Rockwell Automation, Inc. v. Radwell Int'l, Inc.

• Decision Date: 24 November 2020
• Docket Number: Civil No. 15-05246 (RBK/JS)
• Parties: Rockwell Automation, Inc. Plaintiff, v. Radwell International, Inc., Defendant.
• Court: U.S. District Court — District of New Jersey

Rockwell Automation, Inc. Plaintiff, v. Radwell International, Inc., Defendant.

Civil No. 15-05246 (RBK/JS)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY CAMDEN VICINAGE

November 24, 2020

Opinion

KUGLER, United States District Court Judge

Before the Court in this action concerning, among other things, trademark infringement, are two summary judgment motions under Federal Rule of Civil Procedure ["Fed. R. Civ. Proc.", "FRCP", or "Rule"] 56 (a) one from plaintiff Rockwell Automation ["Rockwell"] ["plaintiff's motion"] (ECF Doc. 526 and Docs. 530 through 534) and one from defendant Radwell International, Inc. ["Radwell"] ["defendant's motion"] (ECF Doc. 527 and Docs.528-529).

Plaintiff Rockwell is a 100 year-old company that manufactures electronic controllers (the brains of assembly lines), various motors (the muscle of assembly lines), and various input/output devices for assembly lines, which industrial automation equipment is used in such different applications as amusement parks to auto assembly lines to pharmaceutical companies. Rockwell also sells products and solutions in connection with and to support its industrial automation systems. Rockwell's business hinges on the quality of its products and solutions.

Defendant Radwell is a very large provider of new and used surplus, industrial electrical and electronic control equipment by buying new and used controls from plant closings, auctions and inventory overstock. It certifies the parts, ships them in custom Radwell packaging, and sells them for half of their original price. Radwell also sells 30% of its products outside the United States. Specifically, for this matter, Radwell purchases and resells Programmable Logic Circuits, including those manufactured by plaintiff.

Plaintiff's motion seeks summary judgment on Counts I, II, VII and VIII, of its second amended complaint ["the complaint"] (ECF Doc. 140) and against all of Radwell's Counterclaims I through V in order to dismiss them. (See ECF Doc. 222, Radwell's Second Amended Answer and Amended Counterclaims).

Defendant's motion (ECF Doc. 527) seeks summary judgment on Counts I, III, V, VII, VIII and X and Defendant's memorandum of law (ECF Doc. 528) also seeks summary judgment on Count VI.

Relevant to the complaint, there were originally 10 counts, one has been dismissed¹ and of the remaining nine, one count is not at issue here: Count IX, aiding and abetting fraud.

The seven counts from the complaint at issue in these motions are:

Count I, trademark infringement, Lanham Act, 15 U.S.C. §1114 (plaintiff's and defendant's motions);

Count II, false advertising, Lanham Act, 15 U.S.C. §1125(a) (1) (B) (plaintiff's motion);

Count III, false designation of origin, Lanham Act, 15 U.S.C. §125(a) (1) (A) (defendant's motion);

Count V, statutory unfair competition, N.J. Stat. Ann. § 56:4-1 et seq. (defendant's motion);

Count VII, tortious interference with contract (plaintiff's and defendant's motions);

Count VIII, aiding and abetting tortious interference with contract (plaintiff's and defendant's motion); and Count X, unjust enrichment (defendant's motion).

Relative to Radwell's counterclaims (ECF Doc. 222), all five are at issue here:

First, conspiracy in restraint of trade and commerce under Sherman Act 1, 15 U.S.C. § 1;

Second, conspiracy to monopolize and monopolization under Sherman Act 2, 15 U.S.C. §2;

Third, tortious interference with contract;

Fourth, tortious interference with prospective economic advantage; and

Fifth, specific state antitrust/consumer protection statutes under:

California Cartwright Act, California Business and Professions Code § 16720 et seq.;

Kansas Restraint of Trade Act, Kan. Stat. Ann. § 50-101 et seq.;

Maine Monopolies and Profiteering Law, 10 M.R.S. § 1101 et seq.;

Michigan Antitrust Reform Act, Mich. Comp. Laws § 445.771 et seq.;

Minnesota Antitrust Law, Minn. Stat. §§ 325D.49-.66;

Nevada Deceptive Trade Practices Act, Nev. Rev. Stat. § 598A.010 et seq.;

North Dakota Uniform Antitrust Act, North Dakota Century Code § 51-08.1-01 et seq.;

New Mexico Antitrust Act, NMSA 57-1-1 to -15;

New York Donnelly Act, N.Y. Gen. Bus. Law § 340 et seq.;

South Dakota Codified Laws § 37-1-3.1 et seq.;

Vermont Consumer Protection Act, 9 V.S.A § 2451 et seq.; and

Wisconsin. Stat. Ann. §§ 133.01-.18.

As these motions for and against the complaint counts and against the counterclaims are interrelated and seek opposing rulings on the same issues of law and a similar set of material facts, the Court takes up both parties' motions in this opinion.

