Burndy Corp. v. Teledyne Industries, Inc.

• Decision Date: 10 April 1984
• Docket Number: Civ. No. B-82-656 (PCD).
• Citation: 584 F. Supp. 656
• Parties: BURNDY CORPORATION v. TELEDYNE INDUSTRIES, INC.
• Court: U.S. District Court — District of Connecticut

584 F. Supp. 656

BURNDY CORPORATION v. TELEDYNE INDUSTRIES, INC.

Civ. No. B-82-656 (PCD).

United States District Court, D. Connecticut.

April 10, 1984.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Francis J. Murphy, Hopgood, Calimafde, Kalih, Blaustein & Judlowe, New York City, for plaintiff.

John McN. Cramer, Thomas C. Wettach, Reed, Smith, Shaw & McClay, Pittsburgh, Pa., for defendant.

MEMORANDUM OF DECISION

DORSEY, District Judge.

Plaintiff's action brought under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125, asserts false advertising and unfair competition. Diversity of citizenship is found. 28 U.S.C. § 1332. Jurisdiction is found.

Defendant did misrepresent the qualities of its products as of June 1982 and for a period of time prior thereto. The plaintiff has not, however, proven its entitlement to damages or the relief prayed.

Plaintiff and defendant manufacture electrical connectors, including split bolt connectors, devices which tightly compress two electrical conductors, i.e. wires or cables. The contact permits the flow of electricity from one conductor to another. Of crucial importance is the reduction of resistance to the flow of electricity through the connection because with resistance the efficiency of the transmission of electricity is reduced and heat is generated. The latter phenomenon has a destructive capacity in the conductors, the connector, and structures proximate to the connection.

Aluminum has come to be used as a conductor of electricity. However, it has a characteristic of changing its form that can be overcome by accommodating features in a connector.

Underwriters Laboratory (UL) is an independent, non-profit entity which establishes standards in the electrical field. Electrical fixtures and devices are tested against applicable standards and, if successful, may be marketed as "UL approved." To adapt to the use of aluminum conductors, in 1978, UL, having previously used an all-inclusive split bolt connector standard, number 486, adopted a more stringent standard, 486B, applicable to split bolt connectors to be used with aluminum conductors. The 486B standard was to become effective in August 1981 as to connectors which were to be used with certain sized wires and later as to all other size connectors. UL approval is advantageous as it is relied on by many consumers.

Plaintiff developed a line of connectors, of various sizes, designed to meet the performance requirements of standard 486B, which in late 1981, it was prepared to market. Its connectors were approved by UL. Defendant did likewise. Both sought market enhancement of their respective connectors by publication of the UL approval. Defendant priced its comparable sized connectors lower than plaintiff.

Defendant's 486B connector was made up of several components. As designed, its sizes SW5, 6 and 7 met the standard. As of June 1982, its SW6 and 7 connectors, tested first by plaintiff then also by UL and by defendant, were found not to meet the standard. Subsequent testing of the SW5 connector, particularly in 1983, demonstrated that it was not in compliance. No testing prior to July 1982 demonstrated the noncompliance of the SW5 connector. The components of defendant's SW5, 6 and 7 connectors were found, in July of 1982, to be smaller (down-sized) than their size in the design which was intended to and did meet the 486B standard and was listed with UL. The change in the component sizes occurred in the course of production prior to July 1982 with no clear record in defendant's possession, nor evidence before the court, of the time, the reason (said to be assembly problems) nor the authorization for the changes. Plaintiff claims that defendant's marketing its connectors as UL approved was a misrepresentation that caused a diversion of sales from its products and that it is entitled to redress under the Lanham Act. Defendant denies any intentional misrepresentation and any proof of entitlement to redress and asserts plaintiff's unclean hands as a bar to any relief.

Facts Found

The following facts are found:

1. The dispute centers around each party's split bolt connectors used to join, through a clamping process, wires also known as conductors which carry electrical current.

2. Conductors are largely made of copper or aluminum. The latter has advantages, but maintenance of connection pressure, essential to minimize resistance and heat generation at the connection point, is difficult.

3. UL is an independent agency which develops performance standards to produce safety in electrical fixtures, conductors and other items used to transmit and use electricity.

