B & B Hardware, Inc. v. Hargis Indus., Inc.

• Decision Date: 31 August 2010
• Docket Number: No. 4:06CV01654 SWW,4:06CV01654 SWW
• Citation: 736 F.Supp.2d 1212
• Parties: B & B HARDWARE, INC., Plaintiff, v. HARGIS INDUSTRIES, INC., d/b/a Sealtite Building Fasteners, et al., Defendant.
• Court: U.S. District Court — Eastern District of Arkansas

736 F.Supp.2d 1212

B & B HARDWARE, INC., Plaintiff,

v.HARGIS INDUSTRIES, INC., d/b/a Sealtite Building Fasteners, et al., Defendant.

No. 4:06CV01654 SWW.

United States District Court,

E.D. Arkansas,

Western Division.

Aug. 31, 2010.

Kathryn Bennett Perkins, Byron Jansen Walker, Rose Law Firm, Little Rock, AR, Roger N. Behle, Jr., Foley Bezek Behle & Curtis, LLP, Costa Mesa, CA, for Plaintiff.

Brooks Christopher White, H. William Allen, Allen Law Firm, Little Rock, AR, Bruce E. Munson, Huckabay, Munson, Rowlett & Moore, P.A., Little Rock, AR, Herbert A. Trey Yarbrough, III, Attorney at Law, Debra Elaine Gunter, Yarbrough Wilcox, PLLC, Tyler, TX for Defendant.

Memorandum Opinion and Order

SUSAN WEBBER WRIGHT, District Judge.

Plaintiff B & B Hardware, Inc. ("'B & B") brought this action against defendant Hargis Industries, Inc. ("Hargis") for trademark infringement, unfair competition, and false designation of origin. Hargis counterclaimed, alleging B & B obtained its trademark registration fraudulently, and asserting claims of copyright infringement, false advertising, false designation of origin, and unfair competition. The matter was tried before a jury on June 22-25, 28-30, 2010. The Court denied B & B's motion for judgment as a matter of law, and submitted B & B's claims of trademark infringement, false designation of origin, and unfair competition under both federal and state law and defendant's claims for false advertising and false designation of origin to the jury. The jury returned verdicts against B & B on all its claims and for Hargis on all its claims. The Court entered judgment on July 1, 2010.

Now before the Court is B & B's renewed motion for judgment as a matter of law or, in the alternative, for a new trial. For the reasons that follow, the Court denies the motion.

I.

The grant of judgment as a matter of law "is appropriate 'only if the evidence points all one way and is susceptible of no reasonable inferences sustaining the position of the non-moving party.' " Hauser v. Kubalak, 929 F.2d 1305, 1307 (8th Cir.1991)(quoting Glass Design Imports, Inc. v. Import Specialties, 867 F.2d 1139, 1142 (8th Cir.1989) (citation omitted)). The standard that must be met is a rigorous one. The Court must

(1) consider the evidence in the light most favorable to the prevailing party, (2) assume that all conflicts in the evidence were resolved in favor of the prevailing party, (3) assume as proved all facts that the prevailing party's evidence tended to prove, and (4) give the prevailing party the benefit of all favorable inferences that may reasonably be drawn from the facts proved.

Western American, Inc. v. Aetna Cas. & Sur. Co., 915 F.2d 1181, 1183 (8th Cir.1990). The Court must then deny the motion "if reasonable persons could differ as to the conclusions to be drawn from the evidence." Id.

Hargis made a claim for false advertising under 15 U.S.C. § 1125(a) based on the allegation that B & B wrongfully published photographs of Hargis' construction fasteners on B & B's construction fastener website for a period of approximately six weeks.¹ B & B argues that the Court should dismiss Hargis' claim as a matter of law because the construction fasteners at issue are visually identical. Citing McCarthy on Trademarks and Unfair Competition, B & B argues that if the parties' products are identical, then the use of a photograph of a plaintiff's product is not false or misleading.² B & B further cites Merchant & Evans, Inc. v. Roosevelt Bldg. Products Co., Inc., 963 F.2d 628 (3rd Cir.1992), for the proposition that when the parties' products are identical, defendant's use of a photo of plaintiff's product is not misleading. In response, Hargis argues that B & B presented no credible evidence to establish that B & B had ever sent any fastener designs to any manufacturer for production of specimens. Thus, there is no evidence that any constructions fasteners made from B & B designs even exist. Further, Hargis cites Truck Equipment Service Co. v. Fruehauf Corp., 536 F.2d 1210 (8th Cir.1976), which held that the defendant's use of the plaintiff's photographs in defendant's sales literature is a false representation prohibited by the Lanham Act, even if the defendant's product was not inferior in quality to the plaintiff's. See also Bangor Punta Operations, Inc. v. Universal Marine Co., 543 F.2d 1107 (5th Cir.1976)(Lanham Act violated where thedefendant represented a photograph of plaintiff's trawler to be the defendant's); Woodke v. Dahm, 873 F.Supp. 179 (N.D.Iowa 1995)(violation of 15 U.S.C. § 1125(a) where defendants used a photograph of plaintiff's product in an advertisement in which they represented the product to be one of their own); Potucek v. Taylor, 738 F.Supp. 466 (M.D.Fla.1990)(use of photograph of competitor's product to advertise and sell one's own product is false advertising).

