The Prestwick Group Inc v. Landmark Studio Ltd

Filing 50

ORDER signed by Judge J P Stadtmueller on 5/19/15: granting in part and denying in part 26 Defendant's Motion for Summary Judgment; granting 31 Plaintiff's Motion to Restrict; granting 46 Defendant's Motion to Restrict; and, granting 39 Plaintiff's Motion for Leave to File Amended Complaint. See Order. (cc: all counsel) (nm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
THE PRESTWICK GROUP, INC.,
Plaintiff,

Case No. 14-CV-731-JPS

v.
LANDMARK STUDIO LTD.,
and

Defendant,

ERIE INSURANCE EXCHANGE,

ORDER

Intervenor.
In this civil suit, filed on June 24, 2014, Plaintiff, The Prestwick Group,
Inc. (“Prestwick”), alleges trade dress infringement and unfair competition
in violation of the Lanham Act and copyright infringement against
Defendant Landmark Studio Ltd. (“Landmark”). (Docket #1). On March 27,
2015, Landmark filed a Motion for Summary Judgment. (Docket #26). The
motion is now fully briefed and ready for disposition. As discussed below,
the Court will grant the motion as to the trade dress infringement claim and
deny the motion as to the copyright infringement claim.
Before turning to the undisputed facts, the Court must address two
matters. First, the parties each filed separate Motions to Restrict. (Docket #31,
#46). They request to shield certain documents from the public because they
contain confidential business information and they have been designated as
confidential pursuant to the Court’s February 13, 2015 Protective Order
(Docket #24). With no objection from either party, the Court will grant the
requests to restrict confidential documents. As noted in the Protective Order,
the Court will not enter any decision under seal, however, unless absolutely
necessary. The Court will limit its factual discussion in this Order to

information from the unrestricted documents in order to maintain
confidentiality.
Second, on April 23, 2015, Prestwick filed a Motion for Leave to File
an Amended Complaint. (Docket #39). On April 24, 2014, the Court set a
modified briefing schedule on the matter. (Docket #42). Prestwick indicates
that its claims are substantively unchanged and that Landmark would not
suffer any prejudice or be burdened in any way by the amendment. (Docket
#40 at 1-2). Landmark did not oppose the motion. As such, the Court will
grant the Motion for Leave to File an Amended Complaint. (Docket #39).
1.

FACTUAL BACKGROUND1
1.1

Prestwick Beginnings

Matt Morse (“Morse”), along with his then business partner, Bob
Gerlach, founded Great Lakes Golf Course Products in 1997, which would
eventually become Prestwick. (Prestwick PPF ¶ 1).2 At its inception,
Prestwick sold golf course accessory products, such as rope stakes
manufactured from recycled plastics, signs, tee markers, hazard markers, and
out of bounds markers, among other products. (Prestwick PPF ¶ 2). In
approximately 1998, Prestwick began designing and manufacturing round
waste enclosures, divot mix containers, and round and square water cooler

1

The cited facts are from the parties’ proposed findings of fact, unless
otherwise indicated. The Court will cite to Landmark's Proposed Findings of Fact
(Docket #80) as “Landmark PFF.” Likewise, it will cite to Prestwick’s Proposed
Findings of Fact (Docket #37) as “Prestwick PFF.” Unless otherwise indicated, the
proposed findings to which the Court cites are undisputed.
2

Landmark used the term “Prestwick” for ease of reference in its proposed
findings of fact to refer to all of the former entities as well as the current Prestwick
Group entities: namely, Prestwick Golf Group, Prestwick Limited, Max-R and
Nexterra. (Landmark PFF ¶ 1). In order to avoid any confusion, the Court will do
the same except when specific references are necessary.

Page 2 of 25

enclosures. The waste enclosures, divot mix containers, and round and
square water cooler enclosures were manufactured using slats of recycled
plastic. (Prestwick PPF ¶ 3). In 1998, Morse realized that the waste and water
cooler enclosures that were being offered to golf courses were, to the best of
his knowledge, sold only in solid colors, predominantly green. (Prestwick
PPF ¶ 4). Morse believed that if he could “combine the colors…[Prestwick]
could actually change the market.” (Prestwick PPF ¶ 5). Thus, beginning in
approximately 1998, Prestwick began offering recycled plastic water cooler
enclosures that contained posts with colors that contrasted with the colors of
the front slats of the water cooler enclosure. (Prestwick PPF ¶ 7).
1.2

Prestwick & Landmark Relationship

According to Morse, Prestwick first encountered Landmark in early
1999 when Mark Hammer found Landmark to mold log tee markers for
Prestwick. The relationship continued until sometime in 2002. (Landmark
PFF ¶ 1; Prestwick PFF ¶ 46). In addition to log tee markers, Landmark also
made signs, internal rings for round waste enclosures, and lids for enclosures
for Prestwick. (Landmark PFF ¶ 2). Prestwick used Landmark because it was
focused on sales and marketing and used outside contracting “to do a lot of
[its] stuff in the beginning.” (Response to Landmark PFF ¶ 3) (clarifying
deposition testimony).
The relationship with Landmark ended when a Prestwick salesman
got a call from a company that had problems with tee markers and wanted
replacements. Prestwick determined that the company was mistaken and had
in fact purchased the tee markers from Landmark. (Landmark PFF ¶ 4;
Prestwick PFF ¶¶ 47-48). Realizing that Landmark was competing with
Prestwick using the product that Prestwick hired Landmark to create for
Prestwick, Morse called Dan Hlava (“Hlava”), Landmark's President. Morse
Page 3 of 25

told Hlava that Landmark could either compete with Prestwick or be
Prestwick's vendor, but not both. Landmark opted to be a competitor and
Prestwick ended its relation with Landmark. (Landmark PFF ¶ 5; Prestwick
PFF ¶ 49).

