IP Law Daily Factual issues preclude summary judgment on Deere’s trademark dilution claim
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Thursday, March 9, 2017

Factual issues preclude summary judgment on Deere’s trademark dilution claim

The federal district court in Paducah, Kentucky, has denied Deere & Company’s motion for summary judgment on its claim that FIMCO, Inc.’s use of Deere’s green and yellow color scheme on agricultural equipment dilutes Deere’s registered and common law trademarks. The court did grant Deere summary judgment as to several of FIMCO’s affirmative defenses, and denied FIMCO’s motion that Deere has no trademark rights in "yellow tanks" (Deere & Company v. FIMCO Inc., March 8, 2017, Russell, T.).

Deere sells tractors and towed-and-trailed agricultural equipment in what it calls "[i]ts distinctive green and yellow ‘Deere Colors,’" for which it has three trademarks registered with the USPTO. FIMCO’s main source of business is the manufacture and sale of lawn and garden sprayers, but it also produces and sells agricultural equipment, which is a much smaller part of its business. The agricultural equipment FIMCO manufactures includes towed agricultural sprayers and nutrient applicators, which FIMCO offers in multiple colors, including green and yellow.

Deere alleges that FIMCO’s sale of sprayers and other agricultural equipment "bearing the Deere Colors or green bodies with yellow wheels or tanks," infringes its trademarks. It brought Lanham Act claims for infringement, false designation of origin, and trademark dilution, as well as a common law trademark infringement claim.

FIMCO denies that it has infringed, contending that Deere had notice since at least the 1940s of FIMCO’s, and its alleged predecessor J-D-D Lubricants Co.’s ("JDD"), use of yellow and green on its equipment. FIMCO also counterclaimed, seeking among other things, an order holding Deere’s trademarks invalid and cancelled because the colors are functional. The parties filed cross-motions for summary judgment on several of the claims and defenses.

Trademark dilution. Deere moved for summary judgment on its trademark dilution claim only. The court denied the motion, finding that factual issues as to whether Deere’s mark was famous and whether it became famous before FIMCO began its use, precluded summary judgment.

Deere argued that its mark is famous, citing evidence that (1) it has expended significant amounts of money since the early 1900s on nationwide advertising; (2) its sales of agricultural equipment bearing the "Deere colors" in the United states have been extensive throughout its history, beginning in 1905, reaching $299.7 million in 1950 and $29 billion today; and (3) "industry publications and popular culture" references to Deere’s use of green and yellow, since 1923 or, at the latest, by 1950, demonstrate that the mark has long been recognized as famous by the public.

But as FIMCO pointed out, to prevail on its claim Deere must demonstrate that its marks became famous before FIMCO began using a green and yellow color scheme on its agricultural equipment, not just that Deere’s marks have become famous. The court held that whether and when the marks became famous is a fact question that precludes granting Deere summary judgment on its dilution claim.

Functionality. The court granted Deere’s motion for summary judgment and dismissed FIMCO’s affirmative defense of functionality, as well as FIMCO’s counterclaim seeking invalidation of Deere’s registered trademarks on the grounds that they are functional. FIMCO argued for a finding that Deere’s marks are aesthetically functional, in that allowing Deere exclusive use of the yellow and green color scheme "would put competitors at a significant non-reputation-related disadvantage." FIMCO pointed to evidence that farmers prefer their agricultural equipment to match and complement their tractors, as establishing aesthetic functionality. The court disagreed, noting that even if there were such a preference, FIMCO did not explain why it could not use "a different color scheme involving green or yellow (just not both)."

Laches. FIMCO argued that Deere has been aware of FIMCO’s (or its predecessor’s) use of green and yellow for almost 70 years, and almost 50 years for its sprayers and applicators, citing letters from Deere to FIMCO’s predecessor from 1944 and 1963. According to FIMCO, Deere’s failure to act, in light of that longstanding knowledge, supports a laches defense. But the court agreed with Deere that the letters were sent to JDD and FIMCO failed to establish that JDD was its predecessor. Thus, there was no evidence to show that the letters to JDD show Deere’s notice of FIMCO’s use of the yellow and gold color scheme. Without that link, FIMCO’s laches defense failed and the court granted summary judgment dismissing it.

Acquiescence, estoppel. Although the Court held that Deere’s 1944 and 1963 letters are not attributable to FIMCO for purposes of its affirmative defenses, it found that FIMCO presented at least enough evidence to create a genuine dispute of material fact for its defenses of acquiescence and estoppel, based on Deere’s knowledge of FIMCO’s sale of equipment bearing green and yellow. FIMCO cited the catalogs it published long before 2011, its display of green and yellow products at multiple farm shows every year, including shows held in conjunction with Deere products and dealers, and the fact that many dealers sell both companies’ products.

Implied license. The court agreed with Deere that FIMCO failed to raise a genuine factual dispute as to its implied license affirmative defense. Deere had argued that there was no evidence of a relationship between the parties sufficient to imply a license. Joint attendance at farm shows did not suffice, the court held.

FIMCO motion. The court denied FIMCO’s summary judgment motion on several of its claims. First, it held that fact issues precluded a finding that Deere has no trademark rights in "yellow tanks" on towed agricultural sprayers and applicators. FIMCO argued that Deere’s registered marks do not expressly include "yellow tanks" and Deere has not established common law rights due to the absence of sales of equipment with yellow tanks between 1968 and 2013. The court concluded, however, that even if that were true, those circumstances would not be dispositive. Irrespective of whether Deere acquired rights in "yellow tanks," FIMCO did not establish that Deere had no trademark rights whatsoever. Thus, the court held, the "ultimate analysis will require a determination whether, when compared to the valid trademarks Deere does own, FIMCO’s marks are sufficiently similar."

Incontestability. FIMCO also moved for summary judgment on the issue of whether Deere’s three registered trademarks have become "incontestable" under 15 U.S.C. §1065. Deere contended, and the court agreed, that the language of each of its three Registrations, and the Section 15 affidavits it filed as to each, demonstrates incontestability or, at a minimum, that genuine factual issues exist as to incontestability. The court, therefore, denied the motion.

The case is 5:15-cv-00105-TBR-LLK.

Attorneys: D. Craig York (Dinsmore & Shohl LLP) and Ethan C. Forrest (Covington & Burling LLP) for Deere & Co. Gregory C. Scaglione (Koley Jessen PC) and Nicholas M. Holland (Whitlow, Roberts, Houston & Straub, PLLC) for FIMCO Inc. d/b/a Schaben Industries.

Companies: Deere & Co.; FIMCO Inc. d/b/a Schaben Industries

MainStory: TopStory Trademark KentuckyNews

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