Hugunin v. Land O’ Lakes, Inc., No. 15-2815 (7th Cir. Mar. 1, 2016)
This opinion reflects what you might call Judge Posner’s trademark mix of good sense and arrogance/lack of reasons enabling one to formulate an actual rule for future application.
Since 1997, James Hugunin made and sold fishing tackle in a town in northeastern Wisconsin, which is called Land O’ Lakes because it is located in a region dotted with lakes; the region is also called Land O’ Lakes. He registered LAND O LAKES as the trademark of his fishing tackle in 2000; the registration lapsed, and his application to re-register was held in abeyance pending resolution of this suit.
Defendant, a large agricultural cooperative, sells butter and other dairy products throughout the United States, and has used the LAND O LAKES mark since the 1920s. In 1997, the dairy company became the “official dairy sponsor” of a sport-fishing tournament, the Wal-Mart FLW Tour, and began advertising its dairy products in fishing magazines. In 2000, it found out about Hugunin’s registration and threatened him with infringement liability/told him that he needed a license from the dairy company. After he refused to comply, the dairy company opposed his new registration.
The court expressed its puzzlement that the dairy company should have been worried, given the differences in the parties’ products. It doesn’t sell any fishing-related products that could be confused with Hugunin’s. “It would be strange indeed for a dairy company to manufacture a product so remote from milk, butter, and cream, and there is no sign that the dairy company intends to take the plunge.” The dairy company sponsored the fishing tournament and advertised in fishing magazines “because fishermen, like the rest of us, are consumers of dairy products.”
The court was equally puzzled as to why Hugunin sued the dairy company for trademark infringement. Hugunin claimed to have trouble attracting investors worried about being sued for trademark infringement/having the name enjoined. The dairy company counterclaimed for dilution. The district court dismissed the dilution claim as barred by laches, but the court of appeals—not even pausing to make clear that this was a proper ground—reached out to explain that, even without laches, the dairy company would have lost. In Ty Inc. v. Perryman, 306 F.3d 509, 511 (7th Cir. 2002), Judge Posner explained dilution as involving increased consumer search costs, such that consumers would have to “think harder—incur as it were a higher imagination cost—to recognize the name as the name of the store”; blurring “reduces the distinctness of the trademark as a signifier of the trademarked product or service,” and tarnishment is a subset of blurring. (Pause to note that this theory is not borne out by the evidence of how consumers actually think.)
Here, though, Judge Posner found a blurring theory implausible, because the goods were too different:
Everyone recognizes “Tiffany” as the name of a luxury jewelry store on Fifth Avenue in New York (with stores in other major cities), and seeing the name on a hot-dog stand a passerby might think of the jewelry store and of the incongruity of a hot-dog stand’s having the same name; he might think the jewelry store’s cachet impaired by the coincidence and switch his patronage to Cartier or Harry Winston. [Ed. note: Yeah, right.] Many consumers would recognize the name “LAND O LAKES” as referring to the dairy company, but we can’t see how the company could be hurt by the use of the same name by a seller just of fishing tackle. The products of the two companies are too different, and the sale of fishing tackle is not so humble a business as the sale of hot dogs by street vendors. And so it is beyond unlikely that someone dissatisfied with LAND O LAKES fishing tackle would take revenge on the dairy company by not buying any of its products, or that a customer would have difficulty identifying Land O’ Lakes’ dairy products because he had seen the LAND O LAKES mark used on Hugunin’s fishing tackle. … And the dairy company’s mark is itself derivative from Minnesota’s catchphrase “Land of 10,000 Lakes,” a phrase in such widespread use that the company could not insist that it was the sole lawful user of the phrase in advertising for all products.
Out of this mishmash of rationales, let me select a few possibilities: (1) While dilution doesn’t require similarity in goods and services, sufficient dissimilarity may preclude dilution. The reason why is left as an exercise for the reader. (2) Land O Lakes is not high-falutin’ enough to be blurred/tarnished the way a luxury brand could be by association with fishing tackle; no one would feel the dairy company was passé, and overexposure isn’t a concern for such a product. (3) Land O Lakes is already not unique and can’t suffer more from one more use. Other thoughts?
Meanwhile, Hugunin’s trademark infringement claim was based on his seniority in the fishing industry and alleged reverse confusion. “But the dairy company’s use of the same trademark is confined to products so different from Hugunin’s that few if any consumers would think that simply by virtue of having an identical trademark the dairy company was competing with Hugunin in a different industry.” The fishing-themed ads run by the dairy company showed things like the “Land O’ Lakes Walleye Pro,” “a champion fisherman whom Land O’ Lakes sponsors in fishing competitions in return for his promoting its dairy products.” He’s shown sitting next to packages of Land O’ Lakes butter and cheese, and the company’s logo is also on fishing boats during tournaments.
In a line that defendants are sure to love, Judge Posner writes, “But just as no one watching a NASCAR race and seeing a racing car emblazoned with Budweiser’s logo would think that the beer company had entered the automobile industry, so no one reading the ‘Walleye Pro’ ad or seeing a boat sponsored by the dairy company would think that the advertiser sells fishing tackle.”
Hugunin also objected that the dairy company “permitted” some competing producers and sellers of fishing tackle to use its trademark. If they were licensees, the court continued, that might justify a claim of trademark infringement—the dairy company might be intentionally encouraging those competitors to infringe Hugunin’s mark in order to increase its own revenues from licensing. “But there is no evidence that Land O’ Lakes has issued any such licenses or is even aware that other producers of fishing tackle have used its mark.”