A.I.G. Agency, Inc. v. American International Group ( 2022 )

United States Court of Appeals
For the Eighth Circuit
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No. 21-1948
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A.I.G. Agency, Inc.
Plaintiff - Appellant
v.
American International Group, Inc., doing business as AIG
Defendant - Appellee
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Appeal from United States District Court
for the Eastern District of Missouri
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Submitted: January 13, 2022
Filed: May 13, 2022
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Before LOKEN, GRUENDER, and GRASZ, Circuit Judges.
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GRASZ, Circuit Judge.
A.I.G. Agency, Inc. (“Agency”) sued American International Group, Inc.
(“International”) for trademark infringement over International’s use of the “AIG”
trademark. The district court granted summary judgment for International, holding
Agency’s claims were barred by the doctrine of laches. We reverse and remand to the
district court for further proceedings.
I. Background
This case is about two insurance-related companies that both claim the name “AIG.”
Agency is a family-owned insurance broker in Missouri. Agency allegedly began calling
itself “AIG” around 1958. International is an insurance company incorporated in 1967.
International first used the “AIG” mark sometime between 1968 and 1970. International
obtained a federal trademark registration for “AIG” in 1981, which is still active.
In 1995, International sent a letter through its attorney to Agency notifying Agency
of its trademark registration and demanding Agency stop using “AIG” because it was likely
to confuse consumers. Agency’s attorney sent a response letter claiming Agency had a
right to use the name in Missouri and Illinois because it used the name in those states before
International registered its trademark. Agency also indicated it was open to selling its
rights to International.
In 2008, International’s attorney sent another letter to Agency demanding it stop
using “AIG.” Agency responded with a phone call asserting its rights to use the name in
Missouri and Illinois. International’s attorney then sent Agency another letter saying it did
not object to Agency’s use of “AIG” in St. Charles and St. Louis counties in Missouri but
threatened legal action if Agency expanded its use beyond those counties.
In 2009, International renamed its property and casualty business “Chartis.” The
rebranding did not stick, and in 2012, International returned to using “AIG” for its property
and casualty business. Agency claims that also around 2012, International changed its
marketing strategy and began aggressively selling to consumers through direct
advertisements. Agency says that over the course of the next few years, it began
experiencing significant incidences of consumers confusing Agency with International.
Agency sued International in 2017 over International’s use of “AIG.” Relevant to
this appeal, Agency alleged common-law trademark infringement and unfair competition
along with violation of the Lanham Act, 15 U.S.C. § 1125. International answered and
asserted multiple affirmative defenses, including the doctrine of laches. International also
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asserted counterclaims of trademark infringement, unfair competition, and trademark
dilution under the Lanham Act. International moved for summary judgment, and Agency
moved for partial summary judgment. International argued summary judgment was proper
for multiple reasons, including because the doctrine of laches barred Agency’s claims.
Agency argued that as a matter of law, International’s use of “AIG” in Missouri and Illinois
created a likelihood of confusion for consumers.
The district court agreed with International that Agency’s claims were barred by the
doctrine of laches, so it granted summary judgment in favor of International and dismissed
Agency’s claims. Because none of Agency’s claims survived, the district court denied
Agency’s motion for partial summary judgment as moot. After the district court’s ruling,
International moved to voluntarily dismiss its counterclaims against Agency without
prejudice, which the district court granted.
II. Analysis
On appeal, Agency argues the district court erred in granting summary judgment
because it weighed disputed facts in International’s favor. So, Agency asks us to reverse
the district court’s grant of summary judgment to International and its denial of Agency’s
motion for partial summary judgment. Agency also asks us to direct the district court to
enter partial summary judgment for it on the issue of current likelihood of confusion.
Finally, Agency argues the district court should have dismissed International’s
counterclaims with prejudice for the reason that International’s counterclaims are barred
because International unduly delayed in bringing such claims and has acquiesced to
Agency’s use of “AIG.”
A. Standard of Review
We typically review a grant of summary judgment de novo, Roederer v. J. Garcia
Carrion, S.A., 569 F.3d 855, 858 (8th Cir. 2009), affirming only where “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). But we review the district court’s application of laches for abuse of
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discretion. Roederer, 569 F.3d at 858. Harmonizing these two standards, we have said,
“Although the defense of laches lies within the district court’s discretion, this does not
change the fact that summary judgment requires ‘evidence of the non-movant . . . to be
believed, and all justifiable inferences . . . to be drawn in [its] favor.’” Id. at 860 n.3
(alterations in original) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255
(1986)).
