NO T R EC OM M EN DE D F OR F UL L- TEX T P UB LIC AT ION F ile Nam e: 10a0492n.06 Nos. 09-3402 and 09-3403 UN ITED STA TES C OU RT OF AP P EA LS F OR THE SI XT H C IR CU IT
KY L E LAU KU S, P laintif f-App ellant,
v. RI O B RANDS, I

NC.; a .k.a. AL L -LUMI

NUM, I NC.; WAL -MART STORES, I NC.; S AM’S CL UB ; BJ’S W HO L ESA L E CL

UB , I NC .; L OWE ’S HO ME CENTERS, I

NC., De fend ant s- App e lle e s. ) ) ) ) ) ) ) ) ) ) ) ) ON AP P EAL FROM THE UN I TE D ST AT ES D I STR I CT C O U R T F O R THE NOR THERN DI STRI CT OF O H IO O P I N I O N

BEF OR E: NO RRIS, CO OK , a nd G RI F F IN , C ir c uitJudg e s.
ALAN E. NO RR I S, Circuit Judge. Plaintiff Ky le L aukus (“ L aukus”) filed a c omplaint
a g a i n s td e f

e n d an t s R i o B r an d s , In c . ( “ R i o ” ) ; W a l

- M artS t o r e s , In c . , an d S a m ’ s C l u

b ( c o l l e c t i v e l y, “Wal-Mar

t”); B .J .’s Wholesale Club, I nc. (“ B.J.’s”); and L owe’ s Home Center s, I nc. (“ L owe’ s”). L aukus asse rted fe dera l claims of t rade mark infringe ment and tra demar k counter feiting , as we ll as state -l aw c la ims fo r u

nf a ir c omp e tit ion , c om mo n lawtr a de mark inf ri ng e me nt, and

un jus t enric hment. L aukus soug ht both monetary damag es and injunctive r elief. I n separ ate or ders, dated September 24, 2008 and J anuar y 14, 2009, the di strict court g rante d pa rt ia l summa

ry jud g me nt t o d e fe nd ants . T he or de rs dis po se d of al l but thr e e of L a uk us ’s c la ims
. Th e dis tr ic t c ourt

de nie d s umm ary

jud g me nt o n th e cla im s for fe de ra l tr a de mark inf ri ng e me nt,No. 09-3402/3403

Laukus v. Rio Brands, Inc.

D ef endan t s al s o s t i pul at ed t o t he di s mi s s al o f t hei r co un t er cl ai ms f

or c anc el l at i on of

Lau ku s ’ s t r ademark
. T hat 1 issu e is no t o n a p p e a l. - 2 - common law tra demar

k infring ement, an d s t at e unfair competition to the extent that they soug ht injunctive relief

. There afte r, defendants, without admitting liability , stipulated to the entry of an injunction ag ainst their use of the disputed mark. Concluding that no issue remaine d for tria l, the 1 district court ente red f

inal judgme nt. This appeal f ollowed. We a ffirm in pa rt, reve rse in par

t, and
rema nd for f urther pr ocee dings c onsistent with thi s opinion. I. L a uk us op e rate s a

bu sin e ss t

hat se lls and in st a lls fl a g s and fl a g po le s und e r t

he name “Amer ican Pride” in Be nton Harbor , Michig an. L aukus owns a r eg istration on the Principal Reg ister of the United States Patent and Trade mark Of fice (“U SPTO”) for the service mark “ Americ an Pride” for use in connec tion with “retail store se rvice s in the field of flags , fl ag p o les, penna nts and streame rs, in class 42 (U .S. C.L . 101).” Al though he does not own a se parate “Ame rica n Pride” trade mark re g istration for the flag s and flag -re lated g oods sold in such retail stores, he uses the mar k on the flagproducts sold from his re tail store. R i o i s a m an u fa ct u re r o f v ar i o u s o u t d o o r pr o d u ct s , i n cl u d i n g p at i o fu rn i tu re , fl ags , an d fl agrelate d p r o d

u c ts
. So me ti me in th e s p r in g o f 2 0 0 3 , Ri o c e a s e d s e ll in g it s f la g p r o d u cts under the name “ Rio Outdoor L iving” and starte d using the name “Americ an P ride” instead. Rio claims that at the time it adopted “A merica n Pride” for

its flag products, it was not aw are of L aukus’s ser vice mark re g istration.No. 09-3402/3403

Laukus v. Rio Brands, Inc.

La u k u s v ol u n t ar i l y di s mi s s ed Low e’ s a s a pa r t y t o t h i s a ct i on on N ov embe r 8, 2007. 2 - 3 - L ater that y ear , Rio submi tted a trade mark application to the USPTO f or “Amer ican Pride” for “ [w] all mounted flag h o l d er s , rail mounted flagholders, fla g poles, flag s and banne rs.” The USPTO refuse d the application based upon the likelihood o f co n fu s i on with L aukus’s re g istered
mark fo r r e ta il s tor e se rv ic e s. Rio fi le d a re sp on se to t

he refu sal no tice . T he USP TO the n s e nt a No tic e of Sus pe ns ion

to R io, c on tin

uin g its re fu sa l of

Rio ’s tr a de mark

a pp lic a tio n a

nd statin g , in pe rt ine nt p a rt : The a

pplicant primarily

argues that the g oods/service s are unrelated. The g oods/service s of the par ties need not be identical or dire ctly competitive to find a likelihood of confusion. They need only be related in some manner , or the conditions surrounding their marke ting be such, [si c] that the y could be enc ountere d by the same pur chase rs under circ umstances that c ould give rise to the mistaken belief that the g oods/service s come fr om a common source .

