CFE Racing Products, Inc. v. BMF Wheels, Inc. , 793 F.3d 571 ( 2015 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 15a0145p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
CFE RACING PRODUCTS, INC., ┐
Plaintiff-Appellant/Cross-Appellee (14-1357 & 14-1608), │
│
Plaintiff-Appellee (14-1939),
│
│
v. > Nos. 14-1357/1608/1939
│
BMF WHEELS, INC.; BROCK WELD, │
Defendants-Appellees/Cross-Appellants (14-1357 & 14-1608), │
Defendants-Appellants (14-1939). │
┘
Appeal from the United States District Court
for the Eastern District of Michigan at Detroit.
No. 2:11-cv-13744 —David M. Lawson, District Judge.
Argued: March 5, 2015
Decided and Filed: July 13, 2015
Before: COLE, Chief Judge; MOORE and CLAY, Circuit Judges.
_________________
COUNSEL
ARGUED: Brian B. Brown, CARLSON, GASKEY & OLDS, P.C., Birmingham, Michigan, for
Appellant/Cross-Appellee in 14-1357 and 14-1608 and for Appellee in 14-1939. Mark A.
Cantor, BROOKS KUSHMAN P.C., Southfield, Michigan, for Appellee/Cross-Appellant in 14-
1357 and 14-1608 and for Appellant in 14-1939. ON BRIEF: Brian B. Brown, Steven Susser,
CARLSON, GASKEY & OLDS, P.C., Birmingham, Michigan, for Appellant/Cross-Appellee in
14-1357 and 14-1608 and for Appellee in 14-1939. Mark A. Cantor, Marc Lorelli, Linda D.
Mettes, BROOKS KUSHMAN P.C., Southfield, Michigan, for Appellee/Cross-Appellant in 14-
1357 and 14-1608 and for Appellant in 14-1939.
1
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 2
_________________
OPINION
_________________
CLAY, Circuit Judge. Plaintiff CFE Racing Products, Inc. (“Plaintiff”) appeals from the
order of the district court entering a narrow permanent injunction against BMF Wheels, Inc. and
BMF Wheels owner Brock Weld (“Defendants”) on February 24, 2014 following a jury trial that
resulted in a verdict for Plaintiff. Plaintiff argues that the injunction crafted by the district court
is inadequate, and that the district court erred in declining to cancel Defendants’ trademark
registration and in refusing to award attorneys’ fees. Defendants also appeal from the judgment
and from the district court’s subsequent orders denying their post-trial motions. Defendants
contend that the evidence was inadequate to sustain the jury verdict for Plaintiff, or in the
alternative that a number of evidentiary rulings merit reversal and remand for a new trial.
Defendants also appeal from the June 24, 2014 order partially granting Plaintiff’s motion to hold
Defendants in contempt for failure to comply with the permanent injunction.
For the reasons set forth below, we REMAND to the district court for the award of
attorneys’ fees, modification of the injunction to prohibit Defendants from using the infringing
mark “BMF Wheels,” and for cancellation of their registered “BMF Wheels” trademark. We
AFFIRM the judgment of the district court in all other respects.
STATEMENT OF FACTS
Procedural History
The present litigation arises from the Defendants’ use of a mark reading “BMF Wheels”
on its products and advertising; a mark that is strikingly similar to the logo and registered
trademark “BMF” that Plaintiff places on its high-performance cylinder heads. Plaintiff filed a
complaint against Defendants in August 2011 alleging violations of the Lanham Act, 15 U.S.C.
§§ 1114(1)(a), 1125(a), and the Michigan Consumer Protection Act (“MCPA”), Mich. Comp.
Laws Ann. §§ 445.901 et seq. An amended complaint filed several months later added a claim
seeking cancellation of Defendants’ registration of the trademark “BMF Wheels” under
15 U.S.C. § 1119.
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 3
After a three-day trial, the jury made the following findings by special verdict form:
(1) that “[D]efendants’ use of its mark in connection with the sale of its products creates a
likelihood of confusion with the plaintiff’s registered BMF trademark;” (2) that “[P]laintiff’s
unregistered BMF logo trademark is a valid trademark owned by the plaintiff;” and (3) that, as to
each of the five BMF Wheels logos submitted to the jury, “[D]efendants’ use of its mark in
connection with the sale of its products creates a likelihood of confusion with the plaintiff’s
unregistered BMF logo trademark.” (R. 100, Special Verdict Form, PageID 2037-38.) The jury
also found (4) that Plaintiff had not proven by a preponderance of the evidence that “at the time
of the defendants’ initial use of BMF, the defendants intended to derive a benefit from the
plaintiff’s goodwill or reputation,” and (5) that Plaintiff failed to prove that it “suffered actual
damages.” (Id. at 2038.)
The district court entered judgment for Plaintiff in February 2014 following briefing on
the issue of remedy. The district court also entered a permanent injunction that restrained
Defendants from using current or future logos that approximated the visual appearance of
Plaintiff’s logo, but permitted them to continue using the phrase “BMF Wheels” so long as it was
accompanied by a disclaimer; imposed restrictions on Defendants’ use of the letters “BMF” on
products and advertising; and required Defendants to withdraw all media advertising bearing the
BMF logos by April 30, 2014 and to dispose of stock bearing the logos five months later, on
September 30, 2014. Plaintiff, dissatisfied with this limited relief, filed a timely notice of appeal.
In April 2014, the district court entered an opinion and order denying Defendants’
motions to approve a new proposed logo, modify the injunction, and extend compliance
deadlines and to stay the injunction pending appeal. The district court also denied Defendants’
motion for judgment as a matter of law pursuant to Federal Rule of Civil Procedure 50(b),
together with their alternative motion for a new trial pursuant to Federal Rule of Civil Procedure
59, and Plaintiff’s motion to amend or correct the judgment. Defendants filed a timely notice of
appeal from these orders.
On June 20, 2014, the court considered Defendants’ request for approval of its redesigned
logo and held that the new logo did not comply with the injunction. On June 24, 2014, the
district court granted Plaintiffs’ motion for contempt based on Defendants’ failure to withdraw
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 4
advertising bearing the challenged logos, ordered Defendants to comply with the injunction, and
imposed sanctions. Defendants filed a timely notice of appeal of these orders, initiating the third
of these consolidated appeals.
Factual Background
A. Plaintiff’s BMF Line
Plaintiff CFE Racing Products is a company founded in 1983 by Carl Foltz to
manufacture and sell high-end cylinder heads in the automotive parts “aftermarket.”1 Initially,
Plaintiff sold exclusively to professional racers under the brand name “CFE.” Plaintiff
eventually expanded its business to include a new “BMF” line of cylinder heads targeted to the
consumer market. The choice of “BMF” was apparently inspired by a wallet bearing a certain
indelicate phrase of those initials that was featured in the movie Pulp Fiction. Foltz and
employees in his shop would use the shorthand “BMF” to describe cylinder heads that had a
particularly impressive flow. Over the years, people frequently asked him what “BMF” stood
for, putting forward hypotheses like “[b]ig monster flow,” “big massive” flow, and “by Mr.
Foltz.” (R. 107, Foltz Tr. Testimony, PageID 2245.).
When Plaintiff launched the BMF line, it hired a company in Florida to design the logo,
with instructions to create a logo similar in appearance to its existing CFE logo. The result was a
simple setting of the three capitalized letters in a bold, san-serif font, italicized to evoke speed.
In color print, the logo uses a color scheme of black, red and white—the letters themselves are
black, with red and white outlines around each letter. In several iterations of the logo, “Racing
Heads” is set in smaller typeface immediately under “BMF.” Plaintiff’s first use of the new
BMF logo was in a November 2003 advertisement. The company has used the logo in
essentially the same form from November 1, 2003 until the present. Plaintiff applied for a
trademark registration for the letters “BMF,” without any specification as to font, style, size, or
color, in March 2005. The trademark was registered on January 23, 2007.
1
“Aftermarket” refers to the sale of vehicle parts for installation and use on a car that has already been fully
manufactured and sold by its manufacturer.
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 5
The record contains anecdotal evidence of brand recognition for Plaintiff’s BMF logo.
BMF decals are popular with the company’s customers. Plaintiff has used BMF logos on
banners for race sponsorships, trade shows, and other events since 2006—these banners proved
so popular that more than once they were appropriated by enthusiastic members of the audience
following the race.
As of trial, Plaintiff’s BMF line included cylinder heads, valve covers, and apparel
bearing the BMF logo. Foltz testified that the company had plans for expansion: they wanted to
“fill in” the product line of cylinder heads, and they were in discussions with potential
manufacturers to develop lubricants and mufflers that would carry the BMF brand. Plaintiff’s
sales, however, were declining rather than expanding. After reaching a high of $600,000 in
annual revenue before the recession, total sales for the BMF line dropped to approximately
$80,000 in 2012 (the last full year before the trial). Foltz attributed some of the tail end of the
decline to his decision to pull BMF advertising after discovering Defendants’ BMF brand in
2011.
