Car Freshner Corp. v. Am. Covers, LLC

• Decision Date: 07 August 2019
• Docket Number: 5:17-cv-171 (TJM/ATB)
• Citation: 419 F.Supp.3d 407
• Parties: CAR FRESHNER CORPORATION, and Julius Samann Ltd., Plaintiffs, v. AMERICAN COVERS, LLC, f/k/a American Covers, Inc., d/b/a Handstands, Energizer Holdings, Inc., and Energizer Brands, LLC, Defendants.
• Court: U.S. District Court — Northern District of New York

419 F.Supp.3d 407

CAR FRESHNER CORPORATION, and Julius Samann Ltd., Plaintiffs,

v.AMERICAN COVERS, LLC, f/k/a American Covers, Inc., d/b/a Handstands, Energizer Holdings, Inc., and Energizer Brands, LLC, Defendants.

5:17-cv-171 (TJM/ATB)

United States District Court, N.D. New York.

Signed August 7, 2019

Louis Orbach, Bond, Schoeneck Law Firm, Liza R. Magley, Bond Schoeneck & King, PLLC, Syracuse, NY, for Plaintiffs.

Jennifer F. Deal, Pro Hac Vice, William H. Brewster, Kilpatrick, Townsend Law Firm, Atlanta, GA, for Defendants.

DECISION & ORDER

Thomas J. McAvoy, Sr. U.S.D.J.

Before the Court is Defendants' motion for summary judgment in this case alleging trademark infringement and dilution under state and federal law. See dkt. # 84. The parties have briefed the issues and the Court will consider the parties' positions without oral argument.

I. BACKGROUND¹

This case concerns allegations by Plaintiffs Car-Freshner Corporation and Julius Samann, Ltd., ("Plaintiffs"), that Defendants American Covers, LLC, f/k/a American Covers, Inc., d/b/a Handstands, Energizer Holdings, Inc. and Energizer Brands, LLC, ("Defendants") violated the Plaintiffs' rights in trademarked scent names for automotive air freshener products. Plaintiffs distribute automotive air freshener products under the "Little Trees" label. Defendants engage in the same business using the "Refresh Your Car!" brand, as well as other labels. Plaintiffs contend that Defendants sold "Refresh Your Car!" products with scent names confusingly similar to two of Plaintiffs' "Little Trees" products, "Black Ice" and "Bayside Breeze." Plaintiff contends that Defendants' product names, "Midnight Black/Ice Storm" and "Boardwalk Breeze" misled consumers into believing that Car-Freshner was the source of those goods and diluted the unique market value of Plaintiffs' scent names. After Plaintiffs filed an Amended Complaint and the parties engaged in discovery, Defendants filed the instant motion for summary judgment.

In July 2016, Defendants Energizer Holdings, Inc., and Energizer Brands, LLC, acquired Defendant American Covers, LLC ("Handstands"). Defendants' Statement of Material Facts ("Defendants' Statement"), dkt. # 93-1, at ¶ 1. Handstands sold automotive air freshener and appearance products under a variety of brand names, including Refresh Your Car!, California Scents, Driven, Bahama & Co., Lexol, and Eagle One. Id. The parties dispute the degree to which these brands had achieve widespread recognition in the relevant market segments. Compare Defendants' Statement at ¶ 1 with Plaintiff's Response to Defendants' Statement of Material Facts ("Plaintiff's Response") at ¶ 1. Refresh Your Car! air fresheners have been available since 2006. Defendants' Statement at ¶ 2. The parties dispute Refresh Your Car!'s success; Defendants point to millions in annual sales, while Plaintiff provides evidence that indicates that other companies have larger sales of similar products. See Defendants' Statement at ¶¶ 2-3, Plaintiffs' Response at ¶¶ 2-3.

In December 2017 Energizer began selling retailers and distributors two new Refresh Your Car products. Defendants' Statement at ¶ 5. The first product was a line of dual-scented air fresheners that used the scent names "Midnight Black" and "Ice Storm." Id. The second product was a line of vent stick air fresheners bearing the name "Boardwalk Breeze." Id. Retailers and distributors began selling these products in January 2017. Id. at ¶¶ 6-7.

The parties disagree about whether Handstands made the decision to use the names "Midnight Black" and "Ice Storm" in the same package in early 2016, or after Energizer acquired the company. Compare Defendants' Statement at ¶ 8, Plaintiffs' Response at ¶ 8. Plaintiffs point to the statement of Handstand's former CEO, who testified that "the conception of it was during my time. The go/no go and subsequent launch would have occurred after I separated from the company." Plaintiffs' Response at ¶ 8. In any case, the Court notes, the Defendants acknowledge that–whoever conceived of the product–the products entered the marketplace after Energizer acquired Handstands.

Energizer sold its "Midnight Black/Ice Storm" dual-scented products in a variety of forms. Defendants' Statement at ¶ 9. Among those products were four- and six-pack vent sticks, diffusers, mini diffusers, and gel cans.² Id. Defendants offered the "Boardwalk Breeze" scent only in the form of a four-pack of vent sticks. Id. at ¶ 10.

