Land O’ Lakes – No Harm, No Foul

Addressing the issue of whether a famous mark can be diluted by the identical mark of a much smaller company, the US Court of Appeals for the Seventh Circuit decided that the district court rightly dismissed trademark infringement claims and cross-claims where neither party had been, or was likely to be, harmed by the other. Hugunin, et al. v. Land O’ Lakes, Inc., Case No. 15-2815 (7th Cir., Mar. 1, 2016) (Posner, J).

The plaintiffs make and sell fishing bait and tackle in Land O’ Lakes, Wisconsin, which is located in a region of the same name with many lakes that attract fishermen. Mr. Hugunin first sold fishing tackle to a bait shop in Wisconsin in 1997 and currently sells to retailers in several states. In 2000, the US Patent and Trademark Office registered Mr. Hugunin’s trademark LAND O LAKES for fishing tackle.

The defendant and counterclaimant, Land O’ Lakes, Inc., is located in Minnesota and sells butter and other dairy products throughout the United States. Its trademark, LAND O LAKES, is the same as Mr. Hugunin’s but has been used far longer—since 1920, when the company was founded.

In 1997, the year Mr. Hugunin began selling fishing tackle, Land O’ Lakes began sponsoring a sport-fishing contest called the Walmart FLW Tour and began advertising its dairy products in fishing magazines. Three years later, after learning that Mr. Hugunin had registered LAND O LAKES as a trademark for fishing tackle, Land O’ Lakes wrote to Mr. Hugunin and told him that Land O’ Lakes’ trademark was “famous” and had been in use much longer than Mr. Hugunin’s mark, that he was infringing, and that he must obtain a license or give up using the mark. Mr. Hugunin refused.

Mr. Hugunin’s original registration had lapsed, and Land O’ Lakes filed a trademark opposition at the Trademark Trial and Appeal Board (TTAB) to block Mr. Hugunin’s new application to register the mark. Mr. Hugunin’s application was suspended pending the outcome of the litigation. Mr. Hugunin filed suit for trademark infringement against Land O’ Lakes in 2011, a case that was ultimately dismissed.

Expressing puzzlement over why Land O’ Lakes would have been worried about Mr. Hugunin’s use of the LAND O LAKES trademark, the Seventh Circuit found that despite sponsoring the fishing tournament, advertising in fishing magazines and making other “appeals” to fishermen to buy its dairy products, Land O’ Lakes does not make or sell any items used in fishing that might be confused with Hugunin’s fishing tackle. “It would be strange indeed for a dairy company to manufacture a product so remote from milk, butter, and cream [as fishing tackle], and there is no sign that the dairy company intends to take the plunge.” Similarly, the Court was puzzled over why Mr. Hugunin and his companies sued Land O’ Lakes for trademark infringement when there was nothing to suggest that Land O’ Lakes intended to make or sell fishing tackle. “Can one imagine Land O’ Lakes advertising: ‘we sell the finest dairy products and the best fishing tackle’?” The Court emphasized that there was no evidence of any confusion, and on this basis, Mr. Hugunin’s infringement claims were dismissed.

Regarding Land O’ Lakes’ counterclaims charging that Mr. Hugunin’s companies’ use of the LAND O LAKES trademark diluted the value of Land O’ Lakes’ identical trademark, the district court found that the dilution claim was barred by laches, i.e., Land O’ Lakes had waited too long to bring its claim. The Seventh Circuit did not analyze the district court’s decision regarding laches. Instead, the Court stated that even if laches had not been in the picture, Land O’ Lakes would not have prevailed.

The Court explained that there are two forms of dilution: “blurring,” with an example of the TIFFANY jewelry mark being adopted by an upscale restaurant, and “tarnishment,” with an example of the same famous TIFFANY mark being used by a “striptease joint.” The Court noted that the present case did not fit either type of dilution, because “it is beyond unlikely that someone dissatisfied with LAND O LAKES fishing tackle would take revenge on the dairy company by not buying any of its products, or that a customer would have difficulty identifying Land O’ Lakes’ dairy products because he had seen the LAND O LAKES mark used on Hugunin’s fishing tackle.”

The Court also found that Land O’ Lakes’ mark was itself derivative from Minnesota’s catchphrase, “Land of 10,000 Lakes,” a phrase the Court found was “in such widespread use that the company could not insist that it was the sole lawful user of the phrase in advertising for all products.”

The Court found that Mr. Hugunin’s claim for trademark infringement based on reverse confusion—i.e., when a junior user of a trademark uses its size and market penetration to overwhelm the senior, but smaller, user—was equally without merit, finding that Land O’ Lakes’ use of its mark was confined to products so different from Mr. Hugunin’s that few if any consumers would think that simply by virtue of having an identical trademark the dairy company was competing with Mr. Hugunin in a different industry. The Court was not concerned with the “Land O’ Lakes Walleye Pro,” a fishing champion whom Land O’ Lakes sponsors in fishing competitions in return for that individual’s promotion of Land O’ Lakes dairy products, or with the use of Land O’ Lakes’ logo on fishing boats during tournaments. The Court stated that just as “no one watching a NASCAR race and seeing a racing car emblazoned with Budweiser’s logo would think that the beer company had entered the automobile industry, so no one reading the ‘Walleye Pro’ ad or seeing a boat sponsored by the dairy company would think that the advertiser sells fishing tackle.”

The Court summed up: “So in this unusual case two firms sued each other though neither had been, is, or is likely to be harmed in the slightest by the other. The suit was rightly dismissed.”

Practice Note: In the Seventh Circuit, a litigant claiming trademark infringement, including by dilution or reverse confusion, must be prepared to present evidence of harm or likelihood of harm. Without such evidence, a trademark infringement claim will be nothing more than “the one that got away.”