Max Daetwyler Corp. v. Input Graphics, Inc.

• Decision Date: 20 May 1985
• Docket Number: Civ. A. No. 81-1140.
• Citation: 608 F. Supp. 1549
• Parties: MAX DAETWYLER CORP. and MDC Max Daetwyler, A.G. v. INPUT GRAPHICS, INC., Benton Graphics, Inc., Joseph Halbherr and Rufus Benton.
• Court: U.S. District Court — Eastern District of Pennsylvania

608 F. Supp. 1549

MAX DAETWYLER CORP. and MDC Max Daetwyler, A.G. v. INPUT GRAPHICS, INC., Benton Graphics, Inc., Joseph Halbherr and Rufus Benton.

Civ. A. No. 81-1140.

United States District Court, E.D. Pennsylvania.

May 20, 1985.

Manny D. Pokotilow, Caesar, Rivise, Bernstein & Cohen, Philadelphia, Pa., for plaintiffs.

Peter T. Cobrin, Stempler & Cobrin, P.C., New York City, Robert C. Podwil, Wolf, Block, Schorr & Solis-Cohen, Philadelphia, Pa., for Benton Graphics and Rufus Benton.

Karl Spivak, Steele, Gould & Fried, Philadelphia, Pa., for Input Graphics and Joseph Halbherr.

OPINION

LOUIS H. POLLAK, District Judge.

Plaintiffs brought this patent infringement and unfair competition suit in March, 1981. They allege that defendants have manufactured and sold a doctor blade ("Benton blade") which infringes a patent held by plaintiff ("Daetwyler blade") and that defendants have falsely represented the quality and nature of their doctor blade in violation of the Lanham Act. 15 U.S.C. § 1125(a). A doctor blade, the product at the center of this dispute, is a blade-shaped device for wiping excess ink from the printing surface used in the photogravure printing process. That product and the procedural development of this litigation are discussed at greater length in the earlier opinions in this case at 541 F.Supp. 115 (1982), 545 F.Supp. 165 (1982), and 583 F.Supp. 446 (1984).

Currently pending are (1) defendants' renewed motion for summary judgment on plaintiffs' Lanham Act claim; (2) defendants' motion to sever the Lanham Act claim from the patent infringement claim and patent invalidity counterclaim for purposes of trial; and (3) defendants' motion in limine to preclude plaintiffs from claiming the benefit of the filing dates of earlier applications for the patent at issue in this suit. I will consider these motions in sequence.

1. Motion for summary judgment

In 1982, I denied defendants' motion for summary judgment on the Lanham Act claim. 545 F.Supp. 165. The opinion discussed the five elements which must be shown to establish a Lanham Act violation. They are: "(1) that the defendant has made false or misleading statements as to his own product; (2) that there is actual deception or at least a tendency to deceive a substantial portion of the intended audience; (3) that the deception is material in that it is likely to influence purchasing decisions; (4) that the advertised goods travelled in interstate commerce; and (5) that there is a likelihood of injury to the plaintiff in terms of declining sales, loss of good will, etc. See Ragold, Inc. v. Ferrero, U.S.A., Inc., 506 F.Supp. 117, 124 (N.D. Ill.1980); see also American Home Prods. Corp. v. Johnson & Johnson, 577 F.2d 160, 165-66 (2d Cir.1978)." 545 F.Supp. at 171. The current motion contends that summary judgment is now appropriate on the Lanham Act claim since the record establishes that plaintiffs lack evidence to establish two of the necessary elements of that claim — that consumers were or could have been deceived by defendants' representations and that the representations allegedly made by defendants were false.

a) consumer deception

Defendants' first argument in support of the motion for summary judgment is that plaintiffs do not have the evidence necessary to establish that the alleged misrepresentations actually deceived or had a tendency to deceive a substantial portion of the intended audience. The primary basis for this argument is defendants' assertion that plaintiffs have not performed a consumer survey on the question of consumer deception. Defendants assert that such a survey is essential to make out a Lanham Act violation. Plaintiffs do not dispute that they have no consumer survey evidence. They contend, however, that such evidence is unnecessary since plaintiffs need only show a tendency to deceive in order to obtain injunctive relief.

