Sensient Flavors Llc. v. Sensoryeffects Flavor Co.
| Decision Date | 26 August 2010 |
| Docket Number | No. 09-2686.,09-2686. |
| Citation | 613 F.3d 754 |
| Parties | SENSIENT TECHNOLOGIES CORPORATION; Sensient Flavors, LLC, Plaintiffs-Appellants, v. SENSORYEFFECTS FLAVOR COMPANY, formerly known as SensoryFlavors, Inc.; Performance Chemicals & Ingredients Co.; Diehl Food Ingredients, Inc.; Highlander Partners, L.P., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Eighth Circuit |
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John A. Busch, argued, Milwaukee, WI, Paul F. Linn, Monica M. Riederer, Milwaukee, WI, Thomas Weaver, William M. Corrigan, Jr., Andrew B. Mayfield, St. Louis, MO, on the brief, for appellants.
David S. Corwin, argued, Vicki L. Little, on the brief, St. Louis, MO, for appellees.
Before BYE, ARNOLD, and COLLOTON, Circuit Judges.
Sensient Flavors appeals the district court's 1 grant of summary judgment in favor of SensoryEffects Flavor Company, formerly known as SensoryFlavors. On appeal, Sensient Flavors contends the district court erred in concluding the SensoryFlavors mark was not “used in commerce” as defined by the Lanham Act, 15 U.S.C. § 1127. Sensient Flavors also asserts the district court erroneously held the SensoryEffects Flavor Company name was not likely to cause confusion to customers. Finally, Sensient Flavors argues the district court erred by holding its mark was “relatively weak” and not entitled to protection under the Missouri dilution statute. We affirm the district court's grant of summary judgment.
I
Sensient Technologies Corporation (“Sensient”) sells flavor delivery systems to its customers. Since 2000, Sensient has continuously used the trade name Sensient Flavors, among its other trademarks. The mark appears on communications from Sensient Flavors, including advertising and marketing materials, business cards, letterheads and invoices.
Charles Nicolais, a former employee of Sensient Flavors' sister company Sensient Colors, Inc., left the company to start his own business called Performance Chemicals and Ingredients, LLC (“PCI”). In May 2006, PCI purchased substantially all of the assets of Diehl Food Ingredients, Inc. (“Diehl”). In November 2006, PCI also purchased substantially all of the assets, equipment, trademarks and trade names of SensoryEffects, a business engaged in development, manufacture, and sales of lipid-based flavor delivery systems. The prior owners of SensoryEffects had filed an application for the registration of the SensoryEffects name and graphic in July 2004, which was formally registered by the United States Patent and Trademark Office (“PTO”) on July 3, 2007. PCI further expanded its operations in February 2008 by acquiring Givaudan Flavors, Inc., the dairy flavor systems business within Givaudan Flavors Corporation. As part of the purchase agreement, PCI was not permitted to use the Givaudan Flavors trade name for more than sixty days after the purchase.
After the purchase of Givaudan Flavors, Nicolais undertook the responsibility of choosing a new name and brand for the business. Ultimately, the company decided to use the name SensoryFlavors, Inc., building on the SensoryEffects trademark already in use. As part of this process, SensoryFlavors modified the existing SensoryEffects mark to design the new SensoryFlavors mark. The company's attorneys informed Nicolais the SensoryFlavors name was available for use and registration based on a search of PTO records and corporate names. However, the parties dispute the knowledge Nicolais maintained regarding the existence of the Sensient Flavors name at the time he was choosing the new name. Although he was previously employed by Sensient Colors, Nicolais asserts he never worked for Sensient's flavor group and therefore he was not aware of the Sensient Flavors mark before the lawsuit was filed. Thus, he contends the Sensient Flavors name did not cross his mind while choosing the SensoryFlavors name. Sensient Flavors disputes Nicolais's assertion, noting that a document drafted by one of PCI's employees prior to the purchase of the Givaudan business unit lists Sensient Flavors as one of SensoryFlavors' primary competitors.
On the day the Givaudan purchase was finalized, SensoryFlavors sent an announcement to contacts in the food ingredients industry featuring the SensoryFlavors mark. SensoryFlavors and Givaudan also sent a media release announcing the acquisition, which included the SensoryFlavors mark. SensoryFlavors asserts it only gave two presentations to customers after acquiring Givaudan Flavors on February 13, 2008, both of which occurred prior to the instant suit. Moreover, SensoryFlavors contends no sales were made under the new mark, no packages were sent bearing labels with the new mark, and no goods were transported under the new mark. SensoryFlavors also constructed the website www. sensoryflavors. com, although it states the website was “under construction” at all times and was immediately deactivated when Sensient filed the instant suit.
Shortly after Sensient filed the instant suit on March 10, 2008, the district court entered a temporary restraining order against the use of the SensoryFlavors name. SensoryFlavors subsequently changed its name to SensoryEffects Flavor Company, d/b/a SensoryEffects Flavor Systems (“SensoryEffects”), building on the prior SensoryEffects name already registered with the PTO. The company has continued to sell products and operate under this name since the change.
Sensient amended its complaint to include the new SensoryEffects name. According to Sensient, the two companies are direct competitors because they both sell flavor delivery systems to food and food ingredient companies, although their product offerings differ slightly. The initial contact with customers arises primarily through telephone calls, which leads to appointments and meetings where the company is able to present its products and services. In this sense, the ultimate sale of products is the result of an ongoing collaborative process. Sensient's complaint contained six counts, including federal trademark infringement, unfair competition, false advertising, common law trademark infringement and unfair competition, and trademark infringement and dilution under Missouri law.
The district court granted summary judgment on all counts in favor of SensoryEffects and dismissed the case. The court held a permanent injunction on the SensoryFlavors mark was not warranted because the mark had not been “used in commerce.” The court also held the new SensoryEffects name was not likely to cause confusion to customers and Sensient was not entitled to protection under Missouri's trademark dilution statute. Sensient timely appeals the district court's order.
I
The district court's grant of summary judgment is reviewed de novo, and we apply the same standards as the district court. Frosty Treats Inc. v. Sony Computer Ent. Am. Inc., 426 F.3d 1001, 1003 (8th Cir.2005). Summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). A fact is material when it might affect the outcome of the suit under governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
First, the parties dispute whether section 45 of the Lanham Act applies to infringement cases. The Lanham Act imposes civil liability on “any person who ... without the consent of the registrant ... use[s] in commerce any reproduction ... or colorable imitation of a registered mark.” 15 U.S.C. § 1114(1)(a) (emphasis added). Section 43(a) of the Act also imposes liability for “[a]ny person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof ... which ... is likely to cause confusion ... as to the origin, sponsorship, or approval of goods, services, or commercial activities.” 15 U.S.C. § 1125(a)(1)(A) (emphasis added). Under section 45 of the Lanham Act, “use in commerce” is defined as follows:
15 U.S.C. § 1127.
In its brief, Sensient argues the press release, announcement, and two presentations provided by SensoryFlavors, in addition to its website, were sufficient to establish a question of fact regarding “use in commerce” of the mark under section 45. At oral argument, however, Sensient contradicted its argument by asserting for the first time that section 45 does not apply in infringement cases, and rather is limited in its application to the registration of trademarks. Sensient bases its contention largely on dicta provided by the Second Circuit Court of Appeals in Rescuecom Corp. v. Google, Inc., 562 F.3d 123, 128-29 (2d Cir.2009), which involved an infringement dispute over search...
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