and Submitted December 4, 2017 Seattle, Washington
from the United States District Court No. 2:13-cv-02174-RSM
for the Western District of Washington Ricardo S. Martinez,
Chief Judge, Presiding
P. Walters (argued) and Lawrence D. Graham, Lowe Graham Jones
PLLC, Seattle, Washington, for
Stephen P. Meleen (argued), Jered E. Matthysse, and Travis R.
Wimberly, Pirkey Barber PLLC, Austin, Texas; Christopher
Tompkins, Betts Patterson Mines, Seattle, Washington; for
Before: Richard C. Tallman and Paul J. Watford, Circuit
Judges, and Richard F. Boulware II, [*] District Judge.
panel vacated the district court's grant of summary
judgment in favor of the defendant in a trademark
infringement case, affirmed the district court's denial
of the plaintiff's cross-motion for summary judgment, and
remanded with instructions.
Right Foods, which sold "EatRight"-branded cookies
to Whole Foods for many years, alleged that Whole Foods
infringed on its trademark by selling a variety of foods
under the "EatRight America" mark.
panel concluded that disputed material facts establishing or
defeating the affirmative defenses of laches and acquiescence
had not been resolved. As to laches, the panel concluded that
if the district court had credited Eat Right Foods'
evidence that it waited to file suit because it was
attempting to resolve its claims against Whole Foods without
litigation, then the court might have come to a different
conclusion about the reasonableness of the delay. The panel
also vacated the district court's finding that Whole
Foods suffered expectations-based prejudice. As to
acquiescence, the panel held that the flaws in the district
court's unreasonable delay and prejudice analyses also
affected its acquiescence analysis. In addition, the district
court failed to make factual findings regarding the extent
and reasonableness of Whole Foods' reliance on Eat Right
TALLMAN, CIRCUIT JUDGE.
Right Foods Ltd. (ERF) appeals the district court's
summary judgment dismissal of its claims against Whole Foods
Market Services, Inc., and Whole Foods Market Pacific
Northwest, Inc. (Whole Foods). ERF, which sold
"EatRight"-branded cookies to Whole Foods for many
years, argues that its former customer infringed on its
trademark by selling a variety of foods under the
"EatRight America" mark from 2010-2013. Whole Foods
argues, and the district court held, that ERF's suit is
barred by the affirmative defenses of laches and
acquiescence. Because disputed material facts establishing or
defeating the defenses must be resolved, we vacate the
district court's decision and remand for further
a New Zealand company that sells organic foods. It has used
the "EAT RIGHT" and "EATRIGHT" marks on
its food products in the United States since 2001 and 2003,
respectively. It owns registered trademarks for use of the
"EATRIGHT" mark on several classes of goods,
including certain types of snack foods.
Foods Market Services, Inc., and Whole Foods Market Pacific
Northwest, Inc., are subsidiaries of Whole Foods Market,
Inc., which operates hundreds of grocery stores throughout
North America. From 2004 through 2013, ERF sold a line of
gluten-free cookies to Whole Foods.
Excellence, LLC, is a health and nutrition company that once
did business under the name "Eat Right America." In
late 2009, Whole Foods contracted with Nutritional Excellence
to use its patented Aggregate Nutrient Density Index (ANDI),
a "food-scoring system" designed to communicate the
nutritional value of foods to consumers. Whole Foods'
agreement with Nutritional Excellence allowed it to display
the ANDI scores of certain foods in its stores. Wherever an
ANDI value was displayed, Whole Foods was required to display
the "EatRight America" mark.
early 2010, Whole Foods rolled out the ANDI system and
launched an associated health-and-wellness program called
"Health Starts Here" in all of its 289 stores. As
part of "Health Starts Here, " Whole Foods promoted
Nutritional Excellence's "Eat Right America"
diet and nutrition program. The company issued a press
release about ANDI and "Health Starts Here" on
January 20, 2010, and it featured both initiatives
prominently on its website. The ANDI logo and the
"EatRight America" mark were displayed on
promotional materials, including chalkboards outside stores
and signs inside stores. The mark also appeared alongside the
ANDI scores of a variety of foods, including bulk foods,
produce, and prepared foods.
