United States District Court, N.D. Illinois, Eastern Division
November 3, 2005.
AUTOZONE, INC., a Nevada corporation, and AUTOZONE PARTS, INC. (f/k/a Speedbar, Inc.), Plaintiffs-counterdefendants,
MICHAEL STRICK, an Illinois citizen, STRICK ENTERPRISES, INC., an Illinois corporation, and STRICK, INC., an Illinois corporation, Defendants-counterclaimants.
The opinion of the court was delivered by: WILLIAM HART, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiffs AutoZone, Inc. and AutoZone Parts, Inc. (formerly
known as Speedbar, Inc.)*fn1 have registered the mark
AutoZone and some variations including AutoZone. Plaintiffs
operate numerous automobile parts retail stores that use the
AutoZone mark. In January 2002, plaintiffs were issued a
registration for the mark Zone for retail automotive store
services. The initial application for the Zone mark was submitted in August 1999. Defendants Michael Strick, Strick,
Inc., and Strick Enterprises, Inc.*fn2 operate a quick oil
change business known as Oil Zone. Oil Zone has two locations in
suburban Chicago, one in Wheaton, Illinois and one in Naperville,
Illinois. The Wheaton location opened in 1996 and the Naperville
location in 1998. The Naperville location also has a car wash
that uses the mark Wash Zone. Defendants registered the Oil Zone
mark with the state of Illinois in 1996. It is undisputed that
plaintiffs have known of defendants' use of the two marks since
at least December 1998. Presently pending is plaintiffs' motion
for summary judgment seeking to dismiss all or part of four
counterclaims and one affirmative defense.*fn3
Plaintiffs filed this action in November 2003. In their Amended
Complaint, plaintiffs do not seek any damages. Plaintiffs only
request equitable relief, essentially that defendants discontinue the use of Oil Zone and Wash Zone.
Plaintiffs also request costs and attorney fees. The Amended
Complaint is denominated as having four counts. Count One is
denominated as service mark and trademark infringement in
violation of 15 U.S.C. § 1114(1). Count Two is denominated as
common law trade name infringement, based on Illinois common law.
Count Three is denominated as unfair competition in violation of
15 U.S.C. § 1125(a) and Illinois common law. Count Four is
denominated as service mark and trademark dilution in violation
of 15 U.S.C. § 1125(c) and 765 ILCS 1036/65.
In answer to the Amended Complaint, defendants assert 16
affirmative defenses, some of which may not actually be
affirmative defenses on which defendants bear the burden of
proof. One of the asserted defenses is laches. Defendants have
also filed a countercomplaint which is denominated as having six
counterclaims. Counterclaim I is that, pursuant to
15 U.S.C. § 1119, plaintiffs' registration for Zone should be cancelled
because, prior to August 1999, it was in use by others in
connection with retail automotive store services. Counterclaim II
is denominated as a claim for false or fraudulent registration of
a mark in violation of 15 U.S.C. § 1120 in that plaintiffs had
prior knowledge of defendants' use of the mark Zone, but did not
disclose that fact in their applications. It is alleged that
defendants suffered damages as a result, including the damages of
incurring costs and attorney fees defending against the present lawsuit. Counterclaim III is
denominated as being a claim for infringement of defendants'
Illinois Oil Zone trademark in violation of 765 ILCS 1036/60, as
well as a claim for common law infringement and common law unfair
competition. Counterclaim IV is denominated as a violation of the
Illinois Uniform Deceptive Trade Practices Act, 815 ILCS 510/2.
Counterclaim V is denominated as a violation of the Illinois
Consumer Fraud and Deceptive Business Practices Act ("Consumer
Fraud Act"), 815 ILCS 505/2. Counterclaim VI is denominated as a
claim for an accounting.
On a motion for summary judgment, the entire record is
considered with all reasonable inferences drawn in favor of the
nonmovant and all factual disputes resolved in favor of the
nonmovant. Eiencorp, Inc. v. Rocky Mountain Radar, Inc.,
398 F.3d 962, 965 (7th Cir. 2005); Estate of Moreland v. Dieter,
395 F.3d 747, 758 (7th Cir.), cert. denied, 125 S. Ct. 2915
(2005); Hall v. Bennett, 379 F.3d 462, 464 (7th Cir. 2004);
Hudson v. Chicago Transit Authority, 375 F.3d 552, 558 (7th
Cir. 2004). The burden of establishing a lack of any genuine
issue of material fact rests on the movant. Outlaw v. Newkirk,
259 F.3d 833, 837 (7th Cir. 2001); Wollin v. Gondert,
192 F.3d 616, 621-22 (7th Cir. 1999). The nonmovant, however, must make a
showing sufficient to establish any essential element for which
he or it will bear the burden of proof at trial. Celotex Corp.
v. Catrett, 477 U.S. 317, 322 (1986); Binz v. Brandt
Construction Co., 301 F.3d 529, 532 (7th Cir. 2002); Traylor v.
