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Minn. Pet Breeders, Inc. v. Schell & Kampeter, Inc.

United States Court of Appeals for the Eighth Circuit

June 17, 1994, Submitted ; December 6, 1994, Filed

No. 93-4134

Opinion

 [***1141]   [*1243]  LOKEN, Circuit Judge.

This appeal poses the question, is the owner of a registered trademark entitled to recover a willful infringer's profits from a trade area where the owner does not compete. The governing statute is § 35(a) of the Lanham Act, 15 U.S.C. § 1117(a). The district court 2 held that the trademark owner must  [*1244]  prove actual market penetration of a geographic area to recover an infringer's profits. The court therefore granted summary judgment dismissing Minnesota Pet-Breeders, Inc.'s ("MPB"), claim for an accounting of Schell & Kampeter, Inc.'s ("S & K"), profits. Although we conclude that the district court construed the Lanham Act's equitable remedies too restrictively, on the facts of this case we affirm.

 [**2] I.

We review the judgment in favor of S & K in accordance with our well-established standards for reviewing a district court's grant of summary judgment. See, e.g., Woodsmith Publishing Co. v. Meredith Corp., 904 F.2d 1244, 1247 (8th Cir. 1990).

MPB manufactures dry pet food in Glyndon, Minnesota. MPB began selling pet food under the brand name "PRO-DIET" in 1980 and was granted federal registration of the trademark "PRO-DIET" in January 1987. MPB's annual sales of "PRO-DIET" pet foods rose to a peak of $ 70,380 in 1989 and then declined to $ 24,203 in 1992. Essentially all of those sales were in the States of Minnesota, North Dakota, and South Dakota.

S & K is a Missouri company that sells dry pet food under the brand name "NUTRA-NUGGETS." In late 1986 or early 1987, S & K added the word "ProDiet" to its existing "NUTRA-NUGGETS" pet food labels. When it learned of MPB's newly-registered mark, S & K unsuccessfully attempted to purchase the mark from MPB and then made a "conscious decision" to continue using the "NUTRA-NUGGETS ProDiet" packaging and labels. S & K's president testified during discovery, "no Minnesota milk farmer is going to tell [**3]  us what name we can use."

No doubt advised of the risk of trademark infringement liability, S & K rather quickly began to phase out its use of the word "ProDiet." It did this in stages -- moving first to the label "NUTRA-NUGGETS Professional Diet" and then to the label "NUTRA-NUGGETS Professional." MPB alleges that S & K stretched out this transition period to maximize its wrongful use of the "ProDiet" mark. In addition, MPB notes that S & K failed to change its Uniform [***1142]  Product Code designations and invoicing codes, thus causing customers to equate the new "NUTRA-NUGGETS Professional Diet" and "NUTRA-NUGGETS Professional" products with the prior infringing "NUTRA-NUGGETS ProDiet" products. S & K sold $ 663,882 of "NUTRA-NUGGETS ProDiet" products in 1987 and 1988, and $ 6,649,606 of "NUTRA-NUGGETS Professional Diet" products from 1987 to 1990, when its transition to the admittedly non-infringing "NUTRA-NUGGETS Professional" mark was completed. It is undisputed that S & K did not sell any "NUTRA-NUGGETS ProDiet" or "NUTRA-NUGGETS Professional Diet" products in Minnesota, North Dakota or South Dakota, the only States in which MPB sold "PRO-DIET" products.

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41 F.3d 1242 *; 1994 U.S. App. LEXIS 34188 **; 33 U.S.P.Q.2D (BNA) 1140 ***

Minnesota Pet Breeders, Inc., Plaintiff - Appellant, v. Schell & Kampeter, Inc., Defendant - Appellee.

Prior History:  [**1]  Appeal from the United States District Court for the District of Minnesota. District No. CIV 3-90-277. Honorable Richard H. Kyle, District Judge.

CORE TERMS

infringing, trademark, profits, Lanham Act, products, registered, district court, injunction, user, accounting, willful, trade area, injunctive relief, geographic area, penetration, summary judgment, registration, equitable, senior, sales, food, monetary relief, common law, remedies, pet

Civil Procedure, Appeals, Reviewability of Lower Court Decisions, Timing of Appeals, Trademark Law, Remedies, Equitable Relief, Equitable Accountings, General Overview, Infringement Actions, Standards of Review, Appellate Jurisdiction, Final Judgment Rule, Dismissal, Voluntary Dismissals, Governments, Courts, Common Law, Trademark Cancellation & Establishment, Priority, Business & Corporate Compliance, Causes of Action Involving Trademarks, Determinations, Trademark Enforcement by US Customs, Commercial Use, Conveyances, Damages, Types of Damages, Profits, Registration Procedures, Federal Registration, Burdens of Proof, Likelihood of Confusion, Consumer Confusion, Reverse Confusion, Copyright Law, Infringement Profits, Confusion Among Noncompeting Products, Factors for Determining Confusion, Intent of Defendant to Confuse, Punitive Damages