At around the same time as Morse ended Prestwick's business

relationship with Landmark, Landmark hired Eric Tallmadge (“Tallmadge”),
who, at that time, was a Prestwick sales representative. (Landmark PFF ¶¶
11-12; Prestwick PFF ¶ 50). Prior to Tallmadge’s departure from Prestwick
(but after having accepted an offer to join Landmark), Tallmadge went into
Prestwick's offices on a Sunday and copied Prestwick customer and vendor
information. (Prestwick PFF ¶ 51).3 After Tallmadge joined Landmark, Morse
felt the “knocking off” of Prestwick's products really accelerated. (Landmark
PFF ¶ 13).
Prestwick retained counsel to address the actions of Landmark and
Tallmadge. (Landmark PFF ¶ 14). On July 23, 2002, Prestwick's counsel sent
a detailed letter to Landmark's counsel setting forth a host of allegations
relating to improper conduct by Landmark and Tallmadge. (Landmark PFF
¶ 15). Prestwick's counsel alleged in 2002 that Landmark had engaged in a
series of deceitful and unlawful acts, entered into an unlawful combination
with a former employee, and engaged in unfair competition with Prestwick.
The alleged illegal acts included infringement of trade dress, false and
misleading designation of origin, misleading advertising, interference with
contract, civil conspiracy, conversion and unlawful misappropriation of trade
secrets. (Landmark PFF ¶ 16). On August 14, 2002, Prestwick sent a second
letter, noting that no response had been received and that Prestwick would

3

The parties dispute whether Tallmadge took the information from
Prestwick to Landmark and also dispute the details surrounding the incident. (See
Prestwick PFF ¶ 53 and Landmark Response).

Page 4 of 25

file suit. (Landmark PFF ¶ 17). Prestwick decided not to pursue Tallmadge
or Landmark in 2002. (Prestwick ¶ 18).
1.3

Landmark’s Alleged Infringement Grows

In approximately 2002, Landmark began to expand its business to
offer other products to the golf course industry that closely resembled
Prestwick’s products, including waste and water cooler enclosures, and other
products that competed with Prestwick. (Prestwick PFF ¶ 54). Landmark
offered their own line of similar round enclosures and may have copied the
Prestwick design for the internal ring. Shortly thereafter, Morse saw
Landmark use Post and Panel design, similar panel designs, same posts
designs, etc. (Landmark PFF ¶ 20). Morse saw the Landmark 2003 product
catalog in 2003 and concluded that Landmark was copying Prestwick
products and item numbers but took no action. (Landmark PFF ¶ 27). Mark
Hammer of Prestwick testified that from 2003 or 2004 on, Landmark was
contacting Prestwick customers and constantly selling products similar to
Prestwick, causing customer confusion. (Landmark PFF ¶ 36).
Prestwick alleges that Landmark’s infringement expanded more in
2007 when Landmark introduced the Hampton series using decorative arches
in its waste enclosures. (Prestwick PFF ¶ 67). Landmark again expanded in
2009 with its Luxury series, which Prestwick alleges contained all the
elements of Prestwick’s trade dress, including posts and panels of contrasting
colors. (Prestwick PFF ¶¶ 69-70).4

4

Because the Court resolves the trade dress infringement claim on
Landmark’s laches defense, the Court finds it unnecessary to delve into facts
related to whether the trade dress is protectable, such as functionality and
secondary meaning of the trade dress, many of which are disputed by the parties.

Page 5 of 25

Tallmadge testified that while he was working at Landmark “we
hardly did anything outside of golf courses” and that the “lion's share” of
Landmark's efforts prior to 2011 (while he worked at Landmark) were
directed at the golf marketplace. (Prestwick PFF ¶ 73). Tallmadge also
testified that “exploring other marketplaces was not high on [his] list" when
he left Landmark in 2011 and that it was not “high on anyone's list at
Landmark” while he was employed there. (Prestwick PFF ¶ 74). Prestwick
argues that these facts establish that “Landmark's expansion into the 15
markets it currently sells to occurred in 2011, after Tallmadge left Landmark's
employment.” (Prestwick PFF ¶ 15).5
1.4

Prestwick’s Copyright in its Rendering for LMU6

In approximately September 2010, Prestwick first came into contact
with William Stonecypher (“Stonecypher”), the Waste Management
Recycling Manager, for Loyola Marymount University (“LMU”). (Prestwick
PFF ¶ 128). In approximately December 2010, Jason Heard of Prestwick sent
Stonecypher a 3-D rendering created by Prestwick of the product that
Prestwick proposed to build for LMU, which at that time was an
LMU-badged version of Max-R’s Verde collection. (Prestwick PFF ¶ 129). The
3-D rendering of Max-R’s LMU-badged Verde series enclosure contained a
conspicuous copyright notice stating “©2010 Max-R.” (Prestwick PFF ¶ 130).
Sometime in 2011, Prestwick sold waste and recycling stations to LMU; the

5

Landmark disputes this assertion. Landmark instead argues that these facts
establish only that Tallmadge made no efforts prior to 2011. The Court notes that
Prestwick provides no further facts regarding Landmark’s expansion into the 15
markets it currently sells to. (See Response Prestwick PFF ¶ 15).
6

As discussed more in the analysis, material facts are in dispute in relation
to this issue.

