FN HERSTAL SA, Plаintiff-Counter Defendant-Appellee, v. CLYDE ARMORY INC., Defendant-Counter Claimant-Appellant.
No. 15-14040
United States Court of Appeals, Eleventh Circuit.
(September 27, 2016)
838 F.3d 1071
Glenn Dean Bellamy, Paul J. Linden, Wood Herron & Evans, LLP, Cincinnati, OH, Michael C. Daniel, Prior Daniel & Wiltshire, LLC, Athens, GA, for Defendant-Counter Claimant-Appellant.
Before MARTIN and JORDAN, Circuit Judges, and COOGLER,* District Judge.
COOGLER, District Judge:
This trademark infringement action arises out of the parties’ use of the marks “SCAR” and “SCAR-Stock” in the firearms industry. Appellant Clyde Armory Inc. (“Clyde Armory“) appeals the district court‘s partial grant of summary judgment in favor of Appellee FN Herstal SA (“FN“), its grant of FN‘s motion to strike Clyde Armory‘s jury demand, its denial of Clyde Armory‘s motion to amend the proposed pretrial order, and its entry of judgment against Clyde Armory following a bench trial. After careful review of the record and briefs of the parties, and having the benefit of oral argument, we affirm the district court on all issues raised on appeal.
I. BACKGROUND
A. Facts1
1. FN‘s SCAR Mark
In January 2004, the United States Special Operations Command (“USSOCOM“) issuеd a solicitation requesting bids from firearms manufacturers to design and manufacture a new fully automatic assault-rifle system for various units of the United States military, including Navy SEALs, Army Rangers, and Green Berets. The solicitation and other documents referred to the rifle as the “Special Operations Forces Combat Assault Rifle,” abbreviated with the acronym SCAR. However, the U.S. military did not use SCAR as a trademark or otherwise claim any rights in the name SCAR. The solicitation generated significant publicity and media coverage in the firearms community, as it was the first open competition for a new military rifle since the M16 trials held in the 1960s.
FN is a firearms and weapons manufacturer headquartered in Belgium. In 2004, FN and other firearm manufacturers, including Colt Defense LLC and Cobb Manufacturing, Inc., submitted prototypes in response to USSOCOM‘s solicitation. While not required to do so, FN chose to label its submission with the SCAR mark, placing the mark above the firearm‘s trigger. FN branded its rifles as such to draw on the double еntendre from the military‘s use of the term and the everyday meaning of “scar” as a mark left by the healing of injured tissue. For instance, FN‘s brochures and other promotional materials drew on the ordinary meaning of “scar” through slogans like “BATTLE SCARS.”
On November 5, 2004, FN won the competition, and USSOCOM awarded it a ten-year contract, placing a large initial order for SCAR firearms totaling over $634,000. From that point forward, FN regularly shipped SCAR-branded rifles to the U.S. military for use by special forces. By November 2007, FN had sold over $11 million in SCAR rifles and accessories to the military pursuant to the USSOCOM contract.
The media, law enforcement, and civilian firearms consumers closely followed the USSOCOM competition and FN‘s development of the SCAR rifle. In the years 2004
On February 22, 2005, FN began promoting its SCAR rifle to law enforcement and civilians, though it did not yet have a semi-automatic version of the weapon available for purchase by civilian consumers. Indeed, FN dedicated one-fourth of its advertising budget to promote the SCAR rifle to the firearms market. Throughout 2005 and 2006, FN showcased its military SCAR rifle at hundreds of trade shows, including one of the largest firearms shows in the world, the Shooting, Hunting, and Outdoor Trade Show (“SHOT Show“), as well as National Rifle Association shows, the National Defense Industrial Association Small Arms forum, the Association of the United States Army show, International Chiefs of Police shows, the National Sheriff Show, the Mock Prison Riot, the SWAT Round Up, the Police and Security Expo, and others. At these shows, FN routinely told attendees that it intended to introduce a semi-automatic version within two years. FN also distributed hats, T-shirts, key chains, brochures, flyers, and other promotional materials with the SCAR mark. Public interest in the rifle was high; for example, at the February 2006 SHOT Show held in Las Vegas, Nevada, hundreds of people lined up at FN‘s booth to see FN‘s SCAR rifle, and FN had to dedicate three employees to answering attendees’ nonstop questions about its weapon. According to Bucky Mills, the Senior Director of Law Enforcement Sales and Training at FN, FN‘s SCAR rifle was “big news” and was “the number one talked about firearm at the whole SHOT Show in 2006.” The fact that ninety percent of SHOT Show attendees are not affiliated with the U.S. military but are instead comprised of law enforcement personnel, distributors and retailers of firearms, and civilian consumers, speaks to the excitement among civilians about the prospect that FN would be introducing a semi-automatic SCAR rifle. In March 2006, FN issued a press release entitled, “The Making of the 21st Century Assault Rifle: SCAR SOF Combat Assault Rifle,” which detailed the ongoing development of its SCAR rifle for USSOCOM. The press release also announced that the semi-automatic version of the SCAR “[would] potentially be available in the next two years.”
