United States District Court, E.D. New York
June 14, 2004.
TOYOTA JIDOSHA KABUSHIKI KAISHA also doing business as TOYOTA MOTOR CORPORATION, and TOYOTA MOTOR SALES, U.S.A., INC., Plaintiffs,
ALIMENTS LEXUS INC. and HOWELL ASSOCIATES INC., Defendants
The opinion of the court was delivered by: DAVID TRAGER, District Judge
MEMORANDUM & ORDER
Plaintiffs Toyota Jidosha Kabushiki Kaisha, also doing business as
Toyota Motor Corporation, and its subsidiary Toyota Motor Sales, U.S.A.,
Inc. (collectively "Toyota" or "plaintiffs") filed this suit against
defendants Aliments Lexus Foods, Inc. ("Aliments") and Howell
Associates, Inc. ("Howell") (collectively "defendants") on January 2,
2002, alleging trademark and service mark dilution, trademark and service
mark infringement, trade name infringement, and unfair competition,
pursuant to 15 U.S.C. § 1125(a)(1), 1125(c) and 1114(c), N.Y. Gen. Bus.
Law § 360-1, and at common law. Plaintiffs seek injunctive relief, costs
and attorney fees.
Pending before the court is defendants' motion for summary judgment
pursuant to Fed.R. Civ. P. 56, on the basis that the action is barred under equitable principles
of estoppel by laches and/or acquiescence. For the following reasons,
defendants' motion is denied.
The following facts are undisputed unless otherwise indicated.
Plaintiff Toyota Motor Sales, U.S.A. is a California corporation whose
principal offices are in California. Amended Complaint ("Am. Compl.") ¶
3. Toyota Motor Sales is a wholly-owned subsidiary of co-plaintiff Toyota
Jidosha Kabushiki Kaisha ("Toyota Japan") a Japanese corporation doing
business as Toyota Motor Corporation. Id. Toyota has manufactured and
sold luxury automobiles in the U.S. under the trademark LEXUS since
1989. See Plaintiffs' Rule 56.1 Statement ("Pls.' Rule 56.1 Start.") ¶
1. Toyota also registered LEXUS as a trademark for automobiles in the
United States Patent and Trademark Office ("USPTO") under Registration
No. 1,574,718, which was issued on January 2, 1990. Am. Compl. ¶ 12.*fn1
Defendant Aliments Lexus Foods, Inc. is a Canadian company which has
been in the business of bottling, packaging, and packing fruit juice
products since 1990. See Memorandum of Law in Support of Defendants'
Motion for Summary Judgment ("Defs.' Mem.") Ex. 1, ¶ 3. Fruit juice is
Aliments' sole product. See Defs.' Rule 56.1 Stmt. ¶ 28. Defendant
Howell Associates, Inc., a U.S. company, is a food broker for sales of
LEXUS fruit juices in the U.S. for Aliments. See id. ¶ 1. Aliments was initially incorporated on July 4, 1990 as "173964 CANADA
Inc.," a name which was assigned by the company's lawyers in preparation
for filing, but was later changed to "Lexus Foods" in 1991 or 1992.
Defs.' Mem. Ex. 1, ¶ 3; Groff Decl. Ex. 8 at 3. Although the parties
dispute whether the name "Lexus" was selected in good faith, Raoul Landry
("Landry"), the company's president, asserted that he and the company's
vice-president, Roger Guglia ("Guglia") decided to use "Lexus" because
"it was easy to pronounce and did not require translation." Defs.' Mem.
Ex. A, ¶ 5.
On April 27, 1992, Aliments filed an application with the Canadian
Trademarks Office to register the name LEXUS for use with fruit juices in
Canada. Guglia testified that he had obtained an oral opinion from
Canadian counsel that the mark LEXUS was available for use and
registration for fruit juices in Canada. Defs.' Rule 56.1 Stmt. ¶ 2.
