RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2000 FED App. 0123P (6th Cir.)
File Name: 00a0123p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
;
KELLOGG COMPANY,
Plaintiff-Appellant/
Cross-Appellee,
Nos. 98-6237/6360
v. >
Defendant-Appellee/
EXXON CORPORATION,
Cross-Appellant.
1
Appeal from the United States District Court
for the Western District of Tennessee at Memphis.
No. 96-03070—Julia S. Gibbons, Chief District Judge.
Argued: September 14, 1999
Decided and Filed: April 6, 2000
Before: BATCHELDER* and GILMAN, Circuit Judges;
HOOD, District Judge.
*
The Honorable Denise Page Hood, United States District Judge for
the Eastern District of Michigan, sitting by designation.
1
2 Kellogg Co. v. Exxon Corp. Nos. 98-6237/6360 Nos. 98-6237/6360 Kellogg Co. v. Exxon Corp. 27
_________________ CONCLUSION
COUNSEL Accordingly, we REVERSE the judgment of the district
court granting summary judgment to Exxon on Kellogg’s
ARGUED: Daniel S. Mason, San Francisco, California, for claims of infringement, dilution, and abandonment, we
Appellant. Louis T. Pirkey, ARNOLD, WHITE & DURKEE, VACATE the grant of summary judgment to Exxon on
Austin, Texas, for Appellee. ON BRIEF: Daniel S. Mason, Kellogg’s claimed grounds of progressive encroachment, and
San Francisco, California, Grady M. Garrison, BAKER, REMAND the case for further proceedings consistent with
DONELSON, BEARMAN & CALDWELL, Memphis, this opinion.
Tennessee, Christopher T. Micheletti, FURTH, FAHRNER
& MASON, San Francisco, California, for Appellant. Louis
T. Pirkey, Stephen P. Meleen, William G. Barber, ARNOLD,
WHITE & DURKEE, Austin, Texas, Buckner P. Wellford,
John J. Thomason, THOMASON, HENDRIX, HARVEY,
JOHNSON & MITCHELL, Memphis, Tennessee, Robert D.
Rippe, Jr., Charles A. Beach, EXXON CORPORATION,
Irving, Texas, Christopher T. Micheletti, FURTH, FAHRNER
& MASON, San Francisco, California, for Appellee.
_________________
OPINION
_________________
ALICE M. BATCHELDER, Circuit Judge. Plaintiff-
Appellant Kellogg Company appeals the district court’s order
granting summary judgment to Defendant-Appellee Exxon
Corporation on Kellogg’s complaint alleging federal and state
law claims of trademark infringement, false designation of
origin, false representation, dilution, and unfair competition.
Because we conclude that the district court erred in (1)
holding that Kellogg had acquiesced in Exxon’s use of the
challenged mark, (2) dismissing Kellogg’s dilution claim, and
(3) holding that no genuine issues of fact material to
Kellogg’s claim of abandonment remain for trial, we reverse
the judgment of the district court and remand the case for
further proceedings.
26 Kellogg Co. v. Exxon Corp. Nos. 98-6237/6360 Nos. 98-6237/6360 Kellogg Co. v. Exxon Corp. 3
amended by the Federal Trademark Dilution Act of 1995, BACKGROUND
states:
In 1952, Kellogg began using a cartoon tiger in connection
The term “dilution” means the lessening of the capacity with “Kellogg’s Frosted Flakes” cereal and registered its
of a famous mark to identify and distinguish goods and “Tony The Tiger” name and illustration in the United States
services, regardless of the presence or absence of -- (1) Patent and Trademark Office (“PTO”). Today, Kellogg owns
competition between the owner of the famous mark and a number of federal trademark registrations for the name and
other parties, or (2) likelihood of confusion, mistake or appearance of its “Tony The Tiger” trademark; those
deception. trademark registrations cover, among other things, “cereal-
derived food product to be used as a breakfast food, snack
15 U.S.C. § 1127 (emphasis added).4 food or ingredient for making food.”
The federal cause of action for dilution is found in 15 In 1959, Exxon began using a cartoon tiger to promote
U.S.C. § 1125(c)(1). For a plaintiff to succeed on a federal motor fuel products, and in 1965, Exxon registered federally
claim of dilution “(1) the senior mark must be famous; (2) it its “Whimsical Tiger” for use in connection with the sale of
must be distinctive; (3) the junior use must be a commercial petroleum products. Exxon used its cartoon tiger in its “Put
use in commerce; (4) it must begin after the senior mark has A Tiger In Your Tank” advertising campaign, which ran
become famous; and (5) it must cause dilution of the between 1964 and 1968. In 1968, Kellogg acknowledged
distinctive quality of the senior mark.” Nabisco, Inc. v. PF Exxon’s use of its cartoon tiger when it requested Exxon not
Brands, Inc., 191 F.3d 208, 215 (2d Cir. 1999); see also to oppose Kellogg’s application to register its “Tony The
Syndicate Sales, Inc. v. Hampshire Paper Corp., 192 F.3d Tiger” trademark in Germany. Exxon’s “Whimsical Tiger”
633, No. 98-4217, 1999 WL 707786, at *5 (7th Cir. Sept. 13, trademark, obtained with no opposition from Kellogg, became
1999); Ringling Bros.-Barnum & Bailey Combined Shows, incontestable in 1970.
Inc. v. Utah Div. of Travel Dev., 170 F.3d 449, 452 (4th Cir.
1999), cert. denied, 120 S.Ct. 286 (1999); I.P. Lund Trading In 1972, Exxon changed its name from Standard Oil
v. Kohler Co., 163 F.3d 27, 45-50 (1st Cir.1998); Panavision Company to Exxon Corporation and changed its primary
Int'l v. Toeppen, 141 F.3d 1316, 1324 (9th Cir. 1998). trademarks from “Esso,” “Enco”, and “Humble” to “Exxon.”