FN was not able to release the civilian version of the SCAR rifle until November 2008 because, according to the testimony of Frank Spaniel (“Spaniel“), the Assistant Vice President of Research and Development at FN, it took several years to test the prototypes in various environments, make modifications that would prevent a civilian from converting it into a fully automatic weapon, and ensure that its factories could produce increasing quantities of the weapons while maintaining quality. FN also had to seek government approval from the Bureau of Alcohol, Tobacco, Firearms and Explosives (the “ATF“) to sell the semi-automatic SCAR to the wider commercial market, which took mоnths. Finally, FN was contractually obligated to fill military orders before satisfying civilian demand for the weapon. However, the pent-up demand from 2004 to 2008 resulted in FN selling over $100 million worth of SCAR firearms after receiving ATF approval.
2. Clyde Armory‘s SCAR-Stock Mark
Clyde Armory is a firearms retailer located in Georgia owned by Andrew Clyde (“Clyde“). Clyde has been in the firearms business since 1991. He has long been familiar with FN, having sold FN products since 2002. He was also an FN distributor from approximately 2006 to 2011.
In 2005, Clyde contacted Sage International, Ltd. (“Sage“) President John Klein (“Klein“) about manufacturing a replacement stock for certain rifles made by Sturm Ruger & Co., including the Mini-14, Mini-30, and AC-556. At the February 2006 SHOT Show, the same show in which long lines of attendees waited to see FN‘s SCAR rifle, the two met and planned the specific configuration for this replacement stock.
In April 2006, Clyde Armory selected the name SCAR-Stock or SCAR-CQB-Stock in connection with its replacement stocks. Clyde Armory claims that its use of the term SCAR is an acronym for “Sage Clyde Armory Rifle” stock. However, Klein had no recollection of this. At the time Clyde Armory adopted the SCAR-Stock mark, Clyde knew about the USSOCOM solicitation to create a combat rifle system. Clyde further knew that the rifle was abbreviated as the SCAR, and that USSOCOM had awarded FN the development contract to produce it, as he had seen an article in Small Arms Review announcing that FN won the bid to create the SCAR for USSOCOM.
Jоshua Smith (“Smith“), Clyde Armory‘s former Chief Operations Officer, testified that FN‘s SCAR rifle was well known in the firearms world. He stated that when Clyde disclosed his plan to use SCAR-Stock in association with its stocks, Smith expressed concern that the SCAR “name was already taken ... [b]y FN.” Smith testified that Clyde Armory‘s intent was to “take advantage of marketing of the SCAR being a popular name already” and to “take advantage of the SCAR product name being on the market.” Although Clyde testified that such a discussion never occurred, and although Smith left Clyde Armory in 2009 under bad circumstances, the district court found Smith‘s testimony credible in light of Clyde‘s admitted knowledge about FN‘s SCAR rifles.
Throughout the spring and summer of 2006, Clyde Armory worked with Sage to finalize its replacement stock system, and it shipped its first SCAR-Stock product to a consumer on September 18, 2006. The stocks were engraved with the mark SCAR-CQB-Stock in the same font, color, and size as the SCAR mark on FN‘s rifles, using a laser just as FN used. Clyde Armory began promoting SCAR-Stock stocks through its website www.clydearmory.com, online advertising, print ads, and trade show displays. In early 2007, it began using the domain name www.scarstock.com, which channels Internet traffic to www.clydearmory.com. Through April 2015, Clyde Armory had sold 913 SCAR-Stock units, for a total gross revenue of approximately $450,000.
