VOGEL
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`Law Firm
`
`
`
`TTAB
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`Phone: 701.356.6328 | Fax: 701.476.7676 |ss aeth@vo ellaw.com
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`Sidney J. opaem
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`August 7, 2006
`
`United States Patent and Trademark Office
`Trademark Trial and Appeal Board
`Attn; Jy11 s_ Taylor, Esq_
`P.O. Box 1451
`Alexandria, VA 223 13 -1451
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`~6-*""—”‘“
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`°3'°9'2°°6
`US. Patent & TMOYCITM Mail Rcpt Dt. #3i'.
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`Re:
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`Steve Orwig and Mary C. Orwig v. Midcontinent Livestock Supplements, Inc.
`
`Cancellation No. 92043058
`
`Dear Ms. Taylor:
`
`The civil action in this matter has been completed. Attached, please find certified copies
`of the Findings of Fact and Conclusions of Law entered by Judge Erickson and the Judgment.
`
`Trial was held in November and December of 2005. Judge Erickson entered the attached
`Findings of Fact and Conclusions of Law on July 6, 2006. Judgment was entered on August 1,
`2006.
`
`As you will see, Judge Erickson concluded as a matter of law that the above-referenced
`cancellation proceeding is without merit. (Conclusion of Law No. 14).
`
`Further, the Court directed “the Patent and Trademark Office to dismiss Defendants’
`cancellation proceeding, and to dismiss Defendant’s pending trademark for MLS and design.”
`(Order No. 3).
`
`Claimant’s Steve and Marcy Orwig have applied for a trademark registration referenced
`in the Court’s Order No. 3. The application is a design only mark and carries Serial No.
`7836919.
`
`218 N? Avenue | P.0. Box 1389 | Fargo, ND 58107-1389 | www.vogeIlaw.com | Offices in Fargo, Bismarck, and Moorhead
`Including the former Gunhus Law Firm ""§L‘.“S
`
`

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`I/United States Patent and Trademark Office
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`August 7, 2006
`Page 2
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`Therefore, pursuant to the Court’s Order, Midcontinent Livestock Supplements, Inc.,
`respectfully requests that the Patent and Trademark Office:
`
`1)
`
`2)
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`Terminate the suspension of this cancellation proceeding and dismiss the
`cancellation proceeding; and
`
`Cancel the federal trademark application of applicants Steve and Mary Orwig
`(Serial No. 78366919).
`
`If you have any questions or need additional information, please do not hesitate to contact
`
`me.
`
`Very truly yours,
`
`\ %
`
`««/?/
`
`Sidney J. Sp eth
`
`Cc:
`
`John Alumit (w/encl.)
`Ron McLean (w/encl.)
`
`

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`Case 3:04-cv-00015-RRE-KKK Document 82
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`Filed 07/06/2006
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`Page1of18
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`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE DISTRICT OF NORTH DAKOTA
`
`SOUTHEASTERN DIVISION
`
`FINDINGS OF FACT AND
`CONCLUSIONS OF LAW
`
`Case No. 3:04-cv-015
`
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`)
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`Midcontinent Livestock Supplements,
`Inc., a Missouri Corporation,
`
`Plaintiff,
`
`v.
`
`Modern Livestock Specialites, Inc;
`Orwig’s MLS Tubs, Inc.; Steven Orwig,
`and Mary
`(“Marcy”) Orwig,
`
`Defendants.
`
`
`
`1. This action was commend by the filing of a complaint on February 19, 2004.
`
`2. Defendants filed a counterclaim on April 20, 2004.
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`3. Plaintiff Midcontinent Livestock Supplements (“Midcontinent”) was founded in 1987 in
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`Missouri by Raymond Orwig, Sr., to manufacture and sell molasses-based livestock feed
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`supplements. (Trial Transcript, hereinafter “T.” at 9-10, 113, 145-46).
`
`4. Since its inception in 1987, Midcontinent has continuously manufactured and marketed a
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`livestock feed supplement under the mark “MLS.” (T. 9-10, 145-46).
`
`5. Midcontinent has used the mark MLS both in connection with the name Midcontinent, as
`
`well as a stand-alone mark. Midcontinent has also used the MLS mark both alone and in
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`conjunction with the cow/calf logo. (T. 15, 146-153; Plaintiffs Exhibit, hereinafter “Pltf. Exs.” at
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`8, 31, 34, 35, 38, 39).