Exxon submitted into evidence numerous newspaper and
We hold that the district court’s dismissal of Kellogg’s magazine articles and other promotional materials
dilution claims was improper. Because we hold that Kellogg’s demonstrating its extensive and costly advertising campaign
infringement claim is not in fact barred by acquiescence, we to promote its new “Exxon” mark using the cartoon tiger and
also hold that the district court’s dismissal of Kellogg’s bad to launch its “Energy For A Strong America” campaign,
faith infringement claim was improper. which ran in the latter half of the 1970s. For example, an
article in a 1973 issue of Advertising Age called Exxon’s
advertising campaign “the classic ‘name change’ campaign of
all time, with approximately $100,000,000 involved in the
face lift!” Harry Wayne McMahan, McMahan Picks the 100
4
The Tennessee statute controlling Kellogg’s state dilution claim
Best TV Commercials of the Year, ADVERTISING AGE,
applies “notwithstanding the absence of competition between the parties Feb. 19, 1973.
or the absence of confusion as to the source of goods or services.” TENN.
CODE ANN. § 47-25-512 (1998).
4 Kellogg Co. v. Exxon Corp. Nos. 98-6237/6360 Nos. 98-6237/6360 Kellogg Co. v. Exxon Corp. 25
In the early 1980s, Exxon’s advertising agency, McCann- The district court held that Kellogg had failed to produce
Erickson (“McCann”), suggested that Exxon phase out the use evidence of nonuse—the only element of abandonment that
of its cartoon tiger and begin using a live tiger, opining that Exxon’s motion for summary judgment addressed—and that
the cartoon tiger was too whimsical and, hence, inappropriate Exxon was therefore entitled to summary judgment on
in light of prevalent oil shortages. In 1981, Exxon began to Kellogg’s abandonment claim. Our review of the record,
adopt a new look for its gas stations, implementing a program however, persuades us that there remain for trial genuine
to modernize the gas pumps and to eliminate its cartoon tiger issues of material fact with regard to whether Exxon’s use of
on the pump panels. At that time, Exxon had between 16,000 its cartoon tiger during the 1980s was bona fide or simply a
and 18,000 gas stations in the United States. Over 11,000 of sham to protect its rights in the mark. Because we have held
these gas stations were owned and operated by independent as a matter of law that Kellogg did not acquiesce in Exxon’s
distributors (“distributor stations”), and the rest were owned use of its cartoon tiger in connection with the sale of non-
and operated by Exxon (“company operated retail stores” or petroleum products, Kellogg’s abandonment claim with
“CORS”) or owned by Exxon and operated by independent regard to Exxon’s affirmative defense of acquiescence is
dealers (“dealer stations”). The modernization program to moot. But because the abandonment claim may yet be
bring about this “new look” entailed removal of the cartoon germane to the issues remaining for trial, we conclude that the
tiger head design from the lower panels or “pump skirts” on summary judgment in favor of Exxon on this claim must be
its Exxon “Extra” gasoline dispensers. In a letter dated reversed.
August 12, 1982, Exxon instructed its regional managers to
begin phasing out their use of the cartoon tiger: C. Kellogg’s Remaining Claims
The purpose of this memo is to communicate new In granting Exxon’s motion for summary judgment, the
guidelines pertaining to the application of the Exxon district court, in a footnote, dismissed Kellogg’s remaining
Tiger and the Exxon Emblem in all advertising, point-of- claims as moot:
sale material, Company publications, etc.
The dismissal of Kellogg’s action renders moot the
Exxon Tiger--Effective immediately, the use of the following pending motions: Exxon’s renewed motion
cartoon tiger is to be discontinued. for partial summary judgment on Kellogg’s state dilution
claim; Exxon’s motion for partial summary judgment on
Exxon explored possible ways to protect its cartoon tiger Kellogg’s dilution by tarnishment claims; Exxon’s
trademark while shifting toward a live tiger. For example, a motion for partial summary judgment on the issue of bad
1984 internal office memo suggested: faith; and Exxon’s motion for summary judgment on
Kellogg’s federal dilution claim.
Since the only way to protect the Trademark is to use it,
it might be wise for us to explore ways that the Cartoon The short shrift given to Kellogg’s dilution claims ignores
Tiger can be used in marketing on a limited basis. This the fact that dilution rests on legal grounds entirely distinct
is not a hot item, but one that we can’t forget about and from the law governing infringement. In granting Exxon’s
be embarrassed later. motion for summary judgment, the district court held that the
connection between the products offered by Kellogg and
A 1985 internal office memo, which listed the subject as those offered by Exxon and the respective marketing channels
“Trademarks,” stated: for those products were too attenuated for the parties to be
considered competitors. However, the Lanham Act, as
24 Kellogg Co. v. Exxon Corp. Nos. 98-6237/6360 Nos. 98-6237/6360 Kellogg Co. v. Exxon Corp. 5
including acts of omission as well as commission, causes Advertising discontinued use of the “Cartoon Tiger” in
the mark to become the generic name for the goods or all advertising, point-of-sale material and company
services on or in connection with which it is used or publications on August 12, 1982. Regions were advised
otherwise to lose its significance as a mark. Purchaser at that time to do the same (see letter attached). To my
motivation shall not be a test for determining knowledge, there has been no use of the “Cartoon Tiger”
abandonment under this paragraph. by advertising or [in] the areas other than the tiger head
which appears on the pre-RID Trimline Exxon Extra
15 U.S.C. § 1127. gasoline pumps/dispensers.
In order for a party to succeed on a claim of abandonment, We have asked McCann to explore ways that the
it must prove the elements of both non-use and intent, i.e., “Cartoon Tiger” could be used to protect the mark. In
that the other party actually abandoned its mark through non- reviewing possible station applications, two general areas
use and that it intended to do so. See United States Jaycees seem to afford the most opportunities . . . .
v. Philadelphia Jaycees, 639 F.2d 134, 138 (3d Cir. 1981)
(“To establish the defense of abandonment it is necessary to This memo discussed possible strategic placement of cartoon
show not only acts indicating a practical abandonment, but an tiger decals around the pump islands and sales rooms/kiosks.
actual intent to abandon.”) (internal quotation marks and Other correspondence between Exxon’s attorneys, Exxon’s
citation omitted); Citibank v. Citibanc Group, Inc., 724 F.2d marketing department, and McCann reveals Exxon’s efforts
1540, 1545 (5th Cir. 1984) (citing Jaycees and holding that to reduce its use of the cartoon tiger while ensuring trademark
abandonment requires a showing of non-use and intent to protection. Exxon ultimately decided to use its cartoon tiger
abandon and that the claimant bears a high burden of proof); as a graphic display on its stations’ pump toppers.