Page 6 of 25

parties dispute facts related to which entity designed the product. (See
Prestwick PFF ¶ 131 and Landmark Response).
On October 18, 2011, at 11:51 a.m., Stonecypher sent Chad Schaefer
(“Schaefer”), a Landmark employee, a copy of Prestwick's rendering, with
the copyright notice removed from the photo, and asked Schaefer for
estimates for the “cost of six, eight, twelve, eighteen, twenty-four.” Schaefer
responds by stating, in part, “The Landmark team is on it! I have my design
team on the telephone as I'm writing this email back to you. the [sic] next
steps will require use to produce a rendering, which will generate an
accurate cost.” (Prestwick PFF ¶ 134). At 3:20 p.m. on October 18, 2011,
Schaefer forwarded Stonecypher's 11:51 a.m. e-mail to Brad Horton
(“Horton”) and asked Horton, “Can you reproduce the product (see below
& attached) using your specialized drawing technique?” (Prestwick PFF ¶
135). Two days later, on October 20, 2011, Schaefer e-mailed Stonecypher a
3-D rendering that Prestwick alleges is “virtually identical” to the Prestwick
rendering that Stonecypher sent to Schaefer on October 18, 2011.7 (Prestwick
PFF ¶ 136).
2.

LEGAL STANDARD
“The court shall grant summary judgment if the movant shows that

there is no genuine dispute as to any material fact and the movant is entitled
to judgment as a matter of law.” Fed.R.Civ.P. 56(a); see also Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 324
(1986); Ames v. Home Depot U.S.A., Inc., 629 F.3d 665, 668 (7th Cir. 2011).
“Material facts” are those under the applicable substantive law that “might
affect the outcome of the suit.” See Anderson, 477 U.S. at 248. A dispute over
7

Landmark disputes the characterization of the rendering as virtually
identical. (Response to Prestwick PFF ¶ 136).

Page 7 of 25

“material fact” is “genuine” if “the evidence is such that a reasonable jury
could return a verdict for the nonmoving party.” Id.
A party asserting that a fact cannot be or is genuinely disputed must
support the assertion by: “(A) citing to particular parts of materials in the
record, including depositions, documents, electronically stored information,
affidavits or declarations, stipulations (including those made for purposes of
the motion only), admissions, interrogatory answers, or other materials; or
(B) showing that the materials cited do not establish the absence or presence
of a genuine dispute, or that an adverse party cannot produce admissible
evidence to support the fact.” Fed.R.Civ.P. 56(c)(1). “An affidavit or
declaration used to support or oppose a motion must be made on personal
knowledge, set out facts that would be admissible in evidence, and show that
the affiant or declarant is competent to testify on the matters stated.”
Fed.R.Civ.P. 56(c)(4).
On summary judgment, courts must construe all facts and reasonable
inferences in the light most favorable to the nonmoving party. See CTL ex rel.
Trebatoski v. Ashland Sch. Dist., 743 F.3d 524, 528 (7th Cir. 2014). Additionally,
“[o]n summary judgment a court may not make credibility determinations,
weigh the evidence, or decide which inferences to draw from the facts; these
are jobs for a factfinder.” Payne v. Pauley, 337 F.3d 767, 770 (7th Cir. 2003).
“Summary judgment is not appropriate ‘if the evidence is such that a
reasonable jury could return a verdict for the nonmoving party.’” Id. (quoting
Anderson, 477 U.S. at 248.
3.

DISCUSSION
Landmark’s motion for summary judgment argues that: (1) the

doctrine of laches bars Prestwick’s claim for trade dress and unfair
competition; (2) alternatively, that Landmark did not infringe on Prestwick’s
Page 8 of 25

claimed trade dress; (3) Prestwick has failed to properly allege a claim for
unfair competition; and (4) Landmark did not violate Prestwick’s copyright
in the LMU product. Prestwick opposes all aspects of the summary judgment
motion with the exception of the third argument—acknowledging that its
Complaint does not contain a separate allegation of unfair competition apart
from its trade dress infringement claim. (See Pl’s Opp. at 40, Docket #32). As
the parties now agree on this issue, the Court need not address this argument
any further.8 As discussed in detail below, the Court finds that: (1) summary
judgment will be granted on the trade dress infringement claim because the
doctrine of laches applies; and (2) material disputed facts preclude summary
judgment on the copyright infringement claim.
3.1

Laches

Landmark argues that they are protected from Prestwick’s allegations
of trade dress infringement and unfair competition through the doctrine of
laches. The doctrine of laches is an equitable defense that is “derived from
the maxim that those who sleep on their rights, lose them.” See Chattanoga
Mfg., Inc., v. Nike, Inc., 301 F.3d 789, 792 (7th Cir. 2002). “[L]aches is an
equitable doctrine not fixed by any unyielding measure, but to be determined
in each case under its factual situation, and allowable ‘where the enforcement
of the assured right would work injustice.’” Baker Mfg. Co. v. Whitewater Mfg.
Co., 430 F.2d 1008, 1012 (7th Cir. 1070) (citing Boris v. Hamilton Mfg. Co., 253
F.2d 526, 529 (7th Cir. 1958); see Piper Aircraft Corp. v. Wag–Aero, Inc., 741 F.2d
925 (7th Cir. 1984).
The application of laches in a particular case is dependent upon a
showing of: (1) an unreasonable lack of diligence by the party against whom
8

As such, Prestwick will be barred from any future arguments as to a
separate unfair competition claim.

