Rebecca Goodgame Ebinger, United States District Judge
Timothy J. Zarley, John Gilbertson, Joshua James Conley, Zarley Law Firm PLC, Des Moines, IA, for Plaintiff.
Janice M. Thomas, Lamson, Dugan & Murray, LLP, West Des Moines, IA, Amanda Mestan Richards, Betty Neuman & McMahon PLC, Davenport, IA, Benjamin J. Kenkel, Bradshaw Fowler Proctor & Fairgrave, P.C., Des Moines, IA, for Defendants.
ORDER RE: PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT AND DEFENDANTS’ MOTION FOR SUMMARY JUDGMENTRebecca Goodgame Ebinger, United States District Judge
I. INTRODUCTIONPlaintiff Moon Seed LLC sues Defendants Dru Weidner and Moon Seed Service LLC for unfair competition under the Lanham Act, common law trademark infringement under Iowa law, and unjust enrichment under Iowa law. Plaintiff moves for summary judgment on its claims for unfair competition and common law trademark infringement. Defendants filed a cross motion for summary judgment on all of Plaintiff's claims.
For the reasons set forth below the Court grants Plaintiff's motion for partial summary judgment. The Court denies Defendants’ motion for summary judgment.
II. BACKGROUNDThe following facts are either uncontested or, if contested, viewed in the light most favorable to Plaintiff for purposes of Defendants’ motion for summary judgment. See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp. , 475 U.S. 574, 588, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).
In the mid-1990s, Dennis Moon formed Moon Seed to sell corn seeds and soybean seeds to Iowa farmers. Pl.’s Sealed Statement Material Facts Supp. Mot. Partial Summ. J. ¶ 1, ECF No. 52-2. In 2011, Dan Anderson became a partner in Moon Seed. Id. ¶ 2. That same year, Anderson formally organized the business with the Iowa Secretary of State to create Plaintiff Moon Seed LLC. Id. ¶ 3; Pl.’s Sealed App. 1 Supp. Mot. Partial Summ. J. APP. 010–13, ECF No. 52-3. In 2015, Dennis Moon sold his ownership stake in Plaintiff to Anderson for $540,000. ECF No. 52-2 ¶ 4; see also Defs.’ Sealed Resp. Pl.’s Statement Material Facts ¶ 4, ECF No. 62-1. Prior to Dennis Moon's sale of his interest, Plaintiff utilized a warehouse owned by Dennis Moon in Brooklyn, Iowa. ECF No. 52-2 ¶ 6; ECF No. 62-1 ¶ 6; Defs.’ Sealed App. Part 1 Supp. Mot. Summ. J. Def. App. p. 28, ECF No. 63-2 (Dennis Moon's declaration). After Dennis Moon sold his interest in Plaintiff, he leased the warehouse to Plaintiff. ECF No. 52-3 at APP. 182–85. From at least 2000 until May 2021, Dennis Moon's property featured a "Moon Seed" sign. ECF No. 52-2 ¶ 7; ECF No. 62-1 ¶ 7; Defs.’ Sealed Statement Material Facts Supp. Mot. Summ. J. ¶ 140, ECF No. 63.
In 2014, Weidner began working for Plaintiff. Weidner Decl. ¶ 7, ECF No. 52-3 at APP. 166; ECF No. 52-2 ¶ 8; ECF No. 62-1 ¶ 8. As a salesperson for Plaintiff, Weidner established relationships with prospective customers, sold seed, and delivered seed to customers. ECF No. 52-2 ¶ 39. A feature of the seed sales industry is the relationship between salespersons and customers. Pl.’s Sealed Resp. Defs.’ Statement Material Facts ¶ 118, ECF No. 75-1. It is important for customers to have "trust and confidence" in their salesperson. Id. ¶ 119. Seed sales are conducted almost entirely through direct person-to-person transactions. ECF No. 52-2 ¶ 36. The season for seed sales starts in "August/September." ECF No. 75-1 ¶ 134. By mid-January, two-thirds of all seed sales should be complete. Id. ¶ 136. Some seed purchases take months to complete. See ECF No. 75-1 ¶ 131.
In 2019, Anderson struggled with alcohol. See ECF No. 52-2 ¶ 47. Anderson was hospitalized for some duration of November 2019. ECF No. 75-1 ¶ 166. Weidner stepped in to finalize some of Anderson's seed orders. ECF No. 75-1 ¶ 169. At the end of 2019, Weidner decided to go into business on his own. Weidner Dep. 105:2–10, ECF No. 52-3 at APP. 070. However, Weidner maintained his employment with Plaintiff until late July 2020. ECF No. 52-2 ¶ 15; ECF No. 62-1 ¶ 15. On July 17, 2020, before his resignation, Weidner filed with the Iowa Secretary of State to create "Moon Seed Service LLC." ECF No. 52-2 ¶ 17; ECF No. 62-1 ¶ 17.
Prior to July 2020, Plaintiff sold seed from Wyffels, Stine, and Kruger. See Anderson Dep. 99:17–19, ECF No. 63-3 at Def. App. p. 89. On July 24, 2020, Wyffels terminated its seed representative agreements with Plaintiff. ECF No. 52-2 ¶ 21; 62-1 ¶ 21. That same day, Weidner resigned from his employment with Plaintiff. ECF No. 52-2 ¶ 15; ECF No. 62-1 ¶ 15. On August 19, 2020, Weidner, on behalf of Moon Seed Service, entered into a seed representative agreement with Wyffels. ECF No. 52-2 ¶ 23; ECF No. 62-1 ¶ 23. That same month, Stine terminated its dealer agreement with Moon Seed and entered into a dealer agreement with Weidner and Moon Seed Service. ECF No. 52-2 ¶ 24; ECF No. 62-1 ¶ 24. Around that time, Kruger also terminated its dealer agreement with Moon Seed and entered into a dealer agreement with Weidner and Moon Seed Service. ECF No. 52-2 ¶ 25; ECF No. 62-1 ¶ 25. When Weidner first met with clients in his capacity as the owner of Moon Seed Service, he informed them he "parted ways with Dan [Anderson]." Weidner Dep. 169:15–20, ECF No. 52-3 at APP. 109.
