Haas Outdoors, Inc. v. Dryshod Int'l, LLC
| Decision Date | 04 February 2020 |
| Docket Number | 1:18-CV-596-RP (consolidated),1:18-CV-978-RP |
| Parties | HAAS OUTDOORS, INC., Plaintiff, v. DRYSHOD INTERNATIONAL, LLC and JAMES K. DONOHUE, Defendants. DRYSHOD INTERNATIONAL, LLC and JAMES K. DONOHUE, Plaintiffs, v. HAAS OUTDOORS, INC., TOXEY HAAS, and WILLIAM SUGG, Defendants. |
| Court | U.S. District Court — Western District of Texas |
Before the Court are cross-motions for partial summary judgment filed by Plaintiff Haas Outdoors, Inc. ("Haas"), (Dkt. 163)1, and Defendants Dryshod International, LLC, and James K. Donahue (collectively, "Dryshod"), (Dkt. 158, 194).2 Having considered the parties' arguments, the evidence, and the relevant law, the Court will grant Haas's motion for partial summary judgment and deny Dryshod's motion for partial summary judgment.
This is a copyright and trademark infringement case involving camouflage patterns. Haas designs, manufactures, and licenses camouflage patterns for use in camouflage clothing and related accessories. (Am. Compl., Dkt. 126, at 3). Since 1986, Haas has manufactured—and licensed for manufacture by third parties—camouflage patterns, camouflage clothing, and accessories under the trademark MOSSY OAK. (Am. Compl., Dkt. 126, at 3). Haas also has a number of other registered marks related to its series of BREAK-UP patterns, including BREAK-UP, NEW BREAK-UP, BREAK-UP INFINITY, and BREAK-UP COUNTRY. (Id.).
Earlier in his career, Defendant James K. Donahue ("Donahue") founded a boot manufacturing company, Muck Boot Company ("Muck Boot"), that licensed Haas's MOSSY OAK patterns, including its NEW BREAK-UP pattern. (Id. at 5). While president of Muck Boot, Donahue personally communicated with Haas employees and requested samples of the MOSSY OAK patterns. (Email Requesting Samples, Dkt. 179-43, at 1). During his tenure at Muck Boot, Donahue set up distributor groups to sell his Muck Boot products, which included MOSSY OAK branded products. (Am. Compl., Dkt. 126, at 5). Donahue sold Muck Boot in 2004, but when Muck Boot decided to take its distribution in house in 2017, the two former Muck Boot distributors—Team J and CFD—approached Donahue about creating a new set of boot products. (Haas Resp., Dkt. 179-41, at 3). Donahue accepted the offer and trademarked the name DRYSHOD as the brand name of the new product line. (Email to Haas Rep., Dkt. 164-6, at 7).
The distributors asked that Dryshod use Mossy Oak products on all three of the introductory boot models. (Id. at 7). Donahue assured them that Dryshod would "only use genuine license camo patterns from Haas/Mossy Oak and Real Tree." (Dkt.179-45 at 2). In April 2017, Donahue contacted Haas representatives about obtaining a MOSSY OAK license and filled out a licensing application. (Dryshod Mot. Summ. J., Dkt. 158, at 9; Email to Haas Rep, Dkt. 158-6, at14). He specifically asked for "clearance for temporary use" of the Mossy Oak pattern on "look-see development samples." (Email, Dkt. 179-7, at 1). Donahue noted that "[t]he samples would be used only for photo-communications with CFD management and would not be used at all for sales or marketing purposes." (Id.). At that time, he stated his current interest in the Mossy Oak pattern was "to have the ability to use the authentic patterns so we can select best colors and sizing for decorating the boots with logos or screen-printed elements." (Id.).
In one of these initial emails, Donahue wrote "I can assure you, if all goes as planned, we will be using a lot of Mossy Oak products and materials on DRYSHOD-brand outdoor products." (Id. at 13). Haas did not follow up with Donahue about this initial exchange or on Donahue's initial April 17, 2017, licensing application. (Dryshod Mot. Summ. J., Dkt. 158, at 9). At some point, Donahue picked the name MOBU for his new line of camouflage boots. Early on, a distributor providing feedback commented on the name, assuming MOBU stood for "Mossy Oak Break-Up." (Comparative Model Worksheet, Dkt. 179-47, at 3 ("MOBU meaning Mossy Oak Break-Up?")).