Toyota contested the application by filing a statement of opposition on
February 10, 1993. Id. ¶¶ 1, 3. In the course of the opposition
proceeding, Guglia submitted an affidavit dated August 12, 1994, in which
he detailed the nature and extent of the use made of LEXUS with fruit
juices by Aliments in Canada since 1992. Defs.' Mem. Ex. A, ¶ 9; Ex. 1.
At an unspecified date in 1993, Aliments made one shipment of LEXUS
juice products into the U.S. Defs.' Mem. Ex. A, ¶ 11. Prior to
commencing regular shipments into the U.S. in 1995, Guglia, through a
business associate, sought and obtained a legal opinion on the
availability of LEXUS for use in the U.S. market as a name for fruit
juices. Id. By opinion dated June 12, 1995, counsel indicated that LEXUS was available as a trademark for fruit juice.*fn2 According to
Aliments, the company never sought to register the LEXUS mark in the
U.S. because they believed that Toyota was objecting to Aliments'
registration of LEXUS for fruit juices in Canada but did not object to
their use of LEXUS as their trade name or mark for fruit juices. Id. ¶
13. Indeed, throughout the history of the Canadian opposition
proceedings, Toyota never issued a cease-and-desist demand upon Aliments
with respect to their use of the LEXUS mark. Id. ¶ 10. To avoid "another
legal battle" with Toyota, Aliments' president, Raoul Landry, therefore
decided not to register LEXUS as a mark for fruit juices in the U.S.,
Accordingly, on June 26, 1995, Aliments began regular shipments of
LEXUS branded juices to the U.S. Id. ¶¶ 11-12. Howell Associates handled
the distribution of LEXUS juices in the U.S. on behalf of Aliments.
Declaration of Allison S. Groff ("Groff Decl."), Ex. 16 at 49. Between
1995 and May 2002, annual sales of LEXUS fruit juices in the U.S. grew to
approximately U.S. $180,000. Defs.' Rule 56.1 Stmt. ¶ 17.*fn3 By 2001,
the U.S. constituted the largest single market for Aliments' LEXUS fruit
juices. Id. ¶ 18. On July 22, 1997, the Trademarks Opposition Board of the Canadian
Trademarks Office dismissed Toyota's opposition and found in favor of
Aliments. Groff Decl., Ex. 9. Toyota appealed the dismissal of their
opposition to the Federal Court of Canada, Trial Division. Id., Ex. 10.
While the appeal before the Canadian trial court was pending, Howard
Duchin ("Duchin"), an employee of Howell Associates, attended a
promotional event entitled "A Taste of Lexus" at the Belmont Racetrack in
New York in August 1999. Id., Ex. 16 at 49; Defs.' Mem. Ex. C. "A Taste
of Lexus" was a professional event sponsored by Lexus dealers to
introduce and promote new models of Toyota's Lexus automobiles. Groff
Decl., Ex. 16 at 49-50. At the event, Duchin gave a Lexus representative
his business card and discussed with him the possibility of using
Aliments' Lexus juices to help promote Toyota's Lexus automobiles. Id.,
Ex. 16 at 50-52. The Lexus representative informed Duchin that he would
look into the idea and contact him, but no further communication ensued.
Id., Ex. 16 at 51-52. Toyota asserts that this was the first time any
Toyota entity became aware of any activity by Aliments Lexus in the U.S.
Id., Ex. 15 at 104. As a result of Duchin's conversation with the Lexus
representative at the "Taste of Lexus" event, Toyota requested outside
counsel to investigate the use of the mark LEXUS for fruit juices in the
U.S. Id., Ex. 15 at 111. In the meantime, on August 31, 1999, the
Canadian trial court reversed the Opposition Board's decision. Id., Ex.
10. Aliments then appealed the trial court's decision to the Canadian
Federal Court of Appeal. Id., Ex. 11. While Aliments' appeal before the
Canadian appellate court was pending, Toyota received and reviewed the
initial portion of outside counsel's investigation results from January
until April 2000. Pls.' Rule 56 Stmt. ¶ 8.
