Ducks Unlimited, Inc. v. Boondux, LLC

DUCKS UNLIMITED, INC., Plaintiff, v. BOONDUX, LLC and CALEB SUTTON, Defendants.

No. 2:14-cv-02885-SHM-tmp

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TENNESSEE WESTERN DIVISION

August 18, 2017

MEMORANDUM OPINION FINDINGS OF FACT AND CONCLUSIONS OF LAW

Plaintiff Ducks Unlimited, Inc. sues Defendants Boondux, LLC and Caleb Sutton alleging claims of copyright infringement, in violation of § 501 of the Copyright Act, 17 U.S.C. § 501; trademark infringement, in violation of § 32 of the Lanham Act, 15 U.S.C. § 1114; false designation of origin or sponsorship ("false designation"), in violation of § 43(A) of the Lanham Act, 15 U.S.C. § 1125(a); and trademark dilution, in violation of the Trademark Dilution Revision Act, 15 U.S.C. § 1125(c), based on Defendants' use of a logo in advertising, promoting, selling, and distributing merchandise bearing that logo. (ECF No. 1 ¶¶ 28-59 at 7-11.)

The Court held a bench trial on Plaintiff's claims against Defendants from March 27, 2017, to March 31, 2017. The parties filed their proposed findings of fact and conclusions of law on May 12, 2017. (ECF Nos. 158, 158-1, 159.) The parties responded to each other's proposed findings of fact and conclusions of law on May 26, 2017. (ECF Nos. 160, 161.) The Court's findings of fact and conclusions of law required by Federal Rule of Civil Procedure 52 follow.

I. BACKGROUND

As provided by the Pretrial Order, the parties have agreed to the following summary of the case:

Ducks Unlimited, Inc. is a non-profit corporation that is dedicated to waterfowl and wetlands conservation. Ducks Unlimited makes use of a logo, a drawing of the profile of a mallard's head, which is depicted below [(the "DU Logo")]:

Image materials not available for display.

To promote and support its conservation efforts, Ducks Unlimited licenses the [DU Logo] to be used on a multitude of products. In January 2012, Caleb Sutton created a logo, which combines a fishhook and an antler in such a way that their combination forms the shape of a mallard's head (the "Boondux Logo"):

Image materials not available for display.

Sutton began selling decals, hats, t-shirts, and other products bearing the Boondux Logo, and formed a company, which was eventually named Boondux, LLC.

Ducks Unlimited filed suit against Boondux and Sutton ("Defendants") for trademark infringement, false designation of origin or sponsorship, trademark dilution, and copyright infringement based on Defendants' use of the Boondux Logo. Ducks Unlimited has filed this suit to stop Defendants from using the Boondux Logo and seeks a monetary recovery and attorney's fees from Defendants. Defendants oppose Ducks Unlimited's allegations and deny that they are liable to Ducks Unlimited for a monetary recovery or attorney's fees.

(ECF No. 146 at 3.)

II. JURISDICTION

Each of Plaintiff's claims arises under federal law. The Court has subject-matter jurisdiction to adjudicate federal claims under 28 U.S.C. § 1331.

III. FINDINGS OF FACT

A. Stipulated Facts

As provided by the Pretrial Order, the parties have agreed that the following facts are not in dispute:

1 Ducks Unlimited is a not-for-profit corporation formed for the purpose of conserving, restoring, and managing wetlands and associated habitats for North America's waterfowl. Ducks Unlimited was founded in 1937.

2 Ducks Unlimited is the owner of a federal copyright registration for the [DU Logo] image, issued on July 14, 1980 to Ducks Unlimited Canada and assigned to Ducks Unlimited . . . by a written assignment of copyright dated September 10, 1985.

3 On March 7, 2002, Ducks Unlimited filed with the United States Patent and Trademark Office ("USPTO") an application to register the [DU Logo] on the Principal Register in International Class 35, for "association services -- namely, promoting the preservation of waterfowl."

4 On October 8, 2002, the USPTO registered the [DU Logo] trademark to Ducks Unlimited, Reg. No. 2,631,699 in International Class 35 for "association services -- namely, promoting the preservation of waterfowl."

5 Plaintiff Ducks Unlimited is the owner of Trademark Registration No. 2,613,699, a design-only trademark that depicts a duck's head drawing, in International Class 35 for "association Services -- namely, promoting the preservation of waterfowl." The design registered in this registration is the [DU Logo].

6 Bass Pro Shops, an authorized retailer of items having the [DU Logo] printed on them, sells a number of Ducks Unlimited shirts. In the product description for every shirt sold online by Bass Pro Shops with the [DU Logo] appears the following statement: "It's all part of the Ducks Unlimited promise: Doing more to restore -- one garment at a time™."

7 Boondux has not been involved or affiliated with association services. Boondux sells its products strictly for commercial gain.

8 Boondux sells products that bear marks and designs other than the disputed Boondux Mark.

(ECF No. 146 at 11-12 (citations omitted).)

