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AuSable River Trading Post, LLC v. Dovetail Solutions, Inc.

United States Court of Appeals, Sixth Circuit

October 23, 2017

AuSable River Trading Post, LLC, Plaintiff-Appellant,
v.
Dovetail Solutions, Inc.; Tawas Area Chamber of Commerce, Defendants-Appellees.

          Argued: October 5, 2017

         Appeal from the United States District Court for the Eastern District of Michigan at Bay City. No. 1:16-cv-11207-Thomas L. Ludington, District Judge.

         ARGUED:

          Ronald Tyler, TYLER & TYLER, P.C., East Tawas, Michigan, for Appellant.

          Robert G. Kamenec, PLUNKETT COONEY, Bloomfield Hills, Michigan, for Appellee Tawas Area Chamber of Commerce.

         ON BRIEF:

          Ronald Tyler, TYLER & TYLER, P.C., East Tawas, Michigan, for Appellant.

          Robert G. Kamenec, Michael J. Barton, PLUNKETT COONEY, Bloomfield Hills, Michigan, for Appellee Tawas Area Chamber of Commerce.

          Before: SUTTON, DONALD, and THAPAR, Circuit Judges.

          OPINION

          BERNICE BOUIE DONALD, Circuit Judge.

         Plaintiff-Appellant AuSable River Trading Post, LLC (the "Trading Post") filed this action against Defendants-Appellees Dovetail Solutions, Inc. ("Dovetail") and Tawas Area Chamber of Commerce (the "Chamber") for a declaratory judgment as to whether Defendants hold a valid, enforceable trademark for the term "Perchville, " and for damages under Michigan state law claims. The district court granted summary judgment in favor of the Defendants, finding that Plaintiff's trademark challenge is barred by the doctrine of res judicata and remanding the state court claims. In reaching its conclusion, the district court determined that Plaintiff was in privity with an hourly employee who had previously consented to a permanent injunction barring his use of the "Perchville" mark. Plaintiff challenges the district court's finding that it is in privity with its employee for purposes of res judicata. We REVERSE.

         I.

         Yearly, the city of Tawas, Michigan hosts a winter festival known as "Perchville." The Chamber is a non-profit Michigan corporation dedicated to promoting local business, and Dovetail is a for-profit corporation that oversees and manages the Chamber. In March 2002, the Chamber applied for federal trademark registration for the term "Perchville, " which was then registered in May 2003. The trademark was temporarily cancelled in December 2013 for failure to renew the application, but within three weeks the Chamber reapplied for re-registration, which it received just over one year later. The Trading Post is a wholesale provider of miscellaneous products, including mugs, banners, t-shirts, and sweatshirts. It is alleged that the Trading Post had an order to sell or was actively selling merchandise depicting the term "Perchville."

         On January 29, 2016, the Chamber filed suit in Michigan state court against Salvatore Agnello, an employee of the Trading Post, seeking to obtain an injunction against his unauthorized use of the term "Perchville" on t-shirts. The Chamber did not include the Trading Post in their lawsuit, as it was initially unaware that Agnello was selling the shirts on behalf of the Trading Post. The state court granted the Chamber an ex parte injunctive order. The language of the order included, "this order shall be binding upon the parties to this action, their officers, agents, servants, employees, and attorneys ...


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