In November 2020, Dennis Moon entered into a lease agreement with Weidner and Moon Seed Service to rent the Brooklyn, Iowa warehouse to Moon Seed Service. ECF No. 52-2 ¶ 27; see ECF No. 63-1 at Def. App. p. 317. In December 2020, Dennis Moon and Plaintiff entered into a "Settlement Agreement and Release" whereby Dennis Moon terminated Plaintiff's lease agreement for the Brooklyn, Iowa warehouse and released Plaintiff from obligations under the lease as of January 1, 2021. ECF No. 52-3 at APP. 140. Some customers drove their own vehicles to the Brooklyn, Iowa warehouse to pick up their seed orders. See ECF No. 52-2 ¶ 37; ECF No. 62-1 ¶ 37. Moon Seed Service sells seed from Wyffels, Stine, and Kruger—the same brands Plaintiff used to sell. Weidner Dep. 169:7–14, ECF No. 52-3 at APP. 109; see Anderson Dep. 99:17–19, ECF No. 63-3 at Def. App. p. 89. The "Moon Seed" sign remained in front of the Brooklyn, Iowa warehouse until May 2021, when it was removed in response to a preliminary injunction issued by the Court. ECF No. 62-1 ¶ 28. Defendants contend Weidner had no authority to remove the sign. ECF No. 75-1 ¶¶ 141–42. At the hearing on the parties’ motions, Defendants’ counsel represented the sign was not "removed by [Defendants]." Mots. Hr'g Tr. 30:3, ECF No. 78. In a deposition following the hearing on the parties’ motions, Dennis Moon testified he "suppose[d]" Weidner removed the sign, but he was not there when "they ... took it down." Moon Dep. 134:13–135:6, Pl.’s Ex. 3 Supp. Emergency Mot. Show Cause, ECF No. 79-2 at 012–13.
Weidner testified that he chose his business name to honor Dennis Moon. See Weidner Dep. 144:4–13, ECF No. 52-3 at APP. 092. Weidner further testified he added the word "Service" to his business name because he could not "call it exactly what Dan [Anderson] calls [his business]." Id. at 143:15–20.
In 2020, Defendants sponsored Pheasants Forever of Poweshiek County's Annual Banquet. ECF No. 75-1 ¶¶ 236–38. Plaintiff had sponsored the Annual Banquet in previous years. Id. ¶ 237. Each year, the Annual Banquet sponsors were recognized in a booklet. Id. ¶ 236. When Defendants sponsored the Annual Banquet, volunteers for Pheasants Forever created a sponsor recognition page featuring "Moon Seed Service" with the same font and appearance as the "Moon Seed" logo. See Ryan Decl. ¶ 28, ECF No. 63-2 at Def. App. p. 34 ; compare ECF No. 52-3 at APP. 159, with id. at APP. 172. Rick Ryan, the President of Pheasants Forever, is a former independent contractor for Plaintiff and current sub-representative for Moon Seed Service. See ECF No. 75-1 ¶¶ 234–35; Weidner Dep. 210:17–25, ECF No. 52-3 at APP. 115. Ryan states he advised Pheasants Forever volunteers Moon Seed Service was a new sponsor. Ryan Decl. ¶ 28, ECF No. 63-2 at Def. App. p. 34. Ryan states the volunteers used the template from the previous year's booklet to create Moon Seed Service's sponsorship recognition page. Id. ¶ 27. Weidner had no input in the design for the sponsorship recognition page. Weidner Decl. ¶¶ 37–38, ECF No. 52-3 at APP. 170.
Plaintiff filed an action in this Court alleging, in part, claims for unfair competition in violation of the Lanham Act (Count I); common law trademark infringement under Iowa law (Count II); and unjust enrichment under Iowa law (Count III). Second Am. Compl., ECF No. 68; see also Compl., ECF No. 1. Plaintiff also moved for a preliminary injunction under the Lanham Act to enjoin Defendants from using the "Moon Seed" mark or any similar mark. ECF No. 25. The Court granted Plaintiff's motion. ECF No. 38. Plaintiff now moves for summary judgment on its unfair competition and trademark infringement claims in Counts I and II. ECF No. 53. Defendants resist Plaintiff's motion. ECF No. 60. Defendants filed a cross motion for summary judgment on all Plaintiff's claims. ECF No. 61. Plaintiff resists Defendants’ motion. ECF No. 75.
The parties’ motions came before the Court for hearing on February 2, 2022. Mots. Hr'g Mins, ECF No. 77. Attorneys John Gilbertson and Joshua Conley appeared on behalf of Plaintiff. Id. Attorney Amanda Richards appeared on behalf of Defendants. Id. Having considered the parties’ oral arguments and supporting briefs and exhibits, the Court rules on the parties’ pending motions.
Additional facts are set forth below as necessary.
III. LEGAL STANDARDUnder Federal Rule of Civil Procedure 56, the Court must grant a party's motion for summary judgment if no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a) ; Celotex Corp. v. Catrett , 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A genuine issue of material fact exists where the issue "may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted." Id. at 248, 106 S.Ct. 2505.
When analyzing whether a party is entitled to summary judgment, a court "may consider only the portion of the submitted materials that is admissible or useable at trial." Moore v. Indehar , 514 F.3d 756, 758 (8th Cir. 2008) (internal quotation marks omitted) (quoting Walker v. Wayne Cnty. , 850 F.2d 433, 434 (8th Cir. 1988) ). The nonmoving party "receives the benefit of all reasonable inferences supported by the evidence, but has ‘the obligation to come forward with specific facts showing that there is a genuine issue for trial.’ " Atkinson v. City of Mt. View , 709 F.3d 1201, 1207 (8th Cir. 2013) (quoting Dahl v. Rice Cnty. , 621 F.3d 740, 743 (8th Cir. 2010) ). "In order to establish the existence of a genuine issue of material fact, a plaintiff may not merely point to unsupported self-serving allegations." Anda v. Wickes Furniture Co., Inc. , 517 F.3d 526, 531 (8th Cir. 2008) (cleaned up). "The plaintiff must substantiate [the] allegations with sufficient probative evidence that would permit a finding in [plaintiff's] favor." Smith v. Int'l Paper Co. , 523 F.3d 845, 848 (8th Cir. 2008) (internal quotation marks and citation omitted). "Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial," and the moving party is entitled to judgment as a matter of law. Torgerson v. City of Rochester , 643 F.3d 1031, 1042–43 (8th Cir. 2011) (en banc) (internal quotation marks omitted) (quoting Ricci , 557 U.S. at 586, 129 S.Ct. 2658 ).
IV. DISCUSSIONPlaintiff alleges Defendants’ use of the "Moon Seed" mark constitutes unfair competition in violation of the Lanham Act, 15 U.S.C. § 1125(a), and common law trademark infringement. ECF No. 68 ¶¶ 40–52. Plaintiff also alleges a claim for unjust enrichment under Iowa law. Id. ¶¶ 53–56.