Brown, 295 F.3d 783, 790 (7th Cir. 2002). The movant need not provide
affidavits or deposition testimony showing the nonexistence of
such essential elements. Celotex, 477 U.S. at 324. Also, it is
not sufficient to show evidence of purportedly disputed facts if
those facts are not plausible in light of the entire record. See
Yasak v. Retirement Board of Policemen's Annuity & Benefit Fund
of Chicago, 357 F.3d 677, 679 (7th Cir. 2004); NLFC, Inc. v.
Devcom Mid-America, Inc., 45 F.3d 231, 236 (7th Cir.), cert.
denied, 515 U.S. 1104 (1995); Covalt v. Carey Canada, Inc.,
950 F.2d 481, 485 (7th Cir. 1991); Collins v. Associated
Pathologists, Ltd., 844 F.2d 473, 476-77 (7th Cir.), cert.
denied, 488 U.S. 852 (1988); Shyman v. UNUM Life Insurance Co.
of America, 2004 WL 609280 *2 (N.D. Ill. March 25, 2004). As the
Seventh Circuit has summarized:
The party moving for summary judgment carries the
initial burden of production to identify "those
portions of the pleadings, depositions, answers to
interrogatories, and admissions on file, together
with the affidavits, if any, which it believes
demonstrate the absence of a genuine issue of
material fact." Logan v. Commercial Union Ins. Co.,
96 F.3d 971, 978 (7th Cir. 1996) (citing Celotex
Corp. v. Catrett, 477 U.S. 317, 323,
106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986) (citation and internal
quotation omitted)). The moving party may discharge
this burden by "`showing' that is, pointing out to
the district court that there is an absence of
evidence to support the nonmoving party's case."
Celotex, 477 U.S. at 325, 106 S. Ct. 2548. Once the
moving party satisfies this burden, the nonmovant
must "set forth specific facts showing that there is
a genuine issue for trial." Fed.R.Civ.P. 56(e).
"The nonmovant must do more, however, than
demonstrate some factual disagreement between the
parties; the issue must be `material.'" Logan,
96 F.3d at 978. "Irrelevant or unnecessary facts do not
preclude summary judgment even when they are in dispute."
Id. (citation omitted). In determining whether the
nonmovant has identified a "material" issue of fact
for trial, we are guided by the applicable
substantive law; "[o]nly disputes that could affect
the outcome of the suit under governing law will
properly preclude the entry of summary judgment."
McGinn v. Burlington Northern R.R. Co.,
102 F.3d 295, 298 (7th Cir. 1996) (citation omitted).
Furthermore, a factual dispute is "genuine" for
summary judgment purposes only when there is
"sufficient evidence favoring the nonmoving party for
a jury to return a verdict for that party." Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 249,
106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). Hence, a
"metaphysical doubt" regarding the existence of a
genuine fact issue is not enough to stave off summary
judgment, and "the nonmovant fails to demonstrate a
genuine issue for trial `where the record taken as a
whole could not lead a rational trier of fact to find
for the non-moving party. . . .'" Logan,
96 F.3d at 978 (quoting Matsushita Elec. Indus. Co., Ltd. v.
Zenith Radio Corp., 475 U.S. 574, 587,
106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986)).
Outlaw, 259 F.3d at 837.
Regarding Counterclaims III, IV, and V, plaintiffs contend the
prayers for compensatory and punitive damages should be stricken
because defendants cannot show they suffered any compensatory
damages.*fn4 Plaintiffs do not contend that the
counterclaims should be dismissed in their entirety because
defendants also seek equitable relief. As to Counterclaim II,
plaintiffs contend that counterclaim should be dismissed in its entirety because defendants cannot show any compensatory damages
and do not request equitable relief on that counterclaim. In
response to the motion for summary judgment, defendants admit
that they have no evidence that their Oil Zone establishments
lost any revenues or profits because of plaintiffs' use of Oil
Zone. They, however, contend that they can show other forms of
In support of their summary judgment motion, plaintiffs contend
that defendants cannot show any lost revenues or profits at
defendants' establishments. There is, however, no contention by
plaintiffs that they had no profits related to their own use of
the Oil Zone mark. Since that fact issue is not raised by
plaintiffs' motions, defendants were not required to respond by
providing evidence supporting that plaintiffs profited from use
of the mark. For present purposes, it must be assumed that
plaintiffs profited from use of the mark.