Prudential Ins. Co., 694 F.2d at 1156 (same).
Many Exxon stations were slow to remove the cartoon tiger
Kellogg argues that Exxon abandoned its “bona fide” use from their pumps. In late 1985 and early 1986, Exxon was
of the cartoon tiger during the 1970s and 1980s, and that using its cartoon tiger on pump toppers at approximately
Exxon therefore may not rely on its use of the cartoon tiger 2,500 gas stations. In 1987, Exxon photographed every
mark prior to 1991—when Exxon reintroduced the tiger to distributor station in the United States. Thousands of
promote convenience store food and beverage sales—to photographs were taken and stored at Exxon, but most of
support its affirmative defenses to Kellogg’s infringement them were destroyed in a 1994 routine file room clean-up.
claims. Kellogg asserts that even if Exxon presented Based upon those photographs that remain, Exxon estimates
evidence to establish that its use of the cartoon tiger was fairly that approximately 10% of the 11,000 distributor stations still
continuous, albeit regionally limited, throughout the 1980s, displayed the cartoon tiger in 1987. In 1993, Exxon
Exxon’s use of its cartoon tiger in the 1980s was not “bona contractually obligated its distributors to comply with the
fide” but, rather, “made merely to reserve a right in [the] modernization program and to convert their stations to the
mark.” 15 U.S.C. § 1127. See Exxon Corp. v. Humble “new look,” threatening to remove from the Exxon chain
Exploration Co., Inc., 695 F.2d 96, 99-100 (5th Cir. 1983) those stations that failed to comply by April 1, 1995.
(recognizing that sham use of a trademark—one instituted
solely for the purposes of maintaining trademark rights—does Exxon submitted evidence in an effort to show that, despite
not qualify as a “bona fide” use under the statute). its efforts to convert the look of its gas stations and shift
toward the use of a live tiger, its use of the cartoon tiger
throughout the 1980s was sufficient to maintain its rights in
6 Kellogg Co. v. Exxon Corp. Nos. 98-6237/6360 Nos. 98-6237/6360 Kellogg Co. v. Exxon Corp. 23
the mark. In November 1985, Exxon had renewed its federal suit in the first place, and no infringing conduct in which the
trademark registration for its cartoon tiger; this renewal would plaintiff could have acquiesced. Put another way, if there is
last an additional 20 years. From 1985 to 1990, some Exxon sufficient similarity between the products and connection
stations used a costumed version of the cartoon tiger for between the marketing channels to start the clock running on
appearances at grand opening events and various promotional the defendant’s affirmative defense of acquiescence, then
activities. In late 1989 and again in 1993, Exxon ran a there is sufficient similarity and connection to permit the
promotion called “Color to Win,” in which over one million plaintiff to counter that defense with a showing of progressive
contestants submitted entries of a cartoon tiger to hundreds of encroachment.
Exxon stations. In the early 1990s, Exxon used its cartoon
tiger to promote the Texas State Fair. Exxon also presented Here, we have found as a matter of law that Kellogg did not
evidence showing that in 1973, an Exxon distributor in acquiesce in Exxon’s use of the cartoon tiger. Because
Virginia placed a large statue of a cartoon tiger in front of its progressive encroachment has relevance only to counter
gas station near the highway, and the statue remains there Exxon’s claim of acquiescence, the district court erred in
today. treating progressive encroachment as a claim independent of
Exxon’s acquiescence defense. Therefore, we will vacate the
In the early 1990s, after the Exxon Valdez oil spill, Exxon district court’s grant of summary judgment to Exxon with
changed the appearance of its cartoon tiger, making it “more regard to progressive encroachment; we note that the district
endearing, warm, and friendly.” In the words of Exxon’s court need not engage in a progressive encroachment analysis
principal artist, “Today’s tiger is now cast in a more on remand.
humanitarian role. He is polite to the elderly, plants trees for
ecology and has an overall concern for the environment.” B. Abandonment
Exxon also began to expand the use of its cartoon tiger.
Although Exxon had opened its first company-operated In addition to its progressive encroachment claim, Kellogg
convenience store in 1984, it was not until the early 1990s claimed that Exxon had abandoned the cartoon tiger mark.
that Exxon began to use its cartoon tiger to promote the sale Kellogg’s Complaint recites Exxon’s pending application to
in those stores of certain foods and beverages, such as register a service mark depicting the cartoon tiger, called
Domino’s Pizza, Coca Cola, Pepsi Cola, Lays Potato Chips, “Hungry Tiger & Design;” the Complaint raises as a separate
and Dunkin Donuts. Exxon also began using its cartoon tiger claim for relief that Exxon abandoned its use of the cartoon
to promote its own private label beverage, “Wild Tiger,” and tiger and demands a declaratory judgment to that effect.
its own private label coffee, “Bengal Traders.”
Abandonment is defined in § 1127 of the Lanham Act:
Exxon’s use of the cartoon tiger to promote food,
beverages, and convenience stores increased dramatically A mark shall be deemed to be “abandoned” if either of
from 1992 to 1996. In October 1992, Exxon had about eight the following occurs: (1) When its use has been
“Tiger Mart” stores; by October 1993, there were about 68 discontinued with intent not to resume such use. Intent
“Tiger Mart” stores; by October 1996, there were over 265 not to resume may be inferred from circumstances.