Plaintiff moves for summary judgment on its Lanham Act and common law trademark infringement claims. ECF No. 53; Pl.’s Sealed Br. Supp. Mot. Partial Summ. J. 6–13, ECF No. 52-1. Defendants filed a cross motion for summary judgment on all of Plaintiff's claims, arguing Plaintiff cannot establish unfair competition under the Lanham Act as a matter of law. Defs.’ Sealed Br. Supp. Mot. Summ. J. 11–24, ECF No. 63-1. Defendants argue Plaintiff's common law trademark infringement claim fails for the same reasons as its Lanham Act claim. Id. at 30. Finally, Defendants argue Plaintiff's unjust enrichment claim fails as a matter of law. Id. at 38–39.
Plaintiff requests the Court find Defendants’ alleged infringing conduct to be an "exceptional case" under the Lanham Act and award Plaintiff its attorney's fees. ECF No. 52-1 at 14–30. Defendants similarly request the Court find this case constitutes an "exceptional case" under the Lanham Act due to Plaintiff's conduct and award Defendants their attorneys’ fees. ECF No. 63-1 at 24–30.
The Court first considers the parties’ arguments as to Plaintiff's claims for unfair competition and trademark infringement. The Court then considers the parties’ arguments as to whether this case constitutes an "exceptional case" under the Lanham Act. Finally, the Court addresses Defendants’ motion as to Plaintiff's unjust enrichment claim.
A. Unfair Competition and Trademark Infringement
Though Plaintiff's claims for unfair competition under the Lanham Act in Count I and a trademark infringement in Count II are distinct, they are based on the same substantive allegations and require Plaintiff to prove the same elements. See Hubbard Feeds, Inc. v. Animal Feed Supplement, Inc. , 182 F.3d 598, 601 (8th Cir. 1999) (outlining elements plaintiff must provide to succeed on a Lanham Act claim); Cmty. State Bank, Nat'l Ass'n v. Cmty. State Bank , 758 N.W.2d 520, 525–27 (Iowa 2008) (outlining elements plaintiff must prove to succeed on a common law trademark infringement claim); see also Weems Indus., Inc. v. Teknor Apex Co. , 540 F. Supp. 3d 839, 847–48 (N.D. Iowa 2021). As such, the Court utilizes the same analysis for both claims.
The purpose of the Lanham Act is "to protect persons engaged in commerce against ... unfair competition." Am. Italian Pasta Co. v. New World Pasta Co. , 371 F.3d 387, 390 (8th Cir. 2004) (internal quotation marks and citation omitted). To do so, "[t]he Lanham Act ... prohibit[s] the unauthorized use of a mark in commerce if it would cause confusion as to whether there is an ‘affiliation, connection, or association’ with another person." Davis v. Walt Disney Co. , 430 F.3d 901, 905 (8th Cir. 2005) (quoting 15 U.S.C. § 1125(a)(1)(A) ). The Lanham Act provides protection from infringement to registered trademarks as well as common law trademarks. See Everest Cap. Ltd. v. Everest Funds Mgmt., L.L.C. , 393 F.3d 755, 759 (8th Cir. 2005).
Plaintiff does not have a registered trademark. See ECF No. 52-1 at 6–7. However, Plaintiff argues it has a common law trademark. See id. at 6–8. To establish a claim for common law trademark infringement under the Lanham Act, Plaintiff must first demonstrate it owns a valid common law trademark. See Everest Cap. , 393 F. 3d at 759 ; First Bank v. First Bank Sys., Inc. , 84 F.3d 1040, 1044 (8th Cir. 1996). Then Plaintiff must show Defendants’ use of Defendants’ mark is "likely to cause confusion as to the origin of [Defendants’] products and services, or whether [Defendants] are affiliated with [Plaintiff]." See Everest Cap. , 393 F.3d at 759 (internal quotation marks omitted) (quoting 15 U.S.C. § 1125(a)(1)(A) ).
1. Common law trademark"[A] common[ ]law trademark arises from the adoption and actual use of a word, phrase, logo, or other device to identify goods or services with a particular party." First Bank , 84 F.3d at 1044. A common law trademark owner has exclusive rights to its mark within the relevant geographic area. See Wrist-Rocket Mfg. Co., Inc. v. Saunders Archery Co. , 578 F.2d 727, 730 (8th Cir. 1978) ("[I]f two parties acquire common-law rights in a trademark in different areas and the prior user registers the mark ... the other common-law owner retains exclusive rights to the mark in areas where his rights antedated registration."). "To succeed on its claim of a common[ ]law trademark ... [Plaintiff] must prove: (1) that it actually used [the mark "Moon Seed"] in connection with" seed vending services provided in the relevant geographic area; "and (2) that [the mark "Moon Seed"] identified [Plaintiff] as the provider of those services in the minds of consumers." First Bank , 84 F.3d at 1044.
Regarding the second element of a common law trademark claim, for a mark to identify a plaintiff as the provider of certain goods or services in the minds of consumers it must be sufficiently distinct. Id. at 1045. "To determine whether a mark is distinctive and thus entitled to trademark protection, [a court] must ... categorize it as generic, descriptive, suggestive, or arbitrary." Schwan's IP, LLC v. Kraft Pizza Co. , 460 F.3d 971, 974 (8th Cir. 2006). "[A]n arbitrary or fanciful mark [is] the strongest possible trademark, thus entitling it to the maximum degree of legal protection ...." First Bank , 84 F.3d at 1045. "An arbitrary mark is one that uses a common word to describe a product in an unfamiliar way, while a fanciful mark is one invented solely for use as a trademark." Roederer v. J. Garcia Carrion, S.A. , 732 F. Supp. 2d 836, 864 (D. Minn. 2010) (citing Insty*Bit, Inc. v. Poly-Tech Indus., Inc. , 95 F.3d 663, 673 n.10 (8th Cir. 1996) ). "A descriptive trademark is the weakest protectable mark and requires proof that the mark has acquired secondary meaning." First Bank , 84 F.3d at 1045. Secondary meaning is established "by showing that through long and exclusive use in the sale of the user's goods, the mark has become so associated in the public mind with such goods that the mark serves to identify the source of the goods and to distinguish them from those of others." Id. (internal quotation marks omitted) (quoting Aromatique, Inc. v. Gold Seal, Inc. , 28 F.3d 863, 870 (8th Cir. 1994) ).
As to the first element of a common law trademark, the record supports finding Plaintiff used the name Moon Seed in conjunction with its seed vending services since "the mid-1990s." Anderson Decl. ¶ 1, Pl.’s Sealed App. Supp. Mot. Summ. J. APP. 008, ECF No. 52-3. "Moon Seed" sign was displayed outside the Brooklyn, Iowa warehouse for twenty years. See Weidner Dep. 247:4–25, ECF No. 52-3 at APP. 121. Plaintiff provides photographs demonstrating its use of the "Moon Seed" mark in conjunction with its seed vending services in Iowa. ECF No. 52-3 at APP. 155–59. Defendants do not appear to contest Plaintiff's use of the "Moon Seed" mark, rather Defendants argue Plaintiff fails to demonstrate the second element—i.e., that the "Moon Seed" mark is sufficiently distinct. See ECF No. 63-1 at 11–14.
