use occurred before March 25, 1994, when plaintiff applied for registration of the FABICK mark, and continued, either by the John Fabick Tractor Company or, more recently, by defendant itself, up until trial;
4. the John Fabick Tractor Company began using the FABICK mark without knowledge of plaintiff's use; and
5. the John Fabick Tractor Company's prior use of the FABICK mark and JFTCO's current use of the FABICK mark create the same, continuing commercial impression so that consumers consider both as the same mark.

(Closing Liability Instr. (dkt. #363) 6-7.) The court further instructed the jury that in deciding whether these elements were met, it may consider sales volumes and the amount of advertising, although consistent with the Seventh Circuit's then-recent decision in S.C. Johnson & Son, Inc. v. Nutraceutical Corporation, 835 F.3d 660 (7th Cir. 2016), “[d]efendant, however, need not show either high volume of sales or wide recognition.” (Id. at 7.)

         In its brief in support of the 50(b) motion, defendant sets forth in great detail evidence of its prior use in the Wisconsin and the UP, including the use of the Fabick mark before 1994: (1) in sales associated with the John Fabick Tractor Company's pipeline business, and sales and rental of used equipment; (2) in customer communications (e.g., sale proposals); (3) on the sold equipment typically in the form of the capital “F” Fabick decal; and (4) in advertising. (Def.'s Br. (dkt. #379) 27-42.)

         While certainly persuasive, plaintiff effectively poked holes in this evidence at trial, limiting both its weight and relevance. Specifically, as set forth in its response to defendant's post-verdict motion, plaintiff introduced testimony of Mike Jansen, an employee of defendant, and argument calling into question defendant's proof of sales by the John Fabick Tractor Company in both Wisconsin and the UP before 2002. Plaintiff also pointed out that defendant was unable to show any verifiable sales before 2002 in the UP and that the sales data showing billing addresses in Wisconsin did not indicate whether the equipment was actually sold in or delivered to that state. (Trial Tr. (dkt. #370) 44-46.) Plaintiff further pointed out that the sales figures were not necessarily evidence of the Fabick name itself being identified with the John Fabick Tractor Company in the public consuming mind, given that despite the dollar volume of those sales, the high price of the individual heavy equipment actually sold could have translated into just a few sales in number, especially when compared to FABCO sales during this same period of time. (Trial Tr. (dkt. #372) 116, 119.) As for use of the Fabick name in the pipeline market, plaintiff presented evidence and argument that this was a specialty, niche market, which ceased using the Fabick name altogether in 2005, and for which the public mind similarly failed to form an identity between the use of the Fabick mark and the John Fabick Tractor ...


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