. . .

. . . . On the basis of the fac ts that the mark is ide ntical and the g oods/service s are re la te d, the lik e lih oo d o f c on fu sio n e xists
. Despite re ceivingtwo ref usals from the USPTO to reg ister the mark “ Americ an Pride” for its flag s and flag -re lated produc ts, Rio t ook the position that it s use of the ma rk for go o d s did not inf ri ng e up on

L a uk us ’s re g ist e re d mar

k for re ta il stor e se rv ic e s. Rio the re fo re c on tin ue d to se ll i ts fl a g -r e la te d g oo ds un de r the mark “ Am e ri c an Pr ide .” Am on g tho se wh o p ur c ha se d Ri o’ s g oo ds to
se ll at r e ta il w e re the c ha in s tor e s Wa l- Ma rt , B .J.’ s, and

L ow e ’s
. 2No. 09-3402/3403

Laukus v. Rio Brands, Inc.

T h e r ec or d con t ai n s n o ev i den ce t h at an y of t h e r et ai l er s e v en t u al l y ma de par t i es t o t h i s a ct i on r ec ei v ed a copy 3 o f t he “ cease and de si st ” l et t er. - 4 - Up on dis c ov e ri ngthat Rio wa s u sin g t he “Am eri c an Pr ide ” mark in c on ne c tio n w ithits
mark e tin g and

sa le s o f f

la g pr od uc ts, and tha t a t le a st o ne re ta il s tor e , L ow e ’s , w a s sel lin g tho se products under the “A merica n Pride” name, L aukus’s attorney sent Rio’s counsel a “ cea se and de sis t” le tte r o n F e br

ua ry 28 , 20 05
. Rio ’s c ouns e l re sp on de d on Ma rc h 11 , 20 05 , re fu sin g to c e a se and desist use of the mark a n d re j ec ting L aukus’s c laim that he had a proprieta ry rig ht to use the
mark in c on ne c tio n w ithfl a g -r e la te d g oo ds
. 3 Acc ording to his affidavits, L aukus, he was prepa red to f ile suit in the fall of 2006 but, after conductingon-site investig at i o ns of seve ral re tail stores in Ohio, Michiga n, and Indiana a

nd dis c ov e ri ngno fl a g pr od

uc ts b e ingso ld under the name “ Am e ri c an Pr ide ,” he c on c lud e d th a t Rio ha d in fa c t c e a se d u sin g the “ Am e ri c an Prid e ” name fo r its f la g pr od uc ts, the re by

makin g a laws uit
unnece ssary . I n late May or ea rly J une 2007, howe ver, L aukus lea rned that one or more reta ilers
wer e selling flag s (that he ha d not manufac tured) unde r the name “Ame rica n Pride.” On J uly 31, 2 0 07, L aukus filed this ac tion. I n his second ame nded complaint, L aukus
asser ted five c laims for re lief: (1) fede ral trade mark infr inge ment and unfa ir competition under § 43(a) of t he L anham Act, 15 U.S.C. § 1125(a) ; (2) common law trademark infring ement; (3) fede ral tr a de mark

c ounte rf e iti ngun de r § 32 of

the L anh a m A c t, 1 5 U .S. C. § 11 14 ; ( 4) un jus t e nr ic hme nt; and (5) unfair c ompetition under Ohio Revised Code § 4165.02, et se q. L aukus conte nded that
nume ro us c us tom e rs wh o b ou g ht R io’ s f la g s und e r t

he “ Am e ri c an Pri de” ma rk dis c ov e re d th os e products to be f

aulty an d co n t ac t ed L aukus by e-ma il or telephone a fter a scer taining his c ontactNo. 09-3402/3403

Laukus v. Rio Brands, Inc.

- 5 - inf or ma tio n thr ou g h his we bs ite , w ww .ame ri c anp ri de fl a g s. c om, to r e qu e st that hi s c omp any re pa ir the a lle g e dly

de fe c tiv e and

inf e ri or fl a g pr od uc ts. L a uk us c la ime d that the se c us tom e rs mis take nly believed that the “Amer ican Pride” products they had bought were manuf actur ed by

L aukus, whe n in fac t Rio was the manufa cture r. I n addition to monetary damag es, L aukus sought injunctive relief
and a tto rn e y s’ fe e s. I n an orde r g ranting in part def endants’ f irst motion for summary judgme nt, the district court dismiss ed on the mer its L aukus’s c laim for tra demar k counter feiting(Co u n t I I I ) and dismissed as barr ed by lache s his claim for unjust enrichme nt (Count I V) in its entirety . I n th e s ame or der, the district court also dis missed as barred by lache s L aukus’s fe dera l tradema rk infring ement cla im and his state tr a de mark

inf ri ng e me nt a

nd un fa ir c omp e tit ion c la ims (C ounts I , I I , a nd V) ins of ar a s th os e claims soug ht da

