Trademark Owner Waited Too Long to Raise Its Beef with Alleged Infringer

The Tillamook County Creamery Association, a well-known maker of cheese and other dairy products, began using the TILLAMOOK mark for its products as early as 1918.  It registered the mark with the US Patent and Trademark Office in 1921 and 1950.  Years later, a different entity, the Tillamook Country Smoker began processing meat products.  The general manager of the Creamery Association informed the Country Smoker that he did not object to the Country Smoker provided that it did not build a cheese factory. 

The Country Smoker expanded and started selling its products under the name TILLAMOOK COUNTRY SMOKER in grocery stores as well as at the Tillamook Creamery.  In 1985, the Country Smoker applied for a trademark.  While the Creamery did not object, the PTO rejected the application because the mark was confusingly similar to the Creamery's TILLAMOOK mark.  Nonetheless, the Country Smoker continued to use its mark without objection from the Creamery, and in 1995, the Country Smoker filed a new application that combined the words TILLAMOOK COUNTRY SMOKER with a ribbon design.  The Creamery did not object and the PTO granted the registration.  The Country Smoker later reapplied to register the words TILLAMOOK COUNTRY SMOKER and the PTO granted the registration over the opposition of the Creamery. 

The Creamery began recording instances of actual confusion between the two marks in grocery stores.  The Creamery then sent a cease and desist letter to the Country Smoker which prompted the Country Smoker to file a declaratory judgment action to seek a ruling that it was not infringing the Creamery's mark.  The trial court ruled, in part, that the Creamery's objections to use of TILLAMOOK COUNTRY SMOKER were barred by laches (i.e., the expiration of the limitations period for filing a claim).  In a recent ruling, the Ninth Circuit Court of Appeals agreed. 

The appellate court ruled that the limitations period for laches starts from the time that plaintiff knew or should have known about its potential cause of action.  The court found that the Creamery knew about the use of the infringing mark on complementary products in the same geographical area but did nothing for 25 years to prevent it.  The Creamery argued that the delay in enforcement was excused by the doctrine of progressive encroachment, which allows a trademark owner to wait to sue a junior user until the junior user engages in direct competition.  The Creamery claimed that the Country Smoker's sales expanded significantly in the late 1990s, making the infringement claim timely.  The court held that the doctrine of progressive encroachment does not apply under these circumstances because the Country Smoker merely grew its existing business and did not expand into a new product market in competition with the Creamery.

The court also rejected the Creamery's argument that an injunction should issue to protect the public from inevitable confusion, holding that inevitable confusion is actionable only where the product is harmful or a threat to public safety, which was not the case here.  Accordingly, the Tillamook Creamery was barred from asserting claims for infringement and from obtaining injunctive relief to stop the use of the TILLAMOOK COUNTRY SMOKER mark.   This case may be found here.