     No. 10-0383-cv
     RBC Nice Bearings, Incorporated v. Peer Bearing Company


 1                                   UNITED STATES COURT OF APPEALS
 2                                       FOR THE SECOND CIRCUIT
 3
 4                                                    SUMMARY ORDER
 5
 6   RULINGS BY SUM M ARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
 7   SUM M ARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERM ITTED AND IS GOVERNED BY
 8   FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1. WHEN
 9   CITING A SUM M ARY ORDER IN A DO CUM ENT FILED W ITH THIS COURT, A PARTY M UST CITE
10   EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (W ITH THE NOTATIO N
11   “SUM M ARY ORDER”). A PARTY CITING A SUM M ARY ORDER M UST SERVE A COPY OF IT ON ANY
12   PARTY NOT REPRESENTED BY COUNSEL.
13
14         At a stated term of the United States Court of Appeals for the Second Circuit, held at
15   the Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New
16   York, on the 15 th day of December, two thousand ten.
17
18   PRESENT:            GERARD E. LYNCH,
19                       DENNY CHIN,
20                                     Circuit Judges,
21                       EDWARD R. KORMAN,
22                                     District Judge.*
23
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25
26   RBC NICE BEARINGS, INC., ROLLER BEARING COMPANY OF AMERICA,
27                              Plaintiffs-Counter-Defendants-Appellants,
28
29                                 v.                                                  No. 10-0383-cv
30
31   PEER BEARING COMPANY,
32                                                      Defendant-Counter-Claimant-Appellee.
33
34   --------------------------------------------------------------------
35
36   FOR APPELLANTS:                         JOSEPH W. MARTINI (Aaron S. Bayer, on the brief),
37                                           Wiggin and Dana LLP, New Haven, Connecticut.
38
39   FOR APPELLEE:                           THOMAS C. MCDONOUGH (James P. Muraff, Thomas E.
40                                           Williams, and Stephen Fedo, on the brief), Neal, Gerber &
41                                           Eisenberg, LLP, Chicago, Illinois.

               *
              Honorable Edward R. Korman of the United States District Court for the Eastern
     District of New York, sitting by designation.
 1          Appeal from the United States District Court for the District of Connecticut (Vanessa

 2   L. Bryant, Judge).

 3          UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND

 4   DECREED that the judgment of the district court is AFFIRMED.

 5          Plaintiffs-counter-defendants-appellants RBC Nice Ball Bearing and Roller Ball

 6   Bearing Company of America (together, “Nice”) appeal from that portion of an October 29,

 7   2009 judgment of the United States District Court for the District of Connecticut (Bryant, J.)

 8   granting summary judgment on Nice’s federal trademark claims to defendant-counter-

 9   claimant-appellee Peer Bearing Company (“Peer”) on the basis of laches and dismissing

10   Nice’s related Connecticut state law claims as barred by the applicable statutes of limitations.

11   We assume the parties’ familiarity with the underlying facts and the procedural history of the

12   case, which we reference only as necessary to explain our decision.

13                                          DISCUSSION

14   I. Trademark Claims

15          Summary judgment is appropriate when, drawing all reasonable inferences in favor

16   of the non-moving party, “there is no genuine dispute as to any material fact and the movant

17   is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); see also Miller v. Wolpoff

18   & Abramson, L.L.P., 321 F.3d 292, 300 (2d Cir. 2003). Though this Circuit has not yet

19   settled on the appropriate standard to review a grant of summary judgment based on laches,

20   compare Hermes Int’l v. Lederer de Paris Fifth Ave., Inc., 219 F.3d 104, 107 (2d Cir. 2000)

21   (applying de novo review), with Eppendorf Netheler Hinz GMBH v. Nat’l Sci. Supply Co.,


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 1   14 F. App’x 102, 105 (2d Cir. 2001) (applying abuse of discretion review), in this case the

 2   precise standard is immaterial: we reach the same conclusions as the district court and so we

 3   would affirm its decision regardless of the applicable standard.

 4          Laches bars a claim for relief under federal trademark law where (1) the “plaintiff had

 5   knowledge of [the] defendant’s use of its marks” and “inexcusably delayed in taking action,”

 6   and (2) the “defendant will be prejudiced by permitting [the] plaintiff . . . to assert its rights

 7   at this time.” Saratoga Vichy Spring Co. v. Lehman, 625 F.2d 1037, 1040 (2d Cir. 1980)

 8   (internal quotation marks omitted). The “burden of proving or rebutting the defense [of

 9   laches]” is determined by reference to “analogous [state] statutes of limitation.” Conopco,

10   Inc. v. Campbell Soup Co., 95 F.3d 187, 191 (2d Cir. 1996) (internal quotation marks

11   omitted). “When a suit is brought within the time fixed by the analogous statute, the burden

12   is on the defendant” to demonstrate the applicability of the laches defense. Id. (internal

13   quotation marks omitted). “On the other hand, when the suit is brought after the statutory

14   time has elapsed, the burden is on the complainant to aver and prove the circumstances

15   making it inequitable to apply laches to his case.” Id. (internal quotation marks omitted).

