Intellectual Property Law

Seven Year Delay, Coupled with Witness' Death, Leads to Dismissal for Laches

By Michael Atkins

In Matsunoki Group, Inc. v. Timberwork Oregon, Inc., plaintiff home builder claimed that defendant home builder infringed its HAIKU HOUSES trademark by displaying a confusingly similar mark on its Web site.

The problem was, plaintiff first asserted those claims in 2001, but filed suit in 2008.

Defendant argued that plaintiff’s claims were barred by laches, which bars an otherwise valid claim when a plaintiff’s unreasonable delay in enforcing its rights unfairly prejudices the defendant.

The Northern District of California found that’s what happened here. In particular, it found a witness’ death and the defendant’s reliance on the continued use of its mark constituted undisputed evidence of unfair prejudice. On April 16, therefore, it dismissed plaintiff’s claims on summary judgment.

“‘Evidentiary prejudice includes such things as lost, stale, or degraded evidence, or witnesses whose memories have faded or who have died,’” the court found. “One of the most important witnesses in this case, Gordon Steen, died in 2004. Matsunoki asserts that Steen authored the intellectual property at issue in this case, an assertion Defendants strongly dispute. Without the opportunity to cross examine Steen, Defendants’ ability to defend themselves will be hamstrung. Steen is clearly the best source for information about the manner in which the intellectual property in question was authored and transferred. If Matsunoki had not delayed in bringing the suit, it could have tried this case before Steen’s death, or his testimony could have at least been preserved in some fashion. Therefore, the Court concludes that Matsunoki’s delay has caused Defendants evidentiary prejudice.

“A defendant may demonstrate expectation prejudice ‘by showing that it took actions or suffered consequences that it would not have, had the plaintiff brought suit promptly.’ After Matsunoki did not respond to Timberwork’s February 27, 2001 letter asserting Timberwork’s rights to the intellectual property, Timberwork continued to use the mark in its catalogs, promotional material and websites and has built its business in reliance on the marks. It would be inequitable to permit Matsunoki to wait seven years before bringing suit and then profit from Defendants’ successes.”

The case cite is Matsunoki Group, Inc. v. Timberwork Oregon, Inc., No. 08-04078, 2010 WL 1532351 (N.D. Cal. April 16, 2010).

Full post as published by Seattle Trademark Lawyer on April 22, 2010 (boomark / email).