FN sent Clyde Armory a letter in February 2009, asserting senior rights in the SCAR mark and demanding that Clyde Armory cease and desist all use of its SCAR-Stock mark. Clyde Armory responded that it had no knowledge of FN‘s rights in the mark and requested documentation to support that claim. The following day Clyde Armory filed a trademark application for the SCAR mark with the USPTO for use on “gun stocks” and claiming a first date in commerce on September 14, 2006. Clyde Armory received a reply from FN stating that “the acronym SCAR in U.S. Government jargon does refer to the USSOCOM Program.” The letter went on to state, “[h]owever, in Commercial firearms use of the term SCAR has been registered by [FN] as a Trademark.” Clyde Armory then filed a Petition for Cancellation with the USPTO of FN‘s trademark registratiоn of SCAR (and Design) and an Opposition to FN‘s trademark application for SCAR. The USPTO suspended those proceedings pending the outcome of this case.
In March 2012, FN filed an eight-count complaint against Clyde Armory for trademark infringement, unfair competition, and dilution in violation of the Lanham Act,
Clyde Armory asserted affirmative defenses based on priority of its use of the SCAR-Stock mark and FN‘s unlawful use of the SCAR mаrk. Clyde Armory also asserted counterclaims for federal trademark infringement and requested declaratory relief in the form of cancellation of FN‘s trademark registrations. Clyde Armory sought similar damages and injunctive relief. Both parties demanded a trial by jury.
Both parties submitted motions for summary judgment, in which they agreed that the success of all claims and counterclaims depended on the viability of each party‘s federal trademark infringement claims. Both parties asserted that their mark is distinctive and that they were the first to use it in commerce. The district court denied both motions, finding that genuine disputes of material fact existed regarding which party held priority of rights in its respective mark. However, with respect to Clyde Armory‘s unlawful-use defense, the district court ruled that Clyde Armory could not proceed with it at trial, as the Eleventh Circuit had not adopted the defense, the undisputed facts showed that FN did not engage in a per se violation of the regulations at issue, and even if a violation occurred, it was immaterial.
In preparing for trial, the parties jointly submitted a proposed pretrial order. Although the proposed pretrial order referenced a jury trial, it also stated: “Neither party is seeking damages and the parties further agree that whichever party establishes its priority of rights will request to be entitled to the trademark registration(s) it has sought ... and seek a permanent injunction against the other party.” During the pretrial conference, Clyde Armory represented to the district court that it sought only injunctive relief, confirming that it was not pursuing damages, and agreed with the Court that a jury need not
After the district court issued its order striking the jury demands, Clyde Armory filed a motion to amend the proposed pretrial order so that it could reinstate its demand for FN‘s profits under
The litigation thus proceeded to a three-day bench trial, in which six witnesses testified, including three FN employees, a Clyde Armory employee, Clyde Armory‘s former Chief Operating Officer Smith, and its owner, Clyde. The district court issued an order on August 20, 2015, in which it found that FN developed protectable trademark rights in the SCAR mark before Clyde Armory began using the SCAR-Stock mark in September 2006; Clyde Armory intentionally copied FN‘s SCAR mark in bad faith; and FN thus prevailed on its federal trademark infringement and unfair competition claims and related state law claims. The court ordered Clyde Armory to cease using the SCAR-Stock mark, abandon its trademark applications, assign domain names including the word SCAR to FN, dismiss its petition to cancel FN‘s federal trademark registrations for SCAR, and destroy materials featuring the SCAR-Stock mark.
Clyde Armory timely appealed the district court‘s partial summary judgment order, the order granting FN‘s motion to strike the jury demand, the order denying Clyde Armory‘s motion to amend the proposed pretrial order, and the order granting judgment as to all claims in favor of FN. We have jurisdiction pursuant to
II. DISCUSSION
A. Standards of Review
“After a bench trial, we review the district court‘s conclusions of law de novo and the district court‘s factual find-
B. The District Court‘s Judgment in Favor of FN Following Trial
Clyde Armory contends that the district court committed three errors3 in its post-trial order: (1) finding that FN used SCAR as a mark in commerce before Clyde Armory began using SCAR-Stock; (2) finding that FN‘s SCAR mark acquired distinctiveness through secondary meaning before Clyde Armory began using SCAR-Stock; and (3) finding that Clyde Armory used the SCAR-Stock mark in bad faith to take advantage of the popularity of FN‘s SCAR mark, thus divesting it of any rights in the mark that it otherwise might have obtained.
