United States Court of Appeals

For the Eighth Circuit

___________________________

No. 18-2658

___________________________

Lawn Managers, Inc., a Missouri Corporation

Plaintiff Appellee

v.

Progressive Lawn Managers, Inc., a Missouri Corporation

Defendant Appellant

____________

Appeal from United States District Court 

for the Eastern District of Missouri - St. Louis

____________

Submitted: April 17, 2019

Filed: May 20, 2020 

____________

Before SMITH, Chief Judge, KELLY and KOBES, Circuit Judges.

____________

KELLY, Circuit Judge.

In this trademark infringement case, Progressive Lawn Managers, Inc.,

(Progressive) appeals from the district court’s1 findings of fact and conclusions of law

1The Honorable David D. Noce, United States Magistrate Judge for the Eastern

District of Missouri, to whom the case was referred for final disposition by consent

of the parties pursuant to 28 U.S.C. § 636(c).
after a bench trial finding it liable for trademark infringement and awarding damages

to Lawn Managers, Inc. (Lawn Managers). We affirm. 

I

A

Lawn Managers and Progressive are two Missouri lawn care businesses owned

by Randy Zweifel and Linda Smith, respectively. Prior to Smith’s incorporation of

Progressive, she and Zweifel were married and together owned and operated Lawn

Managers for nearly 20 years in the St. Louis area. In April 2012, Zweifel and Smith

divorced and entered into a marital settlement agreement (MSA) that was incorporated into a divorce decree issued by the Circuit Court of Jefferson County, Missouri,

the following month.

Section 5 of the MSA, which we understand to be the parties’ trademark

licensing agreement, disposed of Zweifel’s and Smith’s interests in the Lawn

Managers business. Smith agreed to assign her 50% interest in the company to

Zweifel. Zweifel would retain the corporate name of Lawn Managers, Inc., and all

right, title, and interest in the business, except for, as relevant here, some commercial

and residential accounts and business equipment specifically awarded to Smith, who

would now operate a separate business. Section 5.02 divided Lawn Managers’ thenexisting accounts and accounts receivables. It awarded “all right, title, and interest”

in certain enumerated commercial accounts to Smith; the remainder went to Zweifel. 

Residential accounts, in turn, were divided by zip code, with each party receiving “all

right, title, and interest in all residential accounts and accounts receivables” contained

within specified zip codes. Section 5.03 divided between the parties various vehicles,

outdoor equipment, and indoor office equipment.

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Section 5.06 specified the conditions for the parties’ “Development of New

Business” and provided that the parties would share the use of the corporate name

“Lawn Managers” for a period of time. Zweifel and Smith agreed that Zweifel would

retain ownership and control of the Lawn Managers business but that Smith could use

the corporate name “Lawn Managers” for two years after the dissolution of their

marriage by establishing a new lawn care company “using the name Progressive

Lawn Managers, Inc. doing business as Lawn Managers.” While Smith used the

name Lawn Managers, she could “use the credit of Lawn Managers, Inc. to purchase

equipment for her new business,” provided she ensured Zweifel would not be liable

for her purchases. At the end of the two years, Smith would discontinue her use of

the Lawn Managers name and would use only the name Progressive Lawn Managers. 

The parties also agreed to a non-solicitation clause providing that for two years after

the dissolution of their marriage, “[Smith] and her employees [would] refrain from

soliciting residential accounts and commercial accounts in the zip codes that have

been awarded to [Zweifel],” and Zweifel would do the same in Smith’s zip codes.

Not long after their divorce was finalized, Zweifel and Smith commenced

divorce-related litigation in state court. Smith filed her first motion for contempt

against Zweifel in early 2013, followed by cross-motions filed by each party. On July

25, 2014, Zweifel and Smith settled their cross-motions through a written agreement

that changed a few terms of the licensing agreement. The Settlement Agreement

extended Smith’s ability to use the Lawn Managers name to December 31, 2014. It

also changed the parties’ limitations on obtaining new business. The parties could

now sign up and service new commercial accounts regardless of zip code, but they

could not “sign up or service any new residential accounts in the zip codes awarded

to the other in their divorce settlement . . . .” The Settlement Agreement specified

that “[t]his non compete agreement shall remain in effect for two years from [July 25,

2014,] and is enacted in lieu of the prior non-solicitation clause found in [§] 5.06 of

the [licensing agreement].”

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As contemplated by the licensing agreement, Zweifel continued to operate the

Lawn Managers business, and Smith began operating Progressive using both the

name Progressive Lawn Managers and, simply, Lawn Managers. Smith’s company

used the two names in advertisements, business materials, and representations to third

parties. Some employees who worked for Lawn Managers before the divorce went

to work for Smith. The public, however, did not know of Zweifel and Smith’s

divorce or the terms of the licensing agreement.

In February 2015, after Smith was to stop using the Lawn Managers name,

Lawn Managers registered the word mark “Lawn Managers” with the U.S. Patent and

Trademark Office. Later that year, Lawn Managers sent Progressive a letter stating

that it considered Progressive’s logo to infringe on the Lawn Managers mark. 

Progressive did not make any changes to its logo.

B

Lawn Managers sued Progressive in February 2016, asserting one count of

federal trademark infringement under the Lanham Act, see 15 U.S.C. § 1114, and

seeking injunctive and monetary relief. Progressive counterclaimed, asserting one

count of cancellation of the trademark registration by virtue of “naked licensing.” As

relevant here, Progressive also raised the affirmative defense of unclean hands.

