Groeneveld Transp. Efficiency, Inc. v. Lubecore Int'l, Inc.
| Decision Date | 12 September 2013 |
| Docket Number | No. 12-3545,No. 12-3576,12-3545,12-3576 |
| Parties | GROENEVELD TRANSPORT EFFICIENCY, INC., Plaintiff-Appellee/Cross-Appellant, v. LUBECORE INTERNATIONAL, INC., Defendant-Appellant/Cross-Appellee. |
| Court | U.S. Court of Appeals — Sixth Circuit |
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 13a0271p.06
Appeal from the United States District Court
for the Northern District of Ohio at Cleveland.
No. 1:10-cv-00702—Donald C. Nugent, District Judge.
Before: GILMAN, GRIFFIN, and WHITE, Circuit Judges.
ARGUED: Thomas L. Anastos, ULMER & BERNE LLP, Cleveland, Ohio, for Appellant/Cross-Appellee. Deborah J. Michelson, MILLER GOLER FAEGES LAPINE LLP, Cleveland, Ohio, for Appellee/Cross-Appellant. ON BRIEF: Thomas L. Anastos, Melissa L. Zujkowski, ULMER & BERNE LLP, Cleveland, Ohio, for Appellant/Cross-Appellee. Deborah J. Michelson, Steven J. Miller, David A. Kunselman, MILLER GOLER FAEGES LAPINE LLP, Cleveland, Ohio, for Appellee/Cross-Appellant. Kenneth B. Germain, WOOD HERRON & EVANS LLP, Cincinnati, Ohio, for Amicus Curiae.
GILMAN, J., delivered the opinion of the court, in which GRIFFIN, J., joined. WHITE, J. (pp. 36-61), delivered a separate dissenting opinion.
RONALD LEE GILMAN, Circuit Judge. The key issue in this case is whether a company can use trade-dress law to protect its functional product design from competition with a "copycat" design made by another company where there is no reasonable likelihood that consumers would confuse the two companies' products as emanating from a single source. We hold that it cannot. In so holding, we reaffirm that trademark law is designed to promote brand recognition, not to insulate product manufacturers from lawful competition.
Groeneveld Transport Efficiency, Inc. sued Lubecore International, Inc., claiming that Lubecore's automotive grease pump is a "virtually identical" copy of Groeneveld's automotive grease pump. The complaint asserts that such copying constitutes trade-dress infringement in violation of § 43(a) of the Lanham (Trademark) Act, 15 U.S.C. § 1125(a), and further violates a number of related federal and Ohio laws. All the claims except trade-dress infringement were dismissed when the district court granted Lubecore's motion for judgment as a matter of law under Rule 50 of the Federal Rules of Civil Procedure. The trade-dress claim went to the jury, which found for Groeneveld and awarded it $1,225,000 in damages.
Lubecore appeals the denial of its Rule 50 motion with respect to the trade-dress claim. Groeneveld in turn cross-appeals from the dismissal of its other claims. For the reasons set forth below, we REVERSE the judgment of the district court denying Lubecore's Rule 50 motion with respect to Groeneveld's trade-dress claim, AFFIRM the district court's dismissal of Groeneveld's other claims, and REMAND the case with instructions to enter judgment as a matter of law in favor of Lubecore on all claims.
This case, like many trademark cases before it, is a contest between an oldtimer and a newcomer. Their battle is over a relatively obscure product—the grease pump used in an automated lubrication system (ALS) for commercial trucks. An ALS, as the name implies, is a system for delivering a controlled amount of lubricant to different parts of a machine (in this case a commercial truck) while the machine is in operation. Automated lubrication saves time, increases operational efficiency, and minimizes corrosion by obviating the need for frequent manual lubrication. The primary component of an ALS is a grease pump that forces grease through injectors and hoses to targeted areas at timed intervals.
Groeneveld is the American branch of a Dutch company that has been in the ALS business for over 40 years. It began marketing the grease pump at issue in the present case—designated by Groeneveld as its EP0 pump—in the 1980s. The Groeneveld family of companies employs thousands of people and has a well-established international presence.