A trademark is “any word, name, symbol, or device, or any combination thereof [used] to identify and distinguish [a producer‘s] goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown.”
1. The District Court‘s Finding that FN Used the SCAR Mark in Commerce before Clyde Armory Used the SCAR-Stock Mark
A trademark on goods is used in commerce when “it is placed in any manner on the goods or their containers or the displays associated therewith [and] the goods are sold or transported in commerce.”
This Court uses a two-part test to determine whether a party has demonstrated prior use of a mark in commerce:
[E]vidence showing, first, adoption, and, second, use in a way sufficiently public to identify or distinguish the marked goods in an appropriate segment of the public mind as those of the adopter of the mark, is competent to establish ownership, even without evidence of actual sales.
Planetary Motion, 261 F.3d at 1195 (quoting New Eng. Duplicating Co. v. Mendes, 190 F.2d 415, 418 (1st Cir. 1951)) (footnotes omitted). The typical evidence of use in commerce is the sale of goods bearing the mark. See id. at 1194-95;
Considerable evidence supports the district court‘s factual finding that FN used the SCAR mark in commerce prior to Clyde Armory‘s first sale of a replacement stock bearing the SCAR-Stock mark September 2006. On November 5, 2004, USSOCOM entered into a ten-year contract with FN and ordered SCAR brand rifles in an amount totaling over $634,000. Thereafter, FN continuously sold and transported firearms bearing its SCAR mark from Belgium to USSOCOM in the United States for use by military special forces. By November 5, 2007, FN had sold over $11 million worth of SCAR firearms and accessories to the military pursuant to the USSOCOM cоntract. All the while, FN received extensive media attention, which credited FN with winning the USSOCOM bid and tracked the development of FN‘s SCAR weapon system for the military.
Nor does the fact that FN did not have a semi-automatic SCAR weapon available for law enforcement and civilian purchase until late 2008 change our analysis because, in addition to military sales, FN established prior use through analogous use: that is, extensive pre-sale advertising and promotional activities for its semi-automatic SCAR rifle dating back to 2005. Almost immediately after it began shipping and selling to USSOCOM, FN started marketing SCAR brand rifles to law enforcement and civilians, dedicating one-fourth of its advertising budget to showcase its SCAR rifles at hundreds of trade shows and events in 2005 and 2006, including the February 2006 SHOT Show where its SCAR rifle was “the number one talked about firearm,” further promoting the SCAR rifles with accompanying hats, T-shirts, keychains, brochures, and other promotional materials all bearing the SCAR mark, and issuing a press release in March 2006 detailing its intent to develop the semi-automatic version within two years. Although actual sales were not made until late 2008, these “open and notorious” promotional activities in 2005 and 2006 sufficiently created an association in the relevant portion of the public‘s mind so that they identified the SCAR rifles with FN. See Goetz, 515 F.3d at 161-62; Planetary Motion, 261 F.3d at 1195-96.
We also note that although Clyde Armory states that it is relevant that FN listed a first use date of November 1, 2008, on one of its trademark applications, its USPTO applications and registrations are not relevant to the foregoing analysis. Neither federal nor Georgia law requires that a party assert a trademark registration before bringing Lanham Act or state law claims. See
In sum, FN‘s sales of SCAR rifles to USSOCOM alone are sufficient to establish FN‘s priority of use as early as 2004. In addition to this use, FN‘s marketing efforts establish priority in 2005 and 2006 because they constitute “use analogous to trademark use” and were followed by sales to law enforcement and civilians within a commercially reasonable period of time.4
The foregoing determination is not the end of the inquiry, however, because a business does not automatically obtain rights in a mark by using it. A business
Investacorp, Inc. v. Arabian Inv. Banking Corp. (Investacorp) E.C., 931 F.2d 1519, 1522 (11th Cir. 1991) (footnotes omitted); see also Knights Armament, 654 F.3d at 1189 (“The party seeking trademark protection must demonstrate that its mark acquired secondary meaning before the alleged infringer first began using the mark.” (emphasis in original)). The district court found not only that FN‘s mark acquired distinctiveness through secondary meaning but that it did so at some point prior to Clyde Armory‘s first sale of SCAR-Stock stocks in September 2006. While Clyde Armory takes issue with the district court‘s failure to pinpoint an exact date upon which FN‘s mark attained distinctiveness, all that matters is that it attained such status before Clyde Armory began using SCAR-Stock. For the reasons stated in the next section, we find that the district court did not clearly err in determining that FN‘s SCAR mark is distinctive and that it acquired that quality prior to September 2006.