16   As the district court found, Connecticut’s three-year statute of limitations for fraud

17   determines which party has the burden of proving the applicability or inapplicability of the

18   laches defense in this case. RBC Nice Bearings, Inc. v. Peer Bearing Co., 676 F. Supp. 2d

19   9, 25 (D. Conn. 2009); see also Argus Res. Group, Inc. v. Argus Media, Inc., 562 F. Supp.

20   2d 260, 273 (D. Conn. 2008), citing Conopco, 95 F.3d at 191. Nice filed its complaint on

21   September 5, 2006 and so the pertinent date for laches purposes is September 5, 2003.


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 1          A. Knowledge of Peer’s Use of 1600 Series Designation

 2          Nice’s claims revolve around Peer’s adoption of the same 1600 Series designation

 3   Nice had long used for its equivalent inch-based bearings. The only reasonable inference that

 4   can be drawn from the record is that Nice should have known of Peer’s allegedly infringing

 5   conduct – which began no later than 1961 – well before September 5, 2003. Nice’s argument

 6   that it was “at most . . . aware of Peer’s sale of equivalent bearings . . . and not Peer’s

 7   infringing sale of bearings actually using the 1600 SERIES trademark” misses the point.

 8   Actual knowledge of Peer’s allegedly infringing conduct is not required: the applicable

 9   limitations period is triggered once Nice “should have known” about it. ProFitness Physical

10   Therapy Ctr. v. Pro-Fit Orthopedic & Sports Physical Therapy P.C., 314 F.3d 62, 70 (2d Cir.

11   2002). “[T]he law is well settled that where the question of laches is in issue the plaintiff is

12   chargeable with such knowledge as he might have obtained upon inquiry, provided the facts

13   already known by him were such as to put upon a man of ordinary intelligence the duty of

14   inquiry.” Johnston v. Standard Min. Co., 148 U.S. 360, 370 (1893); see also Polaroid Corp.

15   v. Polarad Elecs. Corp., 182 F. Supp. 350, 356 (E.D.N.Y. 1960), aff’d, 287 F.2d 492 (1961).

16          By 2002, Nice was aware that some of its largest customers had begun sourcing their

17   1600 Series bearings from Peer instead. (Indeed, Nice was aware of at least one such sale

18   as early as 1997.) Nice was also aware that Peer was marketing its products as equivalent

19   to Nice’s 1600 Series bearings. Had Nice made even the most limited inquiry about its

20   competition, as a reasonable business would have, it would easily have discovered Peer’s

21   catalogs, which for many years had openly advertised its 1600 Series bearings. We conclude,


                                                    4
 1   as did the district court, that any reasonable factfinder would be compelled to find that Nice

 2   should have known about Peer’s allegedly infringing conduct well before September 5, 2003

 3   and, as a result, the presumption of laches applies and the burden is on Nice to demonstrate

 4   its inapplicability to this case.

 5          B. Unreasonable Delay in Filing Suit

 6          Nice offers no evidence to rebut the presumption of unreasonable delay and therefore

 7   its more than five-year delay before filing suit was unreasonable as a matter of law.

 8          C. Prejudice

 9          Peer strengthens the presumption of prejudice in its favor by noting its continuous use

10   of the 1600 Series designation for nearly half a century and the difficulties posed by

11   defending this action after so many years have passed. Not only have memories faded and

12   documents been lost, but, as the district court found, many of the “individuals who would

13   have knowledge regarding the issues relevant to this case are now dead,” RBC Nice

14   Bearings, Inc., 676 F. Supp. 2d at 27, including Robert Balderston, a Nice employee from

15   1940 until 1972 who participated in the naming of the 1600 Series and had intimate

16   knowledge of Nice’s trademark practices, and died in 2008. Nice fails to adequately rebut

17   this evidence or to raise a material issue of fact that would undermine the presumption of

18   prejudice in this case.

19          D. Bad Faith as a Bar to Raising Laches Defense

20          Nice argues that the district court erred in permitting Peer to raise laches as a defense.

21   As Nice points out, Laches cannot be raised by “one tainted with inequitableness or bad faith


                                                    5
 1   relative to the matter in which he seeks relief.” Precision Instrument Mfg. Co v. Auto.

 2   Maint. Mach. Co., 324 U.S. 806, 814 (1945). In the trademark context, bad faith requires a

 3   showing that the junior user “inten[ded] to promote confusion or exploit [the senior user’s]

 4   good will or reputation.” Star Indus., Inc. v. Bacardi & Co., 412 F.3d 373, 388 (2d Cir.