`
`6. Midcontinent’s product is a molasses-based livestock feed supplement. It is
`
`manufactured pursuant to a patented technology. The supplement is often placed in a container,
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`

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`Case 3:04-cv-00015-RRE-KKK Document 82
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`Page 2 of 18
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`such as a bucket or a tire. This supplement is known in the industry as “MLS tubs” or “MLS
`
`product.” (T. 113, 125, 146, 315-16).
`
`7. Midcontinent has been the sole user of the MLS mark in the livestock feed supplement
`
`industry, aside from licensed uses by Midcontinent’s distributors and dealers. (T. 10, 15-16, 85,
`
`125-26, 167, 486-88).
`
`8. Defendants allege that three livestock feed supplement companies use the MLS mark.
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`Two of the companies, Milliron Livestock Supplements and Meyers Livestock Supplements, are in
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`Canada and do not conduct business dealings in the United States. (T. 486-88). The other
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`company, Midwest Livestock Systems, had never sold livestock feed supplements and is now
`
`defunct. (T. 486-88).
`
`9. Midcontinent’s exclusive use of the mark MLS since 1987 has caused the mark to be
`
`associated with Midcontinent and its products. (T. 146, 318-19, 340, 455-56; Pltf. Ex. 39).
`
`10. Defendant Steve Orwig testified that people in the industry refer to Midcontinent as
`
`MLS and also refer to Midcontinent’s product as MLS product. (T. 146).
`
`1 1. During her time as director of national sales for Midcontinent, Marcy Orwig referred to
`Midcontinent as MLS and used MLS interchangeably with the name Midcontinent in advertising
`
`literature she created for the company. (T. 64-65, 149-51, 159-160, 469-72; Pltf. Exs. 31, 34, 35,
`
`38, 39).
`
`12. Prior to 1992, Steven Orwig was either employed by Midcontinent or worked as an
`
`independent distributor of Midcontinent products. (T. 17-18, 154-57, 172-74, 223, 225, 283-84,
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`472-73).
`
`13. In 1989, Steven and Marcy Orwig moved to Alliance, Nebraska, where Steve and two
`
`partners formed a company, then called MLS Nebraska. While not owned by Midcontinent, it
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`2
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`Page 3 of 18
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`licensed technology from Midcontinent and sold MLS product. (T. 125, 156, 315-16).
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`14. In 1989, Marcy Orwig created a design that was later used by MLS Nebraska. This
`
`design featured a silhouette of the front portions of a cow and calf, and is referred to as the
`
`“cow/calf 1ogo.” (T. 311, 411, 412).
`
`15. Marcy Orwig was not an employee of Midcontinent or MLS Nebraska when she
`
`created the cow/calf logo currently at issue. Marcy Orwig created the design in her home in
`
`Fairbury, Nebraska for the purpose of replacing the logo used by Harlan Doeschott’s livestock feed
`
`supplement company.
`
`16. Midcontinent adopted this cow/calf logo under the encouragement of Steven Orwig.
`
`(T. 169-70). This use began in approximately 1989, before Raymond Orwig, Sr.’s death in 1991.
`
`(T. 26, 115).
`
`17. The employment relationship between Steven Orwig and MLS Nebraska ended in
`
`1990. (T. 312-14). After this, but still in 1990, Steven and Marcy Orwig worked with a
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`Midcontinent distributor in South Dakota as an employee of Midcontinent. (T. 17-18, 157, 223,
`
`225)
`
`18. Midcontinent eventually formed a subsidiary, MLS Dakota, and began construction of a
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`manufacturing plant in Ellendale, North Dakota. This facility opened in 1993. (T. 159).
`
`19. Steven and Marcy Orwig, as employees of Midcontinent, oversaw the construction of
`
`the Ellendale plant. Steven Orwig became head of sales and Marcy Orwig became plant manager.
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`In 1997, Steven Orwig became National Sales Manager for Midcontinent and Marcy Orwig became
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`National Promotions Director for Midcontinent. (T. 159-60).