“Tiger Mart” stores. Nonuse for 3 consecutive years shall be prima facie
evidence of abandonment. “Use” of a mark means the
On November 3, 1992, having learned of Exxon’s bona fide use of such mark made in the ordinary course
reintroduction of its cartoon tiger in Canada and Argentina, of trade, and not made merely to reserve a right in a
mark. (2) When any course of conduct of the owner,
22 Kellogg Co. v. Exxon Corp. Nos. 98-6237/6360 Nos. 98-6237/6360 Kellogg Co. v. Exxon Corp. 7
reverse the district court’s grant of summary judgment to Kellogg’s trademark counsel complained about that use in a
Exxon on the infringement claim and remand this matter for telephone conversation with an Exxon attorney and was
trial on the merits of that claim. advised that Exxon had been using its cartoon tiger in the
United States as well. Kellogg immediately requested
We turn next to the district court’s conclusion, based examples of such use, and on November 20, 1992, Exxon sent
largely on the Prudential decision, that “direct competition” Kellogg a compilation of 14 examples of promotional
was dispositive of Kellogg’s progressive encroachment claim: materials appearing in the United States featuring its cartoon
tiger. Not one of those examples disclosed Exxon’s use of its
Although Exxon has entered into the convenient market cartoon tiger to promote food and beverage items or its new
food sales arena, Exxon has not become a manufacturer “Tiger Mart” stores.
or distributor of food items. Exxon’s “product” is a retail
convenience store engaged in the business of selling food In 1993, Kellogg challenged Exxon’s use of the cartoon
on the premises of gasoline service stations. Kellogg’s tiger in Canada, and in 1994, filed a lawsuit against Exxon’s
“product” for the purposes of this case is cereal. Canadian affiliate. Kellogg was unsuccessful in its attempt to
Although, Exxon may sell Kellogg’s cereal product in negotiate a global settlement in 1994 and 1995. In March
the Tiger Mart or Tiger Express stores, this fact alone 1996, Exxon published for opposition its application to the
does not establish that the parties are competitors in the PTO to register its cartoon tiger for use with convenience
same or even a related market. Even if there is actual stores, and Kellogg commenced opposition proceedings. On
confusion between the Kellogg and Exxon cartoon tiger October 7, 1996, Kellogg filed suit against Exxon in the
trademarks, connection between the parties’ products and United States District Court for the Western District of
marketing channels for the sale of their products is too Tennessee. Kellogg originally sought actual and punitive
attenuated to support Kellogg’s claim of progressive damages derived from Exxon’s use of its cartoon tiger
encroachment. trademark in connection with the sale of food items, as well
as a preliminary and permanent injunction to prohibit Exxon’s
Kellogg, 50 U.S.P.Q.2d at 1507. In ruling, without engaging continued use of its cartoon tiger in connection with the sale
in any analysis of the likelihood of confusion, that progressive of food items on the ground that it unlawfully infringed upon
encroachment requires “direct competition” of identical and diluted Kellogg’s “Tony The Tiger” mark. Exxon moved
products, the district court erred as a matter of law. The for summary judgment on the infringement claim based on its
district court held that (1) a plaintiff who failed to bring suit affirmative defense of acquiescence, and for partial summary
when it first learned of the defendant’s infringing use of judgment on Kellogg’s claims of abandonment and
plaintiff’s mark has acquiesced in the defendant’s infringing progressive encroachment. The district court granted these
use, but (2) the plaintiff does not have a meritorious claim of motions and, holding that its decision rendered all remaining
progressive encroachment because the parties’ products are motions moot, dismissed Kellogg’s bad faith infringement
dissimilar and the connection between their marketing and dilution claims. See Kellogg Co. v. Exxon Corp., 50
channels is attenuated. These two propositions are U.S.P.Q.2d 1499, 1507 (W.D. Tenn. 1998).
fundamentally irreconcilable. If the second were true, there
could be no likelihood of confusion; without a likelihood of Kellogg raises the following assignments of error on
confusion, the plaintiff would not have a provable claim of appeal: (1) the district court improperly granted summary
infringement; in the absence of a provable claim of judgment because Exxon presented no evidence that Kellogg
infringement, there would be no basis for the plaintiff’s filing acquiesced in Exxon’s use of its cartoon tiger in connection
8 Kellogg Co. v. Exxon Corp. Nos. 98-6237/6360 Nos. 98-6237/6360 Kellogg Co. v. Exxon Corp. 21
with the sale of non-petroleum products; (2) the district court connection with food, beverages, and retail convenience
improperly denied Kellogg’s progressive encroachment claim stores.
because progressive encroachment is not limited by a
requirement of “direct competition” and the district court To defeat a suit for injunctive relief, a defendant must
failed to consider the likelihood of confusion between the also prove elements of estoppel which requires more than
marks; (3) the district court improperly denied Kellogg’s a showing of mere silence on the part of the plaintiff;
abandonment claim because there are genuine issues of defendant must show that it had been misled by plaintiff
material fact with regard to whether Exxon’s use of its through actual misrepresentations, affirmative acts of
cartoon tiger during the 1980s was bona fide or simply a sham misconduct, intentional misleading silence, or conduct
to protect its rights in the mark; and (4) the district court amounting to virtual abandonment of the trademark.
improperly dismissed Kellogg’s bad faith infringement and
dilution claims as moot. In this appeal, Kellogg has SCI, 748 F. Supp. at 1262. The record reflects a genuine
abandoned its claim1for damages and pursues only its claim factual dispute as to whether Kellogg was put on notice of
for injunctive relief. such use by Exxon in the mid 1980s or the early 1990s;
indeed, the evidence suggests that in 1992, when Kellogg
ANALYSIS requested examples of Exxon’s then-current use of its cartoon
tiger in the United States, Exxon did not include a single
We review de novo a district court’s order granting example of its cartoon tiger used in connection with the sale
summary judgment. See Avery v. King, 110 F.3d 12, 13 (6th of food items, leading Kellogg to believe that Exxon’s use of
Cir. 1997). Summary judgment is appropriate when there its cartoon tiger in the United States was limited to the
exists “no genuine issue of material fact and . . . the moving promotion of petroleum products. But even if we were to
assume for the sake of argument that Kellogg should have
known as early as 1984, when Exxon opened its first
1
convenience store, that Exxon was using the cartoon tiger to
Kellogg also sought declaratory relief pursuant to 28 U.S.C. promote the sale of food products, Kellogg’s failure to bring
§§ 2201, 2202, requesting that Exxon be required to abandon with suit until 1996 was not “so outrageous, unreasonable and
prejudice its application for federal trademark registration of its “Hungry inexcusable as to constitute a virtual abandonment of its
Tiger & Design” mark. Exxon filed a counterclaim pursuant to 15 U.S.C.
