Barrington Music Products Inc v. Guitar Center Stores, Inc. et al

Filing 63

OPINION AND ORDER: The Court DENIES the defendants' 50 Motion for Summary Judgment. Signed by Judge Robert L Miller, Jr on 10/17/2017. (jss) (cc: pro se party)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
SOUTH BEND DIVISION
BARRINGTON MUSIC PRODUCTS,
INC.,
)
)
Plaintiff,
)
)
v.
)
)
MUSIC & ARTS CENTERS et al.,
)
)
Defendants.
)

Cause No. 3:16-CV-6-RLM-MGG

OPINION AND ORDER
Plaintiff Barrington Music Products, Inc. (“Barrington”) sues defendants
Eastman Music Company, Guitar Center Stores, Inc., Music & Arts Centers, and
Woodwind and Brasswind Inc., for state and federal trademark infringement. The
defendants moved for summary judgment asserting a laches defense. The court
denies the defendants’ motion.

I. BACKGROUND
Guitar Center Stores, Inc. markets and sells musical instruments both at
retail stores throughout the country and through a variety of online platforms. It
owns and operates 150 Music & Arts brand retail stores throughout the country
as well as more than 260 Guitar Center stores throughout the country.
Barrington doesn’t operate any retail locations and principally sells musical
instruments through third-parties such as Amazon and Ebay.

In 2010, Guitar Center was working on developing a new name for a brand
of musical instruments to be produced by Eastman Music Company. Eastman is
a well-known manufacturer of woodwind and brass musical instruments,
including flutes that it sells under its Wm. S. Haynes brand name and
saxophones sold under the Andreas Eastman brand name. Eastman instruments
are played by many famous and well-known performers, such as Earth Wind &
Fire and Bob Mintzer. After vetting several name possibilities with its trademark
counsel, Guitar Center eventually settled on the name “Ventus” for its new line of
musical instruments. Because Eastman, as the manufacturer, provided the
necessary credibility for the new line of instruments, the instruments were
marketed and sold as “Ventus by Eastman” and “Ventus by Wm. S. Haynes”.
Prominent engraving on the instruments reinforced this co-branding, as did
conspicuous branding on the carrying cases.
Guitar Center filed for trademark protection for “Ventus” on May 20, 2010
under the goods and services designation of “Musical Instruments.” Its
application was published for opposition on October 26, 2010. No opposition was
filed and it was registered on the principal register on August 2, 2011. Barrington
owns the trademark of “Vento,” which is registered with the goods and services
denomination of musical instruments. Barrington filed for registration of “Vento”
on January 6, 2010. Barrington’s application was published for opposition on
May 25, 2010, five days after Guitar Center had filed the “Ventus” mark.
Barrington’s “Vento” was registered on the principal register on August 10, 2010.

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Barrington’s mark has been used in commerce since May of 2009, achieving gross
sales of a little less than $700,000.
In March 2011, Guitar Center began using “Ventus” (in conjunction with
“by Eastman” and “by Wm. S. Haynes”) in commerce. It marketed and sold flutes,
trumpets, alto saxophones, tenor saxophones, and clarinets under the “Ventus
by Eastman” name. From 2011 until the end of 2015, Guitar Center built the
“Ventus” by Eastman/Wm. S. Haynes brand and achieved gross sales totaling
about $5 million.
The parties dispute when Barrington was put on notice of the “Ventus” line.
Between 2011 and 2014, Guitar Center sold its “Ventus” products exclusively in
Music & Arts retail stores—stores that were not located in Indiana or Michigan.
The combined sales for 2011-2013 totaled less than $800,000. In 2014, Guitar
Center dramatically expanded its “Ventus” sales, raising the annual sales to $1.4
million. In 2015, Guitar Center began selling “Ventus” instruments online
through its websites. Barrington contends that, while web sales have remained a
small part of Guitar Center’s total sales, the sudden shift to the online
marketplace in 2015 placed the “Ventus” mark squarely in competition with
Barrington’s mark for the first time. Guitar Center argues that, had Barrington
notified it at or near the time it registered the “Ventus” mark, Guitar Center would
have simply avoided a dispute and chosen another name.
Barrington also says that it regularly reviewed internet and print catalogues
and other music industry publications for the purposes of market research and
policing its “Vento” marks from May 2009 until now. Barrington asserts that it

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first discovered that Guitar Center was advertising and selling musical
instruments using the “Ventus” in November 2014. In February 2015,
Barrington’s counsel sent a letter to Guitar Music demanding that it cease and
desist its use of the “Ventus” mark. Barrington engaged in negotiations with
Guitar Music, attempting to settle its trademark infringement claims. When those
negotiations broke down, Barrington filed this lawsuit.
All arguments relate to all the defendants, so in the interest of
simplification, the court refers to all defendants as “Guitar Center” in the rest of
this opinion.