On November 20, 2000, the Canadian appeals court reversed the trial
court's decision and found for Aliments. Groff Decl., Ex. 11. The Canadian Supreme Court
ultimately denied Toyota's request for leave to appeal on July 12, 2001.
Id., Ex. 12.
In April 2001, Toyota sent a cease and desist letter to Howell,
objecting to the use of the mark LEXUS in the U.S. Pls.' Rule 56 Stmt.
¶ 9. According to Toyota, a primary factor affecting the timing of the
April 2001 demand letter was the fact that Toyota had prevailed on the
first level of review in the opposition proceeding, which was now on
appeal before the Canadian appellate court. Groff Decl. Ex. 15 at 111.
After obtaining the advice of counsel, Aliments sent a response letter to
Toyota in May 2001 stating that they believed there was no likelihood of
confusion and declining to comply with Toyota's demand. See Defs.' Mem.,
Ex. A ¶ 15. On January 7, 2002, Toyota commenced the instant suit.
Defendants move for summary judgment on their first affirmative defense
of acquiescence, arguing that plaintiffs knew as early as 1994 that
defendants were using the LEXUS mark for fruit juices in Canada, yet
waited until 2001 before demanding that plaintiffs cease use of the mark
in Canada or in the U.S. See Defs.' Mem. at 9. This "silence," in
addition to Toyota's opposition to Aliments' registering (as opposed to
using) the LEXUS mark in Canada, indicated that Toyota acquiesced to
Aliments' use of the LEXUS mark. See id. Plaintiffs counter that
defendants have failed to produce evidence demonstrating that Toyota
indicated their consent through affirmative conduct. Plaintiffs further argue that Toyota's decision to not file suit in Canada to enjoin
Aliments' use of the mark is not the type of affirmative conduct that
supports an acquiescence defense. Plaintiffs' Memorandum in Opposition to
Defendants' Motion for Summary Judgment ("Pls.' Mem.") at 5-6.
Acquiescence refers to "cases where the trademark owner, by affirmative
word or deed, conveys its implied consent to another." TMT North Am.,
Inc. v. Magic Touch, 124 F.3d 876, 885 (7th Cir. 1997) (quoting 2 J.
Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 31:41
(4th ed. 1997)). Acquiescence, unlike laches, implies active consent to
an infringing use of the mark. ProFitness Physical Therapy Ctr. v.
Pro-Fit Orthopedic and Sports Physical Therapy P.C., 314 F.3d 62, 67 (2d
Cir. 2002)). A determination of acquiescence turns on "a consideration of
the circumstances of each particular case and a balancing of the
interests and equities of the parties." Carl Zeiss Stiftung v. VEB Carl
Zeiss Jena, 433 F.2d 686, 703 (2d Cir. 1970). To establish the defense of
acquiescence, three elements must be met: "(1) the senior user actively
represented that it would not assert a right or a claim; (2) the delay
between the active representation and assertion of the right or claim was
not excusable; and (3) the delay caused the defendant undue prejudice."
Deere & Co. v. MTD Holdings, Inc., No. 00 Civ. 5936, 2004 WL 324890, at
*22 (S.D.N.Y. Feb. 19, 2004) (quoting ProFitness, 314 F.3d at 67). Active
consent, in turn, is implied by "conduct on the plaintiff's part that
amount[s] to an assurance to the defendant, express or implied, that the
plaintiff would not assert his trademark rights against the defendant."