Lubecore, by contrast, is the new kid on the block. It was founded in 2007 by Jan Eisses, who had previously sold another company of his to Groeneveld and had been a Groeneveld employee for approximately three years. Lubecore is located in Canada, is owned by Eisses and his wife, and employed 12 people at the time of pretrial discovery. It designed the grease pump at issue in this case in December 2007 and began selling it first in Canada (starting in April 2008) and then in the United States (starting in March 2009). The two companies' competing grease pumps are shown below:
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In April 2010, Groeneveld brought suit against Lubecore in the United States District Court for the Northern District of Ohio. The complaint alleged that Lubecore was marketing a grease pump that was "virtually identical" to Groeneveld's pump with the intent to confuse consumers into believing that the two pumps were made by the same company, thus freeriding on Groeneveld's established goodwill by passing off Lubecore pumps as Groeneveld pumps. Groeneveld further alleged that, of all competing manufacturers, only Lubecore made a pump that had essentially the same design as Groeneveld's.
The complaint asserted six claims against Lubecore: trade-dress infringement, unfair competition, and false advertising, all in violation of the Lanham Act § 43(a), 15 U.S.C. § 1125(a) (Counts 1-3); deceptive trade practices, in violation of Ohio Revised Code §§ 4165.02 et seq. (Count 4); unfair competition, in violation of Ohio common law (Count 5); and unlawful interference with contractual and business relationships, again in violation of Ohio common law (Count 6). Groeneveld sought monetary damages andpermanent injunctive relief. It also filed a motion for a preliminary injunction on the same day as the complaint.
The parties consented to the adjudication of Groeneveld's preliminary-injunction motion by a magistrate judge, who denied the motion after a four-day hearing. Groeneveld and Lubecore then filed cross-motions for summary judgment before the district court. In a three-page summary order, the court denied both motions and set the case for trial.
A seven-day jury trial was held in October 2011. At the close of Groeneveld's proof, Lubecore moved for judgment as a matter of law under Rule 50 of the Federal Rules of Civil Procedure, which motion it renewed at the close of all the evidence. The district court, ruling from the bench and without any analysis (other than "I've listened to everything, believe me"), granted Lubecore's Rule 50 motion with respect to Counts 2-6 of the complaint, but reserved ruling on Count 1, the trade-dress claim.
Count 1 was subsequently submitted to the jury in the form of the following three interrogatories, which track the three elements of a trade-dress claim:
The jury answered "yes" to all three interrogatories and awarded Groeneveld damages in the amount of $1,225,000. On the following day, the jury returned to hear arguments as to whether Lubecore's trade-dress infringement had been willful (whichwould be a relevant consideration for the purpose of damages in the event that Groeneveld's other claims were revived on appeal). It answered "yes" to this question also. The district court accepted the jury's answers and entered judgment in favor of Groeneveld. It also entered a permanent injunction barring Lubecore from selling its grease pump in the United States.
After the jury rendered its verdict, Lubecore renewed its pending Rule 50 motion for judgment as a matter of law and moved in the alternative for a new trial pursuant to Rule 59 of the Federal Rules of Civil Procedure. The district court denied both motions. Lubecore's timely appeal and Groeneveld's cross-appeal followed.
Regarding the denial of its Rule 50 and Rule 59 motions, Lubecore contends that there was insufficient evidence on all three elements of Groeneveld's trade-dress claim—nonfunctionality, secondary meaning, and the likelihood of confusion—to submit the claim to the jury. Alternatively, Lubecore argues that the jury's findings on all three elements were against the weight of the evidence. It also seeks to set aside the damage award on the ground that there was no finding of a causal link between Lubecore's alleged trade-dress infringement and Groeneveld's lost profits. Groeneveld's cross-appeal, in turn, seeks a judgment and punitive damages on the previously dismissed counts of its complaint (Counts 2-6), as well as a broadening of the district court's injunction to include Canada.
Rule 50 of the Federal Rules of Civil Procedure authorizes a court to grant judgment as a matter of law when "a party has been fully heard on an issue during a jury trial and the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue." Fed. R. Civ. P. 50(a). A motion for judgment as a matter of law should be granted "if, under the governing law, there can be but one reasonable conclusion as to the verdict." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). The standard for judgment as a matter of law under Rule 50is...
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