`
`20. Under the management of Steven and Marcy Orwig, MLS Dakota adopted the cow/calf
`
`logo as part of its trademark and has used it since 1993. (T. 83-84, 425-26, 467).
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`3
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`Page 4 of 18
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`21. Midcontinent used the cow/calf design as part of its trademark since 1989 or 1990.
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`(T.
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`26-28, 83-84, 115, 128, 465-66). Midcontinent has expended money to promote the logo design as
`
`its trademark.
`
`22. The cow/calf design has come to represent Midcontinent among livestock feed
`
`supplement customers. (T. 48, 115-16, 128, 174). Steven Orwig has admitted this, and has stated
`
`that a rancher who saw the cow/calf logo and MLS mark would recognize them as representing
`
`Midcontinent.
`
`(T. 174, 191-92; Pltf. Ex. 43).
`
`23. Midcontinent used the cow/calf logo for over a decade before applying for a federal
`
`trademark in September 2001. (T. 131). Midcontinent received the federal trademark registration
`
`in 2003. (T. 32-33; Pltf. Ex. 49).
`
`24. Defendants never objected to the use of the cow/calf logo by Midcontinent prior to the
`
`February, 2004 commencement of the current action.
`
`(T. 30-32, 37, 84-85, 115-17, 124, 170-71,
`
`286-87, 468-69). Defendants objected to Plaintiffs removal of a copyright symbol (“©”) Marcy
`
`Orwig had placed on the cow/calf logo. Defendants were aware of the removal of the copyright
`
`symbol, but never withdrew permission to use the logo. (T. 28-29, 116-17, 286-87).
`
`25. Steven and Marcy Orwig left employment with Midcontinent in 2000 and formed
`
`Modern Livestock Specialties (“Modem”). Modern was created to be the exclusive distributor of’
`
`all products produced at Midcontinent’s Ellendale facility. (T. 34-35, 77, 99, 118, 131-32, 163-64,
`
`293, 365, 427).
`
`26. The name “Modem Livestock Supplements” was specifically chosen so that the
`
`company could utilize the initials MLS. This was done to maintain continuity with Midcontinent
`
`customers and to capitalize on Midcontinent’s reputation for quality. (T. 162-63, 175, 294-95,
`
`340). Each of companies formed by Defendants have utilized the initials MLS for the same reason.
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`4
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`Page 5 of 18
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`27. Midcontinent approved Modern’s use of the MLS mark as Modern was an exclusive
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`distributor of Midcontinent’s products. Midcontinent regularly encouraged its dealers and
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`distributors to utilize the MLS mark in connection with the marketing of MLS product. (T. 35, 72,
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`125-27).
`
`28. After one year, the board of Midcontinent terminated its written distribution agreement
`
`with Modern, although the companies continued to operate under substantially similar terms until
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`2003. (T. 36-37, 290).
`
`29. In October 2003, Modern terminated its relationship with Midcontinent in its entirety
`
`and began construction of a competing plant in Ellendale, North Dakota. This facility opened in
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`March of 2004. Modern continued to use the MLS mark and federally registered logo, despite the
`
`fact that permission to use both had been terminated. (T. 445-46).
`
`30. After the severance from Midcontinent, Modern wrote to their customers, but did not
`
`inform those customers that Modern was no longer associated with Midcontinent and no longer
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`carried Midcontinent product. (T. 164-65; Pltf. Ex. 21).
`
`31. Defendants now operate chiefly through two entities, Orwig’s MLS Tubs, Inc., which
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`manages the production facility, and MLS International, Inc., which is the sales arm, and interacts
`
`with the consuming public.
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`(T. 17-18, 154, 156-57, 172-74, 445-46, 473).
`
`32. Defendant Modem has, on two occasions, attempted to ship their products into Canada
`
`by using Midcontinent’s Canadian registration number. (T. 93-94; Pltf. Exs. 68, 70).
`
`33. Modern has sold a product containing Rabon, which requires an EPA registration
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`number. Modern has placed Midcontinent’s registration number on products containing Rabon.
`
`(Ex. 61).
`
`

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`Case 3:04-cv-00015-RRE-KKK Document 82
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`Filed 07/06/2006
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`Page 6 of 18
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`34. Modern has received payments for products that were intended for Midcontinent.