As to the second element, Plaintiff's "Moon Seed" mark is sufficiently distinct to identify Plaintiff as the provider of seed vending services in the minds of consumers. Cf. First Bank , 84 F.3d at 1044. The word "Moon" does not describe Plaintiff's seed vending services. Though "Moon" is the surname of the company's founder, it is a common word that describes seed and Plaintiff's seed vending services in an unfamiliar way. The word "Moon" is not typically associated with agricultural seed. See Roederer , 732 F. Supp. 2d at 864. As such, the "Moon Seed" mark is arbitrary and inherently distinctive. Cf. First Bank , 84 F.3d at 1045. To the extent "seed" renders the "Moon Seed" mark descriptive, Plaintiff's use of the mark "Moon Seed" in conjunction with its seed vending services for approximately thirty years establishes "long and exclusive use" sufficient to establish secondary meaning. Cf. id.
Defendants fail to generate an issue of material fact as to whether Plaintiff owns a valid common law trademark. As such, Plaintiff is entitled to judgment as a matter of law on this issue. Because the Court finds in Plaintiff's favor on this aspect of its Lanham Act claim, Defendants are not entitled to summary judgment on this ground.
2. Likelihood of confusionThe Court now considers whether Plaintiff demonstrates Defendants’ use of the mark "Moon Seed Service LLC" is likely to confuse customers as to whether Defendants are affiliated with Plaintiff. See Everest Cap. , 393 F.3d at 759 ; First Bank , 84 F.3d at 1044. In evaluating a trademark infringement claim, "[t]he ultimate inquiry always is whether, considering all the circumstances, a likelihood exists that consumers will be confused about the source of the allegedly infringing product." Everest Cap. , 393 F. 3d at 759 (internal quotation marks omitted) (quoting Hubbard Feeds, Inc. v. Animal Feed Supp., Inc. , 182 F.3d 598, 602 (8th Cir. 1999) ). The Court considers six non-exclusive factors in determining whether there is a likelihood of confusion under the circumstances, including: 1) the strength of the trademark; 2) similarity of the marks; 3) competitive proximity; 4) alleged infringer's intent to pass off its goods as the product of another; 5) actual confusion; 6) and the degree of care exercised by the purchaser. SquirtCo. v. Seven-Up Co. , 628 F.2d 1086, 1091 (8th Cir. 1980).
a. Strength of the trademark
First, the "Moon Seed" mark, as discussed above, is arbitrary and thus "inherently distinctive and protectible." Schwan's IP , 460 F.3d at 974 ; supra Part IV.A.1. To the extent "Moon Seed" could be considered a descriptive mark, Plaintiff's long and exclusive use of the mark establishes secondary meaning. Cf. First Bank , 84 F.3d at 1045. Because the "Moon Seed" mark is entitled to trademark protection, this factor weighs in favor of finding likelihood of confusion.
b. Similarity of the marks
Plaintiff contends the "Moon Seed" mark and "Moon Seed Service" mark are nearly identical in sound and meaning. ECF No. 52-1 at 9–10. Defendants argue the "Moon Seed" and "Moon Seed Service" marks are not similar in the industry. ECF No. 63-1 at 16–19.
To determine whether two marks are confusingly similar, the Court "consider[s] the marks’ visual, aural, and definitional attributes and compare[s] the trade dress of the products in determining whether the total effect conveyed by the two marks is confusingly similar." Luigino's, Inc. v. Stouffer Corp. , 170 F.3d 827, 830 (8th Cir. 1999). "The use of identical dominant words does not automatically mean that two marks are similar." Id. The Court "must look to the overall impression created by the marks." Id.
Only one word separates "Moon Seed Service" from "Moon Seed." Thus, the marks sound almost identical. Both companies are in the seed vending business in Iowa. As such, the meaning of the marks is similar. The marks’ logos do feature some differences. Compare ECF No. 52-3 at APP. 159, with id. at APP. 189. Overall, the "sight, sound, and meaning" test supports finding the marks are sufficiently similar to cause confusion. Cf. Luigino's , 170 F.3d at 830. Defendants contend the marks are not similar in the industry because the farmer-customers rely on the salespersons and not the name of the company when purchasing seed. ECF No. 63-1 at 17. However, Defendants’ argument does not consider the total effect of a similar mark under the circumstances where a former salesperson for Plaintiff—Weidner—is now associated with a company bearing nearly the exact same name as Plaintiff and engaging in the same line of business. Additionally, Defendants utilized the same Brooklyn, Iowa warehouse used for years by Plaintiff. Notably, Defendants entered into the lease for the Brooklyn, Iowa warehouse before Plaintiff was released from its lease. For months after Defendants entered into the lease, the warehouse still featured a "Moon Seed" sign. The Court is not persuaded the customers’ relationships with individual salespersons is sufficient under the circumstances to meaningfully distinguish "Moon Seed Service" from "Moon Seed."
Given the nearly identical names used in the same line of business (seed vending), the difference in salespersons working for each company is insufficient to generate a genuine dispute of material fact as to whether the marks are confusingly similar. This factor weighs in favor of likelihood of confusion.
c. Competitive proximity
Plaintiff argues the parties’ goods and services are virtually identical in substance, customer base, trade channels, and geographic areas. ECF No. 52-1 at 10–11. Defendants argue the parties are not in competitive proximity because they sell different brands of seed. ECF No. 63-1 at 19–20.
"Competitive proximity is one factor to be considered, even though infringement may be found in the absence of direct competition." SquirtCo. , 628 F.2d at 1091. "A showing of direct competition ... is not required, and the ... ‘degree of competition’ requires a broader examination of the products’ relationship in the market." Kemp v. Bumble Bee Seafoods, Inc. , 398 F.3d 1049, 1056 (8th Cir. 2005). "Where products are wholly unrelated, this factor weighs against a finding that confusion is likely. Where products are related, however, it is reasonable for consumers to think that the products come from the same source, and confusion, therefore, is more likely." Id.
The parties sell seed for agricultural application to farmers and other customers in eastern and central Iowa. ECF No. 52-2 ¶¶ 34–35. Thus, the parties sell related products—though different brands—in the same geographic area. Cf. Kemp , 398 F.3d at 1056. The parties’ sales are conducted primarily through direct person-to-person transactions. As such, the parties conduct their business of related products in the same manner and in similar geographic locations.
However, Defendants sell the same seed brands previously sold by Plaintiff. See Anderson Dep. 99:17–19, ECF No. 63-3 at Def. App. p. 89; Weidner Dep. 169:7–14, ECF No. 52-3 at APP. 109.