B. Defendant’s Infringing Use of “BMF”
Defendant BMF Wheels is a company founded in 2007 by Defendant Brock Weld.
Defendants sell aftermarket wheels to customers, with an emphasis on trucks. Defendants’ first
use of the term “BMF Wheels” in commerce was October 1, 2007.
Weld testified at trial that he came up with the name “BMF Wheels” in the summer of
2006 as he was discussing plans for the new company with a colleague. They took inspiration
from Weld’s wallet, which bore the same indelicate phrase as the wallet from Pulp Fiction.
According to his testimony, Weld had never seen Plaintiff’s BMF mark and was not aware of its
existence. Weld considered and rejected a number of mock-ups before settling on a final logo.
The one he chose bears a striking similarity to Plaintiff’s BMF logo. As with Plaintiff’s logo, the
three letters “BMF” are set in capitalized, san-serif typeface, with the same forward slant and
sharply contrasting outlines in the color scheme of black, white and red. In some iterations of
the logo, “Wheels” is set in smaller typeface immediately under “BMF.”
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 6
Weld applied for trademark registration of “BMF Wheels” in July 2006. He testified that
in preparing his application, he searched for “BMF” both online and in the PTO website, but did
not find Plaintiff’s logo. The “BMF Wheels” mark was registered to Weld without restriction
based on style, font, size, or color on March 18, 2008. As of the time of trial, Defendants
advertised nationally using the “BMF Wheels” logo.
Weld eventually filed two more applications for trademarks involving the initials
“BMF”—one for “BMF” alone, filed in July 2009, and another for “BMF Offroad,” filed in
December 2010. Each application initially proposed a long list of aftermarket parts, including
two dozen suspension lift components, tires, and automotive accessories like fender flares and
runner boards. As will be discussed in more detail below, in each of these later applications the
examining attorney with the PTO refused the application based on conflict with Plaintiff’s
“BMF” mark. Defendants abandoned the attempt to register “BMF Offroad,” but continued to
use the mark in their online marketing and in their catalogue. Meanwhile, they pursued the
“BMF” application as to tires only, and obtained registration on the eve of trial. After
Defendants stipulated that they would not seek to introduce materials relating to the “BMF”
mark for tires, the trial court granted Plaintiff’s motion in limine to exclude the PTO file and
registration related to that mark.
C. Discovery of the Similar Brands and Anecdotal Confusion
Defendants first learned of Plaintiff’s “BMF” mark not through Weld’s trademark
applications, but in 2008 when a former employee approached Weld and his business partner
with concern that another company that was “ripping off” their logo. Another employee
expressed similar concern. Weld’s brother also sent Weld a text about Plaintiff’s “BMF” logo,
asking if he had ever seen it before.
Foltz did not learn of BMF Wheels until 2011, when the company and its similar logo
came to his attention as a result of a comment made to his girlfriend at a “mini-Sprint” race for
kids that Plaintiff was sponsoring on the West Coast. Around the same time, Plaintiff’s
marketing director Larry Gadette received a call from a man named Michael Locke asking about
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 7
an order for BMF valve covers to go with a set of BMF wheels.2 Gadette looked up the “BMF
Wheels” logo and was immediately struck by the similarity. As he described at trial,
They are black, extended font, bold-faced logos with red outlines and the
components of them are strikingly similar. They both have got double outlines.
They have both got white borders. They are both based on the same derivative of
the same font.
(R. 108, Gadette Tr. Testimony, PageID 2358.) Gadette took a screen shot of Defendants’ logo
and placed it over Plaintiff’s logo to compare the two. He testified that “you couldn’t have
happen chanced on something that was closer,” with an outcome resulting in “fractions of a
degree of skew” and “fractions of an inch in width and height difference.” (Id. at 2359.)
D. Advertising and Marketing Channels
The BMF Wheels advertising that Foltz and Gadette eventually found was not to Foltz’s
liking. Some of Defendants’ ads featured scantily clad women and firearms. One promotion
was a “BMF Wheels Girl Contest,” in which women sent in highly sexualized pictures of
themselves in proximity to BMF Wheels. BMF Wheels also sells product lines with allusions to
drugs, such as Rehab and Novokane. Foltz testified that he found this sort of advertising
distasteful, and that he did not want that image for his company and the BMF brand. Gadette,
though clarifying that he personally was “not opposed to scantily clad women,” explained that
Plaintiff would avoid marketing like that as an economic matter, because some portion of
potential consumers may be offended by such material, and the company has no reason to lose
their business. (R. 108 at 2322-23.)
Both parties sell their products through nationwide third-party distributors; for
Defendants, relationships with distributors account for the “vast majority” of their sales. (R.108,
Weld Tr. Testimony, PageID 2524.) Although the two companies use different distributors, the
distributors used by both sell a broad range of aftermarket parts, including wheels and cylinder
heads. Plaintiff markets its BMF line at an aftermarket trade show called “PRI” that Foltz
described as showcasing “[j]ust about every aftermarket part,” including wheels. (R. 107 at
2258.) Defendants attend the other major trade show for aftermarket products, SEMA.
2
Mr. Locke, it turns out, worked at a company called BMF Customs, where he built custom motorcycles.
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 8
Though the companies advertise through similar means—including print ads in
automotive related magazines, sponsorship of racing events, and commercial websites—there
has been little actual overlap to date. Plaintiff’s ads have appeared in half a dozen car-related
magazines, including Carcraft, Super Chevy, Chevy High Performance, Drag Illustrated, Drag
News, National Dragster, and RPM Magazine, while Defendants’ ads have run in publications
like Truckin’ Magazine and Diesel Power. Although Defendants’ marketing emphasizes trucks,
their advertising materials also include muscle cars, jeeps, cross-overs, and utility vehicles. Both
companies maintain their own websites; Defendants also market their products through social
media. Both companies advertise their brand by sponsoring races, and in fact both have
sponsored events at the same venue in Bowling Green, Kentucky.
Plaintiff stopped advertising its BMF line in 2011 after it learned of BMF Wheels. Foltz
explained the company’s decision to pull back the advertising of the product in light of
Defendant’s competing brand, testifying: “there is no sense to spend – you can spend millions of
dollars on advertising, and to compete against the same image out there just doesn’t make sense
to me to do that.” (R. 107. at 2258-59.)
DISCUSSION
These consolidated appeals encompass challenges to the conduct of trial, the sufficiency
of the evidence, the scope of relief awarded, and the district court’s order holding Defendants in
contempt for failure to comply with the permanent injunction. Defendants argue that they are
entitled to judgment as a matter of law, and in the alternative, that they are entitled to a new trial
based on asserted evidentiary errors, allegedly improper comments made in closing argument by
Plaintiff’s counsel, and the return of a verdict against the weight of the evidence. Plaintiff argues
that the district court abused its discretion by refusing to cancel Weld’s trademark registration of
“BMF Wheels” and by permitting Defendants to continue using the “BMF Wheels” mark; and
that the district court further erred by refusing to award attorneys’ fees under the Michigan
Consumer Protection Act. Finally, Defendants challenge the district court’s order holding BMF
Wheels in contempt for failure to withdraw advertising bearing the old logo by the deadline set
out in the permanent injunction. We address each issue in turn.
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 9
I. Defendants’ Claim to Judgment as a Matter of Law
Defendants argue in their opening appellate brief that they are entitled to judgment as a
matter of law based on the insufficiency of the evidence to sustain a finding of likelihood of
confusion, which is necessary to a claim of trademark infringement under the Lanham Act.
Innovation Ventures, LLC v. N2G Distrib., Inc., 763 F.3d 524, 534 (6th Cir. 2014). Defendants,
however, waived any claim for judgment as a matter of law on these grounds by failing to raise it
before the district court during trial.
Federal Rule of Civil Procedure 50(a)(2) provides that “[a] motion for judgment as a
matter of law may be made at any time before the case is submitted to the jury.” (emphasis
added). If the motion is timely made, then a party may renew it after the verdict pursuant to Rule
50(b). Failure to make the motion prior to the submission of the case to the jury constitutes a
waiver of the right to raise the issue after the jury has returned its verdict. Fed. R. Civ. P. 50(b);
Maxwell v. Dodd, 662 F.3d 418, 420-21 (6th Cir. 2011); Libbey-Owens-Ford Co. v. Ins. Co. of
N. Am., 9 F.3d 422, 426 (6th Cir. 1993) (“A party who has failed to move for a directed verdict
cannot request the district court to rule on the sufficiency of the evidence supporting a verdict
against him nor can he raise this issue on appeal.”).
Here, Defendants never moved for judgment as a matter of law on the likelihood of
confusion issue. At the close of Plaintiff’s case-in-chief, they did make Rule 50(a) motions on
four other issues: Plaintiff’s claim for an accounting of profits; Plaintiff’s damages claim based
on corrective advertising costs; Plaintiff’s MCPA claim; and Plaintiff’s claim against Weld in his
individual capacity. None of Defendants’ arguments in support of these motions alluded to the
sufficiency of the evidence regarding the likelihood of confusion with Plaintiff’s marks.
