should not be encouraged to avoid bringing those potential conflicts to a head in the hopes that if they stay under the radar of the senior user long enough they may be able to defeat the senior users right to relief that's what happened in this case fundamentally pink out knew from day one about cosmetic warriors prior rights in the wash mark they knew about the fact that women's clothing and cosmetic products were closely related goods often offered under the same brand and they were told by the canadian trademark office in two thousand and ten that cosmetic warriors also claimed rights and clothing instead of trying to resolve that conflict in two thousand and ten by challenging cosmetic warrior's claim to clothing in canada or any other way bringing themselves to the attention of cosmetic warriors pinkeye had abandoned its canadian trademark application ensuring that that conflict would not come to light waited for four years and then launched an anonymous attack on cosmetic warrior's registration in canada in two thousand and fourteen equity is not supposed to reward that type of conduct the briefing in this case identifies several errors in the district court's judgment that led to the erroneous outcome here and country direction from the court i'd like to talk today about three in shoes but first as a district courts abuse of discretion in applying the systems factors to the facts of this case the second is the district court's error in conflating the doctrine of willful infringement of unclean hands and the third is the fact that under the supreme court's recent decisions in patrol and ca hygene latches can no longer be asserted against a confusion based cancellation action that's brought under section two hundred sixty four one starting with you systems we recognize that the abuse of discretion standard is a deferential one but that does not mean the district court judgments issued are not reviewable in this case the district court completely failed to give any consideration to factors one and five of the systems test which are the strength and value of the asserted mark which in this case was indisputably extremely strong both from an inherent standpoint as well as a a commercial standpoint with over a billion dollars in sales in the united states alone the district court also failed to properly apply the diligence factor under that you systems test diligence looks at whether the market owner conduct was showing a active policing effort not just against the particular defendant in this case because i'm looking at the denial of summary judgment and the court there are on page eighteen of its order  district court got this one wrong when he found it in favor of your client so that was the district first summary judgment order which you are correct the district court did not grant summary judgment of latches in this case the judgment that we're appealing is the judge's judgment that was issued after a trial and that was made in an in the form of first an oral opinion on the record following trial where he outlined the basis for finding latches against cosmetic warrior's as well as in a subsequent further somewhat further fleshed out written decision that he the strength the value in the foot not the right he identifies the factors that are to be applied in that you systems test but he does not apply them and if we would submit that it is an abuse of discretion where a factor clearly strongly weighs in favor of a party both of those because he does go through one two three four five six in the in the order they are appealing from well i think you can and if you do look at it at the summary judgment discussion then what you see is that that factor way strongly in favor of cosmetic work which is what the district said i get i'm not sure why you're why you're argue that this court failed to do this when the district court addressed it in writing and found in favor of your client well that the point is that all of the fact when you look at all of the factors as a whole they all very strongly weigh in favor of cosmetic worriers and so these two were not part of the discussion that applied the latches doctrine to our case and i think had you consider these two with the other so maybe i'll move on to the others if that's ok because i think you have to look at it as a whole these two strongly weighed in favor of cosmetic warriors the next factor is the diligence factor in enforcement and in discussing diligence the district court failed to acknowledge the more than one hundred and thirty enforcement actions that cosmetic warriors took to enforce it's right in the l against you it shows that wash was very cosmetic worriers was was very aggressive defending its brand it was all over the place it was going after you know one one off stores in remote locations in the united states but it is highly relevant to know latin just right and just get just but it just you know it just cries for an answer as to how it missed this one when you found the spot in montana or wherever it was but you couldn't find a clothing warriors did so in various different ways there was evidence in this case for example of a two thousand and six search report that was conducted and it was nationwide it looked at not only things on the federal register but it looked at things on state registers as well as internet websites and companies that were doing business at that time because medicare years engaged in a strategy to go after those entities importantly although pink that was founded in two thousand and three allegedly had a website at let's call bing dot com in two thousand three is no where on that search report it was not identified in the two thousand and six search report so things come to the attention of trademark owners