ProFitness, 314 F.3d at 68 (quoting Carl Zeiss Stiftung, 433 F.2d at
The sole evidence that Aliments proffers in support of its acquiescence
defense is: (1) that Toyota never made any demand upon Aliments to cease
use of LEXUS until 2001; and (2) that Aliments believed Toyota was only objecting to its Canadian registration
of LEXUS for fruit juices and not to their use of the mark. Although
Aliments correctly contends that "acquiescence can be found where there
is a course of conduct leading Defendants to believe that Plaintiffs did
not object is . . . well grounded in the law," see Defs.' Reply Mem. at
3, Aliments' evidence can be construed as inaction on Toyota's part, not
"a course of conduct." Furthermore, Aliments' belief that Toyota, in
filing an opposition to their application, was only objecting to
Aliments' registration of the LEXUS mark for fruit juice is not
tantamount to evidence of affirmative conduct on Toyota's part. At best,
the reasonableness and credibility of Aliments' belief as to the nature
of Toyota's objection are questions of fact that are more appropriately
evaluated by a fact finder. More significantly, Aliments' president
admitted he was unaware of any affirmative conduct which indicated that
Toyota did not object to the use of LEXUS for fruit juices in Canada.
Groff Decl., Ex. 14, at 100.
Since "silence is far from `active acquiescence'" in trademark
infringement actions, Aliments has not offered uncontroverted evidence
that Toyota actively acquiesced in Aliments' use of the LEXUS mark for
juice products in Canada and the U.S., See, e.g., Deere & Co., 2004 WL
324890, at *19, 22 (finding that plaintiff had not acquiesced to
defendant's use of unique color scheme on its lawn equipment, where sole
evidence of active acquiescence was that plaintiff never raised this
issue in a prior complaint against the defendant alleging Lanham Act
violations, unfair competition and dilution). For these reasons,
defendants' summary judgment motion as to their affirmative defense of
acquiescence is denied.
Defendants additionally move for summary judgment on their second
affirmative defense of laches. "Laches is an equitable defense which bars
injunctive relief where a plaintiff unreasonably delays in commencing an
action." Tri-Star Pictures, Inc. v. Leisure Time Prods., B.V., 17 F.3d 38,
44 (2d Cir. 1994). While laches is an equitable defense, it can bar both
injunctive relief and monetary relief in a trademark infringement
action. Deere & Co., 2004 WL 324890, at *18. To establish a defense of
laches, defendants must show that: (1) plaintiffs had knowledge of the
objectionable usage; (2) plaintiffs inexcusably delayed in taking
action; and (3) defendants will be prejudiced if plaintiffs were
permitted inequitably to assert their rights by their delay in bringing
this suit. Id. (quoting Fourth Toro Family Ltd. P'ship v. PV Bakery,
Inc., 88 F. Supp.2d 188, 196 (S.D.N.Y. 2000)). In addition, defendants
must show that they adopted their mark in good faith. Cuban Cigar Brands
N.V. v. Upmann Int'l, Inc., 457 F. Supp. 1090, 1098 (S.D.N.Y. 1978). "The
inquiry is a factual one," and the issue of whether laches bars a
plaintiff from equitable relief is entirely within the trial court's
discretion. Tri-Star Pictures, Inc., 17 F.3d at 44.
Contrary to defendants' assertion, the record does not clearly show
that plaintiffs' claims should be foreclosed by laches as a matter of
law. It is undisputed that, in August 1999, Toyota became aware that
LEXUS juice products were being sold in the U.S. when Howell's president
approached a Toyota representative at the "Taste of Lexus" event. Under
Second Circuit law, a presumption of unreasonable delay for taking action
arises if the plaintiff fails to bring suit within the six-year New York
statute of limitations for fraud, which is the statute of limitations
most analogous to trademark infringement. Conopco, Inc. v. Campbell
Soup Co., 95 F.3d 187, 191 (2d Cir. 1996). In addition, the statute of limitations applicable to a laches defense in a trademark
dilution claim is three years. Charles Atlas, Ltd. v. DC Comics, Inc.,
112 F. Supp.2d 330, 334 n.7 (S.D.N.Y. 2000). If the relevant time period
is within the statute of limitations, there is a presumption that laches
does not apply and defendants have the burden to establish otherwise.
Conopco, 95 F.3d at 191. However, if the relevant time period is outside
the statute of limitations, there is a presumption that laches does
apply, and plaintiffs have the burden of establishing otherwise. Id.
