United States District Court, N.D. Indiana, South Bend Division
MEMORANDUM OPINION AND ORDER
DEGUILIO JUDGE UNITED STATES DISTRICT COURT
a trademark infringement action over two marks owned by Agdia
Inc. (“Agdia” or “Plaintiff”). Dr.
Jun Qiang Xia owns and operates a company that directly
competes with Agdia in the field of plant diagnostic products
and services: AC Diagnostics, Inc. (“ACD”).
Plaintiff alleges that Defendants placed one of its marks -
the Agdia mark - in white-on-white text on over 200 URL pages
within ACD's website in order to divert search engine
traffic. Plaintiff also alleges Defendants
infringed upon the Agdia mark by selecting a domain name for
ACD's website that is confusingly similar to the Agdia
mark itself. Lastly, Plaintiff alleges that Defendants made
unauthorized use of its ImmunoStrip mark to describe their
products on ACD's website.
has now closed and Defendants moved for summary judgment on
Plaintiff's Counts I-V on July 1, 2016. [DE 37] The
matter has been fully briefed and is ripe for review. For the
reasons discussed herein, Defendants' motion is denied.
summary judgment, the moving party bears the burden of
demonstrating that there “is no genuine dispute as to
any material fact and the movant is entitled to judgment as a
matter of law.” Fed.R.Civ.P. 56(a). A
“material” fact is one identified by the
substantive law as affecting the outcome of the suit.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). A “genuine issue” exists with respect to
any material fact when “the evidence is such that a
reasonable jury could return a verdict for the nonmoving
party.” Id. Where a factual record taken as a
whole could not lead a rational trier of fact to find for the
non-moving party, there is no genuine issue for trial, and
summary judgment should be granted. Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587
(1986) (citing Bank of Ariz. v. Cities Servs. Co.,
391 U.S. 253, 289 (1968)). In determining whether a genuine
issue of material fact exists, this Court must construe all
facts in the light most favorable to the non-moving party and
draw all reasonable and justifiable inferences in that
party's favor. Jackson v. Kotter, 541 F.3d 688,
697 (7th Cir. 2008); King v. Preferred Tech. Grp.,
166 F.3d 887, 890 (7th Cir. 1999).
Inc., based in Elkhart, Indiana, provides plant diagnostic
products and services to customers around the world. [DE
39-1, Affidavit of Baziel Vrient ¶ 3] It owns the two
trademarks at issue here, the “Agdia” mark and
the “ImmunoStrip” mark. Id. ¶¶
7, 23. Defendant Dr. Jun Q. Xia worked as an employee for
Agdia in the late 1990s and early 2000s, along with his wife.
Id. ¶ 4. He and his wife were forced to resign
from Agdia in 2001 after it was discovered that they had
engaged in prohibited competitive activities during their
employ. Id. Around that same time, Dr. Xia attempted
to compete with his former employer in violation of his
non-compete obligations, and formed a company known as
Advanced Diagnostics International LLC (“ADI”).
Id. ¶ 5; see also Case No.
3:01-cv-0781. Agdia sued Dr. Xia to enforce those obligations
and to prevent Dr. Xia from misappropriating Agdia's
trade secrets; the lawsuit resulted in a permanent injunction
being entered against Dr. Xia and ADI. Id.
2004, Xia formed ACD, also named as a defendant herein. [DE
38-9 at 47:20-23] Like Agdia, ACD develops and sells
agricultural diagnostic products and related testing
services, and thus it competes with Agdia in the marketplace.
[DE 39-1, Affidavit of Keith Schuetz, ¶¶ 4, 15]
Defendants maintain a website for ACD and Dr. Xia claims that
he used the volunteer services of some of his friends'
children to assist him with setting up that site. [DE 38-9 at
48:25-49:5] Dr. Xia also maintains that Plaintiff's
former president, Chester Sutula, approved of ACD's
domain name - “www.acdiainc.com” - during a
verbal conversation held between them. [DE 38-9 at 88:15-24]
Mr. Sutula denies this. [DE 39-1, Affidavit of Chester Sutula
between June 24 and August 3, 2007, Plaintiff's Agdia
mark was added to ACD's website, without permission, in
the form of white-on-white text. [DE 38-5 at 5; DE 38-9 at
98:13-17] Based on Plaintiff's own investigation, the
Agdia mark appeared on over 200 URL pages within the website,
many of which displayed certain ACD products that competed
directly with Plaintiff's own. [DE 39-1, Schuetz Aff.
¶¶ 7, 9-14] According to Plaintiff's expert,
Mr. Mohl, the use of white-on-white text was a common
practice associated with search engine optimization
(“SEO”) in 2007, when the Agdia mark began
showing up on ACD's website. [DE 38-5 at 5]. Indeed, this
practice proved effective for Defendants as recently as
January 2015.[DE 39-1, Affidavit of Marcos Amato
website also displayed and used the ImmunoStrip mark to
describe ACD's products that had a function similar to
Agdia's own ImmunoStrip products - this time making open
use of the mark in plain view rather than burying it in
white-on-white text. [DE 39-1, Vrient Aff. ¶¶
24-25] Dr. Xia stated in his deposition that the ImmunoStrip
label was placed on ACD's website because the term was
“very popular.” [DE 38-9 at 112:4-10] As with the
Agdia mark, this was done without permission. Id. at
against the backdrop of these facts that the Court analyzes
the issues at hand.
alleges five Counts in total, for trademark infringement (I),
unfair competition (II), and cyberpiracy (III) under the
Lanham Act, 15 U.S.C. §§ 1114(1), 1125(a), 1125(d),
and for Indiana state common law claims of unfair competition
(IV) and infringement (V). [DE 21] The only substantive issue
raised by the parties in their papers revolves around whether
Defendants' use of Plaintiff's marks and the
selection of the ACD domain name created a likelihood of
confusion. Thus, the Court will confine its analysis to
whether the evidence is so one-sided in favor of Defendants,
that no reasonable jury could conclude that their alleged
conduct created a likelihood of confusion with
succeed, Agdia's claims rely on the presence of a
likelihood of confusion between its own marks and
Defendants' use of the marks. CAE, Inc. v. Clean Air
Eng'g, Inc., 267 F.3d 660, 673-74 (7th Cir. 2001);
see also AHP Subsidiary Holding Co. v. Stuart Hale
Co., 1 F.3d 611, 615 (7th Cir. 1993). A weighing of the
following seven factors determines whether consumers are
likely to be confused:
(1) the similarity between the marks in appearance and
(2) the similarity of the products;
(3) the area and manner of concurrent use;
(4) the degree and care likely to be exercised by consumers;
(5) the strength of the plaintiff's mark;
(6) any actual confusion; and
(7) the intent of the defendant to “palm off” his
product as ...