2. The District Court‘s Finding that FN‘s SCAR Mark is Distinctive (and that it Acquired that Status Prior to Clyde Armory‘s First Use of the SCAR-Stock Mark)
A mark is distinctive when it “serve[s] the purpose of identifying the source of the goods or services.” Knights Armament, 654 F.3d at 1188. A mark can be distinctive in two ways: “if it either (1) is inherently distinctive or (2) has acquired distinctiveness through secondary meaning.” Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 769 (1992) (emphasis deleted). This Court has identified four categories of distinctiveness, listed in descending order of strength: (1) fanciful or arbitrary; (2) suggestive; (3) descriptive; and (4) generic. Knights Armament, 654 F.3d at 1188.5 While arbitrary, fanciful, and suggestive marks are considered inherently distinctive and, therefore, are protectable without a showing of secondary meaning, see Coach House Rest., Inc. v. Coach & Six Rests., Inc., 934 F.2d 1551, 1560 (11th Cir. 1991), a descriptive mark is not inherently distinctive, and “receives protection only if it acquires secondary meaning,” Knights Armament, 654 F.3d at 1188; see also Welding Servs., Inc. v. Forman, 509 F.3d 1351, 1357 (11th Cir. 2007) (“Some marks are inherently distinctive; some marks, though not inherently distinctive, acquire distinctiveness by becoming associated in the minds of the public with the products or services offered by the proprietor of the mark. . . .“). A descriptive mark has acquired distinctiveness through secondary meaning “when the primary significance of the [mark] in the minds of the [consuming] public is not the product but the producer.” Welding Servs., 509 F.3d at 1358 (internal quotation marks omitted). Four factors determine whether a mark has acquired secondary meaning:
the length and manner of its use; - the nature and extent of advertising and promotion;
- the efforts made by the plaintiff to promote a conscious connection in the public‘s mind between the name and the plaintiff‘s product or business; and
- the extent to which the public actually identifies the name with the plaintiff‘s product or venture.
Conagra, Inc. v. Singleton, 743 F.2d 1508, 1513 (11th Cir. 1984).
Clyde Armory contends that the district court misapplied all four of these factors in concluding that FN‘s SCAR mark was descriptive, but had nonetheless acquired secondary meaning. Distinctiveness and “[t]he existence of secondary meaning” are “question[s] of fact,” and we thus rеview the district court‘s findings on these issues for clear error. Knights Armament, 654 F.3d at 1187-88.
i. the length and manner of use
Clyde Armory contends that, contrary to the finding of the district court, the nearly two-year period in which FN used the SCAR mark in commerce before Clyde Armory introduced the SCAR-Stock mark in September 2006 was not a sufficient amount of time for FN‘s mark to acquire distinctiveness through secondary meaning. Relying on
Considerable evidence supports the district court‘s finding that the SCAR mark acquired secondary meaning at some point during the nearly two-year period before Clyde Armory began using SCAR-Stock in September 2006. During that time, FN sold millions of dollars of SCAR rifles to the U.S. military through the USSOCOM contract, and because the USSOCOM solicitation garnered wide interest, FN received extensive media attention as the winner of the bid. See Maternally Yours, 234 F.2d at 544 (noting that the fact that the plaintiff‘s “marked success produced widespread and unusual recognition of its name and operation in the national press by the time defendant entered the field” supported the existence of secondаry meaning in a short period of time). FN also spent a substantial amount independently promoting its SCAR rifles at hundreds of trade shows, such as the February 2006 SHOT Show where civilian consumers flocked to FN‘s booth to see the rifle. The evidence supports the district court‘s conclusion that the public associated the SCAR brand with FN at some point during those two years.