II. STANDARD OF REVIEW
Summary judgment is appropriate when “the pleadings, depositions,
answers to the interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue of material fact and that the
moving party is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(c). A
genuine issue of material fact exists whenever “there is sufficient evidence
favoring the nonmoving party for a jury to return a verdict for that party.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). In deciding whether a
genuine issue of material fact exists, “the evidence of the non-movant is to be
believed, and all justifiable inferences are to be drawn in his favor.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Weigle v. SPX Corp., 729 F.3d 724,
730 (7th Cir. 2013). The existence of an alleged factual dispute, by itself, won’t
defeat a summary judgment motion; “instead, the nonmovant must present

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definite, competent evidence in rebuttal,” Parent v. Home Depot U.S.A., Inc., 694
F.3d 919, 922 (7th Cir. 2012), and “must affirmatively demonstrate, by specific
factual allegations, that there is a genuine issue of material fact that requires
trial.” Hemsworth v. Quotesmith.com, Inc., 476 F.3d 487, 490 (7th Cir. 2007);
see also FED. R. CIV. P. 56(e)(2). “[S]ummary judgment is ‘not a dress rehearsal or
practice run; it is the put up or shut up moment in a lawsuit, when a party must
show what evidence it has that would convince a trier of fact to accept its version
of events.” Steen v. Myers, 486 F.3d 1017, 1022 (7th Cir. 2007) (quoting Hammel
v. Eau Galle Cheese Factory, 407 F.3d 852, 859 (7th Cir. 2005)).

III. DISCUSSION
Guitar Center contends that the doctrine of laches bars Barrington’s
claims, while Barrington contends that if the presumption of laches applies, the
doctrine of progressive encroachment forgives the delay. Guitar Center also
contends that the Lanham Act preempts Barrington’s state law passing off
claim.

A. Laches
When the evidence is viewed in the light most favorable to Barrington (the
non-movant) the record doesn’t support the statutory presumption of laches at
this stage of the proceedings.
The doctrine of laches derives from the maxim that those who sleep on their
rights, lose them. Chattanoga Mfg., Inc. v. Nike, Inc., 301 F.3d 789, 792 (7th Cir.

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2002) (citing Hot Wax, Inc. v. Turtle Wax, Inc., 191 F.3d 813, 820 (7th Cir. 1999)).
To establish laches within the context of a trademark infringement claim, a
defendant must show that “the plaintiff had knowledge of the defendant's use of
an allegedly infringing mark . . . that the plaintiff inexcusably delayed in taking
action with respect to the defendant's use, and that the defendant would be
prejudiced by allowing the plaintiff to assert its rights at this time.” Chattanoga
v. Nike, 301 F.3d at 792-793.
A plaintiff must have actual or constructive notice of the defendant's
activities. See Blue Ribbon Feed Co. v. Farmers Union Cent. Exch., Inc., 731 F.2d
415, 419 (7th Cir.1984) (citations omitted); see also 6 McCarthy on Trademarks
and Unfair Competition § 31:38 (5th ed. 2017). Of constructive notice, “the plaintiff
is chargeable with such knowledge as he may have obtained upon inquiry,
provided the facts already known by him were such as to put upon a man of
ordinary intelligence the duty of inquiry.” Chattanoga v. Nike, 301 F.3d at 793
(citing Johnston v. Standard Mining Co., 148 U.S. 360, 370 (1893)).
Guitar Center contends that the doctrine of laches bars Barrington’s claims
because Barrington had constructive knowledge of the “Ventus” mark no later
than August 2, 2011, when Guitar Center registered “Ventus” on the principal
register. Under the Lanham Act, registration of a mark on the principal register
shall be “constructive notice” of the registrant’s claim of ownership. See 15 U.S.C.
§ 1072. The Lanham Act provides no applicable statute of limitations, but courts
apply the period for analogous state law claims to determine whether the doctrine
of laches bars a claim under the Lanham Act. See Hot Wax, Inc. v. Turtle Wax,

