United States District Court, N.D. Iowa, Cedar Rapids Division
TRUENORTH COMPANIES, L.C.; TRUENORTH PRINCIPALS, L.C., Plaintiffs,
TRUNORTH WARRANTY PLANS OF NORTH AMERICA, LLC, Defendant.
MEMORANDUM OPINION AND ORDER
Leonard T. Strand, Chief Judge
case is before me on a motion (Doc. No. 62) for preliminary
injunction and motion (Doc. No. 65) to exclude expert
opinions, testimony and evidence by plaintiffs TrueNorth
Companies, L.C., and TrueNorth Principals, L.C. (collectively
TrueNorth). Defendant TruNorth Warranty Plans of North
America, LLC (TN Warranty) has filed resistances to both,
see Doc. Nos. 88 and 89, along with a sealed
supplemental resistance. See Doc. No. 96. TrueNorth
has submitted replies. Doc. Nos. 100 and 105.
before me are TN Warranty's motions (Doc. Nos. 90, 91) to
amend/correct the protective order and extend pre-trial
deadlines. TrueNorth has filed resistances (Doc. Nos. 101 and
103) and TN Warranty has filed replies (Doc. Nos. 114 and
a hearing on the motions on October 26, 2018, and allowed the
parties to submit supplemental exhibits. See Doc.
Nos. 121, 122, 123. TrueNorth followed up with a motion (Doc.
No. 124) to strike the exhibits filed as Doc. Nos. 122-1,
122-2, and portions of Doc. No. 123-1. TN Warranty filed a
third set (Doc. No. 125) of supplemental exhibits and a
resistance (Doc. No. 126) to TrueNorth's motion to
strike. Finally, as if attempting to prove Yogi Berra's
famous observation that “it ain't over till
it's over, ” TN Warranty has filed a motion (Doc. No.
127) for leave to supplement its resistance to
TrueNorth's motion for preliminary injunction, which
TrueNorth resists (Doc. No. 128).
FACTUAL AND PROCEDURAL BACKGROUND
filed its original complaint (Doc. No. 2) on March 28, 2017,
alleging two counts of trademark infringement, one count of
mark dilution,  one count of false designation of origin
and one count of mark infringement under Iowa law based on
the parties' respective design logos: Plaintiffs':
November 27, 2017, TrueNorth amended its complaint to add two
new counts: Count VI for false advertising under the Lanham
Act and Count VII for unfair competition under the Lanham Act
and common law. The parties then submitted a joint motion
(Doc. No. 47) for revised deadlines, which Judge Williams
granted. See Doc. Nos. 47, 48. The order established
July 9, 2018, as the deadline for disclosure of
defendant's expert witnesses. See Doc. No. 48 at
3. This deadline was later extended to July 30, 2018. Doc.
August 20, 2018, TrueNorth filed its motion for a preliminary
injunction and motion to exclude TN Warranty's expert. It
seeks a preliminary injunction to stop TN Warranty from using
any mark similar to the TrueNorth mark. TrueNorth alleges
that since filing the lawsuit, it has received several
communications from truck drivers and industry professionals
demonstrating confusion about the affiliation between TN
Warranty and TrueNorth. It also seeks to exclude TN
Warranty's expert based on an alleged failure to disclose
materials the expert relied upon under Rule 26(b)(4)(C).
Nature of the Parties' Businesses
was formed in August 2000 by the merger of three financial
services entities. See Doc. No. 68 at 2. It provides
financial and insurance services to a variety of clients
nationwide including comprehensive property and casualty
insurance, risk management and underwriting services.
Id. at 2, 4. It also provides other specialized
products and services to commercial transportation companies
and individual drivers including transportation risk
management, transportation property insurance and
transportation equipment insurance. Id. TrueNorth
originated in eastern Iowa and now has offices in Tennessee,
Texas, Illinois, Michigan and Colorado.
Warranty was formed on September 1, 2015, to market and sell
commercial truck warranties. See Doc. No. 88 at 4.
Its products provide extended warranty services for
mechanical components for used commercial vehicles
manufactured by others whose original manufacturer's
warranty has expired. Id. at 5. It markets its
services through a network of independent truck dealers or
“authorized retailers, ” who purchase and resell
its warranty products. Id. The end user of TN
Warranty's products is a truck owner or fleet owner who
owns the truck(s) covered by the warranties. Id. TN
Warranty estimates that approximately 80 percent of its
authorized retailers are used truck dealers who sell TN
Warranty products at the point of sale at or near the same
time they close a deal for the sale of a used truck.
