November 5, 2019
from the United States District Court for the Western
District of Wisconsin. No. 16-cv-00172 - William M. Conley,
Flaum, Rovner, and Hamilton, Circuit Judges.
non-competing Midwestern companies operated by brothers used
marks containing the family name, Fabick. The owner of the
registered mark (or "senior user") (Fabick, Inc.,
or "FI"), a small manufacturer of sealants, sued
the "junior user" (JFTCO, Inc.), a larger
distributor of Caterpillar equipment, for trademark
infringement. In a mixed verdict, a jury found that JFTCO had
violated the Lanham Act but had not committed common law
infringement. FI sought an order permanently enjoining JFTCO
from using the name "Fabick," but the district
court entered limited injunctive relief requiring that JFTCO
issue, for five years, disclaimers clarifying that it is not
associated with FI.
parties appealed. FI complains that the district court erred
in setting remedies: it should have entered a broad permanent
injunction against JFTCO, and further should have allowed FI
to recover JFTCO's profits. JFTCO, in its counter-appeal,
seeks reversal of the jury's finding that it violated the
Lanham Act based on an allegedly erroneous jury instruction
and the district court's refusal to overturn the
jury's verdict as a mater of law.
affirm on each issue.
FI is a
Wisconsin corporation, based in Madison, dealing in
protective coatings and sealants for various uses. JFTCO is a
Delaware corporation and wholly owned subsidiary of the John
Fabick Tractor Company, a Caterpillar equipment dealer based
in Missouri. Both companies operate in Wisconsin and the
Upper Peninsula of Michigan (the "UP").
story of clashing family businesses begins with John Fabick,
the founder of multiple business concerns operating
throughout the Midwest. In 1982, his eponymous firm (the John
Fabick Tractor Company, which used various marks including
the word "Fabick" throughout its history) purchased
two existing Caterpillar equipment dealerships serving
Wisconsin and the UP. John intended for his son Joseph
Fabick, Sr. (Joe Sr.) to operate the dealerships. Joe Sr.
moved to Wisconsin and founded FABCO, selling new and used
Caterpillar machines, vehicles, attachments, and parts. In
2001, Joe Sr.'s son Jeré took over FABCO, which
continued to operate Caterpillar dealerships until 2015. For
over a decade, FABCO primarily used a mark reading
"FABCO CAT," highlighting its affiliation with
began as a subsidiary of FABCO and was incorporated in 1993.
Its core business concerned spray-on sealants for use in the
beds of pickup trucks and similar vehicles. Another of Joe
Sr.'s sons, Joseph "Jay" Fabick, Jr., worked at
FI. Apparently, tensions between the brothers Jeré and
Jay became untenable and, in 1997, Jay's employment was
terminated. His severance package included taking over FI
(then primarily owned by FABCO) as its sole owner. FI and
FABCO then operated independently, without apparent incident,
for several years.
1994, while still a subsidiary of FABCO, FI filed a trademark
application and a service mark application with the U.S.
Patent and Trademark Office for the mark "FABICK,"
for "polyurethane-based and polyurea-based sealers and
protect-ants to be applied as a coating to hard or flexible
surfaces." The service mark was granted in 1995 and the
trademark in 1997. FI has used several logos featuring the
dispute at hand was spurred by FABCO's sale to a newly
formed subsidiary of the John Fabick Tractor Company, called
JFTCO, in 2015. Having taken over FABCO's operations,
JFTCO began operating as the exclusive Caterpillar dealer in
Wisconsin and the UP, using the trade name "Fabick
CAT." JFTCO engaged in an extensive rebranding effort
under the Fabick CAT identity. FI claims that this rebranding
began a long period in which customers were confused,
including those who called FI seeking JFTCO and misdirected
checks between the companies. FI complained that as a small
company with minimal advertising, its identity was being
overwhelmed by JFTCO (which extensively advertised, including
at major sporting events).
JFTCO in March 2016; its operative complaint alleged (among
other charges) that JFTCO committed federal trademark
infringement under the Lanham Act and at common law. The case
eventually went to trial. Certain pretrial holdings, the jury
verdict itself, and posttrial decisions are now on appeal.
The relevant district court decisions are as follows.
summary judgment, JFTCO argued that FI should not be allowed
to seek monetary damages because, prior to trial, it had not
put forth evidence of damages due to the alleged
infringement. The district court largely disagreed, noting
that it would be possible for FI to prove up multiple
categories of monetary damages, such as recompense for
employee time spent addressing confused customers or harm to
goodwill. The district court did agree, however, that FI
could not seek JFTCO's profits as damages:
While plaintiff states in its opposition brief that a
defendant's profits may be awarded[, ] it fails to
develop any theory as to why such an award would be
appropriate here, much less evidence supporting its award. On
the contrary, as already noted in discussing plaintiff's
reverse confusion theory, the court is hard-pressed to
understand how defendants were unjustly enriched by consumers
assuming that Fabick's sealants and coatings business is
the same or related to JFTCO's business.
sides presented their cases at trial. JFTCO argued in part
that by virtue of its association with the John Fabick
Tractor Company's longstanding use of a
"Fabick" mark, the jury should find it established
continuous prior use of the mark, a defense showing that it,
and not FI, first used and was the original holder of the
close of evidence, the district court instructed the jury on
the charges. In discussing Lanham Act liability, the judge
diverged from strict adherence to Seventh Circuit pattern
instructions, and provided the following element:
"[D]efendant JFTCO used the FABICK mark in a manner that
is likely to cause confusion as to the source or origin of
plaintiff's product or that plaintiff has somehow
become connected to JFTCO." (additional
language bolded; cf. Seventh Circuit Pattern Jury
district court based its modification to the instructions on
its reading of the caselaw, namely Sands, Taylor &
Wood Co. v. Quaker Oats Co., 978 F.2d 947, 957 (7th Cir.
1992), which described a case of reverse trademark confusion:
"The public comes to assume that the senior user's
products are really the junior user's or that the former
has become somehow connected to the later.
The result is that the senior user loses the value of the
trademark …." Id. (emphasis added)
(quoting Ameritech, Inc. v. Am. Info. Techs. Corp.,
811 F.2d 960, 964 (6th Cir. 1987)).
jury returned a mixed verdict. It found JFTCO liable for
federal trademark infringement and rejected JFTCO's
defenses, including prior use. The jury also rejected
FI's common law infringement claim.
trial, JFTCO sought judgment as a mater of law in its favor
and FI sought a permanent injunction against JFTCO. FI argued
that because it prevailed on its Lanham Act claim, the
district court should permanently enjoin JFTCO from using the
name "Fabick" as a part of its business in any way.
The district court denied JFTCO's mot ion for judgment as
a mate r of law and denied FI the requested permanent
injunction. Instead, the district court ordered JFTCO to
provide multiple notices and disclaimers:
• To defendant's employees on the intranet and on
reference cards at each reception desk … for a period
of five years from the date of this order. Specifically,
defendant's employees are to be regularly reminded to
refer questions about Fabick, Inc., or its products and
services to Fabick, Inc., including providing its phone
number and address, in response to internet and telephone
• To defendant's customers in an insert with
invoices and on all invoices … for a period of five
years from the date of this order.
• To defendant's vendors in an insert with all
purchase orders … for a period of five years from ...