Polaris Indus. Inc. v. TBL Int'l Inc.
| Decision Date | 06 March 2020 |
| Docket Number | Case No. 19-cv-0291 (WMW/DTS) |
| Parties | Polaris Industries Inc., Plaintiff, v. TBL International Inc., Defendant. |
| Court | U.S. District Court — District of Minnesota |
This matter is before the Court on Plaintiff Polaris Industries Inc.'s (Polaris) motion for default judgment against Defendant TBL International Inc. (TBL). (Dkt. 13.) For the reasons addressed below, the motion is granted.
Polaris manufactures recreational vehicles, such as all-terrain vehicles (ATVs) and motorcycles, as well as accessories to be used with the vehicles. The Rhino Grip, a mounting bracket used to affix and fasten items onto recreational vehicles, is one such accessory that Polaris manufactures. Polaris registered the "RHINO GRIP" mark with the United States Patent and Trademark Office in 2015. TBL, a New York company that appears to do business under the name Maggift LLC, manufactures, sells and distributes products that include mounting brackets for recreational vehicles labeled as "Rhino Grip" products.
Polaris alleges that TBL sells counterfeit Rhino Grip products that are identical in appearance to Polaris's trademarked Rhino Grip products. Polaris initiated this lawsuit against TBL in February 2019. TBL's answer was due on March 5, 2019. To date, TBL has not filed an answer or any other pleading.
In April 2019, Polaris applied for entry of default, which the Clerk of Court entered. Polaris subsequently moved for default judgment and various remedies. The Court held a hearing on Polaris's motion on October 2, 2019, at which TBL did not appear.
The entry of default judgment is a two-step process governed by Federal Rule of Civil Procedure 55. First, the party seeking default judgment must obtain an entry of default. "When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default." Fed. R. Civ. P. 55(a). Second, the party seeking default judgment must apply to the district court for entry of default judgment. Fed. R. Civ. P. 55(b)(2).
Whether to enter default judgment against a party is committed to the sound discretion of the district court. Belcourt Pub. Sch. Dist. v. Davis, 786 F.3d 653, 661 (8th Cir. 2015). Although default judgments are not favored because adjudication on the merits is preferred, id., a party's complete lack of participation in litigation is a basis for granting default judgment, see, e.g., Inman v. Am. Home Furniture Placement, Inc., 120 F.3d 117, 118-19 (8th Cir. 1997).
Upon entry of default, all factual allegations in the complaint except those relating to the amount of damages are taken as true. Murray v. Lene, 595 F.3d 868, 871 (8th Cir. 2010). It is the district court's duty to consider whether the unchallenged facts constitute a legitimate cause of action. Id. Polaris asserts five claims in its complaint: (1) counterfeiting and trademark infringement, 15 U.S.C. § 1114; (2) unfair competition and false designation of origin, 15 U.S.C. § 1125(a); (3) deceptive trade practices, Minn. Stat. §§ 325D.43 et seq.; (4) common-law trademark infringement; and (5) common-law unfair competition. The Court addresses liability as to each claim in turn.
The owner of a registered trademark may bring an action for infringement if another person is using a mark that too closely resembles the registrant's trademark. B & B Hardware, Inc. v. Hargis Indus., Inc., 575 U.S. 138, 144 (2015). The district court must determine "whether the defendant's use of a mark in commerce 'is likely to cause confusion, or to cause mistake, or to deceive' with regards to the plaintiff's mark." Id. (quoting 15 U.S.C. § 1114(1)(a)). In doing so, the district court considers six factors to determine whether a likelihood of confusion exists. These factors are (1) the strength of the owner's mark, (2) the similarity between the owner's mark and the alleged infringer's mark, (3) the degree to which the products compete with each other, (4) the alleged infringer's intent to pass off its goods as those of the trademark owner, (5) incidents of actual confusion, and (6) the type of product and its costs and conditions of purchase. Lovely Skin, Inc. v. Ishtar Skin Care Prods., LLC, 745 F.3d 877, 887 (8th Cir. 2014).