mag es for past infring ement. I n a separ ate order g ranting in pa rt defe ndants’ sec ond summary judgme nt motion, the di strict court determined that L aukus was not entitled to rec over a ny
mon e tary dama g e s– sp e c if

ic all y actua l da

ma g e s o r d isg or g e me nt o f p ro fi ts attr ibuta ble to infring ement–on his trade mark infr inge ment and unfa ir competition claims. After these ruling s, the only issue left for

trial was whe ther L aukus wa s entitled to injunctive relief on his t ra d emar k and
un fa ir c omp e tit ion

c la ims
. Ra t h er t h an p ro ce edt o t ri al , d ef

en d an t s en t er eda s t i p u l at i o ni nwh i ch t h ey , wi t h o u tadmitting liability or wrong doing, ag ree d to the entry of an injunction a g ainst Rio’s u s e o f t h e “ Americ an Pride” mar

k for its flag s and flag -re lated products. In light of de fenda nts’ stipulation and the court’s previous dete rminat i o n that L aukus wa s not entitled to monetary damag es, the district cour t
c on c lud e d th a t L a

uk us wa s w ith ou t f

ur the r r e me dy

for hi s tra de mark

inf ri ng e me nt a

nd un fa irNo. 09-3402/3403

Laukus v. Rio Brands, Inc.

- 6 - c omp e tit ion

c la im s. Thus , th e dis tr ic t c ourt de e me d a s mo ot t

he qu e sti on

of wh e the r d e fe nd a nts
wer e in fac t liable for trade mark infring ement and unf air c ompetition and, acc ording ly , dismiss ed L a uk us ’ c omp la int
. On a p p e a l , L a u k u s r a i s e s t h r e e i s s u e s f

o r r e v i e w : ( 1 ) w h e t h e r

t h e d i s t r i c tc o u rte r

r e d in finding that defe ndants wer e entitled to bene fit from the a ffirmative defe nse of lac hes; (2) w hether the district court e rre d in dismissing the fede ral trade mark counter feiting claim on the mer its; and (3 ) w he the r t

he dis tr ic t c ourt

e rr e d in pr e c lud ingL a

uk us fr om s e e kin g an a

wa rd of pr of its un de r h is tr a de mark

inf ri ng e me nt c la ims
. II. We review de novo a district cour t’s g rant of summar

y judgme nt. Sigley v. City of Parma He igh ts , 4 37 F .3 d 5 27 , 5 32 (6 th C ir . 2 00 6) ; Johnson v. Karnes , 398 F.3d 868, 873 ( 6th Cir. 2005). Summary judgme nt is proper “if the pleading s, the discovery and disclosure materia ls on f ile, and any a ff ida vit s sh owtha

t th e re is n o g e nu ine iss ue a s to any ma te ri a l f

a c t and that th e mov a nt i s entitled to a judgme nt a s a matter of la w.” F ed.R.Civ.P. 56(c). To over come a motion for summary judgme nt, the non-moving party must poi n t o u t specific fac ts in the recor d that show more than a scintilla of evidenc e of the exis tence of a g enuine issue of materia l fac t. Ciminil lo v. Streiche r, 434 F.3d 461, 464 ( 6th Cir. 2006). A. Claims Dismissed as Barred by Laches for Past Inf r i n g em en t a nd for Failing t o Show Monetary D amages I n dismiss ing L aukus’s c laims for fe dera l tradema rk infring ement (C o u n t I ), common law trade mark infr inge ment (Count I I ), and O hio unfair c ompetition (Count V) , the district courtNo. 09-3402/3403

Laukus v. Rio Brands, Inc.

- 7 - de te rm ine d in

its Se pte mbe r 2 4, 20 08 or de r t hat L a uk us ’s de lay

in brin g ingsu it b arr e d th os e
c la ims –to the e xten t th a t th e y so ug ht a c tua l da

ma g e s f or pa st i nf ri ng e me nt–

un de r t he e qu ita ble doctrine of

lache s. The district co u rt l at er he ld that L aukus wa s not entitled to an awa rd of de fe nd ants ’ p ro fi ts attr ibuta ble to t he inf ri ng ingc on du c t, i n p art

be c a us e of his de lay in a sse rt inghis rig hts. Thus, the district court found that lac hes bar red those c laims insofar as L aukus soug ht
mon e tary re lie f. Simi larl y , th e dis tr ict cou rt di smi sse d in its e nti re ty

L a uk us ’s c la im f

or un jus t enric hment (Count I V) ba sed upon its determination that lac hes bar red that claim. On appe al, L aukus conte nds that the district court impermissibly weig hed the e vidence and improperly

construed it ag ainst L aukus in deter mining whe ther the pr esumption of lache s applied to this action in the first place , and then, having conclude d that it did, in determining whether L aukus rebu tt e d th e pr e su mpt ion . We a g re e in p art . A lth ou g h th e dis tr ic t c ourt c omm itt e d n o e rr or

in fi nd ingthat th e pr e su mpt ion of la c he s a pp lie d to thi s ac tio n, it impr op e rl y we ig he d th e e vid e nc e in finding that L aukus fa iled to rebut the pre sumption. Cla ims a r i s i n g o ut o f a lle g e d tr a de mark