After a bench trial, the district court entered judgment in favor of Lawn

Managers. The court found that through the licensing agreement, Zweifel had

granted a license to Smith to use the Lawn Managers trademark, and that the license

had not been a naked license. Next, it found that Progressive had infringed on the

Lawn Managers mark after the expiration of the license on December 31, 2014. As

relevant here, the court found that Progressive continued to use the mark in commerce

after that date without consent and, that between 2012 and 2015, there was “constant

and obvious consumer confusion, due to the post-divorce proceedings and the

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resulting . . . license agreement.” And the district court found that after the expiration

of the license, “[Progressive] did not make a good-faith effort to dissipate confusion,

but acted to deliberately exacerbate any consumer confusion with the intent of

profiting from [Lawn Managers’] accrued consumer goodwill for as long as possible.”

The district court entered an injunction and awarded Lawn Managers damages

of $80,688—comprising a percentage of Progressive’s profits during the relevant

time period—and $71,346 for corrective advertising. In calculating its damages

award, the court rejected Progressive’s unclean hands defense. In a post-trial order,

the court also awarded Lawn Managers $138,925 in attorney’s fees.

II

On appeal, Progressive does not contest the district court’s finding of

infringement. But it argues that the issue should not have been reached because

Zweifel granted a naked license to Smith, resulting in the abandonment of the Lawn

Managers mark. In the alternative, Progressive argues that the district court

improperly rejected its unclean hands defense and abused its discretion in its award

of damages. After a bench trial, we review the district court’s legal conclusions de

novo and its factual findings for clear error. Urban Hotel Dev. Co., Inc. v. President

Dev. Grp., L.C., 535 F.3d 874, 879 (8th Cir. 2008). 

A

“As a general matter, trademark owners have a duty to control the quality of

their trademarks.” FreecycleSunnyvale v. Freecycle Network, 626 F.3d 509, 515 (9th

Cir. 2010). “The purpose of the quality-control requirement is to prevent the public

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deception that would ensue from variant quality standards under the same mark . . . .”2

Taco Cabana Int’l, Inc. v. Two Pesos, Inc., 932 F.2d 1113, 1121 (5th Cir. 1991), aff’d

on other grounds sub nom. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763

(1992); see, e.g., Syntex Labs., Inc. v. Norwich Pharmacal Co., 315 F. Supp. 45, 56

(S.D.N.Y. 1970) (emphasizing that “the purpose of the control requirement is to avoid

the danger that the public may be deceived as to the quality of a product sold under

a recognized name” (emphasis added)), aff’d, 437 F.2d 566 (2d Cir. 1971). Naked

licensing occurs when a trademark owner licenses a mark without exercising

sufficient quality control over the services provided under the mark. See, e.g.,

Stanfield v. Osborne Indus., Inc., 52 F.3d 867, 871 (10th Cir. 1995), abrogated on

other grounds by Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S.

118 (2014); FreecycleSunnyvale, 626 F.3d at 515–16. “[Naked licensing] is

inherently deceptive and constitutes abandonment of any rights to the trademark by

the licensor.” Stanfield, 52 F.3d at 871 (cleaned up). 

To succeed on a claim of naked licensing, a party must establish that the

licensor did not retain sufficient control over its licensee to guarantee consistent

quality of the services provided under the mark. See, e.g., id. Because a finding of

naked licensing results in involuntary trademark abandonment and the forfeiture of

trademark rights, the party claiming insufficient control must prove it by clear and

convincing evidence. See Cmty. of Christ Copyright Corp. v. Devon Park

Restoration Branch of Jesus Christ’s Church, 634 F.3d 1005, 1010 (8th Cir. 2011). 

This is a “stringent standard.” Taco Cabana, 932 F.2d at 1121; see also, e.g., Ky.

Fried Chicken Corp. v. Diversified Packaging Corp., 549 F.2d 368, 387 (5th Cir.

1977). Determining “whether the control exercised by the licensor is sufficient under

the circumstances to satisfy the public’s expectation of quality assurance arising from

2Notably, “‘quality control’ does not necessarily mean that the licensed goods

or services must be of ‘high’ quality, but merely of equal quality, whether that quality

is high, low or middle.” Barcamerica Int’l USA Tr. v. Tyfield Imps., Inc., 289 F.3d

589, 598 (9th Cir. 2002) (cleaned up).

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the presence of the trademark on the licensee’s goods or services” is a fact-specific

inquiry, as “[t]he standard of quality control and the degree of necessary inspection

and policing by the licensor will vary with the wide range of licensing situations in

use in the modern marketplace.” 3 J. Thomas McCarthy, McCarthy on Trademarks

and Unfair Competition § 18:55 (5th ed. 2017) [hereinafter McCarthy] (cleaned up);

see, e.g., Eva’s Bridal Ltd. v. Halanick Enters., Inc., 639 F.3d 788, 790–91 (7th Cir.

2011) (explaining that how much control is “enough can’t be answered generally; the

nature of the business, and customers’ expectations, both matter”).

To determine whether a licensor exercises sufficient control, and so may

enforce the terms of the trademark’s use, courts evaluate whether the licensor “(1)

retained contractual rights to control the quality of the use of its trademark; (2)

actually controlled the quality of the trademark’s use; or (3) reasonably relied on [the

licensee] to maintain the quality.” FreecycleSunnyvale, 626 F.3d at 512 n.1; accord

Stanfield, 52 F.3d at 871–72 (applying the same factors). The district court found,

and the parties do not dispute, that the licensing agreement in this case contained no

express contractual right of control and that there was no evidence of actual control

by Lawn Managers. This appeal therefore turns on whether, as the district court

found was the case here, the licensor could reasonably rely on the licensee to maintain

the quality of the services sold under the licensor’s mark.