Even where a party has made some reference to an issue in a Rule 50(a) motion that it
later invokes as the basis for its renewed motion under Rule 50(b), the issue is not preserved if it
was not raised in a sufficiently substantial way in the earlier motion. Libbey-Owens-Ford Co.,
9 F.3d at 425-27. In Libbey, we affirmed a district court’s refusal to consider a Rule 50(b)
motion on grounds that were not presented in a substantial way prior to the close of all the
evidence. Id. This Court explained:
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 10
This waiver rule serves to protect litigants’ Seventh Amendment right to a trial by
jury. In addition, the rule discourages courts from reweighing the evidence simply
because they feel that the jury could have reached another result. Further, the rule
serves to prevent “tactical victories at the expense of substantive interests.”
Requiring a motion for directed verdict prior to a motion for j.n.o.v. enables the
defending party to cure defects in his proofs.
Id. at 426 (citations omitted); see also Unitherm Food Sys., Inc. v. Swift-Eckrich, Inc., 546 U.S.
394, 402 n.4 (2006) (explaining that permitting a party to request judgment entered on its behalf
despite failure to make a Rule 50(a) motion would raise Seventh Amendment concerns).
Defendants’ briefing does not point to any instance prior to submission of the case to the jury
where they presented the district court with substantial legal argument about the sufficiency of
the evidence on the likelihood of confusion. Our own review of the record does not reveal any
such motion.
In their reply brief, Defendants argue that the appeal is proper under Federal Rule of
Evidence 103(b) and Weisgram v. Marley Co., 528 U.S. 440 (2000), recasting their claim for
judgment as a matter of law as seeking a remedy for the asserted evidentiary errors. Rule 103(b)
provides that “[o]nce the court rules definitively on the record—either before or at trial—a party
need not renew an objection or offer of proof to preserve a claim of error for appeal.” Fed. R.
Evid. 103(b). In Weisgram, the Supreme Court held that courts of appeal could direct entry of
judgment for a party on the basis of evidentiary errors where, “on excision of testimony
erroneously admitted, there remains insufficient evidence to support the jury’s verdict.”
528 U.S. at 457. Thus, Weisgram addressed whether a court of appeals should consider the
sufficiency of the evidence actually presented to the jury or the evidence at trial after excising the
evidence erroneously admitted. Id. at 452-53. The Court never questioned Rule 50’s
requirement that a party present its motion to the court before submission of the case to the jury
in order to preserve its argument that it is entitled to judgment as a matter of law. See id. at 452-
57. Moreover, following Weisgram, the Supreme Court subsequently reaffirmed the mandatory
nature of Rule 50’s procedural requirements in Unitherm, where it held that failure to renew a
motion for judgment as a matter of law following the jury verdict “forecloses [a party’s]
challenge to the sufficiency of the evidence.” 546 U.S. at 404.
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 11
Defendants’ attempt to salvage their claim for judgment as a matter of law is therefore
unavailing. Because Defendants failed to challenge the sufficiency of the evidence on the
likelihood of confusion between the marks before the submission of the case to the jury, their
claim for judgment as a matter of law pursuant Rule 50 is foreclosed.
II. Defendants’ Claim for a New Trial
Defendants appeal the district court’s denial of their motion for a new trial made under
Federal Rule of Civil Procedure 59. Rule 59(a) permits a district court to grant a new trial
following a jury verdict “for any reason for which a new trial has heretofore been granted in an
action at law in federal court.” We review the denial of a Rule 59 motion for a new trial for
abuse of discretion. Balsley v. LFP, Inc., 691 F.3d 747, 761 (6th Cir. 2012). A district court
abuses its discretion when it “relies on clearly erroneous findings of fact, improperly applies the
law, or uses an erroneous legal standard.” Mike’s Train House, Inc. v. Lionel, L.L.C., 472 F.3d
398, 405 (6th Cir. 2006). We will find an abuse of discretion only based on “‘a definite and firm
conviction that the trial court committed a clear error of judgment.’” Id. (quoting Engebretsen v.
Fairchild Aircraft Corp., 21 F.3d 721, 728 (6th Cir. 1994)).
A new trial may be warranted under Rule 59 “‘when a jury has reached a ‘seriously
erroneous result’ as evidenced by . . . the verdict being against the weight of the evidence . . . or
[] the trial being unfair to the moving party in some fashion, i.e., the proceedings being
influenced by prejudice or bias.’” Balsley, 691 F.3d at 761 (quoting Holmes v. City of Massillon,
78 F.3d 1041, 1045–46 (6th Cir.1996)). Defendants argue that the trial was unfair due to the
introduction of inadmissible and prejudicial evidence; the exclusion of rebuttal evidence; and
misleading or false statements made by Plaintiff’s counsel. Additionally, Defendants argue that
when the inadmissible evidence is excluded, the verdict is against the weight of evidence.
A. Asserted Evidentiary Errors
An appellate court reviews evidentiary rulings by the district court for abuse of
discretion. Gen. Elec. Co. v. Joiner, 522 U.S. 136, 141-42 (1997). In this context, we review de
novo the district court’s conclusions of law, such as whether certain evidence constitutes hearsay,
and we review for clear error the factual determinations underlying the district court’s legal
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 12
conclusions. Yoder & Frey Auctioneers, Inc. v. EquipmentFacts, LLC, 774 F.3d 1065, 1071 (6th
Cir. 2014) (citing United States v. McDaniel, 398 F.3d 540, 544 (6th Cir. 2005)). Under the
harmless error rule, an error in admitting or excluding evidence may furnish a basis for granting
a new trial only if it affects a party’s “substantial rights” or if justice so requires. Fed. R. Civ. P.
61; Morales v. Am. Honda Motor Co., 151 F.3d 500, 514 (6th Cir. 1998). Where a party does
not object to an evidentiary matter at trial, we review the admissibility of the evidence only for
plain error. Innovation Ventures, 763 F.3d at 541.
Defendants assert three categories of evidentiary error. First, Defendants argue that the
district court improperly admitted the Office Action issued by the Patent and Trademark Office
(“PTO”) refusing Defendants’ “BMF Offroad” application, while erroneously excluding rebuttal
evidence related to the “BMF” registration for tires. Second, Defendants argue that the district
court erred in allowing Foltz to introduce impermissible legal opinion testimony by referring to
the content of conversations with his lawyer. Third, Defendants argue that the district court
erroneously allowed hearsay evidence regarding customer confusion while excluding rebuttal
evidence as inadmissible hearsay.
1. The PTO Record Regarding Defendants’ Trademark Applications
Defendants argue that the jury was presented with a lopsided record of decision-making
by the PTO regarding Weld’s various efforts to register BMF trademarks. As described above,
Weld applied for registration of three different marks that used the letters “BMF.” The first
application, for “BMF Wheels,” was submitted in July 2006 and resulted in registration in March
2008. Defendants highlighted this application and eventual registration of “BMF Wheels” in
opening argument and Weld’s testimony as indicative of his good faith.
In July 2009, Weld submitted a trademark application for “BMF” for a long list of
aftermarket parts. The examining attorney issued a refusal in an Office Action dated June 1,
2010 based on a likelihood of confusion with Plaintiff’s mark. In November 2010, the
examining attorney appears to have indicated that she would withdraw the refusal if Weld
limited the application to tires only. Weld eventually complied, filing the restriction in February
2011. The mark was registered on May 21, 2013, just prior to trial, and defense counsel notified
Plaintiff that it may offer the registration as a trial exhibit. Plaintiff moved in limine to exclude
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 13
the registration and July 2009 trademark application under Federal Rule of Civil Procedure 37(c)
(governing discovery sanctions), citing Defendants’ failure to disclose information about the
application in response to directly pertinent discovery requests. At oral argument on Plaintiff’s
motion, Defendants expressly stipulated that they would not seek to introduce the “BMF”
registration for tires so long as Plaintiff would not seek to introduce the related PTO file;
Plaintiff agreed. The district court accordingly granted Plaintiff’s motion. Defendants did not
seek to offer the materials at trial.
In December 2010, shortly after receiving the invitation to restrict the class of goods to
tires on the “BMF” application, Weld submitted a third application to register the trademark
“BMF Offroad” for the same extensive list of aftermarket parts as had originally been included
in the July 2009 “BMF” application. This application, too, garnered a refusal from the
examining attorney based on the likelihood of confusion with Plaintiff’s mark. Defendants
abandoned the attempt to register “BMF Offroad,” but continued to use the mark in their online
marketing and in their catalogue. Over Defendants’ objection, the court allowed Plaintiff to
introduce the PTO file for “BMF Offroad” and elicit testimony about the examining attorney’s
refusal to register the mark based on the likelihood of confusion with Plaintiff’s mark.