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`Marcy Orwig stated that there is an misdirection rate of about 5 percent. (T. 504; Pltf. Ex. 64).
`
`35. Further, on four occasions, goods and services purchased by Modern were charged to
`
`Midcontinent. All of these transactions were performed by the same employee of Modern. It is
`
`unclear whether this was the result of deliberate fraud or merely incidences of confusion by third
`
`party vendors. (T. 91-93; Pltf. Exs. 65, 66, 67, 71).
`
`36. Defendants have also used Raymond Orwig, Sr. in advertising as to suggest that
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`Defendants are themselves, or are representatives of, the business he established. (T. 179-83; Pltf.
`
`Ex. 56).
`
`37. Most of the products sold by Modern use the same or similar name and number system
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`used by Midcontinent to identify their own products. (T. 193-94).
`
`38. Both Midcontinent and Modern target the same customers and do business within the
`
`same channels of trade. (T. 175).
`
`COCU
`
`1. The Court has jurisdiction of the subject matter and the pursuant to 28 U.S.C. § 1331.
`
`2. Midcontinent has been the exclusive user of the mark MLS, having used the mark in
`
`conjunction with the marketing and use of their product since 1987.
`
`3. MLS is a descriptive name and is subject to trademark protection as the mark has gained
`
`secondary meaning in the minds of its customers. This secondary meaning arises out of the
`
`uninterrupted, exclusive, and substantial use by Midcontinent in connection with the marketing of
`
`their products throughout the Midwest.
`
`4. Defendant’s use of Midcontinent’s MLS logo is likely to cause, and has caused,
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`6
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`Case 3:04-CV-00015-FlFlE-KKK Document 82
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`Page 7 of 18
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`customer and vendor confusion.
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`5. Marcy Orwig has asserted copyright ownership of the logo.
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`6. Marcy Orwig was not employed by Midcontinent or its subsidiaries, distributors, or
`
`agents when she produced the cow/calf logo and her copyright is valid.
`
`7. Steven and Marcy Orwig encouraged Midcontinent’s use of the cow/calf logo, creating
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`an non-exclusive oral license of the use of the cow/calf logo in favor of Midcontinent.
`
`8. Midcontinent used the cow/calf logo with Marcy Orwig’s full knowledge and consent
`
`for a period of almost 15 years.
`
`9. At no time during the period of use has Marcy Orwig or any other Defendant objected to
`
`the use of the cow/calf logo. This failure to object continued for a year after Midcontinent had
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`received federal registration of the cow/calf logo.
`
`10. Denial of Midcontinent’s use of the cow/calf logo would confuse consumers and
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`bestow a windfall on any subsequent users of the logo, including the Defendants.
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`11. Defendants are estopped from claiming copyright infringement by their conduct.
`
`12. Modern’s use of the MLS mark and the cow/calf logo has infringed upon the trademark
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`held by Midcontinent.
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`13. Midcontinent is entitled to injunctive relief in its favor barring Defendants from using
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`the MLS mark or the cow/calf logo as well as any mark confusingly similar to the above referenced
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`marks.
`
`14. The Defendants’ action for cancellation of the registration of the marks registered with
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`the U.S. Patent and Trademark Office is without merit.
`
`15. The Defendants’ registration of marks “MLS” and “MLS Tubs” with the North Dakota
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`Secretary of State is contrary to law, as the marks are the property of Midcontinent, and the North
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`Case 3:04-cv-00015-FIRE-KKK Document 82
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`Filed 07/06/2006
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`Page 8 of 18
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`Dakota Secretary of State is hereby directed to strike the registrations as being granted contrary to
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`law.
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`16. Midcontinent is entitled to damages against the Defendants in the amount of $50,000.