Id. It estimates that approximately 15 percent of
its warranties are sold by finance companies that provide the
financing for the truck and approximately 5 percent of its
warranties are sold by repair facilities. Id. It
states that in rare circumstances (a fraction of one percent
of sales), TN Warranty sells a warranty directly to an end
consumer. Id. at 6.
Warranty has six sales representatives who work directly with
its authorized retailers. The representatives are assigned
geographic regions and are encouraged to travel regularly to
visit the authorized retailers in person. Id. TN
Warranty relies heavily on word of mouth and invests
substantial resources into making sure its sales team meets
face-to-face with dealers and retailers to discuss and
educate them about TN Warranty's products. Id.
When recruiting new authorized retailers, TN Warranty states
it makes in-person visits to explain, in detail, who it is,
what it does and what it offers. Id. TN Warranty
provides training to authorized retailers about its products
and TN Warranty's expectations in selling its products.
Id. at 7.
Warranty advertises and markets its products to truck
dealers. Id. It states its largest marketing
investment is in travel for its sales representatives.
Id. Additional marketing includes direct emails to
authorized retailers, its website and branding and marketing
at the annual gathering of the Used Truck Association.
Id. Dealers around the country attend this event and
not individual truckers. Id. at 7-8.
Warranty states it does not market or sell insurance
products. Id. at 8. It states that in training new
authorized retailers, it emphasizes that it is not selling
insurance, but a limited warranty. It does not compete with
providers of insurance products and does not market its
warranty products through insurance brokers or agents.
Id. It contends that neither it, nor its authorized
retailers, have encountered TrueNorth in the marketplace.
Id. TN Warranty states an authorized retailer has
never contacted it inquiring about the association between
the two entities. It is unaware of any other entities that
market insurance to the end user in the same way that TN
Warranty markets its products. The used truck dealers,
finance managers or repair companies that TN Warranty works
with and that sell its products do not also offer insurance.
Warranty works directly with the authorized retailer when one
of its products is sold. It invoices the authorized retailer
and the authorized retailer pays TN Warranty. Id.
The authorized retailer will pay for the cost of the warranty
in one lump sum and often for a package of several different
warranty products for different trucks at one time. A used
truck dealer or finance company may finance the resale cost
of the warranty with the price of the truck such that the
customer may pay for the warranty through monthly payments.
Id. at 9. All warranties require an inspection of
the truck and TN Warranty's approval. TN Warranty may ask
the authorized retailer to provide more information about a
truck, such as a photo or a correction in the application
prior to issuing a warranty.
retailers market TN Warranty's product to two classes of
customers: large operators who have a fleet of trucks and
independent owner/operators. Authorized retailers answer
customer questions regarding the warranty options.
Id. at 10. TN Warranty states that most customers
are interested in coverage, cost and convenience rather than
the provider of the warranty. Id.
History of the Parties' Marks
Principals, L.C. has three registered trademarks. Doc. No. 68
at 2. On December 11, 2001, it received Registration Number
2, 517, 502 for the logo below:
at 3. On September 26, 2006, it received Registration Number
3, 149, 332 for the text “TRUENORTH.”
Id. On October 10, 2006, it received Registration
Number 3, 154, 664, which covers TRUENORTH and the design
TrueNorth Principals, L.C. issued exclusive licenses to use
these trademarks to TrueNorth Companies, LLC. TrueNorth
represents it has consistently used the word
“TrueNorth” with the above logo designs since
2000. Id. at 4. It states it has invested over $30
million in marketing efforts to strengthen its brand locally
and nationally. Id.
history of TN Warranty's mark begins in 2015. Doc. No. 88
at 10. At that time, Carrbridge Berkshire Group, Inc.
(Carrbridge) began marketing warranty products through its
division Berkshire Fleet Services (Berkshire Fleet). The
warranty products themselves were provided by CompassOne
Warranty Plans of North America LLC (an offshoot of a family
of companies under the umbrella The Compass Group, Inc.,
founded by William “Kirk” Eskridge in 2002).
Id. at 11. Eskridge, who was the chief executive of
Carrbridge, formed CompassOne Warranty in April 2015.
Id. CompassOne Warranty used the following mark to
market its warranty products.
TN Warranty contends that from 2002 through 2012, The Compass
Group, Inc. owned and used a Vector Compass mark created by a
digital marketing firm hired by Compass Group. Id.
It states that CompassOne Warranty's graphic was derived
from the Vector Compass mark. Id. at 12.
March 30, 2015, American Guardian Warranty Services, Inc.
(American Guardian) filed a lawsuit against Carrbridge and
Berkshire Fleet claiming that the use of the term
“Compass” infringed on American Guardian's
intellectual property rights. Id. American Guardian
claimed it had been using its Compass mark since in or around
2005. Eskridge agreed to change the name and mark and ceased
operating CompassOne Warranty. Id. at 13.
