Thomas & Betts Corp. v. Panduit Corp.

• Citation: 935 F. Supp. 1399
• Decision Date: 15 August 1996
• Docket Number: No. 94 C 2656.,94 C 2656.
• Parties: THOMAS & BETTS CORPORATION and Thomas & Betts Holdings, Inc., Plaintiffs, v. PANDUIT CORPORATION, Defendant.
• Court: United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)

935 F. Supp. 1399

THOMAS & BETTS CORPORATION and Thomas & Betts Holdings, Inc., Plaintiffs, v. PANDUIT CORPORATION, Defendant.

No. 94 C 2656.

United States District Court, N.D. Illinois, Eastern Division.

August 15, 1996.

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Sidney David, Keith E. Gilman, Lerner, David, Littenberg, Krumholz & Mentlik, Westfield, New Jersey, Marc L. Fogelberg, McBride, Baker & Coles, Chicago, Illinois, James Hay, Lewis & McKenna, Saddle River, New Jersey, for Plaintiffs.

David C. Hilliard, John Thompson Brown, Pattishall, McAuliffe, Newbury, Hilliard & Geraldson, Chicago, Illinois, for Defendant.

MEMORANDUM OPINION AND ORDER

DENLOW, United States Magistrate Judge.

Plaintiffs Thomas & Betts Corporation and Thomas & Betts Holdings, Inc. (hereinafter collectively referred to as "T & B"), bring this action in five counts against defendant Panduit Corporation (hereinafter "Panduit"). Count I alleges that Panduit's metal barb oval head shaped cable tie infringes on the trade dress of T & B's cable tie in violation of 15 U.S.C. § 1125(a) (hereinafter the "Lanham Act"). Count II alleges that Panduit's use of the name BARB-TY constitutes unfair competition and seeks cancellation of Panduit's trademark registration of the term BARB-TY under 15 U.S.C. § 1064(3). T & B also alleges that Panduit's conduct violates the common law of unfair competition (Count III); the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/2 and the Uniform Deceptive Trade Practices Act, 815 ILCS 510/1 et seq. (Count IV); and the Illinois Anti-Dilution Act, 765 ILCS 1035/15 (Count V).

T & B previously moved for a preliminary injunction which was granted by the trial court (1994 WL 714619), and later reversed by the Seventh Circuit. (Thomas & Betts Corp. v. Panduit Corp., 65 F.3d 654 (7th Cir.1995)). Panduit now moves for summary judgment on all five counts. The Court held an extensive oral argument on July 11, 1996 and has reviewed the voluminous briefs and exhibits submitted by the parties. For the reasons set forth below, Panduit's motion for summary judgment is granted on Counts I, III, IV and V and denied as to Count II of plaintiff's complaint.

I. BACKGROUND FACTS

T & B and Panduit are the nation's largest suppliers of cable ties. Cable ties are nylon plastic straps used to tie together a group of cables or wires. (T & B 12 N p. 26 ¶ 1). Cable ties consist of a strap terminating at one end in a tapered tail and at the other in a head which incorporates a horizontal locking mechanism. Id. Cable ties feature two types of locking mechanisms: one-piece or two-piece. (T & B 12 N p. 26 ¶ 2). At issue here is a two-piece cable tie. In the two-piece tie a metal barb is inserted into the head of the tie and sits in a slot transverse to the slit for the strap. Id. When the strap is pulled taut, the tension on the strap causes the flexed barb to bite into the nylon strap and hold tight.

For purposes of this motion, the following uncontested facts are adopted from the Seventh Circuit opinion. (See 65 F.3d 654). In 1965, T & B obtained a patent on the two-piece cable tie ("the Schwester patent"). That patent disclosed a two-piece cable tie with an oval head, metal barb and transverse slot. The slot, barb and head portions are elements in each of the Schwester patent's claims. The oval shape of the head is not specifically claimed but is illustrated and described in the specifications. T & B currently markets a two-piece cable tie under the trademark TY-RAP that is essentially identical to the model disclosed in the Schwester patent. Though the Schwester patent expired in 1982 and a related patent also held by T & B expired in 1986, until 1993 T & B remained the sole producer of two-piece cable ties with annual sales of almost $100 million worldwide.