Clyde Armory also argues that FN‘s use of the SCAR mark prior to September 2006 was not “substantially exclusive” as required under
Finally, Clyde Armory contends that the district court reduced the “length and manner of use” to length alone by failing to find that FN used SCAR merely as a description of the model of firearm it sold instead of as an identifier of the FN SCAR rifle brand. However, the district court‘s findings of fact previously described show that FN created an association in consumers’ minds between the word SCAR and its specific brand of rifle, and thus FN used SCAR as a mark. The district court did not clearly err in finding that FN satisfied the first factor of the test for distinctiveness through secondary meaning.
ii. the nature and extent of advertising and promotion
Clyde Armory contends that, while FN‘s advertising efforts may have been extensive, they failed to actually connect the SCAR mark with FN‘s rifles. This Court‘s predecessor has stated that “the question is not the extent of the promotional efforts, but their effectiveness in altering the meaning of [the word] to the consuming public.” Aloe Creme Labs., Inc. v. Milsan, Inc., 423 F.2d 845, 850 (5th Cir. 1970), cert. denied, 398 U.S. 928, 90 S.Ct. 1818, 26 L.Ed.2d 90 (1970). However, the same evidence described above belies the contention that FN did not create a connection between SCAR and its company and products through its advertising. The attention FN received after winning the USSOCOM contract increased public awareness of FN‘s SCAR rifle. Then, FN began spending a substantial amount in 2005 and 2006 advertising its SCAR rifles and distributing SCAR brochures, flyers, T-shirts, hats, and other promotional items bearing the SCAR mark. The district court properly addressed the nature of FN‘s advertising and publicity.
iii. efforts made by the plaintiff to promote a conscious connection between the name and the plaintiff‘s product or business and the extent to which the public actually identifies the name with the plaintiff‘s product or venture
Clyde Armory‘s arguments with respect to these factors are largely similar to its previous ones and fare no better. Clyde Armory contends that FN did not use SCAR as a trademark but rather as an abbreviation for “Special Operations Forces Combat Assault Rifle.” We note that if Clyde Armory is contending that acronyms are not protectable as trademarks, it is incorrect. See, e.g., Nat‘l Cable Television Ass‘n, Inc. v. Am. Cinema Editors, Inc., 937 F.2d 1572, 1577 (Fed. Cir. 1991) (rejecting contention that “American Cinema Editors” did not have trademark rights in the acronym “ACE“). Moreover, FN used the SCAR mark on the rifles themselves and in other instances without the accompanying phrase “Special Operations Forces Combat Assault Rifle.” Next,
C. The District Court‘s Partial Grant of Summary Judgment in Favor of FN on Clyde Armory‘s “Unlawful Use” Defense
Clyde Armory argued6 at the summary judgment stage that FN cannot rely on its pre-September 2006 advertisements and promotional activities to show use of the SCAR mark because these activities violated federal regulations and thus cannot provide the basis for a protectable trademark interest in SCAR. The district court recognized the existence of what is known as the “unlawful-use doctrine” briefed by the parties but found Clyde Armory‘s arguments based on the doctrine to be without merit. Clyde Armory now contends that the district court wrongly applied the unlawful use doctrine and thus erred in barring Clyde Armory from pursuing it as a defense at trial.
The “unlawful use doctrine” appears almost exclusively in the administrative setting, originating in United States Trademark Trial and Appeal Board (“TTAB“) proceedings to oppose trademark applications or cancel registrations. See, e.g., In re Garden of Eatin’ Inc., 216 U.S.P.Q. 355, 357 (T.T.A.B. 1982), 1982 WL 52032, at *2. Since the TTAB interprets the “use in commerce” requirement to mean “lawful use,” see Clorox Co. v. Armour-Dial, Inc., 214 U.S.P.Q. 850, 851 (T.T.A.B. 1982), 1982 WL 50434, at *1,
This Court has not adopted the unlawful use doctrine7 and need not do so today because even if we were to adopt it, Clyde Armory has not submitted evidence sufficient to raise an issue of fact in this respect. Clyde Armory contends that FN‘s use was unlawful because it violated a regulation called the United States Special Operations Command Federal Acquisition Regulation Supplement (“SOFARS“),8 which, among other things, prohibits contractors from disclosing unclassified information pertaining to contracts with USSOCOM without prior authorization, see SOFARS § 5652.204-9003(a), and provides that the contractor acknowledges that
D. The District Court‘s Decision to Hold a Bench Trial
Clyde Armory argues it was entitled to a jury trial as of right under
Although both FN and Clyde Armory originally sought legal relief in the form of damages and the other party‘s profits, they both expressly waived all legal claims in their joint proposed pretrial order and orally at the pretrial conference, choosing instead to seek only vindication of their trademark rights and pursue injunctive relief, thus extinguishing any right to a jury trial. As the Fifth Circuit determined, and we agrеe, “[t]he right to trial by jury is determined by the issues, not by the pleadings.” Armco, Inc. v. Armco Burglar Alarm Co., 693 F.2d 1155, 1158 (5th Cir. 1982). Nothing more formal in the way of withdrawal or waiver of the jury trial right was required. See Morro, 117 F.3d at 515 (an issue is waived “by failing to ensure that the issue is clearly preserved in
1. The District Court‘s Grant of FN‘s Motion to Strike the Jury Demands
Rule 39 provides, “In an action not triable of right by a jury, the court, on motion or on its own: (1) may try any issue with an advisory jury; or (2) may, with the parties’ consent, try any issue by a jury whose verdict has the same effect as if a jury trial had been a matter of right. . . .”
