Maple Grove Farms, Vt. v. Euro-Can Products, Inc., Civ.A. No. 94-30137-MAP.

• Decision Date: 30 July 1997
• Docket Number: Civ.A. No. 94-30137-MAP.
• Citation: 974 F.Supp. 85
• Parties: MAPLE GROVE FARMS OF VERMONT, INC., v. EURO-CAN PRODUCTS, INC., et al.
• Court: U.S. District Court — District of Massachusetts

974 F.Supp. 85

MAPLE GROVE FARMS OF VERMONT, INC., v. EURO-CAN PRODUCTS, INC., et al.

Civ.A. No. 94-30137-MAP.

United States District Court, D. Massachusetts.

July 30, 1997.

COPYRIGHT MATERIAL OMITTED

Richard L. Binder, Jack R. Pirozzolo, Willcox, Pirozzolo & McCarthy, Boston, MA, for Plaintiff.

Edward T. Robinson, Seegel & Lipshutz, Wellsley, MA, Michael B. Cosentino, Seegel, Robinson & Lipshutz, Wellesley, MA, for Defendants.

MEMORANDUM AND ORDER REGARDING REPORT AND RECOMMENDATION OF APRIL 25, 1997

PONSOR, District Judge.

This court has now had an opportunity to review in detail the Report and Recommendation of Magistrate Judge Kenneth P. Neiman of April 25, 1997, regarding the defendants' Motion for Summary Judgment (Docket No. 51). In conducting this review the court has considered the parties' objections, applying a de novo standard.

Magistrate Judge Neiman's careful analysis makes an extended discussion unnecessary. Finding his conclusions to be correct, the court hereby adopts his Report and Recommendation. The defendants' Motion for Summary Judgment as to Counts I and II is hereby ALLOWED as to any claim for injunctive relief and as to any claim for damages arising from defendants' use of what the Report and Recommendation denominated "Jug 4." The motion is otherwise DENIED.

The clerk is ordered to set the case for a status conference to assign a trial date or discuss further pretrial proceedings.

It is So Ordered.

REPORT AND RECOMMENDATION REGARDING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT (Docket No. 51)

April 25, 1997

NEIMAN, United States Magistrate Judge.

I. INTRODUCTION

This is an unfair competition case brought by one of the largest sellers of pure maple syrup, Maple Grove Farms of Vermont, Inc. ("Maple Grove" or "Plaintiff"), against a more recent entrant into the market, Spring Tree Corporation ("Spring Tree") and its distributor, Euro-Can Products, Inc. (collectively "Defendants"). Maple Grove's complaint, which seeks both damages and a permanent injunction, raises claims under the federal unfair competition statute — section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) — and state law. At issue is the trade dress of various jugs of pure maple syrup.

"Trade dress" is a commonly used term in the law of unfair competition. Blau Plumbing, Inc. v. S.O.S. Fix-It, Inc., 781 F.2d 604, 608 (7th Cir.1986). It refers to the entire visual image of a product and the overall effect it creates. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 764 n. 1, 112 S.Ct. 2753, 2755 n. 1, 120 L.Ed.2d 615 (1992). A product's trade dress "is a complex composite of features" to be considered together, American Greetings Corp. v. Dan-Dee Imports, Inc., 807 F.2d 1136, 1141 (3d Cir.1986), including the product's size, shape, color and graphics. Paddington Corp. v. Attiki Importers & Distributors, Inc., 996 F.2d 577, 582 (2d Cir.1993).

Following the resolution of a number of preliminary disputes, District Judge Michael A. Ponsor, on April 30, 1996, referred the case to Senior District Judge Walter J. Skinner for mediation. When the case did not settle, Defendants filed the instant motion for summary judgment (Docket No. 51) which has been referred to this Court for a report and recommendation. See 28 U.S.C. § 636(b)(1)(B). After reviewing the parties' briefs and hearing oral argument, the Court recommends that the motion be allowed, in part, and denied, in part.¹

II. BACKGROUND

The following background is taken primarily from the statement of facts supplied by Plaintiff, the party opposing summary judgment. (Docket No. 60; see also Docket No. 52 (Defs.' Facts).) See Fennell v. First Step Designs, Ltd., 83 F.3d 526, 534 (1st Cir.1996) (at summary judgment, the facts, and all reasonable inferences that may be drawn from them, must be viewed in the light most favorable to the non-moving party). Legal arguments made in the parties' factual statements are incorporated in Section IV, infra.

Maple Grove was founded in St. Johnsbury, Vermont in 1915 and has sold pure maple syrup to grocery chains, specialty stores and warehouse clubs for a number of years. It also has an extensive mail-order business. From 1986 until recently, one of Maple Grove's customers was Waban, Inc., d/b/a B.J.'s Wholesale Club ("BJ's"), a New England-based warehouse store. By the spring of 1994, Maple Grove was the primary supplier of pure maple syrup to BJ's, at that time having sold about 700,000 jugs of its product to the chain. However, as discussed infra, Maple Grove's favored relationship with BJ's soured in the spring of 1994 when BJ's began buying pure maple syrup from Defendants.