Page 9 of 25

the defense is asserted; and (2) prejudice arising from this lack of diligence.
Hot Wax, Inc. v. Turtle Wax, Inc., 191 F.3d 813, 822 (7th Cir. 1999). The Seventh
Circuit “has held consistently that under the two-prong test for laches the
plaintiff bears the burden of explaining its delay in bringing suit.” Lingenfelter
v. Keystone Consol. Indus., Inc., 691 F.2d 339, 340 (7th Cir. 1982).
In lawsuits filed under the Lanham Act, the doctrine of laches plays
a more important role than it otherwise might because the Act does not
contain a statute of limitations on trademark infringement claims. Instead,
the Seventh Circuit looks to “analogous state statutes of limitations.”
Chattanoga, 301 F.3d at 793. Once a relevant state limitations period has run,
an allegedly infringing party is entitled to a presumption that the doctrine of
laches applies. Id.
Here, the parties do not agree on an analogous statute of limitations.
Landmark argues that the three-year statute of limitations found in the
Uniform Trade Secrets Act, Wis. Stat. § 893.51(2), is the analogous statute, or,
in the alternative, a four-year general limitation on the commencement of
federal civil actions. 28 U.S.C. § 1658. (Def’s Reply at 2; Docket #2). In
contrast, Prestwick argues, without any support, that a six-year statute of
limitations applies. (Pl’s Opp. at 12; Docket #32). Neither party makes a
particularly persuasive argument as to which statute the Court should
consider analogous; however, the Court need not resolve this issue since it
finds laches would apply even assuming a six-year analogous statute of
limitations. The Court now turns to analyzing each prong of the laches test,
individually.
3.1.1

Unreasonable Delay

The Court finds an unreasonable lack of diligence by Prestwick in
bringing this suit. It is undisputed that Prestwick had knowledge of at least
Page 10 of 25

some of the alleged infringement in 2002 when it sent a detailed letter to
Landmark’s counsel setting forth a host of allegations relating to improper
conduct by Landmark and Tallmadge. (See Landmark PFF ¶ 15). Prestwick
alleged illegal acts against Landmark, including: infringement of trade
dress, false and misleading designation of origin, misleading advertising,
interference with contract, civil conspiracy, conversion and unlawful
misappropriation of trade secrets. (Landmark PFF ¶ 16). This 12-year delay
is approximately four times longer than the three-year statute of limitations
(as suggested by Landmark), or, in the alternative, two times longer than the
six-year statute of limitations that Prestwick suggests. (Pl’s Opp. at 12).
Under either interpretation, however, there is a presumption that Prestwick’s
delay was inexcusable. See Chattanoga, 301 F.3d at 793. In turn, Prestwick
attempts to refute this presumption by arguing that it did not unreasonably
delay in bringing suit because Landmark progressively encroached on
Prestwick’s trade dress. (Opp. at 9, Docket #32).
The doctrine of “‘[p]rogressive encroachment is an offensive countermeasure to the affirmative defense [ ] of laches.’” Oriental Fin. Grp., Inc. v.
Cooperativa de Ahorro y Credito Oriental, 698 F.3d 9, 21 (1st Cir. 2012) (quoting
Kellogg Co. v. Exxon Corp., 209 F.3d 562, 571 (6th Cir. 2000). The Seventh
Circuit recently explained that “[u]nder 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,
301 F.3d at 794. The parties agree that the relevant test for progressive
encroachment requires: “proof that (1) during the period of the delay the
plaintiff could not reasonably conclude that it should not bring suit to
challenge the allegedly infringing activity; (2) the defendant materially
Page 11 of 25

altered its infringing activities; and (3) suit was not unreasonably delayed
after the alteration in infringing activity.” Oriental, 698 F.2d at 21-22.
Prestwick argues that progressive encroachment applies here because
Landmark’s encroachment on its trade dress was progressive, with
Landmark materially altering its infringement in 2011 and 2012 respectively.
Specifically, Prestwick alleges that Landmark materially altered its
infringement activity in 2011 by expanding its business beyond golf, to
include numerous other markets and in 2012 by intentionally copying
Prestwick’s design for its LMU-badged Halston series. (Pl’s Opp. at 11). Thus,
Prestwick argues that the filing of this lawsuit in June 2014 was not
unreasonable because it was only three years after Landmark’s market
expansion. (Pl’s Opp. at 12). Prestwick analogizes this case to Oriental, a First
Circuit case where the court applied the doctrine of progressive
encroachment when a defendant materially altered its use of a mark by
expanding geographic reach of its business and creating a new logo
emphasizing the infringing mark. Oriental, 698 F.2d at 21-22.
In Oriental, when the defendant began using the plaintiff’s mark in
1966, its operations were geographically limited to one branch in Puerto Rico.
Id. at 13. Thirty years later, as of 1996, the defendant operated only three
branches, which were all located in northeastern Puerto Rico. Id. Between
2008 and 2010, the defendant expanded its geographic reach by purchasing
three branches in San Juan. Id. Defendant also purchased a branch in
southeastern Puerto Rico in 2010. Id. Additionally, in 2009, the defendant
began an “expansive advertising campaign in newspapers and on television,
including the use of advertising media not previously used by it, such as
billboards and cable television.” Id. at 14. Further, the defendant adopted a
new logo with the mark that contained similar orange trade dress used in the
Page 12 of 25