Courts have found that a licensor may reasonably rely on a licensee for quality

control where the parties have enjoyed a long-term professional association, often

termed a “special relationship.” See 3 McCarthy § 18:57. In finding reasonable

reliance, these courts have also stressed the lack of evidence showing deviant quality

in the products or services provided by the licensee. For example, in Land O’Lakes

Creameries, Inc. v. Oconomowoc Canning Co., the Seventh Circuit rejected a naked

licensing claim where the licensor and licensee enjoyed a 40-year relationship and

there had been “no complaints about the quality of the goods” during that time. 330

F.2d 667, 670 (7th Cir. 1964). Likewise, in Taco Cabana, the Fifth Circuit rejected

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a naked licensing claim against two brothers who had cross-licensed their trade dress

to one another for use in separate restaurants, but whose licensing agreement did not

include any formal provisions establishing quality control. 932 F.3d at 1121. The

court held that the brothers could reasonably rely on each other to maintain consistent

quality because they had enjoyed a close working relationship for eight years and

were intimately familiar with the standards and procedures necessary to ensure

consistent quality. Id. at 1121–22. Similarly, in Transgo, Inc. v. Ajac Transmission

Parts Corp., the Ninth Circuit rejected an abandonment claim against a licensor,

finding adequate control where the licensor had a relationship with the licensee going

back ten years, manufactured 90% of components sold by the licensee, and “believed

that [licensee] was second only to [the licensor] himself in overall knowledge and

ability in product development for th[e] market.” 768 F.2d 1001, 1017–18 (9th Cir.

1985).

On this record, we agree with the district court that Progressive has not met its

high burden of proving that Lawn Managers abandoned its mark through naked

licensing. The district court properly found that Zweifel could reasonably rely on

Smith’s own quality control efforts and thus met the duty of control as licensor.

Of crucial importance in this case are the unique circumstances surrounding the

licensing agreement. The licensing agreement was the result of a divorce and

provided that Zweifel and Smith would, in effect, operate parallel, almost identical

companies using the same name3 and similar equipment and vehicles but in different

zip codes. The licensing agreement split property, such as trucks and various lawn

equipment, between Lawn Managers and Progressive. Among other things, it also

provided that Smith could use Lawn Managers’ credit to purchase equipment for her

new business. In essence, then, the licensing agreement provided that Zweifel and

3Smith was to use Progressive Lawn Managers, doing business as Lawn

Managers.

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Smith would operate virtually the same business for a fixed period of time, or as

Progressive asserts on appeal, that Progressive would “impersonate” Lawn Managers

for the duration of the license period. After the licensing period terminated, so too

did Smith’s permission to use the name Lawn Managers. 

These terms, combined with the couple’s successful operation of the Lawn

Managers business for over 17 years and the lack of any evidence of quality

deviations at Progressive, are sufficient to support the district court’s finding of

reasonable reliance. It is reasonable to expect that Smith was familiar with the

standards and procedures used to control quality at Lawn Managers, and that she

would use those same standards and procedures at Progressive for the specified

period after the divorce. Indeed, as the district court found, “[t]he work crews

employed by [Progressive] had previously been employed by [Lawn Managers] and

made use of the same procedures and equipment they had always used.” The

carryover of workers from Lawn Managers to Progressive indicated a continuity of

services, and there is no evidence in the record that the services provided by

Progressive differed in quality from those provided by Lawn Managers. To the

contrary, Lawn Manager’s crews “observed the work being done by [Progressive’s]

crews and observed and reported that the work [they] performed . . . was consistent

with [Lawn Managers’] standards.” Under these circumstances, “we would depart

from the purpose of the law to find an abandonment simply for want of all the

inspection and control formalities” appropriate in cases involving more formal

licensing transactions. Taco Cabana, 932 F.2d at 1121.

Further, the district court’s findings of fact and conclusions of law paint a

picture of Smith, at Progressive, doing her best to emulate Zweifel and Lawn

Managers. Smith used an advertisement video on her website that described

Progressive as having been in business for a number of years. This was not true, but

the statement is evidence that Progressive intended to hold itself out as Lawn

Managers and to advertise the same quality of services that Lawn Managers had

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always provided. Moreover, Smith was operating Progressive in the same geographic

area as Lawn Managers, and Lawn Manager employees were in a position to observe

that Progressive’s work was consistent with Lawn Managers’ standards. Lawn

Managers could reasonably rely on Smith’s quality control efforts and conclude that

the services offered by Progressive were “of equal quality.” Barcamerica, 289 F.3d

at 598. 

This conclusion aligns with the consensus of our sister circuits. A licensor’s

confidence in the licensee’s ability to maintain quality, without more, may not be

sufficient to show reasonable reliance.4 But courts have consistently concluded that

a “special relationship” can confer adequate quality control. Stanfield 52 F.3d at 867

(“In cases in which courts have found that a licensor justifiably relied on a licensee

to quality control, some special relationship existed between the parties. . . . [In this

case] in contrast, the relationship . . . was neither close nor successful.”). Accord 

FreecycleSunnyvale, 626 F.3d at 518 (citing Barcamerica, 289 F.3d at 597); Land

O’Lakes, 330 F.2d 667 (no naked license when company’s name was on the label and

there were no complaints about the quality of the goods during the forty years of the

license agreement). Here, Zweifel and Smith had a long, close, and successful

relationship operating Lawn Managers together. They were later bound by the MSA

to continue operating parallel lawn care businesses for a comparatively short period

of time after their divorce. The district court did not err in concluding that, under the

circumstances, the “business relationship between Zweifel and Smith was more than

sufficient to give [Lawn Managers] reasonable assurance of the quality of service

[Progressive] would provide to customers.”