Defendant argues that the district court abused its discretion in admitting the “BMF
Offroad” file, and then by excluding the “BMF” registration for tires as rebuttal evidence
regarding the PTO’s judgment of the likelihood of confusion between Plaintiff’s mark and
Defendants’ mark.
a. The BMF Offroad File
At trial, Defendants objected on relevance grounds to the admission of the “BMF
Offroad” file. Plaintiff argued that file was relevant to the issue of willfulness because it showed
that Defendants continued to use BMF logos and marks despite receiving a rejection based on
the likelihood of confusion with Plaintiff’s mark. The district court ruled for Plaintiff, finding
that the “BMF Offroad” file history “can make it more likely than not, than it would be without
the evidence, that there is an intention to use the mark willfully with knowledge of the competing
mark.” (R. 108, Bench Ruling, at 2444.)
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 14
“Evidence is relevant if . . . it has any tendency to make a fact more or less probable than
it would be without the evidence,” and that fact “is of consequence” in the action. Fed. R. Ev.
401. Defendants’ intent and alleged good faith in using the letters “BMF” was a material issue in
the case, and one to which the defense devoted considerable energy. In fact, from their opening
statement, Defendants made Weld’s conscientious compliance with the PTO process and his
reliance on the federal government’s stamp of approval in registering “BMF Wheels” a
centerpiece of their argument that he acted in good faith. As a matter of relevance, we agree
with the district court that Defendants’ continued use of “BMF Offroad” in their advertising after
learning of the PTO rejection and abandoning the application has a “tendency” to make it “more
probable” that their use of the letters “BMF” was willful. Id.
On appeal, Defendants now argue that the “BMF Offroad” file should have been
excluded under Rule 403 in light of the risk of confusion and unfair prejudice that can result
from introducing PTO office actions. Defendants cite an unpublished case from the Northern
District of Illinois that collected cases cautioning against admission of PTO office actions,
Minemyer v. B-Roc Representatives, Inc., 2012 WL 346621, at *4 (N.D. Ill. Feb. 2, 2012).
Introducing a PTO file does raise a risk that the jury will be unduly influenced by the examining
attorney’s determinations or confused by the terms of art in the text—and these, undoubtedly
may be sound reasons for a district court to exclude such documents under Rule 403 balancing in
a particular case. Defendants did not raise this argument below, however, so our review is for
plain error only.3 Bowman v. Corr. Corp. of Am., 350 F.3d 537, 548 (6th Cir. 2003).
Any error by the district court was not plain. While there may be sound reasons to
exclude PTO files and office actions, cases do not unanimously condemn use of PTO rejections
to show bad faith. In some cases, courts have relied on a party’s persistence in the face of PTO
rejections as evidence of bad faith. Mr. Water Heater Enters. v. 1-800-Hot Water Heater, LLC,
648 F. Supp. 2d 576, 588 (S.D.N.Y. 2009); E. Gluck Corp. v. Rothenhaus, 585 F. Supp. 2d 505,
517-18 (S.D.N.Y. 2008), abrogated on other grounds by Salinger v. Colting, 607 F.3d 68 (2d
3
Defendants did allude to the possibility of confusion resulting from the “BMF Offroad” application in
argument to the district court, but the concern they expressed was distinct from the one proffered on appeal. Below,
they argued that the jurors would be confused by the discussion of a logo that was not an accused mark in the case,
and they raised concern that time and attention would be wasted on tangential issues. Moreover, Defendants
expressly made relevance the basis for their objection at trial, and they did not request that the district court exclude
the evidence as unduly prejudicial under Rule 403 after receiving the ruling on relevance.
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 15
Cir. 2010). Moreover, because Defendants so heavily emphasized Weld’s reliance on the PTO
process as probative of his good faith, introduction of evidence that he disregarded red flags
raised by the PTO about the use of the letters “BMF” in the aftermarket industry had probative
value in countering the theory of the defense. Plaintiff also argued to the district court that
because Defendants were relying on the presumption of validity attached to the “BMF Wheels”
registration as part of their defense, the jury should be permitted to consider evidence that the
PTO did find a likelihood of confusion in a similar application where the examining attorney was
aware of Plaintiff’s mark. In light of the lack of clear guidance in the cases and the probative
value of the materials in responding to the defenses raised in this case, we cannot say that the
court plainly erred in failing to sua sponte exclude the materials under Rule 403 balancing.
b. The “BMF” Registration for Tires
Defendants also argue that the district court erred in “excluding” the registration and PTO
file for the “BMF” mark for tires.4 In particular, Defendants argue that the file history would
have provided crucial rebuttal evidence as an instance where the examining attorney found
Plaintiff’s mark yet subsequently allowed a registration for “BMF” so long as Defendants
restricted the mark to tires.
Defendants waived any claim that this evidence was wrongly excluded. “‘[W]aiver is the
intentional relinquishment or abandonment of a known right’ leaving no correctable error in its
wake.” Williams v. Port Huron Sch. Dist., 455 F. App'x 612, 623 (6th Cir. 2012) (Moore, J.
dissenting) (quoting United States v. Olano, 507 U.S. 725, 733 (1993)). Waiver requires
“knowledge of the right and intent to waive that right, either by action or omission.” Days Inns
Worldwide, Inc. v. Patel, 445 F.3d 899, 906 n.6 (6th Cir. 2006). Defendants were faced with a
motion to exclude the “BMF” registration for tires as a sanction for discovery violations. Rather
than oppose that motion on the merits, they willingly stipulated to keeping the registration out of
the case in exchange for Plaintiff’s agreement not to introduce the corresponding PTO file,
which contained an interim refusal based on the likelihood of confusion with Plaintiff’s mark.
Defendants entered into this stipulation knowing that Plaintiff might still seek to introduce the
4
Defendants never sought to introduce the exhibit at trial, much less as rebuttal evidence after Plaintiff
drew attention to the PTO’s refusal based on a likelihood of confusion with Plaintiff’s mark in the “BMF Offroad”
application. It is therefore incorrect to suggest that the district court “excluded” the “BMF” file as rebuttal evidence.
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 16
file history for “BMF Offroad.” After intentionally relinquishing the right to offer the “BMF”
registration for tires as evidence, Defendants cannot now claim error based on the omission of
that evidence at trial.
2. Legal Opinion Testimony
Defendants also seek reversal based on the testimony offered by Foltz about his
understanding of the scope of Plaintiff’s trademark application and registration. Foltz testified in
his direct examination regarding the scope of his BMF registration: “my understanding, when I
communicated with my attorney, [was] that it covered us for automotive parts.” (R. 107 at
2249.) Defendants did not object. On cross-examination, defense counsel pressed Foltz on the
scope of CFE’s application with regard to the goods claims in the following exchanges:
Q. Would it surprise you to know that the classification manual states that
Class 7 does not include motors or engines for land vehicles?
A. Again, I can only tell you what my attorney told me. My attorney told me
that we were protected against after market parts.
...
Q. [T]he goods you claimed were cylinder heads, right? Forget about the
class, you said cylinder heads.
A. I was under the understanding when I talked to my attorney that it was
aftermarket parts for the automotive industry.
Q. You didn’t file for aftermarket parts. You filed for cylinder heads. Is that
correct or not?
A. I don’t know that that’s correct. When I talked to my attorney, he said we
were covered under aftermarket parts.
(R. 107 at 2281, 2291.) Defense counsel did not raise any objections to these answers during
cross-examination or request the judge to instruct Foltz to omit reference to his attorney’s
opinion. Defendants objected for the first time on redirect, when Plaintiff’s counsel asked Foltz,
“[i]s it your understanding that whatever the internal classification of the [PTO] . . . that’s the
limit of your trademark protection, you can’t go outside the box?” (Id. at 2299.) The district
court allowed the question, noting that defense counsel had “roundly explored” the same issue on
cross. (Id.) Foltz answered that no, that was not his understanding.
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 17
Defendants argue that Foltz’s statements reporting what he understood from his attorney
were inadmissible both as hearsay and as legal opinion testimony. Responding to the hearsay
challenge, Plaintiff argues that the testimony was offered only to prove Foltz’s understanding,
not that his belief was legally correct. If relevant, the testimony would be admissible for this
purpose. Biegas v. Quickway Carriers, Inc., 573 F.3d 365, 379 (6th Cir. 2009) (“A statement
that is not offered to prove the truth of the matter asserted but to show its effect on the listener is
not hearsay.”) We can identify no issue requiring proof of Foltz’s understanding, and Plaintiff
does not offer one. Instead it appears that both attorneys were using questions about Foltz’s
understanding of the scope of the trademark application and registration as a means of suggesting
to the jury what protection against similar marks Plaintiff could properly claim. The statements
should have been excluded as hearsay.
Additionally, the statements conveyed the legal opinion of Foltz’s attorney, at least as
filtered through Foltz’s understanding of the conversation. We have previously explained that
“[t]he problem with testimony containing a legal conclusion is in conveying the witness'
unexpressed, and perhaps erroneous, legal standards to the jury. This ‘invade[s] the province of
the court to determine the applicable law and to instruct the jury as to that law.’” Torres v. Cnty.
of Oakland, 758 F.2d 147, 149 (6th Cir. 1985) (quoting F.A.A. v. Landy, 705 F.2d 624, 632 (2d
Cir. 1983)). Foltz’s testimony during this passage conveyed an opinion regarding the legal
effects of Plaintiff’s trademark registration—a legal matter which was the responsibility of the
trial court to explain to the jury. As legal opinion testimony, Foltz’s statements should not have
been admitted.