§ 1119 for declaratory judgment of its right to register federally its right” to seek injunctive relief with regard to the sale of non-
“Hungry Tiger & Design” mark, as well as its “Whimsical Tiger” and petroleum products. See University of Pittsburgh, 686 F.2d
“Tiger Express” marks, based on its intent to use those marks to promote at 1044-45. There simply is no evidence in this record that in
retail convenience store services rendered at gasoline stations. The waiting until 1996 to file its complaint, Kellogg actively
district court did not rule on Exxon’s counterclaim, stating only that consented to Exxon’s use of its cartoon tiger in connection
Kellogg failed to put Exxon’s use of the “Hungry Tiger” at issue in any
of its dispositive motions before the court and that Exxon’s creation and with the sale of non-petroleum products or that it engaged in
use of the “Hungry Tiger” is not determinative of Exxon’s claim of some “affirmative conduct in the nature of an estoppel, or
acquiescence or Kellogg’s claims of abandonment and progressive conduct amounting to ‘virtual abandonment.’ ” See Tandy,
encroachment. The district court found in favor of Exxon in all respects 769 F.2d at 366 n.2 (internal citations omitted).
and never addressed Exxon’s counterclaim for declaratory judgment to
register its marks. Because Exxon filed a timely notice of cross-appeal to We therefore hold that, as a matter of law, Kellogg did not
preserve its right to reassert its counterclaim in the event that any portion
of Kellogg’s claims is remanded for further proceedings, and because we acquiesce in Exxon’s use of its cartoon tiger in connection
reverse the district court decision in its entirety, we note that Exxon is with the sale of non-petroleum products. Accordingly, we
entitled to pursue its counterclaim on remand.
20 Kellogg Co. v. Exxon Corp. Nos. 98-6237/6360 Nos. 98-6237/6360 Kellogg Co. v. Exxon Corp. 9
opposition from Kellogg–and Kellogg did not file suit until party is entitled to judgment as a matter of law.” FED R. CIV.
31 years later. See Kellogg, 50 U.S.P.Q.2d at 1505. P. 56(c). “[T]he mere existence of some alleged factual
dispute between the parties will not defeat an otherwise
We think that the district court erred in this conclusion. properly supported motion for summary judgment; the
The failure to oppose Exxon’s registration of its tiger and the requirement is that there be no genuine issue of material
lapse of time from that event until the filing of this action are fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-8
not dispositive here. Although Exxon did in fact register its (1986). The nonmoving party “must set forth specific facts
“Whimsical Tiger” trademark in 1965—with no opposition showing that there is a genuine issue for trial” such that a jury
from Kellogg—Exxon’s trademark registration was for use in reasonably could find for the plaintiff. Id. at 250 (citing FED.
connection with the sale of petroleum products, a product and R. CIV. P. 56(e)). However, it is for the jury and not the judge
product market with which Kellogg had no connection. to weigh the evidence and draw inferences from the facts. See
Exxon had used its cartoon tiger to promote petroleum sales id. at 250. “The evidence of the nonmovant is to be believed,
and Kellogg used its trademark to promote food sales; the two and all justifiable inferences are to be drawn in his favor.” Id.
marks peaceably co-existed, each catering to its own market. at 255 (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-
Because proof of the likelihood of confusion is necessary in 59 (1970)); see also Wathen v. General Electric Co., 115 F.3d
any trademark infringement claim, Kellogg was not obligated 400, 403 (6th Cir. 1997) (holding that when reviewing a
to bring suit at that time in order to protect its trademark. It motion for summary judgment, the district court must resolve
is undisputed, however, that at some point after registering its all ambiguities and draw all factual inferences in favor of the
cartoon tiger in 1965, Exxon moved into the non-petroleum nonmoving party).
market of food, beverages, and retail convenience stores and
used its cartoon tiger in connection with those sales. The Kellogg alleged trademark infringement against Exxon in
point at which Exxon established itself in this non-petroleum violation of § 1114 of the Lanham Act, which states:
market was the point at which Kellogg knew or should have
known that it now had a provable claim for infringement; it (1) Any person who shall, without the consent of the
was at this point that Kellogg’s duty to defend its trademark registrant–(a) use in commerce any reproduction,
was triggered, and it is from this point that any delay must be counterfeit, copy, or colorable imitation of a registered
measured for purposes of determining laches or acquiescence. mark in connection with the sale, offering for sale,
We hold that Exxon’s 1965 registration was insufficient to distribution, or advertising of any goods or services on or
put Kellogg on notice of Exxon’s later use of its cartoon tiger in connection with which such use is likely to cause
in connection with the sale of non-petroleum products. The confusion, or to cause mistake, or to deceive . . . shall be
district court’s failure to distinguish between Exxon’s sale of liable in a civil action by the registrant for the remedies
petroleum and non-petroleum products resulted in the clearly hereinafter provided.
erroneous conclusion that Kellogg acquiesced in Exxon’s use
of its cartoon tiger to promote any and all of its products. 15 U.S.C. § 1114(1). In Daddy’s Junky Music Stores, Inc. v.
Big Daddy’s Family Music Ctr., 109 F.3d 275 (6th Cir. 1997),
Although Kellogg originally challenged Exxon’s use of its we set forth the elements necessary to succeed on a claim of
cartoon tiger in connection with both petroleum and non- trademark infringement.
petroleum products, Kellogg now seeks injunctive relief only
to prohibit Exxon’s continued use of its cartoon tiger in The touchstone of liability under § 1114 is whether the
defendant’s use of the disputed mark is likely to cause
confusion among consumers regarding the origin of the
10 Kellogg Co. v. Exxon Corp. Nos. 98-6237/6360 Nos. 98-6237/6360 Kellogg Co. v. Exxon Corp. 19
goods offered by the parties. When determining whether resulting from the defendant’s moving into the same or
a likelihood of confusion exists, a court must examine similar market area and placing itself more squarely in
and weigh the following eight factors: competition with the plaintiff. This approach is consistent
with the principle that the touchstone of liability for
1. strength of the senior mark; trademark infringement is the likelihood of confusion, not
2. relatedness of the goods or services; direct competition of identical products. Although direct
3. similarity of the marks; competition of identical products certainly would make it
4. evidence of actual confusion; easier for a plaintiff to show a likelihood of confusion, this
5. marketing channels used; factor alone is not dispositive of progressive encroachment.