Most of the courts which have considered what must be proven to make out this element of a Lanham Act claim have held that injunctive relief may be obtained by showing only that the defendant's representations about its product have a tendency to deceive consumers while recovery of damages requires proof of actual consumer deception. E.g., Schutt Mfg. Co. v. Riddell Inc., 673 F.2d 202 (7th Cir.1982); Black Hills Jewelry Mfg. Co. v. Gold Rush Inc., 633 F.2d 746, 753-54 (8th Cir.1980); James Burrough Ltd. v. Sign of the Beefeater, Inc., 572 F.2d 574, 578 (7th Cir.1978); Hesmer Foods Inc. v. Campbell Soup Co., 346 F.2d 356 (7th Cir.1965), cert. denied, 382 U.S. 839, 86 S.Ct. 89, 15 L.Ed.2d 81 (1965); Parkway Baking Co. v. Freihofer Baking Co., 255 F.2d 641, 648-49 (3d Cir.1958); Mennen Co. v. Gillette Co., 565 F.Supp. 648 (S.D.N.Y.1983) aff'd, 742 F.2d 1437 (2d Cir.1984); Walker-Davis Publications, Inc. v. Penton/IPC, Inc., 509 F.Supp. 430 (E.D. Pa.1981); Toro Co. v. Textron, Inc., 499 F.Supp. 241 (D.Del.1980); Pennwalt Corp. v. Plough, Inc., 85 F.R.D. 257 (D.Del.1979); John Wright, Inc. v. Casper Corp., 419 F.Supp. 292 (1976) aff'd in part, rev'd in part, 587 F.2d 602 (3d Cir.1978); Skil Corp. v. Rockwell International Corp., 375 F.Supp. 777 (S.D.N.Y.1974); Ames Publishing Co. v. Walker-Davis Publications, Inc., 372 F.Supp. 1 (E.D.Pa.1974). Therefore, there may be a basis upon which a plaintiff may obtain injunctive relief without presenting any evidence regarding the reactions of consumers to the representations made by the defendant.

Plaintiffs also assert that they may recover damages without establishing actual consumer deception.¹ In support of that position, plaintiffs cite American Home Products Corp. v. Johnson & Johnson, 577 F.2d 160, 165 (2d Cir.1978), which quoted Judge Lasker's statement in American Brands, Inc. v. R.J. Reynolds Co., 413 F.Supp. at 1356 (S.D.N.Y.1976), that "if a statement is actually false, relief can be granted on the court's own findings without reference to the reaction of the buyer or consumer of the product." Plaintiffs argue that they will present evidence that the representations made by defendants with regard to their product are actually false. Therefore, plaintiffs contend, it is not necessary for them to show more than a tendency to deceive to obtain damages.

Despite the apparent breadth of the language cited by plaintiffs on this point, I have not discovered any decisions which have applied this principle to grant damages to a plaintiff who had failed to show actual consumer deception. Furthermore, although this issue has not been discussed recently by the Court of Appeals for the Third Circuit, in Parkway Baking Co. v. Freihofer Baking Co., 255 F.2d 641, 648 (3d Cir.1958), that court concluded that:

.... a plaintiff in order to make out a cause of action for damages under Section 43(a) of the Lanham Act must show not only that the defendant's advertisement is false but also that this falsification actually deceives a portion of the buying public.... This does not place upon the plaintiff a burden of poving detailed individualization of loss of sales. Such proof goes to the quantum of damages and not to the very right to recover. However, there must be a showing of some customer reliance on the false advertisement.

I conclude, however, that it is not necessary to determine at this time whether plaintiffs could recover damages without proof of actual deception in this case.² This issue is presented in the form of a motion for summary judgment. In support of that motion defendants have presented no evidence that customers were not actually deceived by defendants' representations. Without such evidence presented in support of the motion, plaintiffs are under no obligation to present countervailing evidence that actual consumer deception has occurred and can rely solely upon their pleadings. Thus, since plaintiffs have alleged a claim to damages under the Lanham Act due to alleged misrepresentations by defendants, they have sufficiently pleaded their claim of deception for the Lanham Act claim to survive the current motion.

Defendants argue, however, that to establish actual deception, it is essential for plaintiffs to present a consumer survey. If defendants are correct on this evidentiary requirement, and if actual deception is a necessary element of a Lanham Act damages claim, then summary judgment would be appropriate despite defendants' failure to present evidence of a lack of actual deception. In other words, if plaintiffs are required to present a consumer survey, defendants may be entitled to summary judgment if defendants can establish that no survey has been prepared although discovery has closed.

In support of their position that a consumer survey is a necessary item of evidence in a Lanham Act suit, defendants point to American Brands, Inc. v. R.J. Reynolds Tobacco Co., 413 F.Supp. 1352, 1356-57 (S.D.N.Y.1976). In that case, the court said:

We are dealing not with statements which are literally or grammatically untrue; and the tendency to deceive alleged here does not arise out of possible confusion of one product with another. Rather, we are asked to determine whether a statement acknowledged to be literally true and grammatically correct nevertheless has a tendency to mislead, confuse or deceive. As to such a proposition "the public's reaction to the advertisement will be the starting point in any discussion of the likelihood of deception.... If an advertisement is designed to impress ... customers, ... the reaction of that groups will be determinative." 1 Callman: Unfair Competition, Trademarks & Monopolies at § 19.2(a)(1) (3rd ed. 1967). A court may, of course, construe and parse the language of the advertisement. It may have personal reactions as to the defensibility or indefensibility of the deliberately manipulated words. It may conclude that the language is far from candid and would never pass muster under tests otherwise applied — for example, the Securities Acts' injunction that "thou shalt disclose"; but the court's reaction is

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