If the parties were to agree that Toyota's time to take action began to
run as of the "Taste of Lexus" event in August 1999 and ended when Toyota
issued its cease and desist letter in April 2001, a period of
approximately twenty months, there is no presumption of unreasonable delay
for the trademark dilution and the infringement claims since twenty
months is well within the applicable three- and six-year statutes of
limitations. Since the delay is less than the analogous statutes of
limitations, defendants maintain the burden of showing that the delay was
unreasonable. However, defendants provide no argument or facts to
overcome this burden. Instead Toyota's argument that the twenty-month
"delay" was reasonable under the circumstances is persuasive. Toyota
asserts that, while the company reviewed the investigation results of
LEXUS juices in the U.S. from January until April 2000, Toyota was also
the prevailing party in the Canadian opposition proceeding. Pls.' Mem. at
11. According to Toyota, the pendency of that appeal affected the timing
of its April 2001 cease and desist letter, in that if Toyota prevailed in
the final Canadian appeal, Aliments would be compelled to stop using the
LEXUS mark in Canada and possibly discontinue its exports to the U.S. or
change the name of its products. Id.
Notwithstanding the August 1999 "Taste of Lexus" event, defendants
charge that Toyota should have known of the sale of LEXUS juice products in June 1995, when
Aliments began regular shipments of LEXUS fruit juices to the U.S.
Ascribing constructive knowledge as of June 1995 would mean that Toyota's
time for filing its April 2001 cease and desist letter fell approximately
two months short of the six-year statute of limitations for trademark
infringement, and well over three years beyond the three-year statute of
limitations for trademark dilution. Because these longer "delays" affect
the presumption of laches in this case, the issue is whether Toyota
should have known that the LEXUS mark was being used for juice products
in the U.S. as early as June 1995.
Although proof of knowledge is usually required for the defense of
laches, a plaintiff can still be barred if "the defendant's conduct has
been open and no adequate justification for ignorance is offered."
Chandon Champagne Corp. v. San Marino Wine Corp., 335 F.2d 531, 535 (2d
Cir. 1964). "[W]here the question of laches is in issue, the plaintiff is
chargeable with such knowledge as he might have obtained upon inquiry,
provided the facts already known to him were such as to put upon a man of
ordinary intelligence the duty of inquiry." Johnston v. Standard Mining
Co., 148 U.S. 360, 370 (1893); Polaroid Corp. v. Polarad Elec. Corp.,
182 F. Supp. 350, 355 (E.D.N.Y. 1960), aff'd, 287 F.2d 492 (2d Cir. 1961)
(applying this standard in a trademark infringement case).
In support of their position that Toyota should be charged with
constructive knowledge as of June 1995, defendants pont out that
plaintiffs knew Aliments was using LEXUS as its trade name in Canada as
early as February 1993, and that plaintiffs knew Aliments was using LEXUS
for its fruit juices in Canada as early as August 1994, when Guglia
submitted an affidavit in the course of the Canadian opposition
proceeding detailing the use made of LEXUS with fruit juices in Canada.
See Defs.' Mem. at 4, 8. Defendants have also proffered a U.S. State
Department profile of Canada dated June 2002 which characterizes the U.S.-Canadian relationship as "perhaps
the closest and most extensive in the world," with a "staggering volume
of trade the equivalent of $1.4 billion a day in goods, services, and
investment income. . . ." See Defs.' Ex. B. Due to this trading
relationship, and a "reasonable expectation" that Aliments would expand
its sales into the U.S., defendants assert that Toyota at least had a
duty to inquire. Defs.' Mem. at 8.
With respect to this duty to require, Aliments challenges the adequacy
of Toyota's enforcement efforts and faults the company for failing to
engage in any independent investigation prior to the events of August
1999. In particular, Aliments points to the deposition testimony of
Martin Smith, the managing counsel in the legal department of Toyota
Motor Sales, U.S. A. Smith testified that, when he first joined the
department in 1991, Toyota's primary means of finding potential
infringers of the LEXUS mark was to receive information from Lexus field
personnel, Lexus dealers, other infringers, other customers, and outside
counsel. Defs.' Ex. D at 62. Toyota employees also conducted searches and
performed some investigative work to ascertain potentially infringing uses
of the LEXUS mark and to look for applications for use of the same mark.