inf ri ng e me nt m ay

be ba rr e d b y la c he s w he re the pa

rt y alleg ing inf

ring ement has ne g lige ntly and unintentionally

failed to protec t its rig hts. Nartron Corp. v. STMicroele ctronics, Inc

. , 305 F.3 d 39 7, 40 8 ( 6th Cir . 2 00 2) . “ Un lik e statut e s o f l imi ta tio ns , ‘lac hes is not
. . . a mer e matter of time[,] but principally

a question of the ine quity of per mitti ng the claim to be enf

orce d.’ ” Fo rd Mo tor Co. v . Ca tal an ott e , 342 F.3d 543, 550 ( 6th Cir. 2003) (quoting Holmberg v . Armbrec ht , 327 U.S. 392, 396 (1946)). To bene fit from the de fense of lac hes, the pa rty asser ting it must show: (1) lack of diligenc e by the pa rt y a g a ins t w ho m th e de fe ns e is a sse rt e d, and (2 ) p re jud ic e to t

he pa rt y a sse rt ingit.No. 09-3402/3403

Laukus v. Rio Brands, Inc.

- 8 - N a r t r on , 3 0 5 F
. 3 d

a t 4 0 8
. Inth is c ir c u it , a p la in ti f f ’ s d e la y in in it iati n g a

c la im b a s e d u p on trade mark infr inge ment is subject to a strong presumption of re asonable ness as long as the a nalog ous state statute of limitations has not elapsed. Id. Howeve r, whe n a plaintiff f iles s u i t o u t s i d e that period, a rebuttable presumption arises that the delay was unre asonable and pre judi ci al to the defe ndant. Id. 1. Application of L aches Th e dis tr ic t c ourt

c on c lud e d th a t la c he s a

pp lie d to thi s a c tio n b e c a us e L a uk us bro ug ht h is claims outside the statutory period, render ing them presumptively unrea sonable a

nd prejudicia l. To deter mine whether

a plaintiff’ s delay

in bring ing a t rade mark c laim give s rise to the application of l a c h e s , c o u rt s i n t h i s c i r c u i t l o o k t o t h e s t a t e - l aw s t a tu t e o f l i m i t a t i o n s f

o r i n j u r y t o p e r s o n a l p r o p e rt y. Id. at 408. The g ener al rule is tha t w here Congr ess has not provided a statute of limitations, t he trial
co u rt s h o u l d

b o rr o w t h e s t at u t e o f l i m i t at i o n s fr o m t h e f o ru m s t at e t h at p ro v i d es t h e c l o s es tan al o gy t o t h e fede ral c ause of

action. I n te rn a ti o n a l A s s ’ n o

f M a c h in is ts & A e r o s

p a c e W o r k e r s v . Te nn. Va lle yAu th ., 108 F.3d 658, 661 ( 6th Cir. 1997). Here , the forum state is Ohio and the re levant statute of limitation is two y ear s. See Ohio Rev. Code § 2305.10(A) (“[A]n a ction for
. . . injuring persona l property

shall be broug ht w ithin two y ear s after the ca use ac crue s.”). The period of de lay beg ins to run when plaintiff ha d “ac tual or constru c ti v e k n o wledg e of the alleg ed infring ing a ctivity .” Nartron Corp. , 3 0 5 F. 3 d at 4 0 8 (q u o t i n g Da na Cor p. v . I PC L td. Pa rtn e rsh ip , 674 F.Supp. 581, 583 (E.D. Mich. 1987) ). Thus, in this action, the period of delay beg an to r un no later than Fe bruar

y 28, 2005, the date of

the “c ease and desist” letter L aukus’s counsel sent to Rio because, a s of that date, L aukus had actual knowledg e of the allege d infring ing a ctivity . Acc ording ly , under the analog ousNo. 09-3402/3403

Laukus v. Rio Brands, Inc.

- 9 - Ohio statute of limitations, L aukus wa s require d to file suit by Fe bruar y 27, 2007. Howeve r, he
w a it e d u n ti l Ju ly 3 1 , 2 0 0 7

– a

p p r o xim a te ly

f iv e mo n th s a f

te r th e s tatute o f li mi tati o n s h a d r u n . We the re fo re a g re e wi th t

he dis tr ic t cou rt ’s c on c lus ion that L a uk us ’s de lay

wa s p re su mpt ive ly
un re a so na

ble and pr e jud ic ia l to de fe nd ants
. I n r e a c hin g thi s c on c lus ion , w e re je c t L a uk us ’s c on te nti on

that Rio wa s n ot e nti tle d to r a ise the lache s defe nse under

the doctrine of uncle an hands be cause Rio eng ag ed in eg reg ious conduct by usin g s i m i l ar t ra de dre ss for its products, including using the “®” sy mbol for the “A merica

n Pride” mar

k that it did not own, and by continuing to use t he mark afte r its application for the mark
wa s tw ic e de nie d b y

the USP TO ba se d u

po n li ke ly

c on fu sio n w ith L auk us ’s servi c e mark . T his court ha s previously

noted t hat “refusa l by the Unit ed S tates P atent Office to reg ister a mark is not of itself evide nce of

bad fa ith.” Nalpac, Ltd. v. Corning Glass W orks , 784 F.2d 752, 755 ( 6th Cir. 19 86 ). An d, qu oti ngfr om a n o pin ion fr om t he S econ d Cir c uit , w e fu rt he r o bs e rv e d th a t me re ly beca use “‘ the Patent Office had ref used t he defenda