February or early March of 2010, ERF Managing Director
Rebecca Douglas-Clifford, traveling from New Zealand, visited
a Whole Foods store in San Francisco, California. She noticed
the "EatRight America" mark on "books, DVDs
and some promotional files, " but did not observe the
mark on any food products.
March 2010, Douglas-Clifford e-mailed Whole Foods counsel
Chris Graff and stated that, "[o]n a recent trip to San
Francisco I couldn't help but notice Whole Foods
'America's Healthiest Grocery Store' positioning
and their alliance with Eat Right America . . . fantastic to
see." In the same e-mail, Douglas-Clifford asked
Graff to discuss with Whole Foods officials the possibility
of "Whole Foods purchasing our EATRIGHT brand."
November 2010, ERF became aware that Nutritional Excellence
principal Kevin Leville was seeking to register the
"EATRIGHT AMERICA" mark for "a variety of food
products." Douglas-Clifford investigated and determined
that Nutritional Excellence was selling snack bars online,
but she did not discover that it had licensed use of the
"EatRight America" mark to Whole Foods. ERF opposed
Leville's registration before the Trademark Trial and
Appeal Board (TTAB) from October 2011 through April 2013,
arguing that use of the mark would confuse consumers.
February or March of 2011, Douglas-Clifford visited two Whole
Foods stores. This time, she noticed the "EatRight
America" mark on "a wide variety of food
products." But it was not until the following September
that she contacted Graff to discuss what she described as
Whole Foods' "infringement" of her
company's trademark, and Graff told her to "look to
Nutritional Excellence for a remedy." Douglas-Clifford
instead proposed that Graff "approach Whole Foods to
inquire whether Whole Food[s] would agree to purchase our
rights in the brand EATRIGHT, " and he told her he would
talk to Whole Foods and "get back to" her.
February 2012, ERF counsel James Martin began communicating
with Graff about Whole Foods' alleged infringement. On
April 4, 2012, ERF sent Whole Foods a cease-and-desist letter
asserting that ERF owned the rights to the
"EATRIGHT" mark and Whole Foods had been using
"a confusingly similar mark."
April 20, 2012, Graff responded that Whole Foods' use of
the mark was licensed by Nutritional Excellence, but that
because Whole Foods had "no desire to become involved in
a trademark dispute" with ERF, it would "agree to
cease its use of the designation Eat Right America" by
the end of the year. The first line of the e-mail read
"PRIVILEGED SETTLEMENT NEGOTIATIONS UNDER FED. R. EVID.
and Martin corresponded or spoke on the phone about the
matter multiple times in April and June 2012. They discussed
different options for resolving the dispute, including the
possibility of Whole Foods funding ERF's legal battle
against Nutritional Excellence or acquiring ERF's brand.
Martin followed up with Graff in July and August.
September 26, 2012, Martin sent Graff a letter reiterating
ERF's objection to Whole Foods' use of "EatRight
America" and stating that despite Whole Foods'
assurances that the mark was no longer in use, it was
"continuing to be used widely in Whole Foods
stores." The letter requested that Whole Foods
"give serious consideration to acquisition of the
EATRIGHT brand, " or "confirm that it will
immediately cease all use of the infringing" mark.
October 9, 2012, Graff told Martin via e-mail that Whole
Foods was "not interested in pursuing a possible
acquisition of your client's EATRIGHT brand at this
November and December 2012, Douglas-Clifford corresponded
with Whole Foods' Vice President of Business Development
"regarding a potential brand purchase as a way to
resolve outstanding infringement claims." In January
2013, Martin sent Graff a letter requesting that Whole Foods
confirm that it had ceased using the "EatRight
America" mark in stores. The next month, Graff repeated
that Whole Foods was "not interested in pursuing"
an acquisition of ERF's ...