Ninth Circuit Adopts Test for an Acquiescence Defense in Trademark Infringement Cases
In an appeal over a business deal that included the transfer of trademarks gone awry, the Ninth Circuit took the opportunity to adopt a test to apply when assessing the equitable defense of acquiescence in trademark infringement cases.
Agreeing with the Eleventh Circuit that the equitable defenses of acquiescence and laches are very similar, the Ninth Circuit adopted the Eleventh Circuit's definition of a prima facie case for acquiescence. Specifically, the Ninth Circuit held that the elements of a prima case of acquiescence are:
(1) the senior user actively represented that it would not assert a right or a claim; (2) the delay between the active representation and assertion of the right or claim was not excusable; and (3) the delay caused the defendant undue prejudice.
With respect to the third element, the Ninth Circuit discussed the type of prejudice necessary to the defense:
[P]rejudice in the context of acquiescence inherently must involve reliance on the senior user's affirmative act or deed, and such reliance must be reasonable. When inquiring into the reasonableness of reliance, a district court must examine both the content of the affirmative act and the context in which that act was performed. In addition to their relevance with respect to undue prejudice, findings with respect to reliance also may inform whether the delay between the active representation and assertion of the right or claim was excusable.
The case cite is Seller Agency Council, Inc. v. Kennedy Center for Real Estate Educ., Inc., No. 08-56791 (9th Cir. Sept. 3, 2010).
