Hot Wax, Inc., brought this action against Turtle Wax, Inc., for false advertising and false promotion under § 43(a) of the Lanham Act seeking damages and in-junctive relief. The district court granted Turtle Wax’s motion for summary judgment after concluding that the doctrine of laches barred Hot Wax’s pursuit of all requested relief. Because we agree with the district court’s conclusion that the doctrine of laches applies in this case, we affirm.
I. History
Hot Wax and Turtle Wax are competitors in the automated earwash/car wax industry. In the late 1960’s and early 1970’s, Edward Holbus began marketing Hot Wax products to carwashes nationwide. During that time, Holbus developed a self-described break-through product and a unique system of application that made it possible to apply genuine carnauba wax to the surface of automobiles in automatic carwashes. This system provides automobiles with both polish and protec *817 tion. In 1975, Holbus incorporated Hot Wax, Inc., to sell Hot Wax products and the applicators for these products. Due to the physical characteristics of the wax and the manner in which the wax had to be applied, Hot Wax encountered high costs in integrating its wax into, its line of car-wash products. Hot Wax began experiencing diminished financial success and blamed declining sales on competing products that Holbus described as “cheater” waxes developed by competitors such as Turtle Wax.
Turtle Wax entered the automatic car-wash market as a supplier.of products in 1976. Turtle Wax has advertised and sold its products to consumers and retailers in the automatic carwash business under the product names Polyshell Triple Shine (Red, Blue, and Gold), Polish Wax and Cherry Polish Wax, Sealer Wax, and Super Foaming Sealer Wax. As with Hot Wax’s “Hot Wax” products, these Turtle Wax products are typically sprayed onto the surface of an automobile at automatic carwash facilities.
According to Holbus, Hot Wax has suffered significant lost sales as a result of Turtle Wax’s entry into the market. Hot Wax describes the products sold by Turtle Wax as non-wax spray products that Turtle Wax falsely promotes as wax for the automatic carwash industry because Turtle Wax’s products contain mineral seal oils and wax emulsions that are less costly to produce than traditional natural and synthetic wax ingredients. Because Turtle Wax’s products are less expensive to produce than Hot Wax’s wax products, Turtle Wax has dominated the automatic carwash market to the point of becoming an industry leader. As a result of Turtle Wax’s entry into this market, Hot Wax’s presence in this market has been effectively reduced, and Hot Wax has experienced declining sales.
Holbus learned that Turtle Wax entered the automatic carwash market as a supplier sometime in the mid-1970’s. It was also during this time that Holbus became aware of the nature of Turtle Wax’s products; namely that the products sold by Turtle Wax neither contained natural or synthetic substances typically found in wax nor exhibited wax-like properties when applied to the surface of a car. Despite having this information, Holbus waited until 1993 to take any action with respect to his concerns.
In 1993, Holbus began a letter writing campaign directed at Turtle Wax and others accusing them of falsely advertising certain products for automatic carwashes as wax. In these letters, Holbus specifically accused Turtle Wax of having mislabeled its products for twenty years. In addition to sending a letter to Turtle Wax, Holbus also directed one of his letters to the Wisconsin Department of Agriculture, Trade and Consumer Protection requesting that it take action against the allegedly false advertising by Turtle Wax and other companies. In response to this letter, the Department informed Holbus that the term “wax” had grown to encompass a variety of substances, including those that fell outside the traditional definition of the term. The Department also stated that “it would [not] be possible to hold sellers of carwash products to a strict chemical definition of a word that has come to mean much more in everyday usage” and concluded that Turtle Wax had not violated any Wisconsin deceptive trade practice laws by labeling its automatic carwash products as waxes.
