Deere & Co. v. Fimco Inc.

• Decision Date: 13 October 2017
• Docket Number: CASE NO. 5:15–CV–105–TBR
• Citation: 302 F.Supp.3d 837
• Parties: DEERE & COMPANY, Plaintiff/Counter–Defendant v. FIMCO INC., d/b/a/ Schaben Industries, Defendant/Counter–Claimant
• Court: U.S. District Court — Western District of Kentucky

302 F.Supp.3d 837

DEERE & COMPANY, Plaintiff/Counter–Defendant

v.FIMCO INC., d/b/a/ Schaben Industries, Defendant/Counter–Claimant

CASE NO. 5:15–CV–105–TBR

United States District Court, W.D. Kentucky, Paducah Division.

Signed October 13, 2017

D. Craig York, Dinsmore & Shohl LLP, Louisville, KY, Ethan C. Forrest, Rebecca A. Jacobs, Simon J. Frankel, Covington & Burling LLP, San Francisco, CA, Neil K. Roman, Covington & Burling LLP, New York, NY, for Plaintiff/Counter–Defendant.

Gregory C. Scaglione, Koley Jessen PC, LLO, Omaha, NE, Nicholas M. Holland, Whitlow, Roberts, Houston & Straub, PLLC, Paducah, KY, for Defendant/Counter–Claimant.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

Thomas B. Russel, Senior Judge

I. INTRODUCTION

Plaintiff, Deere & Company ("Deere"), brings this action alleging that Defendant, FIMCO, Inc. ("FIMCO"), is acting in violation of federal trademark and common law by producing and distributing trailed agricultural sprayers and applicators bearing green and yellow colors that are indistinguishable from the green and yellow colors Deere uses on its agricultural equipment.¹ Specifically, Deere asserts that FIMCO's actions constitute (1) federal trademark infringement in violation of 15 U.S.C. § 1114, (2) federal false designation of origin and unfair competition in violation of 15 U.S.C. § 1125(a), (3) federal trademark dilution in violation of 15 U.S.C. § 1125(c), and (4) common law trademark infringement in violation of the laws of Kentucky. [DN 1 at 6–9 (Complaint).] Deere seeks a permanent injunction prohibiting FIMCO from "using the Deere Colors trademark in connection with its sprayers and wheeled agricultural equipment, as well as an injunction ordering [FIMCO] to cease using yellow tanks or wheels in connection with wheeled agricultural equipment having green vehicle bodies." [Id. at 1–2.]

This Court conducted a five-day bench trial in which it heard testimony from several Deere employees, including Brian Myers, Manager of the Business Partnerships, Crop Care Platform; Doug Felter, Product Marketing Manager of the Application Equipment department; Neil Dahlstrom, Manager of Corporate Archives and History; and Aaron Wetzel, Vice President of the Global Crop Care Platform at Deere. Deere also called as witnesses Hal Poret, a survey expert; Greg Thompson, Sales Lead at Heritage Tractor in Lawrence, Texas; and Clay Roll, General Manager of FAST Manufacturing, Inc. in Windom, Minnesota.

On behalf of FIMCO, the Court heard testimony from Shannon Persoma, paralegal at the law firm of Koley Jessen in Omaha, Nebraska; Kevin Vaughan, Owner and CEO of FIMCO; Albert Kessler, Manager for the Sprayer Systems and Precision Equipment departments of Stutsman, Inc. in Hills, Iowa; Mark Schwarz, Acting Store Manager for FIMCO's company store in Columbus, Nebraska; Todd Yeazel, National Sales Manager for Fertilizer Dealer; Cindy Perkins, Co–Owner of Perkins Sales, Inc. in Bernie, Missouri, and Dave Wipson, President and COO of FIMCO.

Additionally, both parties submitted designated deposition testimony, counter-designations, and objections. [DN 220 (Deere's Amended Submission of Deposition Designations, Counter–Designations, and Objections); DN 221 (FIMCO's Submission of Deposition Designations, Counter–Designations, and Objections).] Deere designated the deposition testimony of Robert Conley, a retired FIMCO employee; Rob Goltz, FIMCO's National Account Manager; Mark Schwarz; Kevin Vaughan; and Dave Wipson. [DN 220.] FIMCO designated deposition testimony of Neil Dahlstrom; Lant Elrod, Manager of Creative Services for the Agriculture and Turf Divisions at Deere; Doug Felter; Brian Myers; and Barry Nelson, Manager of Media Relations at Deere. [DN 221.]

Following the bench trial, the parties filed post-trial proposed findings of fact and conclusions of law. [DN 337; DN 338.] Pursuant to Federal Rule of Civil Procedure 52, the Court will now make its findings of fact and conclusions of law. For the reasons explained in this opinion, the Court concludes that FIMCO's use of green and yellow on trailed agricultural sprayers and applicators infringes on and dilutes Deere's trademarks in violation of 15 U.S.C. § 1114, § 1125(a), § 1125(c), and Kentucky common law. The Court also finds that FIMCO failed to prove the elements of its affirmative defenses of acquiescence and estoppel. Based on these findings, the Court will issue a permanent injunction prohibiting FIMCO's future use of the green and yellow color combination.

