Am. Dairy Queen Corp. v. W.B. Mason Co.

• Decision Date: 14 July 2022
• Docket Number: 18-CV-693 (SRN/ECW)
• Parties: AMERICAN DAIRY QUEEN CORPORATION, Plaintiff, v. W.B. MASON CO., INC., Defendant.
• Court: U.S. District Court — District of Minnesota

AMERICAN DAIRY QUEEN CORPORATION, Plaintiff,
v.
W.B. MASON CO., INC., Defendant.

No. 18-CV-693 (SRN/ECW)

United States District Court, D. Minnesota

July 14, 2022

Dean Eyler and Ashley Bennett Ewald, Lathrop GPM LLP, 80 S. 8th St., Ste. 500, IDS Center, Minneapolis, MN 55402, and Sheldon Howard Klein, Lathrop GPM LLP, 600 New Hampshire Ave., N.W., Ste. 700, Washington, DC 20037, for Plaintiff.

Jason Kravitz, Gina McCreadie, Deborah Thaxter, Leslie Hartford, Melanie Dempster, Nixon Peabody LLP, Exchange Pl., 53 State St., Boston MA 02119; and Thomas Johnson, Merchant & Gould, P.C., 150 S. 5th St., Ste. 2200, Minneapolis, MN 55402, for Defendant.

AMENDED ^[1] FINDINGS OF FACT AND CONCLUSIONS OF LAW

SUSAN RICHARD NELSON, UNITED STATES DISTRICT JUDGE

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CONTENTS

I. INTRODUCTION ................................................................................................. 4

FINDINGS OF FACT ....................................................................................... 7

II. FACT WITNESSES AND EVIDENCE ................................................................ 7

A. The Parties 7

B. Dairy Queen's BLIZZARD® Frozen Treat ............................................. 9

C. W.B. Mason's Business and Products .................................................... 25

D. Dairy Queen's Trademark Enforcement Strategy .................................. 40

E. Dairy Queen's Refreshed Logo, July 2018 ............................................ 44

F. W.B. Mason's Sales and Advertising of Third-Party Brands ................ 47

G. Sales of Ice Cream and Blizzard Water In Ice Cream Shops ................. 49

H. Third-Party Use of BLIZZARD 56

III. EXPERT OPINIONS ........................................................................................... 76

A. Recognition of Dairy Queen's BLIZZARD® Mark .............................. 76

B. Strength of the Mark 89

C. Similarity .............................................................................................. 102

D. Association, Impairment of Distinctiveness, and Harm ....................... 106

E. Consumer Confusion ............................................................................ 123

F. Dilution ................................................................................................. 129

CONCLUSIONS OF LAW .......................................................................... 134

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I. JURISDICTION ................................................................................................. 134

II. TRADEMARK INFRINGEMENT/FALSE DESIGNATION OF ORIGIN .... 134

A. Strength of the Mark ............................................................................. 137

B. Similarity .............................................................................................. 148

C. Degree of Competitive Proximity ........................................................ 158

D. Intent ..................................................................................................... 169

E. Degree of Care of Potential Customers ................................................ 174

F. Evidence of Actual Confusion ............................................................. 179

G. Balancing the SquirtoCo Factors .......................................................... 182

III. DILUTION ......................................................................................................... 186

A. Fame ..................................................................................................... 188

B. Degree of Similarity ............................................................................. 193

C. Distinctiveness of the Famous Mark and Substantially Exclusive Use 195

D. Degree of Recognition .......................................................................... 202

E. Intent to Create an Association with Senior Mark ............................... 204

F. Evidence of Actual Association Between the Marks ........................... 204

G. Likelihood of Impairment of Famous Mark's Distinctiveness ............ 208

H. Balancing the Factors ........................................................................... 212

IV. STATE LAW CLAIMS ..................................................................................... 217

V. INJUNCTIVE RELIEF ...................................................................................... 218

ORDER ........................................................................................................ 219

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I. INTRODUCTION

Plaintiff Dairy Queen Corporation, (“Plaintiff” or “Dairy Queen”), a quick-service restaurant franchisor based in Minnesota, holds registered trademarks for its BLIZZARD® frozen treat. It sells BLIZZARD® frozen treats directly to consumers from its nationwide network of franchisee-operated, quick-service restaurants. Dairy Queen's general trademark enforcement strategy for its BLIZZARD® marks is to stop others from using “blizzard” in connection with “consumables,” because Dairy Queen restaurants carry a broad variety of consumable food and beverages.