4See, e.g., FreecycleSunnyvale, 626 F.3d at 519 (“Because sole reliance on a

licensee’s own control quality [sic] efforts is not enough to overcome a finding of

naked licensing without other indicia of control, and because [the licensor] lacked a

close working relationship with [the licensee] and failed to show any other indicia of

actual control, we conclude that [the licensor] could not rely solely on [the licensee’s]

own quality control efforts.” (internal citation omitted). 

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In urging us to reach a contrary conclusion, Progressive argues that Zweifel

could not reasonably rely on Smith’s own quality control efforts because his

relationship with Smith was adversarial, as evidenced by the contempt proceedings

in state court. But there is no evidence in the record that the companies Zweifel and

Smith run—Lawn Managers and Progressive—were adversarial toward one another

in ways that would affect the quality of the parties’ lawn care services. Indeed, even

though Zweifel testified that he was not in a position to ask Smith whether he could

oversee the quality at Progressive—because they “were not talking at that

time”—there is evidence in the record that others at Lawn Managers were keeping an

eye on Progressive’s work. Scott Hewett, Lawn Managers’s general manager,

testified that he had observed the quality of Progressive’s work and concluded that

“the lawns seemed good, they seemed fine.” Zweifel and Smith’s personal

relationship, post-divorce, appears from the record to have been acrimonious. But

this, standing alone, is not sufficient to conclude that Lawn Managers could not rely

on Smith’s business-related expertise and experience to maintain the quality of

Progressives’ lawn services during the life of the MSA-monitored license agreement. 

In light of the particular facts and circumstances in this record, the district court

did not err in finding that Progressive failed to meet its stringent burden of proving

a naked license. See Barcamerica, 289 F.3d at 596. 

B

Progressive next argues that the district court improperly denied its unclean

hands defense. We review the district court’s decision to deny an equitable defense

for an abuse of discretion. Sturgis Motorcycle Rally, Inc. v. Rushmore Photo & Gifts,

Inc., 908 F.3d 313, 343 (8th Cir. 2018); see Levi Strauss & Co. v. Shilon, 121 F.3d

1309, 1313 (9th Cir. 1997).

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The defense of unclean hands may be invoked when the plaintiff has “engaged

in ‘willful act[s] concerning the cause of action which rightfully can be said to

transgress equitable standards of conduct.’” Sturgis, 908 F.3d at 344 (alteration in

original) (quoting Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S.

806, 815 (1945)). Before the district court, Progressive argued that Lawn Managers

had unclean hands because it sent a “We Want You Back” mailer in late July 2016

to approximately 2,000 of Progressive’s customers. According to Progressive, the

licensing agreement awarded these customer accounts to Smith in perpetuity, and

Lawn Managers was prohibited from ever soliciting those customers. The district

court rejected Progressive’s assertion, concluding that the licensing agreement

unambiguously provided that after July 25, 2016—when the parties’ non-compete

clause expired—Lawn Managers was entitled to renew advertising to all customers.

The district court’s rejection of Progressive’s unclean hands defense turns on

the interpretation of the licensing agreement, which is an issue we review de novo. 

In re Fitzgerald Marine & Repair, Inc., 619 F.3d 851, 858 (8th Cir. 2010). Under

Missouri law, which the parties agree applies here, “[t]he cardinal rule in the

interpretation of a contract is to ascertain the intention of the parties and to give effect

to that intention.” J. E. Hathman, Inc. v. Sigma Alpha Epsilon Club, 491 S.W.2d 261,

264 (Mo. banc 1973). If the contract is unambiguous, “the intention of the parties is

to be gathered from it and it alone.” Id. “A contract is ambiguous only when it is

reasonably susceptible of different constructions”; mere disagreement between the

parties as to construction does not render the contract ambiguous. Id.

Like the district court, we conclude that there is no relevant ambiguity in the

licensing agreement and that Lawn Managers was permitted to send the “We Want

You Back” mailer in July 2016. The licensing agreement originally contained a nonsolicitation clause in § 5.06 that was to be in effect for two years after the parties’

divorce. This clause, however, was replaced entirely by a non-compete agreement

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contained in the parties’ July 25, 2014, Settlement Agreement. This non-compete

agreement provides: 

[The p]arties agree that each of them shall not sign up or service any

new residential accounts in the zip codes awarded to the other in the

[licensing agreement]. This non compete agreement shall remain in

effect for two years from today’s date and is enacted in lieu of the prior

non-solicitation clause found in [§] 5.06 of the [licensing

agreement] . . . .

(Emphasis in original). By its plain language, then, the Settlement Agreement

provided that the only restriction placed on Zweifel with respect to competition for

customer accounts was that, through July 25, 2016, he could not “sign up or service

any new residential accounts” in the zip codes encompassing the residential accounts

that had been awarded to Smith in § 5.02. And there is nothing else in the licensing

agreement that can reasonably be interpreted to place any other limits on the parties’

solicitation of any accounts.

