U-Haul 2016 Annual Report Download - page 88

AMERCO AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
F-32
Operating lease commitments for leases having terms of more than one year were as follows:
Property,
Plant and
Equipment
Rental
Equipment
Total
(In thousands)
Year-ended March 31:
2017
$
16,360
$
14,433
$
30,793
2018
15,457
10,989
26,446
2019
14,313
9,058
23,371
2020
14,132
1,310
15,442
2021
14,029
–
14,029
Thereafter
47,473
–
47,473
Total
$
121,764
$
35,790
$
157,554
Note 18. Contingencies
PODS Enterprises, Inc. v. U-Haul International, Inc.
On July 3, 2012, PODS Enterprises, Inc. (“PEI”), filed a lawsuit against U-Haul International, Inc. (“U-
Haul”), in the United States District Court for the Middle District of Florida, Tampa Division, alleging (1)
Federal Trademark Infringement under Section 32 of the Lanham Act, (2) Federal Unfair Competition
under Section 43(a) of the Lanham Act, (3) Federal Trademark dilution by blurring in violation of Section
43(c) of the Lanham Act, (4) common law trademark infringement under Florida law, (5) violation of the
Florida Dilution; Injury to Business Reputation statute, (6) unfair competition and trade practices, false
advertising and passing off under Florida common law, (7) violation of the Florida Deceptive and Unfair
Trade Practices Act, and (8) unjust enrichment under Florida law.
The claims arose from U-Haul’s use of the word “pod” and “pods” as a generic term for its U-Box
moving and storage product. PEI alleged that such use is an inappropriate use of its PODS mark. Under
the claims alleged in its Complaint, PEI sought a Court Order permanently enjoining U-Haul from: (1) the
use of the PODS mark, or any other trade name or trademark confusingly similar to the mark; and (2) the
use of any false descriptions or representations or committing any acts of unfair competition by using the
PODS mark or any trade name or trademark confusingly similar to the mark. PEI also sought a Court
Order (1) finding all of PEI’s trademarks valid and enforceable and (2) requiring U-Haul to alter all web
pages to promptly remove the PODS mark from all websites owned or operated on behalf of U-Haul.
Finally, PEI sought an award of damages in an amount to be proven at trial, but which are alleged to be
approximately $70 million. PEI also sought pre-judgment interest, trebled damages, and punitive
damages.
U-Haul does not believe that PEI’s claims have merit and vigorously defended the lawsuit. On
September 17, 2012, U-Haul filed its Counterclaims, seeking a Court Order declaring that: (1) U-Haul’s
use of the term “pods” or “pod” does not infringe or dilute PEI’s purported trademarks or violate any of
PEI’s purported rights; (2) the purported mark “PODS” is not a valid, protectable, or registrable trademark;
and (3) the purported mark “PODS PORTABLE ON DEMAND STORAGE” is not a valid, protectable, or
registrable trademark. U-Haul also sought a Court Order cancelling the marks at issue in the case.
The case was tried to a jury, beginning on September 8, 2014. On September 19, 2014, the Court
granted U-Haul’s motion for directed verdict on the issue of punitive damages. The Court deferred ruling
on U-Haul’s motion for directed verdict on its defense that the words “pod” and “pods” were generic terms
for a container used for the moving and storage of goods at the time PEI obtained its trademark
(“genericness defense”). Closing arguments were on September 22, 2014.
On September 25, 2014, the jury returned a unanimous verdict, finding in favor of PEI and against U-
Haul on all claims and counterclaims. The jury awarded PEI $45 million in actual damages and $15.7
million in U-Haul’s alleged profits attributable to its use of the term “pod” or “pods.”