plaintiff’s logo as well as altered the font of the mark to emphasize the term
“Oriental” (the plaintiff’s mark). Id. The Court held that the allegedly
infringing activity was de minimus before 2009 and that the doctrine of
progressive encroachment applied. Id. At 24.
Here, Prestwick fails to point out that the crux of the court’s analysis
in Oriental focused on the first prong of the progressive encroachment test.
Here, the Court finds the second prong—whether Landmark “materially
altered” its infringement activity—to be determinative. The court in Oriental
noted that the materially altered requirement “‘turns…on the likelihood of
confusion resulting from the defendant’s moving in the same or similar market
area and placing itself more squarely in competition with the plaintiff.’” 698
F.3d at 22 (quoting Kellogg, 209 F.3d at 573). Here, it is undisputed that one
of Prestwick’s customers confused a Landmark product for a Prestwick
product as early as 2002. (See Prestwick PFF ¶ 47) (noting the customer
confusion incident that led Prestwick to end its relationship with Landmark).
Additionally, Prestwick employee Hammer testified that he learned of
customer confusion between Landmark and Prestwick back in 2003 or 2004,
and 2005 and 2006. (Landmark PFF ¶ 40).
The Court finds that Prestwick fails to show Landmark materially
altered its business specifically in 2011; instead, the Court views Landmark’s
growth as more gradual and the Court does not find that at one specific point
in time Landmark “materially altered” its infringement action. Increased
sales alone do not amount to progressive encroachment. Tillamook Country
Smoker, Inc. v. Tillamook Cnty. Creamery Assoc., 465 F.3d 1102, 1110 (9th Cir.

Page 13 of 25

2006) (“A junior user’s growth of its existing business and concomitant
increase in its use of the mark do not constitute progressive encroachment”).9
Both Prestwick and Landmark grew their markets and product lines
from 2002 to 2014. It is undisputed that Morse felt that Landmark’s
“knocking off of Prestwick’s products really accelerated” in 2002 after
Tallmadge joined Landmark. (Landmark PFF ¶ 13).

Morse saw the

Landmark 2003 product catalog in 2003 and concluded that Landmark was
copying Prestwick products and item numbers but took no action.
(Landmark PFF ¶ 27). Prestwick further alleges that Landmark’s
infringement expanded more in 2007 when Landmark introduced the
Hampton series using decorative arches in its waste enclosures. (Prestwick
PFF ¶ 67). Landmark again expanded in 2009 with its Luxury series, which
Prestwick alleges contained all the elements of Prestwick’s trade dress,
including posts and panels of contrasting colors. (Prestwick PFF ¶¶ 69-70).
Prestwick contends Landmark has copied its business model with a
pattern of conduct of over 15-17 years (see Landmark PFF ¶ 33), yet at the
same time requests that the Court find 2011 or 2012 as the specific point in
time that Landmark materially altered its infringement activity. The Court
declines to do so. Prestwick fails to rebut the presumption that its delay was
inexcusable. See Chattanoga, 301 F.3d at 793. In particular, the Court finds the
lack of evidence that Prestwick offers in relation to Landmark’s post-2011
expansion into 15 markets other than golf to be telling. As Landmark points

9

This limitation is consistent with the Seventh Circuit’s view that a
trademark owner who has full knowledge of infringement should not be permitted
“to wait and see how successful his competitor will be and then destroy with the
aid of court decree, much that the competitor has striven for and accomplished.”
Hot Wax, 191 F.3d at 823 (quoting Polaroid Corp. v. Polarad Elects. Corp., 287 F.2d 492,
498 (2d Cir. 1961)).

Page 14 of 25

out, and as far as the Court can tell, the only evidence offered in relation to
the expansion is Tallmadge’s testimony, which relates solely to his efforts to
grow the company, and says nothing about the rest of Landmark. Prestwick
fails to show any facts on what specific 15 markets Landmark expanded into,
nor does Prestwick show details related to any geographical location
expansion. The facts available to the Court here are wholly different from
Oriental where the defendant lay dormant for thirty years in one geographic
region and then spread to the entire island of Puerto Rico while at the same
time changing its mark to more closely resemble the plaintiff’s. As such,
Prestwick fails to meet the second-prong of the progressive encroachment
test.
Finally, the Court also notes that Prestwick’s unreasonable delay is not
mitigated by the fact that it sent two cease and desist letters over 12 years. In
Hot Wax, the Seventh Circuit held that five warning letters sent over the
course of two years were insufficient to mitigate the unreasonableness of the
plaintiff’s 10 to 20-year delay in taking legal action against the defendant’s
alleged false advertising. 191 F.3d at 823-24. The court stated:
Although we have recognized that attempts to resolve a
dispute without resorting to a court do not constitute
unreasonable delay for determining the applicability of laches,
Hot Wax’s sparse letter writing campaign can hardly be
characterized as a serious attempt to resolve its concerns
regarding Turtle Wax's products and advertising.
Id. Similarly, Prestwick’s two cease and desist letters in this case do not
reflect a genuine attempt to settle the infringement dispute. See A.C.
Aukerman Co. v. Miller Formless Co., 693 F.2d 697, 700 (7th Cir. 1982) (“…[T]he
negotiations must ordinarily be continuous and bilaterally progressing, with
a fair chance of success, so as to justify significant delays.”).