The Court finds B & B is not entitled to judgment as a matter of law as to Hargis' counterclaim for false advertising as the verdict is supported by the evidence presented at trial.

Hargis' claim of false designation of origin also is based on B & B's publication of photographs of Hargis' construction fasteners on B & B's website that promoted B & B's new construction fastener line. B & B asserts that Hargis' claim is really a trade dress claim because the appearance of the product is at issue and Hargis did not meet its burden of showing evidence of non-functionality or secondary meaning.³ In response, Hargis states its claim is not that B & B wrongfully copied the trade dress of its fasteners by developing, manufacturing, and offering for sale fasteners with the same or similar appearance. Instead, the wrongful act underlying Hargis' claim is B & B's appropriation of photos of Hargis' fasteners and placing them on B & B's website as a line of construction fasteners offered by B & B.

The court in Fruehauf considered two alleged wrongful acts: the defendant's use of photographs of plaintiff's trailer in its sales literature and defendant's copying of the exterior design of the plaintiff's trailer in the manufacture of its own trailer. The court held, "[t]he use of another's product, misbranded to appear as that of a competitor, has been repeatedly found to be 'a false designation of origin' actionable under § 43(a)." 536 F.2d at 1216. Because the Court finds Hargis' false designation of origin claim is not a trade dress claim and the jury's verdict is supported by the evidence, B & B's motion for judgment as a matter of law is denied.

II.

"A motion for a new trial may be 'bottomed on the claim that the verdict is against the weight of the evidence, that the damages are excessive, or that, for other reasons, the trial was not fair to the party moving; and may raise questions of law arising out of alleged substantial errors in admission or rejection of evidence or instructions to the jury.' " Children's Broad. Corp. v. Walt Disney Co., 245 F.3d 1008, 1017 (8th Cir.2001) (quoting Montgomery Ward & Co. v. Duncan, 311 U.S. 243, 251, 61 S.Ct. 189, 85 L.Ed. 147 (1940)). In deciding B & B's motion for a new trial, the Court must find "that prejudice or error has crept into the record, that the verdict is against the clear weight of the evidence, or that substantial justice has not been done." Greenwood v. Dittmer, 596 F.Supp. 235, 239 (W.D.Ark.1984), aff'd, 776 F.2d 785 (8th Cir.1985).

The trial court is in the best position to determine whether the alleged error affectedthe substantial rights of any party sufficient to warrant a new trial. Therefore, the trial court's decision deserves considerable deference. A trial court must determine whether an evidentiary ruling was so prejudicial as to require a new trial which would be likely to produce a different result. We may only find a trial court's determination of the admissibility of evidence was prejudicial where there has been a clear abuse of discretion.

O'Dell v. Hercules, 904 F.2d 1194, 1200 (8th Cir.1990) (citations omitted). "When the basis of the motion for a new trial is that the jury's verdict is against the weight of the evidence, the district court's denial of the motion is virtually unassailable on appeal." Children's Broad. Corp. v. Walt Disney Co., 357 F.3d 860, 867 (8th Cir.2004) (internal citation/quotations omitted).

As grounds for a new trial, B & B argues: 1) the Court erred in refusing to defer to the TTAB opinions or, in the alternative, refusing to admit the TTAB opinions; 2) the Court committed substantial and prejudicial error in refusing to give appropriate jury instructions; and 3) the weight of the evidence does not support the jury verdict.

A. TTAB opinions

In its unsuccessful motion for summary judgment, B & B argued the Court should give preclusive effect to TTAB findings involving the same parties and same trademarks. In the motion now before the Court, B & B focuses on a TTAB opinion dated August 28, 2007, denying Hargis' registration on the basis of its finding of likelihood of confusion.⁴ As in its earlier motion, B & B relies on Flavor Corp. of America v. Kemin Indus., Inc., 493 F.2d 275 (8th Cir.1974) in support of its argument. The principle issue on appeal in Flavor was "whether a finding of the Court of Customs and Patent Appeals in a trademark cancellation proceeding operates as collateral estoppel in a subsequent trademark infringement action." 493 F.2d at 277. That determination, in turn, hinged on whether the CCPA was a "court of competent jurisdiction to bind the parties in a subsequent action." Id. at 279. The Flavor court's affirmance of the district court's decision to apply collateral estoppel in the subsequent infringement action was dependent on the fact that the earlier finding of likelihood of confusion was actually made and affirmed by the CCPA, an Article III court. Here, the findings were made by the TTAB. The Court finds the Flavor case, as well as the other cases cited by B & B, distinguishable from the case at bar.

B & B further argues the...