McGowen Precision Barrels, LLC v. Proof Research, Inc.
| Docket Number | CV 22-39-M-KLD |
| Decision Date | 24 August 2023 |
| Parties | McGOWEN PRECISION BARRELS, LLC, Plaintiff, v. PROOF RESEARCH, INC., Defendant. |
| Court | U.S. District Court — District of Montana |
This matter comes before the Court on Defendant Proof Research Inc.'s (“Proof”) motion for summary judgment on Plaintiff McGowen Precision Barrels, LLC's (“McGowen”) malicious prosecution claim. For the reasons discussed below, Defendant's motion is granted.
Proof began making helically wound and ground carbon fiber rifle barrels through its predecessor in interest, Advanced Barrel Systems (“ABS”) in 2003. (Doc. 65, ¶ 1; Doc 64-1, at 1-2). Proof makes rifle barrels pursuant to a patented process that replaces some of the steel with carbon fiber in a way that does not overly compromise the barrel's stiffness or heat-handling abilities, while substantially reducing the weight and decreasing the amplitude of vibrations during firing. (Doc. 65, ¶¶ 1-3). In non-technical terms, the patented process begins with a hollow steel rod with the center bored out to the desired size for the bullet to travel through. (Doc. 41, at 11; Doc. 65, ¶ 8). Next, outer portions of the steel rod are machined away to make what is called a “barrel liner.” (Doc. 41, at 11; Doc. 65, ¶ 8). After coating black carbon fiber tows with a clear resin and winding them around the machined-out portion of the barrel liner, the barrel is cured at a high temperature. (Doc. 65, ¶ 8). Proof maintains that after curing, the barrel is rough and slightly over-sized, but otherwise functional, though not marketable. (See Doc. 65, ¶ 8; Doc. 42-1, at 172 [24:11-21]).
Significant to this dispute, ABS, and later Proof, “finish” their barrels by placing them in a lathe and grinding down the rough surface to a smooth finish diameter using progressively finer grinding wheels. (Doc. 65, ¶ 8). This process exposes the outer layers of carbon fiber in “a mottled pattern of irregularly-sized, rippled patches.” (Doc. 65, ¶ 8). The barrels are then wiped with a solvent but not coated with any finish. (Doc. 65, ¶ 8). Proof's founder, K.K. Jense, testified that ABS barrels had “a unique pattern and a look [he] liked,” contributing to his decision to begin purchasing barrels from ABS in 2008, and later purchase the company and its patent in 2011. (Doc. 65, ¶¶ 2-3).
Ronald Duplessis is the sole owner of McGowen, a steel firearm barrel and barrel liner manufacturer formed in 2006, and its sister company, Carbon Six Barrels, LLC (“Carbon Six”).[2] (Doc. 65, ¶¶ 11, 14; Doc. 42-1, at 217-18, 221-23). Carbon Six purchases barrel liners exclusively from McGowen and wraps them with a continuous-filament carbon fiber and epoxy resin composite. (Doc. 42-1, at 417). Although Proof and Carbon Six differ in the technical way in which they structurally engineer the carbon fiber composite materials around the barrel liners, their finished barrels look “quite similar.” (Doc. 42-1, at 433).
In May 2012, Proof applied to register its trade dress (“Mark”) with the United States Patent and Trademark Office (“USPTO”). (Doc. 42-1, at 62-71). The USPTO initially refused to register the Mark, noting it “consisted of nondistinctive features of a product design that is not registrable on the Principal Register without sufficient proof of acquired distinctiveness” and “the applied for mark includes elements that are functional.” (Doc. 42-1, at 80-81). In an email discussing this initial refusal, Proof's then-attorney, Bradley Smith, advised its then-CEO, Pat Rainey, that if the finish of the barrel was a natural consequence of the manufacturing process, Proof could not get a trademark. (Doc. 42-1, at 110). Three days later, Proof responded to the USPTO by asserting that “nothing in the patent or the underlying technology dictates the appearance of the Mark on gun barrels incorporating the patented technology, namely, the unique irregular, mottled, rippled patches on the finished barrel.” (Doc. 42-1, at 126).
Along with an attached declaration from Rainey, Proof's response included a list of “other simpler, cheaper, and commercially viable finishing techniques” that Proof claimed could be used to finish the barrels and not display the Mark, as well as photographs of carbon fiber rifles displaying a regular, geometric pattern distinct from the Mark, and Proof's marketing and advertising initiatives to evidence the extent to which the Mark had become distinctive over its ten years of Proof's “extensive and continuous use.” (See Doc. 42-1, at 124-25, 127-28). The response argued that “[w]hen considering the above evidence in total, it becomes apparent that the Mark, as a whole, is distinctive and has acquired secondary meaning identifying only the Applicant as the source of the identified services in the minds of the consuming public.” (Doc. 42-1, at 125). On August 27, 2013, the USPTO registered the Mark. (Doc. 42-1, at 157). On June 3, 2014, Proof also registered the name “PROOF,” consisting of “standard characters without claim to any particular font, style, size, or color.” (Doc. 42-1, at 161).
