579 F.3d 603 (6th Cir. 2009), 08-1834, Hensley Manufacturing, Inc. v. ProPride, Inc.

Docket Nº:08-1834.
Citation:579 F.3d 603, 92 U.S.P.Q.2d 1003
Opinion Judge:McKEAGUE, Circuit Judge.
Party Name:HENSLEY MANUFACTURING, Incorporated, Plaintiff-Appellant, v. PROPRIDE, INCORPORATED; Sean Woodruff; James C. Hensley, Defendants-Appellees.
Attorney:Craig A. Redinger, Young Basile, Ann Arbor, Michigan, for Appellant. Josh J. Moss, Barris, Sott, Denn & Driker, PLLC, Detroit, Michigan, John F. Early, Jr., Law Office, Fenton, Michigan, for Appellees. Marshall G. MacFarlane, Young Basile, Ann Arbor, Michigan, for Appellant. Josh J. Moss, Barris,...
Judge Panel:Before: McKEAGUE and WHITE, Circuit Judges; MARBLEY, District Judge.[*]
Case Date:September 03, 2009
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
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Page 603

579 F.3d 603 (6th Cir. 2009)

92 U.S.P.Q.2d 1003

HENSLEY MANUFACTURING, Incorporated, Plaintiff-Appellant,

v.

PROPRIDE, INCORPORATED; Sean Woodruff; James C. Hensley, Defendants-Appellees.

No. 08-1834.

United States Court of Appeals, Sixth Circuit

September 3, 2009

Argued: June 19, 2009.

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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ARGUED:

Craig A. Redinger, Young Basile, Ann Arbor, Michigan, for Appellant.

Josh J. Moss, Barris, Sott, Denn & Driker, PLLC, Detroit, Michigan, John F. Early, Jr., Law Office, Fenton, Michigan, for Appellees.

ON BRIEF:

Marshall G. MacFarlane, Young Basile, Ann Arbor, Michigan, for Appellant.

Josh J. Moss, Barris, Sott, Denn & Driker, PLLC, Detroit, Michigan, John F. Early, Jr., Law Office, Fenton, Michigan, for Appellees.

Before: McKEAGUE and WHITE, Circuit Judges; MARBLEY, District Judge.[*]

OPINION

McKEAGUE, Circuit Judge.

Hensley Manufacturing, Inc. (" Hensley Manufacturing" ) and ProPride, Inc., (" ProPride" ) both manufacture and sell trailer hitches for " RVers" everywhere. And, more importantly, both companies manufacture and sell trailer hitches designed by the same man: James Hensley (also known as " Jim Hensley" ). Hensley Manufacturing claims that ProPride's use of Jim Hensley's name in its advertising material is likely to confuse consumers and infringes upon Hensley Manufacturing's registered trademark in the name " Hensley."

Hensley Manufacturing sued ProPride, its founder Shawn Woodruff, and Jim Hensley (collectively, " defendants" ) in federal district court, asserting, inter alia, a claim for trademark infringement under the Lanham Act. Defendants filed separate motions to dismiss the complaint, and Hensley Manufacturing filed its own motion for a preliminary injunction. The district court granted defendants' motions to dismiss and denied Hensley Manufacturing's motion for a preliminary injunction, holding that ProPride's use of Jim Hensley's name fell under the fair use exception to trademark infringement claims.

On appeal, Hensley Manufacturing argues that the complaint adequately stated a claim for trademark infringement. It also argues that the district court prematurely dismissed the complaint on the basis

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of the affirmative defense of fair use and improperly considered matters outside the complaint. We affirm the district court's dismissal of the complaint.

I. BACKGROUND

Hensley Manufacturing is a Michigan corporation with its principal place of business in Davison, Michigan. It designs, engineers, manufactures, and sells trailer-towing products. ProPride is a Michigan corporation with its principal place of business in Grand Blanc, Michigan. ProPride also designs, engineers, manufactures, and sells trailer-towing products in competition with Hensley Manufacturing.