September 1, 2015, Eskridge formed TN Warranty. Id.
It used the same Vector Compass mark as CompassOne to promote
its products. It states it chose the name
“TrüNorth” to pay homage to its CompassOne
Warranty and Compass Group roots. Id. It chose to
use a dieresis (ü) in its mark to give the brand an
international feel, consistent with the company's
international aspirations. Id. Thus, TN Warranty
began using its “TRÜNORTH” mark and compass
design (below) sometime in late 2015.
Warranty filed an application to register its mark with the
United States Patent and Trademark Office (USPTO) on February
5, 2016. Id. at 14. On October 31, 2016, TrueNorth
filed an opposition to the application. Doc. No. 68 at 5. On
December 20, 2016, the USPTO issued a notice of default
regarding TN Warranty's application because it failed to
answer TrueNorth's opposition. Id. On February
16, 2017, the USPTO entered a judgment by default against TN
Warranty, sustaining TrueNorth's opposition and denying
TN Warranty's application for a trademark. Id.
History of Dispute Between Parties
September 2015, TrueNorth learned of TN Warranty's mark
when Joe Hoovestol of Lone Mountain Leasing in Carter Lake,
Iowa, forwarded an email he had received from Rick VanHove, a
Regional Sales Director for TN Warranty. Doc. No. 68 at 5. On
January 19, 2016, TrueNorth sent a cease and desist letter to
Eskridge, TN Warranty's CEO, demanding that TN Warranty
stop using the word “TRÜNORTH” or the logo
stating that it infringed on TrueNorth's marks.
Id. On August 23, 2016, TrueNorth received an
application for insurance from one of its clients in the
trucking industry. Id. at 6. Among the forms
submitted with the application included a Component Breakdown
Limited Warranty Agreement form for TRÜNORTH™.
Id. TrueNorth ultimately filed this action on March
TrueNorth filed suit, TN Warranty attempted to reach a
negotiated arrangement but those efforts were not successful.
Id. at 17. TN Warranty states that it then
voluntarily redesigned its mark as follows:
Id. TN Warranty asserts that it began implementing
this design in May 2018. It is displayed on its website
(https://www.trunorthwarranty.com) and TN Warranty represents
that it is in the process of using this design on all print
and online marketing materials. Id.
Warranty provides additional background concerning a
non-party, Gateway Management Services, Ltd., d/b/a Premium
2000 (Premium 2000), and its President and Chief Executive
Officer, Lynn Murphy. Id. at 17. TN Warranty states
that Murphy and Eskridge were business partners at one time
but are now rivals and competitors. Id. It alleges
that Murphy (and affiliates) have filed various lawsuits
against Eskridge and his affiliates. Id. at 18-19.
With regard to this lawsuit, TN Warranty claims that Premium
2000 has offered to do business with TrueNorth, but has
cited TN Warranty's name and mark as a “road
block” to doing business. Id. at 20 (citing
Doc. No. 85-9 consisting of emails from Premium 2000's
attorney to counsel for TrueNorth). See also Doc.
No. 123-1 (excerpts from Murphy's deposition).
Essentially, TN Warranty contends that this evidence suggests
that TrueNorth's lawsuit is premised more on Murphy's
animosity towards Eskridge rather than on true confusion in
the marketplace. See Id. at 17-22.
has provided a detailed summary of emails and phone
calls it has received from truck drivers and
professionals within the trucking and insurance industries
that allegedly demonstrate confusion in the marketplace
between TN Warranty and TrueNorth. See Doc. No. 68
at 6-10. It contends these communications speak for
themselves and that Premium 2000 has nothing to do with TN
Warranty's own actions in choosing a mark or the alleged,
resulting harm to TrueNorth. See Doc. No. 105 at
TN Warranty's Expert Disclosures
other motion (Doc. No. 65) concerns TN Warranty's expert,
Christopher King. TrueNorth states that with respect to
damages, it relies on an unjust enrichment/profit
disgorgement theory pursuant to 15 U.S.C. § 1117(a).
TrueNorth alleges that an “Expert Rebuttal Report on
Damages” authored by King and disclosed by TN Warranty
reveals that much of the information King relied upon to form
his opinions was not provided to TrueNorth in discovery and
was not included with TN Warranty's expert disclosures.
See Doc. No. 65 at 2. TrueNorth argues TN Warranty
is required to produce the information under Federal Rule of
Civil Procedure 26(a)(4)(C). Id. at 2-3. TrueNorth
claims that it has been prejudiced by TN Warranty's
refusal to produce the information because its own expert is
unable to rebut that opinion without the underlying
information. It requests that King's opinions and
testimony be excluded. Id. at 3-4.
