IP Law Daily, TRADEMARK—D. Neb.: Producer of ‘LaGrange’ branded welding rods prevails against three of four defendants, (Apr 20, 2017)

By Mark Engstrom, J.D.

JDR Industries, a producer of LaGrange-branded welding rods, was entitled to summary judgment against a former employee and two companies that infringed its "LaGrange" mark by unlawfully selling "LaGrange" welding rods, the federal district court in Lincoln, Nebraska, has ruled. Trademark claims against a fourth defendant could not be decided on summary judgment because an issue of material fact was present on the asserted defenses of laches and the statute of limitations (JDR Industries, Inc. v. Vance, April 18, 2017, Gerrard, J.).

JDR brought claims for federal and state trademark infringement, plus other claims, against four defendants: Michael McDowell and his company (LaGrange Supply) and James Vance and his company (J.L. Vance). The court noted that both of the entity defendants—LaGrange Supply and J.L. Vance (JLV)—were in default, and that an individual defendant (former employee James Vance) had not responded to JDR’s motion for summary judgment.

Vance and JLV. In a prior order, the court had ruled that JDR owned a valid and protectable trademark in the brand name "LaGrange." In addition, no party had contested the fact the defendants sold welding rods under the LaGrange name in commerce. JDR was thus entitled to summary judgment on those two elements of its trademark claims. Still, the court had to decide whether the use of "LaGrange" by Vance and his company created a likelihood of consumer confusion. The court found that it did.

According to the court, Vance and JLV used an identical mark in the sale of identical goods, and the record included evidence of actual consumer confusion that arose from the defendants’ conduct. Significantly, several JDR customers had submitted affidavits indicating that Vance had contacted them regarding the sale of a LaGrange welding rod. Based on Vance’s representations and his use of the LaGrange name, the customers believed that they were speaking with a JDR representative. Based on that testimony, and given the identical nature of the parties’ marks and products, JDR was entitled to summary judgment on its trademark claims against Vance and his company.

McDowell and LG Supply. JDR sought the cancellation of McDowell’s trade name ("LaGrange Supply Co.") under Nebraska’s Trademark Registration Act (NTRA). As with Vance and JLV, McDowell and LG Supply used an identical mark to sell an identical product. Although JDR presented less evidence of actual customer confusion with respect to McDowell and LG Supply, the record evidence of actual confusion was undisputed.

Based on that evidence and the remaining confusion factors, the court decided that summary judgment was warranted on the likelihood of confusion element of JDR’s trademark claims against McDowell and LG Supply. McDowell argued, however, that the federal claims were barred by the equitable doctrine of laches and the state law claims were barred by the applicable 4-year statute of limitations.

According to McDowell, JDR had slept on its federal rights and neglected to take action against McDowell, even though it knew about McDowell’s business operations. In asserting that argument, McDowell referenced his continuous online web presence between 2006 and 2015, his registration of the trade name "LaGrange Supply Co." with Nebraska’s Secretary of State, and his general marketing of LaGrange welding rods in Nebraska and throughout the Midwest. In addition, he proffered testimony from Vance and another former JDR employee (Joseph Longo), and that evidence suggested that JDR’s president was aware that other individuals were selling LaGrange-branded welding rods.

JDR argued that Vance’s affidavit should be "entirely disregarded" based on inconsistencies in the record, and it further argued that Longo’s testimony was "extremely suspect." JDR’s arguments dealt largely with witness credibility, the court explained, an issue that the court refused to weigh on summary judgment. The court concluded that issues of material fact remained as to when JDR knew about McDowell’s conduct and how long, if at all, it had acquiesced in it.

Ultimately, McDowell had used the LaGrange mark to sell welding rods for more than 20 years, and the evidence indicated that McDowell had registered the tradename "LaGrange Supply Co." in 1997 and renewed it in 2007. Finally, there was "at least some" testimony that indicated that JDR’s president either knew or should have known that McDowell had been operating his business since the early- to mid-2000s. For those reasons, the court denied JDR’s motion for summary judgment of infringement with respect to McDowell.

Moreover, because McDowell had proffered evidence to show that JDR knew about and acquiesced in his business conduct since the early- to mid-2000s, and because McDowell had also proffered his 1997 registration of the trade name "LaGrange Supply Co.," which he had renewed with Nebraska’s Secretary of State in 2007, the court could not conclude that McDowell failed to produce any evidence regarding an essential element of his NTRA defense. The court thus ruled that McDowell could pursue his statute of limitations defense with respect to the NTRA claim.

Permanent injunction. The court declined to grant JDR’s request for a permanent injunction at the summary judgment stage of the proceedings. Because JDR still had claims against each of the four named defendants, the viability and parameters of its request for injunctive relief would be determined on final judgment.

The case is No. 8:14-CV-284.

Attorneys: Dana C. Bradford III (Houghton Bradford Whitted PC, LLO) for JDR Industries, Inc., d/b/a Farmer's Choice.

Companies: JDR Industries, Inc., d/b/a Farmer's Choice

Cases: Trademark NebraskaNews