in different ways and in this case it simply is an unfortunate fact that it did not come to but that cuts different ways i mean if if it's something that probably should have come to their attention but for some fluke the reason didn't we're looking at it from the press well from the perspective of pink i mean if they assuming they were thinking about this i probably would have thought if there was a problem they would have come after us by that well that's interesting because then walked away from the canadian trademark office in two thousand and ten without saying a word about the conflict that only it was notified about cosmetic worriers was never notified that pink that had had its mark rejected and then four years later when they did actually go and try to challenge the cosmetics for years less mark in canada they did so anonymously when they announced their business name in california they did it in a korean newspaper only i mean there's i think it is a misunderstanding and a misstatement of this record to suggest the pink that was out there trying to bring itself to the attention of cosmetic warriors i don't have an obligation to do you go to the cosmetics counter of the local department store you go to the clothing section and then they may be on different floors well as a woman i respectfully would disagree with that assessment but personally however i understand my personal view is not part of the record what i think is part of the record is that under budget testimony of dr jack installer who explains that clothing cosmetics are extremely extremely related there are dozens of trademark trial and appeal board and district court decisions holding not quite as a matter of law but almost as a matter of law that clothing women's clothing and beauty products are related once you got notice in two thousand and ten why did your client sleep on its rights my client did not get notice in two thousand and ten that the district court in this case found that cosmetic wear years knew or should have known or is no finding that this was ever brought to cosmetic warrior's attention and in fact the testimony at trial was unreported that cosmetic were used to not actually owe and what you got in two thousand  was notice to your outside counsel well that's not clear the evidence in the record is that cosmetic worriers was engaging in a trademark watch service through outside counsel there was evidence put into the record that was obtained by a subpoena to thomson reuters which is a watch notice provider and they gave a printout of what they say are a listing of all the marks that were brought to the attention of cosmic warriors counsel however the record also shows that thomson reuters had errors it had experienced errors in the past where marks that were supposed to have been reported to counsel were not and the testimony from thompson reuters was very clear that even if one of those errors had occurred here with respect to providing that watch notice to cosmetic wearers coun that trademark would still appear in his report because he's reprinting that report from a different source so he was very clear in his testimony that he could not testify but the information made it to outside counsel all he could testify is that it appeared in thompson reuters records so your honor respectfully i think the only evidence in the record about who had actual knowledge of the other party in this case is that pinhead had actual knowledge of cosmetic warriors in two thousand and three again in two thousand and ten and that once has medicare years investigated who was possibly attacking their mark in canada anonymously they eventually figured out that it was pink at and the dispute between the parties and it up being in and fifteen i think applying an equitable doctrine requires looking at the equity as and in this case given the clear evidence of payouts knowledge and were outlined only constructive notice to the warriors that it is in equitable to apply that it in this case i think the evidence of unrefuted harm that was presented in the case to harm to c w well from the testimony of dr jack installer and other sources was also not properly considered by the district court instead he relied solely on the fact that cosmetic workers decided not to seek actual damages in favor of seeking injunctive relief and he decided there was no harm because the jury did not a word discouragement damages but of course discouragement measures the profits to the other party not the harm to warriors and its brand the district court also improperly conflated the good faith ignorance factor by substituting for  identical standards or did he just use one and finding that the other imply he didn't he said there's no evidence that the evidence is that pink it had good faith because the jury found no willfulness it it just didn't there was not enough analysis to understand why he made that substitution but it isn't proper and particularly relying on willfulness when the jury's verdict on willfulness was issued in the absence of evidence about everything that went on with their noticed in canada and then in face of the testimony of the pink at principles during trial to the jury saying they had never had cosmetic warriors on their radar until this trial i want to ask this question about the about the evidence issue because evidence issue kind of trouble me when i first got into this case and apart from the relevance that you just indicated which is that it may have somehow controlled what the district court did or it unduly relied on i on a  finding that was not using the same standard and not informed by by the evidence that wasn't presented to them but apart from that which is kind of interact i was having trouble seeing the relevance of the of