Nartron Corp. v. Stmicroelectronics, Inc.

• Decision Date: 01 October 2002
• Docket Number: No. 01-1293.,01-1293.
• Citation: 305 F.3d 397
• Parties: NARTRON CORPORATION, Plaintiff-Appellant, v. STMICROELECTRONICS, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

305 F.3d 397

NARTRON CORPORATION, Plaintiff-Appellant, v. STMICROELECTRONICS, INC., Defendant-Appellee.

No. 01-1293.

United States Court of Appeals, Sixth Circuit.

Argued: August 8, 2002.

Decided and Filed: October 1, 2002.

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Robert Tuttle (briefed), Ernie L. Brooks (argued), Frank A. Angileri (briefed), Pete N. Kiousis (briefed), Brooks & Kushman, Southfield, MI, for Plaintiff-Appellant.

Philip J. Kessler (argued and briefed), Laurie J. Michelson (briefed), Butzel Long, Detroit, MI, William A. Sankbeil, Kerr, Russell & Weber, Detroit, MI, Jane Politz Brandt (briefed), Bruce S. Sostek (briefed), Thompson & Knight, Dallas, TX, James E. Stewart (briefed), Butzel Long, Ann Arbor, MI, for Defendant-Appellee.

Before KEITH, MOORE, and GILMAN, Circuit Judges.

OPINION

KEITH, Circuit Judge.

Plaintiff-Appellant, Nartron Corporation ("Nartron" or the "plaintiff"), appeals the district court's grant of summary judgment in favor of the Defendant Appellee, STMicroelectronics, Inc. ("ST" or the "defendant") on ST's claim of laches and genericness in Nartron's action for trademark infringement. For the reasons set forth below, we AFFIRM the district court's order granting ST's motion for summary judgment on both claims, and dismissing Nartron's complaint alleging federal and state law claims of trademark infringement, dilution, and unfair competition.

I. BACKGROUND

Nartron is a Michigan corporation with its principal place of business in Reed City, Michigan. Nartron develops and produces advanced electronic devices including sensors, acoustic devices, displays, controls, harnesses and connectors, lamps, flashers and switches.

ST is a Delaware corporation having a principal place of business in Carrollton, Texas.¹ ST manufactures and supplies semiconductors or "microchips,"² and competes with numerous companies such as Motorola, International Rectifier and Siliconix in the semiconductor industry. Over the years, ST has also manufactured products that combine power and intelligence on a single integrated circuit chip.

In April 1978, Nartron began using "Smart power" as a trademark and in 1982, it obtained a federally registered trademark for "Smart power" for "electrical relay assemblies in combination with electrical logic components and parts thereof." In 1986, Nartron broadened the identification of its goods to "electrical power circuits in combination with electrical logic circuits and parts thereof." In 1987, pursuant to 15 U.S.C. § 1065, Nartron filed an affidavit of incontestability with the United States Patent and Trademark Office.³ Nartron alleges that over the years, it has expended significant time, effort and money advertising and promoting its "Smart power" mark. As a result, Nartron alleges that it has acquired a reputation as a provider of high-quality electrical components in connection with the "Smart power" mark. This, according to Nartron, distinguishes its products from those of its competitors.

In this action for trademark infringement, Nartron alleges that ST made infringing use of its "Smart power" mark on several occasions. First, between 1987 and 1993, Nartron alleges that ST made isolated use of Nartron's "Smart power" mark. Nartron asserts that in August 1987, an ST employee presented a paper entitled Smart Power Application in Multiple Systems at a Society of Automotive Engineers ("SAE") show. Nartron further asserts that in October 1990, ST published a manual entitled Smart Power Application Manual. Finally, in October 1993, Nartron claims that ST used Nartron's "Smart power" mark in an ST product announcement published in the October 25, 1993, issue of Electronic Engineering Times, and in an article published in the October 14, 1993, edition of Electronic Design. Second, Nartron alleges that after 1996, ST ran three advertisements, which Nartron claims used its "Smart power" mark in an infringing manner. Nartron alleges that these ads emphasized the "Smart power" mark, capitalizing or otherwise enhancing the two words. However, unlike previous uses, Nartron alleges that these uses were not isolated.