Thus, we use a two-pronged standard to review summary judgment based upon
laches: (1) we determine whether there are any genuine disputes of material fact de novo,
and (2) we review the district court’s application of the laches defense to the facts for abuse
of discretion. See id.; accord Ray Commc’ns, Inc. v. Clear Channel Commc’ns, Inc., 673
F.3d 294, 299 (4th Cir. 2012); Jarrow Formulas, Inc. v. Nutrition Now, Inc., 304 F.3d 829,
833–34 (9th Cir. 2002); Hot Wax, Inc. v. Turtle Wax, Inc., 191 F.3d 813, 819 (7th Cir.
1999).
B. Laches Standard
Laches is an equitable affirmative defense which bars a trademark claim when the
“claimant inexcusably delays in asserting its claim and thereby unduly prejudices the party
against whom the claim is ultimately asserted.” Roederer, 569 F.3d at 858–59 (quoting
Hubbard Feeds, Inc. v. Animal Feed Supplement, Inc., 182 F.3d 598, 602 (8th Cir. 1999)).
A party raising a laches defense bears the burden of establishing: “(1) a delay in asserting
a right or a claim; (2) that the delay was not excusable; and (3) that there was undue
prejudice to the party against whom the claim is asserted.” Id. (quoting Kason Indus., Inc.
v. Component Hardware Grp., Inc., 120 F.3d 1199, 1203 (11th Cir. 1997)). In deciding
whether there was inexcusable delay, one factor we consider is the doctrine of progressive
encroachment. Id. at 859.
C. Progressive Encroachment
“[U]nder the doctrine of progressive encroachment, the time of delay is to be
measured not from when the [claimant] first learned of the potentially infringing mark, but
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from when such infringement became actionable and provable.” Id. Thus, “the progressive
encroachment doctrine requires a[] . . . finding of when the infringement became
actionable to determine the period of delay[.]” Id. at 859–60. Although a district court is
not required “to locate the precise moment a trademark claim became actionable before
proceeding with its laches analysis, more is required than merely citing marginal or
irrelevant factors without reference to any of the principles governing trademark
infringement.” Id. at 860. The doctrine saves trademark holders from being “hoisted upon
the horns of an inequitable dilemma—sue immediately and lose because the alleged
infringer is insufficiently competitive to create a likelihood of confusion, or wait and be
dismissed for unreasonable delay.” Id. at 859.
Agency argues it did not have an actionable and provable infringement claim until
late 2012, at the earliest, when International allegedly changed its marketing strategy. A
trademark infringement claim becomes actionable and provable when the infringer’s use
of the mark becomes likely to confuse customers as to the source or sponsorship of the
goods or services. See Davis v. Walt Disney Co., 430 F.3d 901, 903 (8th Cir. 2005) (citing
15 U.S.C. § 1125(a)(1)); see also Minn. Min. & Mfg. Co. v. Rauh Rubber, Inc., 130 F.3d
1305, 1308 (8th Cir. 1997) (“Likelihood of consumer confusion . . . is the ‘hallmark of any
trademark infringement claim.’”) (quoting Polymer Tech. Corp. v. Mimran, 37 F.3d 74,
80 (2d Cir. 1994)). Likelihood of confusion is an issue of fact and a “highly fact-intensive
inquiry.” Select Comfort Corp. v. Baxter, 996 F.3d 925, 934 (8th Cir. 2021), cert. denied
sub nom. Dires, LLC v. Select Comfort Corp., No. 21-212, 142 S. Ct. 561 (2021).
We consider six factors in evaluating likelihood of confusion:
1) the strength of the plaintiff’s mark; 2) the similarity between the plaintiff’s
and defendant’s marks; 3) the degree to which the allegedly infringing product
competes with the plaintiff’s goods; 4) the alleged infringer’s intent to confuse
the public; 5) the degree of care reasonably expected of potential customers[;]
and 6) evidence of actual confusion.
Roederer, 569 F.3d at 860 (quoting Davis, 430 F.3d at 903). “[A]lthough no one factor is
determinative, each must be analyzed.” Insty*Bit, Inc. v. Poly-Tech Indus., Inc., 95 F.3d
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663, 670 (8th Cir. 1996). Because International bears the burden of showing inexcusable
delay, it bears the burden of showing there was a likelihood of confusion, under the six-
factor analysis, at some past time from which Agency inexcusably delayed in bringing its
infringement claim. See Roederer, 569 F.3d at 858–59.
