American Dairy Queen Corporation v. W.B. Mason Co., Inc.

Background

American Dairy Queen Corporation sued W.B. Mason Co., Inc. Dairy Queen alleged five causes of action: federal trademark infringement, federal unfair competition based on false designation of origin, federal trademark dilution, common-law unfair competition under Minnesota law, and deceptive trade practices under Minnesota law. The dispute concerns Dairy Queen’s BLIZZARD mark for its frozen dessert and W.B. Mason’s use of BLIZZARD for paper and spring-water products.

Dairy Queen sought partial summary judgment on its dilution claim, arguing that its BLIZZARD mark was famous and that W.B. Mason’s use was likely to dilute it. W.B. Mason sought summary judgment on all of Dairy Queen’s claims, arguing that Dairy Queen could not prove infringement or dilution. W.B. Mason also sought rulings concerning willfulness and Dairy Queen’s request for disgorgement of profits.

The parties also filed motions under Federal Rule of Evidence 702 to exclude expert testimony. Dairy Queen sought to exclude two surveys and related opinions by W.B. Mason’s expert Sarah Butler and the opinions of Dr. Wayne D. Hoyer. W.B. Mason sought to exclude the recognition survey and related opinions of Dr. E. Deborah Jay and the testimony of Dairy Queen’s expert Dr. Erich Joachimsthaler.

Summary judgment on dilution

The court explained that a federal dilution claim requires a famous and distinctive mark and a defendant’s use that is likely to dilute the mark by blurring or tarnishment. Dairy Queen presented evidence of extensive nationwide advertising, substantial sales, trademark registrations, media attention, and consumer recognition. W.B. Mason presented evidence of third-party uses of “blizzard,” its lack of intent to associate its products with Dairy Queen, and expert opinions disputing the strength and recognition of Dairy Queen’s mark.

The court held that disputed material facts prevented summary judgment on the dilution claim. Those disputes included the extent of actual recognition, the similarity of the marks, the exclusivity of Dairy Queen’s mark, and whether W.B. Mason’s use was likely to impair the mark’s distinctiveness. The court noted that the evidence of intent was weak but declined to decide the issue before trial. It denied Dairy Queen’s motion for partial summary judgment and denied W.B. Mason’s motion for summary judgment.

Summary judgment on infringement and related claims

The court stated that trademark infringement requires proof of a valid, protectable mark and a likelihood of consumer confusion. It evaluated the disputed evidence under factors including the strength of Dairy Queen’s mark, the marks’ similarity, the relationship between the products, W.B. Mason’s intent, consumers’ degree of care, and evidence of actual confusion.

The court found genuine factual disputes about several factors. It determined that Dairy Queen’s BLIZZARD mark was suggestive and entitled to some protection, but that the degree of protection could not yet be determined because the parties disputed its commercial strength. The parties also disputed the overall appearance of their marks and packaging, the relationship between frozen desserts and W.B. Mason’s water products, the likely care of purchasers, and the significance of the absence of admissible evidence of actual confusion at the summary-judgment stage.

Because those factual disputes prevented a determination of likelihood of confusion, the court denied W.B. Mason’s motion for summary judgment on Dairy Queen’s federal infringement claims. The court stated that the denial also applied to Dairy Queen’s Minnesota unfair-competition and deceptive-trade-practices claims because those claims relied on the same likelihood-of-confusion analysis.

Willfulness and disgorgement

W.B. Mason sought summary judgment on whether Dairy Queen could recover W.B. Mason’s profits and on the related issue of willfulness. Dairy Queen stated that it sought only injunctive relief for dilution and sought disgorgement for infringement based on alleged bad faith and deliberate disregard, rather than relying on willfulness as the basis for a dilution profits award.

The court reserved infringement-related disgorgement issues for trial. It explained that disputed facts concerning willfulness and other relevant factors required a fuller trial record. The court therefore denied W.B. Mason’s motion for summary judgment concerning disgorgement.

Expert-evidence motions

The court applied Rule 702 and the principles governing admissibility of expert testimony, including whether the testimony was relevant, reliable, and based on sufficient expertise and methodology. Because the case would be tried to the court rather than a jury, the court applied a more relaxed form of expert-evidence screening while still assessing reliability and relevance.

The court denied Dairy Queen’s motion to exclude Sarah Butler’s surveys and opinions. It concluded that Butler was qualified, that her methods used commonly accepted trademark-survey questions, and that Dairy Queen’s criticisms generally concerned the weight of the evidence rather than admissibility. The court also denied Dairy Queen’s motion to exclude Dr. Hoyer’s opinions about third-party use of “blizzard,” finding him qualified and his methodology sufficiently explained.

The court denied W.B. Mason’s motion to exclude Dr. Jay’s recognition survey and related opinions. It found that Jay had explained her methodology and that W.B. Mason’s criticisms went to the weight the court should give the survey, not whether it could be admitted. The court also denied W.B. Mason’s motion to exclude Dr. Joachimsthaler’s testimony concerning consumer confusion, similarity, competitive proximity, misassociation, distinctiveness, third-party use, and possible harm from negative associations. The court found those opinions sufficiently reliable and relevant, while allowing W.B. Mason to challenge them through cross-examination and competing evidence.

Disposition

Judge Nelson denied Dairy Queen’s motion for partial summary judgment, denied W.B. Mason’s motion for summary judgment, denied both parties’ motions to exclude the identified expert testimony and surveys, and reserved the remaining factual issues for a bench trial. The order was temporarily filed under seal and required the parties to show cause within seven days why it should remain sealed. The order stated that the bench trial would commence on August 16, 2021.