Hensley Manufacturing alleges that on February 22, 1994, it purchased the trailer hitch business of Jim Hensley-an inventor and designer of trailer hitches-as a going concern.1 The company marketed and sold Jim Hensley's trailer hitch under the name " Hensley Arrow" or " Arrow." The company also registered a trademark for the name " Hensley" as well as the " Hensley Arrow" graphic design.2 Hensley Manufacturing alleges that these trademarks have become widely known and respected in the marketplace for trailers and recreational vehicles, or " RVs."

Sean Woodruff worked as a sales and marketing director at Hensley Manufacturing until July 2007, when he left and formed ProPride. At about the same time, Jim Hensley also split with Hensley Manufacturing. Hensley designed a new trailer hitch and licensed the new design to ProPride. ProPride began marketing this hitch as the " ProPride Pivot Point Projection Hitch," or " 3P Hitch."

On January 30, 2008, Hensley Manufacturing sued ProPride, Sean Woodruff, and Jim Hensley in the United States District Court for the Eastern District of Michigan. Hensley Manufacturing brought claims of trademark infringement and unfair competition in violation of the Lanham Act, common law trademark infringement, breach of contract against Jim Hensley, misappropriation of trade secrets against Woodruff and ProPride, and tortious interference with business relations. Specifically, Hensley Manufacturing alleged that defendants had " misappropriated the Plaintiff's registered trademark by offering for sale products and services utilizing the ‘ HENSLEY’ trademark," such that there was a " strong likelihood of confusion in the marketplace as to the source of origin and sponsorship of the goods." In support of these allegations, the complaint referred to four attached examples of ProPride's promotional and advertising materials.

Two of these attached examples are print advertisements by ProPride. Both advertisements state: " Only one man has ever designed a trailer hitch that effectively eliminates trailer sway before it begins. That man is Jim Hensley. NOW he has done it again and IMPROVED the PERFORMANCE of his old design." Both advertisements provide ProPride's telephone number. One advertisement directs the reader to " www. Trailer Sway Control Facts. com," which is part of ProPride's

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website, for a free report regarding towing safety. The other advertisement specifically identifies ProPride and provides its website address: " www. Pro Pride Hitch. com." Both advertisements also contain a disclaimer at the bottom, which states that Jim Hensley is " no longer affiliated with Hensley Mfg., Inc."

In addition to the two print advertisements, an excerpt from ProPride's website was also attached as an exhibit to the complaint. The website includes a link to " The Jim Hensley Hitch Story," which describes Jim Hensley's background, his design contributions to the RV industry, and his relationship to both Hensley Manufacturing and ProPride. The website refers to the 3P hitch as " Jim's new design."

The final attached example of ProPride's alleged trademark infringement is an eBay listing by ProPride entitled " Used Hensley Arrow(R) hitch? Buy NEW Jim Hensley Design." The body of the advertisement, which markets the 3P Hitch, states:

Jim Hensley designed the original Hensley Arrow(R) towing system and it was the standard for over 13 years.

NOW he has done it again with an updated and improved design for today's travel trailers.

Jim is no longer affiliated with the company that was named after him. He chose ProPride, Inc. as the manufacturer of his new design.

On April 1, 2008, Jim Hensley filed a motion to dismiss the complaint for failure to state a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, which was quickly followed by a motion to dismiss filed by ProPride and Sean Woodruff. Hensley Manufacturing opposed both motions. It also filed its own motion for a preliminary injunction, seeking to enjoin defendants from using Jim Hensley's name in connection with the sale or advertising of ProPride's products.

The district court granted defendants' motions to dismiss and denied Hensley Manufacturing's motion for a preliminary injunction. It held that " [t]he use of an individual's name in a descriptive sense, as opposed to the use as a trade name is acceptable under" the fair use exception to claims of trademark infringement. Hensley Mfg., Inc. v. Propride, Inc., 622 F.Supp.2d 554, 559 (E.D.Mich.2008). Because Hensley Manufacturing's claims were based upon ProPride's use of Jim Hensley's name in connection with his individual reputation, and not as a trade name, the district court held that the fair use exception applied and it accordingly dismissed the trademark infringement and unfair competition claims. Reasoning that a successful breach of contract action could have only been based upon a valid claim for trademark infringement, the district court also held that Hensley Manufacturing had failed to state a claim for breach of contract against Jim Hensley.3 Further, having dismissed Hensley Manufacturing's federal claims, the district court declined to...

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