the issue that the canadian evidence was not given to the jury because the decisions that were made were made with respect to latches which were made by the district court hafter hearing that evidence right so in your brief you say well that doesn't address claims of discord and claims of made the decision with respect to gorgias it made an equitable decision in which it had the evidence before him so how is how is the how is the exclusion of this evidence meaningful and i no that you don't raise it as one of your three arguments maybe you just don't want to focus on that argument but i'm i'm having trouble seeing how the argument gets you anywhere while you're at it does seem like they should have had the evidence that was my first intuition but then i couldn't see why it made any difference i really don't see how it made it makes a huge difference and how does that make a difference if he heard it because the district court if you read the district court's decision he heavily relied instead of argument that it should have pressed been presented to the jury it just escapes me as to why we care about that anymore since he did have it before and when he made the decisions that you're appealing i think your honor would have also impacted the jury's finding on w would have come out differently on latches the advisory verdict that the judge district judge relied so heavily on i think you also would have had a finding of willfulness and under the district court's conclusion that good faith and law acts of unclean hands to prevent purport i just don't see it i think it all goes into willfulness if the jury had found willful infringement which we submit they would have had they been privy to the evidence about the canadian notice had the jury found willful infringement there would be no latches because the district court by his own admission would not have want to discuss on the distinct issue with respect to the cancellation i'll give you a minute to do that i'll give you a minute for a bottle but you'll have to keep it short ok absolutely i will and your honor recently the supreme court has taken up the issue of latches as it applies to actions that are governed by a federal statute of limitations imposed by congress that was done in the trial and as soon hygiene case if you read those decisions it's very clear that the supreme court views latches as a gap filling remedy that only applies where congress has otherwise failed to provide a specific time period in which to take action in this case the specific time period provided to bring a confusion based cancellation under ten sixty four one well and in this case the time period as in which you can bring an inner party is proceeding for likelihood of confusion based cancellation and congress has expressly provided a five year time period for that the general statement in the that equitable defenses such as latches acquiescence in the stoppel where applicable may be applied in all inner parties proceedings has application to other cancellation actions there are other actions i want to do with footnote fifteen a patrol fifty for the fifteenth yeah i know fifteen says that the decision doesn't apply to lana mack cases for infringement that's under eleven fifteen of the lanham act and that's about bringing lawsuits in federal court and the the court was not considering at all the cancellation actions in the trademark trial an appeal board when it wrote that and it is true that the lanham act as to trademark infringement claims i mean we have lots of debt we have lots of deadlines but deadlines aren't necessarily statutes of limitations you have a certain amount of time to file an answer we don't refer to that as a statute of limitations but the five years in the cancellation action under ten sixty four one is the statute of limitations if you do not bring a likelihood of confusion based objection to issued trademark registration within five years of its issue for whatever reason if you do not do it within five years of issues you are barred it is a statute of limitations and is applied as a statute of limitations by the trademark trial in the field point what are you other you do what do you do with our with our cases that say that we look to state laws and that we give a strong presumption that's that is true with respect to infringement claims brought under the lanham act in federal court because infringement claims right in federal court don't have a set to the limitations and so you borrow the state courts analogous statute that was expressly discussed by justice ginsburg in the trial as saying where you're borrowing a state statute of limitations where the statute itself doesn't have one what they're saying  doesn't apply what they're saying in patrol is where congress has imposed a statute of limitations in which to act courts cannot bring in equity to the equity is a gap filling doctrine and where there is a congressional statute limitations equity is not applicable and what i'm saying about ten sixty four sub one is that that type of a cancellation action congress has said only can be brought within five years of issue it cannot be brought at any other time abandonment based cancellation actions certification markets cancellation actions other types of cancellation actions can be brought any time which the courts have construed to mean there is no statute of limitations provided for those and equitable defenses would apply in those cases the five year period for confusion based cancellations is a statute of limitations and under patrol and as you hygiene equitable principles are not able to be applied to bar suits that are brought within that period and we i gather are the first impact the issue of whether the five year cancel confusion based