`
`ANALXSLS
`
`Viability of “MLS” as a trademark
`
`A common law trademark arises from the adoption and actual use of a word, phrase, logo,
`
`or other device to identify and distinguish goods or services with a particular company. S3; A1_l,a1;_cl
`
`Enter, 2, Adyagced Eroggamming fies” inc. 249 F.3d 564, 571 (6th Cir. 2001); First flank v, First
`
` -, 84 F.3d 1040, 1044 (8th Cir. 1996); 15 U.S.C. §1127 (“The Lanham Act”). In
`
`order to establish trademark infringement under Section 43(a) of the Lanham Act, a plaintiff must
`
`show that it has a protected trademark and that use of an allegedly infringing mark is likely to cause
`
`customer confusion. Hubbard Feeds, Inc. v, Animal Feed Supplement, Inc,, 182 F.3d 598, 601 (8th
`
`Cir. 1999). The North Dakota Supreme Court has adopted the same standard for proving trademark
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`infringement under North Dakota law. KAT yideo Productions, Inc. v. KKCT-FM Radio, 560
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`N.W.2d 203, 208 (N.D. 1997)“
`
`Midcontinent has been the exclusive user of the mark MLS, having continually used the
`
`mark in conjunction with the marketing and sale of their product since 1987 . Defendants made
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`prior use of the MLS mark as either employees of Midcontinent or as distributors of Midcontinent’s
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`products. Afier 2003, Defendants marketed non-Midcontinent product under the MLS mark. As
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`such, Plaintiff is the senior user of the MLS mark.
`
`The level of protection afforded a mark is proportionate to is level of distinctiveness. Se_e_
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`General Mills, Inc” v. Kellogg Co., 824 F.2d 622, 625 (8th Cir. 1987). There are four categories of
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`distinctiveness: (1) generic; (2) descriptive; (3) suggestive; and (4) arbitrary or fanciful. i
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`News-Tribune v, Mesabi Pub1’g Co., 84 F.3d 1093, 1096 (8th Cir. 1996); General Mills, 824 F.2d
`
`at 625. The Eighth Circuit describes the differences among the classifcations:
`
`An arbitrary of fanciful trademark is the strongest type of mark
`and is afforded the highest level of protection. At the other end
`of the spectrum, a generic term is one that is used by the general
`public to identify a category of goods, and as such merits no
`trademark protection. Suggestive and descriptive marks fall
`somewhere in between. A suggestive mark is one that requires
`some measure of imagination to reach a conclusion regarding the
`nature of the product. A descriptive mark, on the other hand,
`immediately conveys the nature or function of a product and is
`entitled to protection only if it has become distinctive by
`acquiring a secondary meaning.
`
` , 84 F.3d at 1096 (internal citations omitted). The categorization of a specific
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`term or phrase is a factual issue. , 750 F.2d 631, 635
`
`(8th Cir. 1984). This Court finds that MLS is a descriptive name.
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`Terms that are merely descriptive are not entitled to protection absent a showing of
`
`secondary meaning. G, flejlman Breyyigg Co, 2, Aghguser-Busch, 873 F.2d 985, 991-92 (7th Cir.
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`1989). Though a mark may be merely descriptive, it can be used in business long enough to
`
`generate sufficient reputation and goodwill as to establish this secondary meaning in the minds of
`
`customers. The mark must be of sufficient duration and quality that the mark identifies not simply
`
`the product, but the actual producer.
`
`§_e_e_ .,
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`758 F. Supp. 512, 522 (E.D. Mo. 1991); QC. Comics y, Bowers, 465 F. Supp. 843, 846 (S.D.N.Y.
`
`1978); 15 U.S.C. § 1052(f) (proof of substantial, continuous, and exclusive use of a mark for five
`
`years is prima facie evidence that the mark has become distinctive of the owner’s good or service).
`
`The MLS mark, by virtue of its long (since 1987) and exclusive association with Midcontinent, has
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`Page 10 of 18
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`acquired secondary meaning in the minds of its consumers. This is supported by testimony offered
`
`by Plaintiff that MLS is recognized throughout the industry as representing Midcontinent. (T. 318-
`
`19, 340, 455-56; Pltf. Ex. 39). Defendant Steven Orwig admits the same. (T. 146).
`
`Defendants’ use of the MLS mark creates a likelihood of confusion
`
`In order to prevail to prevail in a trademark-infringement claim, the plaintiff must show a
`
`likelihood of consumer confusion. Minnesota Mining & Manufacturing Company v. Rauh Rubber,
`
`mg, 130 F.3d 1305, 1308 (8th Cir. 1997). Likelihood of customer confiasion is the “hallmark of
`
`
`
`
`
`:any trademark infringement claim.” Ld. (citing _ ;4 - =._a_ 37 F.3d 74,
`
`80 (2d Cir. 1994)).