Defendant W.B. Mason Co., Inc., (“Defendant” or “W.B. Mason”), an office-supply company based in Massachusetts, holds a registered trademark for its Blizzard® copy paper. In 2016, the U.S. Patent and Trademark Office approved its Blizzard spring water marks, which Dairy Queen has opposed.^[2] W.B. Mason sells copy paper and spring water, along with other office supplies, to businesses for use in office breakrooms. It does not sell goods directly to consumers. Dairy Queen and W.B. Mason are not business competitors.

At issue here is W.B. Mason's use of its Blizzard marks on bottled spring water. W.B. Mason began selling its Blizzard branded spring water in 2010. Since that time,

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Dairy Queen's BLIZZARD® treat and W.B. Mason's Blizzard spring water have coexisted in the marketplace for over eleven years. During this period of coexistence, there have been no reports of actual consumer confusion between Dairy Queen's BLIZZARD® treat mark and W.B. Mason's Blizzard bottled water mark.

In March 2018, Dairy Queen filed this lawsuit, asserting federal and state law claims against W. B. Mason for trademark infringement, trademark dilution, unfair competition, and deceptive trade practices, for which it seeks damages, injunctive relief, and an award of attorneys' fees and costs.

First, Dairy Queen contends that W.B. Mason's Blizzard marks on spring water are likely to cause confusion with Dairy Queen's marks for its BLIZZARD® treat. Thus, Dairy Queen asserts two Lanham Act claims-one for trademark infringement under 15 U.S.C. § 1114(1)(a) (Count 1), and one for unfair competition by false designation of origin under 15 U.S.C. § 1125(a) (Count 2). To succeed on such claims, a plaintiff must establish by a preponderance of the evidence that it has a valid, protectible mark and that there is a likelihood of confusion between its mark and the defendant's mark. Cmty. of Christ Copyright Corp. v. Devon Park Restoration Branch of Jesus Christ's Church, 634 F.3d 1005, 1009 (8th Cir. 2011).

In a third Lanham Act claim, Dairy Queen alleges that W.B. Mason's use of its Blizzard marks on spring water are likely to cause dilution by the blurring of Dairy Queen's BLIZZARD® marks. Under this theory, it asserts one count of trademark dilution in violation of 15 U.S.C. § 1125(c) (Count 3). To succeed on a federal claim of dilution by blurring, a plaintiff must establish by a preponderance of the evidence that it is the owner

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of a famous and distinctive mark, and after its mark became famous, the defendant began using a mark in commerce that is likely to impair the distinctiveness of the famous mark. 15 U.S.C. § 1125(c)(2)(A)-(B).

Under Minnesota common law, Dairy Queen also asserts a claim for unfair competition, arguing that W.B. Mason's infringing use of its Blizzard marks on spring water causes a likelihood of confusion as to the origin of W.B. Mason's goods (Count 4). Finally, Dairy Queen asserts a state-law claim under the Minnesota Trade Practices Act, Minn. Stat. §§ 325D.44, based on W.B. Mason's allegedly willful deceptive trade practices by using Blizzard on its spring water (Count 5). These state-law claims are subject to the same requirements as the Lanham Act claims for trademark infringement and false designation of origin, which require a plaintiff to prove, by a preponderance of the evidence, the likelihood of confusion among consumers between the plaintiff's mark and the defendant's mark. DaimlerChrysler AG v. Bloom, 315 F.3d 932, 935 (8th Cir. 2003) (finding state and federal trademark infringement claims were ‘coextensive' and subject to the same analysis).

This matter was tried by way of a bench trial before the undersigned judge over twelve days on September 27-30, October 12-14, October 18-21, and November 8, 2021. At trial, the parties introduced over 500 exhibits and testimony from 30 witnesses. Plaintiff introduced the testimony of 17 witnesses, 13 of whom appeared live and four by deposition designation.^[3] Defendant introduced the testimony of 13 witnesses, four of whom appeared

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live and nine by deposition designation.^[4] Based on the evidence presented at trial, and all of the files, records, and proceedings in this matter, the Court makes the following Findings of Fact and Conclusions of Law.^[5]

FINDINGS OF FACT

II. FACT WITNESSES AND EVIDENCE

A. The Parties

1. Plaintiff is the...