Given the similarities in the parties’ goods and services, trade channels, and geographic areas of operation, the difference in brand of seed distributed is insufficient to generate a genuine dispute of material fact as to competitive proximity. This factor weighs in favor of finding likelihood of confusion.
d. Intent to pass off goods as the product of another
Plaintiff argues Defendants demonstrated an intent to trade off the goodwill associated with Plaintiff's mark. ECF No. 52-1 at 11–12. Defendants argue Weidner informed customers he parted ways with Anderson and never used the name "Moon Seed Service" when meeting with customers. ECF No. 63-1 at 20. Defendants argue this conduct demonstrates Defendants did not intend to pass of its goods and services as Plaintiff's. Id.
"[T]he inference of intent is strengthened when the parties have had a prior relationship, because [s]uch a relationship provides evidence of the alleged infringer's intent to trade on the plaintiff's goodwill." Insty*Bit , 95 F.3d at 671 (second alteration in original) (internal quotation marks and citation omitted). In Insty*Bit , the Eighth Circuit found the defendant's solicitation of the same customers and distributors to which it had previously sold the plaintiff's products was probative of the defendant's intent to pass off its competing product as the plaintiff's product. Id.
Weidner's first meetings with customers in his capacity as owner of Moon Seed Service and his decision to lease Plaintiff's former warehouse space support finding Defendants intended to pass off their goods and services as Plaintiff's. Weidner testified he initially informed customers: "Dan [Anderson] and Wyffels had parted ways, Weidner "had parted ways with Dan [Anderson]," and that Weidner intended "to go out on [his] own and hopefully take on a Wyffels dealership" agreement. Weidner Dep. 169:15–22, ECF No. 52-3 at APP. 109. Weidner's testimony emphasizes he informed Plaintiff's customers he "parted ways" with Anderson, but not with Plaintiff. Weidner's failure to distinguish himself from Plaintiff supports finding Weidner chose the name Moon Seed Service to give the appearance of continuity when initially meeting with Plaintiff's former customers. Additionally, Weidner states he informed customers Wyffel's "parted ways" with Anderson, but he does not state he informed them Wyffels parted was with Plaintiff. Weidner's failure to advise customers that Wyffels terminated its sales representative agreements with Plaintiff and his indication that he hoped to sell Wyffels—a seed brand Plaintiff previously sold to its customers—further supports Defendants intended to give customers the appearance of continuity with Plaintiff's business. Further, Weidner's decision to enter into a lease agreement for the same warehouse Plaintiff leased, which featured a "Moon Seed" sign, further supports finding Defendants intended to utilize Plaintiff's goodwill by giving the appearance of continuity with Plaintiff. Because the parties’ business is primarily conducted through salesperson-to-customer direct transactions, Plaintiff's former customers were familiar with Weidner in his capacity as a salesperson for Plaintiff. As such, the nature of the transactions further supports inferring Weidner's failure to distinguish himself from Plaintiff when meeting with Plaintiff's former clients constitutes an intent to confuse customers.
The parties rely on varying testimony by Weidner regarding his intention in choosing the name "Moon Seed Service." The Court recognizes it must not "weigh the evidence or attempt to determine the credibility" of Weidner's testimony regarding his intention in choosing the name "Moon Seed Service." Kammueller v. Loomis, Fargo & Co. , 383 F.3d 779, 784 (8th Cir. 2004). Viewing the record as a whole, Weidner's explanation of choosing the name "Moon Seed Service" to honor Dennis Moon is insufficient to generate a genuine issue of material fact on this factor where Defendants chose a nearly identical name to Plaintiff's, failed to distinguish themselves from Plaintiff when initially meeting with customers, and leased Plaintiff's former warehouse—which featured a "Moon Seed" sign. Given the overwhelming support in the record for finding Defendants intended to pass off their goods and services as Plaintiff's, a reasonable jury could not find in Defendants’ favor.
e. Actual confusion
Plaintiff points to the Pheasants Forever sponsorship recognition page to argue actual confusion occurred from Defendants’ use of the "Moon Seed Service" mark. ECF No. 52-1 at 12–13. Plaintiff contends the only plausible explanation for Moon Seed Service's sponsorship recognition to have the same appearance as Plaintiff's past sponsorship recognition is the creator's confusion as to whether Plaintiff and Defendants were the same. Id. Defendants rely on a declaration by Rick Ryan, Pheasants Forever's President to argue there was no actual confusion regarding the Pheasants Forever sponsorship recognition page. ECF No. 63-1 at 20–22.
"Under the fifth factor, [the Court] examines incidents of actual confusion." Sensient Techs. Corp. v. SensoryEffects Flavor Co. , 613 F.3d 754, 768 (8th Cir. 2010). "Although such incidents are proof of the likelihood of confusion, the plaintiff is not required to bring forth incidents of actual confusion to succeed in an infringement case." Id. "In analyzing this factor, weight is given to ‘the number and extent of instances of actual confusion.’ " Id. (quoting Duluth News-Trib., a Div. of Nw. Publ'ns, Inc. v. Mesabi Publ'g Co. , 84 F.3d 1093, 1098 (8th Cir. 1996) ). "[E]ven several isolated incidents of actual confusion that occur initially upon the creation of a potentially confusing mark are insufficient to establish a genuine issue of material fact as to the likelihood of confusion." Duluth News–Trib. , 84 F.3d at 1098.
Plaintiff posits one instance of actual confusion, which Defendants contest based on a declaration from Rick Ryan. See ECF No. 63-1 at 20–22. Ryan, Pheasants Forever's President and former independent contractor for Plaintiff, denies any confusion as to whether Moon Seed Service was related to Plaintiff. See Ryan Decl. ¶¶ 4, 16, ECF No. 63-2 at Def. App. p. 31, 33. Ryan states Pheasants Forever volunteers created the sponsorship recognition for Plaintiff in past years. See id. ¶ 20. For the 2020 sponsorship recognition, Ryan notified the volunteers "Anderson was not sponsoring and ... Dru Weidner and his company Moon Seed Service, L.L.C. w[ere] ... new sponsor[s]." Id. ¶¶ 26–28. Ryan states volunteers use the template from the past year to create the sponsorship recognition pages. Id. As a result, the sponsorship recognition page for Moon Seed Service utilized the same font and overall appearance of Plaintiff's prior sponsorship recognition page, with the addition of the word "Service" and the substitution of Weidner's contact information for Anderson's. Id.