As a result of the ineffectiveness of his letter writing campaign, Holbus filed suit on behalf of Hot Wax in 1997 against Turtle Wax and eight other companies involved in selling products to the automatic carwash industry. Holbus accused Turtle Wax of misrepresenting the qualities of its products and sought both damages and injunctive relief. After the district court dismissed all defendants except for Turtle Wax because of improper joinder, Hot Wax filed an amended complaint alleging that Turtle Wax violated § 43(a)(2) of the Lanham Act, 15 U.S.C. § 1125, because its *818 products, including Polish Wax, Cherry Polish Wax, Sealer Wax, Super Foaming Sealer Wax, Poly Sealant, and Poly Shell Triple Shine, contained no wax and did not protect or polish the surface of an automobile in the same manner as traditional wax products do.
Before the district court, the parties submitted cross motions for summary judgment. In support of these motions, the parties provided competing expert testimony regarding the industry definition of “wax” and whether Turtle Wax’s products fell within this definition. The parties’ experts also disputed the effectiveness of the products at issue and whether the products provided the type of protection typically associated with wax.
In addressing the motions for summary judgment, the district court concluded that neither Turtle Wax nor Hot Wax provided conclusive evidence regarding whether Turtle Wax’s products falsely represented that they had certain qualities that would be material to a consumer’s decision to purchase the product. The district court based this conclusion on the fact that the parties presented conflicting testimony and data regarding the effectiveness of Turtle Wax’s products, the carwash industry’s and consumer’s understanding of the term “wax”, and the appropriate definition of the term wax. For this reason, the district court denied both parties’ motions to the extent the motions sought a disposi-tive ruling on the merits of Hot Wax’s Lanham Act claims.
Despite not reaching the merits of Hot Wax’s Lanham Act claims, the district court entered summary judgment in favor of Turtle Wax after concluding that the doctrine of laches barred these claims. The district court found that Hot Wax unduly delayed in pursuing • its claims against Turtle Wax in light of the fact that Holbus admitted that he believed as early as the mid-1970’s that Turtle Wax misrepresented the character and quality of its products, yet did not file suit until 1997. The district court determined that this unexplained delay prejudiced Turtle Wax due to the substantial investment Turtle Wax made both in product development and in promoting its products as waxes. The district court reasoned that, had Hot Wax filed its suit in a timely manner, Turtle Wax could have promoted its products as less’costly but more effective alternatives to natural wax products. In finding the doctrine of laches applied, the district court rejected Hot Wax’s arguments that laches should not preclude Hot Wax from maintaining its suit because: (1) the statute of limitations had not run; (2) Hot Wax’s claim was akin to a claim at law for damages; (3) Turtle Wax’s alleged unclean hands; and (4) laches is not an appropriate subject for summary judgment in Lanham Act false advertising cases. Hot Wax now appeals the district court’s grant of summary judgment in favor of Turtle Wax on this issue.
II. Analysis
A. Standard of Review
We typically review a district court’s grant of summary judgment
de novo,
drawing our own conclusions of law and fact from the record before us.
See Thiele v. Norfolk & Western Ry. Co.,
The traditional standard of review in summary judgment cases must be considered in light of the notion that a district court enjoys considerable discretion in determining whether to apply the doctrine of laches to claims pending before it.
See Hawxhurst v. Pettibone Corp.,
B. The Applicability of the Doctrine of Laches to Hot Wax’s Lanham Act Claim
Hot Wax contends that Turtle Wax’s use of the word “wax” in its description and marketing of certain products constitutes false advertising under § 43(a) of the Lan-ham Act. The Lanham Act prohibits false or misleading “commercial advertising or promotion of the nature, characteristics, qualities, or geographic origin of the advertiser’s or another person’s goods, services, or commercial activities.” 15 U.S.C. § 1125(a). 1
To establish a claim under the false or deceptive advertising prong of § 43(a) of the Lanham Act, a plaintiff must prove: (1) a false statement of fact by the defendant in a commercial advertisement about its own or another’s product; (2) the statement actually deceived or has the tendency to deceive a substantial segment of its audience; (3) the deception is material, in that it is likely to influence the purchasing decision; (4) the defendant caused its false statement to enter interstate commerce; and (5) the plaintiff has been or is likely to be injured as a result of the false statement, either by direct diversion of sales from itself to defendant or by a loss of goodwill associated with its products.