B. Facts Established at Trial

1. Ducks Unlimited's Use of the DU Logo

Since 1937, Ducks Unlimited has conserved nearly 14 million acres of wetlands and waterfowl habitat, completing conservationprojects in all 50 states, Canada, and Mexico. (ECF No. 152 at 39-41, 47-48.) As part of its mission, Ducks Unlimited educates its members and the general public about the importance of its work. (Id. at 49-50.) Its nationwide education efforts include public service announcements, newsletters, a television show, and radio shows. (Id.) About 450 to 500 employees and 55,000 volunteers nationwide contribute to Ducks Unlimited's mission. (Id. at 38.)

Ducks Unlimited's members and chapters play an integral role in furthering its mission. As of January 2012, Ducks Unlimited had 550,000 adult members and 45,000 youth members. (Id. at 51.) Today, the adult-membership figure is approximately 600,000. (Id. at 49.) Members include conservationists, waterfowlers, and people interested in hunting, fishing, and the outdoors generally. (Id. at 50-51.) Members join Ducks Unlimited in one of several ways. Some join by responding to an offer by mail or email or by seeking out Ducks Unlimited's website. (Id. at 58-59.) Others -- about two thirds -- join by attending Ducks Unlimited events, which are ordinarily organized by chapters. (Id. at 58.) Whether through a direct contribution or through the price of an event ticket, members join by making an annual $35 gift to the organization. (Id. at 55, 73.) The annual retention rate among members joining through events is about 50%; the rate among members whojoin apart from events is about 55%. (Id. at 73.) Over 1 million people have made a financial contribution to Ducks Unlimited over the last three years. (Id. at 74.)

Members are organized into chapters by geographic location. (Id. at 51.) The chapters' primary purpose is fundraising. (Id. at 54.) Ducks Unlimited has 2,800 chapters spanning all 50 states, and those chapters organize about 4,000 fundraising events annually. (Id. at 53, 61; Tr. Ex. No. 7 (chapter map).) In Louisiana, there are 64 chapters with over 20,000 members. (ECF No. 152 at 53-54.) Two chapters are in Baton Rouge, Louisiana (Sutton's hometown), both of which have existed since 1985. (Id. at 53.) Since before 2012, the Baton Rouge Chapter has maintained about 900 members, and an annual event organized by the Louisiana State University Chapter draws about 500 attendees. (Id.)

Ducks Unlimited uses its DU Logo extensively in connection with its membership, chapter, and fundraising activities. It uses its DU Logo in various member communications, including mail invitations, email "blasts," and press releases. (Id. at 55-56; e.g., Tr. Ex. No. 27 (letterhead).) The DU Logo is displayed in the welcome letter and on the membership card that members receive in their membership kits. (ECF No. 152 at 55-56; Tr. Ex. No. 8 (letter & card).) Also included in every kit are two automotive (or window) decals, one of which is the DULogo. (ECF No. 152 at 56; Tr. Ex. No. 9 (decals).) Ducks Unlimited has distributed over 10 million DU Logo decals to members over the last 20 years. (ECF No. 152 at 57-58.) Amy Batson, Chief Fundraising Officer for Ducks Unlimited, testified that she has seen the DU Logo decal displayed in all 50 states, Canada, and Mexico. (Id. at 133-34.)

Members also receive an annual subscription to the Ducks Unlimited Magazine, which is published six times a year. (Id. at 81-82; see ECF No. 153 at 67.) The DU Logo always appears standing alone in the lower-right corner of the magazine's front cover and can be seen throughout the magazine. (ECF No. 152 at 81-82; Tr. Ex. No. 17 (magazines).) In 2012, the magazine had a circulation of 530,000 per issue; today that figure is 610,000. (ECF No. 152 at 99.) Since 2012, about 150 companies have advertised with Ducks Unlimited, primarily in the magazine. (Id. at 80.) Advertisements annually generate $3 to $4 million in revenues for Ducks Unlimited. (Id. at 81.)

Chapters are permitted to use the DU Logo in chapter communications and in promoting fundraising events and chapter activities. (Id. at 54.) Ducks Unlimited provides guidance to chapters about how the DU Logo should be displayed. (ECF No. 153 at 79-80.) Chapters are given some latitude to tailor how they display the DU Logo for their own purposes, such as, for example, placing design elements around the logo or behind thelogo, but Ducks Unlimited does not authorize chapters to alter the DU Logo itself. (Id. at 80.) Ducks Unlimited allows the chapters a certain amount of deviation from the guidelines. (Id. at 81.) Doug Barnes, Creative Director for Ducks Unlimited, testified that he is not inclined to be overbearing in enforcing the guidelines as to loyal, small-dollar supporters or smaller chapters that are trying to raise money for Ducks Unlimited. (Id. at 59, 81-82.)

Ducks Unlimited makes available a variety of "incentive merchandise" goods that chapters may use at member and fundraising events. (ECF...