The following month, Donahue and the distributors became aware of the costs associated with licensing existing camouflage brands for his new boot line. Donahue informed distributors that "[w]e will use our own camo print to avoid fees and add-on costs from branded camo suppliers." (Cost Emails, Dkt. 179-48, at 4). Even so, Donahue explained the company would continue to use the name MOBU for boots made with its own camouflage pattern because MOBU could stand for "My Own Break-Up." (Email Dkt. 179-49, at 2). Specifically, Donahue wrote to distributors and other Dryshod employees: "I have some issues with Mossy Oak regarding their licensing fees, costs and restrictions on using a third party to apply the Hydrokote. If we can do our own camo print, it will still be referred to as MOBU, which stands for "My Own Break-Up." (Id.).
Around this same time, Donahue hired an artist by the name of Scott Hewett ("Hewett") to assist in designing the Dryshod camouflage pattern. (Donahue Dep., Dkt. 179-46, at 26-27). WhileDonahue denies ever giving Hewett the Mossy Oak pattern, he emailed Hewett during the design process and stated:
In looking over the trademarks for Mossy Oak patterns, I found they have attempted to include certain leaf types as trademark elements. Specifically maple leaves and leaves with rounded edges. I'm not sure if they are actually getting away with that but it is easy to get around by using a leaf style not covered in the language of their trademarks. The easiest way around it is to use a leaf that is not maple and with predominantly pointed tips. My choice would be the Spanish Oak or a derivative.
(Email to Hewett, Dkt. 179-50, at 1). Later, in discussing Hewett's preliminary drawings, Donahue noted that Hewett's drawings "looked very nice but [were] not as detailed as the prints from Mossy Oak." (Email, Dkt. 179-53).
Shortly after—and with licensing talks with Haas still stalled—Donahue emailed his distributors about the possibility of using True Timber's camouflage pattern instead. (Email, Dkt. 179-54, at 2). In assessing this option, Donahue noted (Email, Dkt. 179-54, at 2).
Still having heard nothing back from Haas about his initial April 2017 licensing application, Donahue followed up with Haas representatives, again expressing interest in licensing the Mossy Oak camouflage pattern for his product line. (Email to Haas Rep, Dkt. 179-42, at 4). In that follow-up email, Donahue compared the Mossy Oak pattern with competitor True Timber's camouflage pattern and noted: "True Timber is an adequate brand but I feel strongly that the new [Dryshod] hunting models will have a better chance of achieving mass appeal if we use the Mossy Oak patterns on the boots." (Id. at 4).
After reinitiating contact with Haas, Dryshod requested permission to use "300 [yards] of Mossy Oak breakup just collecting dust in [the materials warehouse]" to make samples for his new boot line. (Email, Dkt. 179-42, at 2). A Haas representative responded (Id.). Donahue then instructed Pepei, a Dryshod employee responsible for interfacing with the textile factory in China, to outfit MOBU sample boots with the MOSSY OAK pattern. (Email, Dkt. 179-55, at 1 (); Email, Dkt. 179-56, at 1 (); Email Dkt. 179-59 at 2 (); Photographs of Samples, Dkt. 179-44, at 1-3)).
Meanwhile, Hewett continued to tweak the commissioned camouflage painting in accordance with Donahue's feedback. At some point though, Donahue decided to pursue a "backup option." (Dryshod Mot. Summ. J., Dkt. 158, at 11). According to Donahue, he set up "Live Oak bark, Live Oak leaves, Spanish Oak leaves, Texas Ball Boss, Live Oak sprigs and a few sprigs of Mountain Laurel" in his yard and took a picture of the arrangement with his iPhone. (Id. at 12). He then sent this photo to a graphics technician at a textile supplier in Dongguan, China, to prepare a camouflage pattern based on the photo. (Id.). In doing so, he instructed the graphics technician to "make modifications, such as color correction, scaling, and stepping and repeating the photograph to turn it into a pattern suitable to pass as camouflage." (Id. at 12). During the design process, the "graphics technician also manipulated a limited number of elements found within the photograph to cover or hide edges of repeated frames." (Id.).
Dryshod contends that "[a]t no time during the development of the Dryshod camouflage pattern was a Mossy Oak design or pattern used for reference." (Id.). Haas, on the other hand, contends Donahue "continued to have issues with his pattern" and highlights an email Donahue sent to Pepei stating "I am comparing the image size and quality to the Mossy Oak camo and find that the image size and print quality of ours is very weak compared to the Mossy Oak." (HaasEmail, Dkt. 179-58, at 1). According to Haas, all of the modifications and enhancements noted above ultimately brought the Dryshod pattern "closer and closer to Mossy Oak Break-Up." (Haas Resp., Dkt. 179-41, at 7). In support, Haas highlights a September 2017 email in which Donahue "expressed dismay to his Chinese employee that on the most recent sample boots, the factory had affixed a MOBU pattern on part of the boot and Mossy Oak Break-Up on another part of the same boot." (Haas...
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