cancellation proceeding is barred by the analysis of patrol arrested hygene all of the decisions that i've seen talking about how you can use equity in a confusion  based cancellation action don't discuss patroller hygiene at all they're relying on older decisions but have said that these are available and of course the law of every court across the united states also used to apply latches to patent cases and also  to the extent you interpret it as applying to anything other than an infringement action yes but the court i believe in the trial and i see hygiene was being confronted with questions about trademark infringement actions brought in federal court not with questions about cancellation actions at the p that just issue was not on their radar screen and so it is true there is no statute of limitations in the lanham act as it pertains to bringing suit for trademark infringement it is not true that there is no statute of limitations in the lanham act under ten sixty four one for bringing cancellation i thought the trial was about the copyright act it is ok so i did having to do it a lot of it didn't but there there were arguments being presented about whether some of the and now logy arguments were that we apply actions in trademark cases and she was simply saying application of latches and trademark cases is consistent with what we're saying today that it's a gap filler where it applies where congress has not otherwise provided a specific time period in which t of this case were not different from the leading case he systems from this court they were not i mean they weren't exactly on all fours but in in many similar respects there's one interesting aspect of this case that you don't see in too many cases which is the junior user has a registered mark that the latches were so severe and and the and the senior user slept on the right so severely that the junior user was able to obtain a registered mark that's the same case that you have any systems itself i understand in isas thems this court took pains to explain that any time you're going to deny an injunction on lashes that there is what that means is that the senior user is being deprived to some degree however small of controlling its market controlling its good will and because there's been some finding of confusion that there's some risk however small to the public of confusion but the system case itself says that those considerations are are built into the doctrine of latches which congress has deliberately expressly put into the lanham act and that they can be outweighed as a court sitting in equity the court considering all the factors can to decide that they're out weighed that's exactly what happened and he systems and based on very similar facts that's what the court did in this case even after the jury did the same thing with an advisory verdict so what palin is asking this court to find is that the jury got it wrong and the court after hearing additional supplemental evidence also got it wrong and that the court abused its discretion in doing so and somehow committed clear error and making the findings that it did and i don't think this court can or should do that because the findings that the district court made here were very terminations the court first of all did go through each factor in its summary judgment order that's clear that's in writing secondarily the court had an oral ruling a finding of findings of fact and conclusions of law in which it mentioned the system's factors and then issued a written order denying appellants motion for an injunction in which it said it was applying the system's factors it listed all of the systems factors and then said the court had up they said that it had applied them and then it said in its application the court considered these factors and then it said you know for instance and it's true then you did not in a discursive manner  list two of the factors were addressed two of the factors that's true that's in the record what what i think i heard counsel for appellate say is because it they think that one of the factors the strength of the mark weighed heavily in their favor this was somehow reversible  this isn't so this very court in the group oh he got a decision that we cite stated that even if one of the factors weighs heavily in favor of one party it doesn't mean that it can be can't be outweighed by all the others or any of the others again this is a court sitting in equity the whole purpose of equity and the whole function of equity of a court sitting in equity is to consider all the factors the systems factors themselves are not even an exhaustive list of course right this is a court sitting in equity can consider any factors so it's a non exhaust exhaustive list and it's a balancing test and by nature when just records engage in balancing tests and especially sitting in equity they are to consider any all factors and they balance them all and of course even if one factor weighs heavily it can be outweighed by the say these are the factors that i find outweigh all the others could it could it take into account as part of a broad examination of the factors a plaintiff sort of playing games not that you were but they could couldn't they are not sitting in equity i think a court can take note of almost any fact as long as ok and that's just i got to tell you the one concern i have about your position is that it looks like or least they describe your opponent describes it as sort of lying in wait and keeping a low profile knowing that there might be some problem so what exactly is that it is a in order to not have that factor weigh against you what is somebody in your client's position supposed to do if they get some indication that there's a problem with another person using the same mark