Blue Coral, Inc. v. Turtle Wax, Inc.
| Decision Date | 21 May 1987 |
| Docket Number | No. 87 C 1239.,87 C 1239. |
| Citation | 664 F. Supp. 1153 |
| Parties | BLUE CORAL, INC., Plaintiff, v. TURTLE WAX, INC., Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
Marc O. Beem, R. Dickey Hamilton, Catherine H. McMahon, Miller Shakman Nathan & Hamilton, Chicago, Ill., Bruce O. Baumgartner, R. Scott Keller, Baker & Hostetler, Cleveland, Ohio, for plaintiff.
J. Patrick Herald, Baker & McKenzie, Chicago, Ill., for defendant.
The plaintiff, Blue Coral, Inc., ("Blue Coral") has sued defendant Turtle Wax, Inc., ("Turtle Wax"), alleging trade dress infringement. The dispute centers around Blue Coral's newly introduced product "Wheel Magic" and Turtle Wax's newly introduced product, "All Purpose Wheel Cleaner," both universal wheel cleaning products. Blue Coral introduced its new product, Wheel Magic, at an August 1986 trade show. Shortly after that Turtle Wax also introduced as a new product in the United States its "All Purpose Wheel Cleaner." Turtle Wax for some time had a universal wheel cleaning product on the market in Europe under the trade name, "Wheel Brite."
Blue Coral had moved this Court to enter a very extensive temporary restraining order which, inter alia, would have prohibited Turtle Wax from using the current trade dress of its All Purpose Wheel Cleaner in any manner. We denied Blue Coral's motion for a temporary restraining order, but did order Turtle Wax to change the color of its spray caps from green and white to yellow and white so the caps did not duplicate the spray caps on Wheel Magic. Subsequently, we conducted a trial on Blue Coral's motion for a preliminary injunction against Turtle Wax. Having heard the oral testimony, read the written testimony and depositions, reviewed the paper evidence, physical exhibits, and considered the parties' legal memoranda, we enter the following memorandum opinion denying the motion for preliminary injunction. For the reasons stated below, we hold that Blue Coral has not satisfied the prerequisites for injunctive relief.
Blue Coral and Turtle Wax are major "players" in the automotive appearance chemical market. They are major competitors in virtually all their various product lines. Their products include, but are not limited to, car washes, car and all purpose cleaners, car waxes, polishing compounds, color restorers, wheel and tire cleaners, protectants, bug and tar removers, and auto body sealers. If one player comes out with a "new" product, the other is very quick to follow with a "knock-off." A "knock-off" in the industry parlance is a competing product, not necessarily a look-alike product. Consequently, players will take steps to keep their new products secret from one another until the time when the product is officially launched. Frequently, although not always, a product will be launched at a key trade show. At the trade show the product will be shown to customers, customers in this case referring to the retail merchandisers, not the ultimate consumers. The key trade show for the automotive appearance chemical market is the Automotive Parts and Accessories Aftermarket Show (the "APAA" Show). Prior to the trade show it is not uncommon for competitors who intend to introduce a new product to show the product to key customers. Usually, key customers are the high-volume mass merchandisers such as WalMart or K-Mart. Because the success or failure of a new product can be tied so closely to its acceptance or rejection by these particular customers, players such as Blue Coral and Turtle Wax show proposed new products in the process of being developed to the mass-merchandisers for their feedback. For example, if the customer did not like a particular color combination in the trade dress, both Blue Coral and Turtle Wax would allow that to influence their ultimate choice of trade dress for their new products. The evidence clearly showed that if one of the key customers told Blue Coral or Turtle Wax to jump, they did.
Since 1983, Turtle Wax had considered the possibility of introducing a universal wheel cleaner. At that time it marketed different wheel cleaners for different types of wheels.2 Although Turtle Wax had an acceptable formula for a universal wheel cleaning product since August of 1985, it chose not to put it on the market for strategic reasons. Testimony indicated that a key goal of any company in this market is to get as many of its own SKU's (Stock Keeping Units) as possible on the retailer's shelf. An SKU is one individual product. From Turtle Wax's perspective, if it put a universal wheel cleaning product on the market, retailers would be reluctant to also stock the specialized cleaners. Thus, Turtle Wax would lose two SKUs just to place the universal cleaner on the market. Turtle Wax had prepared a mock-up or "comp" of a potential universal cleaner and had brought it to the 1985 APAA trade show to show selective customers, but not to officially introduce it. Apparently, the reception it received was not sufficient to overcome the possibility of losing SKUs already on the shelf. Thus, as of early 1986 Turtle Wax had put the universal cleaner on the back burner. In June of 1986, because of lackluster sales, Turtle Wax was reexamining its entire wheel care line, the "Power Brite" line. An external consultant advised Turtle Wax to drop the "Power Brite" name and play up the name of Turtle Wax and move to green bottles as a way of playing up the Turtle Wax brand use of green. The consultant also suggested that the introduction of a universal wheel cleaning product could help Turtle Wax get on retail shelves.