 5   2005). As this Court stated in Hermes, the laches defense is inapplicable where the junior

 6   user “intentionally traded off the [senior user’s] name and protected products.” 219 F.3d at

 7   107.

 8          Nice cobbles together words and phrases from the deposition of Peer’s founder,

 9   Laurence Spungen (“Spungen”) – who made the decision to adopt the 1600 Series

10   designation as Peer’s own – that it believes show bad faith. Spungen testified that, in

11   adopting the 1600 Series designation, he was aware that Nice was using the same designation

12   and that customers “in some respect” associated Nice with 1600 Series bearings. He also

13   admitted that Nice’s use of the 1600 Series designation “had some influence” on his decision

14   to adopt the same designation.

15          While Spungen’s deposition demonstrates his knowledge of Nice’s prior use of the

16   mark, more than mere knowledge is required; to forestall the laches defense, there must be

17   a finding of the infringer’s intent “to promote confusion or exploit [plaintiff’s] good will or

18   reputation.” Star Indus., 412 F.3d at 388. Nothing in the record contradicts Spungen’s

19   disavowal of such an intention, and much evidence corroborates it. For example, it is

20   undisputed that Peer’s catalogs and packaging always clearly and prominently labeled its

21   bearings with Peer’s corporate name and logos, which Nice does not claim are similar to its


                                                   6
 1   own. Moreover, “Spungen later testified that, at the time he adopted the 1600 Series

 2   designations, he did not believe that Nice bearings were good quality,” which the district

 3   court concluded “belie[d] any inference that [he] wanted customers to confuse or otherwise

 4   associate his bearings with Nice bearings.” RBC Nice Bearings, 676 F. Supp. 2d at 25-26.

 5   (In fact, it is undisputed that Peer’s 1600 Series bearings met the applicable Annular Bearing

 6   Engineering Committee standard, while Nice’s bearings did not.) Furthermore, Nice does

 7   not contest Peer’s evidence that the sophisticated purchasers who are both companies’

 8   customers independently test the quality of bearings they receive, so that the series number

 9   matters much less than whether the specific bearing purchased meets the customer’s

10   requirements. On this record, no factfinder could conclude that Spungen adopted the 1600

11   Series designation in order to free-ride on Nice’s reputation or confuse customers about the

12   origin of his product. Peer was therefore free to raise laches as a defense to Nice’s claims

13   of infringement.

14   II. Connecticut State Law Claims

15          Nice alleges various state law causes of action predicated on the same factual

16   assertions as its federal trademark claims. While conceding that a three-year limitations

17   period applies to these claims and that the limitations period accrues on the date of

18   infringement, Nice insists that each allegedly infringing action creates a new three-year

19   limitations period and so its claims are not time-barred insofar as they reference allegedly

20   infringing actions taken by Peer within three years of Nice’s 2006 complaint.



                                                   7
 1          Nice fails to identify a single case applying Connecticut law in the manner it suggests

 2   to the causes of action at issue in this case. Nor could it. In a closely analogous case

 3   addressing a counterclaim alleging ongoing violations of the Connecticut Trademark Statute,

 4   fraud, unfair trade practices, tortious interference, and breach of contract, a Connecticut state

 5   court held that “to allow the defendants to now come forward and pursue these allegations

 6   . . . after knowing of the violations for almost a decade would violate the purpose of a statute

 7   of limitations, which ‘is to prevent the unexpected enforcement of stale claims.’” S. Pope

 8   Inc. v. Pope Exterminating, No. 66712, 1993 WL 489708, at *3 (Conn. Super. Ct. Nov. 17,

 9   1993), quoting Vilcinskas v. Sears, Roebuck & Co., 144 Conn. 170, 174-75 (1956); see also

10   Argus Research Group, 562 F. Supp. 2d at 279-81; Roberto’s, Inc. v. Mirafrore, No. CV

11   940312295S, 1996 WL 150379, at *2 (Conn. Super. Ct. Mar. 12, 1996). The same is

12   certainly true here. Furthermore, under Connecticut law, “[t]he doctrine of laches applies

13   where a trademark owner has ignored a known infringer of his mark for a considerable length

14   of time.” Roberto’s, 1996 WL 150379, at *2, citing Polaroid, 287 F.2d at 492. But see P&S

15   Contractors v. Tig HitCo, Inc., No. HHBCV085010760S, 2009 WL 1424612, at *5 n.9

16   (Conn. Super. Ct. Mar. 31, 2009) (“As for whether laches may be a defense . . . the law is

17   unsettled.”). We therefore affirm the district court’s dismissal of Nice’s state law claims as

18   time-barred.

19

20



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1                                      CONCLUSION

2         We have considered all of Nice’s remaining arguments and find them to be without

3   merit. Accordingly, the judgment of the district court is AFFIRMED.
4
5
6                                    FOR THE COURT:
7                                    Catherine O’Hagan Wolfe, Clerk of Court
8




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