`
`In determining whether there exists a likelihood of customer confusion, the Court considers
`
`the following: (1) the strength of the owner’s mark, (2) the similarity of the owner’s mark and the
`
`mark of the alleged infringer, (3) the degree to which the products compete with one another, (4) the
`
`alleged infringer’s intent to pass its goods off as those of the trademark owner, (5) incidents of
`
`actual confusion, and (6) whether the degree of purchaser care can eliminate any likelihood of
`
`confusion which would otherwise exist. , 826 F.2d
`
`775, 776 (8th Cir. 1987) (citing Sguirtco v. Seven-Up C0,, 628 F.2d 1086, 1091 (8th Cir. 1980)). A
`
`determination of customer confusion does not turn on any one factor. §_ggi;t§_g, 628 F.2d at 1091
`
`CL 523 F.2d 1331 (2d
`
`Cir. 1975)). Nor should any factor should be afforded excessive weight at the expense of any other
`
`factor. Life lechgglogjes, 826 F.2d at 776 (citing
`
` , 815 F.2d 500, 504 (8th Cir. 1987)).
`
`In examining the first factor, this Court concludes that MLS is a fairly strong mark. While
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`the mark is not comparable to marks of international recognition, such as IBM, GB, or BMW, it is
`
`sufficiently recognized to permit advertising wherein the initials MLS, rather than the full company
`
`name, are mentioned. (Pltf. Exs. 35, 39). In short, in its industry niche and geographic area, MLS
`
`has come to represent Midcontinent Livestock Supplements.
`
`In addressing the second factor, the Court finds that the competing MLS marks are identical
`
`and that the full, formal names of the companies are extremely similar. The Court also notes when
`
`the competing products are analogous in nature, less similarity between the parties’ competing
`
`marks is needed to support a finding of infringement. Q. (citing
`
` , 314 F.2d 149, 157-58 (9th Cir. 1963)). Defendants’ use of the MLS mark
`
`leaves little room for distinction between the two companies or their products. The Court further
`
`reads the addition of “Orwig’s” to the front of MLS as to likely create more confusion, rather than
`
`less. By Defendant Steven Orwig omitting his first name from the name “Orwig’s MLS Tubs,” a
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`customer could easily mistake the product as one produced by Midcontinent, as Midcontinent was
`
`founded and run by Raymond Orwig, Sr. until his death, and is run by the Orwig family today. The
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`Court finds that this factor leans heavily towards a likelihood of customer confusion.
`
`The third factor also weighs in favor of a likelihood of customer confusion. Both
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`Midcontinent and Modern manufacture and sell a molasses-based feed supplement, designed for
`
`consumption by ruminant livestock. The products compete in the same geographic area, indeed the
`
`parties are direct competitors. Further, this Court finds that Modern intended to pass its goods off
`
`as Midcontinent products, or, at a minimum, wished to convey the image that Midcontinent
`
`authorized or otherwise endorsed Modem’s products. Modern not only utilized the mark MLS, but
`
`also omitted Steven Orwig’s first name in its marketing in order to create the image that “Orwig’s
`
`MLS Tubs” was a product created by the company of Raymond Orwig, Sr. Steven Orwig stated
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`that the rationale behind selecting the name Modern was to mimic the mark MLS and, in so doing,
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`to capitalize on Midcontinent’s/MLS’s reputation for quality and to maintain continuity with
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`customers. (T. 162-63, 175, 294, 340).
`
`The record also shows instances of actual customer confusion. Modern has received
`
`payments for products that were intended for Midcontinent, and have stated that there is an
`
`misdirection rate of about 5 percent. (T. 295, 504, Pltf. Ex. 64). There has also been possible
`
`mistakes in billing by third parties, having sent remittance to Midcontinent rather than Modern. (T.
`
`91-93; Pltf. Exs. 65, 66, 67, 71). This Court accords great weight to these instances of actual
`
`confusion. “Actual confusion is not essential to a finding of trademark infringement, although it is
`
`positive proof of a likelihood of confusion.” mm, 628 F.2d at 1091. The Court finds that this
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`factor weighs strongly in favor of finding of customer confusion.
