- Laches and the Doctrine of Progressive Encroachment
In trademark infringement litigation an alleged infringer may sometimes claim that he/she has been using the mark for an extended period of time prior to the initiation of the lawsuit. In addition, the accused infringer may also claim that the plaintiff had knowledge of this prior use. In these types of situations the defense of “laches” may be invoked by the defendant. Laches is an equitable defense and stands for the proposition that the Plaintiff in the lawsuit, with knowledge of the defendant’s use of the trademark, waited too long to institute a lawsuit alleging infringement of the involved mark. Under the laches doctrine, one cannot refrain for an extended period, from bringing an infringement action, once aware of the other’s use of the trademark. If the defense is successful, laches can bar some or all of the relief requested by the plaintiff.
To establish laches, a defendant must prove that:
- the plaintiff unreasonably delayed in enforcing its rights; and
- the delay caused prejudice to the defendant.
As alluded to above the period of time that must pass for delay to be unreasonable, must be established. Since there is no federal statute of limitations, the question becomes, what constitutes an unreasonable delay. Courts, when the affirmative defense of laches is asserted, will typically look to the most analogous state law statute of limitations and apply it as the period within which suit should be brought. Determining which state law is most analogous is an important consideration as the choice of law will determine the appropriate statute of limitations to be applied. In Wilson v. Garcia, 471 U.S. 261, 266–7, 105 S. Ct. 1938, 85 L. Ed. 2d254 (1985), the Supreme Court held: “When Congress has not established a time limitation for a federal cause of action, the settled practice has been to adopt a local time limitation as federal law if it is not inconsistent with federal law or policy to do so.” The federal courts followed that policy of adopting state statute of limitations for federal claims that are analogous to or similar to or identical with state law claims. Accordingly, depending on the state where the trademark infringement suit is brought, there can be a large difference in how different Circuits treat the laches defense.
In general, the Court will look at the length of delay, whether the defendant was prejudiced by the delay, and whether the period of delay was excusable for some reason. Conopco,Inc. v. Campbell’s Soup Co., 95 F.3d 187, 191 (2d Cir. 1996). As the Court opined in The Saul Zaentz Company d/b/a Tolkien Enterprises v. Wozniak Travel, Inc., 2008 U.S. Dist. LEXIS 57285, Case No. 06-5421 (N.D. Cal. July 2008), a defendant raising laches as a defense must show (1) that the plaintiff's delay in filing suit was unreasonable, and (2) that the plaintiff would suffer prejudice caused by the delay if the suit were to continue. In determining whether a delay is unreasonable, courts look to a number of factors, which, according to the court, in the Ninth Circuit, include: “(1) strength and value of the trademark rights asserted; (2) plaintiff's diligence in enforcing mark; (3) harm to senior user if relief is denied; (4) good faith ignorance by junior user; (5) competition between senior and junior users; and (6) extent of harm suffered by the junior user because of senior user's delay.” The factors may vary from circuit to circuit, but the inquiry is always a fact-intensive one.
Even if the delay in bringing an infringement action extends beyond the imposed statute of limitations, the affirmative defense of laches may be able to be countered by a plaintiff through the application of the doctrine of Progressive Encroachment. The doctrine of progressive encroachment stands for the principle that the owner of a mark has no obligation to sue until the likelihood of confusion “looms large.” The doctrine of progressive encroachment tell us that delay in bringing an action for trademark infringement is to be measured from the time at which the plaintiff knows or should know she has a provable claim for infringement. Under this principle, laches may be excused if the defendant changes its business significantly so as to make the likelihood of confusion much greater. This typically is shown by pointing to changes in a mark to make it more similar, or changes in products or retail outlets that bring the defendant closer to what the plaintiff does.
So when does the clock start ticking? The answer is; “It depends.” Under the doctrine of progressive encroachment, the time of delay is to be measured not from when the plaintiff first learned of the potentially infringing mark, but from when such infringement became actionable and provable. See Angel Flight of Ga., Inc. v. Angel Flight Am., Inc., 522 F.3d 1200, 1207 (11th Cir. 2008) (“Under the doctrine of progressive encroachment, delay is to be measured from the time at which the plaintiff knows or should know she has a provable claim for infringement.” (quotation omitted)); Kason Indus., 120 F.3d at 1206 (“[A] court should consider, in its assessment of laches, progressive encroachment, damage the plaintiff was suffering, and the likelihood of confusion at the time the plaintiff sued.”); Sara Lee Corp. v. Kayser-Roth Corp., 81 F.3d 455, 462 (4th Cir. 1996) (laches defense is inapplicable where plaintiff chose to delay suit “until its right to protection had clearly ripened”); 6 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 31.19 (4th ed. 2009) (owner of a mark “has no obligation to sue until the likelihood of confusion looms large” and “cannot be guilty of laches until his right ripens into one entitled to protection” (quotation omitted)). The doctrine of progressive encroachment makes sense. Otherwise, trademark holders would be hoisted upon the horns of an inequitable dilemma—sue immediately and lose because the alleged infringer is insufficiently competitive to create a likelihood of confusion, or wait and be dismissed for unreasonable delay. See Sara Lee Corp., 81 F.3d at 462.
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