See B. Sanfield, Inc. v. Finlay Fine Jewelry Corp.,
The false statement necessary to establish a Lanham Act violation generally falls into one of two categories: (1) commercial claims that are literally false as a factual matter; or (2) claims that may be literally true or ambiguous, but which implicitly convey a false impression, are misleading in context, or likely to deceive consumers. When the statement in question is actually false, the plaintiff need not show that the statement either actually deceived customers or was likely to do so. In contrast, when the statement is literally true or ambiguous, the plaintiff must prove that the statement is misleading in context by demonstrated actual consumer confusion. See id. at 971-72.
Although the district court in the present case denied both parties’ motions for summary judgment on the issue of whether Turtle Wax’s conduct constituted a violation of § 43(a) of the Lanham Act, the court also concluded that the doctrine of laches barred Hot Wax’s Lanham Act claims and constituted a separate ground upon which to base the granting of summary judgment. Hot Wax contends that the district court’s decision to apply the doctrine of laches to its case was erroneous for three reasons. First, it argues that under Illinois law, laches may not apply to actions at law seeking damages that are within the applicable statute of limitations. Second, it contends that the necessary requirements for the application of the doctrine of laches cannot be satisfied based on the facts of the present case. Finally, Hot Wax submits that Turtle Wax’s alleged unclean hands and the public interest at stake in this case also preclude an application of the doctrine of laches.
1. Availability of the Doctrine of Laches
The equitable doctrine of laches is derived from the maxim that those who sleep on their rights, lose them. Laches addresses delay in the pursuit of a right when a party must assert that right in order to benefit from it. For laches to apply in a particular case, the party asserting the defense must demonstrate: (1) an unreasonable lack of diligence by the party against whom the defense is asserted and (2) prejudice arising therefrom.
See Cannon,
Hot Wax argues that, under Illinois law, the equitable defense of laches does not apply to actions at law seeking damages that are filed within the statute of limitations. Hot Wax supports its argument with language included in such cases as
Maksym v. Loesch,
At the outset of our consideration of Hot Wax’s argument, we note that contrary to Hot Wax’s assertion, the application of federal law and not state law controls the outcome of this case.
See NLRB v. Natural
Gas
Utility Dist.,
Rather than refusing to apply laches when plaintiffs bring claims within the analogous state statute of limitations as Hot Wax suggests, courts have used this analogous limitations period as a baseline for determining whether a presumption of laches exists.
See Tandy Corp. v. Malone & Hyde, Inc.,
Hot Wax’s contention that the doctrine of laches should not apply to its claims under the Lanham Act because its claims are for damages as well as injunctive relief is also without merit. The Lanham Act specifically contemplates that both injunctive relief and awards of damages for violations of 15 U.S.C. § 1125 shall be subject to the principles of equity, which include the doctrine of laches.
See
15 U.S.C. § 1125(c)(1) & (2);
see also Maksym,
2. Application of the Doctrine of Laches
Having addressed Hot Wax’s preliminary arguments regarding the availability of the doctrine of laches as a defense in this case, we may now turn to the actual facts of the case to determine whether the criteria for the application of laches have been satisfied. The application of laches in a particular case is dependent upon a showing of an unreasonable lack of diligence by the party against whom the defense is asserted and prejudice arising from this lack of diligence.
See Conopco,
a. Hot Wax’s Unreasonable Delay
Evidence in the record demon-' strates that Holbus believed as early as the late-1970’s that Turtle Wax misrepresented the character and quality of its automatic carwash products. Although Hot Wax disputes this fact on appeal, Hot Wax’s Local Rule 12(N) Statement belies any argument to the contrary. In its Local Rule 12(N) Statement, Hot Wax admitted that “[s]ometime in the late 1970’s or early 1980’s, Ed Holbus concluded that Turtle Wax’s products for automatic car-washes did not contain wax or exhibit wax-like properties.” Furthermore, this admission is bolstered by paragraphs found in Hot Wax’s Statement of Additional Facts attached to its Local Rule 12(N) Statement. In these paragraphs, Hot Wax acknowledges that:
Beginning in, and throughout much, if not all, of the 1970s and continuing through the present, Turtle Wax has represented, marketed, advertised and sold to customers and retailers through *823 out the United States, products identified as “wax” under the product names Sealer Wax, Polish Wax, Cherry Polish Wax, Poly Sealant, Polyshell Triple Shine (Red, Blue and Gold), and Super Foaming Sealer Wax.