Plaintiffs use "Black Ice" as a scent name for a line of air fresheners the company sells. Id. at ¶ 13. Plaintiffs' packaging for this product, sold under the "Little Trees" brand, includes a yellow background, green pine tree logo, and "little trees" logo, along with a logo for the name of the particular scent. Id. at ¶¶ 13, 13(a). Plaintiff offers the "Black Ice" scent in a variety of formats, including paper³ , vent wrap⁴ , "fresh link⁵ ," can, pump, and, after Plaintiffs filed their lawsuit in this matter, a "fiber can."⁶ Id. at ¶¶ 13(a-e), 15. Plaintiffs add that they also sold Black Ice in the "vent clip+s" format.⁷

Plaintiffs filed their Complaint in this Court alleging trademark infringement, trademark dilution, and unfair competition, on February 16, 2017. See dkt. # 1. The Complaint addressed infringement and dilution only with respect to Plaintiff's "Black Ice" mark. Id. Defendants' counsel notified Plaintiffs' in-house counsel on March 31, 2017⁸ that Defendants had decided to stop selling the Midnight Black and Ice Storm dual scent product. Defendants' Statement at ¶ 16. Counsel also informed Plaintiffs that a "sell-off" period would end no later than June 30, 2017. Id. Plaintiffs never agreed to a sell-off period. Plaintiffs' Response at ¶ 17. Plaintiffs filed an Amended Complaint alleging infringement and dilution of both the "Black Ice" and "Bayside Breeze" marks on April 11, 2017, after Defendants informed Plaintiff that they had decided to stop selling Midnight Black and Ice Storm together. Defendants' Statement at ¶¶ 17-18; see dkt. # 13.

Plaintiffs use "Bayside Breeze" as a scent name in a variety of air fresheners. Defendants' Statement at ¶ 19. These products use a yellow background, the tree design mark and the Little Trees logo. Id. These products include hanging paper trees, vent wraps, and fresh links. Id. at ¶ 19(a-c). Plaintiffs began using the "Bayside Breeze" scent in 2013. Id. at ¶ 21. On May 5, 2017,⁹ after Plaintiffs filed their Amended Complaint, Defendants' counsel notified Plaintiffs' counsel that Defendants had decided to stop selling its allegedly infringing "Boardwalk Breeze" product, and that a United States "sell-off" period would end no later than June 30, 2017. Id. at ¶ 22. Defendants decided to stop selling the "Boardwalk Breeze" product due to poor sales.¹⁰ Id. at ¶ 23. The parties disagree about exactly when Defendants stopped selling the two scents. Defendants claim that they had ceased selling both products by June 30, 2017. Defendants' Statement at ¶ 24. Plaintiffs contend that Defendants delivered some "Midnight Black/Ice Storm" products to AutoZone after that date, and that some of those products might have been "miscoded" and sold in the United States. Plaintiffs' Response at ¶ 24. Plaintiffs deny Defendants' claim that Energizer "quarantined" and "blocked" the products to prevent sales after June 30, 2017 for the same reason. Compare Defendants' Statement at ¶¶ 25-26; Plaintiffs' Response at ¶¶ 25-26.

Defendants replaced the Midnight Black/Ice Storm dual scent product with a nearly identical product. Defendants' Statement at ¶ 27. The only difference between the new and old vent sticks product was the name: "Lighting Bolt/Ice Storm" replaced "Midnight Black/Ice Storm." Id. Plaintiffs do not complain that the Lightning Bolt/Ice Storm" products violate their trademark rights. Id. at ¶ 28. Defendants sold single-scent products using the name "Midnight Black" before the Plaintiffs filed their Complaint and after; Plaintiffs have not complained of infringement. Id. at ¶ 30.

Plaintiffs have filed dozens of lawsuits alleging infringement of their distinctive tree-shaped design, either in the form of similar paper air fresheners, or in product packaging that incorporated the tree and "Little Tree" marks. Id. at ¶ 31. Plaintiffs have also filed complaints alleging a violation of their distinctive trade dress–yellow product packaging showing the Little Trees brand name diagonally across the top and the Tree Design mark in the corner as a logo. Id. at ¶ 32. Plaintiffs use this packaging, logo, and brand name on the products here in question. Id. at ¶ 33. In responding to Defendants' statement, Plaintiffs contend that the term "yellow packaging" is ambiguous. Defendants' Statement at ¶ 33.

The parties disagree about how recognizable Plaintiffs' trade dress is for consumers. Defendants claim that the Plaintiffs' witnesses testified that consumers recognize the Little Trees products "instantly" because of the packaging, but Plaintiffs contend that those witnesses testified more equivocally, asserting that the aim of the trade dress was to make the products recognizable "instantly," but that the buying decisions relate more to fragrance than anything else. Compare Defendants' Statement at ¶ 34; Plaintiffs' Response at ¶ 34.

Most of Plaintiffs' freshener sales are in the paper format. Defendants' Statement at ¶ 35. Defendants did not offer any of the items in question in paper format. Id. at ¶ 36. Defendants sold an Ice Storm fragrance in a variety of formats for eight years before this dispute arose. Id. at ¶¶ 37-38. Defendants have also used the name "Arctic Ice," "Black Out," and "Ice." Id. at ¶¶ 39-44. Likewise, Defendants have sold and continue to sell a number of products that use "Breeze" as a scent name, including "Cool Breeze," "Summer Breeze," "Laguna Breeze," "Tropical Breeze," and "Aruba Blue Breeze." Id. at ¶¶ 45-46. Plaintiffs have never complained about any of these products....