Did the 8th Circuit recently make “progressive encroachment” more of a formalistic, procedural headache than it had been? That’s how its decision in Champagne Louis Roederer v. J. Garcia Carrion, S.A., No. 08-2907 (8th Cir. June 24, 2009), seemed to me.
Roederer makes the famous CRISTAL high-end champagne; Carrion and its predecessor (“Carrion”) make a much cheaper Spanish sparkling wine under the marks CRISTALINO and CRISTALINO JAUME SERRA. There were plenty of times when Roederer had been aware of CRISTALINO. Roederer opposed Carrion’s attempts to register one or more of these marks in Spain in 1989, in Colombia in 1991, and in the U.S. in the mid-1990s. Roederer also saw an affidavit in another case in 1995 from which it learned that a Cost Plus store in California was stocking CRISTALINO. In 2002, Carrion filed another application for CRISTALINO in the U.S., and Roederer filed a TTAB opposition.
But Roederer didn’t file a district court action until 2006. The district court dismissed the lawsuit based on laches because it found that Roederer learned in 1995 that Carrion was selling CRISTALINO in the U.S., and by that time Carrion was selling as many bottles of CRISTALINO as Roederer was selling of CRISTAL.
The 8th Circuit reversed. It held that progressive encroachment can alter the date that a laches defense begins to run (which other courts have noted). But where the 8th Circuit seemed (at least to me) to go further was in holding that, where progressive encroachment is asserted, the date runs from the time that the trademark holder first possesses an “actionable and provable” claim. It then said that this analysis requires an assessment of all of the likelihood of confusion factors at the time that the plaintiff first received notice of the defendant’s infringing use (in this case, the court assumed that was 1995, when Roederer found out about the California Cost Plus sales). The 8th Circuit reversed and remanded because the district court hadn’t made that full assessment.
My two cents: This test just seems too formalistic. Also, it would almost necessarily seem to have the effect of unduly lengthening and complicating trials. The parties will have to prove infringement at two times: the present time, and whatever the laches date is alleged to be. I have always conceptualized progressive encroachment as focusing on a less rigid analysis. Courts would look at objective and subjective facts concerning what the infringer had been doing and how confusing and damaging that was, and then see whether there was any substantial and relatively sudden change to the nature of the use or the extent of damage, as opposed to the simple results of natural growth in the marketplace. If it was just natural growth, laches began running at the earlier date; if there was a big, sudden change, laches began running at the later date. My view, of course, could be wrong, but in any event be forewarned about how the 8th Circuit apparently now analyzes progressive encroachment allegations.