According to the President of Hot Wax, Edward Holbus, Hot Wax has and continues to suffer significant lost sales ever since Turtle Wax entered the market with non-wax products which Turtle Wax promotes as “wax” for the car wash and wax industry.
Hot Wax also ignores Holbus’s correspondence that supports Hot Wax’s admission of knowledge of the facts which form the basis of its Lanham Act claims. In a letter to the Chicago Tribune dated January 4, 1993, Holbus wrote that “[f]or almost twenty years Turtle Wax has in our opinion succeeded in victimizing the motoring public in a massive fraud. They advertise wax products that are nothing more than kerosene or similar oils.... [SJince 1975 Turtle Wax has advertised a number of products.... [N]one of these products contain any wax.” Similarly, in a letter to the President of Turtle Wax dated May 26, 1993, Holbus stated his belief that “[d]ur-ing the last twenty years, [Turtle Wax] has engaged in a widespread conspiracy with [its] distributors and others to deny our company a fair market share of the wax business,” and referred to Turtle Wax’s products as “cheater waxes.”
Hot Wax’s effort to cast the district court’s conclusion regarding the unreasonable nature of its delay as an “oversimplification” of the actual factual development of this case also falls short of demonstrating that the district court erred in the present case in calculating the delay and its unreasonableness. Rather than identifying a specific time that it became aware of the nature of Turtle Wax’s products, Hot Wax points to the “evolutionary development of marketing by Turtle Wax which, over the course of time, became literally false and misleading” and the need for “chemical analysis of the composition of various products” as a justification for not filing its false advertising claims under the Lanham Act earlier. When Hot Wax’s assertion of the “evolutionary development” of its claims is juxtaposed against the admissions in Hot Wax’s Local Rule 12(N) Statement, it becomes clear that this claim is nothing more than a
post hoc
rationalization for Hot Wax’s unreasonable delay. The record indicates that Hot Wax conducted analyses of Turtle Wax’s products (by its own expert) only
after
its suit had been filed in 1997. Based on the evidence in the record, it would be disingenuous for Hot Wax to argue that its decision to file suit was motivated by anything other than Hol-bus’s belief that Turtle Wax’s products did not contain wax or exhibit wax-like properties. Likewise, it would be troublesome, to say the least, if we permitted Hot Wax to rely on the need to assess the “evolutionary development” of Turtle Wax’s marketing campaigns to justify its delay. “[I]t cannot be equitable for a well-informed merchant with knowledge of a claimed invasion of right, to wait to see how successful his competitor will be and then destroy with the aid of court decree, much that the competitor has striven for and accomplished.”
Polaroid Corp. v. Polarad Elecs. Carp.,
Hot Wax’s final attempt to justify its unreasonable delay in pursuing its claims against Turtle Wax rests on the belief that the delay is somehow excusable because it resulted from its attempts to resolve the claims without recourse to litigation. Between 1993 and 1995, Hot Wax sent a total of five letters to the
Chicago Tribune,
Turtle Wax, and the Wisconsin Department of Agriculture, Trade and Consumer Protection concerning the marketing of Turtle Wax’s products. Although we have recognized that “[a]ttempts to resolve a dispute without resorting to a court do not constitute unreasonable delay” for determining the applicability of the doctrine of laches,
Leon
*824
ard v. United Airlines,
b. Prejudice to Turtle Wax Resulting from Hot Wax’s Unreasonable Delay
In addition to showing unreasonable delay, a party seeking to avail itself of the equitable defense of the doctrine of laches must also show that the party has been prejudiced by the plaintiffs unreasonable delay in pursuing its cause of action.