in a different but maybe related area one way and this would would arguably happen when you lose your application in canada in two thousand and ten it's kind of a red flag or a signal or something one way to deal with that is to say well we don't think that's different that's canada that's t shirts and that's not what we do and it's not our country and we've already got this one here so it's probably not a problem let's just lie low and hope that it never blows up in the meantime continue to do what we're doing or the other thing you could do is to write a letter and say we don't think this makes a difference and and we want your know that that's what we don't think that way you might be able to avoid the problem when it might come up later i mean is this is there something i'm missing because it seems like it would be it would be better for the system if you did the latter rather than the former but when you start or they say you you you put public notices in korean language newspapers and stuff like this makes it sound like you're actively trying to hide can you respond that you see what my concern is i do you want to think i understand the hypothetical first of all course i want to know it's counterfactual and i'll get to why i think that is but the answer is i think going back to the oldest english common law that's not an element of lapses which is what the defense here was based you know but you said i can't take w things into account in the exercise of our in the exercise we were supposed to call you you went on for several minutes about the breadth of the things that we can take into account yes making this balance right the district court was what was what this is what the district court was aware of this is why i think it's counterfactual which is important to answer the court's question first of all the district court here made an express finding that pink at acted openly a notoriously was using this that's the that's the phrase of the district courts finding a fact that they operated for fourteen years and they registered the mark that's true i'm sorry certainly under saddam and that's are insistent with knowing that someone else thinks you might be doing something wrong that was my hypothetical you have some you have some indication and then you know some flag that comes up on there somebody over there and at least in canada they would have a problem doing what we're doing and we're not doing them much different from what people are doing in the united states so it's a it's a hint it's a flag i'm not saying it's notice or some legal standard it's just some something has arisen on the horizon and there's two ways to deal with that one is to has to hunker bunker down or whatever the word is on the other is to say let's get this so in the open let's figure out whether we indeed have the rights which we assume we do and they don't or it's to wait so that if this thing ever does blow up we'll be able our u s all right see what i'm saying out there you know this do ways you could go i do but i think it's really important to understand what was cosmetic warrior's own a registered mark in canada for clothing for class twenty five namely t shirts in the u s they did not of course and they never have to this day in the us it was the inverse of the record and the registration to which it referred by registration number is up one seventy three of the record if you look at page one seventy three in the registration to which the canadian court referred was the registration for clothing so what canada was saying was we aren't going to allow two registrations registrations for from two different companies for life on clothing right that if anything tells you the opposite of notice that there is a problem in the u s what it says is the one who has the registration for clothing is in the clear which was the situation in the united states so the fact to think that there was that was notice of a problem united states lies with the least notice not enough of an inference if you if you find that in a market that in many respects similar to america then we have the benefit of the supplemental evidence regarding this and a question that the district court heard after the jury verdict this is from pages one fourteen to one forty three of the record where edward came testified and they got to cross examine him as much as they wanted and they asked these questions didn't you receive this notice we're told by your lawyers and he said yes i believe our lawyers told us about it did this change your behavior and why not and he said no my understanding was canadian law was different than us law and we had the registration in the u s and there wasn't a problem it's that testimony along with all the games testimony that the district court said that it found to be not just credible but very credible and of course it's that sort of credibility finding that under the right runs i understand that's the heart of my hypothetical is that exactly something like that happened and they came to the conclusion that they were doing everything right but you can come to the conclusion that you're doing everything right and also realize that some court might disagree with you and so the the thing to do is to get it out in the open get it settled so that you don't take a chance that later on illegal you'll have wasted your investments or you can just not get it resolved now right but that doesn't that's perfectly consistent with having your lawyers tell you you're right is not you had lawyers can tell you you're right there's a two percent chance that you're wrong hung or of minimal chance that you're wrong or information ply that whatever and and you can say well let's just keep going because we're relying on our lawyers we're not