Warranty states it had legitimate and serious concerns
regarding confidentiality when it produced King's expert
report, which is why it withheld commercial and financial
information in connection with that report. Doc. No. 89 at 1.
It states that it proposed creating additional
confidentiality safeguards before producing the information
and extending the deadline for TrueNorth to depose King and
submit any rebuttal expert report. Id. at 2. TN
Warranty contends this information is purely supplemental and
therefore, its disclosure timely. To the extent it is not
supplemental, it contends that any delay is substantially
justified by its confidentiality concerns. Id.
Warranty's alleged confidentiality concerns stem from its
history with Premium 2000 and Murphy. Id. at 3-9.
TN Warranty states that it is concerned that any financial
information produced through this case may be leaked to
Premium 2000, which TN Warranty fears Premium 2000 would
then use against it. Id. at 9. TN Warranty states
that Eskridge even refused to turn over TN Warranty's
financial records to King, TN Warranty's own expert
witness, based on his fear that the records would make their
way to Premium 2000. Id. TN Warranty explains that
when it submitted King's expert report, it notified
TrueNorth about its confidentiality concerns. Id. at
10. TN Warranty notes that Premium 2000 has been a subject
of this litigation throughout discovery. Id.
to serving King's expert report, TN Warranty states that
it conferred with opposing counsel by phone about its
confidentiality concerns regarding Premium 2000. Counsel for
TrueNorth stated that it was contemplating filing a motion to
compel or motion to exclude. Id. at 11. After this
phone call, TN Warranty's counsel considered moving to
amend the Protective Order. However, TrueNorth filed its
motion to exclude 10 days after counsels' phone call.
Id. Eskridge then provided the financial records to
King so he could supplement his opinion on TN Warranty's
profits from the sale of its warranty products during the
relevant time period. Id. TN Warranty states that
Eskridge agreed to turn over these documents only if the
Protective Order was amended to prohibit Randall Rings
(Secretary and General Counsel for TrueNorth) from having
access to the information. Id.
Warranty acknowledges it has not yet produced the financial
records, but intends to do so, along with the supplement to
the King report. Id. at 12. It states that four days
after TrueNorth filed its motion to exclude, TN Warranty
proposed, via letter, a resolution to the discovery dispute
in the form of additional protections for the financial
documents. See Doc. No. 89-10. TrueNorth rejected
that proposal via letter on September 6, 2018. See
Doc. No. 89-11. TN Warranty asked TrueNorth to reconsider and
submitted a proposed revised protective order. See
Doc. No. 89-12. The proposed amendment consists of an
additional category of information titled “Highly
Confidential Plus Material.” Id. It
specifically seeks prohibiting disclosure to the
non-producing party and in-house counsel of the non-producing
party. Id. TrueNorth rejected the proposal that day.
purpose of a preliminary injunction is to “preserve the
relative positions of the parties until a trial on the merits
can be held.” Univ. of Texas v. Camenisch, 451
U.S. 390, 395 (1981). The Lanham Act authorizes a preliminary
injunction in favor of the owner of a registered trademark.
15 U.S.C. 1116(a). The Eighth Circuit relies on the
Dataphase factors to determine whether to issue a
preliminary injunction with regard to conduct that allegedly
violates the Lanham Act. See United Industries Corp. v.
Clorox Co., 140 F.3d 1175, 1179-84 (8th Cir. 1998).
These factors are:
1. the threat of irreparable harm to the movant
2. the state of the balance between this harm and the injury
that granting the injunction will inflict on other parties
3. the probability that the movant will succeed on the merits
4. the public interest
Dataphase Systems, Inc. v. C L Systems, Inc., 640
F.2d 109, 113 (8th Cir. 1981) (en banc). While no single
factor is dispositive, the Eighth Circuit has stated that
“likelihood of success on the merits is most
significant.” Laclede Gas Co. v. St. Charles Cnty.,
Mo., 713 F.3d 413, 419 (8th Cir. 2013) (quoting
Minn. Ass'n of Nurse Anesthetists v. Unity
Hosp., 59 F.3d 80, 83 (8th Cir. 1995)). In evaluating
the factors, I must “flexibly weigh the case's
particular circumstances to determine whether the balance of
equities so favors the movant that justice requires the court
to intervene.” Hubbard Feeds, Inc. v. Animal Feed
Supplement, Inc., 182 F.3d 598, 601 (8th Cir. 1999).
“The party seeking injunctive relief bears the burden
of proving all the Dataphase factors.”
Watkins Inc. v. Lewis, 346 F.3d 841, 844 (8th Cir.