S.C. Johnson & Son, Inc. v. Nutraceutical Corporation
835 F.3d 660
7th Cir.
2016

Background

  • Sandy Maine founded Sunfeather and developed the "BUG OFF" natural insect-repellant line in the 1980s; Sunfeather marketed nationally via craft fairs, trade shows, catalogs, and a website through the 1990s and 2000s.
  • Melvin Chervitz filed for and later obtained a federal registration for BUG OFF in 2000; subsequent related applications and registrations involved Kaz and DeJay.
  • S.C. Johnson acquired the Chervitz/Kaz registration chain (settling and assigning registrations to S.C. Johnson in 2007) and later registered BUG OFF for insect repellants in 2011; it then sued Nutraceutical (Sunfeather’s successor) in 2011 for trademark infringement.
  • Nutraceutical asserted a prior-and-continuous-use defense under 15 U.S.C. § 1115(b)(5), relying on nationwide use predating the registrant’s filing; parties and the district court had focused on the pre-1998 period throughout discovery and pretrial.
  • After the bench trial, S.C. Johnson for the first time argued in post-trial briefing that Nutraceutical failed to prove continuous use after 2012; the district court accepted this and granted an injunction against Nutraceutical.
  • The Seventh Circuit reversed: it held S.C. Johnson was estopped/waived from raising the post-trial theory and alternatively found the district court clearly erred in requiring post-2012 sales records, concluding the record showed continuous use.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether S.C. Johnson could raise a new post-2012 continuity argument post-trial S.C. Johnson argued it could because continuity was contested generally and evidence at trial did not prove post-2012 use Nutraceutical argued the late-shift was waived/estopped because S.C. Johnson had previously admitted post-2012 continuity and limited trial issues to pre-1998 Court: S.C. Johnson waived/estopped from raising post-trial post-2012 continuity issue; district court abused discretion in allowing it
Whether Nutraceutical proved prior and continuous use sufficient to defeat the registrant’s presumption of priority under § 1115(b)(5) S.C. Johnson contended Nutraceutical failed to show nationwide continuous use pre- and post-2012 and thus could not rebut the registration presumption Nutraceutical pointed to pre-1998 nationwide sales/promotions, website presence, catalogs, trade shows, and admissions by S.C. Johnson showing ongoing distribution through the present Court: Nutraceutical proved prior and continuous use (through at least 2012 and sufficiently after via website, admissions, testimony); district court clearly erred in requiring specific post-2012 sales records
Proper standard of review for district court’s ruling about sufficiency of continuity proof S.C. Johnson urged clear-error review for mixed-law-fact findings Nutraceutical urged de novo review (legal standard applied incorrectly) Court: applied de novo to legal error and held district court’s focus on sales records was erroneous; alternative clear-error review also could not sustain district court’s finding
Whether public, non-sales evidence (catalogs, website, trade shows, advertising) can establish "use" for trademark ownership S.C. Johnson implied sales records were necessary to prove use Nutraceutical argued that use includes advertising, catalogs, website and need not be high-volume sales Court: Confirmed precedents that sales are not strictly necessary; publicly available website, advertising, catalogs, and admissions can establish use and continuity

Key Cases Cited

  • Allard Enterprises, Inc. v. Advanced Programming Res., Inc., 146 F.3d 350 (6th Cir. 1998) (trademark rights arise from prior appropriation and use, not registration)
  • Homeowners Grp., Inc. v. Home Mktg. Specialists, Inc., 931 F.2d 1100 (6th Cir. 1991) (registration does not create ownership; prior use does)
  • Zazu Designs v. L’Oreal, S.A., 979 F.2d 499 (7th Cir. 1992) (registration creates a rebuttable presumption of use as of filing date)
  • Johnny Blastoff, Inc. v. Los Angeles Rams Football Co., 188 F.3d 427 (7th Cir. 1999) (various forms of public use—ads, catalogs, media—can establish trademark ownership)
  • New West Corp. v. NYM Co. of Cal., Inc., 595 F.2d 1194 (9th Cir. 1979) (use must be public enough to identify goods to an appropriate segment of the public)
  • Specht v. Google Inc., 747 F.3d 929 (7th Cir. 2014) (a website bearing a mark may constitute bona fide use in commerce)
  • N. Am. Med. Corp. v. Axiom Worldwide, Inc., 522 F.3d 1211 (11th Cir. 2008) (website use can support trademark rights)
  • Planetary Motion, Inc. v. Techsplosion, Inc., 261 F.3d 1188 (11th Cir. 2001) (sporadic or de minimis use may be insufficient; courts examine whether use is bona fide commercial utilization)
  • Grochocinski v. Mayer Brown Rowe & Maw, LLP, 719 F.3d 785 (7th Cir. 2013) (abuse-of-discretion standard for allowing late amendments to argument or issues)
  • RK Co. v. See, 622 F.3d 846 (7th Cir. 2010) (waiver review standard)
  • Morisch v. United States, 653 F.3d 522 (7th Cir. 2011) (standards for reviewing mixed questions of law and fact)
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