Applying these factors to the allegations in the complaint, the Court concludes that a likelihood of confusion exists. The Rhino Grip is a distinctive product attributable to Polaris for which Polaris has a registered trademark. Substantial similarity exists between Polaris's Rhino Grip product and TBL's product, as is evident from the side-by-side images included in Polaris's complaint. Although Polaris's product is offered on its subsidiary's website and TBL's product is sold on common platforms, such as Amazon and eBay, the products nonetheless compete with each other. The same consumers—those interested in mounting brackets for a recreational vehicle—occupy each product's market, and the products are marketed to those consumers. TBL initially was on constructive notice of Polaris's trademark over the "RHINO GRIP" mark. But after Polaris sent TBL two cease-and-desist letters, TBL had actual notice of its infringement of Polaris's trademark. From these facts, the Court infers TBL's intent to pass off to customers TBL's goods as Polaris's Rhino Grip products. Finally, the Rhino Grip product is not so expensive or different in price from TBL's product that consumers might differentiate from whom they purchase the product.
Because a majority of the likelihood-of-confusion factors favors Polaris, the Court concludes that Polaris has stated a claim for trademark infringement in Count I of its complaint.
The Lanham Act also permits a registered trademark owner to recover for unfair competition that results from false designations of origin. Co-Rect Prods., Inc. v. Marvy! Advert. Photography, Inc., 780 F.2d 1324, 1329 (8th Cir. 1985). "A false designation oforigin occurs when another's use of the same or similar mark [as the owner's registered mark] actually confuses, or is likely to cause confusion among consumers as to the source of the product." Id. at 1330. A showing of a likelihood of confusion entitles the trademark owner to injunctive relief. Id. The six factors used to determine a likelihood of confusion as to a claim for trademark-infringement also are used to determine a likelihood of confusion as to a claim for false designation of origin. Id.
Here, consistent with the Court's conclusion in Part I of this Order, the Court concludes that Polaris has alleged a likelihood of confusion. As such, Polaris has stated a claim for false designation of origin in Count II of its complaint.
The Uniform Deceptive Trade Practices Act (UDTPA) makes it unlawful to pass off goods as those of another; to cause a likelihood of confusion or misunderstanding as to the source of the goods; to cause a likelihood of confusion as to the affiliation, connection, or association with another; or to engage in any other conduct that similarly creates a likelihood of confusion. Minn. Stat. § 325D.44, subdiv. 1(1)-(3), (13). Neither proof of competition between the parties nor actual confusion is required to prevail. Id. at subdiv. 2.
Polaris asserts that TBL's actions constitute "passing off" and "deception as to origin," causing confusion as to the source of the disputed goods. Based on the facts alleged in the complaint, when taken as true, and based on the analysis above, the Court agrees. Polaris has stated a claim of deceptive trade practices under Minnesota law.
There is no distinction between the elements required to prove a Lanham Act trademark-infringement claim and those required to prove a common law trademark-infringement claim. See John Deere & Co. v. Payless Cashways, Inc., 681 F.2d 520, 523-24 (8th Cir. 1982). In light of the Court's determination that Polaris has stated a claim for trademark infringement under the Lanham Act, Polaris also has stated a common law trademark-infringement claim.
Similar to trademark infringement, that which constitutes unfair competition under the Lanham Act also constitutes common law unfair competition. Cf. Brown & Bigelow v. B.B. Pen Co., 191 F.2d 939, 943 (8th Cir. 1951). As such, Polaris has stated a claim for common law unfair competition.
In summary, Polaris has established that the unchallenged facts in the complaint constitute legitimate causes of action. In light of TBL's failure to defend against this action, default judgment in favor of Polaris against TBL is warranted.
The issues that remain pertain to the relief to which Polaris is entitled. Polaris seeks the following: a permanent injunction prohibiting TBL from using the "RHINO GRIP" mark and from holding itself out as an authorized seller of Rhino Grip products; an order requiring the destruction of all infringing products; statutory damages; and attorneys' fees, costs, prejudgment interest, and post-judgment interest. The Court addresses each form of relief in turn.
Polaris argues that it is entitled to permanent injunctive relief to prevent future infringement by TBL. Injunctive relief is an available remedy for trademark infringement. 15 U.S.C. § 1116. After succeeding on the merits of a trademark-infringement claim, a plaintiff seeking permanent injunctive relief must show that it has suffered an irreparable injury, legal remedies such as monetary damages are inadequate to compensate for the injury, the balance of hardships between the plaintiff and the defendant warrant an equitable remedy, and the public interest will not be disserved by...
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