BBK Tobacco & Foods LLP v. Skunk Inc.
| Decision Date | 15 December 2020 |
| Docket Number | No. CV-18-02332-PHX-JAT,CV-18-02332-PHX-JAT |
| Parties | BBK Tobacco & Foods LLP, BBK, v. Skunk Incorporated, et al., Defendants. |
| Court | U.S. District Court — District of Arizona |
Pending before the Court are BBK Tobacco & Foods LLP's Motion for Partial Summary Judgment (Doc. 280), Defendants Skunk, Inc. and Vatra, Inc.'s Motion for Partial Summary Judgment for Laches and Non-Infringement (Doc. 337), and accompanying motions to supplement the record (Doc. 336) and strike (Doc. 358). Because the motions contain overlapping issues, the Court addresses them together. The motions are fully briefed,1 and the Court now rules.2
Of all the animals to fight over, the skunk seems like an unlikely choice. But the uniquely foul little creature finds itself at the center of this contentious trademark dispute. BBK Tobacco & Foods, LLP sells a variety of smoking-related products under different brand names. At issue here is BBK's "SKUNK" brand. BBK's SKUNK products includeitems such as rolling papers, herbs for smoking, and glass cigarette tips. In November 2014, BBK began selling its "Skunk Sack" odor-free storage bags, which are plastic zip-top bags, that it has sold ever since. (See Doc. 378).
BBK holds several registered trademarks for both SKUNK and SKUNK BRAND that apply to smoking-related product categories. Specifically, BBK's SKUNK marks apply to cigarette lighters, cigarette rolling papers, cigarette tubes, and herbs for smoking (the "'677 Registration")3 and to electronic cigarettes and cigars (the "'712 Registration").4 (Doc. 280-7 at 2; Doc. 280-8 at 2). BBK's SKUNK BRAND marks apply to cigarette rolling papers and cigarette lighters (the "'666 Registration"); to cigarette tips made of glass (the "'902 Registration"); and to hemp-based rolling papers and tubes for cigarettes and cigars (the "'903 Registration").5 (Doc. 280-6 at 2; Doc. 280-9 at 2; Doc. 280-10 at 2).
Defendants Skunk, Inc. and Vatra, Inc. share the same sole owner, Alise Jusic. (Doc. 280-16 at 8). Vatra, Inc. sells a variety of bags and accessories ranging from small fabric zipper bags to large pieces of luggage that bear Skunk, Inc.'s brand name and logo.6 (See Doc. 337-3 at 142-63). Skunk, Inc.'s bags are advertised as odor-eliminating and have been featured in catalogs along with smoking accessories such as bongs and grinders. (See Doc. 341-4).
Skunk, Inc. holds a registered trademark for SKUNK that applies to wallets, belt bags, drawstring bags, kit bags, and traveling bags (the "'795 Registration").7 Skunk, Inc.has applied to register a trademark for the word SKUNK together with its contemporary skunk-tail logo that applies to more styles of bags than its '795 Registration (the "Pending Application"). (Doc. 280-28 at 2; Doc. 280-37 at 2).
In July 2015, representatives of both BBK and Skunk, Inc. featured their products at the CHAMPS trade show in Las Vegas, Nevada—a show for those in the smoking industry. (Doc. 280-24 at 3-4; Doc. 332-2 at 44, 92-93). At the trade show, Skunk, Inc. featured its SKUNK-branded bags at a large booth that had the single word skunk and its logo printed largely on its backdrop. (Doc. 332-3 at 56). A BBK employee at the trade show noticed Skunk, Inc.'s booth and informed BBK's corporate counsel. (Doc. 280-24 at 3-5).
In February 2017, BBK sent Skunk, Inc. a cease and desist letter which stated that Skunk, Inc.'s use of the SKUNK mark violated the Lanham Act. (Doc. 280-31). Skunk, Inc. responded two weeks later with a letter denying any trademark violations. (Doc. 280-34). That same day, Skunk, Inc. filed the Pending Application with the Patent and Trademark Office (PTO). (Doc. 280-37 at 2). BBK did not respond to Skunk, Inc.'s letter, requested an extension of time to oppose the Pending Application with the PTO in February 2018, and formally objected to the Pending Application with the PTO in late May 2018. (Doc. 280-37 at 3).