4. Products which comply with UL standards may be represented as UL approved.

5. The "UL approved" label suggests to consumers, including the electrical trade, a standard of performance which thereby enhances the product's acceptability. In some installations, including those under municipal building codes, UL approval is almost universally essential. In other markets, such as to utilities or for export, UL approval is not significant as buyers in those markets develop their own standards.

6. UL standards are developed by testing and consultation with industry representatives and associations, and in-put through study committees. The standards are derived after careful and thorough study. Standards are usually phased in with advance notice.

7. UL had a standard for all split bolt connectors, 486. Because of problems with aluminum a more stringent standard, 486B, was developed prior to 1978. UL announced the new standard to be effective, for certain wire sizes, August 18, 1981. Connectors manufactured before August 18, 1981, were subject to the earlier standard, 486.

8. Plaintiff, Burndy Corporation (Burndy), manufactured, split bolt connectors as did defendant, Teledyne Industries, Inc., through its Penn-Union subsidiary (Penn-Union).

9. Plaintiff and defendant are dominant suppliers of split bolt connectors.

10. There are other manufacturers of split bolt connectors, including Reliable Electrical Company, Blackburn Manufacturing Company, and Mercury-Greeves Company. The capacity of each of these to produce split bolt connectors comparable to those in question and compliant with the 486B standard, at any specific date relevant to the issues herein, was not totally clear. At least Blackburn Manufacturing Company, commencing in the Fall of 1981, was advertising split bolt connectors which complied with the 486B standard. Two other sellers of split bolt connectors, Ilsco Corporation and Ideal Industries, sell private brand connectors manufactured by Burndy. There are other types of connectors which function the same as split bolt connectors.

11. Plaintiff and defendant knew of the new UL standard prior to 1981 and sought UL approval of their respective line of connectors under the more stringent standard.

12. In November of 1981, defendant attempted to sell its line of connectors to Ilsco, one of plaintiff's customers for private labelling, without success.

13. Burndy continued to sell its older, tin-plated copper connectors but marketed new, larger connectors, its KSA Series, specifically to meet the new UL standard, 486B.

14. After the effective date of the 486B standard, Penn-Union marketed its SW Series as compliant with UL standard 486B and UL approved.

15. The four components of Penn-Union's SW5-7 split bolt connectors were originally made in Ansonia, Connecticut, but by November 1981 that facility had been phased out and components were being manufactured in Pennsylvania. The components from Ansonia produced a connector which complied with standard 486B. It is unclear when the Ansonia components for each connector size were exhausted. Upon exhaustion of components for each connector size made in Ansonia, production in Pennsylvania was accomplished using the Ansonia molds and dies. At some time, in Pennsylvania, the molds and dies from Ansonia were replaced and the replacement molds and dies produced different size components. Penn-Union phased into the production of connectors with components made in Pennsylvania commencing in November of 1981. The resulting connectors were also represented as approved under UL 486B. The changes in the molds and dies in Pennsylvania resulted in down-sizing of components of the SW5, 6 and 7 connectors with resulting inability to perform in accordance with the 486B standard. There was no evidence as to the time between Penn-Union's receipt of orders for connectors, and its delivery of products ordered, nor the appearance of the end product in the hands of distributors, wholesalers or retailers.

16. Connectors which were composed of components made in Ansonia, or in Pennsylvania using Ansonia molds and dies, were in accordance with the design size submitted and tested for compliance with 486B and in fact met the standard. The down-sizing occurred in components manufactured in Pennsylvania commencing at various times for the several sizes of connectors in or after November 1981, whenever the components made in Ansonia, or in Pennsylvania with the Ansonia molds and dies, came to be exhausted. Different size connector components were used up at different times. When a particular size component made in Ansonia, or with the Ansonia molds and dies, was exhausted, production of that size component was commenced in Pennsylvania. There is no evidence as to when, before July 1982, any particular size connector came to consist entirely of down-sized components.

17. In June 1982, testing by Burndy demonstrated non-compliance of some SW6 and 7 connectors. The facts were reported to UL. Its testing, then, of the SW5 did not demonstrate noncompliance. Subsequent testing by Penn-Union confirmed the noncompliance of the SW6 and 7 in July and August of 1982. In 1983, the SW5 was also found to be noncompliant.

18. Connector components are made by a stamping process, using molds and dies which are constructed from...