In Kramer, the defendant successfully moved shortly before trial to exclude the plaintiff‘s compensatory and punitive damages claims, thus eliminating any legal claims, and simultaneously moved to strike the jury demand. Id. at 967. Because no legal issues remained, the Seventh Circuit held that the demand for a jury, even if established on consent, did not preclude the defendant from withdrawing that consent on the eve of trial. Id. at 967-68. Instead, the court noted that Rule 38(d) prеcludes withdrawing a jury demand only where there is the right to a jury trial, id. at 968; see also
We agree with Kramer‘s reasoning and holding. When no right to a jury trial exists and where no prejudice will result, a party may unilaterally withdraw its consent to a jury trial. We are also persuaded by the Fifth Circuit‘s discussion in Armco, in which the defendant demanded a jury trial based on the plaintiff‘s claims for legal relief—trademark infringement damages. Armco, 693 F.2d at 1158. The plaintiff moved to strike the defendant‘s jury demand “[o]n the eve of trial” because the plaintiff no longer sought legal relief. Id. The district court proceeded with an advisory jury pursuant to
Clyde Armory argues that it was prejudiced by the striking of the jury demands because the test for trademark distinсtiveness involves a number of considerations for which a jury would seem better suited than a judge. While perhaps the nature of the issues is one relevant consideration,
2. The District Court‘s Denial of Clyde Armory‘s Motion to Amend the Proposed Pretrial Order to Reinstate its Demand for FN‘s Profits
After the district court struck the jury demand, Clyde Armory moved to amend the prоposed pretrial order to reinstate its demand for profits, believing that such a demand for profits would implicate a right to a trial by jury. The district court denied this motion. This Court has “not hesitated to back up district courts when they put steel behind the terms of pretrial orders and hold parties to them.” Morro, 117 F.3d at 515. As such, we will “not disturb the trial court‘s ruling unless it is demonstrated that the trial court has so clearly abused its discretion that its action could be deemed arbitrary.” Id. at 516; see also Hodges, 597 F.2d at 1018 (“[F]or pretrial procedures to continue as viable mechanisms of court efficiency, appellate courts must exercise minimal interference with trial court discretion in matters such as the modification of its orders.“); Del Rio Distrib., Inc. v. Adolph Coors Co., 589 F.2d 176, 178 (5th Cir. 1979) (“This court has previously recognized that the trial judge is vested with broad discretion in determining whether or not a pre-trial order should be modified or amended.“).9
Under the particular facts of this case we cannot say that the district court‘s actions were arbitrary, and consequently, we deny Clyde Armory‘s claim of error in this regard. Clyde Armory waived its claim for profits by failing to preserve it in the pretrial order. See Morro, 117 F.3d at 515-16. We also note that any prejudice Clyde Armory asserts from the court‘s denial of its motion is a “direct result of [its] own failure to properly present its case.” Morro, 117 F.3d at 516 (citing Hodges, 597 F.2d at 1018); see also Del Rio Distrib., 589 F.2d at 178-79 (same).10
III. CONCLUSION
For the foregoing reasons, we affirm the district court on all issues raised on appeal.
AFFIRMED.
Notes
THE COURT: Obviously the request here is for injunctive relief. . . . I mean, I see this as a matter of law as opposed to something the jury needs to do.
MR. BELLAMY: That is the Defendant‘s position.