Page 15 of 25

Thus, the Court finds no progressive encroachment in this case and,
as such, Prestwick has failed to rebut the presumption of unreasonable delay.
Upon this finding, the Court turns to the prejudice-prong of the laches
analysis.
3.1.2

Prejudice to Landmark

Turning to the second element of laches, a party asserting a laches
defense must show that it has been prejudiced by the trademark owner's
unreasonable delay in pursuing its cause of action. Chattanoga, 301 F.3d at
792-93. In defining prejudice, the Seventh Circuit has stated:
A defendant has been prejudiced by a delay when the assertion
of a claim available some time ago 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. In this context,
we have explained that laches is a question of degree. To this
end, if only a short period of time has elapsed since the accrual
of the claim, the magnitude of prejudice required before the
suit should be barred is great, whereas if the delay is lengthy,
prejudice is more likely to have occurred and less proof of
prejudice will be required.
Hot Wax, 191 F.3d at 824 (internal citations omitted). The Seventh Circuit has
held that prejudice may be presumed when the delay is unreasonable and
inexcusable. Baker Mfg., 430 F.2d at 1009.
Prestwick asks the Court to adopt the Eighth Circuit’s approach as
explained in Roederer v. J. Garcia Carrion, S.A., 569 F.3d 855, 859 (8th Cir.
2009). In Roederer, the court acknowledged that “courts tend to reject a
defendant’s assertion of the laches defense when the defendant knew that the
plaintiff objected to the use of the mark.” Id. The court explained that “[t]his
rule can be understood either as an analogue to assumption of risk, or as a
factor that prevents the defendant from suffering undue prejudice…

Page 16 of 25

[F]orewarning of a plaintiff’s objections generally prevents a defendant from
making a laches defense.” Id. at 859. Further, Prestwick purports that “[t]he
Seventh Circuit has recognized the rule that notice of infringement bars a
defendant from asserting laches.” (Pl’s Opp. at 14, Docket #32) (citing Tisch,
350 F.2d at 615 (reversing district court's finding of laches in part because
defendants received a cease and desist letter, stating “[i]t may be that in this
case defendants thought they had the legal right to adopt and use plaintiff's
name. Even so, they acted at their own peril in doing so, and further acted at
their peril in continuing to use the name in the face of a demand….”);
Stronghold, 205 F.2d at 925 (“Defendant adopted its logotype emphasizing the
word 'Stronghold' with full knowledge of plaintiff's registered trade-mark
which featured the same world. It did so at its peril.”)).
Under this logic, Prestwick argues Landmark suffered no prejudice
because it had notice of the trade dress infringement claim as early as July 23,
2002 (the date of the cease and desist letter). (See Pl’s Opp. at 14, Docket #32).
Plaintiff further argues that “between at least 2002 and 2011, Landmark was
continually aware that Prestwick believed that Landmark was copying
Prestwick.” (Pl’s Opp. at 14, Docket #32).10
To begin, the Court disagrees with Prestwick’s assertion that Seventh
Circuit precedent requires the Court to find no prejudice here, simply
because Landmark was on notice of the alleged infringement as a result of
the cease and desist letter. Indeed, Prestwick fails to acknowledge other
Seventh Circuit language found in A.C. Aukerman, which in fact suggests the

10

The Court notes that Landmark failed to even acknowledge this entire
argument in its Reply, much less distinguish it. (See Def’s Reply at 6-7, Docket #43).
However, an unpersuasive brief does not dictate the Court’s analysis; the Court
must independently determine whether the prejudice prong of laches is satisfied.

Page 17 of 25

exact opposite. Id. at 699 (“[N]otice from a [plaintiff] to the defendant that
infringement has occurred, accompanied by a threat of enforcement, and
followed by an extended period of nonenforcement, is affirmative conduct
from which an alleged infringer could reasonably infer that the claim against
it had been abandoned.”); see also Wis. Cheese Grp., Inc. v. V&V Supremo Foods,
Inc., 537 F. Supp. 2d 994, 1004 (W.D. Wis. 2008) (applying A.C. Aukerman
language to laches analysis and finding prejudice regardless of cease and
desist letters ). Although the language in Tisch and Stronghold (cases cited by
Prestwick which pre-date A.C. Aukerman) lends support to the argument, it
is far from clear that this language developed a rule that the Court must
apply in its prejudice analysis.
Further, the Court declines to find the Eighth Circuit “assumption of
the risk” theory as outlined in Roederer as outcome determinative in this case.
True, Landmark was aware of the alleged infringement in 2002 when it
received the cease and desist letter. And, to be sure, Landmark risked the
possibility of legal action by continuing the alleged infringement activities
following its receipt of the letters. However, in equity, the Court finds that,
at some point in time, a party’s claim to legal protection must
end—regardless of a cease and desist letter. As previously mentioned, laches
is derived from the maxim that those that sleep on their rights, lose them.
The Court finds that it is simply unreasonable to hold that a party may
sleep on their rights, in theory, for any period of time, and maintain an
infringement claim simply because it gave the other party notice of its alleged
infringement. Following the two cease and desist letters sent in this
case—both in 2002—there is no evidence that Prestwick took any action until
2014 when it filed suit. The Court finds that Landmark reasonably relied on
Prestwick’s inaction following the cease and desist letters when Landmark
Page 18 of 25

