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Just when it looked as though the four-year trademark infringement battle between two competing fire truck manufacturers was over, the 4th U.S. Circuit Court of Appeals vacated the verdict of a North Carolina district court jury, remanding the case for another trial. E-One, a fire and rescue truck manufacturer located in Ocala, Fla., filed a trademark infringement complaint in 1996 against American FireEagle, a competing manufacturer of fire trucks. The lawsuit revolved around the use by American FireEagle of a logo containing the image of a bald eagle superimposed over an American flag. E-One’s complaint alleged that the bald eagle logo was confusingly similar to the logo it used on its American Eagle brand of trucks. American FireEagle, although stipulating that the marks were confusingly similar, defended on the ground that E-One had abandoned its rights to the trademark by discontinuing its use for over three years, without showing intent to resume use in the reasonably foreseeable future. American FireEagle then filed a counterclaim alleging that E-One’s renewed use of the logo was an infringement of American FireEagle’s common law trademark rights. “Had E-One abandoned the American Eagle mark?” Judge M. Blane Michael framed the issue in the 4th U.S. Circuit Court of Appeals opinion. “If yes, E-One was infringing [American FireEagle's] rights; if no, [American FireEagle] was infringing E-One’s rights.” A five-day jury trial in the U.S. District Court for the Eastern District of North Carolina returned a verdict for E-One. American FireEagle thereafter appealed, claiming that Senior District Judge W. Earl Britt failed to instruct the jury properly on the law of trademark abandonment. “Under the Lanham Act [the federal statute regulating the registration of trademarks] a trademark is abandoned when ‘its use has been discontinued with intent not to resume such use,’” wrote Judge Michael. “Thus, a party claiming that a mark has been abandoned must show ‘non-use of the name by the legal owner and no intent by that person or entity to resume use in the reasonably foreseeable future.’” E-One, which obtained the rights to the logo when it purchased the company that had registered it as a trademark — American Eagle Fire Apparatus Co. (American Eagle) — discontinued use of the logo from mid-1992 until 1995, when it ceased production on a line of fire trucks originally manufactured by American Eagle. The company did, however, continue to use the logo on promotional items, such as hats and T-shirts. “There is a presumption in the Lanham Act that if the trademark hasn’t been used for three years it is abandoned — but you can rebut that,” said Professor Joseph J. Beard of St. John’s University School of Law. “If the company that is said to have abandoned its trademark has any objective evidence of a reasonable expectation of using it in the future, the presumption of abandonment can be rebutted.” Evidence presented by E-One of its intent to resume use of the logo was enough to quash American FireEagle’s request for a judgment in its favor as a matter of law, according to the decision. The court found that, while E-One’s failure to use the logo on any of its trucks for three years amounted to a prima facie case of abandonment, there was sufficient evidence of E-One’s intent to use the trademark in the future to rebut the assumption. “E-One’s continuous promotion of the brand by using it on hats, T-shirts, tote bags and souvenir nameplates is evidence of some intent to resume use of the mark,” wrote Judge Michael. “In addition, E-One executives testified that they actively considered using the American Eagle mark on fire trucks between 1992 and 1995 … This evidence of intent to resume was sufficient to satisfy E-One’s burden of production. The evidence also created a triable issue of fact, precluding judgment as a matter of law.’ The court did, however, rule in favor of American FireEagle’s assertion that Judge Britt’s instructions to the jury were sufficiently incorrect to justify vacating the verdict and remanding the case for trial. According to the opinion, Judge Britt erred by failing to tell the jury that, in order to avoid abandonment, a trademark owner who discontinues use of the mark must have an intent to resume use in the reasonably foreseeable future, as opposed to any point in the future. Judge Britt also erred, in the opinion of the court, by failing to instruct the jury properly on the fact that the standard for determining whether a trademark has been abandoned is whether it was used in the course of trade of a particular good. While the use of the trademark on promotional items could be evidence of E-One’s intent to use the trademark, Judge Britt was incorrect in failing to instruct the jury on the inadequacy of such evidence in establishing a prima facie abandonment case, according to the 4th Circuit. Because of the insufficiency of Judge Britt’s instructions to the jury, the case will be tried again. E-One’s attorney, Christopher B. Wilson of Grippo & Elden in Chicago, told American Lawyer Media News Service that it will be difficult to start from scratch, but he expects the verdict will again come back in his client’s favor. “It’s frustrating because you are starting back at square one after a lot of hard work and a great result,” said Wilson. “But our feeling is that, based on the court’s ruling on a lot of critical issues, we’re confident that the new jury will come to the same conclusion.”

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