Eldon Industries, Inc. v. Rubbermaid, Inc.
| Decision Date | 28 March 1990 |
| Docket Number | No. 87 C 6476.,87 C 6476. |
| Citation | 735 F. Supp. 786 |
| Parties | ELDON INDUSTRIES, INC., Plaintiff, v. RUBBERMAID, INCORPORATED, and Rubbermaid Commercial Products, Inc., Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
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A. Sidney Katz, Donald L. Welsh, Robert B. Breisblatt, Welsh & Katz, Ltd., Chicago, Ill., for plaintiff.
Robert B. Jones, Timothy E. Levstik, Fitch, Even Tabin & Flannery, Chicago, Ill., Edward G. Greive, Renner, Kenner, Greive Bobak & Taylor, Akron, Ohio, for defendants.
Plaintiff Eldon Industries, Inc. ("Eldon") is engaged in the business of designing, manufacturing and selling office accessories. Defendants Rubbermaid, Inc. and its subsidiary Rubbermaid Commercial Products, Inc. (collectively, "Rubbermaid") are also in the business of designing, manufacturing and selling office accessories. In this action, Eldon alleges that Rubbermaid is liable for trademark infringement and unfair competition in connection with Rubbermaid's manufacture and sale of various office supplies which are similar to office supplies manufactured and sold by Eldon. Rubbermaid has filed counterclaims which seek, among other relief, cancellation of trademarks registered by Eldon on the Supplemental Register and other relief. Pending before the Court are objections to the Magistrate's Reports and Recommendations concerning plaintiff's motion for a preliminary injunction and defendants' motion for partial summary judgment.1
This case centers around three lines of products produced by Eldon: the Stackable line of office trays (see Figure 1); the Add-A-File vertical sorters (see Figure 2); and the Image 1500 line of office trays (see Figure 3). Count I alleges that Rubbermaid's QuickStack trays (see Figure 4) infringe Eldon's trademark rights in the Stackable line in violation of ? 32 of the Lanham Act, 15 U.S.C. ? 1114. Count II alleges that Rubbermaid's QuickSnap sorters (see Figure 5) infringe Eldon's trademark rights in the Add-A-File line in violation of ? 32. Counts III and IV allege that production and sales of the QuickStack trays and QuickSnap sorters, respectively, constitute unfair competition under ? 43(a) of the Lanham Act, 15 U.S.C. ? 1125(a). Counts V and VI allege that Rubbermaid's production and sales of the Form 1000 trays (see Figure 6), and the risers for stacking those trays, constitute unfair competition in violation of ? 43(a).
The Magistrate has provided 135 recommended findings of fact in her Report and Recommendation on Eldon's motion for a preliminary injunction. Those findings are extremely thorough and detailed. Although Eldon asserts that the Report "includes clearly erroneous and incomplete findings of fact," Eldon identifies very few specific findings of fact with which it takes issue. Those findings are relatively minor and will be addressed where necessary in the context of the Court's discussion of the legal issues. Other than any findings which are rejected in that discussion, the Court adopts the Magistrate's findings of fact.
Rubbermaid moved for summary judgment with respect to Counts III and IV, the unfair competition counts concerning the Stackable trays and the Add-A-File, on the ground that the trade dress of neither product had acquired a secondary meaning prior to the introduction of Rubbermaid's competing products. Rubbermaid argued both that Eldon had failed to establish secondary meaning and that by placing its mark on the Supplemental Register, Eldon conceded that its products had not attained secondary meaning.
The Magistrate rejected both of Rubbermaid's arguments and concluded that there is a triable issue of material fact with respect to secondary meaning. Rubbermaid has not objected to this portion of the Report and Recommendation. Accordingly, the Court adopts the Magistrate's recommendation with respect to Counts III and IV and denies Rubbermaid's motion for summary judgment on those counts.
With respect to Counts I and II, the trademark infringement counts concerning the Stackable trays and the Add-A-File, Rubbermaid argued that Eldon's claims must fail because Eldon's trademarks are invalid. Specifically, Rubbermaid argued that Eldon had not satisfied the requirement of ? 23 of the Lanham Act, 15 U.S.C. ? 1091, that registration on the Supplemental Register is appropriate only if the mark was "in lawful use in commerce by the proprietor thereof, upon or in connection with any goods or services for the year preceding the filing of the application." For the same reason, Rubbermaid moved for summary judgment in its favor on its counterclaims for cancellation of Eldon's trademark registrations for these products.2
Before the merits of the Magistrate's Report may be reached, the Court must consider the retroactivity of an amendment to the Lanham Act which became effective during the pendency of Eldon's objections. In order to address this issue, the Court must review chronologically a portion of the Lanham Act's history.
