FN Herstal, S.A. v. Clyde Armory, Inc.

123 F. Supp. 3d 1356, 2015 U.S. Dist. LEXIS 109993, 2015 WL 4973693
CourtDistrict Court, M.D. Georgia
DecidedAugust 20, 2015
DocketNo. 3:12-CV-102 (CAR)
StatusPublished
Cited by4 cases

This text of 123 F. Supp. 3d 1356 (FN Herstal, S.A. v. Clyde Armory, Inc.) is published on Counsel Stack Legal Research, covering District Court, M.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
FN Herstal, S.A. v. Clyde Armory, Inc., 123 F. Supp. 3d 1356, 2015 U.S. Dist. LEXIS 109993, 2015 WL 4973693 (M.D. Ga. 2015).

Opinion

BENCH TRIAL ORDER

C. ASHLEY ROYAL, UNITED STATES DISTRICT JUDGE

In this trademark infringement case, Plaintiff FN Herstal, S.A. (“FN”) and Defendant Clyde Armory, Inc. (“Clyde Armory”) both claim superior rights to use “SCAR” or “SCAR-Stock” in the firearms industry. The Court conducted a bench trial in this case on July 21-July 23, 2015, and, 'thereafter, directed the parties to, submit their proposed findings and fact and conclusions of law. After considering all the evidence and the applicable law, the Court makes the following Findings of Fact and Conclusions of Law. As explained herein, the Court finds that FN has superior trademark rights in the SCAR mark and thus enters judgment in favor of FN on all claims.

FINDINGS OF FACT

■FN is a well-known firearms and weapons manufacturer with its principal place of business in Herstai, Belgium. FN manufactures and distributes a full range of firearms and accessories- for the military, law enforcement, and civilian consumers in the United States. In 1997, FN created FNH USA to handle development, marketing, and sales of its products to the United States market. FNH USA later merged with FN Manufacturing in 2014 to become FN America, LLC. Clyde Armory is a firearms retailer and distributor, which sells firearms and other accessories to law enforcement and civilian consumers in the United States, Clyde Armory’s principal place of business is in Athens, Georgia.

At issue in this case is FN’s use of the SCAR mark as a-designation for a family of rifles and Clyde Armory’s use of SCAR-Stock on replacement gun stock. The history of each party’s use of SCAR and SCAR-Stock is summarized below.

I. FN’s SCAR

On January 23, 2004, United States Special Operations Forces Command (“SO-COM”) issued a solicitation requesting bids from firearm manufacturers-to design and manufacture a new combat assault [1360]*1360rifle for the U.S. military.1 The solicitation, as well as other documents issued by SOCOM, referred to the rifle as the “Special Operations Forces Combat Assault Rifle,” abbreviated as the “SCAR.”2 The solicitation requested specific models of the rifle, including a SCAR-Light or SCAR-L, for the 5.56mm caliber, and SCAR-Heavy or SCAR-H, for the 7.62mm caliber, and specified a Standard (S) configuration, a close quarter combat (CQC) configuration, and a sniper variant (SV).3 It is clear that the term “SCAR” originated with SOCOM as an abbreviation for “Special Operations Forces Combat Assault Rifle,” and the competition initiated by the solicitation was commonly known in the firearms industry as the SCAR Program.4

FN along with other firearms manufacturers, including Colt and Cobb Manufacturing, submitted SCAR prototypes to SO-COM in 2004 in hopes of winning the bid.5 Although it was not required to do so, FN chose to label its prototype submissions with the SCAR mark. On November 5, 2004, SOCOM officially awarded the ten-year development contract for the SCAR to FN.6 In that award, SOCOM ordered over $684,000.00 of SCAR firearms and attachments.7 To fulfill its obligations under the contract, FN sold and shipped rifles imprinted with the SCAR mark throughout 2004, 2005, and 2006, to various U.S. military-related agencies, including SOCOM, Naval Air Systems Command (“NAVAIR”) and Naval Surface Warfare Center (“NSWC”).8 By November 5, 2007, FN had filled eleven delivery orders and sold over $11,000,000.00 of SCARs and accessories pursuant to the contract.9

The engineering and development of the SCAR weapon system underwent a strict government approval process that lasted several years. The process included multiple early user assessments followed by integrated product team meetings to discuss the results of those assessments and to implement changes to the SCAR. Once the changes were made, each new generation of the SCAR was tested again. This cycle continued through four or five generations of the SCAR. Then, from July to December 2007, the SCAR was set for operational testing and evaluation to determine if the rifle was ready for service, followed by low rate production of the SCAR in 2008.

From its inception, the SOCOM program generated significant media coverage in the -firearms industry because the SCAR was the first rifle procured by the U.S. military through a full and open competition since the military adopted the M16 rifle in the mid-1960s. Various magazine and newspaper articles tracked the development of the SCAR pursuant to the SO-COM program. A sample of these articles [1361]*1361appeared in Small Arms Review (July 2005), National Defense (July 2005), Army Times (July 2006), Guns and Ammo (July 2006), and Defense News (October 2006), each crediting FN with developing the SCAR and outlining the features and benefits of the different forms and variants of the firearm.10 At least an article a month was dedicated to updates on FN’s development of the SCAR during that time period. While many of these articles reference FN as the winner of the SOCOM bid, four articles highlight prototypes submitted by other manufacturers.11

It is customary for manufacturers like FN to first develop a weapon for the military and then develop similar versions of the same weapon system for nonmilitary consumers. The reason, in part, is because civilian and law enforcement consumers tend to follow military trends in the firearms industry — when the military starts using new products, nonmilitary consumers anticipate versions of the same products. Indeed, John Klein, the president of Sage, International, Inc., a firearms manufacturer, testified that when a new military weapon is developed, it is normal for nonmilitary consumers to inquire about a version of the same weapon for civilian use.12 In short, the evidence shows the U.S. military is a popular customer in the firearms industry — when the U.S. military adopts a new firearm, everyone else wants that firearm too.

Consistent with this general practice and popular demand, FN began promoting its SCAR to law enforcement and civilian gun enthusiasts in 2005. FN, however, did not have a semi-automatic version of the SCAR available for purchase by civilian consumers at that time. The only rifle available for display was a fully automatic SCAR-the sale of which is restricted to military and law enforcement. Nevertheless, in February 2005, FN imported its fully automatic SCAR to display and promote at trade shows, and visits to gun dealers, law enforcement agencies, and distributors.13 FN displayed these firearms at hundreds of tradeshows and events throughout 2005 and 2006.14 The most notable example was the February 2006 Shooting, Hunting, Outdoor Trade Show [1362]*1362(“2006 SHOT Show”) held , in Las Vegas, Nevada, one of the largest firearms trade shows-in the world. Thousands of firearms industry insiders attend the SHOT Show ever year, ranging from military personnel and law enforcement to firearm manufacturers, distributors, retailers, and others having an interest in firearms. Approximately ninety percent of the SHOT Show attendees are nonmilitary consumers.

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123 F. Supp. 3d 1356, 2015 U.S. Dist. LEXIS 109993, 2015 WL 4973693, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fn-herstal-sa-v-clyde-armory-inc-gamd-2015.