In the early 1980s, Maple Grove began selling some of its syrup, including its sales to BJ's, in decorative one quart plastic jugs. The jugs themselves were supplied by Hillside Plastics, Inc. ("Hillside") — one of the nation's largest producers of maple syrup jugs — which has a trademark on the jugs' shape. Maple Grove printed a bright green and red design on almond-colored Hillside jugs.² As so designed, the jug (Jug 1), with some minor modifications (Jug 1A), was utilized by Maple Grove continuously until the spring of 1994 when it switched to Jug 2.³

Jug 1: The design on Jug 1 is best described as follows. At the center of the design is a vertically-oriented oval which contains, among other things, a farmhouse-barn-silo image and the words "maple grove farms" written in red. A similar oval is on the back of the jug. The sides of the jug display a woodland scene which includes the following elements: a snow covered red building; red sap buckets hanging on green maple trees; a wood pile; an ox; and men in red jackets laden with sap buckets striding through the snowy woods. A border of thirteen red maple leaves circles the bottom of the jug. The entire design is in red and green and the jug is capped by a red plastic lid.

Jug 1A: Jug 1A is nearly identical to Jug 1. The main differences include the addition of nutritional and other information and a slightly more prominent farmhouse-barn-silo image. The woodland scene, although slightly more obscured by the added wording, remains essentially the same as on Jug 1.

Jug 2: Around the time that Maple Grove lost the BJ's account, in May of 1994, and in response to new federal labelling regulations, Maple Grove switched to a new design for its one quart jugs, Jug 2. The design of Jug 2 eliminates both the woodland scene on the sides of the oval and the bottom border of red maple leaves, adds several falling red maple leaves and gives more prominence to a larger farmhouse-barn-silo image. Moreover, the green is brighter than the greens used on Jugs 1 and 1A.

Although Jug 2 is Maple Grove's current design, Jug 1 continues to be displayed in Maple Grove's mail order catalogues as it has for approximately the last ten years.⁴ Moreover, when BJ's told Maple Grove that it preferred Jug 1 to Jug 2, Maple Grove stated that, if BJ's resumed purchasing with Maple Grove, Jug 1 would be available to BJ's with the new FDA required label.

For a number of years, Defendant Spring Tree had continuously, and until recently unsuccessfully, tried to obtain BJ's business. In 1992, Spring Tree allied itself with a Canadian syrup broker, Jacques Letourneau ("Letourneau"), in a renewed attempt to sell its product to BJ's. Letourneau, evidently on his own, initially sold syrup to BJ's on a test basis in a "Maple Crest" jug.⁵ BJ's tested this jug in eight to fifteen stores and found that the change in label did not affect sales. Apparently pleased with the results, BJ's asked Spring Tree for a controlled label, i.e., one that no other Spring Tree customers would have.

In the fall of 1993, Letourneau and Paul Simons ("Simons"), Spring Tree's president, met with BJ's buyer, Lawrence Cocuzzo ("Cocuzzo"). Simons offered Cocuzzo a lower price for pure maple syrup than any price Maple Grove was willing to offer. Although Cocuzzo agreed to Spring Tree's price, the deal was not immediately sealed. Specifically, Cocuzzo indicated his dissatisfaction with the artwork on at least four Spring Tree jugs that Simons presented, Jugs 9-12.⁶ Cocuzzo indicated, however, that he liked a Maple Crest design Letourneau had brought with him from Canada. Spring Tree thereafter designed and shipped its product to BJ's in Jug 3 and has since been the primary supplier of pure maple syrup to BJ's. Maple Grove, on the other hand, now makes only occasional and irregular shipments to BJ's.

Jug 3: Like Maple Grove's Jugs 1, 1A and 2, Spring Tree's Jug 3 is a one quart, almond-colored Hillside jug with a red plastic lid. The design on Jug 3 contains a horizontally-oriented oval in which there are three red maple leaves and the name "Red Leaf Farms" printed in green. On either side of the oval is a woodland scene which contains the following elements: a red building with a snow covered roof, a woodpile; several dark green trees on which red sap buckets are attached; and a man wearing a red shirt carrying red sap buckets from the trees. The entire design is in bright red and green and the back of the jug indicates that it is distributed by "Euro-Can Products, Inc." Maple Grove claims that, at the time Jug 3 was introduced, the names "Red Leaf Farms" and "Euro-Can Products, Inc." were virtually unknown in the industry.

Letourneau has been in maple syrup business for many years. He claims to have "conceptualized" Jug 3 from a Maple Crest jug (Jug 6) that he had designed a number of years previously. (See n. 5, supra.) The actual artist of Jug 3 was Stephen Grant ("Grant"). Letourneau had directed Grant to include in his design "trees," "sap buckets on trees" and "a house and a small man who's carrying some maple in his hand."⁷ Prior to the introduction of Jug 3, Letourneau had visited Maple Grove's headquarters in Vermont where Jug 1 was conspicuously displayed. In addition, Simons had direct knowledge of Jug 1's existence.

Jug 4: In July or August of 1...