The Lanham Act was originally passed in 1946. Section 46(a) of the Act, the enabling section, provided, in part: "This act shall be in force and take effect one year from its enactment, but except as otherwise herein specifically provided shall not affect any suit, proceeding, or appeal then pending...."3
In Hygienic Product Co. v. Judson Dunaway Corp. 81 F.Supp. 935, 947 (D.N.H. 1948), rev'd on other grounds, 178 F.2d 461 (1st Cir.1949), cert. denied, 339 U.S. 948, 70 S.Ct. 802, 94 L.Ed. 1362 (1950), the court gave effect to ? 46(a) and denied a request to apply the Lanham Act to a lawsuit which had been filed on May 31, 1947, over one month before the effective date of the Lanham Act. See also Magic Foam Sales Corp. v. Mystic Foam Corp., 167 F.2d 88, 90 (6th Cir.1948); King Kup Candies, Inc. v. H.B. Reese Candy Co., 140 F.Supp. 115 (M.D.Pa.1956).
In 1975, ? 35 of the Lanham Act, 15 U.S.C. ? 1117, was amended to provide for recovery of attorneys' fees in exceptional cases. Section 4 of the Act which effected this amendment provided that the amendment did not affect any pending suit, proceeding or appeal.4 In Five Platters, Inc. v. Purdie, 419 F.Supp. 372 (D.Md.1976), the court held that the amendment to ? 35 did not apply to a lawsuit which had been instituted in 1973.
In 1988, Congress passed the Trademark Law Revision Act of 1988, which is in issue here. Section 121 of the 1988 Act amended ? 23 of the Lanham Act to eliminate the one year requirement, by deleting the bracketed material in the following passage:
All marks capable of distinguishing applicant's goods or services and not registrable on the principal register ... which have been in lawful use in commerce by the proprietor thereof, upon or in connection with any goods or services for the year preceding the filing of the application may be registered on the supplemental register....
Section 136 of the 1988 Act provides: "This title and the amendments made by this title shall become effective on the date which is one year after the date of enactment of this Act."5 The Act was enacted on November 16, 1988, and it became effective November 16, 1989.
The Magistrate found that Rubbermaid was entitled to summary judgment on Counts I and II of the complaint and on Rubbermaid's counterclaims because Eldon had not enjoyed exclusive use of the alleged trademark for the relevant one year period. This analysis necessarily rested on the one year provision which was dropped by the 1988 amendment.
The parties dispute whether the 1988 amendment applies to this pre-existing lawsuit. Eldon brought the amendment to the Court's attention by filing, with leave of Court, supplemental objections to the Magistrate's Report. Eldon primarily relies on the principle of Bradley v. School Board of City of Richmond, 416 U.S. 696, 711, 94 S.Ct. 2006, 2016, 40 L.Ed.2d 476 (1974), that "a Court is to apply the law in effect at the time it renders its decision, unless doing so would result in manifest injustice or there is a statutory direction or legislative history to the contrary." Eldon states that in this case there is no such manifest injustice or statutory or legislative history forbidding retroactive application, and that the 1988 amendment should therefore govern.
Rubbermaid has responded by relying on ? 46 of the Lanham Act, which provides that the act does not apply retroactively,6 and by moving for sanctions pursuant to Fed.R.Civ.P. 11 and 28 U.S.C. ? 1927. Rubbermaid argues that pursuant to ? 46, Lanham Act amendments do not apply to pending litigation. Rubbermaid cites Five Platters, supra, King Kup, supra, and Hygienic Product, supra, in support of this proposition.
Eldon replies by arguing that Rubbermaid's motion for sanctions is not well grounded and is itself sanctionable. Eldon further argues that ? 46 applied only to the 1946 Act and does not apply to subsequent amendments. Rubbermaid counters that the 1988 Act re-enacted the 1946 Act, including ? 46.
The Court agrees with the position advanced by Eldon. Section 46 of the 1946 Act was merely the enabling provision. It was not codified, and by its terms it refers only to the 1946 Act itself. With the exception of Five Platters, the cases relied on by Rubbermaid concern the application of the 1946 Act itself to pending litigation, and they are thus inapplicable to the present dispute concerning the 1988 amendment. In Five Platters, the court refused to apply to pending litigation an amendment which provided, by that amendment's own terms, that it was not to be applied to pending litigation. The 1988 amendment, in contrast to the 1975 amendment at issue in Five Platters, does not contain such a provision. It does...
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