The error, however, was harmless. As a preliminary matter, we note that Defendants
were equally implicated in the efforts to use Foltz’s testimony about his understanding of
trademark law as a proxy for legal argument. Because they objected only after engaging in the
same problematic pattern of questioning themselves, their substantial rights were not affected by
the district court overruling their belated objection. Additionally, we are confident that Foltz’s
statements about his own understanding of the scope of trademark protection sought and
obtained by his company did not affect the outcome of the trial. The district court gave clear
instructions on the legal issues encompassed by this testimony. The court’s charge to the jury
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 18
included a statement clarifying that the PTO’s classification system “is merely for convenience
of searching; it does not limit or extend the applicant’s or registrant’s rights,” and that “[t]he
classification assigned to a trademark registration has no effect on the validity or scope of
protection of the registered trademark.” (R. 110-2, Jury Instructions, at PageID 2729.) As to the
products covered by the registration, in response to a jury question that arose during
deliberations, the district court instructed that Plaintiff’s “BMF” registration gave Plaintiff the
exclusive right to use the mark with cylinder heads, and that enforcement of that right “is not
limited to products listed in the registration” but also includes “products reasonably related to
them.” (R. 109 at 2674.) Thus, any error was cured. And where prejudice from erroneously
admitted evidence “‘is cured by instructions of the court, the motion for a new trial should be
denied.’” Holmes v. City of Massillon, Ohio, 78 F.3d 1041, 1047 (6th Cir. 1996) (quoting
Clarksville–Montgomery Cnty. Sch. Sys. v. United States Gypsum Co., 925 F.2d 993, 1002 (6th
Cir. 1991)).
3. Out-of-Court Statements of Michael Locke
Next, Defendants argue that the district court improperly allowed Plaintiff’s marketing
director Larry Gadette to offer hearsay testimony when he relayed his conversation with Michael
Locke as evidence of customer confusion. Relatedly, Defendants assert that they should have
been permitted to introduce, in rebuttal, a declaration from Locke that he had never purchased
BMF wheels and that he was not confused.
Defendants’ arguments regarding Locke are entirely without merit. Gadette’s testimony
that Locke called to inquire about the status of his order for BMF valve covers and made
reference to a corresponding set of BMF wheels was not offered for “the truth of the matter
asserted,” Fed. R. Evid. 801(c), but rather was “probative of the declarant’s confusion,” Fun-
Damental Too, Ltd. v. Gemmy Industries Corp., 111 F.3d 993, 1003-04 (2d Cir. 1997) (citing
Fed. R. Evid. 803(3)). The district court did not err in allowing the testimony.
The “rebuttal” declaration from Locke, in contrast, was plainly proffered by Defendants
to prove the truth of his assertions—that he had not purchased BMF wheels, and that he was not
confused. Defendants seek to rely on the state of mind exception to the hearsay rule, but that
exception requires that the statement concern the declarant’s “then-existing state of mind;” it
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 19
expressly prohibits “a statement of memory . . . to prove the fact remembered.” Fed. R. Evid.
803(3). Locke’s declaration that he was not confused at the time of the call was a statement of
memory offered for its truth. The district court correctly excluded the declaration.
B. Alleged Improper Statements by Plaintiff’s Counsel
Defendants also argue that a new trial is warranted because of allegedly improper
comments made by Plaintiff’s counsel in closing argument. Defendants must meet a high
standard to obtain a new trial on the grounds of improper statements by opposing counsel.
Balsley v. LFP, Inc., 691 F.3d 747, 761-62 (6th Cir. 2012).
First, Defendants must overcome the “high level of deference that [we] afford[] to the
trial court in determining whether improper comments prejudiced the jury.” Id. at 762. This
deference is grounded in our recognition that “[t]he trial court is in a far better position to
measure the effect of an improper question on the jury than an appellate court which reviews
only the cold record.” City of Cleveland v. Peter Kiewit Sons' Co., 624 F.2d 749, 756 (6th Cir.
1980). We have previously instructed that “the power to set aside verdict for misconduct of
counsel should be sparingly exercised on appeal.” Id. (citation and quotation marks omitted). In
considering whether allegedly improper attorney statements merit a new trial, we analyze the
totality of the circumstances, “including the nature of the comments, their frequency, their
possible relevancy to the real issues before the jury, the manner in which the parties and the court
treated the comments, the strength of the case (e.g. whether it is a close case), and the verdict
itself.” Balsley, 691 F.3d at 761 (quoting Mich. First Credit Union v. CUMIS Ins. Soc'y, Inc.,
641 F.3d 240, 249 (6th Cir. 2011)).
Even if the statements are improper, Defendants are not entitled to a new trial unless
“there is a reasonable probability that the verdict of the jury has been influenced by such
conduct.” Id. (quoting Strickland v. Owens Corning, 142 F.3d 353, 358 (6th Cir. 1998)). Our
review, as in other issues in this case, is further constrained by the fact that Defendants did not
object to any of the allegedly improper comments. Their failure to object “raise[s] the degree of
prejudice which must be demonstrated” in order for this Court to grant the request for a new trial.
Strickland, 142 F.3d at 358. We have found statements that were “egregious” or “outrageous” to
have met this standard. Id.Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 20
We conclude that a new trial is not warranted. First, all but one of the challenged
statements merely contrasted the PTO file for “BMF Offroad” with the application leading to the
registration for “BMF Wheels,” or otherwise highlighted the examiner’s basis for finding a
likelihood of confusion with Plaintiff’s mark. For example, Plaintiff pointed out to the jury that
the “BMF Offroad” examiner defined the relevant category of goods as “vehicle parts,” and that
the examiner concluded that “because the marks are highly similar, and the goods being provided
by both parties are related, registration must be refused.” (R. 109 at 2615-16.) Plaintiff placed
especially heavy emphasis on the fact that the examiner in the “BMF Offroad” file found and
considered Plaintiff’s mark, unlike the examiner in the “BMF Wheels” file. (Id. at 2615, 2657.)
Defendant objects that these statements “turned on its head” the presumption of validity
accorded by statute to their registered trademark “BMF Wheels,” and created a “presumption of
invalidity” by suggesting to the jury that the conclusion of the examiner in “BMF Offroad”
should be given more credence. Def.’s First Br. at 42. That, we imagine, was precisely the
point. The presumption of validity attaching to a trademark registration under 15 U.S.C.
§ 1057(b) may of course be rebutted. Mktg. Displays, Inc. v. TrafFix Devices, Inc., 200 F.3d
929, 934 (6th Cir. 1999), rev’d on other grounds sub nom. TrafFix Devices, Inc. v. Mktg.
Devices, Inc., 532 U.S. 23 (2001). Evidence that the PTO, when aware of Plaintiff’s mark,
identified a likelihood of confusion with a proposed mark using “BMF” on auto-parts is rebuttal
evidence casting doubt on the reliability of the registration process for “BMF Wheels,” the
accused mark in the case. See Mktg. Displays, 200 F.3d at 934 (“[T]here is no evidence that the
PTO considered the WindMaster mark, and the PTO might have made a mistake.”). Defendants
do not argue that the “BMF Offroad” file was inadmissible for this purpose, and indeed never
requested a limiting instruction from the district court. These statements were not improper.
It appears that Defendants’ true concern is that Plaintiff was able to make arguments
about the PTO record without acknowledging the “BMF” registration Weld obtained for tires.
This incomplete discussion is the natural consequence of their stipulation to the exclusion of the
“BMF” registration and file; Defendants have waived any objection on these grounds. Olano,
507 U.S. at 733. While their stipulation may have been unwise, they may not rely on the absence
of that evidence from the record to characterize otherwise accurate statements as improper.
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 21
Defendants’ more serious contention is that Plaintiff’s counsel knowingly made a false
statement in the course of the comparative discussion of the PTO files when he asserted that the
examiner of the “BMF Offroad” application was the “only examiner” who saw Plaintiff’s mark:
So two categories of vehicle parts, both with the exact same name in them, BMF,
because Offroads is a descriptive and really that has to be disregarded, so both
with BMF in them, the same three letters, for automotive or for vehicle parts, no
good, says the only examiner who actually saw our mark.