decided to grow its business. Had Prestwick taken legal action against
defendant within a reasonable time after learning of the alleged
infringement, defendant “certainly could have invested its time and money
in other areas or simply [changed] its products.” Hot Wax, 191 F.3d at 824.
Prejudice is presumed when the delay is unreasonable and
inexcusable, see Baker Mfg., 430 F.2d at 1009, and Prestwick has failed to rebut
this presumption. Although there are few specific facts the Court can point
to in finding prejudice,11 the delay here was lengthy, and thus less proof of
prejudice is required. See Hot Wax, 191 F.3d at 824 (upholding finding of
prejudice as matter of law when defendant invested significant time and
money in advertising and product development during a 10 to 20-year
delay); Chattanoga, 301 F.3d at 795 (finding “more severe” prejudice when
alleged infringer spent millions of dollars promoting products and
acquiring position as market leader during 15-year delay); ABB Robotics, Inc.
v. GMFanuc Robotics Corp., 52 F.3d 1062, 1065 (Fed. Cir.1995) (finding that
“increasing sales” may alone constitute economic prejudice). As discussed
above, Landmark has gradually grown up its business since 2002 with
expanding product lines that allegedly infringe Prestwick’s trade dress. (See
Prestwick PFF ¶¶ 54, 67, 69, 70). Prestwick has failed to rebut the
presumption of prejudice; thus, the Court finds that Landmark was

11

The Court notes that Landmark’s factual assertions related to a showing
of economic prejudice are wholly inadequate, and, in many cases would be
insufficient. For example, defendant claims it “has expanded its product lines, spent
significant amounts of money on product advertising and company growth, and
dedicated itself to becoming a forerunner in the recycled plastic furnishings market.
(Opening Brief at 18, Docket #27). While this may be true, it is not supported by any
citation to the record and the following citation “See generally, DPFF 22-40 and
60-65,” also fails to support this argument. (Opening Brief at 18, Docket #27).

Page 19 of 25

prejudiced by Prestwick’s unreasonable delay in pursuing its cause of action
and that laches applies.12
3.1.3

Injunctive Relief

The only issue related to trade dress infringement that remains, then,
is the proper scope of the laches defense. Prestwick argues that even if laches
applies, the Court should not dismiss the claim entirely, and, instead, allow
the claim to proceed on damages suffered from the date the lawsuit was filed
forward and for injunctive relief. (Pl’s Opp. at 18; Docket #32).
The doctrine of laches bars a plaintiff from recovering damages or
wrongfully derived profits during the time prior to filing a suit, Hot Wax, 191
F.3d at 824 n.3, but it is not an automatic bar to injunctive relief in trademark
actions. Seven-Up Co. v. O-So-Grape, Co., 283 F.2d 103, 106 (7th Cir. 1960). The
Seventh Circuit has held that even if laches is found, a party “may still be
entitled to injunctive relief, and to damages and profits for the period
subsequent to the filing of suit.” James Burrough Ltd. v. Sign of Beefeater, Inc.,
572 F.2d 574, 578 (7th Cir. 1978). However, courts have also held that “[i]n
some cases…‘the delay may be so prolonged and inexcusable that it would
be inequitable to permit the plaintiff to seek injunctive relief as to future
activities.’” Wis. Cheese, 537 F. Supp. 2d at 1005 (quoting Seven-Up, 283 F.2d
at 106).

12

The Court notes, for clarity, that it does not find Landmark’s arguments
related to loss of important testimony, or litigation costs, to be persuasive. (Def’s
Opening Brief at 19, Docket #27). The Court agrees with Prestwick that the lost
testimony that defendant refers to does not appear to be material. Additionally,
Landmark fails to support the argument that litigation costs should be considered
as part of the prejudice analysis.

Page 20 of 25

In this case, the Court finds that it would be inequitable to permit
Prestwick to seek injunctive relief on its trade dress claims. The delay of 12
years here is significant, and, as discussed above, Landmark has grown its
business in a time period spanning over a decade. Since 1996, Landmark has
grown its business from 3 employees to 22 and purchased new equipment for
its products. (Marsch Decl. Ex. 2 at 8-9, Docket #38-2). Prestwick fails to offer
an excuse for this delay other than its progressive encroachment argument,
which, as discussed above, fails. As the maxim goes, the plaintiff slept on its
rights and lost them. As such, the Court finds that Prestwick is not entitled
to injunctive relief in this case.
Finally, because the Court finds that the doctrine of laches bars both
monetary and injunctive relief, it need not address Landmark’s alternative
argument that Prestwick’s products do not possess protectable trade dress.
Thus, the Court will grant summary judgement on the trade dress
infringement claim and it will be dismissed in its entirety.
3.2

Copyright Infringement

Landmark initially argues that it was entitled to summary judgment
on the copyright infringement claim because the LMU product is not entitled
to protection because “there is little design beyond the function of a cabinet
to enclose a particular type of waste receptacle.” (Opening brief at 28, Docket
#27). However, Prestwick points out that this argument is misplaced since
“Prestwick’s copyright is not over its products but over the rendering, which
is not a useful article, but a copyrightable graphic work.” (Pl’s Opp. at 38,
Docket #32). In its Reply, Landmark clarifies its argument and instead
contends summary judgment is appropriate because it did not copy the
Prestwick rendering of the LMU-badged Verde series enclosure. (Def’s Reply
at 14, Docket #43).
Page 21 of 25