Id. at 69. Smith also affirms that, since 1991, Toyota has filed civil
actions in courts and inter paries registration proceedings in the USPTO
to contest infringing and diluting misuses of the LEXUS mark, and from
1991 through 2002, there were at least 500 different enforcement matters
involving the alleged misuse of the LEXUS mark in the U.S. See
Declaration of Martin L. Smith ("Smith Decl.") ¶¶ 3-4.
In light of these enforcement efforts and the opposition proceedings in
Canada, it is indeed strange that Toyota never engaged in any independent
investigation prior to 1999. Nonetheless, defendants provide no authority
for their argument that a legal duty to inquire must be assumed under the circumstances, and we decline to impose such a duty upon Toyota
at this time. Instead, viewing the record in the light most favorable to
Toyota, there is a genuine issue of material fact as to when Toyota
should have known about Aliments' use of LEXUS for juices sold in the
Specifically, aside from the acts or lack thereof of Toyota and its
counsel during the pendency of the Canadian action, there are questions
of fact as to the openness of Aliments' U.S. sales activities beginning
in June 1995. Plaintiffs point out that the papers filed in the Canadian
proceeding did not disclose any reference to any sale of LEXUS juice
products in the U.S. in 1995. See Groff Decl. ¶ 4(o). Furthermore,
plaintiffs also note that Howell Associates' president, Howard Duchin,
testified that LEXUS juice products in the U.S. were sold only to
institutional food service distributors, and not to any supermarket
chains, drugstore chains, or restaurants. Groff Decl. Ex. 16 at 31. This
limited distribution of LEXUS juices in the U.S. conceivably may not have
come immediately to Toyota's attention. Furthermore, the existence of a
strong bilateral trade relationship does not automatically create an
inference that a Canadian company such as Aliments can be expected to
export its products to the U.S. at an indeterminate time. Under these
circumstances, a reasonable fact-finder could conclude that Toyota had no
constructive knowledge of Aliments' use of the mark in 1995.
These facts are distinguishable from those cases where the plaintiff
was charged with constructive notice of an infringing use. For example,
in Chattanoga Mfg., Inc. v. Nike, Inc., the Seventh Circuit upheld the
district court's holding on summary judgment that plaintiff had
constructive notice of defendant Nike's alleged infringement of the
trademark JORDAN. In that case, it was undisputed that Nike had launched
a prominent, national advertising campaign for its Michael
Jordan-endorsed products, and plaintiff conceded that the U.S. media
referred to products identified or associated with Michael Jordan with the term "Jordan." 301 F.3d 789, 793
(7th Cir. 2002). In Chandon Champagne Corp., the Second Circuit upheld
the district court's dismissal of plaintiffs' complaint on laches
grounds, noting that plaintiffs had the opportunity to discover the prior
existence of defendant's federal registration of the trademark "Pierre
Perignon," and that advertisements and the official minimum resale prices
of defendant's product had been published in trade journals at least 9
years earlier. 335 F.2d at 535. And following a bench trial in McDonald's
Corp. v. Druck and Gerner, the district court found that plaintiff
McDonald's had constructive knowledge of defendant's use of the mark
"McDental" for its dental practice, where defendant's business was
located in a "highly trafficked" shopping mall less than one mile away
from a McDonald's franchise, defendant had engaged in widespread
advertising in various media, and McDonald's employees were regularly
present in the same geographic area as defendant's business.