(R. 109 at 2657 (emphasis added).) As with all the other allegedly improper statements,
Defendants did not object. On the basis of a cold record, this statement certainly is amenable to
an interpretation that the PTO examining attorney who reviewed the “BMF Offroad” application
was the only examining attorney ever to find Plaintiff’s mark in analyzing a trademark
application from Defendants. This is clearly incorrect insofar as it goes; the examining attorney
for the application that eventually became the “BMF” registration for tires also found Plaintiff’s
mark—but that attorney, too, issued an initial rejection based on likelihood of confusion with
Plaintiff’s mark. The falsity detected by Defendants is potentially material only because the
examining the examining attorney in the “BMF” registration eventually resolved her concern and
allowed the registration to proceed as to tires only. Defendants waived their right to present that
outcome to the jury, and Plaintiff’s statement is in conflict with that outcome only by a chain of
inferences. While Plaintiff’s counsel should have chosen his words more carefully, this
misstatement is not so “outrageous” or “egregious” that Defendants are entitled to a new trial
notwithstanding their failure to object. Strickland, 142 F.3d at 358.
C. The Weight of the Evidence
The third basis for a new trial advanced by Defendants is that the verdict was against the
weight of the evidence. “[G]ranting a new trial on this ground is a rare occurrence.” Innovation
Ventures, 763 F.3d at 534 (quoting Armisted v. State Farm Mut. Auto. Ins. Co., 675 F.3d 989,
995 (6th Cir. 2012)). We will uphold the verdict reached by the jury “if it was one which the
jury reasonably could have reached; we cannot set it aside simply because we think another
result is more justified.” Id. We conclude that the jury reached a permissible verdict on the
evidence.
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 22
The jury found that Defendants’ use of the BMF Wheels marks created a likelihood of
confusion with Plaintiff’s registered and unregistered marks. The “likelihood of confusion”
among consumers as to the origin of the goods provided by a defendant is a mixed question of
fact and law. Champions Golf Club, Inc. v. The Champions Golf Club, Inc., 78 F.3d 1111, 1116
(6th Cir. 1996). We consider eight factors in determining whether a finding of likelihood of
confusion is permissible. Frisch's Rest., Inc. v. Shoney's Inc., 759 F.2d 1261, 1264 (6th Cir.
1985). These factors include:
1. strength of the plaintiff's mark;
2. relatedness of the goods;
3. similarity of the marks;
4. evidence of actual confusion;
5. marketing channels used;
6. likely degree of purchaser [care];
7. defendant's intent in selecting the mark;
8. likelihood of expansion of the product lines.
Id. There is no requirement that each factor be established in each case, nor do these factors
imply “mathematical precision” or a particular balancing formula. Homeowners Grp., Inc. v.
Home Mktg. Specialists, Inc., 931 F.2d 1100, 1107 (6th Cir. 1991). Instead, the factors are
“interrelated in effect” and only a “guide to help determine whether confusion is likely.” Id.The enumeration is meant “merely [to] indicate the need for weighted evaluation of the pertinent
facts in arriving at the legal conclusion of confusion.” Frisch, 759 F.2d at 1264. “The ultimate
question remains whether relevant consumers are likely to believe that the products or services
offered by the parties are affiliated in some way.” Homeowners Grp., 931 F.2d at 1107.
The similarity of the marks “is a factor of considerable weight,” and here, it weighs very
strongly in favor of a finding of likelihood of confusion. Daddy’s Junky Music Stores, Inc. v.
Big Daddy’s Family Music Ctr., 109 F.3d 275, 283 (6th Cir. 1997). A reasonable jury could find
that Defendants’ marks were nearly identical to Plaintiff’s registered and unregistered marks. In
“BMF Wheels,” the letters “BMF” provide the dominant identifier as the non-generic element of
the composite. The dominant role of the letters “BMF” in Defendants’ mark plainly contributes
to a likelihood of confusion with Plaintiff’s registered trademark for the letters “BMF,” without
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 23
restriction as to font, style, size, or color. See, e.g., Giant Food, Inc. v. Nation’s Foodservice,
Inc., 710 F.2d 1565, 1570 (Fed. Cir. 1983) (finding likelihood of confusion supported by the
dominant role of the word “giant” in the two relevant marks, “GIANT FOOD” and “GIANT
HAMBURGERS”). The striking visual similarity of Defendants’ logo to Plaintiff’s logo, of
course, also supports a finding of a likelihood of confusion as to Plaintiff’s unregistered marks.
Although Defendants dispute the degree of relatedness between the two companies’
products, their efforts to diminish this factor are unavailing. The products were both aftermarket
vehicle parts. In fact, both companies sold in the specialty aftermarket for automotive parts—
namely, in a market targeted to consumers who are not merely repairing their vehicles, but
instead seeking to improve image and performance. The relatedness of the products is further
illustrated by the fact that the distributors used by both companies sold cylinders heads and
wheels alike.
In the circumstances of this case, the nearly identical nature of the marks and the
relatedness of the goods are likely sufficient to reject Defendants’ claim that the verdict was
against the weight of the evidence. We would be remiss, however, if we did not point out
additional evidence supporting the jury’s finding that there was a likelihood of confusion. The
jury heard anecdotal evidence of actual confusion in Gadette’s testimony about the call he
received from Michael Locke asking about a BMF valve cover order to go with a set of BMF
wheels. Additionally, the initial perception of Weld’s colleagues and brother that Plaintiff’s
company must be “ripping off” Defendants’ mark reveals the high degree of similarity these
individuals found between the marks. Although Defendants emphasize the degree to which
Plaintiff’s mark was in decline, the jury could have concluded that it had some strength based on
the moderate distinctiveness of the design, significant previous sales numbers, and testimony
about Plaintiff’s success with targeted marketing. Finally, the record contained evidence that
both companies were likely to expand their product lines: Foltz reported discussions with
manufacturers about producing lubricants and mufflers that would carry the “BMF” brand, and
in the course of the back and forth about the PTO record, the jury heard evidence of Defendants’
proposed expansion into tires and items like suspension parts and vehicle grilles. The verdict, in
short, was well supported by the evidence. A new trial is not warranted.
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 24
III. Plaintiff’s Challenge to the Narrow Scope of Injunctive Relief
Plaintiff contends that the district court abused its discretion in declining to cancel
Defendants’ trademark and in permitting Defendants to continue using the phrase “BMF
Wheels,” subject to redesign of the logo and disclaimers of affiliation in some instances. We
agree.
A. Cancellation of the Trademark Registration for “BMF Wheels”
Part of the equitable relief Plaintiff requested was the cancellation of Weld’s registered
trademark to “BMF Wheels” pursuant to 15 U.S.C. § 1119. That provision of the Lanham Act
authorizes district courts to rule directly on the validity of a registration:
In any action involving a registered mark the court may determine the right to
registration, order the cancelation of registrations, in whole or in part, restore
canceled registrations, and otherwise rectify the register with respect to the
registrations of any party to the action.
§ 1119. Courts have held that the permissive language of § 1119, providing that the court “may”
determine the right to registration, order cancellation of registrations, and the like, endows the
district court with discretionary authority. Empresa Cubana del Tabaco v. Culbro Corp.,
541 F.3d 476, 478 (2d Cir. 2008). Therefore, “[a] district court’s determination to grant relief
pursuant to 15 U.S.C. § 1119 is reviewed for an abuse of discretion.” Patsy’s Italian Rest., Inc.
v. Banas, 658 F.3d 254, 264 (2d Cir. 2011).
A request for cancellation under § 1119 must be supported by a showing that (1) the party
“has standing to petition for cancellation because it is likely to be damaged,” and (2) “there are
valid grounds for discontinuing registration.” Coach House Rest. v. Coach & Six Rests.,
934 F.2d 1551, 1557 (11th Cir. 1991). Appellate courts have found an abuse of the discretionary
authority granted by § 1119 where district courts “refus[e] to order the cancellation of
registrations for claimed marks found to be incapable of serving as valid marks.” See, e.g.,
Gracie v. Gracie, 217 F.3d 1060, 1065 (9th Cir. 2000). As the Seventh Circuit explained,
because the judgment of a court “may raise doubts about the validity of a trademark registration,
§ 1119 arms the court with the power to update the federal trademark register to account for a
mark’s actual legal status (or lack thereof) after it has been adjudicated, thereby reducing the
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 25
potential for future uncertainty over the rights in a particular mark.” Cent. Mfg., Inc. v. Brett,
492 F.3d 876, 883 (7th Cir. 2007). Where a jury’s verdict establishes that one of the party’s
registered trademarks is invalid, then “cancellation is not merely appropriate, it is the best
course.” Id.The district court declined to cancel Weld’s registration because it determined that
“[c]onfining the defendants’ use of [their] registration to the phrase ‘BMF Wheels’ and limiting
their use of that phrase adequately protects the plaintiff’s interest in its mark.” (R. 125, Opinion
Regarding Injunctive Relief, PageID 2908.) This reasoning overlooks two crucial aspects of the
case. First, Plaintiff’s interest in its registered mark must be understood by the scope of its
registration, which encompassed the use of “BMF” without restrictions as to style. Second, the
jury’s verdict necessitates a finding that Defendants’ registered trademark is invalid. The PTO
may not issue registration for a trademark if the proposed mark “[c]onsists of or comprises a
mark which so resembles a mark registered in the [PTO], or a mark or trade name previously
used in the United States by another and not abandoned, as to be likely, when used on or in
connection with the goods of the applicant, to cause confusion, or to cause mistake, or to
deceive.” 15 U.S.C. § 1052(d). In other words, the PTO may not issue registered marks for
logos that cause confusion with a registered or unregistered trademark. See id.; Coach House
Rest., 934 F.2d at 1559 (holding that a likelihood of confusion furnishes one ground for
cancelling a registration).