nts’ application for reg istration[ ,]
. . . it did not follow that the defendants could not have hone stly believed that on a weig hing of all the re lative and varia b l e pertinent fac tors a cour t of compete nt jurisdiction would not permit t hem to use the trade mark.’” Id. (q u o t i n g Triumph Hosiery Mills, Inc. v. Triumph Int’l Corp. , 308 F.2d 196, 199 (2d Cir. 1962) ). Her e, Rio ha s consistently taken the position that it s use of the “ Americ an Pride” mark for flag s and flag -re lated g oods did not infringe upon L aukus’s re g istered mar k “Amer ican Pride” for reta il store service s in the field of fla g s, flagpoles , pennants a nd streame rs bec ause the
us e of a mark for good s is dis tin c t f

ro m th e us e of

a mark fo r s e rv ic e s. In a dd iti on , th e re c or d is devoid of e vidence that Rio k n ew o f L aukus’ r eg istration when it adopted the “ Americ an Pride”No. 09-3402/3403

Laukus v. Rio Brands, Inc.

- 10 - mark or that it continued to use the “®” sy mbol nex t to the mark af ter re ceivingthe application denials fr om the USPTO.

2. Rebuttal of the Presumption of Laches Ha vin g de te rm ine d th a t def

e nd ants su c c e ssf

ull y e sta bli sh e d a pre su mpt ion

of un re a so na

ble d e la y a n d ma te r ia l p rejudice , we now c onsider whe ther L aukus pre sented suff icient re buttal evidence to defe at def

endants’ motion for summ ary judgme nt. A party

ag ainst whom lache s is asserted ba sed upon a delay bey ond the statutory period may

defe at the def

ense by “(1) rebu[ting] the presumption of prejudice; (2) e stablish[ ing] that there was a g ood excuse for its delay ; or (3) show[ing ] t hat the de fe nd ant e ng a g e d in

‘p art ic ula

rl y e g re g iou s con du c t whic h wou ld ch ang e the e qu iti e s si g nif ic a ntl y in plaintiff’s favor.’” Nartron , 3 0 5 F. 3 d at 4 0 9 (q u o t i n g Dana Corp. , 647 F.Supp. at 583). As no te d a

bo ve , L a uk us ha s n ot p ro vid e d e vid e nc e of e g re g iou s con du c t by de fe nd ants wi th respe ct to use of the pr otected ma rk. Thus, to defe at t h e l ac hes def ense, he must establish good
cause for de lay

or lac k of mater ial prejudice to defe ndants. As a thre shold matter, we note that “the e ssence of the defe n s e o f lac hes is prejudice to a def e n d an t thr o u g h u n c o n s c io n a b le d e la y b y a p la in ti f

f in th e a s s e rti o n o f h is c la im
. ” Ute Indian Tribe of Uintah v. Probst, 4 2 8 F. 2 d 4 9 1 , 4 9 6 (1 0 t h C i r. 1 9 7 0 ) ( ci t i n g Costello v. United States , 365 U.S. 265, 282 (1961)). U nderpinning the bar to r elief based upon such dela y s is the policy

that “[t] he lapse of time car

ries with it the m emory and li fe of witnesses, t he muni ments of evidence, a nd other
means of proof

.” Br own v . Coun ty of B ue na Vi sta , 9 5 U
. S
. 1 5 7 , 1 6 1 ( 1 8 7 7 )
. G u i d e d b y t h i s p o l i c y, in the context of trademar

k infring ement ac tions, we have observe d that “[a] r e a s o n able businessman should be aff

orded some latitude to assess both the impact of a nother’s use of an alleg edly infring ingNo. 09-3402/3403

Laukus v. Rio Brands, Inc.

- 11 - trade mark [and] the wisdom of pursuinglitigation on the issue.” Tandy Corp. v. Malone & Hyde , Inc. ,76 9 F. 2 d 362, 366 (6th Cir. 1985). Moreove r, abse nt significa nt material pre

judice to a defe ndant, cour

ts are g ener ally hesitant to c onclude that tra demar k infring ement cla ims are ba rre d by lache s for suc h a short per iod as prese nted her e. Com pa re Mc Cart

hy on Tr a de mark s and

Un fa ir Competiti o n , § 31:29 (collec ting c ases holding time delay s of betwe en thre e months and thirteen y ear s not sufficient for

lache s defe nse) with McCarthy on Trade marks and U nfair Compet i t ion, § 31:30 (collec ting c ases holding time delay s of betwe en thre e y ear s and six ty -nine y ear s sufficient f or la c he s d e fe ns e ). Th is i s p art ic ula rl y tr ue wh e re the de fe nd ant w a s p ut o n n oti c e of the a lle g e dly infring ing c onduct. See Tisch Hote ls, Inc. v. A mericana I nn, Inc. , 350 F.2d 609, 615 ( 7th Cir. 1965) (“It is only

