Marketquest Grp., Inc. v. BIC Corp.

316 F.Supp.3d 1234

MARKETQUEST GROUP, INC., Plaintiff,

v.BIC CORPORATION; BIC USA Inc.; Norwood Promotional Products, LLC, Defendants.

Case No. 11–cv–618–BAS–JLB

United States District Court, S.D. California.

Signed June 12, 2018

Gregory Harris Guillot, Pro Hac Vice, Gregory H. Guillot, P.C., Dallas, TX, Guillermo Marrero, International Practice Group, P.C., Kent M. Walker, David Michael Kohn, Michael Thomas Lane, Lewis Kohn & Walker LLP, San Diego, CA, for Plaintiff.

Richard P. Sybert, Joan Borzcik Flaherty, Yuo–Fong C. Amato, Gordon & Rees LLP, San Diego, CA, for Defendants.

ORDER:

(1) GRANTING IN PART AND DENYING IN PART PLAINTIFF MARKETQUEST'S MOTION FOR PARTIAL SUMMARY JUDGMENT

[ECF No. 205];

(2) DENYING DEFENDANT BIC CORP.'S MOTION FOR PARTIAL SUMMARY JUDGMENT

[ECF No. 216];

AND

(3) GRANTING IN PART AND DENYING IN PART DEFENDANTS BIC USA AND NORWOOD'S MOTIONS FOR SUMMARY JUDGMENT AS TO DAMAGES

[ECF Nos. 214, 215]

Hon. Cynthia Bashant, United States District Judge

This case is on remand from the Ninth Circuit's reversal of this Court's previous order granting summary judgment to Defendants on their fair use defense and corresponding dismissal of Plaintiff Marketquest Group, Inc.'s ("Marketquest") claims that Defendants infringed its All in One and THE WRITE CHOICE marks. See Marketquest Grp., Inc. v. BIC Corp. , No. 11-cv-618-BAS-JLB, 2015 WL 1757766 (S.D. Cal. April 17, 2015), rev'd by , Marketquest Grp., Inc. v. BIC Corp. , 862 F.3d 927 (9th Cir. 2017). The Court has reinstated Marketquest and BIC Corp.'s cross-motions for summary judgment filed in 2014, the merits of which the Court has not previously reached. Marketquest seeks partial summary judgment on all of Defendants' thirteen counterclaims and twelve of Defendants' twenty-two affirmative defenses. (ECF No. 205.) BIC Corp. has opposed the motion. (ECF No. 254.) BIC Corp. has cross-moved for partial summary judgment on five counterclaims, which Marketquest has opposed. (ECF Nos. 216–1, 259.) The Court has also reinstated Defendants BIC USA, Inc. ("BIC USA") and Norwood Promotional Products LLC's ("Norwood") motions for summary judgment as to Plaintiff's damages, which Marketquest has opposed. (ECF Nos. 214, 215, 258.) The reinstated motions and opposing papers, the record submitted, and the parties' evidentiary objections number several thousand pages.¹

For the reasons herein, the Court: (1) grants in part and denies in part Marketquest's motion; (2) denies BIC Corp.'s motion in full; and (3) grants in part and denies in part BIC USA and Norwood's motions.

I. BACKGROUND

A. Factual Background

1. The Parties and the Promotional Products Industry

The acts of alleged trademark infringement in this case arise in the context of the promotional products industry. A promotional product is a product used by a company to brand itself with its customers. (ECF No. 205–8 Decl. of Harris Cohen ("Cohen Decl.") ¶ 16.) The industry supports the manufacture, imprinting, and distribution of promotional products to companies seeking to brand themselves. (Id. ) In this context, a distributor approaches a supplier which either manufactures or imports a promotional product and then imprints the company's brand and messaging on the product. The end company then gives the product away as part of a promotion. (Id. ¶ 17, Ex. I.3.)

Marketquest, doing business as "All in One," is a San Diego, California-based local supplier of promotional products, including pens, writing instruments and magnets. (Id. ¶¶ 5–12.) At issue in this case are Plaintiff's federally registered All in One and THE WRITE CHOICE trademarks. Marketquest's All in One marks, primarily for "writing instruments, namely pens," include: (1) the word mark "ALL–IN–ONE", Registration No. 2,422,976 (Jan. 23, 2001) ('976 Registration); (2) the word mark "ALL–IN–ONE LINE," Registration No. 2,426,417 (Feb. 6, 2001) ('417 Registration); (3) the design mark "ALL IN ONE," Registration No. 3,153,089 (Oct. 10, 2006) ('089 Registration)² (a registration which also covers services of "dissemination of advertising matter"); and (4) the design service mark "ALL IN ONE," Registration No. 3,718,333 (Dec. 1, 2009) ('333 Registration)³ , specifically for services including "customized printing of equipment, merchandise and accessories for business promotion." (ECF No. 205–2, Request for Judicial Notice ("RFJN") ¶¶ 1–3, 5, Exs. A–C, E.) Plaintiff also sues for alleged infringement of the word mark for goods "THE WRITE CHOICE," Registration No. 3,164,707 (Oct. 31, 2006) ('707 Registration). (Id. ¶ 4, Ex. D).

According to Plaintiff, Defendant Norwood is one of the largest non-apparel promotional products suppliers in the industry. (ECF No. 205–22, Decl. of Michael Lane ("Lane Decl.") ¶¶ 12–13, Exs. J, K.) Plaintiff claims that Norwood has reached this size by acquiring and aggregating smaller suppliers, like Plaintiff, and retaining their trademarks. (Id. ¶¶ 14–15, Exs. F.2, I.2.) BIC Corp. and BIC USA acquired Norwood in 2009 at a bankruptcy auction. (ECF No. 214–2, Decl. of Lori Bauer ("Bauer Decl.") ¶ 3.)