See Conopco,
The prejudice resulting to Turtle Wax as a result of Hot Wax’s unreasonable delay is clear and is sufficient to justify the application of laches given the great length of the delay. Hot Wax permitted Turtle Wax’s advertising and the development of its products to go unchecked for well over a ten- to twenty-year period. During this time, Hot Wax sat idly by and chose not to challenge Turtle Wax’s use of the term “wax” with respect to its products, and Turtle Wax invested significant amounts of time and money in product development and advertising. Indeed, rather than contesting Turtle Wax’s use of the term “wax” in this regard, Hot Wax attempted to break into the same market with the development of similar products that it also referred to as “wax,” even though these products had many of the same properties and characteristics as the Turtle Wax products at issue. The market position pursued by Turtle Wax with respect to the products at issue was uncontested by Hot Wax for years and courts have held that investments to exploit such a position are sufficient prejudice to warrant the application of the doctrine of laches.
See, e.g., Conopco,
*825 3. Unclean Hands and the Public Interest
The final hurdles that Hot Wax asserts stand in front of the application of the doctrine of laches come in the form of the doctrine of unclean hands and the public interest. Hot Wax’s position with respect to the doctrine of unclean hands and the public interest as a bar to laches stems from the district court’s denial of the parties’ motions for summary judgment based on its reasoning that:
Hot
Wax,
Inc. v. Turtle Wax, Inc.,
In the case at bar ... neither party has provided conclusive evidence that Turtle Wax’s products — while not meeting the chemical definition of a wax— falsely represent that they have certain qualities that are material to a consumer’s decision to purchase the product. The parties have presented conflicting testimony and data regarding the effectiveness of Turtle Wax’s products, the car wash industry’s and consumer’s understanding of the term “wax”, as well as the appropriate definition of the term wax.
... In the instant case, we are presented with conflicting expert testimony regarding the acceptable definition of wax, and competing evidence as to industry standards.... In light of the conflicting testimony, and because we must draw all inferences against the moving party, we find that the disposition of this issue is properly left to the trier of fact.
a. Unclean Hands
A party’s unclean hands may stand as an obstacle to the application of the doctrine of laches in certain circumstances. The notion of unclean hands working as a bar to the application of laches stems from the belief that an equitable defense, such as laches, cannot be used to reward a party’s inequities or to defeat justice.
See Precision Inst. Mfg. Co. v. Automotive Maintenance Mach. Co.,
Hot Wax asserts that Turtle Wax’s unclean hands result from the fact that Turtle Wax is allegedly engaged in a form of fraud — the false advertisement that certain Turtle Wax products contain wax or exhibit wax-like properties when, in Hot Wax’s opinion, they do not. In light of this alleged fraud, Hot Wax, relying on
La Republique Francaise v. Saratoga Vichy Spring Co.,
A broad chasm separates the concept of actual fraud considered by the Supreme Court in La Republique Francaise as a bar to the application of the doctrine of laches and the facts of the present case; broad enough, indeed, to defeat Hot Wax’s contention that Turtle Wax has sought the benefit of the equitable defense of laches with less than clean hands. Turtle Wax’s marketing of the products at issue as “waxes” can hardly be considered willful fraud, given the evidence presented to the district court regarding the industry’s use of the term “wax.” While the evidence may not have been conclusive so as to warrant a grant of summary judgment on behalf of Turtle Wax with respect to the merits of Hot Wax’s Lanham Act claims, the inability to prevail at the summary judgment stage on this issue hardly translates into proof of unclean hands sufficient to preclude an application of laches. To conclude otherwise would be effectively to preclude the application of laches whenever a dispute of fact regarding the merits of a Lanham Act claim existed because, as Turtle Wax points out, conceivably all suits involving Lanham Act claims could involve accusations of fraudulent or deceptive conduct.