. . . wher e the de lay

is so prolonge d an d inexcusable that it amounts to a virtual
a ba nd on me nt o f t

he ri g ht b y

the pla int if

f f or a lon g pe ri od

of tim e that the ba lanc e of e qu iti e s w ou ld favor the knowing infring er.” ) I n this ac ti o n , L a

u k u s p r o v id e d

s w o r na f f id a v it s s tati n g th a t h e d id n o t f il e s u it w it h in the statutory period be cause , in a

n eff ort to c onfirm that his infring ement cla ims remained viable , he and others on his beha lf conduc ted visual i n s p ec t ions of reta il stores in Michiga n and Ohio that had pr e vio us ly

c arr ie d th e a lle g e dly

inf ri ng ingpr od

uc ts. Hi s a ff

ida vit stat ed that, a s a

re su lt o f t

ho se inspections, he believe d the infring ement had cea sed. At the summary judgme nt sta g e, the district court wa s require d to view this evidence in the light most favor able to L auk u s as the non-moving party , and to dra

w all re asonable infere nces in his favor. I n order for the district c ourt to rea ch it s co nclusion that the roug hly two-and- a-ha lf-y ear de lay in b ri ng ingsu it w arr ante d th e a pp lic a tio n o f l a c he s, on e mus t c on c lud e that it i mpe rm iss ibl yNo. 09-3402/3403

Laukus v. Rio Brands, Inc.

- 12 - weig hed the evidenc e in or der to f ind that L aukus did not have a g ood rea son for fi l i n g s u i t fi ve months after the statutory limit ations period and that his evi d en ce d id not show the absenc e of pr e j u d i c e t o d e f

e n d an t s . I n a d d i t i o n , t h e d i s t r i c t c o u rt n e g l e c t e d t o v i e w t h e e v i d e n c e a nda ll
rea sonable infe renc es der ived there from in the light most favor able to L aukus. F or example, althoug h the district court c oncluded that the r etail def endants sold Rio’s flagproducts y ear -round, it ne ve rt he le ss de te rm ine d th a t no re a so na ble pe rs on

c ou ld f ind that L a uk us re a so na

bly be lie ve d Ri o had ce ased i t s alleg ed infring ement bec ause his visual inspections of the r etail stores–whic h wer e made wit h i n t h e t wo-y ear statutory

period a

nd which yielded no evide nce of continued inf ri ng e me nt– oc c ur

re d d ur ingthe “ of

f- se aso n” for

fl a g sa le s. Th e dis tr ic t c ourt re a c he d th is
co n cl u s i o nn o t wi t h s t an d i n g t h e f ac tt h at L au k

u s fi rs td i s co v er edt h e i n fr i n gi n g p ro d u ct s d u ri n g a period that fe ll within what the court dee med the off -se as o n . M o re over, w hether a “f lag -selling season” even e x ists and when it oc curs is itself a f actua l determination beyond the scope of summary judgme nt. I n a similar vein, the district cour t identified sever al questions left u n answe red by the
a ff idavits th a t L a

uk us a nd his c ouns e l su

bmi tte d c on c e rn ingthe me tho ds and tho ro ug hn e ss w ith which the inspec tions were unde rtake n. For example, the district c ourt questioned whether L aukus and his ac quaintance s inspected e very aisle or mer ely

“ente r[ed] t he fr ont of ea ch store a nd [t ook]
a qu ic k lo ok

aro un d, ” and

wh e the r t he y a sk e d a sa le s a sso c ia te if the sto re c arr ie d Ri o’ s f la g s. Th os e questions invaded the pr ovince o f t h e factfinder in weig hing the evidenc e to deter mine the
rea sonablene ss of L aukus’s de cision to delay filing suit.No. 09-3402/3403

Laukus v. Rio Brands, Inc.

T he January 1 4 , 20 0 9 ord er al so f o und t hat Laukus f

ai l ed t o off

er any evi d ence of act ual d am ages. Laukus 4 d o es not ap p eal t hat aspect o f t he d i st ri ct co urt ’ s judgm ent .

- 13 - Finally , had L aukus initiated this action in Michiga n (his state of residence and the plac e of harm), his c laims would have fa llen well within that state’s three -y ear statute of limitations, and he would have e njoy ed a strongpresumption of re asonable ness i n delay ing suit. See Mich. Comp. Laws § 60 0. 58 05 (1 0)
. We ob se rv e that, a s th e ow ne r o f a Mic hig an- ba se d b us ine ss, L a uk us c ou ld
rea sonably

have r elied on the long er statutory period in ca lculating how long he could wa it before
a sse rt inghi s c la ims in a

c ourt of law. Th e dis tr ic t c ourt

ne g le c te d to re c og nize thi s in fe re nc e in L aukus’s fa

vor. Be cause g enuine issues of material fa ct exist reg arding whether L aukus had g ood cause for his delay in bring ing suit, the district cour t erre d in ruling othe rwise. 3. Awa rd of Pro fit s After its S eptember

24, 2008 order

conclude d that laches b ar red L aukus’s tra demar k inf ri ng e me nt a

nd un fa ir c omp e tit ion

c la ims to t

he e xten t th e y

so ug ht d a ma g e s f

or pa st i nf ri ng e me nt, the district court then de termined in its J anuar y 14, 2009 order that L aukus failed to offer sufficie nt
e vid e nc e wa

rr anti ng statut or

y dama g e s fo r dis g or g e me nt of de fe nd ants ’ p ro fi ts attr ibuta ble to p a st use of the protec ted mark. L aukus cla ims the district court err ed by requiringa showing of 4 wi lf uln e ss, c on tr ary

to t he law o f t

his c ir c uit . H e a lso c on te nd s th a t, to the e xten t w ilf uln e ss i s a proper considera

tion, he prese nted evidenc e cre ating a g enuine issue of mater ial fac t that the district court e rrone ously

disreg arde d in ruling in fa vor of de fenda

nts.No. 09-3402/3403

Laukus v. Rio Brands, Inc.