Progressive nevertheless argues that Lawn Managers could not solicit certain

accounts even after July 25, 2016. Progressive’s sole assertion is that the initial

division of accounts in § 5.02 effectively gave Smith a perpetual property interest in

certain customer accounts, and that those accounts thus remained off-limits to Zweifel

forever. But § 5.02 merely divided the customer accounts of the pre-divorce Lawn

Managers business. It states only that “[Smith] is awarded all right, title, and interest”

in certain commercial accounts and that “[she] is awarded all right title, and interest

in all residential accounts and accounts receivables of the corporation in the [listed]

zip codes.” By its plain language, this initial division of assets is wholly unrelated

to restrictions on solicitation or competition.5 And Progressive points to nothing in

5Progressive’s contrary argument—to which it devotes much of its brief—that

the accounts divided in § 5.02 constituted marital property and therefore could never

be solicited again, misapprehends that this is a trademark infringement action in

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the rest of the licensing agreement that prohibited the parties from eventually

competing for the accounts initially divided up in § 5.02. “[A] court’s duty is

confined to the interpretation of the contract which the parties have made for

themselves, . . . and a court may not read into a contract words which the contract

does not contain.” Textor Const., Inc. v. Forsyth R-III Sch. Dist., 60 S.W.3d 692, 698

(Mo. Ct. App. 2001) (cleaned up). Accordingly, the district court was within its

discretion to conclude that the Lawn Managers mailer did not support Progressive’s

unclean hands defense.6

C

Progressive next argues that the district court clearly erred in awarding to Lawn

Managers $80,688 of Progressive’s profits—constituting 25% of Progressive’s total

profits during the relevant time period—and $71,346 for corrective advertising. “In

a bench trial, ascertaining the plaintiff’s damages is a form of factfinding that can be

set aside only if clearly erroneous.” Hall v. Gus Const. Co., 842 F.2d 1010, 1017 (8th

Cir. 1988). Under that standard of review, we will reverse “only if we are ‘left with

the definite and firm conviction that a mistake has been committed.’” Id. at 1013

(quoting Anderson v. City of Bessemer City, 470 U.S. 564, 573 (1985)). 

The district court did not clearly err in its damages award. In an action for

trademark infringement, a plaintiff may recover, “(1) defendant’s profits, (2) any

damages sustained by the plaintiff, and (3) the costs of the action.” 15 U.S.C.

§ 1117(a); see Tonka Corp. v. Tonk-A-Phone, Inc., 805 F.2d 793, 794 (8th Cir. 1986). 

federal court, and that its unclean hands defense turns on the language of the

licensing agreement before us.

6Progressive also challenges the district court’s finding that there was no other

evidence in the record supporting its unclean hands defense. Based on our thorough

review of the record, this finding is not clearly erroneous.

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In awarding Lawn Managers $80,688 of Progressive’s profits, the district court first

found—based on expert reports and Progressive’s tax returns and financial

statements—that Progressive’s total profits during the relevant time period were

$322,753. On appeal, Progressive argues that the district court’s starting point should

have been lower, because, among other things, the parties were bound by a noncompete agreement for some months after the license expired. As a result,

Progressive asserts, Lawn Managers did not lose any business due to the infringement

during that period. But in a trademark case, the defendant bears the burden of

proving any claimed deductions from total profits. See § 1117(a) (“In assessing

profits the plaintiff shall be required to prove defendant’s sales only; defendant must

prove all elements of cost or deduction claimed.”); see also 5 McCarthy § 30:65 (“[I]t

is the infringer’s burden to prove any proportion of his total profits which may not

have been due to use of the infringing mark.”). And the district court found that

Progressive had not submitted any credible evidence supporting its proposed

reductions. Progressive points to nothing in the record that renders this finding

clearly erroneous. But even more damaging to Progressive’s position, in the end, is

that the district court did consider Progressive’s claimed causation problems. The

district court awarded to Lawn Managers only 25% of Progressive’s total profits,

finding that an award in the full amount of $322,753 would be excessive for two

reasons: (1) it was “difficult to trace causation from confused customers to an

infringing act of [Progressive] instead of to [Lawn Managers’] two-year license”; and

(2) from the expiration of the license on January 1, 2015, to July 25, 2016, the parties

were under a non-compete agreement. The district court’s reduction was within its

power to consider equitable principles in awarding damages, see § 1117(a) (Lanham

Act monetary remedies are “subject to the principles of equity”), and we find no clear

error in the district court’s award.

We reach a similar conclusion with respect to the court’s corrective advertising

award. Courts have approved monetary awards to plaintiffs for “corrective

advertising” under the general rubric of “compensatory damages.” See, e.g., Big O

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Tire Dealers, Inc. v. Goodyear Tire & Rubber Co., 561 F.2d 1365, 1374–76 (10th Cir.

1977). “The purpose of general compensatory damages is to make the plaintiff

whole.” Id. at 1374. A trademark infringer “diminishes the value of plaintiff’s

trademark, and advertising restores that mark to its original value.” Zazu Designs v.

L’Oreal, S.A., 979 F.2d 499, 506 (7th Cir. 1992).