Ryan contends he was not confused as to whether Defendants were affiliated with Plaintiff. See Ryan Decl. ¶ 16, ECF No. 63-2 at Def. App. p. 33. Ryan is a sub-representative for Moon Seed Service. See Weidner Dep. 210:17–25, ECF No. 52-3 at APP. 115. As such, Defendants may not merely rely on Ryan's self-serving statements to argue there was no actual confusion. Cf. Anda , 517 F.3d at 531. While Ryan contends he was not confused, he does not state the volunteers charged with creating the sponsorship recognition page were not confused. He states he directed Pheasants Forever volunteers that Anderson was no longer a sponsor, but he does not indicate he informed volunteers that Plaintiff was no longer a sponsor. Defendants’ sponsorship recognition page appears to use the same font and graphic as Plaintiff's prior sponsorship recognition. Given these similarities, the record demonstrates Ryan's failure to differentiate Defendants from Plaintiff resulted in confusion by the volunteers as to whether Defendants were affiliated with Plaintiff.
Defendants argue a single incident of alleged confusion by volunteers for a conservation group is insufficient to show an appreciable number of farming customers will be confused. See ECF No. 63-1 at 22 (quoting Duluth , 84 F.3d at 1098 ). Though a single contested instance of actual confusion can be probative of likelihood of confusion, it is insufficient by itself to demonstrate likelihood of confusion. The Court notes Plaintiff cites no other instances of actual confusion. However, Plaintiff need not provide evidence of actual confusion to succeed on its Lanham Act claim. As such, this factor neither weighs in favor of nor against finding likelihood of confusion.
f. Degree of care exercised by the purchaser
Defendants argue the degree of care exercised by customers purchasing field crop seed demonstrates there was no likelihood of confusion resulting from Defendants use of the "Moon Seed Service" mark. ECF No. 63-1 at 22–23. Plaintiff resists, arguing customer sophistication as to seed brand is irrelevant because knowledge of seed does not equal knowledge of the company the seed is purchased from. ECF No. 75 at 12–13.
"[T]he sixth factor examines the conditions of purchase and the degree of care expected of customers." Sensient Techs. Corp. , 613 F.3d at 769. "In considering this factor, [the Court] must stand in the shoes of the ordinary purchaser, buying under the normally prevalent conditions of the market and giving the attention such purchasers usually give in buying that class of goods." Id. (internal quotation marks and citation omitted). "This factor is more important in confusion-of-source cases where the degree of care that the purchaser exercises in purchasing a product can eliminate the confusion that might otherwise exist." Id. (internal quotation marks and citation omitted).
The parties sell field crop seed primarily to farmers, some of whom are sophisticated about the brand of seed they intend to purchase. Anderson Dep. 12:6–24, ECF No. 63-2 at Def. App. p. 38. These transactions can be thousands of dollars and are not impulse buys. Id. at 13:4–8. While Defendants focus on the farmers’ knowledge of seed brands, they provide no evidence indicating farmers are sophisticated as to seed vendors or exercise a degree of care that would remedy any confusion about the source of a seed sale.
Seed sales primarily occur in direct transactions between salesperson and the customer. The record indicates farmers rely on relationships with the salespersons and are knowledgeable about seed brands. There is nothing in the record indicating customers exercise a significant degree of care in purchasing from a particular vendor. If Weider contacts a customer to sell a brand of seed he used to sell as an employee for Plaintiff while operating under a company name nearly identical to Plaintiff's, there is nothing about the customer's knowledge regarding seed brands that would eliminate any confusion as to whether Defendants are affiliated with Plaintiff. Cf. Sensient Techs. Corp. , 613 F.3d at 769. Such knowledge would only be apparent if Plaintiff's former customers were informed that Plaintiff no longer sold a particular brand of seed. However, Weidner testified that when he initially met with customers in his capacity as owner of Moon Seed Service, he informed them Wyffels had parted ways with Anderson—not with Plaintiff.
Defendants fail to generate a genuine dispute of material fact as to whether customers’ degree of care in purchasing seed diminishes confusion about Defendants’ affiliation with Plaintiff. This factor weighs in favor of finding a likelihood of confusion.
Considering all the SquirtCo. factors, in light of the record as a whole, Plaintiff demonstrates a likelihood of confusion resulting from Defendants’ use of the "Moon Seed Service" mark. Defendants fail to point to sufficient evidence from which a reasonable jury could find Defendants’ use of the "Moon Seed Service" mark did not create a likelihood of confusion under the circumstances.
Viewing the record as a whole, Plaintiff demonstrates both the common law trademark and likelihood of confusion elements of its Lanham Act claim. Because Defendants fail to generate a genuine dispute of material fact as to either element of Plaintiff's Lanham Act claim, Plaintiff is entitled to summary judgment on Count I. Because Plaintiff is entitled summary judgment on its Lanham Act claim, the Court finds Plaintiff is similarly entitled to summary judgment on its common law trademark claim under Iowa law. See supra Part IV.A. n.2.
Plaintiff requests to seek a determination of damages at a future date. ECF No. 52-1 at 31. As such, the Court declines to determine damages in this Order. B. Exceptional Case
The Lanham Act provides, "[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party." 15 U.S.C. § 1117(a). Since Plaintiff is entitled to summary judgment on its Lanham Act claim, the Court considers Plaintiff's request that the Court find this case constitutes an "exceptional case," entitling Plaintiff to an award of reasonable attorney's fees.
Plaintiff argues Defendants’ conduct of stepping into Plaintiff's shoes and continuing Plaintiff's business without authorization or compensation warrants finding this an exceptional case under the Lanham Act. ECF No. 52-1 at 14–17. Defendants argue, in part, Plaintiff's request is precluded on summary judgment because Plaintiff has reserved the issue of damages for trial. ECF No. 62 at 5–6. Defendants contend Plaintiff cannot be deemed a "prevailing party" under such circumstances. See id.
In Octane Fitness LLC v. ICON Health & Fitness, Inc. , the United States Supreme Court considered the phrase "exceptional case" in the Patent Act's attorney fees provision, which features the same language as the Lanham Act's attorney fees provision. See 572 U.S. 545, 554, 134 S.Ct. 1749, 188 L.Ed.2d 816 (2014). In construing the phrase "in accordance with its ordinary meaning," the Supreme Court considered an "exceptional case" to be "one that stands out from others with respect to the substantive strength of a party's litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated." Id. at 553–54, 134 S.Ct. 1749 (internal quotation marks and citation omitted); see also Noxell Corp. v. Firehouse No. 1 Bar-B-Que Rest. , 771 F.2d 521, 526 (D.C. Cir. 1985) ("[W]e think ‘exceptional,’ as Congress used the word in section 35 of the Lanham Act, is most reasonably read to mean what the word is generally understood to indicate—uncommon, not run-of-the-mill."). The Supreme Court stated, "[d]istrict courts may determine whether a case is "exceptional" in the case-by-case exercise of their discretion, considering the totality of the circumstances." Octane Fitness , 572 U.S. at 554, 134 S.Ct. 1749.