- 14 - A p re va ili ngpla int if

f i n a tr a de mark

inf ri ng e me nt c a se may , und e r c e rt a in c ir c ums tanc e s,
rec over a defe ndant’s prof

its subject to th e p ri n ci p l es of equity . 15 U.S.C. § 1117(a). In the trade mark infr inge ment context, we have pr eviously rec og n i z ed that an awar d of prof its may be
war rante d under various rationale s, such as unjust e nrichment, de terre nce, a nd compensation. W

ynn Oil Co. v. Am. W

ay Serv . Corp. , 9 43 F .2 d 5 95 , 6 06 -0 7 ( 6th Cir . 1 99 1) ; s e e als o Basketball Mk tg. Co., Inc. v. Upscale Entm’t and Mktg. Group , 2 2 7 F. Ap p ’x 4 9 2 , 4 9 3 (6 th C i r. 2 0 0 7 ) ( ci t i n g W ynn Oi l and rea ffirming that, afte r the amendments to L anham Act in 1999, a showi n g o f w i llful i n fr i n gement is not require d for e quities to weig h in favor of an aw ard of

profits). Al t h o u gh showing willfulness is not require d, willfulness is one element that c ourts may consider in we ighing the equities
. See Gucc i America, I nc. v. D affy’s, Inc

. , 3 54 F .3 d 2 28 , 2 41 (3 d Ci r. 20 03 ); Quick Te c hn ologie

s, In c . v . S

ag e Gr ou p P LC , 313 F.3d 338, 349 ( 5th Cir. 2003). I n weig hing the equities in this action, the district court looked to the six factors identified by the Fif th Circuit in Quick Tec hnologies : “(1) w hether the def endant ha d the i ntent to confuse or dece ive, (2) w hether s al es h av e been diverte d, (3) the a dequac y of other r emedies, ( 4) any
unrea sonable de lay

by the plaintiff i n as s er t i n g his rights, (5) the public intere st in making the misconduct unprofitable , and (6) whether it is a case of

palming of

f.” Qu ick Te c hs

. , 313 F.3d at 348-49. The district c ourt found that defe ndants had no intent to confuse or dece ive, that the re cord contained no e vidence of diverte d sales, and that L aukus had not shown that an injunction would be ina d e qu a te to p r o te c t h is r ig h ts
. I t a ls o f o u n d , a s d is c u s s e d in d e ta il a b o v e , tha t L aukus
unrea sonably

delay ed in asser

ting his rig hts. The district court ma d e n o fi nding c oncer ning the public’s intere st in making the misconduc t unp ro fi t able. Base d upon these finding s, it concludedNo. 09-3402/3403

Laukus v. Rio Brands, Inc.

- 15 - that the equitable c onsiderations at play did not support a finding t hat L aukus was entitled to rec over de fe nd ants ’ p ro fi ts. Con tr ary to L a

uk us ’s a sse rt ion , the dis tr ic t c ourt did no t re qu ir e a sh ow ing of will fu lne ss. Ra the r, the co urt a

pp ro pr ia te ly

c on sid e re d th a t e le me nt a mon g oth e r f

a c tor s it de e me d r e le va

nt t o the weig hing of

the equities in this action. Moreo v er , t h e district cour t did not err in consider ing wi llf uln e ss a s a re le va

nt fa c tor , no r did it e rr in loo kin g to the fa c tor s ide nti fi e d by the F if th C ir c uit in Quick Tec hnologies . We a g re e wi th L auk us , ho we ve r, that he pr od uc e d s uf fi c ie nt e vid e nc e to
cre ate a g enuine issue of materia l fac t with respec t to whether Rio intended to conf use or de ceive , g iven Rio’s continued use of the “Ame rica

n Pride” mar

k afte r re ceivingnotice fr om the USPTO that L a uk us ha d a pr ote c te d r ig ht t o th a t ma rk and that Rio ’s us e of

the mark

was li kel y to ca

us e confusion amongcustomers. I n addition, as di scussed a bove, since L aukus cr eate d a g enuine issue of materia l fac t
conce rning the re asonable ness of his delay in filing suit, the district court e rre d in weig hing L aukus’s delay ag ainst him in balancing the equities on his trade mark c ounterfe iting cla im. F ina lly , th e dis tr ic t c ourt imp ro pe rl y

pla c e d th e burd e n o n L a uk us to showlos t pr of

its att ributable to past infring ement. The United States Supreme Court has ma de cle ar that “[t] he b u r d e ni s t h e i n f

r i n g e r ’ s t o p r o v e t h a t h i s i n f r i n g e m e n t h a d n o c a s h v a l u e i ns a l e s m a d e b y h i m . If he does not do so, the pr ofits made on sale s of g oods bear ing the infring ing mark prope rly belong to the owner

of the mar

k. ” Mishawaka Rubber &W oolen Mfg. Co. v. S.S. Kresge Co. , 316 U.S. 203, 206-07 (1942)
.No. 09-3402/3403

Laukus v. Rio Brands, Inc.