The available remedies for violations of § 60 of the Illinois
Trademark Registration and Protection Act are provided for in §
70 of the Act. See 765 ILCS 1036/60, 70. The monetary remedies
under § 70 are not limited to damages suffered by the trademark
owner. The owner may also be entitled to the profits the
defendant derived from use of the mark, as well as trebling of
that amount if the use was with knowledge or in bad faith. Id.
§ 70. The prayer for damages related to Counterclaim III will not
Counterclaim IV alleges a violation of the Illinois Deceptive
Trade Practices Act. Relief under that Act is limited to injunctive relief. 815 ILCS 510/3; Smith v. Prime Cable of
Chicago, 276 Ill. App. 3d 843, 658 N.E.2d 1325, 1337 (1st Dist.
1995), appeal denied, 166 Ill.2d 554, 664 N.E.2d 648 (1996).
Fees that defendants incur in defending against plaintiffs'
present lawsuit are not awardable as damages under this Act and
defendants do not contend otherwise. To the extent successful on
Counterclaim IV, defendants may obtain their costs and fees
incurred in pursuing this counterclaim if they show plaintiffs
"wilfully engaged in a deceptive trade practice." 815 ILCS 510/3.
Any prayer for monetary damages related to Counterclaim IV will
As for Counterclaim V, a private claimant may only bring a
Consumer Fraud Act claim if the claimant suffered "actual
damages." 815 ILCS 505/10a(a); Xydakis v. Target, Inc.,
333 F. Supp. 2d 683, reconsideration denied, 333 F. Supp. 2d 686 (N.D.
Ill. 2004). Even if defendants only seek to disgorge plaintiffs'
profits, defendants must also show that they suffered actual
damages in that they lost customers to plaintiffs.*fn5 B.
Sanfield, Inc. v. Finlay Fine Jewelry Corp., 76 F. Supp. 2d 868,
873 (N.D. Ill. 1999), aff'd, 258 F.3d 578 (7th Cir. 2001).
Also, even injunctive relief requires that the claimant have
suffered actual damages. Xydakis, supra. Since defendants have
presented no evidence supporting that they suffered actual
damages, Counterclaim V will be dismissed in its entirety.
As for Counterclaim II, damages proximately caused by the false
registration is a necessary element of a § 1120 claim. United
Phosphorus, Ltd. v. Midland Fumigant, Inc., 205 F.3d 1219, 1226
(10th Cir. 2000); Gilbert/Robinson, Inc. v. Carrie
Beverage-Missouri, Inc., 989 F.2d 985, 990 (8th Cir.), cert.
denied, 510 U.S. 928 (1993). As previously discussed, defendants
cannot show that they lost any sales as a consequence of the
allegedly false application. Defendants claim they are incurring
litigation costs in defense of plaintiffs' lawsuit seeking to
enforce the mark. Such costs, however, are not an injury or
damages that can support a § 1120 claim. Exxon Corp. v. Exxon
Corp., 696 F.2d 544, 550-51 (7th Cir. 1982); Gilbert/Robinson,
989 F.2d at 991 n. 5. Counterclaim II will be dismissed.
The other issue raised by plaintiffs' motion is whether facts
support a laches defense by defendants. It is undisputed that
plaintiffs were aware of defendants' use of Oil Zone and wash
Zone by at least December 1998 when plaintiffs received a report
from one of their investigators. Plaintiffs made no complaint
about defendants' use of these marks until first sending a
protest letter to defendants in February 2003, which was four
years and two months later. Plaintiffs contend that, under
Seventh Circuit case law, such a period of time is per se
insufficient to support a laches defense when, as is true here,
plaintiffs are seeking injunctive relief only. In response to summary judgment, defendants have presented evidence supporting
that they have incurred substantial expenses promoting the Oil
Zone and Wash Zone names.
The defense of laches generally requires a fact-intensive
inquiry. In re Rovell, 194 F.3d 867, 871 (7th Cir. 1999); PSN
Illinois, Inc. v. Ivoclar Vivadent, Inc., ___ F. Supp. 2d ___,
2005 WL 2542611 *3 (N.D. Ill. Oct. 10, 2005). Although it is
usually not amenable to being resolved on summary judgment, there
are some circumstances where laches can be resolved on such a
motion. Smith v. Caterpillar, Inc., 338 F.3d 730, 733 (7th Cir.