The Eighth Circuit has not adopted the Octane Fitness exceptional case definition for Lanham Act claims. However, other courts of appeals and district courts in the Eighth Circuit have applied to the Octane Fitness exceptional case definition. See, e.g., Romag Fasteners, Inc. v. Fossil, Inc. , 866 F.3d 1330, 1334–35 (Fed. Cir. 2017) ; SunEarth, Inc. v. Sun Earth Solar Power Co. , 839 F.3d 1179, 1180–81 (9th Cir. 2016) ; Baker v. DeShong , 821 F.3d 620, 622–25 (5th Cir. 2016) ; Slep–Tone Entm't Corp. v. Karaoke Kandy Store, Inc. , 782 F.3d 313, 317–18 (6th Cir. 2015) ; Ga.–Pac. Consumer Prods. LP , 781 F.3d 710, 721 (4th Cir. 2015) ; Fair Wind Sailing, Inc. v. Dempster , 764 F.3d 303, 314–15 (3d Cir. 2014) ; Pocket Plus, L.L.C. v. Runner's High, LLC , No. 21-CV-4-CJW-MAR, 579 F.Supp.3d 1082, 1087 (N.D. Iowa Jan. 11, 2022) ("In light of Octane Fitness , the Court rejects plaintiff's definition of ‘exceptional’ as requiring ‘particularly egregious conduct such as bad faith, asserting frivolous claims, or repeatedly engaging in wasteful or irresponsible litigation tactics.’ "). As such, the Court considers whether the facts here demonstrate an "exceptional case" as defined by Octane Fitness.
In Yah Kai World Wide Enterprises, Inc. v. Napper , the District Court for the District of Columbia applied the Octane Fitness "exceptional case" definition to a claim for attorney's fees under the Lanham Act where the defendant ousted the plaintiff and essentially assumed plaintiff's business. 292 F. Supp. 3d 337, 365–67 (D.C. Dist. 2018). The court acknowledged the D.C. Circuit's "exceptional cases" standard at the time—which required the plaintiff to demonstrate willful or bad faith infringement to receive an award of attorney's fees—may not have survived Octane Fitness . Id. at 366. The court determined that regardless of Octane Fitness ’s effect on the D.C. Circuit's willfulness requirement, the conduct at issue in Yah Kai was "undoubtedly extraordinary." Id. The court noted the defendants "deliberate heist" and "intentional freeriding on the goodwill that [plaintiff] had established with customers" was "exceedingly unusual" and thus "far from run-of-the-mill." Id. at 367 (emphasis in original).
Considering the totality of the circumstances, the record here supports finding this case constitutes an "exceptional case" as defined in Octane Fitness. Here, Weidner decided to start his own business more than six months before resigning from his employment with Plaintiff. Months after his decision, Weidner organized Moon Seed Service LLC as an Iowa limited liability company while still working for Plaintiff. Defendants entered into a lease agreement for the Brooklyn, Iowa warehouse Plaintiff utilized before Plaintiff's lease was terminated. Once Defendants’ lease began, the warehouse property still featured the same "Moon Seed" sign that was on the property during Plaintiff's lease term. When Weidner met with customers initially on behalf of Moon Seed Service, he informed customers he was no longer affiliated with Anderson but did not inform them he was no longer affiliated with Plaintiff. While Defendants’ conduct is not as extreme as that in Yah Kai , the Court need not find Defendants acted in the same extreme or willful manner to find this case exceptional under the Lanham Act. Defendants’ conduct can be construed as efforts to provide an appearance of continuity with Plaintiff. Such conduct warrants finding this is an exceptional case, entitling Plaintiff to an award of attorney's fees. Because these circumstances are sufficient to render this case not "run-of-the-mill," the Court need not consider the import of Defendants’ counsel's incorrect statement to the Court that Defendants did not remove the "Moon Seed" sign.
As to Defendants’ argument that Plaintiff is not a prevailing party because it has reserved the issue of damages, the Court considers the Eighth Circuit's three principles in determining whether there is a prevailing party.
Those three principles are:
First, in order to be a prevailing party, a claimant must show that there has been a court-ordered change in the legal relationship between the plaintiff and the defendant.
Second, a prevailing party is a party in whose favor a judgment is rendered, regardless of the amount of damages awarded.
Third, a claimant is not a prevailing party merely by virtue of having acquired a judicial pronouncement unaccompanied by judicial relief.
Doe v. Nixon , 716 F.3d 1041, 1048 (8th Cir. 2013) (internal quotation marks and citations omitted. As discussed above, the Court finds Plaintiff is entitled to summary judgment on its Lanham Act claim. The Court grants Plaintiff's request for a permanent injunction. While the permanent injunction may not constitute all of Plaintiff's judicial relief, it is "actual relief on the merits ... [that] materially alters the legal relationship between the parties by modifying the [D]efendant[s]’[ ] behavior in a way that directly benefits ... [P]laintiff." Id. As such, the Court's finding in Plaintiff's favor and issuance of a permanent injunction is sufficient to deem Plaintiff a "prevailing party" for the purpose of awarding attorney's fees under the Lanham Act.
C. Unjust EnrichmentPlaintiff alleges a claim for unjust enrichment under Iowa law. ECF No. 68 ¶¶ 53–56. Defendants move for summary judgment on Plaintiff's claim, arguing Plaintiff cannot show Weidner derived any benefit from use of the "Moon Seed" mark. ECF No. 63-1 at 38–39. Defendants further argue Anderson's conduct caused Plaintiff's loss of business, therefore Plaintiff's unjust enrichment claim is barred by the doctrine of unclean hands. Id. at 39. Plaintiff resists, arguing Defendants cannot rely on the unclean hands affirmative defense because they fail to show Plaintiff engaged in "bad conduct." ECF No. 75 at 16–17. Plaintiff further argues the record demonstrates it is entitled to summary judgment on its unjust enrichment claim. Id. at 17–20.
"The doctrine of unjust enrichment is based on the principle that a party should not be permitted to be unjustly enriched at the expense of another or receive property or benefits without paying just compensation." State, Dep't of Hum. Servs. ex rel. Palmer v. Unisys Corp. , 637 N.W.2d 142, 154 (Iowa 2001). "To recover under a theory of unjust enrichment, the plaintiff must establish: (1) defendant was enriched by the receipt of a benefit; (2) the enrichment was at the expense of the plaintiff; and (3) it is unjust to allow the defendant to retain the benefit under the circumstances." Meardon v. Register , 994 F.3d 927, 936 (8th Cir. 2021), reh'g denied (May 26, 2021) (internal quotation marks omitted) (quoting Palmer , 637 N.W.2d at 154–55 ).