In its award for corrective advertising, the district court credited Lawn

Managers’ expert, economist Fernando Torres, who opined that “a reliable estimate

of the cost of a corrective advertising campaign to redress [the wrongful marketing

impressions created by Progressive’s infringing conduct] . . . would be the cost of

mailing a flyer” to households in the zip codes encompassing the accounts Smith was

awarded in § 5.02 of the licensing agreement and that opened up to competitive

activity after the expiration of the non-compete restriction in July 2016. According

to Torres, the total cost for this corrective advertisement was $71,346. On appeal,

Progressive argues that Torres’s estimate was flawed because it did not explicitly

consider how many of the households in those zip codes had ever seen Progressive’s

infringing advertisements or had ever used Progressive’s services. Additionally, it

argues, Torres “could not say” how many of these households had a yard or had ever

seen a mailer in the past. But “[m]ere difficulty in calculating damages is not

sufficient reason to deny relief, as we have repeatedly stressed that some uncertainty

in damages should not work to bar a plaintiff from recovering from a proved

wrongdoer.” WWP, Inc. v. Wounded Warriors Family Support, Inc., 628 F.3d 1032,

1044 (8th Cir. 2011) (cleaned up). We find no clear error in the district court’s award

for corrective advertising.7

Accordingly, the judgment of the district court is affirmed.

7

In a single footnote in its opening brief, Progressive asserts that the district

court’s award of attorney’s fees in favor of Lawn Managers was improper. But

because Progressive did not meaningfully argue this point in its opening brief, it has

waived it. See, e.g., United States v. Stanko, 491 F.3d 408, 415 (8th Cir. 2007);

Chay-Velasquez v. Ashcroft, 367 F.3d 751, 756 (8th Cir. 2004).

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KOBES, Circuit Judge, dissenting.

No one thinks the Marital Separation Agreement (MSA) is a model trademark

transaction. It emerged from a contentious divorce of two people who lived and

worked side-by-side for more than 17 years. The MSA tried to walk a fine line by

giving each spouse their sweat equity in Lawn Managers and preserving their

livelihood. But the catch is that trademarks are also public rights. When the mark

holder abuses the mark by deceiving the public, those rights are lost. 

“A trademark carries with it a message that the trademark owner is controlling

the nature and quality of the goods or services sold under the mark.” 3 McCarthy on

Trademarks and Unfair Competition § 18:48 (5th ed. 2017). The court holds that

Zweifel/Lawn Managers did not grant a naked license because he could reasonably

rely on his former spouse’s (Smith/Progressive) quality control efforts. Zweifel

admitted, though, that there was “no way possible” for him to control quality. 

This extends the “reasonable reliance” doctrine too far. A close working

relationship may substitute for formal controls, but a prior relationship is insufficient

without some indicia of control. FreecycleSunnyvale v. Freecycle Network, 626 F.3d

509, 518–19 (9th Cir. 2010). This is the first time a court has approved a license

without an ongoing relationship to monitor and prevent misleading uses of the mark. 

Our sister circuits have found that a licensor who does “not retain any control” has

engaged in naked licensing and forfeited its rights. Eva’s Bridal Ltd. v. Halanick

Enterprises, Inc., 639 F.3d 788, 791 (7th Cir. 2011) (emphasis in original);

Barcamerica Int’l USA Tr. v. Tyfield Importers, Inc., 289 F.3d 589, 597 (9th Cir.

2002) (naked licensing when licensor fails to “demonstrate[] any ongoing effort to

monitor quality”); Stanfield v. Osborne Indus., Inc., 52 F.3d 867, 872 (10th Cir. 1995)

(naked licensing when parties have adversarial relationship during license). I would

not break from this consensus.

Nor does licensee estoppel apply. Our precedent only bars a licensee from

challenging the mark during the life of the license. Lawn Managers requests damages

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for infringement after the license expired, and the license caused consumer confusion,

so Progressive is not estopped from asserting a naked licensing defense. 

I.

If a licensor that does not take reasonable steps “to prevent misuses of his

trademark in the hands of others the public will be deprived of its most effective

protection against misleading uses of a trademark.” Dawn Donut Co. v. Hart’s Food

Stores, Inc., 267 F.2d 358, 367 (2d Cir. 1959). Although the court’s decision

accurately recites the applicable standards, it concludes that a licensor has sufficient

control by having none at all. This fails to protect the public from naked licensing—a

practice that “is inherently deceptive and constitutes abandonment of any rights to the

trademark by the licensor.” Barcamerica, 289 F.3d at 598 (citation omitted). 

The cases the court relies on all show some form of licensor control. None

hold that a defunct, adversarial business relationship is sufficient. The mark holder

in Transgo made 90% of the components in the trademarked “Shift Kits,” and

therefore relied on its “own quality control procedures at its plant.” Transgo, Inc. v.

Ajac Transmission Parts Corp., 768 F.2d 1001, 1017 (9th Cir. 1985). Further, the

mark holder and the licensee conferred on modifications to existing parts and the

development of new products to be sold under the trademark. Id. In Taco Cabana

Int’l, Inc. v. Two Pesos, Inc., 932 F.2d 1113 (5th Cir. 1991), a jury found “Taco

Cabana exercises adequate supervision and control over TaCasita.” 932 F.2d at 1117. 

Although it opined that the “purpose of the quality-control requirement” is quality not

policing, the Fifth Circuit acknowledged “record evidence of at least some bilateral

quality monitoring.” Id. at 1121. 

The Seventh Circuit has found reasonable reliance when the licensor appeared

on the label and the long history without complaints. Land O’Lakes Creameries, Inc.

v. Oconomowoc Canning Co., 330 F.2d 667, 670 (7th Cir. 1964). But the district

court earlier found that the licensor had “retained the right of supervision over all

labels and products bearing the mark.” Land O’Lakes Creameries, Inc. v.

