Ga.-pac. Consumer Prod.s Lp v. Myers Supply Inc.
| Decision Date | 04 November 2010 |
| Docket Number | No. 09-2980.,09-2980. |
| Citation | 621 F.3d 771 |
| Parties | GEORGIA-PACIFIC CONSUMER PRODUCTS LP, Plaintiff-Appellant, v. MYERS SUPPLY, INC., Defendant-Appellee. |
| Court | U.S. Court of Appeals — Eighth Circuit |
OPINION TEXT STARTS HERE
Mark G. Arnold, Husch & Blackwell, argued, St. Louis, MO, W. Kyle Carpenter, Woolf & McClane, on the brief, Knoxville, TN, Samuel E. Ledbetter, McMath & Woods, on the brief, Little Rock, AR, for Plaintiff-Appellant.
Stephen Lewis Curry, Curry Law Firm, argued, North Little Rock, AR, Albert P. Allan, on the brief, Charlotte, NC, Michael Paul Thomas, Patrick & Harper, on the brief, Hickory, NC, for Defendant-Appellee.
Before MURPHY, BEAM, and BENTON, Circuit Judges.
Following a bench trial, the district court 1 entered judgment for Myers Supply, Inc. on Georgia-Pacific Consumer Products LP's claim for contributory trademark infringement. Earlier, the district court granted summary judgment to Myers, on Georgia-Pacific's claim for tortious interference with contractual relationship. Georgia-Pacific appeals. Having jurisdiction under 28 U.S.C. § 1291, this court affirms.
Georgia-Pacific manufactures paper-towel dispensers and disposable paper towels. In 2002, it introduced a touch-less paper-towel dispenser, “enMotion.” The enMotion dispenser displays federally registered enMotion and Georgia-Pacific trademarks. Georgia-Pacific also makes a 10-inch-wide, paper-towel roll for use in the enMotion dispenser. The towels have no trademarks printed on them. The packaging, however, clearly identifies Georgia-Pacific as the manufacturer.
Georgia-Pacific considers the enMotion a “proprietary” dispenser. Georgia-Pacific does not sell the enMotions, but leases them to distributors. From the distributor, Georgia-Pacific receives a small initial payment and seeks to profit from paper-towel sales for the dispensers. Distributors may sublease the dispensers at prices they choose. The distributor is supposed to require sublessees to fill the dispenser with Georgia-Pacific towels. Whether or not the distributor makes an agreement with the sublessee, a sticker and warranty card inside the dispensers state that only Georgia-Pacific towels may be used.
Georgia-Pacific also manufactures “universal” towel dispensers-non-proprietary dispensers also bearing Georgia-Pacific trademarks. It is common practice in the industry, and not improper, to put one brand of towels in an unleased, universal dispenser displaying a different manufacturer's trademarks. Georgia-Pacific sells towels for use in other manufacturers' trademarked dispensers; its catalogue suggests towels that replace other manufacturers' towels.
In 2003, Georgia-Pacific leased enMotion dispensers to one of its distributors, Brown Janitorial Supply. Brown distributed the enMotion dispensers to business and not-for-profit entities, including a Baptist church and a school district-the end-users. Myers, the defendant in this case, is also a distributor of other paper-towels and paper-towel dispensers. In 2007, Myers began selling a 10-inch-wide paper towel manufactured by von Drehle Corporation, the “810-B towel,” which works in the enMotion dispensers. At that time, the enMotion was the only 10-inch dispenser widely available. Myers knew “with 99 percent” certainty that the 810-B towels would be used in enMotion dispensers. The 810-B towels are less expensive than enMotion towels and have a paper- like, “crinkly” feel, unlike the more cloth-like feel of enMotion towels. The packaging on the 810-B towels clearly identifies von Drehle as the manufacturer, although the towels themselves have no identifying marks. Because of the packaging on the von Drehle (and Georgia-Pacific) towels, purchasers have no uncertainty about the source of the towels. The purchaser decides what kind of towel to use, actually loading them into the dispensers.
Myers sold 810-B towels to the Baptist church and the school district. Georgia-Pacific sent Myers a cease-and-desist letter stating that enMotion dispensers are property of Georgia-Pacific and subject to lease and sublease agreements. Georgia-Pacific accused Myers of trademark infringement and tortious interference with Georgia-Pacific's distributors and the end-user purchasers. In reply, Myers demanded evidence of signed subleases and continued selling the 810-B towels. Georgia-Pacific did not provide Myers with subleases containing a towel-use restriction signed by the Baptist church or school district. The evidence presented at the district court includes duplicates of the front side of what Georgia-Pacific claims to be sublease agreements between Brown and the Baptist church, and the school district. Also in evidence is the back side of a sample sublease that Georgia-Pacific claims is the back side of all sublease agreements. The sample sublease requires the sublessee to use only Georgia-Pacific towels in subleased Georgia-Pacific dispensers. Georgia-Pacific did not produce subleases containing a towel-use restriction signed by the Baptists church or the school district.