“To establish copyright infringement, [a party] must prove two
elements: ‘(1) ownership of a valid copyright, and (2) copying of constituent
elements of the work that are original.’” JCW Invs., Inc. v. Novelty, Inc., 482
F.3d 910, 914 (7th Cir. 2007) (quoting Feist Pubs., Inc. v. Rural Tel. Serv. Co.,
Inc., 499 U.S. 340, 361 (1991)). The owner of a copyright may obtain a
certificate of copyright, which is “prima facie evidence” of its validity.
17 U.S.C. § 410(c). Copying may be “inferred ‘where the defendant had
access to the copyrighted work and the accused work is substantially similar
to the copyrighted work.’” JCW Invs. 482 F.3d at 915. (citations omitted).
Access is shown where the defendant had an opportunity to view the
copyrighted item. Wildlife Express Corp. v. Carol Wright Sales, Inc., 18 F.3d 502,
508 n. 5 (7th Cir. 1994). “It is not essential to prove access, however.” Id.
If “‘two works are so similar as to make it highly probable that the later
one is a copy of the earlier one, the issue of access need not be addressed
separately…’” Id. (quoting Ty, Inc. v. GMA Accessories, Inc., 132 F.3d 1167,
1170 (7th Cir. 1997)). To determine “substantial similarity” “the test is
whether the accused work is so similar to the plaintiff’s work that an
ordinary reasonable person would conclude that the defendant unlawfully
appropriated the plaintiff's protectable expression by taking material of
substance and value.” Atari Inc. v. N. Am. Philips Consumer Elecs. Corp., 672
F.2d 607, 614 (7th Cir. 1982) (superseded by statute on other grounds as recognized
in Scandia Down Corp. v. Euroquilt Inc., 772 F.2d 1423, 1429 (7th Cir. 1985).

Page 22 of 25

The Court finds that material disputed facts preclude summary
judgment on this claim.13 It is undisputed that Landmark had access to the
copyrighted rendering. (Prestwick PFF ¶ 134) (On October 18, 2011, LMU
employee sent Landmark the copyrighted rendering of Prestwick’s LMUbadged Verde series). As such, Landmark’s reliance on Building Graphics, Inc.,
v. Lennar Corp., 708 F.3d 573 (4th Cir. 2013) carries little weight since the
analysis there focused on whether the defendant had access to the
copyrighted home designs. What remains, then, is whether the accused work
is substantially similar to the copyrighted work—an issue on which
Landmark makes no argument.14 Courts have found that “[w]here reasonable
minds could differ on the issue of substantial similarity…summary judgment
is improper.” Cavalier v. Random House, Inc., 259 F.3d 97, 112 (1st Cir. 2006).
The Court finds that reasonable minds could differ here on the issue of
substantial similarity, especially considering this argument was not
developed in the briefing. Thus, summary judgment is improper on the
copyright infringement claim.
Because this claim survives summary judgement, the Court urges the
parties to focus on exactly what this copyright infringement claim actually
entails; it is clear from the briefing on this issue that neither party has done

13

The Court also notes that summary judgment should also be denied simply
because Landmark’s initial argument failed to even address that the copyright
claim is related to the copying of the rendering of the LMU-badged Verde series
and not the manufactured product itself. Landmark’s argument is undeveloped and
unclear.
14

Landmark argues, in two sentences and without any detail, that “[a]t best,
Prestwick has established elements of ‘innocent infringement’” which is not
actionable. (Def's Reply at 14-15, Docket #43). Landmark fails to articulate any
argument, much less with any specificity, as to how the undisputed facts prove this
point.

Page 23 of 25

so at this stage. One might reasonably conclude that Landmark intended to
argue—but unsurprisingly failed to clearly articulate it in the only two
sentences addressing the matter—that the rendering of the LMU-badged
Verde series should not be considered a graphic work, and, therefore, receive
no protection because it is incapable of existing independently from the
utilitarian aspects of the article. See 17 U.S.C. § 101 (noting that a useful
article is considered a “pictorial, graphic, or sculptural work only if, and only
to the extent that, such design incorporates pictorial, graphic, or sculptural
features that can be identified separately from, and are capable of existing
independently of, the utilitarian aspects of the article.”); Incredible Techs., Inc.
v. Virtual Techs., Inc. 400 F.3d 1007, 1012 (7th Cir. 2005) (noting the tension
between copyright and patent laws). In preparing for trial, especially in
considering potential jury instructions, the parties should strive to determine
what portion of the rendering, if any, deserves copyright protection and, if
so, what damages occurred as a result of that copying.
4.

CONCLUSION
In sum, the Court finds that: (1) summary judgment will be granted

on the trade dress infringement claim because the doctrine of laches applies;
and (2) summary judgment will be denied as to the copyright infringement
claim because material disputed facts exist.
Accordingly,
IT IS ORDERED that the defendants’ Motion for Summary Judgment
(Docket #26) be and the same is hereby GRANTED in part and DENIED in
part, as more fully described in detail above;
IT IS FURTHER ORDERED that the plaintiff’s Motion to Restrict
(Docket #31) and the defendant’s Motion to Restrict (Docket #46) be and the
same are hereby GRANTED; and
Page 24 of 25

IT IS FURTHER ORDERED that the plaintiff’s Motion for Leave
to File Amended Complaint (Docket #39) be and the same is hereby
GRANTED.
Dated at Milwaukee, Wisconsin, this 19th day of May, 2015.
BY THE COURT:

J.P. Stadtmueller
U.S. District Judge

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