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Inc., 191 F.3d 813, 821 (7th Cir. 1999). Under Indiana law, the analogous statute
of limitations for claims to personal property is two years. Ind. Code § 34-11-2-4;
see e.g., Noble Roman’s Inc. v. Hattenhauer Distributing Co., No. 1:14-CV-1734WTL-DML, 2017 WL 747536, at *3–4 (S.D. Ind. Feb. 27, 2017). “Once the relevant
state limitations period has run, an allegedly infringing party is entitle to a
presumption that the doctrine of laches applies.” Wis. Cheese Group, Inc. v. V&V
Superemo Foods, Inc., 537 F. Supp. 994, 1000 (W.D. Wis. 2008). Guitar Center
asserts that because Barrington had constructive notice in 2011, Barrington
delayed in bringing the present action more than double the time permitted by
Indiana’s statute of limitations, giving rise to the presumption of laches.
Barrington denies it had constructive notice it acquired actual knowledge of
Guitar Center’s use of “Ventus” in November 2014, and argues that Guitar
Center’s registration of the “Ventus” mark didn’t provide constructive notice for
purposes of laches. 15 U.S.C. § 1072 “is intended to protect against users of the
registrant's trademark who might otherwise raise a defense of innocent
misappropriation.” Mobile Anesthesiologists Chicago, LLC v. Anesthesia Assocs.
of Houston Metroplex, P.A., 623 F.3d 440, 446 (7th Cir. 2010); accord, In re Int'l
Flavors & Fragrances, Inc., 183 F.3d 1361, 1367 (Fed. Cir. 1999).
Barrington would have the better argument under 15 U.S.C. § 1072 as the
senior user of “Vento,” to assert that Guitar Center—the junior user—had
constructive knowledge of the senior mark. Consequently, Guitar Center’s use of
15 U.S.C. § 1072 doesn’t provide a strong basis of constructive notice. Guitar
Center points to nothing in the record to support a finding of constructive notice,

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other than proof that Guitar Center registered “Ventus” on the principal register.
When the facts of record are viewed most favorably to Barrington, a genuine issue
exists as to when Barrington obtained constructive knowledge of the “Ventus”
mark.
If Guitar Center were successful in establishing the presumption of laches,
a trier of fact could reasonably infer that Barrington can rebut that presumption
and excuse its delay under the doctrine of progressive encroachment. “Under this
doctrine, where a defendant begins use of a trademark or trade dress in the
market, and then directs its marketing or manufacturing efforts such that it is
placed more squarely in competition with the plaintiff, the plaintiff's delay is
excused.” Chattanoga v. Nike, 301 F.3d at 794 (citing Kason Ind. v. Component
Hardware Group, 120 F.3d 1199, 1205 (11th Cir.1997)). The doctrine of
progressive encroachment is relevant in assessing whether laches applies to bar
a trademark claim. See id.
Barrington relies on Am. Eagle Outfitters, Inc. v. Am. Eagle Furniture, Inc.
to establish progressive encroachment. AE Outfitters had actual knowledge that
the defendant American Eagle Furniture had applied to register its “AE Furniture”
design mark in 2006, but was only using the “AE Furniture” mark for some
furniture products sold out of its warehouse. Am. Eagle Outfitters, Inc. v. Am.
Eagle Furniture, Inc., No. 11 C 02242, 2013 U.S. Dist. LEXIS 180912, at *41 (N.D.
Ill. Dec. 27, 2013). Because the use of the mark was so limited, American Eagle
Outfitters “chose not to oppose the defendant’s registration and instead decided
to wait and see whether the defendant’s mark created any confusion in the

