All In Good Time – Doctrine of Laches Defence Rejected

In A.I.G. Agency Inc v American International Group 21-1948 the Court of Appeals for the Eight Circuit’s (CA8C’s) application of the doctrine of progressive encroachment led it to reject the district court’s finding of a doctrine of laches defence.

Agency operates primarily in Missouri and began using AIG in relation to its insurance broker services around 1958. International was incorporated in 1967 and began using AIG in relation to insurance services sometime between 1968 and 1970, and obtained its first federal trademark registration for AIG in relation to insurance in 1981. In 1995 International notified Agency about its registration and demanded Agency stop using AIG. In response Agency asserted its right to use AIG in Missouri and Illinois on account of using the mark there prior to International’s registration. In 2012 International significantly increased its direct to consumer marketing strategy and Agency experienced a significant increase in incidences of consumer confusion thereafter.

In 2017 Agency sued International on the basis of its common law trademark rights, unfair competition and contravention of 15 USC § 1125 (false designations of origin; false description or representation). International counter-claimed for trademark infringement, unfair competition and dilution and moved for summary judgement on the basis of a doctrine of laches, which provides a defence when the claimant inexcusably delayed in asserting its claim. The district court granted summary judgement to International on the basis of its doctrine of laches defence.

On appeal, the CA8C noted that a party raising a laches defence bears the burden of establishing: (1) a delay in asserting a right or a claim; (2) that the delay was not excusable; and (3) that there was undue prejudice to the party against whom the claim is asserted. The CAFC further noted that in this case the doctrine of progressive encroachment is a relevant factor in whether there was inexcusable delay. Under the doctrine of progressive encroachment, the delay is measured from when the infringement or offending use became actionable and provable, not from when the claimant first learned of the potentially infringing or offending mark.

Agency argued that given the fact-intensive nature of the likelihood of confusion inquiry it was only following International’s change of marketing strategy in 2012 that it had actionable grounds. By asserting that there was inexcusable delay, International had the burden of showing that there was a likelihood of confusion prior to its 2012 change in marketing strategy. The CA8C found International provided little to no pre-2012 evidence of confusion in Agency’s markets of Missouri and Illinois while also finding that to be consistent with Agency’s evidence showing consumer confusion being negligible pre-2012 and significantly increasing from 2015. Another factor was the degree to which the two parties were competitive prior to International’s 2012 change in marketing strategy. Whereas International was primarily an insurance product creator or underwriter, Agency was an insurance broker, sometimes selling International’s products. Although the parties operated in both the commercial insurance market and the consumer insurance market prior to 2012, until 2011 International’s involvement in direct-to-consumer products was marketed under a different name.

These factors led the CA8C to find there to be a genuine dispute of material fact as to whether a likelihood of confusion existed pre-2012, thereby preventing application of the doctrine of laches at the summary judgement stage. Hence, while International’s 1995 cease and desist letter made Agency cognizant of the risk of confusion, on the evidence this was insufficient to establish that Agency had an actionable and provable claim at that time.

Author: Quinn Miller

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