6. likely degree of purchaser care; In evaluating a plaintiff’s claim of progressive encroachment,
7. the intent of defendant in selecting the mark; and a court must perform a likelihood of confusion analysis,
8. likelihood of expansion of the product lines. informed by factors such as whether the defendant has
brought itself more squarely into competition with the
When applying these factors to a given case, a court must plaintiff, whether the defendant has made changes to its mark
remember that these factors imply no mathematical over the years so that it more closely resembles plaintiff’s
precision, but are simply a guide to help determine mark, whether the parties market to the same customers or
whether confusion is likely. They are also interrelated in area, and whether the parties sell products interchangeable in
effect. Each case presents its own complex set of use.
circumstances and not all of these factors may be
particularly helpful in any given case. But a thorough In the case before us here, the district court held both that
and analytical treatment must nevertheless be attempted. Kellogg had acquiesced in Exxon’s use of the cartoon tiger
The ultimate question remains whether relevant and that Kellogg could not demonstrate progressive
consumers are likely to believe that the products or encroachment by Exxon on Kellogg’s mark. We will address
services offered by the parties are affiliated in some way. first the district court’s holding that Kellogg acquiesced in
Exxon’s use of the cartoon tiger.
Id. at 280 (internal quotation marks, citations, and alterations
omitted). Thus, crucial to any trademark infringement claim In granting Exxon’s motion for summary judgment based
is the plaintiff’s ability to show a likelihood of confusion on on acquiescence, the district court held that Kellogg’s
some fundamental level. remaining silent for a grossly extended period of time and
refusing to facilitate the protection of its trademark
A. Laches, Acquiescence and Progressive constituted “conduct amounting to virtual abandonment” such
Encroachment that it acquiesced in Exxon’s infringing use of its cartoon
tiger. See SCI, 748 F. Supp. at 1262; Tandy, 7693 F.2d at 366
In its motion for summary judgment, Exxon asserted the n.2. Relying on the Anheuser-Busch decision, the district
affirmative defenses of laches and acquiescence. Although court found that Kellogg similarly was “grossly remiss” in
laches precludes a plaintiff from recovering damages, it does that Exxon registered its “Whimsical Tiger” in 1965–with no
not bar injunctive relief. See TWM Mfg. Co., Inc. v. Dura
Corp., 592 F.2d 346, 349-50 (6th Cir. 1979) (“Laches alone
does not foreclose a plaintiff’s right in an infringement action 3
The time period that the Anheuser-Busch Court considered so
to an injunction and damages after the filing of the suit. Only grossly extended as to constitute acquiescence and bar injunctive relief
by proving the elements of estoppel may a defendant defeat was 31 years (1909 to 1940). See Anheuser-Busch, 175 F.2d at 374.
18 Kellogg Co. v. Exxon Corp. Nos. 98-6237/6360 Nos. 98-6237/6360 Kellogg Co. v. Exxon Corp. 11
Manufacturers Screw Products to Stronghold Screw Products, such prospective relief.”); Tandy Corp. v. Malone & Hyde,
and the plaintiff filed suit in 1948. See id. The district court Inc., 769 F.2d 362, 366 n.2 (6th Cir. 1985) (same). Because
held that the plaintiff was barred by laches because it knew of Kellogg withdrew its claim for actual and punitive damages,
defendant’s infringing use of its trademark as early as 1940 or seeking injunctive relief only, the district court properly
1941 and did not bring suit until 1948. See id. The Seventh determined that laches was inapplicable and that Exxon must
Circuit reversed the district court under a theory of prove acquiescence.
progressive encroachment, stating:
Acquiescence, like laches, requires a “finding of conduct on
Prior to 1946 there was no confusion among prospective the plaintiff’s part that amounted to an assurance to the
customers that had come to the attention of plaintiff's defendant, express or implied, that plaintiff would not assert
officers. It was defendant’s incorporation of the word his trademark rights against the defendant.” Elvis Presley
“Stronghold” into its business name that caused most of Enter., Inc., v. Elvisly Yours, Inc., 936 F.2d 889, 894 (6th Cir.
the confusion. Defendant’s course was “progressive * * 1991) (quoting Sweetheart Plastics, Inc. v. Detroit Forming,
* encroachment” and “such a course does not tend to Inc., 743 F.2d 1039, 1046 (4th Cir. 1984)). Although both
arouse hostile action until it is fully developed.” laches and acquiescence require proof that the party seeking
to enforce its trademark rights has unreasonably delayed
Independent Nail & Packing, 205 F.2d at 927 (emphasis pursuing litigation and, as a result, materially prejudiced the
added) (citing O. & W. Thum, 245 F. at 623). In determining alleged infringer, acquiescence requires more. See Elvis, 936
whether, for purposes of the defendant’s laches defense, the F.2d at 894 (holding that with acquiescence, “more is
plaintiff had unreasonably delayed in filing suit, the court did necessary than the ordinary requirement of showing
not consider the period prior to the defendant’s incorporation unreasonable delay and prejudice to the defendant”); Tandy,
of the word “Stronghold” into its business name, when there 769 F.2d at 366 n.2 (“To deny injunctive relief in trademark
was little likelihood of confusion. Rather, the court litigation, . . . some affirmative conduct in the nature of an
determined when the likelihood of confusion began to loom estoppel, or conduct amounting to ‘virtual abandonment,’ is
large, considering such factors as the similarity in scope of the necessary.”) (internal citations omitted); Sara Lee Corp. v.