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marketplace.” Id. In 2009 and 2010, the defendant opened three retail stores using
the name “American Eagle Furniture” in malls where American Eagle Outfitters
already had retail stores. Am. Eagle v. Am. Eagle, U.S. Dist. LEXIS 180912, at
*41-42. When American Eagle Outfitters sued in April 2011, American Eagle
Furniture sought summary judgment on the issue of laches. The court rejected
that claim, holding that the “sudden shift from operating a warehouse under a
different name to opening three retail stores under the name American Eagle
Furniture in malls where AE Outfitters was already operating its own retail stores
is a prime example of progressive encroachment.” American Eagle v. American
Eagle, U.S. Dist. LEXIS 180912, at *42 (citing Union Carbide Corp. v. Ever- Ready,
Inc., 531 F.2d 366, 388-389 (7th Cir. 1976); Indep. Nail & Packing Co., Inc. v.
Stronghold Screw Prods., Inc., 205 F.2d 921, 927 (7th Cir. 1953)).
Barrington contends that Guitar Center’s conduct is a “prime example” of
what occurred in American Eagle. Between 2011 and 2014, Guitar Center only
sold its “Ventus” products in its retail stores—stores that weren’t located in
Indiana or Michigan. Guitar Center dramatically expanded its “Ventus” sales,
raising the annual sales from $800,000 to $5 million from 2011-2015. Although
Guitar Center began its use of “Ventus” in 2011, it placed the “Ventus” line
squarely in competition with Barrington’s “Vento” line in 2015, when Guitar
Center shifted from retail to online sales.
When Barrington learned about Guitar Center’s shift to the online
marketplace, it hired a lawyer and sent a cease and desist letter. When
negotiations fell through, Barrington contends that it promptly filed suit in

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January 2016—a little more than a year after it learned of the infringement. So
even if Barrington learned Guitar Center was using “Ventus” in 2011, Barrington
says, progressive encroachment justifies Barrington in waiting to pursue its
claims until there was a real threat of confusion in the marketplace.
Guitar Center argues that progressive encroachment isn’t applicable
because there is no evidence that Guitar Center redirected or expanded its
business into different markets, and Guitar Center’s use of the internet and
increase in sales was the “natural growth” of its existing business. To support
this argument, Guitar Center cites persuasive authority from the Ninth Circuit 1
and the western district of Wisconsin. The Wisconsin court held that “increased
sales alone do not amount to progressive encroachment,” and rejected a plaintiff’s
contention that increased sales over a period of time “constitute a ‘classic
illustration’ of progressive encroachment.” Wis. Cheese Group, Inc. v. V & V
Supremo Foods, Inc., 537 F.Supp.2d 994, 1002 (W.D. Wis. 2008).
A reasonable trier of fact could infer from this record that Guitar Center’s
shift from brick and mortar to the online market placed the “Ventus” mark
squarely in competition with the “Vento” mark, even though Guitar Center says
the shift was a minor one. That Barrington’s business is solely online makes the
shift more significant than it would have been had Barrington sold in different
markets. Barrington’s “Vento” line has been in commerce since 2009, while

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See, e.g., Fitbug Ltd. v. Fitbit, Inc., 78 F.Supp. 3d 1180, 1190 (N.D. Cal. 2015). A “junior user’s growth of its
existing business and the concomitant increase in its use of the mark do not constitute progressive encroachment.”
Id. quoting Tillamook Country Smoker, Inc. v. Tillamook County Creamery Ass’n, 465 F.3d 1102, 1110 (9th Cir.
2006). As the Ninth Circuit noted in Prudential Ins. Co. of Am. V. Gibralter Fin. Corp. of Cal., 694 F.2d 1150, 1154
(9th Cir. 1982), “it is true that [defendant] has grown tremendously, but growth alone does not infringement make.”

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Guitar Center’s “Ventus” line was sold in stores from 2011 until 2015. A trier of
fact could infer from this record that Guitar Center’s online sales of “Ventus”—a
lucrative line of instruments—posed a threat to Barrington’s successful, yet less
lucrative line of instruments. Guitar Center’s shift to online sales in 2015 creates
a genuine dispute as to whether Barrington’s delay is reasonable under
progressive encroachment.
Lastly, if Barrington’s delay was unreasonable, a genuine issue exists as to
whether the delay prejudiced the defendants. “A delay prejudices a defendant
when the assertion of a claim available for some time would be inequitable in light
of the delay in bringing that claim and ensues when a defendant has changed his
position in a way that would not have occurred if the plaintiff had not delayed.”
Chattanoga v. Nike, 301 F.3d at 795; See Hot Wax v. Turtle Wax, 191 F.3d at
824. Prejudice may be shown if the “plaintiff's unexcused [delay] caused the
defendant to rely to its detriment and build up a valuable business around its
trademark.” See id.; see also Conopco, Inc. v. Campbell Soup Co., 95 F.3d 187,
192 (2d Cir.1996); 5 McCarthy § 31:12, at pp. 31–36 to 31–37.
Prejudice is presumed when the delay is unreasonable and inexcusable.
Baker Mfg. Co. v. Whitewater Mfg. Co., 430 F.2d 1008, 1012 (7th Cir. 1970).
When a delay is lengthy, less proof of prejudice is required. See Hot Wax v. Turtle
Wax, 191 F.3d at 824; Chattanoga v. Nike, 301 F.3d at 795; see also ABB
Robotics, Inc. v. GMFanuc Robotics Corp., 52 F.3d 1062, 1065 (Fed. Cir.1995)
(finding that "increasing sales" may alone constitute economic prejudice).