Georgia-Pacific claims that Myers committed contributory trademark infringement by selling 810-B towels knowing that they would be placed in enMotion dispensers. Georgia-Pacific also contends that Myers's actions constitute tortious interference with the contracts requiring end-users to use Georgia-Pacific paper towels in enMotion dispensers. After a bench trial, the district court ruled for Myers on the contributory infringement claim, finding no likelihood of confusion by consumers. The district court had earlier granted summary judgment against Georgia-Pacific on the tortious interference claim, finding that Georgia-Pacific could not prove that Myers intentionally caused the end-users to breach sublease agreements, or that its conduct was improper.
To prove contributory infringement, Georgia-Pacific must establish that Myers continued to supply towels to its customers with knowledge that they were engaging in trademark infringement with the paper towels. See Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 854, 102 S.Ct. 2182, 72 L.Ed.2d 606 (1982). Because there is no dispute that Myers knew that its customers were putting 810-B towels in enMotion dispensers, the district court's only consideration was whether this infringed Georgia-Pacific's trademarks.
To establish actual infringement under the Lanham Act, a mark must be used in commerce in connection with a product in a manner that is likely to cause confusion as to the source or sponsorship of the product. 15 U.S.C. § 1125(a)(1)(A). The issue is whether the trademarks on a towel dispenser are “source-identifying,” meaning they identify the source of the paper towels inside, so that putting von Drehle's 810-B towels in the enMotion dispenser creates a likelihood of confusion as to the brand of the towels. The district court found no likelihood that purchasers or consumers would be confused and believe that the trademark on the dispenser indicates the source of the towels inside.
This court reviews the district court's determination of likelihood of confusion, which is a question of fact, for clear error. Kemp v. Bumble Bee Seafoods, Inc., 398 F.3d 1049, 1053-54 (8th Cir.2005). If there are two permissible views of the evidence, “the fact-finder's choice between them cannot be clearly erroneous.” Anderson v. City of Bessemer City, 470 U.S. 564, 574, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985).
To determine a likelihood of confusion, this court considers six factors: 1) the strength of the plaintiff's mark; 2) the similarity between the plaintiff's mark and the alleged infringing mark; 3) the degree to which the allegedly infringing product competes with the plaintiff's goods; 4) the alleged infringer's intent to confuse the public; 5) the degree of care reasonably expected of potential customers; and 6) evidence of actual confusion. Davis v. Walt Disney Co., 430 F.3d 901, 903 (8th Cir.2005), citing SquirtCo v. Seven-Up Co., 628 F.2d 1086, 1091 (8th Cir.1980). Each case is unique, and the factors are useful only to the extent they answer the ultimate question-in this case, whether a trademark on a towel dispenser is source-identifying for the towels inside.
First, the district court found that Georgia-Pacific's trademarks are strong. Second, it found that because the von Drehle marks are not visible once the 810-B towels are put in an enMotion dispenser, the second factor is neutral. Third, the court found that the von Drehle 810-B competes directly with the enMotion towel. Fourth, relying on testimony that it was common in the industry to “stuff” one brand of towel in a dispenser of a different brand, the district court found no intent to confuse the public, by either the end-users or Myers. Fifth, the court found a low degree of care by bathroom consumers. While this normally favors the plaintiff, the district court stated that here, this lack of care shows that the marks on a dispenser do not identify the source of the towels inside. The court also found that the end-users have a high-degree of care, and are fully aware of the source of the towels they purchase.
Finally, the district court found that there was no actual confusion in the marketplace. The court examined the experiences of both the end-user and the bathroom consumer, focusing on the latter. As mentioned, the end-users are fully aware of the brand of towel they stuff into their dispensers, thus there is no actual confusion as to the source of the towel-a determination unchallenged by Georgia-Pacific. In deciding that there was no actual confusion by bathroom consumers, the court considered the consumer-surveys submitted by both sides, but relied more on the general industry practice of stuffing unleased dispensers with other company's towels.
Georgia-Pacific contends that the district court abused its discretion in discounting...
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