Although Turtle Wax and Blue Coral did not have universal wheel cleaning products on the market during early 1986, there were at least two and possibly five such products on the market. There was a German product, P-21-S, which was sold by Mercedes-Benz dealers; it was packaged in a translucent3 plastic bottle with a green liquid. (Plaintiff's Exhibit 20-A). It is this product that gave Blue Coral the idea to push Wheel Magic as a special "German Formula" because one of the key ingredients was a "German" chemical. There was also a product put out under the Rain Dance name by Borden, Inc. (Plaintiff's Exhibit 17). Blue Coral also introduced into evidence three other products, which according to their labels are multi-purpose wheel cleaners: Mother's Wheel Mist (Plaintiff's Exhibit 28); Kit Wheel Cleaner (Plaintiff's Exhibit 19); and Meguiar's All Wheel (Plaintiff's Exhibit 18). Blue Coral introduced these products as evidence of the distinctiveness of Wheel Magic's trade dress, which would imply these products were all on the market prior to Wheel Magic.
Blue Coral's idea for a universal wheel care product originated in the spring of 1986 by Michael Moshontz, the president of Blue Coral when someone told him that Blue Coral's all purpose cleaner, Clear Magic, was a pretty good wheel cleaner. By the end of March, Blue Coral was considering various red trade dress designs utilizing a clear plastic bottle for its new universal wheel cleaner. Other than the German P-21-S product in the translucent bottle with a green liquid, there were no other specialized wheel cleaning products in a clear bottle with a colored liquid. During the approximately six month period during which the Wheel Magic trade dress developed, March—September 1986, Blue Coral considered various different approaches. It had an outside artist develop mock-ups of various color and bottle combinations for the Wheel Magic product, known as "comps" in the trade. It looked at red liquids in clear bottles with red labels, blue liquids with blue labels; opaque silver bottles with silver labels, opaque black bottles with black labels, opaque white bottles with white labels and also a clear bottle with green liquid. The label itself went through numerous changes before arriving at the final version. (See Appendix A). Initially, the labels featured only a picture of a wheel. This was the direction the package was taking until the middle of July 1986 when the label changed drastically and moved to a "high tech" look, a high tech look is described by Blue Coral as involving the use of slanted letters and grids. The label now had five wheels instead of just one. All during this process, Blue Coral personnel had shown the comps to key customers and other employees and solicited their feedback. Apparently, Blue Coral received feedback which indicated it needed to go with a more modern high tech look, although none of the Blue Coral people could remember specifically who gave them this feedback.
As of mid-July 1986, however, Blue Coral had narrowed its choice of colors to green or red liquid in clear bottles with high tech labels. The green comp was almost identical to the current product and the red comp was the same in red. Blue Coral personnel then took these two bottles to key customers who favored the green presentation. Blue Coral decided to go with the green look and also had a hang tag made to go on the bottle neck. Initially, the tag was circular, but this was changed to a square sometime before this lawsuit. (See Plaintiff's Exhibit 50 # 28). Based on key customer reactions at this time, Blue Coral formalized its plans to introduce the Wheel Magic product in its green trade dress at the August 1986 APAA show.
Over in the rival camp, Turtle Wax was moving on its universal product at more of a turtle's pace. Turtle Wax had prepared a comp for an all purpose wheel cleaner in a white bottle with a blue and red label in the event a customer expressed an interest in a universal wheel cleaner. On July 16, 1986 Turtle Wax sales people met with WalMart, one of Turtle Wax's largest customers, to review their new product line. WalMart, indeed, expressed an interest in a universal wheel cleaning product. Apparently Blue Coral had been in the day before to see WalMart and had discussed the Wheel Magic product. The evidence was...
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