2. Defendants' Alleged Infringement of the Marks

Plaintiff alleges Defendants used its "All in One" marks in their 2011 catalogue. (ECF No. 227–5, Lane Decl. ¶ 32, Exs. Y, Z.) Plaintiff claims Defendants placed the mark on the cover of the catalog in the same location where Norwood placed its "sub brands" on the cover of its 2010 catalog, which Plaintiff contends implied that Defendants had acquired Plaintiff. (Id. ¶¶ 20–23, Exs. S, N, O, P, Q.) Defendants contend that the phrase "All in One catalogue" signified that Defendants had merged multiple catalogues into one. (ECF No. 214–2, Bauer Decl. ¶ 6.) Defendants also distributed promotional materials that featured an image of this 2011 catalogue, and directed customers to look for products or information in the "2011 Norwood All in One catalogue." (ECF No. 227–5, Lane Decl. ¶¶ 34–38, Exs. X, Y, Y.2, AC, AD, AE, AF.) Plaintiff also alleges that Defendants distributed an on-line advertisement that said "Put Your Drinkware Needs...in a Norwood All in One basket," which included a photo of a basket containing several types of drinkware. (Lane Decl. ¶ 12, Ex. C.2.)⁴

Plaintiff further alleges Defendants used "the Write Pen Choice" to promote the 30th anniversary of the BIC Round Stic pen. (First Amended Complaint ("FAC") ¶ 23; ECF No. 227–5, Lane Decl. ¶ 43, Ex. K.3.) Plaintiff claims that this infringed the "THE WRITE CHOICE" mark. (Id. )

B. Procedural Posture

1. Pre–Appeal

On March 28, 2011, Marketquest brought suit against BIC Corp., BIC USA, and Norwood, alleging that (1) Defendants infringed the All in One marks in violation of 15 U.S.C. § 1114 ; (2) Defendants' conduct with respect to the All in One marks constituted unfair competition in violation of 15 U.S.C. § 1125(a) ; (3) Defendants infringed THE WRITE CHOICE mark in violation of 15 U.S.C. § 1114 ; (4) Defendants' conduct with respect to THE WRITE CHOICE mark constituted unfair competition in violation of 15 U.S.C. § 1125(a) ; (5) Defendants' conduct violated the California Unfair Competition Law, CAL. BUS. & PROF. CODE § 17200, et seq. ; and (6) Defendants were unjustly enriched. (ECF No. 1.) Plaintiff filed the FAC on May 5, 2011, alleging these same claims. (ECF No. 14.) On May 13, 2011, Defendants filed their Answer, raising thirteen counterclaims, broadly grouped into fraud, abandonment, and mere descriptiveness and ornamentality. (ECF No. 17.) Defendants also asserted some twenty-two affirmative defenses, including fair use, defenses related to the counterclaims, and multiple equitable defenses. (Id. )

In August 2011, Marketquest moved for a preliminary injunction to enjoin Defendants from continuing their alleged infringement of the marks. (ECF No. 27.) Judge Sammartino, then presiding over this case, denied Plaintiff's motion on November 7, 2011. (ECF No. 41.) Judge Sammartino determined that Plaintiff was likely to show it has valid, protectable All In One marks, and rejected Defendants' defenses of fraud and abandonment.⁵ (Id. at 6–9.) Although Judge Sammartino determined that there was "some likelihood of confusion" based on the eight likelihood of confusion factors elaborated in AMF, Inc. v. Sleekcraft Boats , 599 F.2d 341, 348–49 (9th Cir. 1979), she also determined that Defendants were likely to succeed on a fair use defense. (Id. at 9–23.) Marketquest did not appeal the denial of the preliminary injunction motion.

Roughly three years later, after numerous discovery disputes among the parties requiring Court intervention on eighteen occasions (ECF No. 175), the case entered the summary judgment stage on October 27, 2014 when Marketquest filed its motion for partial summary judgment on Defendants' counterclaims and certain affirmative defenses. (ECF No. 205). BIC Corp. filed its motion for partial summary judgment on Defendants' fraud and abandonment counterclaims. (ECF No. 216–1.) BIC USA and Norwood each filed motions for summary judgment on the fair use defense and Marketquest's damages. (ECF Nos. 214, 215.) After submission of extensive briefing and a swelling record, the Court held oral argument on the parties' motions on February 9, 2015. (ECF No. 323, 324.)

On April 17, 2015, the Court granted Defendants Norwood and BIC USA's motions on fair use. (ECF No. 327.)⁶ As a result of that decision, the Court denied Defendant BIC Corp.'s cross-motion (ECF No. 216–1) and dismissed Defendants' counter-claims (ECF No. 17). The Court terminated as moot Plaintiff's motion for partial summary judgment (ECF No. 205), Defendants' motion for sanctions (ECF No. 289) and several motions seeking to exclude testimony of experts and certain witnesses. (ECF Nos. 199, 217, 218, 219). Judgment was entered in favor of Defendants and the FAC was dismissed. (ECF No. 328.)

2. Appeal and Post–Remand

Plaintiff appealed this Court's summary judgment decision in favor of Defendants on May 15, 2015. (ECF No. 339.) Over two years later, the Ninth Circuit issued its...