parties’ geographic markets, the degree to which the parties Kayser-Roth Corp., 81 F.3d 455, 462 (4th Cir. 1996)
contacted the same prospective customers and appealed to the (“Although the doctrines of acquiescence and laches, in the
same general users’ market, and the interchangeability of the context of trademark law, both connote consent by the owner
products the parties sold; the court calculated the to an infringing use of his mark, acquiescence implies active
reasonableness of the plaintiff’s delay from that point. The consent, while laches implies a merely passive consent.”); SCI
court’s finding of progressive encroachment was not Sys., Inc. v. Solidstate Controls, Inc., 748 F. Supp. 1257, 1262
dependent upon a finding of direct competition between (S.D. Ohio 1990) (same).
identical products; rather the progressive encroachment
finding involved a recognition that the defendant’s increasing In University of Pittsburgh v. Champion Prod., Inc., 686
use of the challenged word was not actionable until it actually F.2d 1040, 1044-45 (3d Cir. 1982), a decision relied upon by
caused a likelihood of confusion. this Court in Tandy, the Third Circuit recognized that
although mere delay by an injured party in bringing suit
It is clear from all of these cases that the progressive would not bar injunctive relief, “there is that narrow class of
encroachment analysis turns not on the single question of cases where the plaintiff's delay has been so outrageous,
direct competition, but rather, on the likelihood of confusion unreasonable and inexcusable as to constitute a virtual
12 Kellogg Co. v. Exxon Corp. Nos. 98-6237/6360 Nos. 98-6237/6360 Kellogg Co. v. Exxon Corp. 17
abandonment of its right.” (citing Anheuser-Busch, Inc. v. In Prudential Ins. Co. v. Gibraltar Fin. Corp., 694 F.2d
DuBois Brewing Co., 175 F.2d 370, 374 (3d Cir. 1949) 1150, 1154 (9th Cir. 1982), a decision largely relied upon by
(“[M]ere delay by the injured party in bringing suit would not the SCI Court, the plaintiff was a general insurance provider,
bar injunctive relief. This doctrine, however, has its limits; and the defendant was a savings and loan association with
for example, had there been a lapse of a hundred years or insurance sales comprising less than 0.3 % of its business.
more, we think it highly dubious that any court of equity See id. at 1155. Relying on a number of progressive
would grant injunctive relief against even a fraudulent encroachment cases, the Prudential Court stated:
infringer.”)).
These cases all rely on the principle that if the junior user
Implicit in a finding of laches or acquiescence is the of a mark moves into direct competition with the senior
presumption that an underlying claim for infringement existed user, selling the same “product” through the same
at the2 time at which we begin to measure the plaintiff’s channels and causing actual market confusion, laches is
delay. In Brittingham v. Jenkins, 914 F.2d 447 (4th Cir. no defense. Gibraltar has not moved into direct
1990), the Fourth Circuit held: competition with Prudential as contemplated in these
cases. Gibraltar and Prudential do not offer the same
While the operation of laches depends upon the services to any substantial extent and there is no evidence
particular facts and circumstances of each case, the that actual confusion of their services has occurred.
following factors ordinarily should be considered: (1)
whether the owner of the mark knew of the infringing Id. at 1154 (emphasis added) (citing Chandon Champagne
use; (2) whether the owner’s delay in challenging the Corp. v. San Marino Wine Corp., 335 F.2d 531, 535 (2nd Cir.
infringement of the mark was inexcusable or 1964); Standard Oil Co. v. Standard Oil Co., 252 F.2d 65
unreasonable; and (3) whether the infringing user was (10th Cir. 1958); Independent Nail & Packing Co. v.
unduly prejudiced by the owner’s delay. Stronghold Screw Products, Inc., 205 F.2d 921, 927 (7th Cir.
1953); Miss Universe, Inc. v. Patricelli, 271 F. Supp. 104,
Id. at 456. In Sara Lee, the Fourth Circuit recognized that a 110 (D. Conn. 1967)).
laches analysis “assumes the existence of an infringement for
an extended period prior to the commencement of litigation.” Kason, SCI and Prudential, however, do not stand for the
81 F.3d at 462 (relying on Brittingham and holding that “to proposition that direct competition of identical products in
the extent that a plaintiff’s prior knowledge may give rise to identical markets is required for a finding of progressive
the defense of estoppel by laches, such knowledge must be of encroachment. For example, in Independent Nail & Packing,
a pre-existing, infringing use of a mark.”). In other words, 205 F.2d at 923, the plaintiff was a manufacturer of nails, and
when a defendant charged with trademark infringement avails registered its “Stronghold Nails” trademark in 1938. Shortly
itself of an acquiescence defense, we must presume the thereafter, the defendant, a manufacturer of screws, nuts, and
existence of some underlying infringement to which the bolts, began using the name “Stronghold” in the design of a
plaintiff acquiesced, and any delay attributable to the plaintiff bolt and washer displayed on its business forms and catalogs;
must be measured from the time at which the plaintiff knew also displayed on these items was the company’s name,
Manufacturers Screw Products. See id. at 923-24. The
plaintiff was aware of defendant’s use of the name
2
In this context, we use the analysis of laches and acquiescence “Stronghold” on its business forms as early as 1941. See id.
interchangeably given that acquiescence encompasses the elements of at 924, 927. In 1946, the defendant changed its name from
laches.
16 Kellogg Co. v. Exxon Corp. Nos. 98-6237/6360 Nos. 98-6237/6360 Kellogg Co. v. Exxon Corp. 13
In SCI Systems, 748 F. Supp. at 1257, the district court also or should have known that this infringement had ripened into
was faced with a progressive encroachment claim countering a provable claim. See Kason Indus., Inc. v. Component
a laches defense. There, the plaintiff provided a variety of Hardware Group, 120 F.3d 1199, 1206 (11th Cir. 1997)
electrical and electronic goods, including electrical power (“[D]elay is to be measured from the time at which the
supplies and engineering services, and the defendant plaintiff knows or should know she has a provable claim for
manufactured and sold electrical power control equipment. infringement.”); Gasser Chair Co. v. Infanti Chair Mfg.