2003); PSN Illinois, supra; Ameripay LLC v. Ameripay
Payroll, Ltd., 2005 WL 2293676 *3 (N.D. Ill. Sept. 16, 2005).
"For laches to apply in a trademark infringement case, the
defendant must show that the plaintiff had knowledge of the
defendant's use of an allegedly infringing mark, that the
plaintiff inexcusably delayed in taking action with respect to
the defendant's use, and that the defendant would be prejudiced
by allowing the plaintiff to assert its rights at this time."
Chattanoga Manufacturing, Inc. v. Nike, Inc., 301 F.3d 789,
792-93 (7th Cir. 2002) (citations omitted). The Seventh Circuit
applies a "sliding scale" approach. The magnitude of prejudice
that must be shown has an inverse relationship with the length of
delay; that is, the longer the delay, the less prejudice that
need be shown. Smith, 338 F.3d at 733; Hot Wax, Inc. v. Turtle
Wax, Inc., 191 F.3d 813, 824 (7th Cir. 1999). Similarly, the
level of reasonableness of or inexcusable nature of the delay
should be factored into the sliding scale. Shelwin Trading, Inc.
v. M/V Quo Vadis, 1987 WL 8735 *2 (S.D. Tex. March 26, 1987). All the
facts and circumstances must be considered in weighing the
equities involved. Clever Ideas, Inc. v. Citicoro Diners Club,
Inc., 2003 WL 21982141 *11 (N.D. Ill. Aug. 20, 2003)
The Seventh Circuit has held that circumstances may be
sufficient to bar a claim for past damages without also being
sufficient to bar a claim for prospective relief enjoining
further trademark violations. James Burrough Ltd. v. Sign of
Beefeater, Inc., 572 F.2d 574, 578-79 (7th Cir. 1978). See also
Hot Wax, 191 F.3d at 824 n. 3. A delay may be so prolonged and
inexcusable that it is sufficient to bar any relief whatsoever,
including injunctive relief. Seven-Up Co. v. O-So-Grape Co.,
283 F.2d 103, 106 (7th Cir. 1960). See also Hot Wax,
191 F.3d at 824 n. 3. No Seventh Circuit case, however, establishes any
fixed period of delay that is necessary to support barring
injunctive relief.*fn6 Moreover, considering the delay side
only is inconsistent with the sliding scale approach. Whether to
apply laches can only be determined by balancing the length of
delay against the magnitude of prejudice, while also taking into
consideration any other pertinent factors. There could be an
amount of prejudice to the alleged infringer that would be so great that a relatively shorter period of delay is sufficient to
bar injunctive relief. Since plaintiffs' motion addresses only
the delay factor, it cannot be conclusively determined that
laches would be inappropriate. Additionally, since plaintiffs do
not raise any issue regarding the prejudice suffered by
defendants, defendants were not obliged to present evidence fully
establishing the degree of prejudice they may have suffered.
Since plaintiffs' motion fails to address all factors pertinent
to a laches determination, plaintiffs cannot be entitled to
summary judgment on this issue.
The next step in this case is the preparation of the final
pretrial order. During that preparation, the parties should
consider narrowing the issues they intend to present to the trier
of fact.*fn7 Each side raises a number of overlapping
claims, some of which add little or nothing to the principal
claims. To avoid confusion, the parties should consider limiting
the claims and defenses they intend to pursue at trial.
IT IS THEREFORE ORDERED that plaintiffs' motion for partial
summary judgment as to defendants' third, fourth, and fifth
counterclaims  is granted in part and denied in part.
Plaintiffs' motion for summary judgment as to defendants' second
counterclaim  is granted. Plaintiffs' motion for summary
judgment as to defendants' laches defense  is denied. Counterclaims II and IV are dismissed. AutoZone Parts, Inc.
(f/k/a Speedbar, Inc.) is substituted for
plaintiff-counterdefendant Speedbar, Inc. and the Clerk of the
Court is directed to accordingly amend the docket. As to
Counterclaim IV, any prayer for monetary relief is stricken. In
open court on December 14, 2005 at 11:00 a.m., the parties shall
present an original and one copy of a final pretrial order in
full compliance with Local Rule 16.1 and Local Rule Form 16.1.1.
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