Pinnacle Adver. v. Pinnacle Adver. & Mktg. Grp., LLC

7 F.4th 989

PINNACLE ADVERTISING AND MARKETING GROUP, INC., Plaintiff-Appellant,

v.PINNACLE ADVERTISING AND MARKETING GROUP, LLC, Defendant-Appellee.

No. 19-15167

United States Court of Appeals, Eleventh Circuit.

August 2, 2021

Edward L. Bishop, Benjamin Adam Campbell, Nicholas S. Lee, Bishop Diehl & Lee, Ltd, Schaumberg, IL, Jon Michael Gibbs, James S. Toscano, Lowndes Drosdick Doster Kantor & Reed, PA, Orlando, FL, for Plaintiff-Appellant.

Joe M. Grant, Adam Marshall, Marshall Grant, PLLC, Thomas G. Zeichman, Counsel, Beighley Myrick Udell & Lynne, PA, Boca Raton, FL, Jennifer L. Mozwecz, Shams Rodriguez & Mozwecz, Chicago, IL, for Defendant-Appellee.

Before MARTIN, NEWSOM, and BRANCH, Circuit Judges.

BRANCH, Circuit Judge:

This appeal arises out of a trademark dispute between two advertising and marketing companies—both of which operate under the name Pinnacle Advertising and Marketing Group. The Illinois-based Pinnacle owns two registered trademarks for the name "Pinnacle" and a stylized version of the word "Pinnacle." It sued the Florida-based Pinnacle for trademark infringement and unfair competition under the Lanham Act.¹ When a company sues to enforce its registered marks, it faces the risk of losing its marks’ protection in the process. After Pinnacle Illinois filed suit, Pinnacle Florida filed a counterclaim seeking to cancel Pinnacle Illinois's trademark registrations under 15 U.S.C. § 1119.² Pinnacle Florida also alleged that Pinnacle Illinois's claims were barred by the doctrine of laches.

A jury eventually rendered a verdict in favor of Pinnacle Illinois on its infringement and unfair competition claims. After Pinnacle Florida filed a post-trial motion for judgment as a matter of law, the district court disregarded the jury's findings that Pinnacle Illinois's marks were distinctive and thus trademark protectable and cancelled the registrations under § 1119.

The district court also found that Pinnacle Illinois's claims were barred by laches.

After careful review and with the benefit of oral argument, we conclude that the district court erred by disregarding the jury's findings that Pinnacle Illinois's marks were distinctive and protectable and misapplying the presumption of validity given to registered marks. Accordingly, we vacate and remand the district court's order cancelling Pinnacle Illinois's registrations. Further, although we affirm the district court's finding that Pinnacle Illinois's claims for monetary damages were barred by laches, we remand for the district court to consider whether to grant Pinnacle Illinois injunctive relief to protect the public's interest in avoiding confusion.

I. Background

Pinnacle Illinois has used the name "Pinnacle Advertising and Marketing Group, Inc." in connection with its advertising business since 1998. Pinnacle Florida has operated its advertising business under the name "Pinnacle Advertising and Marketing Group, LLC" since its formation in 2010. Although it is undisputed that Pinnacle Illinois learned of Pinnacle Florida's use of the "Pinnacle" name at some point before it filed the current lawsuit, the parties dispute exactly when Pinnacle Illinois obtained this knowledge.

A. Pinnacle Illinois's Knowledge of Pinnacle Florida

Pinnacle Florida contends that Pinnacle Illinois learned of its company in late 2013 or early 2014 when, during a client pitch meeting, the potential client—the Central Florida Honda Dealers Association—asked Pinnacle Illinois if it was affiliated with Pinnacle Florida.³ Pinnacle Illinois's initial response to an interrogatory stated that Pinnacle Illinois CEO Michael Magnusson "first became aware of Pinnacle (FL) in or around late 2013 ... when pitching to ... Central Florida Honda." But Magnusson later testified at trial that he did not specifically learn of Pinnacle Florida at this meeting. Rather, he testified that he overheard a conversation about a person at the meeting confusing Pinnacle Florida and Pinnacle Illinois, and he only later (after learning of Pinnacle Florida) connected the dots that the "Pinnacle" the potential client had referred to was Pinnacle Florida.

Pinnacle Illinois contends that it first learned of Pinnacle Florida in January 2015 when an industry magazine, Advertising Age, mistakenly linked Pinnacle Florida's website to an article about Pinnacle Illinois. Magnusson testified at trial that he was "horrified" at the mistake because the article was about Pinnacle Illinois's Super Bowl commercial and "all the eyes" in the industry were reading to see which advertisers created the all-important commercials that year. So Magnusson contacted a magazine employee to correct the mistake. Following the correction, Magnusson took no further action to rectify the confusion between the two companies because, judging from Pinnacle Florida's website, "[t]hey looked like a small agency" that focused on hospitality work and Pinnacle Illinois was "very busy" and "not ... concerned about [Pinnacle Florida] at the time."