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`In addressing the last factor, that of consumers’ ability to avert future confusion, the Court is
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`mindful of the relative sophistication of the Midcontinent and Modem’s customers. As commercial
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`cattle producers, these consumers can be expected to pay a great deal of attention to their
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`supplement suppliers. It is unlikely that these customers would repeatedly make mistaken
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`purchases. This factor tends to weight against a finding of customer confusion.
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`In balancing these factors, the Court finds that there is a likelihood of customer confusion.
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`The Court has already concluded that Midcontinent has a valid trademark in the MLS mark. The
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`Court thus concludes that Defendants’ use of the MLS mark constitutes trademark infringement.
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`Use of Cow/Calf Logo
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`The Copyright Act defines a “transfer of copyright ownership” to consist of “an assignment,
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`mortgage or an exclusive license, or any other conveyance, alienation, or hypothetication of a
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`copyright or of any of the exclusive rights comprised in a copyright...but not including a
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`nonexclusive license.” 17 U.S.C. § 101. A transfer other than by one by operation of law “is not
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`valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing
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`and signed by the owner of the rights conveyed...” or, as a substitute, “a note or memorandum of the
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`transfer.” 17 U.S.C. § 204(a). A written instrument, however, is not required when the copyright
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`transfer is not one of ownership. While ownership is construed broadly, nonexclusive licences are
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`explicitly omitted from the requirement that a transfer be in written form. ,
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`908 F.2d 555, 558 (9th Cir. 1990); 17 U.S.C. § 101. Thus, a non-exclusive license may be granted
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`orally, or, more rarely, one may be inferred from conduct that indicates the copyright holder’s intent
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`to allow the licencee to use the work.
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`322 F.3d 26, 31-32 (1st Cir. 2003). The burden of proving the existence of a license rests on the
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`party seeking its protection. Bonnie y, wait Qisngy C9,, 68 F.3d 621, 631 (2d Cir. 1995). In an
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`exclusive license, the copyright holder permits the licensee to use the specified material for a
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`specific use and further promises that the same permission will not be given to others. I.A.E. Inc.
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` , 74 F.3d 768, 775 (7th Cir. 1996). By contrast, a copyright owner who grants a
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`nonexclusive license gives permission to the licensee to merely use his copyrighted material,
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`retaining the right to use, reproduce, or create derivative works from the original copyrighted image.
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`ggnney 3;, National Juyegile Detention A§§’n, 187 F.3d 690, 694 (7th Cir. 1999). Because Steven
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`Crwig admitted that he and his wife encouraged Midcontinent to adopt and use the cow/calf logo,
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`the Court finds that there is indeed a license. Because Midcontinent has not produced any written
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`instrument or agreement, the Court also finds that the license was oral, and therefore was a
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`nonexclusive license. The grantor of a license waives his right to sue the licencee for copyright
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`infringement. Graham y, James, 144 F .3d 229, 236 (2d Cir. 1998).
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`Even assuming that no implied oral license was created, however, Defendants still may not
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`assert a copyright infringement claim as they are barred by the principles of estoppel. A four-
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`element test has arisen to govern whether a party is estopped from asserting infringement: 1) the
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`plaintiff must know the facts of the defendant’s infringing conduct; 2) the plaintiff must intend that
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`its conduct shall be acted upon or must so act that the defendant has a right to believe that it is so
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`intended; 3) the defendant must be ignorant of the true facts; and 4) the defendant must rely on the
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`plaintiffs conduct to its injury. , 344 F.3d 446, 453 (5th Cir. 2003).
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`As to the first element, it cannot be seriously contended that Defendants were not aware of
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`Plaintiffs near 15 year use of the cow/calf logo, particularly considering the high level of
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`responsibility that Defendants enjoyed at Midcontinent. Marcy Orwig herself created
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`advertisements that featured the cow/calf logo and had served as National Promotions Director, at
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`position that inevitably involves the dissemination of a company’s promotional materials and
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`concomitant logo. The second element is also met. Steven Orwig encouraged Midcontinent to
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`adopt the cow/calf logo. (T. 169-70). Further, Marcy Orwig, while National Promotions Director,
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`actually oversaw the production and distribution of promotional materials with the cow/calf logo.