See id. at 1259. The plaintiff admitted that it had been aware Corp., 60 F.3d 770, 777 (Fed. Cir. 1995) (holding that the
of defendant’s trademark and product since 1969, but claimed trigger for delay begins when the plaintiff’s “right ripens into
that the defendant had “only recently departed from the one entitled to protection”) (citation omitted).
business practices which had allowed the parties to co-exist
peaceably for many years, and that defendant has only Potential plaintiffs in trademark infringement cases steer a
recently encroached on plaintiff’s rights.” Id. at 1262. The hazardous course between the Scylla of laches and
plaintiff presented evidence showing that the defendant made acquiescence and the Charybdis of premature litigation. The
certain changes to its mark, making it more similar in Fourth Circuit articulated this quandary as follows:
appearance to plaintiff’s mark. See id. at 1262-63.
From the time that [defendant] Kayser-Roth first
[I]t was not until the 1980’s when defendant entered into introduced its Leg Looks (R) products, [plaintiff] Sara
the data processing market, of which plaintiff had been Lee has been on the horns of a dilemma: If [the
a part for many years, by offering uninterruptible power trademark owner] waits for substantial injury and
supplies specially designed for use with data processing evidence of actual confusion, it may be faced with a
equipment . . . that actual confusion between the laches defense. If it rushes immediately into litigation, it
companies developed. It was not until this time, plaintiff may have little or no evidence of actual confusion and
contends, that the defendant changed its color scheme real commercial damage, may appear at a psychological
and its trademark presentation significantly which disadvantage as “shooting from the hip” and may even
brought its usage of the mark “SCI” much closer to face a counterclaim for overly aggressive use of
plaintiff’s use. litigation.
Id. at 1262 (emphasis added). Sara Lee, 81 F.3d at 462 (internal quotation marks and
citation omitted) (third alteration in original). This common
The SCI Court recognized that under a progressive predicament has given rise to the doctrine of progressive
encroachment analysis, changes to a trademark and entry into encroachment.
the same marketing area can defeat a claim of laches. See id.
at 1262. Because the defendant in SCI had “expanded its line Progressive encroachment is relevant in assessing whether
and entered into new marketing areas[, and] . . . changed the laches or acquiescence may be used to bar a plaintiff’s
appearance of its mark through presentation changes in design trademark claim; it applies in cases where the defendant has
and color,” the SCI Court, without addressing the merits of engaged in some infringing use of its trademark—at least
the underlying dispute or whether defendant was within its enough of an infringing use so that it may attempt to avail
rights to make such changes, reversed the district court’s grant itself of a laches or acquiescence defense—but the plaintiff
of summary judgment in favor of the defendant on the defense does not bring suit right away because the nature of
of laches. Id. at 1263. defendant’s infringement is such that the plaintiff’s claim has
yet to ripen into one sufficiently colorable to justify litigation.
14 Kellogg Co. v. Exxon Corp. Nos. 98-6237/6360 Nos. 98-6237/6360 Kellogg Co. v. Exxon Corp. 15
In Kason, the Eleventh Circuit addressed a plaintiff’s 1997)); see also O. & W. Thum Co. v. Dickinson, 245 F. 609,
progressive encroachment claim in the context of a 623 (6th Cir. 1917) (recognizing that progressive
defendant’s laches defense, explaining the relationship encroachment is “a course [that] does not tend to arouse
between the two doctrines as follows: hostile action until it is fully developed”). Progressive
encroachment is an offensive countermeasure to the
Though courts typically discuss encroachment as an affirmative defenses of laches and acquiescence; upon a
excuse for delay, a close examination of . . . cases reveals finding of progressive encroachment, the delay upon which
that the doctrine significantly overlaps the courts’ inquiry those defenses are premised is excused. In other words,
into when delay begins. In AmBrit, for example, this progressive encroachment allows the plaintiff to demonstrate
court measured delay from the point where the plaintiff that although it might have been justified in bringing suit
knew the defendant was manufacturing the allegedly earlier but did not, certain factors now exist that have
infringing product, but we considered the plaintiff's prompted it to do so.
reasonable explanation for failing to sue immediately.
The Kason Court, like many courts before it, recognized
Kason, 120 F.3d at 1206 (citing AmBrit, Inc. v. Kraft, Inc., that implicit in a progressive encroachment analysis is an
812 F.2d 1531, 1546 (11th Cir. 1986)). The plaintiff in inquiry into the likelihood of confusion between the parties’
Kason was a manufacturer and distributor of commercial marks.
refrigeration and food services hardware, and the defendant
produced and marketed nearly identical hardware. See id. at The district court should have evaluated under the
1201. Both parties competed in two markets: the original progressive encroachment theory the point at which
equipment manufacturer’s market (OEMs) and the Kason could have demonstrated likelihood of confusion
replacement parts distribution markets. See id. However, in its primary (either OEM or replacement) market . . . .
with regard to some particular parts, the plaintiff alleged that It is not clear when Kason determined there was a
the defendant had been competing only in one market and had likelihood of confusion in either market to file a claim
slowly encroached upon the other market—that is, the market for dress infringement. Thus, the district court on
in which plaintiff had been competing. See id. at 1201-2. remand must view the merits of Kason’s claims of trade
Kason held that “where a defendant begins use of a trademark dress infringement for each product in terms of the
or trade dress in the market, and then directs its marketing or market involved. It must determine whether there is a
manufacturing efforts such that it is placed more squarely in difference between the two markets material to the
competition with the plaintiff, the plaintiff's delay is infringement claim, and whether and when any
excused.” Id. at 1205. likelihood of confusion might have ripened into a claim.
We deem all of these facts not only relevant to the merits
Because the doctrines of laches and acquiescence must of Kason’s claims, but also relevant to the equitable
assume some underlying infringement, we recognize doctrine of laches and when, if at all, Kason legally could
progressive encroachment as simply giving the plaintiff some have asserted a provable claim of trade dress
latitude in the timing of its bringing suit, that is, waiting until infringement. On the record submitted, without further
the “likelihood of confusion looms large” to bring the action. explication by the district court, we cannot say as a
Sara Lee, 81 F.3d at 462 (quoting THOMAS MCCARTHY, matter of law that laches bars any claim.
MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION,
§ 31.06[2][a] (3d ed. 1995), renumbered as § 31.19 (4th ed. Kason, 120 F.3d at 1206-07 (emphasis added).