"The doctrine of unclean hands rests on the principle that courts sitting in equity will not provide shelter or aid to a party who seeks the benefit of their own wrongdoing." JP Morgan Chase Bank, Nat. Ass'n v. Ackley , No. 12-1338, 2013 WL 1749783, at *1 (Iowa Ct. App. Apr. 24, 2013) (citing Opperman v. M. & I. Dehy., Inc. , 644 N.W.2d 1, 6 (Iowa 2002) ). "[W]henever a party who seeks to ... obtain some equitable remedy has violated good conscience or good faith ... the doors of equity will be shut." Id. (omissions in original) (internal quotation marks omitted) (quoting Opperman , 644 N.W.2d at 6 ). "To avail oneself of the defense, the bad conduct must have damaged or prejudiced the defensive party in some way." Id. (citing Midw. Mgmt. Corp. v. Stephens , 353 N.W.2d 76, 81 (Iowa 1984) ). "The defense of the clean hands doctrine is not favored by the courts." Id. (internal quotation marks omitted) (quoting Butler v. Butler , 253 Iowa 1084, 114 N.W.2d 595, 619 (1962) ).
A genuine issue of material fact precludes summary judgment on Plaintiff's unjust enrichment claim. Defendants argue Plaintiff fails to show Weidner derived any benefit from the use of "Moon Seed." ECF No. 63-1. Defendants rely on Anderson's deposition testimony affirming no one had told him they bought from Weidner "solely because [Weidner] used the name Moon Seed." Anderson Dep. 229:8–14, ECF No. 63-3 at Def. App. p. 133; see also ECF No. 63-1 at 39. Plaintiff contends Defendants received the benefit of access to Plaintiff's clients after Weidner determined he would leave Plaintiff in late 2019, but stayed on and formed relationships with clients he did not have previously. ECF No. 75 at 18. Plaintiff argues that by maintaining his employment with Plaintiff, Weidner was able to learn of Plaintiff's loss of the Wyffel's contract within minutes. Id. Plaintiff argues this knowledge enabled Defendants to outpace competitors immediately because Weidner knew of customers inclined to switch seed dealers. Id. Plaintiff further contends Defendants benefitted from using a mark similar to Moon Seed, which enabled them to give the appearance of continuity and secure orders from otherwise skeptical clients. Id. at 19.
The record demonstrates Weidner decided to leave his employment with Plaintiff in late 2019. Weidner testified he made contact with Anderson's clients after January 7, 2020—after deciding to leave his employment with Plaintiff. Weidner testified "[f]armers generally are mistrusting people" and securing new clients requires "continually showing up ... [and] getting to know them." Weidner Dep. 22:24–23:3, Pl.’s Sealed App. Supp. Reply Supp. Mot. Partial Summ. J., ECF No. 74-1 at S. App. 010–11. Further, when Weidner initially contacted Plaintiff's customers in his capacity as owner of Moon Seed Service he did not inform customers he was not affiliated with Plaintiff. A reasonable jury could find Weidner's efforts to form relationships with Plaintiff's clients after deciding to leave his employment with Plaintiff constitutes a benefit Defendants derived at the expense of Plaintiff. As such, the record demonstrates there is a genuine issue of material fact as to Plaintiff's unjust enrichment claim. Defendants are not entitled to summary judgment. Viewing the record in the light most favorable to Plaintiff, Defendants’ reliance on a singular statement from Anderson is insufficient to entitle Defendants to judgment as a matter of law on Plaintiff's unjust enrichment claim.
At this stage in the proceedings, Defendants’ reliance on the unclean hands affirmative defense falls short in terms of establishing Defendants are entitled to judgment as a matter of law on Plaintiff's unjust enrichment claim. Defendants point to no facts in the record before the Court demonstrating conduct by Plaintiff damaged or prejudiced Defendants in some way. Cf. JP Morgan Chase Bank , 2013 WL 1749783, *1. Viewing the record in the light most favorable to Plaintiff, there is insufficient evidence to entitle Defendants to judgment as a matter of law on Plaintiff's unjust enrichment claim on the basis of the unclean hands affirmative defense.
V. CONCLUSIONPlaintiff is entitled to summary judgment on its Lanham Act claim and common law trademark infringement claim. As to Plaintiff's Lanham Act claim, viewing the record in the light most favorable to Defendants, Plaintiff demonstrates it owns a common law trademark in the "Moon Seed" marks. Additionally, considering the Squirtco. factors under the totality of the circumstances, Plaintiff demonstrates Defendants’ use of the "Moon Seed Service" mark is likely to confuse customers about whether Defendants are affiliated with Plaintiff. Because Plaintiff is entitled to summary judgment on its Lanham Act claim, it is entitled to summary judgment on its common law trademark infringement claim. The Court grants Plaintiff's request to reserve the issue of damages. The Court also grants Plaintiff's request for a permanent injunction barring Defendants from using the name "Moon Seed Service LLC" or any similar mark.
The Court finds this matter constitutes an "exceptional case" under the Lanham Act and Plaintiff is entitled to reasonable attorney's fees associated with this case.
Because the Court grants summary judgment to Plaintiff on Counts I and II, Defendants’ motion for summary judgment as to Counts I and II is foreclosed.
Defendants are not entitled to summary judgment on Plaintiff's unjust enrichment claim in Count III. A genuine issue of material fact exists as to whether Defendants derived a benefit from Weidner forming relationships with Plaintiff's customers after deciding to leave Plaintiff's employment months before his resignation. Defendants fail to demonstrate any conduct by Plaintiff that prejudiced Defendants. As such, Defendants cannot rely on the doctrine of unclean hands to defeat Plaintiff's unjust enrichment claim.
For the foregoing reasons, IT IS ORDERED that Plaintiff Moon Seed LLC's Motion for Partial Summary Judgment, ECF No. 53, is GRANTED .
IT IS FURTHER ORDERED that Defendants Dru Weidner and Moon Seed Service LLC's Motion for Summary Judgment, ECF No. 61, is DENIED .
IT IS FURTHER ORDERED that Defendants Dru Weidner and Moon Seed Service LLC are PERMANENTLY ENJOINED from using the name "Moon Seed Service LLC" or any similar mark.
Plaintiff's claim for unjust enrichment remains set for trial to commence on November 14, 2022, in accordance with the Scheduling and Trial Setting Order, ECF No. 14. At the time of trial, the Court will consider the outstanding issues of damages related to Plaintiff's Lanham Act and common law trademark infringement claims, and attorney's fees warranted pursuant to the "exceptional case" determination.
IT IS SO ORDERED.
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