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`The third element is satisfied as well. Midcontinent used the logo for close to 15 years
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`before Marcy Orwig withdrew her permission. Further, Steve and Marcy Orwig were employees of
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`Midcontinent when Midcontinent filed for trademark registration of the cow/calf logo and the MLS
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`mark. Despite Defendant’s knowledge of both the use and registration of the mark, they did not
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`object to such use until 2004. The fourth element is also satisfied. Midcontinent has built a solid
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`customer base during the approximately 15 years it operated with the cow/calf design as its logo.
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`Bound up in these dealings is a certain amount of recognition and goodwill. To now deprive
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`Midcontinent of the use of the logo would only confuse customers and bestow a windfall to any
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`subsequent user of the cow/calf logo. The Court finds that all of the above elements are satisfied,
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`and that Defendants are therefore estopped from claiming copyright infringement.
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`Defendants have also attacked the validity of the trademark’s registration, asserting that it
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`obtaining by fraud as it incorporated Marcy Orwig’s cow/calf image. Defendants’ claims, here too,
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`chafe against the doctrine of estoppel. By using the trademark in commerce, a party acknowledges
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`the validity of the mark, and is estopped from later asserting otherwise.
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` , 387 F.2d 477, 482 (8th Cir. 1967); ggglg §
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`Union Centxa E3911" [nc,, 318 F.2d 894, 908-09 (9th Cir. 1963). Defendants utilized the cow/calf
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`logo post-registration to promote the products of Midcontinent and are estopped from attacking the
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`validity of the registration after the fact.
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`While Defendant retains a copyright in the cow/calf logo, their use of the image to promote
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`livestock feed supplements constitutes infringement of Midcontinent’s trademark. Such a mark is
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`composed not merely of a drawing or image, but rather the goodwill it has created through the
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`course of its business dealings. As the Sixth Circuit explains:
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`...[A] trade-mark is generally the growth of a considerable period of
`use rather than a sudden invention; and the exclusive right to it
`grows out of its use and not its mere adoption. The purpose of the
`trade-mark is to permit people to build up their businesses around
`trade names by which articles are known, and establish goodwill;
`and it is the goodwill, not the mark, that is protected.
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`§.E, Erjtghard Co. 3;. Cgnsgmggs flrgmjgg C9,, 136 F.2d 512, 518 (6th Cir. 1943) (internal citations
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`omitted). Midcontinent has used the cow/calf logo for close to 15 years, during which time it has
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`had extensive contacts and dealings with livestock producers across the Midwest. To allow another
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`company to use the mark in the livestock supplement business would serve only to diminish the
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`value of their mark and to confiise customers. The Court thus finds that Modern has infringed upon
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`the trademark of Midcontinent through its use of the initials MLS and the cow/calf logo in the
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`livestock feed supplement industry.
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`Appropriate Remedies
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`Once it has been established that there has been unlawful use and a likelihood of consumer
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`confusion, irreparable injury is presumed as a matter of law. ,
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`824 F.2d 622, 625 (8th Cir. 1987); , 633 F.2d 746,
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`753 (8th Cir. 1980); § 25.31 (4th ed.) (irreparable harm always flows
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`from unlawful use and confusion.”) (emphasis in original) (quoting
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`Elmira Mjssjgh Q: the Church of §ciehtology, 794 F.2d 38, 43 (2d Cir. 1986)). When a former
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`licensee continues to use a mark after the termination of the license, “a finding of irreparable harm
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`is automatic.” Chhggh Qf Sgiehtglogy lhfl, 794 F.2d at 42.
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`“It is generally said that once infringement of a trademark is shown, the owner of the mark is
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`entitled to injunctive relief. Indeed, when the infringement is clear and deliberate, such relief is
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`denied only in the most unusual of cases.” Uhjted §t§;§§ Jycegs y. Qedag Rapids Jaycees, 794 F.2d
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`379, 382 (8th Cir. 1986). Further, under the Lanham Act, a successful plaintiff my recover (1)
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`Defendant’s profits, (2) Plaintiffs damages, and (3) the costs of the action. 15 U.S.C. §l117(a).
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`Here, however, Plaintiff has sought only to recover Defendants’ profits and the costs of the action.
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`The Lanham Act provides that the Court may assess damages for any amount up to three times the
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`actual damage