CFE Racing Products, Inc. v. BMF Wheels, Inc.

Addressing numerous evidentiary issues arising during the course of a jury trial, as well as the scope of a permanent injunction, the U.S. Court of Appeals for the Sixth Circuit affirmed in part and remanded in part the district court’s decision concerning the defendants’ infringing use of their BMF Wheels trademark. CFE Racing Products, Inc. v. BMF Wheels, Inc., Case Nos. 14-1357; -1608; -1939 (6th Cir., July 13, 2015) (Clay, J.).

The plaintiff, CFE Racing Products, filed a complaint against the defendants BMF Wheels and its owner, Brock Weld, alleging trademark infringement under the Lanham Act. According to the plaintiff, the defendants’ “BMF Wheels” trademark was “strikingly similar” to the plaintiff’s logo and registered “BMF” trademark. The plaintiff later added a claim seeking the cancellation of the defendants’ “BMF Wheels” trademark registration pursuant 15 U.S.C. § 1119. The case proceeded to a three-day jury trial, where the jury found that the defendants’ use of the “BMF Wheels” mark and logos created a likelihood of confusion with the plaintiff’s “BMF” mark. The district court entered judgment for the plaintiff and an injunction that, while prohibiting the defendants from using logos that were similar to the plaintiff’s logos, permitted the defendants to use the “BMF Wheels” mark so long as it was used with a disclaimer. The district court also declined to cancel the defendants’ “BMF Wheels” registration.

Dissatisfied with the narrow scope of the injunction, the plaintiff appealed. The defendants also appealed, seeking review of, among other things, the district court’s denial of their motion for judgment as a matter of law (JMOL motion) and denial of their motion for a new trial.

The 6th Circuit quickly disposed of the defendants’ appeal of the JMOL motion, noting that the defendants’ pre-verdict Fed. R. Civ. P. 50(a) JMOL motion failed to argue that there was insufficient evidence to sustain a likelihood of confusion, and, as such, the defendants waived their right raise that argument in a post-verdict JMOL motion.

The defendants’ appeal of their motion for a new trial asserted a host of evidentiary errors, only some of which will be addressed here. First, the defendants asserted that the court wrongfully excluded evidence that the defendants had recently obtained a trademark registration for “BMF” for tires. The court rejected this argument because the defendants, facing a motion for sanctions for failing to produce documents concerning their “BMF” registration, had entered into a stipulation with the plaintiff where the defendants agreed they would not introduce the “BMF” registration into evidence. Second, the defendants asserted that the district court erred by permitting a witness to testify about conversations with his attorney concerning the witness’ understanding of the scope of the plaintiff’s “BMF” trademark registration. Although the court concluded that this testimony should have been excluded because it was hearsay and legal opinion testimony, the error was harmless. Third, the defendants claimed that the court should have excluded testimony concerning a conversation evidencing customer confusion on hearsay grounds. The court rejected this argument, finding that the evidence was not being offered for the truth of the matter asserted, but rather was probative of the declarant’s confusion. The court thus held that a new trial was not warranted.

The 6th Circuit next considered the scope of the injunction entered by the district court, finding that the district court clearly erred in not cancelling the defendants’ “BMF Wheels” trademark registration in light of the jury’s verdict that the defendants’ “BMF Wheels” trademark created confusion with the plaintiff’s registered “BMF” mark. The district court also erred in failing to permanently enjoin the defendants from using the “BMF Wheels” mark. The court remanded the case to the district court to cancel the defendants’ “BMF Wheels” trademark registration and to enjoin the defendants from using their infringing “BMF Wheels” trademark.