814 F. Supp. 1127, 1137 (N.D.N.Y. 1993).
In this case, defendants offer no other fact to support a finding of
constructive knowledge, other than their argument that Toyota, which
already knew that LEXUS juices were being sold in Canada, should have
known and should have investigated the possibility that Aliments would
someday sell LEXUS juices in the U.S. because of the U.S.-Canadian
trading relationship. It should also be noted that Aliments never
registered LEXUS as a mark for juices in the U.S.,*fn4 and the record
does not reflect the extent to which LEXUS juices were marketed in the
U.S. in 1995, the extent of public awareness of LEXUS juices in the U.S.,
or other indicia that would put an ordinary person on notice of an
infringing use. Given the dispute of material fact on the issue of constructive
knowledge, summary judgment cannot be granted as to defendants' laches
Plaintiffs argue that defendants' "unclean hands" in selecting the
LEXUS mark for juice products precludes them raising the acquiescence and
laches defenses. Although this argument is moot, given the dismissal of
defendants' summary judgment motion as to both defenses, it will
nonetheless be addressed here for the sake of thoroughness.
"Under the doctrine of unclean hands, a court `may decline to exercise
its equitable powers in favor of a party whose unconscionable act . . .
has immediate and necessary relation to the matter that he seeks in
respect of the matter in litigation.'" Nat'l Baseball Hall of Fame and
Museum, Inc. v. All Sports Promotions Group, Inc., 99-CIV-3635, 2001
U.S. Dist. LEXIS 1592, at *33 (S.D.N.Y. Feb. 20, 2001) (quoting
Aris-Isotoner Gloves, Inc. v. Berkshire Fashions, Inc., 792 F. Supp. 969,
969 (S.D.N.Y. 1992)). A party asserting acquiescence or laches as a
defense must therefore have clean hands. Hermes Int'l v. Lederer de Paris
Fifth Ave., Inc., 219 F.3d 104, 107 (2d Cir. 2000); Nat'l Baseball, 2001
U.S. Dist. LEXIS 1592, at *33. See, e.g., Hermes Int'l, 219 F.3d at 107
(defendants who intentionally traded off of the plaintiff's mark and
protected products could not invoke doctrine of laches as a defense);
Dial-A-Mattress, 841 F. Supp. at 1357 (defendants who were fully aware of
plaintiff's claim of superior rights in mark could not succeed on laches
defense); McDonald's Corp., 814 F. Supp. at 1138 (defendants failed to
establish laches defense, where defendants' intention was to capitalize
on and benefit from plaintiff's marketing techniques). Based on the present record, there is a genuine issue of material fact
as to whether Aliments adopted the mark LEXUS in good faith. On the one
hand, plaintiffs cite to statements made by Aliments' vice president,
Robert Guglia, that one of the principal reasons Aliments adopted LEXUS
was because it "represented a quality name." Groff Decl., Ex. 8 at 3.
Aliments' president, Raoul Landry, also testified at his deposition
that, other than Toyota's LEXUS automobile, he was not aware of other
reasons why the LEXUS name was associated with quality. Groff Decl., Ex.
14 at 27-28. Plaintiffs also point out that Landry and Guglia admitted
they knew of the LEXUS name before selecting the LEXUS mark for their
products. Groff Decl., Ex. 8 at 4; Ex. 14 at 25. Defendants, on the other
hand, point to Guglia's explanation that the name LEXUS represented a
quality name because the word also had no meaning in English or French,
could be pronounced in different languages, and did not require
translation. Defs.' Reply Mem. Ex. E at 3-4; Ex. F at 27-28; Ex. G at
24. Guglia also testified that he disagreed with Landry's 2002 testimony
that LEXUS meant "quality" in automobiles and claimed he knew nothing
about the quality of LEXUS automobiles when Aliments adopted that name in
1991. Defs.' Reply Mem. Ex. F at 29-31.
Accordingly, there is a genuine issue of material fact as to
defendants' good faith in adopting the LEXUS mark. However, other issues
of material fact with respect to defendants' laches defense i.e.,
whether Toyota should have known of the potentially infringing use of the
LEXUS mark in the U.S. in 1995 preclude granting summary judgment in
defendants' favor on the laches defense. Conclusion
For the foregoing reasons, defendants' motion for summary judgment is