II. STANDARD

Rule 52 of the Federal Rules of Civil Procedure requires that, "[i]n an action tried on the facts without a jury ... the court must find the facts specially and state its conclusions of law separately." Fed. R. Civ. P. 52(a)(1). "The findings and conclusions ... may appear in an opinion or a memorandum of decision filed by the court." Fed. R. Civ. P. 52(a)(1). "In considering a district court's decision following a bench trial," this Court's findings of fact are reviewed "under the clearly erroneous standard. Conclusions of law, on the other hand, are reviewed de novo. " Overton Distributors, Inc. v. Heritage Bank , 340 F.3d 361, 366 (6th Cir. 2003) (quoting Burzynski v. Cohen , 264 F.3d 611, 616 (6th Cir. 2001) ).

III. EVIDENTIARY DETERMINATIONS

Numerous evidentiary determinations remain to be ruled on in this case. The Court will address all objected-to exhibits, testimony, and deposition designations on which it relies in making its findings of fact and conclusions of law set out herein. For those exhibits on which the Court does not rely, however, the Court will not address the parties' objections thereto.

IV. FINDINGS OF FACT

A. The Parties

1. Deere is organized under the laws of Delaware, with its principal place of business located at One John Deere Place, Moline, Illinois 61265.

2. FIMCO is organized under the laws of Iowa, with its principal place of business located at 800 Stevens Port Drive, Suite DD836, Dakota Dunes, South Dakota 57049. FIMCO is registered to do business in the State of Kentucky and has a registered agent for service in Kentucky. FIMCO also has a storefront location at 3303 Pembroke Road, Hopkinsville, Kentucky 42240.

B. The Parties' Brands

(1) Deere

3. Deere was founded in 1837. Today, it is a multi-billion dollar company and does business worldwide. In 2016, for example, Deere had over $26 billion in global sales. [Tr. Vol. 1B at 14 (Doug Felter Testimony).]

4. For more than 100 years, Deere has sold a wide variety of agricultural, forestry, lawn, and garden equipment. Deere is what is known as a "long line" or "full line" company, meaning it "offers all or very nearly all of the equipment that a farmer would need to carry out a complete cropping cycle from tillage to planting to spraying and on to harvest." [Id. at 20–21.]

5. In addition to Deere, other "long line" or "full line" companies include Case New Holland Global, which operates both Case IH and New Holland, and AgCo. [See id. at 20; Tr. Vol. 1A at 45–46 (Brian Myers Testimony); Tr. Vol. 5B at 39 (Dave Wipson Testimony).]

6. Deere sells its products in the United States only through authorized independent dealerships. [Tr. Vol. 1B at 14 (Felter Testimony).] Deere sells its equipment to its dealers which, in turn, sell it to end-users. Deere has slightly over 1,300 dealer locations in the United States. [Id. at 16.] Forty-nine out of fifty states in the U.S. have dealerships that sell Deere equipment. [Id. ]

7. Deere is the leading seller of agricultural tractors in the United States, accounting for approximately fifty to sixty percent of large agricultural tractors sold today. [Id. at 27.]

8. Nearly all of Deere's agricultural equipment is painted using green and yellow colors. [Tr. Vol. 1A at 31 (Myers Testimony); Tr. Vol. 1B at 8 (Felter Testimony).] The only agricultural equipment that Deere does not paint green and yellow is that purchased by entities such as government agencies or municipalities which desire to purchase their equipment painted bright orange for increased visibility. [Tr. Vol. 1A at 31 (Myers Testimony); Tr. Vol. 1B at 8 (Felter Testimony).]

9. Deere is the only manufacturer of green and yellow tractors in the United States. [Tr. Vol. 5B at 101–102 (Wipson Testimony).]

(2) FIMCO

10. FIMCO was incorporated on January 10, 1966. [Tr. Vol. 3A at 54 (Kevin Vaughan Testimony); DX–168 (FIMCO Articles of Incorporation).]

11. FIMCO's Articles of Incorporation list the names, addresses, and signatures of five incorporators. [See DX–168 at 3.] One incorporator, Tom Vaughan, was the father of the current CEO and sole owner of FIMCO, Kevin Vaughan.

12. Kevin Vaughan was born on November 25, 1960. [Tr. Vol. 3A at 32 (Vaughan Testimony).]

13. Vaughan, now FIMCO's CEO and sole shareholder, testified that he began to receive stock in FIMCO from his father when he was in high school and ultimately became the sole shareholder in 2002. [Id. at 38–42.]

14. Today, FIMCO has two divisions within the company. [Tr. Vol. 5B at 40–41 (Wipson Testimony).] The first is its lawn and garden division, which currently uses the "FIMCO" brand. [Id. at 41.] FIMCO's FIMCO-branded lawn and garden equipment is typically painted white, red, and black. [Id. ] In this division, FIMCO sells primarily fifteen to forty gallon lawn and garden sprayers. [Id. at 41–42.] FIMCO also sells attachments for lawn and garden tractors, including, for example, carts, aerators, and spikers. [Id. at 42.] Wipson estimated that FIMCO makes up nearly 80% of the market share for lawn and garden equipment in the U.S. [Id. ]

15. FIMCO's second division is its agricultural division, which currently uses the "Ag Spray" brand. [Id. at 41–43.] FIMCO's Ag Spray division is made up of equipment that it primarily painted green and yellow. [Id. at 43.] Through its Ag Spray division, FIMCO sells such products as large agricultural implements, including trailed agricultural sprayers and liquid nutrient applicators. [Id. ] Generally, this equipment features between 1,000 to...