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East Iowa Plastics, Inc. v. PI, Inc.

United States Court of Appeals, Eighth Circuit

April 30, 2018

East Iowa Plastics, Inc. Plaintiff- Appellee
v.
PI, Inc. Defendant-Appellant

          Submitted: March 13, 2018

          Appeal from United States District Court for the Northern District of Iowa - Waterloo

          Before GRUENDER, BEAM, and KELLY, Circuit Judges.

          KELLY, CIRCUIT JUDGE.

         This trademark dispute returns to us after proceedings on remand. In the previous appeal, E. Iowa Plastics, Inc. v. PI, Inc., 832 F.3d 899 (8th Cir. 2016), we asked the district court to address state-law questions pertaining to the availability of attorney's fees and the ownership of a contested trademark. Id. at 907-08. The district court entered orders on those questions, and this appeal followed.

         I. Background

         The underlying facts are more fully laid out in our first opinion. Id. at 901-02. As relevant to the present appeal, the parties in this case-East Iowa Plastics (EIP) and PI-both purchased manufacturing equipment from a company called KenTech. KenTech manufactured plastic goods for the poultry industry using injection molding (hot liquid plastic injected into a mold) and thermoforming (heated plastic sheet pressed into a shape by a mold). KenTech's products included chicken coops, egg baskets (used to make the containers eggs are sold in at the grocery store), and egg flats (used to transport eggs before they are packaged for sale). KenTech's poultry products were branded with a registered trademark: PAKSTER.

         KenTech was getting out of the poultry business, and was looking to sell its poultry products. First, EIP entered into a written asset purchase agreement (APA) to buy KenTech's thermoform production equipment. The APA also transferred ownership of the PAKSTER mark to EIP, but KenTech retained an irrevocable license to use the mark "in connection with the production and sale of injection molded plastic products." A short time later, KenTech sold its injection molds for chicken coops and egg baskets to PI, along with sundry completed products including egg flats. There was no written contract of sale between KenTech and PI, and KenTech did not expressly assign PI its PAKSTER license. However, the injection molds that PI bought from KenTech were inscribed with the PAKSTER mark. About a year after acquiring KenTech's molds, PI bought injection molds for egg flats from a different company.

         Ten years passed. During that time, EIP's registration of the PAKSTER mark lapsed. Some time afterward, PI applied to register "PAKSTER" with the United States Patent and Trademark Office (PTO). As part of its application, PI falsely certified that no other person or entity was using the PAKSTER mark. PI and EIP maintained peaceful coexistence for several years, which came to an end when a proposed deal for EIP to acquire PI's injection molds fell through.

         EIP sued PI under the Lanham Act for trademark infringement and unfair competition. See 15 U.S.C. § 1125(a). EIP also sought a declaration that PI's registration of the PAKSTER mark was invalid. PI counterclaimed for other Lanham Act violations. After a trial, the district court found that PI had defrauded the PTO by falsely certifying that it was the only company using the PAKSTER mark. The court also found that, although PI had acted in bad faith, EIP had not proved any resulting damages. The district court then cancelled PI's registration of the PAKSTER mark and awarded EIP $585, 000 in attorney's fees under the Lanham Act. See 15 U.S.C. § 1117(a).

         In the first appeal, we concluded that EIP lacked standing to seek cancellation of PI's mark because EIP had failed to establish any damages. E. Iowa Plastics, 832 F.3d at 903-06. Accordingly, we vacated the cancellation. Id. at 906. As to attorney's fees, we determined that EIP's lack of standing on the cancellation issue meant that it was not a "prevailing party, " and so was not entitled to Lanham Act fees. See id. at 906-07.

         We remanded two state-law questions to the district court. We asked the district court to address EIP's claim that it was entitled to attorney's fees under state law, and to clarify the scope of the parties' interests in the PAKSTER mark (a question of state contract law). Id. at 907-08.

         On remand, the parties agreed that Iowa law applied. The district court determined that EIP was entitled to $400, 000 in Iowa common law attorney's fees. E. Iowa Plastics, 2016 WL 7406705, at *2 (N.D. Iowa Dec. 9, 2016).[1] The district court also found that EIP was the owner of the PAKSTER mark, and that PI owned a license "to use or sell only the product of the [injection] molds, egg flats, [and] nothing more." E. Iowa Plastics, 2016 WL 6650848, at *2 (N.D. Iowa Nov. 9, 2016). PI appeals.

         II.Discus ...


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