FILED

U.S. COURT OF APPEALS

ELEVENTH CIRCUIT

 APRIL 23, 2010

JOHN LEY

CLERK

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

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No. 09-14540

Non-Argument Calendar

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D.C. Docket No. 07-22937-CV-EGT

MYSTIQUE, INC.,

Plaintiff-Counter-DefendantAppellee,

versus

138 INTERNATIONAL, INC.,

Defendant-Counter-ClaimantAppellant,

BANCO POPULAR NORTH AMERICA,

Defendant.

________________________

Appeal from the United States District Court

for the Southern District of Florida

________________________

(April 23, 2010)

Before CARNES, MARCUS and COX, Circuit Judges.

PER CURIAM:
Mystique, Inc. sued 138 International, Inc. (“138 International”) for trademark

infringement and related torts. Mystique, Inc. sought cancellation of the Mystique

trademark registered to 138 International, alleging that Mystique, Inc. had been using

the mark in commerce prior to 138 International’s use and registration. 138

International defended the lawsuit on the basis oflaches and alleged in a counterclaim

that Mystique, Inc. was the infringer. The parties consented to resolution of the case

by a magistrate judge and filed cross-motionsfor summary judgment. The magistrate

judge granted Mystique, Inc. partial summary judgment, finding that Mystique, Inc.

used the Mystique mark in commerce before 138 International registered and used it;

that 138 International infringed Mystique, Inc.’s mark; and that the Mystique

trademark 138 International had registered must be cancelled. The magistrate judge

denied 138 International’s motion for summary judgment. Thereafter, the magistrate

judge held a trial on the issue of damages. After trial, the court awarded Mystique,

Inc. $2,950,000.

138 International appeals. It argues that the district court erred in granting

Mystique, Inc. partial summary judgment because there were genuine issues of fact

to be resolved regarding whether 138 International used the Mystique mark before

Mystique, Inc. did so. It argues that Mystique, Inc. should be barred from recovery

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by laches. And, it argues that Mystique, Inc. is not entitled to damages, as a matter

of law, because Mystique, Inc. did not register the Mystique mark.

This court reviews a district court’s grant of summary judgment by applying

the same legal standards used by the district court. See, e.g., Hilburn v. Murata Elecs.

N. Am., Inc., 181 F.3d 1220, 1225 (11th Cir. 1999). Summary judgment is

appropriate where “‘there is no genuine issue as to any material fact and the moving

party is entitled to a judgment as a matter of law.’” Wooden v. Bd. of Regents of the

Univ. Sys. of Ga., 247 F.3d 1262, 1271 (11th Cir. 2001) (quoting Fed. R. Civ. P.

56(c)). We review the trial court’s application of the laches defense for abuse of

discretion. See Sanders v. Dooly County, 245 F.3d 1289, 1291 (11th Cir. 2001). In

considering 138 International’s challenge to the damages award, we consider de novo

the question of the availability of damages under the Lanham Act. See United States 1

v. Pistone, 177 F.3d 957, 958 (11th Cir. 1999) (“The interpretation of a statute is a

question of law subject to de novo review.”)

We affirm, finding no reversible error. On the record considered by the

magistrate judge, there is no genuine issue of material fact as to whether 138

International used the Mystique mark before Mystique, Inc. Even if all the evidence

138 International challenges the legal availability of an award of damages, not the amount 1

of the damage award.

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138 International cites in its briefsis credited, that evidence isinsufficient as a matter

of law to establish 138 International’s use of the mark in commerce prior to

Mystique’s use because it is only evidence of 138 International’s communications

with its suppliers. “[N]ot every transport of a good is sufficient to establish

ownership rights in a mark. To warrant protection, use of a mark ‘need not have

gained wide public recognition,’ but ‘[s]ecret, undisclosed internal shipments are

generally inadequate.’” Planetary Motion, Inc. v. Techplosion, Inc., 261 F.3d 1188,

1196 (11th Cir. 2001) (quoting Blue Bell, Inc. v. Farah Mfg. Co., 508 F.2d 1260,

1265 (5th Cir. 1975)). “Trademark claims based upon shipments from a producer’s

plant to its sales office, and vice versa, have often been disallowed.” Blue Bell, 508

F.2d at 1265.2

And, the court did not err in denying 138 International’s motion for summary

judgment on the equitable ground of laches. 138 International did not carry its

burden of proof; it did not prove when Mystique knew or should have known of the

infringement of its mark. Failure to prove that fact is fatal to the laches defense. See

Kason Indus., Inc. v. Component Hardware Group, Inc., 120 F.3d 1199, 1206 (11th

Cir. 1997). 

In Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir. 1981) (en banc), the Eleventh 2

Circuit adopted as binding precedent all decisions handed down by the former Fifth Circuit prior to

October 1, 1981.

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Finally, the court did not err in awarding damages to Mystique, Inc. Damages

may be awarded where, as here, the violation is one of section 43(a) of the Lanham

Act, codified at 15 U.S.C. § 1125(a). Registration of the mark is not required. See

15 U.S.C. § 1117(a) (“When a violation of any right of the registrant of a mark

registered in the Patent and Trademark Office, a violation under section 1125(a) or

(d) of this title, or a willful violation under section 1125(c) of this title, shall have

been established in any civil action arising under this chapter, the plaintiff shall be

entitled, subject to the provisions of sections 1111 and 1114 of this title, and subject

to the principles of equity, to recover (1) defendant’s profits, (2) any damages

sustained by the plaintiff, and (3) the costs of the action.”).

AFFIRMED.

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