- 16 - B. Cla im Di

sm iss e d o n th e Me rit

s T h e d i s t r i c tc o u rts u m m ar i l y d i s m i s s e d

L a u k u s ’ s t r a d e m ar

k c o u n t e r f e i tc l a i m ( C o u n tIII ) b as edu p o ni t s co n cl u s i o n t h at t h e al l ege d m i s u s e of L au k u s ’s re gi s t er ed m ar k wa s fo r go o d s (f l agpo le kit s) un re la te d to the purp os e fo r w hic h his mark wa s is su e d ( re ta il s tor e se rv ic e s in the fi e ld of flag s, flagpoles, penna nts, and streamers). A ccor ding to the district c ourt, the pl ain lang uag e of the L anham Ac t defining “counte rfe it mark,” see 15 U.S.C. § 1116, and the distinction between g oo ds and

se rv ic e s o pe rate to d e fe a t L a uk us ’s tr a de mark

c ounte rf e iti ngc la im. Th e L anh a m A c t p rohi bit s th e us e of “ any re pr od uc tio n, c ounte rf

e it, c op y , o r c olo ra

ble imitation of a reg istered mark in c onnection with the sale
. . . of any g oods or servic es [where ] such use is likely

to cause confusion, or to cause mistake, or to dece ive.” 15 U.S.C. § 1114(1)( a). To
rec over on a

fede ral tra demar

k counter feiting claim, a plaintiff must sh o w t h at : (1 ) the de fenda nt inf ri ng e d a re g ist e re d tr a de mark

in v iol a tio n o f 1 5 U .S. C. § 11 14 ; and (2 ) the de fe nd ant i nte nti on a lly used the mar

k knowing it was a counter feit as the t erm counterfe it is define d in 15 U.S.C. § 1116. 15 U.S.C. § 1117(b). Section 1116 define s “c o unterfe it mark” a s a mark that is reg istered on the principal re g ister in the United States Patent and Tr adema rk Off ice f or such goods or service s sold, of fe re d f or sa le , o r di st ri bu ted an d th a t is in u se , w he the r o r n ot t he pe rs on a g a ins t w ho m r e lie f i s
so ug ht k ne w s uc h ma

rk wa s so reg is ter ed.” 1 5 U .S. C. § 11 16 (d )( 1) (B )( i) . E lse wh e re , th e statut e provides additional cla

rification, de fining “counte rfe it” as a spurious mark which is identical with, or substantially

indisti ng uishable fr om, a re g istered mar k.” 15 U.S.C. § 1127. I n th e pr e se nt a c ti on , the dis tr ic t c ourt dis mis se d L a

uk us ’s tr a de mark

c ounte rf e iti ngc la im beca use it c oncluded that defe ndants used the mark for purposes unrelated to L auku s ’s p rot ecte dNo. 09-3402/3403

Laukus v. Rio Brands, Inc.

- 17 - re g istratio n in

that L a uk us us e d th e pr ote c te d mar k in conne c tio n with

se rv ic e s w he re a s Ri o u se d it in connec tion with g oods. None of the authority cited by the di strict court or the parties, howe ver, addre sses the question of whe ther the distinction betwee n g oods and ser vices pre cludes a

n action for trade mark counter feiting wher e, as here , the protec ted mark is r eg istered for servic es an d t he alleg edly counter feit mark is used on or in connec tion with goods. For purposes of a counter feiting claim, the statute in no w ay distinguishes re g istered mar ks for se rvice s from re g istered mar ks for g oods. T h e u s e o f a counterf eit of either

ty pe of r eg istered
mark , wh e the r in c on ne c tio n wi th the sa le of g oo ds or in c on ne c tio n wi th the sa le of s ervi ces, is actionable under the circ umstances de scribed by the statute. I n v ie w o f t

he pla in l angua g e of

the statut e , w e c on c lud e that the di st ri ct court e rr e d in deter mining that def

endants’ a lleg ed misuse o f t he mar k was unre lated to the purpose for whic h L a u k u s ’ s s e r v i c e m ar k w a s i s s u e d m e r e l y b e c a u s e d e f e n d an t s u s e d t h e “ A m e r i c an P r i d e ” m a rk in
connec tion with the sale of flag -pole kits, not in c onnection with r etail store service s. L aukus has
a re g istered mar

k for “ reta il store service s in the field of flag , flagpoles, penna nts, and streamers,” and he ha s used that mark both to identify his retail store a

nd to desig nate the sour ce o f hi s flag products. Rio used a n i d en t i cal mar k on its flag products, which the reta ilers then sold at re tail. Be cause defe ndants used L aukus’s prote cted se rvice mark– whic h ma r k h e re g istered f

or “r etail store
se rv ic e s in

the fi e ld o f f

la g , f la g po le s, pe nn ants , a

nd str e a me rs ” –in c on ne c tio n wi th the sa le of its fl a g pr od uc ts, we c on c lud e that L a uk us ha s ma de a

pr ima fa c ie c ounte rf

e it tra de mark

c la im.No. 09-3402/3403

Laukus v. Rio Brands, Inc.

- 18 - III . Th e jud g me nt o f t

he dis tr ic t c ourt

is aff irm ed in p art and reve rsed in p art and the c a us e
rem anded for f

urther pr ocee dings c onsistent with thi s opinion