Infringement claim not barred by laches

Where plaintiff sued defendants under Virginia law for trademark infringement, federal law informs the court’s evaluation of whether laches is a valid defense to plaintiff’s suit.

Defendants have not proven their laches defense in their plea in bar. Plaintiff lacked knowledge of defendants’ infringing use of the registered trademark until about a year before the suit, thus plaintiff’s claim did not ripen until then.

Further, defendants did not show that they were prejudiced by the timing of plaintiff’s suit.

Finally, because the laches issue is being decided on the merits, defendants may not reassert the issue at trial.

“[T]he Court denies Defendants’ Plea in Bar asserting the defense of laches, with prejudice.”

Background

Plaintiff, Whitehall Farm, registered its trademark on Oct. 20, 2020. Before registration, plaintiff had been in operation since 1947. A few months before registering, plaintiff found “found Whitehall Farms, LLC, Whitehall Farms Property, LLC, and Whitehall Farm Events Barn, LLC (collectively, ‘Defendants’) advertising as ‘Whitehall Farm’ or ‘Whitehall Farms’ on a wedding website in May of 2020.

“The Defendants maintained to have used the name ‘Whitehall Farms’ since 1959. For at least sixty-one years, both Plaintiff and Defendants operated businesses under the name of ‘Whitehall Farms,’ ‘Whitehall Farm,’ or some other variant of similarity.”

Plaintiff filed a trademark infringement claim in May 2021, claiming instances of confusion between the two businesses. Before the court is defendants’ plea in bar, seeking to dismiss the suit under the doctrine of laches.

Federal precedent

Federal precedent will guide the court’s evaluation of whether laches provides defendants with a viable defense to plaintiff’s trademark infringement claim. “The federal Lanham Act is substantially identical to the Virginia trademark statute. …

“Since there is no precise Virginia precedent as to how the defense of laches pertains to trademark claims, this Court accepts well-developed federal case law as persuasive in this context, particularly considering the Lanham Act’s similarity to Virginia law regarding ownership and exclusive use. Thus, the Court employs such authority in the analysis of the questions at hand.”

Legal standard

“In federal trademark infringement jurisprudence, courts apply !aches to ‘address the inequities created by a trademark owner who, despite having a colorable infringement claim, has unreasonably delayed in seeking redress to the detriment of the defendant.’ …

“In determining whether laches operates as a viable defense to a trademark infringement claim, the following factors are considered:

“‘(1) whether the owner of the mark knew of the infringing use; (2) whether the owner’s delay in challenging the infringement of the mark was inexcusable or unreasonable; and (3) whether the infringing user has been unduly prejudiced by the owner’s delay.’”

No knowledge

“An owner knows of the infringing use of a mark when the trademark owner has (1) actual or constructive knowledge of the infringer’s use of the mark, and (2) the use of the mark causes a likelihood of confusion. …

“[I]n the Plea in Bar, Defendants failed to prove Plaintiff had actual or constructive knowledge of Defendants’ infringement prior to the year 2020. Defendants claimed Plaintiff should have known of Defendants’ infringing use of Plaintiffs mark because there are forty-seven other businesses operating under the name ‘Whitehall’ or ‘White Hall.’ However, it is not proven to this Court whether the Plaintiff actually or constructively knew that Defendants’ use of ‘Whitehall Farms’ was an infringing use of Plaintiffs mark, not just that use of the trade name existed. …

Defendants claim the Plaintiffs predecessors were ‘allowing the defendants to use the name for at least fifty-five years prior to trial.’ …

“Still, without evidence that Plaintiff knew the Defendants were using the mark in an infringing manner, or causing a likelihood of confusion, there is no evidence the Plaintiff allowed the Defendants use of Plaintiff’s mark. The forty-seven other trade names in use might be so unrelated to the same line of business as the Plaintiff’s name that it would create no likelihood of confusion between them.”

Reasonable delay

“The defense of estoppel by laches arises ‘only where the plaintiff has unreasonably delayed its pursuit of a remedy.’ … (emphasis in original). The cornerstone of trademark law, then, only requires the trademark owner to sue when ‘the likelihood of confusion looms at large.’ … Therefore, the owner guarding a trademark may ‘delay its pursuit of a remedy until its right to protection ha[s] clearly ripened.’ … (emphasis added). …

“Defendants argued Plaintiff unreasonably delayed in bringing the suit because the Defendants’ use of the trade name in dispute was in the ‘public domain.’ Therefore, according to the Defendants, the Plaintiff had a burden to seek out infringing marks. …

“However, the second evaluative factor does not place this kind of burden on any plaintiff pressing a trademark infringement suit. Under the doctrine of progressive encroachment, the Plaintiff is allowed ‘some latitude in the timing of its bringing suit.’ …

“The Plaintiff ‘should not be obligated to sue until its right to protection has ripened such that Plaintiff knew or should have known, not simply that defendant was using the potentially offending mark, but that plaintiff had a provable infringement claim against defendant.’ …

“This Court finds the Plaintiff did not delay unreasonably in bringing suit because the Defendants could not show the Plaintiff had a ripened, provable trademark infringement claim other than in the year prior to the Plaintiff filing its trademark suit. …

“Although Defendants admitted that Plaintiff’s claim did not ripen during the past sixty-one years, Defendants conceded the Plaintiff discovered the Defendants advertising under the name ‘Whitehall Farm’ on a wedding website in May of 2020. After additional research, the Plaintiff found that Plaintiff’s business was being confused with Defendants’ business at the Culpeper Farmer’s Cooperative. …

“Additionally, Plaintiff cited to communications about inquiries for events happening at Defendants’ property, and when Plaintiff was incorrectly tagged on a Facebook page by a vendor meaning to tag the Defendants. … Additionally, Plaintiff cited to confusion in August 2021, when Plaintiff was invoiced by a vendor of Defendants, which bill was intended for Defendants’ principal, Jeff Waters. …

“Actual confusion is an important factor in the ‘likelihood of confusion’ analysis, and without evidence of such confusion prior to 2020, this Court cannot find that Plaintiff’s suit ripened prior to that year. … Therefore, this Court cannot find that Plaintiff unreasonably delayed in bringing suit.”

No prejudice

“Defendants did not even argue in their filings, nor prove at the hearing on the Plea in Bar, that any identifiable prejudice occurred to them due to Plaintiffs delay in filing suit. …

“Consequently, the Court denies Defendants’ Plea in Bar asserting the defense of laches, with prejudice.”

Whitehall Farm, LLC v. Whitehall Farms, LLC, et al. , Case No. CL-2021-3114, Dec. 15, 2021, Fairfax Circuit Court (Bernhard). Patrick J. McDonald for plaintiff, James P. Magner for defendants. VLW 021-8-133, 15 pp.