In 1993, Panduit entered the two-piece cable tie market with the BARB-TY, an oval-headed, metal-barbed cable tie essentially identical to T & B's TY-RAP. T & B promptly sued Panduit for trade dress infringement under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). T & B claimed that its trade dress includes a rounded, low profile head configuration with a vertical slot which is aligned with the body of the cable tie and, in the case of Thomas & Betts' dominant product, includes a metal barb visible in the lower portion of the vertical slot. T & B also brought a federal unfair competition claim based on Panduit's use of the BARB-TY trademark and ancillary state law claims.

T & B moved for a preliminary injunction prohibiting Panduit from selling its BARB-TY. After an evidentiary hearing, the trial court found that "the transverse slot, the vertical slot, the steel barb and the tail or body" were all "functional parts" and thus not entitled to trade dress protection, but that the oval shape of the head was not functional and thus was protectable trade dress. The trial judge preliminarily enjoined Panduit "from further sales, advertising, promotion, or marketing of cable ties incorporating a steel barb locking mechanism with an oval shaped head and a transverse or vertical slot in the head." 1994 WL 714619 *25.

Panduit appealed and the Seventh Circuit reversed the preliminary injunction finding that T & B had not established a reasonable likelihood of success on the merits of its claim that T & B's cable tie had acquired secondary meaning and that its features are protectable trade dress. Thomas & Betts Corp. v. Panduit Corp., 65 F.3d 654 (7th Cir.1995). Panduit now moves for summary judgment on all counts.

II. SUMMARY JUDGMENT STANDARD

Summary judgment "shall be rendered forthwith 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). Celotex Corporation v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986).

When reviewing the record on summary judgment, the court must draw all reasonable inferences in the light most favorable to the nonmovant. Hill v. Burrell Communications Group, Inc., 67 F.3d 665, 667 (7th Cir.1995). To avert summary judgment, however, plaintiff "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986). A dispute about a material fact is genuine only if the evidence presented is such that a reasonable jury could return a verdict for the nonmovant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). A summary judgment proceeding is not a vehicle for the resolution of factual disputes; it is designed to determine whether there is any material dispute of fact that requires a trial. Id. If no reasonable jury could find for the party opposing the motion, it must be granted. Hedberg v. Indiana Bell Tel. Co., 47 F.3d 928, 931 (7th Cir.1995).

III. DISCUSSION

The question in this case arises at the intersection of the Nation's patent and trademark laws and raises a host of novel and fascinating legal issues. First, the case raises the question of what weight should be given to factual findings made in connection with the motion for preliminary injunction when deciding the current motion for summary judgment. Second, the principal issue concerns the relationship between the Patent Act and the Lanham Act and whether the oval head disclosed in T & B's expired utility patent can be protected as trade dress under the Lanham Act. Third, the Court considers the propriety of Panduit's BARB-TY trademark. Finally, we consider the state law claims of unfair competition and deceptive trade practices.

Panduit advances several arguments in support of its motion for summary judgment on the federal claims raised in Counts I and II. First, Panduit claims that T & B cannot receive trademark protection in the oval head shape of its cable tie contained in its expired utility patent because that would contravene the public's right to copy and to use inventions once a patent expires. Second, Panduit argues that it is entitled to judgment on T & B's trademark claims because the oval head shape of the cable tie is functional and therefore cannot qualify for trade dress protection. Third, Panduit argues that even if the oval head is deemed non-functional, in which case it may be entitled to trademark protection, T & B has failed to show that the oval head shape of the TY-RAP cable tie has acquired secondary meaning. Panduit also argues that T & B has failed to show that T & B's TY-RAP cable ties will be confused with Panduit's BARB-TY cable ties. Finally, Panduit asserts that T & B may not prohibit its use of the term BARB-TY to describe their cable tie.

The Court will discuss each of these arguments in turn while viewing the evidence and drawing all inferences in the light most favorable to T & B. Under the standards for summary judgment, such an examination of the facts is required. Thereafter, the Court will consider the state law claims raised in Counts III through V.

A. WEIGHT TO BE GIVEN TO PREVIOUS FINDINGS OF CONTESTED FACT

The first issue is what weight this Court should assign in deciding Panduit's motion for summary judgment to the trial court's or Seventh Circuit's factual findings in their preliminary injunction rulings. Because parties are held to different standards of proof in preliminary injunction hearings than in motions for summary judgment, and because findings of fact at the preliminary injunction stage are not as fully fleshed out as at the summary judgment stage, this Court will not rely on the trial court's or Seventh Circuit's findings of contested facts in deciding Panduit's motion for summary judgment. (Emphasis Added). University of Texas v. Camenisch, 451 U.S. 390, 395,...