By special verdict form, the jury explicitly found that Defendants’ use of its mark “BMF
Wheels” created a likelihood of confusion with “[P]laintiff’s registered BMF trademark.”
(R. 100, Verdict Form, PageID 2037.) The district court supported its decision not to order
cancellation with the assertion that “[t]he principal point of confusion found by the jury was the
use by the defendants of their logos, which closely approximated the style, font and colors used
by the plaintiff’s use of the letters ‘BMF’ in connection with its products.” (R. 125 at 2907.)
This conclusion was clearly erroneous. Plaintiff’s registered “BMF” trademark provided no
restriction as to size, style, font, or color, so the “principal point of confusion” found by the jury
could not have been the similar style, font, and colors of the two marks. To give effect to the
jury’s finding that Defendants’ marks created a likelihood of confusion with Plaintiff’s registered
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 26
trademark, we must acknowledge that this likelihood of confusion is fatal to the validity of the
“BMF Wheels” registration—as the sole point of similarity between the two, and the sole
potential source of confusion is the use of the three letters “BMF.” Moreover, the district court’s
instructions made plain that a finding of likelihood of confusion with Plaintiff’s mark was
equivalent to a finding of the invalidity of Weld’s registration:
You have heard evidence that Brock Weld is the owner of a trademark
registration for the mark BMF Wheels for land vehicle parts, namely wheels,
registered on March 18, 2008, Registration Number 3,400,041. That registration
means that the owner of the registration has the exclusive right to use the – to use
the registered mark in connection – in commerce or in connection with the goods
or services specified in the registration unless the registration is determined to be
invalid. You may find that the registration is invalid if the Plaintiff proves by a
preponderance of the evidence that use of the mark is likely to cause confusion
among ordinary buyers as to the source of the products.
(R. 109 at 2582 (emphasis added).) Although the special verdict form did not include a special
interrogatory on the validity of Weld’s registration, the jury’s finding of a likelihood of
confusion with Plaintiff’s registered “BMF” trademark cannot be reconciled with the district
court’s implicit finding that the Weld’s registration is nonetheless valid.5 As we have already
discussed, the jury’s verdict was fully supported by the evidence. Here, as in Gracie, “[i]n light
of the jury verdict, which the district court allowed to stand, the district court should have
ordered cancellation” of Weld’s federal registration for “BMF Wheels.” Gracie, 217 F.3d at
1066; see also In re Lewis, 845 F.2d 624, 629 (6th Cir. 1988) (“[W]hen a party has a right to a
jury trial on an issue involved in a legal claim, the judge is of course bound by the jury’s
determination of that issue as it affects his disposition of an accompanying equitable claim.”
(internal quotation marks omitted)).
5
The district court described its ruling as “limiting” Defendants’ registration by a number of means that
ultimately prove illusory. It purported to confine Defendants’ “use of [the] registration to the phrase ‘BMF
Wheels’”—yet the registration was for that precise phrase. (R. 125 at 2908.) The court also prohibited Defendants
from “using their registered mark in connection with the production, promotion, display or sale of any product
except automotive wheels and rims.” (Id.) To find this limitation supportable, we would need to ignore the reality
that Defendants’ principal use of the mark—and unquestionably the use underlying the jury’s verdict in this case—is
already in connection with wheels. Although there was some evidence that the companies intended to expand their
BMF product lines, that relatively minor evidence would not have supported a finding of likelihood of confusion
absent a finding that the parties’ current BMF products were materially related. Finally, the district court required
that use of the mark must be accompanied by a disclaimer of association with Plaintiff. The necessity of a
disclaimer, however, underscores the invalidity of the mark. See 3 McCarthy on Trademarks and Unfair
Competition § 19:2 (4th ed.) (“Since the goal of the register is to make registration and use as coincidental as
possible, where a court has determined that a party cannot use a mark without a prescribed disclaimer, that mark
cannot be registered. Use of the mark without a disclaimer is illegal and is not a basis for registration.”) (citing
Ultracashmere House, Ltd. v. Spring Mills, Inc., 828 F.2d 1580 (Fed. Cir. 1987)).
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 27
B. Scope of the Injunction
For the same reasons, we agree with Plaintiff that the district court abused its discretion
in issuing an injunction that permitted Defendants to continue using the letters “BMF” in
connection with their products. We review the scope of injunctive relief in a trademark case for
abuse of discretion. Audi AG v. D’Amato, 469 F.3d 534, 550 (6th Cir. 2006). The factual
findings of the district court are reviewed for clear error, and the legal conclusions are considered
de novo. Id.The Lanham Act grants federal courts hearing trademark infringement actions “power to
grant injunctions, according to the principles of equity and upon such terms as the court may
deem reasonable.” 15 U.S.C. § 1116(a). Courts must “closely tailor injunctions to the harm that
they address.” ALPO Petfoods, Inc. v. Ralston Purina Co., 913 F.2d 958, 972 (D.C. Cir. 1990);
see also Innovation Ventures, 763 F.3d at 545. “In a trademark case, a court determines the
scope of an injunction depending upon: the manner in which the plaintiff is harmed, the ways in
which the harm can be avoided, the viability of the defendant's defenses, the burden that would
be placed on the defendant and the potential effect upon lawful competition between the parties.”
ProNational Ins. Co. v. Bagetta, 347 F. Supp. 2d 469, 472 (E.D. Mich. 2004) (citing Champion
Spark Plug Co. v. Sanders, 331 U.S. 125, 130 (1947)).
The district court gave inadequate attention to the nature of the harm suffered by
Plaintiff. As with the request for cancellation, the district court’s determination that adequate
relief could be achieved by requiring redesign of the logo and limiting Defendants’ use of “BMF
Wheels” depended on its belief that the “principal point of confusion” was the similarity in the
appearance of the parties’ logos. As we have already discussed, this position is untenable in light
of the jury’s finding that Defendants’ use of “BMF Wheels” created a likelihood of confusion
with Plaintiff’s registered “BMF” trademark, which had no specification as to style, font, size, or
color. Effective relief must address the harm to Plaintiff’s interest in its registered trademark,
not simply in its logo.
The reality of this harm is not negated by the absence of damages. For the purpose of an
injunction, “‘[i]rreparable harm exists in a trademark case when the party seeking the injunction
shows that it will lose control over the reputation of its trademark . . . because loss of control
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 28
over one’s reputation is neither ‘calculable nor precisely compensable.’’” Juicy Couture, Inc. v.
Bella Int’l Ltd., 930 F. Supp. 2d 489, 503 (S.D.N.Y. 2013) (quoting U.S. Polo Ass’n, Inc. v. PRL
USA Holdings Inc., 800 F. Supp. 2d 515, 540 (S.D.N.Y. 2011)). Indeed, the district court well
articulated this interest in stating that the remedial purpose of the injunction must be “to restore
to the plaintiff the rightful control over its mark and eliminate the likelihood of confusion of the
defendants’ products with those of the plaintiff.” (R. 125 at 2905.) The source of the district
court’s error was in overlooking the scope of Plaintiff’s registered mark, and therefore in failing
to meaningfully address the likelihood of confusion created by Defendants’ use of the letters
“BMF,” regardless of the visual design.
We do not find the other factors sufficiently weighty to justify the district court’s failure
to issue an effective remedy for Plaintiff’s loss of control over its registered trademark.
Although Weld and his business partner submitted declarations swearing to their belief that
requiring BMF Wheels to change its name would be a death knell to the company, they did little
to substantiate this dire prediction beyond offering their speculation about the possible reactions
of their wholesale customers and other business contacts. Additionally, the district court pointed
to no evidence that a disclaimer would be effective in eliminating the risk of confusion—and, as
the disclaimer would only apply to packaging, it leaves the confusing similarity of the mark
“BMF Wheels” unmitigated on the wheels themselves. Cf. Austrialian Gold, Inc. v. Hatfield,
436 F.3d 1228, 1243 (10th Cir. 2006) (rejecting proposed disclaimer remedy where the
defendants had “not shown that a disclaimer would be sufficient to alleviate the likelihood of
confusion”); Weight Watchers Int’l, Inc. v. Luigino’s, Inc., 423 F.3d 137, 144 (2d Cir. 2005)
(“Where . . . an infringer attempts to avoid a substantial likelihood of consumer confusion by
adding a disclaimer, it must establish the disclaimer’s effectiveness.”); see also Int’l Kennel
Club, Inc. v. Mighty Star, Inc., 846 F.2d 1079, 1093 (7th Cir. 1988) (“[W]e are convinced that
that [the] plaintiff’s reputation and goodwill should not be rendered forever dependent on the
effectiveness of fineprint disclaimers often ignored by consumers.”).