ST, on the other hand, alleges that it has always made continuous, non-infringing use of the "Smart power" mark. Furthermore, ST claims that it has consistently rejected Nartron's contentions regarding the validity of Nartron's "Smart power" trademark. According to ST, like the rest of the semiconductor industry, ST has only used the term "smart power" to refer generally to technology that combines power transistors and control circuitry on a single integrated circuit. ST alleges that since at least 1988, it has manufactured and marketed products that contain integrated circuits which combine power circuits and logic circuits. ST claims that its VIPower® products are illustrative of products that utilize or embody this "smart power" technology. ST, for example, has described certain of its VIPower® products as follows: "The VIPower® MO process is a vertical smart power technology that allows a rugged power stage to be combined with on-chip analog and digital circuitry." See J.A. at 883 (emphasis added). ST says that it uses the federally registered trademark VIPower®—as well as its company name — to clearly inform the reader that ST is the source of its VIPower® products. Indeed, claims ST, the ST name and federally-registered ST logo is prominently featured in the advertising, marketing and sales of ST products, including those that fall within the "smart power" category.

After each of ST's uses, which Nartron alleged infringed its trademark, Nartron alleges that it took measures to stop the infringing activity. Nartron claims, contrary to ST's assertions of continuous use, that after each of Nartron's objections, ST ceased use of Nartron's "Smart power" mark. ST disagrees and instead contends that it clearly and unequivocally rejected Nartron's contentions regarding the legality of ST's use of the term "smart power."

First, ST notes, and Nartron does not dispute, that with respect to its 1987 use of "smart power," Nartron contacted only SAE, not ST. Second, in a letter dated April 23, 1991, in response to Nartron's request that ST cease and desist from its use of its "Smart power" mark, ST responded that due to significant third party use, "smart power" had lost any trademark significance it may have had, and, in any case, no confusion was likely. Consistent with ST's response in this letter, ST claims it continued to use "smart power." In support of its claim of continuous use, ST cites the fact that its Smart Power Application Manual was circulated through, at least, 1992. Furthermore, in May of 1993, ST cites the fact that it also presented a VIPower® Application Note⁴ at an International Symposium on Power Semiconductor devices that discussed "smart power technologies." As another example of continuous use, ST cites the fact that in January 1994, in response to a December 1993 letter from Nartron's president objecting to ST's use of the term "smart power" in Electronic Design (October 14, 1993 edition), ST informed Nartron that its position had not changed from the one expressed in its April 23, 1991 letter. Finally, from 1993 through 1998, ST asserts that it published additional data sheets and application notes referring to "smart power" as well as a VIPower® databook containing hundreds of uses of "smart power" and published ads referring to "smart power."

In 1998, Nartron commenced an action against ST alleging, infringement of its trademark, "Smart power." Nartron filed a complaint in district court alleging that ST had (i) wilfully infringed its federally registered trademark in the mark "Smart power" in violation of 15 U.S.C. §§ 1051-1127; (ii) engaged in unfair competition in violation of 15 U.S.C. § 1125(a); (iii) caused the dilution of the distinctive and valuable quality of the "Smart power" trademark in violation of 15 U.S.C. § 1125(c); and (iv) engaged in unfair competition and trademark infringement in violation of Michigan common law. The parties were allowed to conduct limited discovery. Thereafter, the defendant moved for summary judgment on, amongst other things, the ground that the term "smart power" is generic and commonly descriptive with respect to its goods, such that the plaintiff is not entitled to prevent the defendant's use of the term. The defendant also sought summary judgment on the ground that the plaintiff's trademark infringement claim, to the extent one did exist, was precluded by laches because of the plaintiff's unreasonable delay in waiting eleven years after first learning of the defendant's use of the term before bringing the present action.

On its second⁵ hearing of the parties' summary judgment motions after allowing for additional limited discovery, the district court reversed its earlier rulings on the matter and granted the defendant's motion on both grounds. The district court issued no opinion. At the hearing on the motions, with respect to the issue of genericness, the district court concluded that genericness was undisputed in light of the fact that "ignorance [of the term's genericness in the semiconductor industry] is all the plaintiff offer[ed] the court." See J.A. at 1411. Relying on a 150-page chronology produced by the defendant detailing use of the "smart power" term by the semiconductor industry in trade publications, conferences, symposia, advertisements, third party uses, patents, trademarks and copyrights, the district court concluded that "[a] good showing ha[d] been made that Smart Power became a generic term over the 20 years of use in the [semiconductor] industry." See id.

The district court also reversed its earlier ruling on the laches issue. With respect to laches, at the hearing, the district court stated that "[the defendant's] eleven years of constant use of the term Smart Power, [a] total rejection of every request to stop, ... [a]nd the [] obviously...