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Oconomowoc Canning Co., 221 F. Supp. 576, 581 (E.D. Wis. 1963). The district

court held that the “practice of the parties and the contract conditions render the

license arrangement more than a naked license.” Id. 

Taken together, the cases cited by the court allow reasonable reliance through

a “special relationship” when the mark holder had some control over the products. 

Here, the court holds that a “special relationship” alone confers adequate quality

control. Maj. Op. 10. And the court does not acknowledge the further step it takes

today: allowing a licensor to rely on the licensee because of a past relationship that

has gone bad. 

The court finds that Zweifel could reasonably rely on Smith because the license

ensured that they“would operate the same business for a fixed period of time.” Maj.

Op. 8. This is besides the point because Zweifel did not retain “the right to control

the nature and quality of defendant’s use of the mark.” Lawn Managers, Inc. v.

Progressive Lawn Managers, Inc., 390 F. Supp. 3d 975, 982 (E.D. Mo. 2018). The

three-sentence license merely permitted Progressive to “do[] business as Lawn

Managers” and allowed Smith to “use the name Lawn Managers for” two years after

the divorce. Add. 15–16. It did not limit or guide Progessive’s choices in offering

services, training employees, purchasing equipment, or adhering to quality standards. 

The court also holds that Progressive “has not met its high burden” to prove

naked licensing by overlooking key evidence. Maj. Op. 6. When asked whether he

had approached Smith (or anyone at Progressive) about the quality of their services,

Zweifel testified, “No. We were not talking at that time. There was no way possible

to approach her like that.” D. Ct. Dkt. 109, 10/30/17 Tr. 115:23–116:3 (emphasis

added). Zweifel claimed, by “looking at her most recent website,” that Smith “offers

the exact same” treatments. Id. at 76:2–5. Smith, however, explained that “I change

my product and my applying at different times per what we’re learning every year.” 

D. Ct. Dkt. 110, 10/31/17 Tr. 125:19–126:1. Lawn Managers’s general manager,

Scott Hewett, testified that although he had observed lawns Progressive had serviced,

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he stopped supervising Progressive employees “right at the time of the separation.” 

Id. at 41:22–42:3. There is no evidence that Lawn Managers “made any effort to

supervise defendant’s work.” Lawn Managers, 390 F. Supp. 3d at 983. Progressive

did more than show Lawn Managers’s lacked sufficient control, it proved the

“extreme case” where the licensor had none. Eva’s Bridal Ltd., 639 F.3d at 791.

Trying to show evidence of some oversight, the court notes that “others at

Lawn Managers were keeping an eye on Progressive’s work.” Maj. Op. 12. Yet it

cites no case where casual observation, without an ongoing relationship, is sufficient

to permit the mark holder to reasonably rely on the licensee. And in Barcamerica,

the court rejected the mark holder’s assertion of quality control through informal wine

tastings. 289 F.3d at 598. “What matters is that [the mark holder] played no

meaningful role in holding the [product] to a standard of quality.” Id.

As a result, the court approves a license that caused “constant and obvious

consumer confusion.” Lawn Managers, 390 F. Supp. 3d at 979. Customers were

dumbfounded when they were told that Lawn Managers “can’t service your ZIP

Code” as “Lawn Managers” trucks drove through their neighborhood. Id. And more

“confusion manifested itself in phone calls to one party meant for the other party and

checks that had to be hand-sorted to make sure they went to the correct company.” 

Id. Progressive impersonating Lawn Managers without any guarantee that the goods

and services were the same is the very harm to the public that trademarks seek to

prevent. Because the license deceived the public Lawn Managers forfeits the mark.

II.

The court’s decision is also hard to square with those of our sister circuits that

require the mark holder to show some indicia of control and oversight through an

ongoing relationship. The court does not dispute that Zweifel had no relationship

with Smith after the divorce and any oversight was limited to casual observation. I

cannot agree that a licensor who admitted he did not talk to the licensee somehow

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maintained a special relationship that permits a court to infer an indicia of control

over quality. 

The Seventh Circuit rejected a similar licensing scheme in Eva’s Bridal. There,

a family-owned dress shop licensed its name to the owner’s siblings after the siblings

purchased a location that they had operated for eight years. Eva’s Bridal Ltd. v.

Halanick Enterprises, Inc., No. 07 C 1668, 2010 WL 9921849 *2 (N.D. Ill. Aug. 4,

2010). The relevant agreement only required payment of $75,000 per year to use the

“Eva’s Bridal” name and marks. Eva’s Bridal Ltd., 639 F.3d at 789. After the

agreement expired, the siblings stopped paying the royalty but continued using the

mark. Id. The mark holders brought an infringement action five years later. The

district court dismissed the suit because it held that plaintiffs had abandoned the mark

by granting a naked license. Id. Specifically, it found that the agreement had no

quality control provisions and that plaintiffs had “never tried to control any aspect of

how defendants’ shop operated or how the mark was used.” Id. at 790. 

The Seventh Circuit affirmed, explaining that the “supervision required for a

trademark license is the sort that produces consistent quality.” Id. (emphasis in

original). Although the amount of control is a factual question, the Seventh Circuit

found that it was unnecessary to decide that “because plaintiffs did not retain any

control—not via the license agreement, not via course of performance.” Id. at 790–91

(emphasis in original). It was the “paradigm of a naked license” because the mark

holder had “no authority over the appearance and operations of defendants’ business,

or even over what inventory to carry or avoid.” Id. at 791 (emphasis in original). 