We hold the district court abused its discretion in finding International met this
burden because it did not “conduct a meaningful analysis” of when International’s alleged
infringement became actionable. Id. at 860. Specifically, the district court failed to use
the six-factor analysis for deciding the issue of progressive encroachment. The district
court did not announce any test on which it relied for determining when a likelihood of
confusion arose. It also did not meaningfully analyze the strength of International’s mark
at the relevant times, whether Agency intended to confuse the public, the degree of care
expected of potential customers, or the evidence of actual confusion. See Insty*Bit, 95
F.3d at 670 (holding each of the six factors must be analyzed for likelihood of confusion).
Instead, it found Agency’s claims barred by laches because “both parties have been using
[‘AIG’] in the same markets for decades, each with full knowledge of the other’s activities,
and [because] Plaintiff has been cognizant of the risk of consumer confusion since 1995[.]”
These findings alone, however, do not necessarily establish Agency had an actionable and
provable infringement claim in 1995. Instead, the Roederer six-factor analysis is the “the
applicable law governing trademark infringement” the district court should have used.
Roederer, 569 F.3d at 860. Thus, the district court abused its discretion. See id. at 860–
61 (holding the district court abused its discretion in applying laches to a trademark claim
because it failed to consider the appropriate principles governing progressive
encroachment and trademark infringement); see also Principal Sec., Inc. v. Agarwal, 23
F.4th 1080, 1083 (8th Cir. 2022) (“A district court abuses its discretion if it applies an
incorrect legal standard[.]”).
In view of the Roederer factors, we also find genuine disputes of fact that preclude
summary judgment on the basis of laches because, if resolved in favor of Agency, the
disputed facts could “tilt the entire balance” of the factfinder’s likelihood-of-confusion
analysis. Davis, 430 F.3d at 903 (quoting Duluth News–Tribune v. Mesabi Publ’g Co., 84
F.3d 1093, 1096 (8th Cir. 1996)). We have noted that of the six likelihood-of-confusion
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factors, “[a]ctual confusion in the marketplace is often considered the best evidence of
likelihood of confusion.” Safeway Transit LLC v. Disc. Party Bus, Inc., 954 F.3d 1171,
1179 (8th Cir. 2020) (quoting John Allan Co. v. Craig Allen Co., 540 F.3d 1133, 1140
(10th Cir. 2008)). Yet International, which bears the burden of proving the elements of
laches, see Roederer, 569 F.3d at 859, presented little-to-no evidence of actual confusion
in Missouri and Illinois, Agency’s geographic markets, before 2012.
On the other hand, Agency presented evidence that there was minimal actual
confusion until International changed its market strategy in 2012. Agency presented the
sworn testimony of Gregory Wherry, Agency’s owner, who stated Agency started noticing
an uptick in consumer confusion around 2013. Wherry testified there “was really no
[actual] consumer confusion” before then. Agency also presented voluminous telephone
conversation records; declarations and depositions of Agency employees; and declarations
of International customers or customer representatives, all evidencing instances of actual
confusion after 2013, and none evidencing actual confusion before.1 One particular
Agency employee, who had been answering phone calls for Agency since the 1980s,
testified that in 2015 Agency began getting “[a] lot more calls” of customers confusing
International and Agency. Another Agency employee, who began working with Agency
in 2012, recalled a significant increase in 2015 in telephone calls of customers confusing
International and Agency. Viewed in the light most favorable to Agency, this evidence,
combined with a general lack of evidence of actual confusion in the relevant geographic
markets before 2012, supports the inference that there was little-to-no actual confusion
before 2012 and a significant increase in actual confusion after 2013. We find such an
inference could tilt the balance of the progressive encroachment analysis and thus
represents a genuine dispute of material fact.
There are also disputed material facts as to the degree to which International’s
services competed with Agency’s services. The district court relied on evidence that
International was selling insurance directly to consumers for decades before 2012. The
1
These records are not inadmissible hearsay as International suggests because they
were not presented to prove the truth of the callers’ statements, but to show the callers’
states of mind at the time of the calls. See Fed. R. Evid. 801(c)(2).
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district court especially relied on International’s direct-to-consumer advertisements dating
back to 1970. The district court also cited testimonial evidence that Agency was heavily
involved in the commercial insurance market, a market in which International is
undisputedly involved. From these facts, the district court concluded the parties were both
using “AIG” to sell insurance in the direct-to-consumer and commercial markets long
before 2012, triggering its finding of laches.