In January 2016, Advertising Age made the same mistake again. Magnusson once again contacted the magazine to seek a correction. Nevertheless, Pinnacle Illinois did not reach out to Pinnacle Florida or take further action at that time because its "priority was taking care of [its] clients" and it "didn't have the capacity to [take action] at that time."

B. Further Confusion and Registration

Customer confusion continued in the lead-up to this lawsuit. In addition to the Central Florida Honda pitch meeting and the two Advertising Age mix-ups, there was evidence of misdirected communications from current and prospective customers, misdirected invoices from vendors, and misdirected job applications.

Pinnacle Illinois filed for registration of the two marks at issue in this litigation with the Patent and Trademark Office ("PTO") on November 4, 2016, and obtained registrations on September 12, 2017. Pinnacle Illinois obtained registrations for "Pinnacle" as a word mark (U.S. Reg. No. 5,284,206) and the following stylized form of the word "PINNACLE" (U.S. Reg. No. 5,284,223).

During the registration process, the PTO did not require Pinnacle Illinois to provide proof that its marks had obtained secondary meaning.⁴

C. The Current Lawsuit

On April 4, 2018, over four years after the Central Florida Honda pitch meeting and over three years after the first Advertising Age mistake, Pinnacle Illinois sued Pinnacle Florida for trademark infringement in the Northern District of Illinois, but the case was dismissed for lack of personal jurisdiction.

On November 21, 2018, Pinnacle Illinois filed this action against Pinnacle Florida in the Southern District of Florida. Pinnacle Illinois brought claims for trademark infringement of its ’206 and ’223 marks under 15 U.S.C. § 1114 ; unfair competition under 15 U.S.C. § 1125(a) ; and cybersquatting under 15 U.S.C. § 1125(d).

Pinnacle Florida filed its answer to Pinnacle Illinois's complaint, which asserted, among other things, an affirmative defense that Pinnacle Illinois's claims were barred by the doctrine of laches. Shortly thereafter, Pinnacle Florida filed an amended counterclaim which asserted six claims, including a claim for cancellation of Pinnacle Illinois's registered mark No. 5,269,641 (a different registered mark than the two at issue in this case) under 15 U.S.C. § 1119.

Pinnacle Illinois then moved to dismiss all of Pinnacle Florida's counterclaims and to strike its affirmative defenses. As to the cancellation counterclaim, Pinnacle Illinois responded that the ’641 registration was not at issue in this case. Thus, Pinnacle Illinois argued that the district court did not have jurisdiction to cancel the ’641 registration under § 1119.

In response, Pinnacle Florida acknowledged that it could not seek cancellation of the ’641 registration in this case and explained that "[it] intends to file a motion seeking leave to amend (if it is unable to reach agreement on leave to amend with [Pinnacle Illinois])." Pinnacle Florida attached a draft cancellation counterclaim (seeking cancellation of the ’206 and ’223 registrations) to its response. Pinnacle Florida did not formally seek leave to amend its counterclaim or attempt to reach an agreement with Pinnacle Illinois.

The district court granted in part and denied in part Pinnacle Illinois's motion to dismiss/strike Pinnacle Florida's counterclaims and affirmative defenses. As to the cancellation counterclaim, the district court acknowledged that it could not consider the ’641 mark in this case. It then stated:

While [Pinnacle Florida] never sought leave to amend the Counterclaim, it represented that it would confer with [Pinnacle Illinois] as to whether an Amended Counterclaim would be permitted and attached a proposed amended cancellation or restriction of registration counterclaim to its response to the present Motion. ... Although the time to amend the Counterclaim has passed, I will allow Defendant to proceed with the proposed amendment ... in the interest of fairness. I make this conclusion because [Pinnacle Florida] conceded that it identified an incorrect mark when drafting the Counterclaim, attempted to resolve the amendment issue with opposing counsel amicably, and attached the proposed Amended Counterclaim to the response to the present Motion. Accordingly, I will not dismiss [the cancellation counterclaim], as amended.

Pinnacle Illinois filed a motion for reconsideration of the district court's order to the extent that it allowed Pinnacle Florida's cancellation claim to proceed.⁵ Pinnacle Illinois notified the court that Pinnacle Florida never conferred with it about amending its cancellation counterclaim and never moved for leave to amend (like it said it "intended" to do in response to Pinnacle Illinois's motion to dismiss). Pinnacle Illinois did not request additional discovery or a continuance of the trial.

The district court denied Pinnacle Illinois's motion for reconsideration.⁶ The district court began by observing that its ...