BBK then filed the instant action in July 2018 alleging federal trademark infringement under 15 U.S.C. § 1114 (Count 1) and federal false designation of origin and representation under 15 U.S.C. § 1125(a) (Count 2), seeking cancellation of Skunk, Inc.'s '795 Registration under 15 U.S.C. § 1064 (Count 3) and refusal of the Pending Application under 15 U.S.C. §§ 1052(d) and 1051(a) (Count 4), and alleging Arizona common law claims of trademark infringement (Count 5) and unfair competition (Count 6). (Doc. 1, amended at Doc. 49). Skunk, Inc. generally denied BBK's allegations and raised affirmative defenses of unclean hands, fraud, misuse of the federal registration symbol, laches, estoppel, acquiescence, prior registration under Morehouse,8 abandonment,genericness, descriptiveness, and lack of priority. (Doc. 55; Doc. 128). Skunk, Inc. also counterclaimed for cancellation of the '666 Registration on fraud, abandonment, and genericness grounds; of the '677 Registration on fraud and genericness grounds; of the '712 and '902 Registrations on fraud and descriptiveness grounds; and of the '903 Registration on descriptiveness grounds. (Doc. 128). The Court previously dismissed Skunk, Inc.'s genericness-based counterclaims for failing to state a claim upon which relief can be granted. See Fed. R. Civ. P. 12(b)(6). (Doc. 120).
BBK now moves for partial summary judgment on Skunk, Inc.'s affirmative defenses and remaining counterclaims (Doc. 280), and Skunk, Inc. moves for partial summary judgment on its laches affirmative defense and on all BBK's claims that require proof of a likelihood of confusion. (Doc. 337).
Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). The party asserting "that a fact cannot be or is genuinely disputed must support th[at] assertion by" either "citing to particular parts of materials in the record" or "showing that materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed. R. Civ. P. 56(c)(1)(A)-(B).
The movant bears the initial responsibility of presenting the basis for its motion and identifying those portions of the record, together with affidavits, if any, that it believes demonstrate the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. If the movant fails to carry its initial burden of production, the nonmovant need not produce anything. Nissan Fire & Marine Ins. Co., Ltd. v. Fritz Co., Inc., 210 F.3d 1099, 1102-03 (9th Cir. 2000). But if the movant meets its initial responsibility, the burden shifts to the nonmovant to demonstrate the existence of a factual dispute and that the fact in contention is material. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 250 (1986); see Triton Energy Corp. v. Square D. Co., 68 F.3d 1216, 1221 (9th Cir. 1995).
The nonmovant need not establish a material issue of fact conclusively in its favor. First Nat'l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 288-89 (1968). However, it must "come forward with specific facts showing that there is a genuine issue for trial." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (internal citation omitted); see Fed. R. Civ. P. 56(c)(1). "Only disputes over facts that might affect the outcome of the suit," and thus are material, "properly preclude the entry of summary judgment." Anderson, 477 U.S. at 248. Such disputes are "genuine" when they can "reasonably be resolved in favor of either party." Ellison v. Robertson, 357 F.3d 1072, 1075 (9th Cir. 2004).
At summary judgment, the Court's function is not to weigh the evidence and determine the truth but to determine whether there is a genuine issue for trial. Anderson, 477 U.S. at 249. In its analysis, the Court must believe the nonmovant's evidence and draw all inferences in the nonmovant's favor. Id. at 255. The Court need consider only the cited materials, but it may consider any other materials in the record. Fed. R. Civ. P. 56(c)(3). "When simultaneous cross-motions for summary judgment on the same claim are before the [C]ourt, the [C]ourt must consider the appropriate evidentiary material identified and submitted in support of both motions, and in opposition to both motions, before ruling on each of them." Tulalip Tribes of Wash. v. Washington, 783 F.3d 1151, 1156 (9th Cir. 2015) (quoting Fair Hous. Council of Riverside Cnty., Inc. v. Riverside Two, 249 F.3d 1132, 1134 (9th Cir. 2001)) (alteration omitted).
With the exception of a few alternative grounds for relief,9 all BBK's claims require BBK to prove that a likelihood of confusion exists between its marks and Skunk, Inc.'s. See 15 U.S.C. §§ 1114(1), 1125(a), 1064(3), 1052(d); Taylor v. Quebedeaux, 617 P.2d 23, 24 (Ariz. 1980); see also Angel's Gate Inc. v. All-Star Grand Canyon Tours Inc., No. CV-12-08181-NVW, 2013 WL 12114580, at *3 (D. Ariz. Sept. 30, 2013). Skunk, Inc. claims that it is entitled to partial summary judgment because no likelihood of confusion exists between BBK's marks and its own. (Doc. 337 at 20).
"The test for likelihood of confusion is whether a 'reasonably prudent consumer' in the marketplace is likely to be confused as to the origin of the good or service bearing one of the marks." Servpro Indus. Inc. v. Zerorez of Phx. LLC, 339 F. Supp. 3d 898, 904 (D. Ariz. 2018) (quoting Dreamwerks Prod. Grp., Inc. v. SKG Studio, 142 F.3d 1127, 1129 (9th Cir. 1998)). "This requires the confusion 'be probable, not simply a possibility.'" Id. (quoting Murray v. Cable NBC, 86 F.3d 858, 861 (9th Cir. 1996)). Whether a likelihood of confusion exists is determined by the eight-part test set forth in AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-49 (9th Cir. 1979). "The Sleekcraft factors are not a scorecard, a bean-counter, or a...
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