In November 2013, Proof acquired Performance Polymer Solutions, a company cofounded by Drs. David Curliss and Jason Lincoln, who began working on a new patent application on Proof's behalf for “a composite projectile barrel . . . comprising a continuous fiber composite outer shell whose average effective coefficient of thermal expansion in the longitudinal direction approximately matches that of an inner liner . . . exhibits light weight, superior axial stiffness and strength, durability, and is reliably accurate.” (Doc. 65, ¶ 10). Proof was awarded U.S. Patent No. 10,168,117 (“the ‘117 Patent”) in January 2019. (Doc. 65, ¶ 10).
On June 2, 2016, Proof sent a cease-and-desist letter to Carbon Six, informing the company of its Mark and demanding it “cease and desist from selling, distributing, advertising, or promoting barrels, or rifles fitted with barrels, having a ground carbon fiber composite winding finish” with Proof's “distinctive trade dress.” (Doc. 42-1, at 455-58).[3] On June 10, 2016, Carbon Six responded with a letter, stating, “We strongly believe that once the facts are brought to light, [the Mark] will be cancelled,” and “we do not believe that any action on our part is necessary.” (Doc. 42-1, at 460-64).
In March 2017, Carbon Six launched its website, carbonsixllc.com. (Doc. 65, ¶ 18; Doc. 64-4, ¶ 9). Proof discovered that Carbon Six was using the word “proof” in the copy of its online advertising materials and planting the word “proof” throughout its website metadata in an apparent attempt to direct online searches for Proof's carbon fiber barrels to Carbon Six's website. (Doc. 65, ¶¶ 14, 18). Duplessis testified that as soon as he was notified about these “meta tags,” he had them removed. (Doc. 65, ¶ 18).
On December 15, 2017, Proof filed a complaint against McGowen in this district court, alleging trademark infringement, unfair competition, and trademark dilution under the Lanham Act. (Doc. 65, ¶¶ 14-15; Doc. 64-3; Proof Research, Inc. v. McGowen Precision Barrels, LLC, No. 9:17-cv-00173-DLC (D. Mont. 2017) (“Infringement Proceeding”)). On December 22, 2017, McGowen filed a Petition for Cancellation of the Mark (“Cancellation Proceeding”) with the USPTO Trademark Trial and Appeal Board (“TTAB”), asserting five grounds for cancellation: the Mark comprised matter that is functional; the Mark represented multiple marks; the trade dress was generic; the trade dress was aesthetically functional; and Proof committed fraud in the procurement of its registration. (Doc. 65, ¶ 15; Doc. 42-1, at 487-97). On January 16, 2018, the parties agreed to stay the Infringement Proceeding pending the outcome of the Cancellation Proceeding. (Doc. 65, ¶ 15).
The parties proceeded to litigate the Mark's validity in front of the TTAB, conducting extensive discovery, including written discovery, disclosure of expert opinions, and depositions. (Doc. 65, ¶ 16). Throughout the Cancellation Proceeding, Proof maintained its Mark was not necessary to the functionality of its barrels. (Doc. 65, ¶ 17). However, during a deposition on August 21, 2018, Curliss, who was at that time the general manager of Proof's Advanced Composites Division, admitted that, although the ‘117 Patent did not disclose any particular finish, if one were to follow the instructions in the patent application, “[w]ith no further coatings applied to the external surface of a ground barrel, it will exhibit the trade dress.” (Doc. 65, ¶ 10; Doc. 42-1, at 168, 173).
On August 30, 2018, Proof applied to renew the Mark's registration. (Doc. 42-1, at 620). On September 13, 2018, the USPTO issued a notice stating Proof's trademark registration of the Mark would remain in force. (Doc. 42-1, at 620).
In November 2018, McGowen moved the TTAB for summary judgment, arguing, in part, that the Mark should be cancelled due to functionality. (Doc. 65, ¶ 20). The TTAB denied McGowen's motion as to the issue of functionality, concluding that:
With respect to the claim that the involved mark is “wholly functional,” at a minimum, there is a genuine dispute of material fact as to whether the exclusive use of rifle barrels formed with a mottled pattern of irregularly-sized, rippled patches created by the carbon fiber filament winding process would put competitors at a significant non-reputation-related disadvantage and whether finishing a carbon fiber rifle barrel by using any method other than that which results in the registered mark significantly affects cost or quality. The factintensive nature of whether the trade dress as a whole is functional makes it particularly unsuited to summary judgment.
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