Laches Defense Applies to Cancellation Actions – Cosmetic Warriors v. Pinkette Clothing

In Cosmetic Warriors v. Pinkette Clothing, the U.S. Court of Appeals for the Ninth Circuit filed an opinion a couple weeks ago, reconfirming that the equitable defense of laches (unreasonable and prejudicial delay in bringing a lawsuit) applies in trademark cancellation actions, even though the U.S. Supreme Court has recently curtailed that defense in copyright and patent cases, and even if such an action is brought within the five-year window for bringing certain types of cancellation claims under the Lanham Act, 15 U.S.C. § 1064.

In this case, Cosmetic Warriors, makers of LUSH brand cosmetics, filed a lawsuit against a fashion company, Pinkette Clothing, that markets LUSH-branded clothing, claiming trademark infringement and seeking cancellation of its trademark registration. But the Ninth Circuit affirmed that Cosmetic Warriors waited too long (nearly five years) to bring its case after it “should have known about its claims.” According to well-established precedent, because the Lanham Act contains no statute of limitations, courts apply a presumption in favor of laches if the plaintiff’s delay is longer than the most analogous state statute of limitations. The Ninth Circuit concluded that California’s analogous four-year statute of limitations for trademark infringement actions applied. Therefore, because Cosmetic Warriors’ delay was beyond four years, the court held a “strong presumption in favor of laches” applied.

Cosmetic Warriors argued that laches could not bar its claims for cancellation, based on a five-year period for cancellation actions specified in 15 U.S.C. § 1064, and based on recent U.S. Supreme Court precedent limiting the defense of laches in copyright and patent infringement actions, Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962 (2014) (Copyright Act), and SCA Hygiene Products v. First Quality Baby Products, LLC, 137 S. Ct. 954 (2017) (Patent Act).

The Ninth Circuit rejected Cosmetic Warriors’ arguments based on the Supreme Court precedent from copyright and patent cases, stating, “the principle at work in those cases—a concern over laches overriding a statute of limitations—does not apply here, where the Lanham Act has no statute of limitations and expressly makes laches a defense to cancellation,” see 15 U.S.C. § 1069. Regarding the five-year deadline of 15 U.S.C. § 1064, the court held “[t]here is no question that [15 U.S.C. § 1064] is not a statute of limitations in the usual sense of barring an action entirely once a defined period expires”; rather, that statute “merely limits the grounds on which cancellation may be sought. A petition brought within five years of registration may assert any ground …. By contrast, a petition brought five years after registration (against an incontestable mark) may only assert one of several enumerated grounds.”

This opinion by the Ninth Circuit accords with similar precedent from other federal courts and follows the position of the leading trademark treatise, McCarthy on Trademarks §§ 20:74, 76. It is another reminder to trademark owners and practitioners of the importance of monitoring for infringing uses, and acting quickly to initiate enforcement actions. As in this case, and according to the maxim often quoted by courts, “[t]hose who sleep on their rights, lose them.”

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