Opinion ID: 795959
Heading Depth: 3
Heading Rank: 4

Heading: The Laches and Estoppel Defenses

Text: 44 Lanard's final appeal challenges the district court's decision denying Lanard summary judgment based on laches and estoppel defenses. 5 Laches is the negligent and unintentional failure to protect one's rights. Nartron Corp. v. STMicroelectronics, Inc., 305 F.3d 397, 408 (6th Cir.2002). To demonstrate a valid estoppel claim, Lanard must show that it had been misled by [General Motors/AM General] through actual misrepresentations, affirmative acts of misconduct, intentional misleading silence, or conduct amounting to virtual abandonment of the trademark. Id. at 412. In its estoppel defense, Lanard relies on the silence and virtual abandonment requirements. Because the application of these related defenses here turns on AM General's silence and the potential abandonment of its claims, we will address both defenses together. 45
46 Before we can reach the merits of the laches and estoppel defenses, we must be sure that an appeal of a summary judgment can be heard. After denying Lanard's motion for summary judgment on laches, the district court submitted the question of the laches and estoppel defenses to the jury and the jury rejected Lanard's defenses. We will generally not rule on an appeal of summary judgment if the issue went to trial. Garrison v. Cassens Transport Co., 334 F.3d 528, 537 (6th Cir.2003). However, an exception to that rule exists if the summary judgment was based on a pure question of law rather than on a material issue of facts, in which case this Court may review the summary judgment motion. Paschal v. Flagstar Bank, 295 F.3d 565, 572 (6th Cir.2002). Although the district court did not provide an explanation for why it denied Lanard's motion for summary judgment on laches and estoppel, it subsequently submitted the question to the jury, thereby insinuating that there were questions of fact for the jury to answer. We thus reason from the district court's ruling that its denial of summary judgment was not based on a pure question of law, but on factual disputes over the elements of laches. 47 Lanard argues that the submission of the question of laches to a jury is irrelevant because the district court did so in an advisory sense. Because the jury's determination on this issue was only advisory, Lanard argues, there was no jury verdict on the issue of laches and this Court may therefore hear the appeal. Based on this advisory jury determination, we agree. While a jury may be used to consider factual disputes in a laches defense, the fact that the jury was used in an advisory manner suggests that our review of the denial of summary judgment is appropriate.
This Court has held that: 48 [a] party asserting laches must show: (1) lack of diligence by the party against whom the defense is asserted, and (2) prejudice to the party asserting it. In this Circuit, there is a strong presumption that a plaintiff's delay in asserting its rights is reasonable as long as an analogous state statute of limitations has not elapsed. In evaluating whether a party has been diligent in protecting its trademark, we look to the state-law statute of limitations for injury to personal property. Here, under Michigan law, that period is three years. In other words, a delay beyond the three-year statutory period is presumptively prejudicial and unreasonable. The period of delay begins to run when plaintiff had actual or constructive knowledge of the alleged infringing activity. 49 Nartron, 305 F.3d at 408 (internal quotation marks and citations omitted). The applicable state statute of limitations in this case is three years. M.C.L.A. § 600.5805(10). 50 Lanard believes the facts demonstrate that AM General was negligent in the protection of its rights and that AM General's silence misled Lanard into continuing with the production of its toys. Because Lanard was the moving party in the summary judgment motion on the issue of the defenses, we must view the facts in the light most favorable to General Motors and AM General. Additionally, in reviewing the facts, we must keep in mind that the subject matter of the case before us is Lanard's use of the trademarked grille design and the trade dress, not its use of the term Humvee. 51 AM General was first aware of Lanard's MUDSLINGER toy in 1993 when AM General contacted Lanard about the use of Hyper Humvee on its packaging. After Lanard agreed to discontinue the use of Hyper Humvee on its packaging, AM General's representative wrote to Lanard on August 26, 1993: You state in your telefax that Lanard Toys is redoing its packaging. If that means that Lanard Toys intends to continue selling toy vehicles that replicate AM General's HUMMER vehicle, we believe that Lanard Toys may still be violating our client's rights. Based on this letter, there appears to be a material issue of fact as to whether AM General was aware that Lanard Toys was going to continue making its Humvee-styled toys without the Humvee name. A reasonable fact-finder could interpret Lanard's silence to constitute agreement with AM General that the company would cease making its toys or, as actually happened, the letter could have been ignored by Lanard. Considering the language in AM General's letter and the failure of Lanard to respond, a jury could believe that AM General was unaware that Lanard continued making its Humvee-styled toys. 52 The parties again contacted each other in 1997, and this time Lanard initiated the dialogue to make a deal with AM General to add the name Humvee back to the toys, and included pictures of the toys in question. Based on this letter, there is still a material issue of fact as to whether AM General took this letter to mean Lanard was already producing the Humvee-styled toys and wanted to use the Humvee name, or whether the entire production of the toys rested on whether AM General would allow Lanard to use the name. Because there remains a question of fact whether AM General delayed in the exercising of its rights, the district court was correct to deny summary judgment as to the laches and estoppel defenses and submit those questions to a jury.