Before the district court, Turtle Wax submitted evidence in an effort to refute Hot Wax’s allegation that Turtle Wax set out to deceive the public through the marketing campaign of its products. Turtle Wax provided evidence that its competitors used the term “wax” to refer to nontraditional “wax” products similar to those marketed by Turtle Wax as “wax” products. Furthermore, Turtle Wax also tellingly pointed to the Wisconsin Department of Agriculture, Trade and Consumer Protection’s letter to Holbus informing him that the term “wax” had grown to encompass a variety of substances including those that fell outside the traditional definition of this term. The Department recognized that “it would [not] be possible to hold sellers of carwash products to a strict chemical definition of a word that has come to mean much more in everyday usage.” The district court concluded that the evidence submitted by Turtle Wax was “evidence of industry and consumer expectations — evidence that Hot Wax fails to rebut.”
Hot Wax,
b. The Public Interest
“[L]aches may be properly applied so long as its application is equitable in light of the public’s interest in being free from confusion and deception.”
Conopco,
Hot Wax submits that the public interest in the present case militates against a finding of laches. This argument is based on Hot Wax’s belief that it is untenable on one hand for the district court to recognize an issue of fact with respect to its Lanham Act claims, and yet conclude on the other that Hot Wax’s claims are barred by laches.
It is evident that the notion of the public’s interest to be free from confusion with respect to products in the marketplace alone cannot stand as a bar to the application of laches in cases involving Lanham *827 Act claims. Moreover, Hot Wax s argument with respect to the public interest ignores the fact that Turtle Wax submitted evidence before the district court demonstrating that the expectations of the vast majority of purchasers of wax in a carwash are satisfied by the performance of Turtle Wax products and that the performance of these products is within the realm of their expectations. To the contrary, Holbus testified during his own deposition that he had not conducted any type of consumer research (other than talking to customers at carwashes), nor had any research been performed on his behalf or on behalf of any of the companies in which he possessed an ownership interest, regarding consumer expectations of automated car-washes. And, although by no means dis-positive of the issue of the public interest, it bears repeating that Turtle Wax received a letter from a state governmental consumer agency stating that the agency did not believe Turtle Wax was misrepresenting its products or deceiving customers. Given the fact that there has been no clear showing that the marketing of Turtle Wax’s products has had or is having a negative impact on the public interest, we conclude that the public interest does not stand in the way of the application of the doctrine of laches in the present case.
III. Conclusion
We conclude that the application of the doctrine of laches to Hot Wax’s Lanham Act claims by the district court was proper. The judgment of the district court granting summary judgment in favor of Turtle Wax is
AFFIRMED.
Notes
. Section 43(a) of the Lanham Act provides, in relevant part:
(1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which—
* * *
(B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities,
shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.
15 U.S.C. § 1125(a).
. Some federal courts have rejected the application of the doctrine of laches within the applicable statute of limitations with respect to other federal statutes. In
Ashley v. Boyle’s Famous Corned Beef Co.,
The court in
Ashley
did, however, note that the principle of separation of powers did not pose quite the same stumbling block to the application of the doctrine of laches in cases in which Congress did not prescribe an express statute of limitations and instead, by its silence, chose to borrow the most analogous state statute,of limitations.
Ashley,
The conclusions reached by the Second Circuit in
Ivani
must be considered in light of the same court’s holding in
Conopco,
. In the context of a trademark infringement action, we have stated that although laches may bar a plaintiff from recovering damages or wrongfully derived profits during the time prior to filing suit, "[u]pon a showing of infringement ... the plaintiff may still be entitled to injunctive relief ... and to damages and profits for the period subsequent to the filing of suit” because of the continuous nature of trademark infringement.
James Burrough,
Although Hot Wax does not specifically address this matter in its brief on appeal, we see no error in the district court’s handling of this issue. Counsel for Hot Wax suggested during oral argument that the issue of damages was no longer before the district court. This position stands in direct conflict with the position taken by Hot Wax in its brief to support its argument that laches could not be applied in this case: "[T]he doctrine of laches, an equitable defense, should not be applied to bar Hot Wax from recovering Turtle Wax's wrongfully gained profits.” Regardless of whether Hot Wax's request for relief is solely for an injunction, requests for injunctive relief under the Lanham Act are subject to equitable considerations, including the doctrine of laches.
See Conopco,