Table 1 shows the specific summary judgment requests from plaintiff and defendant.

Table 1

 Complaint Count Law Pleaded P RequestedECF Doc. 526 D RequestedECF Doc. 527  I: Trademark Infringement  Federal  Grant  Denial  II: False Advertising  Federal  Grant   III: False Designation of Origin    DenialNot briefed separatelybut in combination withCounts I, V, and VI  V: Unfair Competition  NJ Statute   GrantNot briefed separatelybut in combination withCounts I, III, and VI  VI. Common Law Unfair Competition    GrantNot briefed separatelybut in combination withCounts I, III, and V  VII: Tortious Interference ["TI'] with Contract  State  Grant  Denial  VIII: Aiding / Abetting TI with Contract  State  Grant  Denial  X. Unjust Enrichment  State   Denial          Counterclaim (ECF Doc. 222) Law Pleaded P RequestedECF Doc. 526   1. Conspiracy of Restraint of Trade andCommerce  Federal  Grant to Dismiss   2.Conspiracy to Monopolize andMonopolization  Federal  Grant to Dismiss   3.Tortious Interference["TI"] with Contract  State  Grant to Dismiss   4. TI with Prospective Economic Advantage  State  Grant to Dismiss   5.State antitrust  State Statutory  Denial   

The COURT HAVING REVIEWED the parties' submissions (without a hearing in accordance with Rule 78.1 (b)) and for the reasons below, and for good cause shown,

As to Count I (Trademark Infringement), the Court GRANTS plaintiff's Motion for Summary Judgment on liability, DENIES defendant's Motion for Summary Judgment, and enters Judgment in favor of plaintiff and against defendant on this Count;

As to Count II (False Advertising), the Court GRANTS plaintiff's Motion for Summary Judgment on liability and enters Judgment in favor of plaintiff and against defendant on this Count;

As to Count III (False Designation of Origin), the Court DENIES defendant's Summary Judgment Motion;

As to Counts V and VI (State and Common Law Unfair Competition), the Court DENIES defendant's Motion for Summary Judgment;

As to Counts VII and VIII (Tortious Inference with Contract and Aiding and Abetting Such), the Court DENIES the Motions for Summary Judgment of plaintiff and defendant;

As to Count X (Unjust Enrichment), the Court GRANTS defendant's Motion for Summary Judgment Motion and enters Judgment in favor of Defendant and against Plaintiff on this Count; and

As to Counterclaims I through VI (Sherman Act §§1 and 2, Tortious Inference with Contract and with Prospective Advantage, and State Law Antitrust), the Court GRANTS plaintiff's Motion for Summary Judgment and Judgment is entered in favor of Plaintiff and against Defendant on all of the Counterclaims.

For the following issues, a jury trial remains and will be scheduled in due course: Plaintiff's damages for defendant's liability for trademark infringement and false advertising; Whether defendant is liable for state law and common law unfair competition (Counts V and VI); Whether defendant is liable for tortious interference with plaintiff's contracts and for aiding and abetting such tortious interference (Counts VII and VIII).

An appropriate Order of this date accompanies this Opinion.

1.0 Background and Procedure

There is a lengthy procedural history of this matter. The recounting below focuses on information relevant to the pending summary judgment motions.

To avoid ambiguity, here are the Court's definitions for several terms:

As used herein, a " 'bare' reseller" refers to an entity that buys from one of plaintiff's Authorized Distributors ["AD"] a Programmable Logic Circuit ["PLC"], which is a solid-state, electronic device that operates a machine within a factory assembly line or other industrial setting through software logic programmed into its memory and includes a Central Processing Unit ("CPU"), memory caches, and circuits to receive input and output data. The "bare" reseller then re-sells the PLC without installing it into a factory installation, machine set-up, panel, or into a machine system. In other words, such a reseller does NOT add value, either in terms of technological solution or know-how.

As used herein, a "value-added reseller" or "VAR" refers to an entity that inserts the PLC into a ready-made pre-fab installation or designs an installation into which the PLC will articulate, or builds a machine panel for housing the PLC. All ways a VAR may articulate a PLC into an installation are contemplated here, even if not expressed.

As used herein, Rockwell's "customers" refers to VARs. This is how Rockwell regards VARs in their distribution chain, as discussed infra in detail.

As used herein, "end-user" refers to the entity that engages a VAR to perform a service that may include designing and/or building a factory installation or entire factory or a machine part or a control panel, e.g., a fuse box or an area where controls for an automated part are accessible as a technological innovation or the design plus PLC as know-how that the end-user buys from the VAR. ECF Doc. 140 (the Complaint) ¶28.

As used herein, "consumer" can have two uses. When used as a generic term in this matter, "consumer" can have various legal meanings. For example, when used in consumer protection statutes, such as the Lanham Act, the statutory definitions of 'consumer' have common core features, which include: private individual or a sole proprietorship or a partnership acquiring goods or services, for whom the statute is protecting against unfair trade or deception by the purveyor.²

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