going to get this result we're not even we're going to we're go arise i think i think what they were actually believing was that it wasn't a problem not hoping that it was a problem that would come to a head with them where why are they maintaining such a low profile about it then if it's not a problem well you see that's that's we know there's this problem but it's not a problem for these reasons not that you have to course but that's different from i mean why do you why do you that puzzled me why do you put a public notice in a korean language newspaper because there are mean and they work in the gar industry in los angeles in korean i mean your business the business the business that well who who does this notice go to anyway and i think they're saying it was in the public notices section of a wide circulation newspaper in los angeles and i say can i ask you you have very little time left about the cancellation yes from the time sixty four when you heard your opponent's argument there i'd love to hear your response yes  obviously that has already been noted s e hygiene and patrol neither of them are trademark cases and there we do have them both expressly noting that the lanham act is different number one and as i've already been noted the footnote unfortunate yes yeah that number one doesn't really fly with me because as your opponent argued maybe address her argument right that clearly what the court was referring to in that footnote were infringement actions for which there is no statute of limitations and in fact that's the the very premise that was noted out it seems like ten sixty four one i don't know maybe disagree it seems like that is a statue imitations says five years in congress set that limit yes your honor first of all the footnote isn't clear that it's only referring to infringement doesn't say so it says two separate statutory provisions regarding latches applying got eleven fifteen with regarding infringement it's got ten sixty four regarding cancellation right and the one that put it was the one that cited in the footnote is the eleven fifteen which has no such limitations that's what the court was talking about well it's referring to eleven fifteen b nine yes you are which which statute is that that would be infringement ok so what's your first one line response is that in the cancellation provisions intensity for are not statute of limitations you can file for cancellation after five years just under narrower grounds as the statute makes clear and second of all we're not talking about bringing a lawsuit we're talking about industry administrative remedy  to cancel an act it's not a statute of limitations it's not labeled as a statute of limitations second of all we have after patricia the penetrate mark office has promulgated a regulation this is in our brief thirty seven that needs to be brought within the five years yes your honor that's what the regulations probably get in january two thousand seven hundred and then of course i understand this is before put trey and se hygene but there is as just one example cited the pro football versus harjo case that hygene to tell you to make this argument and people did and it was rejected in pro football the only gloss they're adding with with as you hygiene it and patrol is to say the supreme court took interest in this where there is no eleven fourteen be to us and that is that was a two thousand and seventeen regulation yes january two thousand and seven ok i see that i'm out of time there's no furthe questions i don't think that i'm sorry just because i'm looking at it and isn't this just a regulation that specifies what the content of an answer and what it says of the answer may contain a lot of defense yes or what does it have to do with the argument that the thought the dressing argument we're contending with here said the fact that certain defenses are listed as being available to plead in an answer does not mean that constitutionally those equable defenses are applicable to every type of claim that might be brought and specifically they are not applicable where congress otherwise provided for a specific statute of limitations the other cases that have been cited by leave were decided before an s c hygene and i think they have no relevance because this was an issue that was considered by the supreme court to sort of be a new take on how to treat statutes of limitations in respect to these cases so i think that after you cannot read ten sixty four one other than as saying if you bring a cancellation action within five years after the registration of a mark there is no equitable defense of latches and that is what happened here cosmetic warrior's cancellation was brought within five years and it should proceed with respect to  was made that this case has very similar facts to the systems case it really doesn't because what distinguishes this case from almost all of the other cases that have been cited by the parties is that in these systems there was no dispute that neither party had notice of each other in this case that record shows that it is undisputed regardless of what credibility you give to the testimony of pink that it is undisputed that they knew from day one they knew that warriors had lashed as a mark and the tisch case from the seventh circuit which we cited and other cases say where you're going to take a risk like that it's incumbent on you to do something to try to figure it out and it should not be put the full burden of pink cat's decision to take that risk to knowingly adopt the lead well that they knew already belong to someone else when they knew about the relationship between the parties goods and to continue to charge forward starting in two thousand and ten even though they knew about the conflict between