IV. Plaintiff’s Claim to Attorneys’ Fees Under the Michigan Consumer Protection Act
The district court held that a plaintiff that does not suffer actual damages is not entitled
attorneys’ fees under the Michigan Consumer Protection Act. “Statutory construction is a
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 29
question of law that this Court reviews de novo.” Jordan v. Mich. Conference of Teamsters
Welfare Fund, 207 F.3d 854, 858 (6th Cir. 2000) (citing EEOC v. Frank's Nursery & Crafts,
Inc., 177 F.3d 448, 454 (6th Cir. 1999)). De novo review continues to apply where a district
court interprets state law. United States v. Dedman, 527 F.3d 577, 584-85 (6th Cir. 2008).
The Michigan Consumer Protection Act (“MCPA”) authorizes private suits for a set of
unfair competition violations, including trademark infringement. Mich. Comp. Laws Ann.
§§ 445.903(1)(b); 445.911. The parties agree that the “likelihood of confusion” finding by the
jury controls Defendants’ liability under the MCPA. They disagree, however, as to whether
Plaintiff is entitled to attorneys’ fees. The relevant provision states:
[A] person who suffers loss as a result of a violation of this act may bring an
action to recover actual damages or $250.00, whichever is greater, together with
reasonable attorneys’ fees.
§ 445.911(2). The Michigan Court of Appeals has explained that “[o]ne of the purposes behind
. . . the MCPA is to provide, via an award of attorney fees, a means for consumers to protect their
rights and obtain judgments where otherwise prohibited by monetary constraints.” Jordan v.
Transnat’l Motors, Inc., 537 N.W.2d 471, 473 (Mich. Ct. App. 1995). The Michigan Supreme
Court has not provided authority on when a plaintiff is entitled to attorneys’ fees under this
provision.
The district court interpreted the phrase “a person who suffers loss” to operate to restrict
fee awards to parties that prove actual damages. Thus, because the jury awarded no damages,
the court held that Plaintiff was not entitled to fees. As a preliminary matter, the district court’s
interpretation was internally inconsistent. The same requirement of loss applies to the
authorization to bring suit and the right to recover statutory damages; yet the district court
ordered that Plaintiff was entitled recover the statutory damages of $250. Indeed, the use of the
term “loss” separate from “damages” in the same sentence strongly suggests that the two are not
synonymous.
Second, the weight of authority in Michigan is contrary to the result reached by the
district court. The Michigan Court of Appeals directly addressed the loss requirement in
Mayhall v. A.H. Pond Co., 341 N.W.2d 268, 269 (Mich. Ct. App. 1983). There, reversing the
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 30
dismissal of a complaint that did not allege a monetary loss, the court found that “[b]y specifying
. . . that in order to bring suit a plaintiff must suffer a ‘loss’ as a result of the statutory violation,
the Legislature . . . has incorporated in the acts the common-law requirement of injury.” Id. at
270. The decisions of an intermediate state appellate court are persuasive in our interpretation of
that state’s law, and we adopt the sound interpretation of § 445.911(2) in Mayhall as well-
reasoned and consistent with the language, statutory framework, and purpose. Conlin v. Mortg.
Elec. Registration Sys., Inc., 714 F.3d 355, 358 (6th Cir. 2013).
In reaching an opposite conclusion, the district court misconstrued Gorman v. Am. Honda
Motor, Co., 839 N.W.2d 223 (Mich. Ct. App. 2013). The district court quoted a passage from
Gorman describing that “nominal damages may be awarded under the MCPA without proof of
actual damages,” id. at 233, yet failed to recognize that this proposition runs counter to its
conclusion that a plaintiff must prove actual damages to “suffer loss” within the meaning of the
statute. In this portion of Gorman, the Michigan Court of Appeals was recounting another case,
Gadula v. Gen. Motors Corp., No. 213853, 2001 WL 792499 (Mich. Ct. App. Jan. 5, 2001), that
confirmed that monetary loss was not necessary for a plaintiff to bring an MCPA claim. See id.Gadula, consistent with our interpretation of the statute, held that “[a]lthough [the] plaintiff
failed to present sufficient evidence on the required element of damages under her breach of
warranty claims, [she] did present evidence from which a jury could find a compensable
violation of the MCPA.” Gadula, 2001 WL 792499 at *3. Consistent with the interpretation
that “loss” incorporates the common law concept of injury, Michigan courts have allowed
plaintiffs to recover reasonable attorneys’ fees without establishing actual damages. McNeal v.
Blue Bird Corp., No. 308763, 2014 WL 2619408, at *10 (Mich. Ct. App. June 12, 2014)
(rejecting the argument that MCPA plaintiff was not entitled to attorneys’ fees when “the jury
awarded zero damages for the claim.”) (citing Mikos v. Chrysler Corp., 404 N.W.2d 783 (Mich
Ct. App. 1987)).
The district court’s interpretation of the MCPA as requiring proof of actual damages was
in error. On remand, the court should award reasonable attorneys’ fees in accordance with
Michigan law. See Smolen v. Dahlmann Apartments, Ltd., 463 N.W.2d 261, 263 (Mich. Ct. App.
1990) (discussing the factors to be considered in awarding attorneys’ fees under the MCPA).
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 31
V. Defendants’ Challenge to the Contempt Ruling
Defendants appeal from the district court’s order holding them in contempt for failing to
withdraw advertising bearing the prohibited logo design by the date specified in the preliminary
injunction. We review a district court’s finding of civil contempt for an abuse of discretion.
Liberte Capital Grp., LLC v. Capwill, 462 F.3d 543, 550 (6th Cir. 2006). Factual findings
underlying the contempt ruling are reviewed for clear error. Innovation Ventures, 763 F.3d at
544.
“A court's ability to issue injunctions, and then enforce those injunctions with a finding of
contempt, springs from the court's inherent equitable powers.” Innovation Ventures, 763 F.3d at
544 (citing Porter v. Warner Holding Co., 328 U.S. 395, 398 (1946)). In order to support a
motion for civil contempt, a plaintiff has “the burden of establishing by clear and convincing
evidence that [the defendant] ‘violated a definite and specific order of the court requiring [the
defendant] to perform or refrain from performing a particular act or acts with knowledge of the
court’s order.’” Rolex Watch U.S.A., Inc. v. Crowley, 74 F.3d 716, 720 (6th Cir. 1996) (quoting
NLRB v. Cincinnati Bronze, Inc., 829 F.2d 585, 591 (6th Cir. 1987)). There is no requirement to
show intent beyond knowledge of the order. In re Jaques, 761 F.2d 302, 306 (6th Cir. 1985).
The order at issue here is the permanent injunction entered by the district court on
February 24, 2014. The injunction mandated that Defendants “MUST . . . [w]ithdraw all
advertising in all media that bears the logos set out herein on or before April 30, [2014].” (R.
126, Judgment, PageID 2912 (emphasis in original).) The injunction also required Defendants to
“dispose of, by sale or destruction, all existing stock of products bearing the logos set out herein
on or before September 30, 2014.” (Id.) The district court found Defendants in contempt on
June 24, 2014 based on their publication of advertising materials, after April 30, 2014, that
included photographs of Defendants’ wheels prominently displaying the old logo. The district
court ordered Defendants to comply with the terms of the injunction, imposed a $500 fine for
each day following the ruling until they fully complied with the order, and required Defendants
to pay Plaintiff $2,500 in attorneys’ fees.
These orders were not an abuse of discretion. Defendants argue that the injunction was
ambiguous on the theory that permission to continue selling products bearing the old logos until
Nos. 14-1357/1608/1939 CFE Racing Products v. BMF Wheels, et al. Page 32
September 2014 created an implied exception to the requirement to withdraw advertising bearing
the logo. The terms of the injunction do not admit such a meaning; rather, the injunction clearly
states two absolute, independently applicable requirements: Defendants were required to
withdraw “all advertising in all media that bears the logos set out” in the judgment by the
deadline of April 30, 2014; separately, Defendants were required to dispose of all products
bearing the logos, by sale or otherwise, by September 30, 2014. Defendants could easily comply
with both requirements simultaneously by displaying product photographs that did not show the
old logo, or by displaying advertising that did not include pictures of the product.
Defendants also quibble with the district court’s choice of words in describing its order
as “clear and definite.” Instead, Defendants argue the order must be “clear and unambiguous”—
but that is simply a formulation of the same concept preferred by other circuits, and one which
we have previously recognized as the equivalent of “definite and specific.” Grace v. Ctr. for
Auto Safety, 72 F.3d 1236, 1243 (6th Cir. 1996). Of course, the slight variation in phrasing does
not provide Defendants a basis to evade the clear import of the district court’s holding.
CONCLUSION
We REMAND this case to the district court to award reasonable attorneys’ fees to
Plaintiff under the MCPA, to modify the injunction to preclude Defendants from using their
infringing mark, and to order cancellation of the invalid BMF Wheels trademark registration.
We AFFIRM the judgment of the district court in all other respects.