Illinois Tamale Co. v. El-Greg, Inc., No. 16 C 5387, Slip Op. (N.D. Ill. Dec. 14, 2018) (Kennelly, J.).
After a jury trial on plaintiff Illinois Tamale’s Lanham Act claims regarding its PIZZA PUFFS marks and state breach of contract claims the jury returned an award to Illinois Tamale on all claims and a willfulness finding as to each Lanham Act claim. Pursuant to the parties’ agreement, the Court relied upon the trial record and an additional, brief bench trial on defendant El-Greg’s laches claim regarding Illinois Tamale’s Lanham Act claim. The Court held that the laches claim did not warrant dismissing Illinois Tamale’s claims, but did reduce the award on the Lanham Act claim by half, from $80,000 to $40,000 based on Illinois Tamale’s delay in bringing suit.
Of particular note, the Court held as follows:
- Illinois Tamale had knowledge of El-Greg’s infringement at least as early as August 2011 when it sent El-Greg a cease and desist letter related to the PIZZA PUFF marks.
- Because the Lanham Act does not have its own statute of limitations, the Court looks to the most applicable state statute. The Court held that was the three year period for the Illinois Consumer Fraud and Deceptive Business Practices Act, not the five year period for fraud claims, as Illinois Tamale argued.
- Having delayed three years, there was a rebuttable presumption of delay.
- El-Greg’s failure to respond to the cease and desist coupled with its continued sale of product using the accused marks was “tantamount to a rejection” of Illinois Tamale’s demand.
- Illinois Tamale offered no justification for its delay.
Regarding El-Greg’s allegations of harm based upon Illinois Tamale’s delay, the Court held as follows:
- There is no evidence that El-Greg significantly invested in marketing or product development.
- El-Greg’s claim that it was harmed because Illinois Tamale’s PIZZA PUFFS mark became incontestable during the delay period had facial appeal, but failed. El-Greg offered no persuasive evidence that it could have succeeded in defeating the mark before it became incontestable.
- El-Greg’s argument that the delay allowed damages to accumulate was supported by the evidence. El-Greg changed its marketing seven months after suit was filed. There is no reason to believe El-Greg would not have acted similarly, had it been sued earlier.
The Court also held that El-Greg’s willful infringement did not prevent its laches claim based upon an unclean hands theory.
While the Court found El-Greg’s laches defense meritorious, Illinois Tamale’s delay was not so extreme as to warrant wiping out all of the damages. The Court, therefore, halved the damages based upon a consideration of pre-suit versus post-suit damages.