But the relevant factor under the Roederer analysis is not whether the parties
competed, but the degree to which International’s allegedly infringing services competed
with Agency’s services. See Roederer, 569 F.3d at 860. International’s own corporate
representative admitted to uncertainty about the number of consumers who receive
International’s television advertisements. And there is also little-to-no evidence as to the
impact of International’s advertisements before 2012 in Missouri and Illinois—the relevant
markets here for analyzing likelihood of confusion. See Oriental Fin. Grp., Inc. v.
Cooperativa de Ahorro y Credito Oriental, 698 F.3d 9, 24 (1st Cir. 2012) (holding an
infringer’s longstanding use of a trademark did not defeat progressive encroachment where
the infringer failed to produce evidence of “how or in what degree [the trademark] was
disseminated” in the relevant geographic market for the relevant timeframe).
In contrast, Wherry testified that when he first learned of International’s use of
“AIG” around 1984, he believed International “operated at a different section of the
[insurance] business” than did Agency. Agency also cites testimony from International’s
corporate representative indicating AIG Direct, a direct-to-consumer division of
International, went by the name Matrix Direct before 2011 and did not use the “AIG” name
in advertising for life insurance until 2011. Wherry testified he believed it was AIG
Direct’s advertisements around 2013 that led to “a massive amount of consumer confusion
taking place.” Moreover, Agency is an insurance broker, while International creates
insurance products that are often sold through brokers like Agency. In fact, Agency has
sold International’s insurance products.
The district court was not persuaded by this evidence, stating it could not accept
Agency’s characterization that the parties were not competitors before 2012. But, again,
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the relevant inquiry under Roederer is the degree of competition. Id. at 860. And when
viewed in a light most favorable to Agency, the evidence creates a genuine dispute about
the degree to which International’s services under the “AIG” name competed with
Agency’s services before 2012, which is material to determining if and when Agency had
an actionable and provable infringement claim. Thus, again, we find a genuine dispute of
material fact exists, which prevents application of laches at the summary judgment stage.
Cf. Select Comfort, 996 F.3d at 936 (holding summary judgment for a trademark
infringement claim was foreclosed where a material “question of fact exist[ed] as to the
level of consumer sophistication”) (emphasis added).
We also reject the district court’s reliance on International’s 1995 cease-and-desist
letter to find Agency “has been cognizant of the risk of consumer confusion since 1995.”
Being “cognizant of the risk of customer confusion” is not the test for laches on trademark
infringement claims. Rather, the test is whether the likelihood of confusion was
sufficiently clear, under the Roederer six-factor analysis, to establish Agency had an
actionable and provable claim at that time. The cease-and-desist letter simply does not
satisfy this test when inferences are drawn in a light most favorable to Agency.
Agency was not required to take International’s word for it in a cease-and-desist
letter that there was a likelihood of confusion. And indeed, Agency’s response to the 1995
letter indicated it was not sold on International’s conclusion about the likelihood of
confusion, referring to International’s statements as “allegations of likelihood of
confusion” (emphasis added). When viewed in the light most favorable to Agency, the
letter merely establishes that Agency was aware of International’s claim to the mark and
its allegations of a likelihood of confusion. This does not establish that Agency had an
actionable and provable trademark infringement claim against International.
In sum, the district court abused its discretion by not applying the proper analysis
for progressive encroachment. Further, when we view the facts through the lens of the
proper six-factor analysis, we find genuine disputes of material fact that preclude summary
judgment on the basis of laches.
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III. Conclusion
For the reasons stated herein, we reverse the district court’s grant of summary
judgment to International.2
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2
Because we reverse the district court’s summary judgment in favor of International,
we necessarily reverse the district court’s mootness-based denial of Agency’s motion for
partial summary judgment on the issue of likelihood of confusion. We leave resolution of
the merits of Agency’s motion to the district court to decide in the first instance. We also
decline the invitation to decide Agency’s claim that the district court erred by dismissing
International’s counterclaims without prejudice. Agency argues the counterclaims should
be dismissed with prejudice because International acquiesced to Agency’s use of the mark
and unduly delayed in bringing its claims. Each of these issues requires resolution of fact-
intensive inquiries the district court has yet to decide. Thus, we decline to address these
issues for the first time on appeal. See Alliant Techsystems, Inc. v. Marks, 465 F.3d 864,
873 (8th Cir. 2006).
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