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Guitar Center argues that it would have chosen another name had
Barrington given proper notice of infringement, and that Guitar Center is
prejudiced because it spent “significant sums” building its brand and selling its
product. Guitar Center contends that after getting Barrington’s cease and desist
letter, it immediately ceased producing new instruments under the “Ventus”
name and began aggressively marketing and selling off all existing “Ventus”
inventory. Barrington’s actions have forced Guitar Center to spend money
building and developing new lines of musical instruments.
It is plausible that Guitar Center was prejudiced, but that question is
predicated upon whether Barrington’s delay was unreasonable. Although Guitar
Center’s “Ventus” line experienced a significant increase in sales—from $1.4
million in 2014 to $5 million in 2015—Barrington sent Guitar Center a cease and
desist letter in November 2014, just as Guitar Center’s sales were increasing.
Although Guitar Center contends it was “forced” to spend money developing a
new line, it fared pretty well at the end of 2015. When viewing the evidence in the
light most favorable to Barrington, the non-moving party, a genuine issue exists
as to whether Guitar Center was prejudiced.

B. Preemption
In the alternative, Guitar Center argues that the Lanham Act bars Barrington’s
state law claims, even if the laches defense fails. 15 U.S.C. § 1125(c)(6) provides:
The ownership by a person of a valid registration…on the principal
register under this chapter shall be a complete bar to an action
against that person, with respect to that mark, that:

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(A)(i) is brought by another person under the common law or
statute of a State; and (ii) seeks to prevent dilution by blurring or
dilution by tarnishment; or
(ii) asserts any claim of actual or likely damage or harm to the
distinctiveness or reputation of a mark, label, or form of
advertisement.
15 U.S.C. § 1125(c)(6) (2017).
Guitar Center asserts that Barrington’s state law “passing off” claim asserts a
claim of dilution under the Indiana’s unfair competition doctrine. Burns Ind. Code
Ann. § 24-2-1-13. Because “Ventus” is a registered trademark under the Lanham
Act, Guitar Center contends the state-law claim is completely barred.
Although our court of appeals hasn’t addressed this issue, applying 15 U.S.C.
§ 1125(c)(6) to Barrington’s common law claim is contingent upon Barrington’s
success in cancelling Guitar Center’s “Ventus” mark under the Lanham Act. The
Ninth Circuit addressed this very issue. “Defendant’s claim that [its mark’s]
registration acts as a bar to plaintiff’s state law claim is misplaced because
plaintiff’s counterclaim is for cancellation of the [mark’s] registration under 15
U.S.C. § 1064. As such, if plaintiff can succeed in obtaining that cancellation, the
bar to state unfair competition actions found in 15 U.S.C. § 1125(c)(6) will be
inapplicable.” Jada Toys, Inc. v. Mattel, Inc., 518 F.3d 628, 635 (9th Cir. 2008).
Although not controlling authority, this dictum provides the court with
persuasive guidance on how to proceed with this argument. Accordingly,
Barrington’s outstanding claim under the Lanham Act must be resolved before
the court can decide whether Barrington’s state-law claims are barred under 15
U.S.C. § 1125(c)(6).

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IV. CONCLUSION
For the foregoing reasons, the court DENIES the defendants’ motion for
summary judgment [Doc. No. 50].
SO ORDERED.
ENTERED: October 17, 2017
/s/ Robert L. Miller, Jr.
Judge
United States District Court

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