The Ninth and Tenth Circuits have also required an indicia of control without

an ongoing relationship. Barcamerica, 289 F.3d at 596; Stanfield, 52 F.3d at 872. 

In Stanfield, an inventor of a fiberglass heating pad for newborn hogs received

royalties from the manufacturer and later sold the rights to use “Stanfield” for 15

years. 52 F.3d at 869. Shortly after signing the licensing agreement, the inventor

resigned from the company and had no contact with it except for litigation over

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royalty payments and the trademark. Id. at 870. The Tenth Circuit affirmed the

district court’s naked license finding because there was no express quality control

provision or actual control and the only relationship between the parties existed in

court.8 Id. at 871–72. 

Likewise, the Ninth Circuit rejected a vineyard’s licensing scheme where the

“sole evidence” of the mark holder’s quality control was random wine tastings and

reliance on the licensee’s reputation. Barcamerica, 289 F.3d at 596. Even though

the wine tastings “perhaps demonstrate a minimal effort to monitor quality,” id. at

597, the Ninth Circuit expected the mark holder “to sample (or to have some

designated wine connoisseur sample) on an annual basis, in some organized way,

some adequate number of bottles of the Renaissance wines which were to bear

Barcamerica’s mark to ensure that they were of sufficient quality,” id. at 598. It held

that a mark holder with no “involvement whatsoever regarding the quality of the wine

and maintaining it at any level” engages in naked licensing. Id. at 597. As the court

points out, the Ninth Circuit’s decision in FreecycleSunnyvale prohibited the licensor

to rely on the licensee because there was no close working relationship (and never

had been) and the licensor failed to show any other indicia of actual control. Maj. Op.

10 n.4. The Ninth Circuit explained that “[o]ther circuits have also relied on the

licensor's confidence in the licensee only where there were additional indicia of

control.” 626 F.3d at 519 n.7. I agree with our sister circuits and would require

Lawn Managers to show some indicia of control.

8

 The court notes that Lawn Managers and Progressive (the companies vis à vis

Zweifel and Smith) were not “adversarial in ways that would affect the quality of the

parties’ lawn care services.” Maj. Op. 11. But the Tenth Circuit did not find an

adversarial relationship because the quality of the pig heating pads had suffered. The

relationship was adversarial because the parties had no working relationship and a

history of lawsuits. Stanfield, 52 F.3d at 871–72. Here, there was no working

relationship and the contempt lawsuits centered on Lawn Managers violating the

MSA by competing for Progressive’s clients. See Maj. Op. 11–13.

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III.

Because the mark has been abandoned due to naked licensing, I also address

the claim that licensee estoppel bars Progressive’s naked licensing defense. Lawn

Managers argues that “a plaintiff-licensee is estopped from contesting the validity of

its licensor’s marks,” citing Seven Up Bottling Company v. Seven Up Co., 561 F.2d

1275 (8th Cir. 1977) (citing Heaton Distrib. Co. v. Union Tank Car Co., 387 F.2d

477, 482 (8th Cir. 1967)). This court has been reluctant to apply licensee estoppel

broadly. “Licensee estoppel precludes only licensees of a mark from contesting it,”

Sturgis Motorcycle Rally, 908 F.3d 313, 321, (8th Cir. 2018), and “covers only the

mark that the licensee has agreed to use,” id. at 322. I would follow this narrow view

of estoppel. 

Our precedent establishes only that a current licensee cannot challenge the

validity of a mark during the life of the license. In Seven Up, we explained that “the

establishment of an existing licensor-licensee relationship between [licensor] and

[licensee] effectively constitutes an insuperable bar to recovery by [licensee] with

regard to its trademark claims.” 561 F.2d at 1279. But there, the licensee “ ha[d]

established the existence of a present and valid licensing agreement between plaintiff

and defendant.” Id. (emphasis added). Nor does the Heaton decision’s statement that

a licensee “would be estopped to claim” a mark is invalid bind us. 387 F.2d at 482. 

There, the court merely enforced a no-contest provision against a licensee. Id. The

court had no occasion to decide if licensee estoppel applied “in the absence of” that

provision. Id. As a result, the estoppel statement is “unnecessary to the decision in

the case and therefore not precedential.”9 Shephard v. United States, 735 F.3d 797,

798 (8th Cir. 2013). 

9

 The court even stated that its entire discussion, including the estoppel

statement, “is immaterial to the outcome of the case.” See id. Accepting that as true,

the statement is dicta.

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As Progressive did not challenge the license’s validity while using the mark,

it is not barred from asserting a naked licensing defense to post-license infringement

claims. This defense is not inconsistent with the license or Progressive’s recognition

that in 2012 the mark held significance. Progressive should be allowed to show that

by 2015 there was no mark left to protect, and therefore, it cannot be liable for postlicense infringement. Especially where the license caused consumer confusion, I

would permit the licensee to assert a naked licensing defense against infringement

claims arising after the license expired.10 

* * *

Trademark law imposes an affirmative duty on the licensor to police the goods

and services offered to the public under its mark. A licensor cannot shirk this duty

by relying on a past relationship with no way to control quality. Because I would not

approve a trademark license that worked a fraud on the public, I respectfully dissent.

______________________________

10 Some courts even hold that naked licensing estops the trademark owner from

asserting rights to the mark. Barcamerica, 289 F.3d at 596 (9th Cir. 2002); Sheila’s

Shine Prod., Inc. v. Sheila Shine, Inc., 486 F.2d 114, 124 (5th Cir. 1973). 

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