Smith-Victor Corporation v. Sylvania Electric Products, Inc.
| Decision Date | 01 February 1965 |
| Docket Number | No. 61 C 331.,61 C 331. |
| Parties | SMITH-VICTOR CORPORATION, Plaintiff, v. SYLVANIA ELECTRIC PRODUCTS, INC., Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
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George E. Hale, Wilson & McIlvaine, Chicago, Ill., for plaintiff.
Thomas R. Mulroy, Hopkins, Sutter, Owen, Mulroy, Wentz & Davis, Chicago, Ill., for defendant.
The facts underlying the plaintiff's amended complaint can be stated generally. The plaintiff, one of several manufacturers, made and sold what is called a "bar light" (or "light bar") which is used, primarily by the amateur, as a source of illumination for taking motion pictures; plaintiff's "bar light" consists of a length of hollow metal bar on which are mounted two or four incandescent photoflood lamps of 300 to 375 watts. In 1960, the defendant, Sylvania, introduced its "Sun Gun," which is used for the same purpose as the plaintiff's "bar light." The "Sun Gun" is a unit resembling a traditional press-type flash gun, which provides light from a single halogen light source.
Plaintiff alleges that, as a result of certain actions taken by the defendant in the marketing of its "Sun Gun," to be described more fully below, its sales diminished significantly so that it sustained damages.
In general, the amended complaint alleges the following:
Count I — "In the promotion and sale of said product, Sylvania made false claims for its `sun gun' and disparaged the products of the plaintiff by said false statements."
Count II — The advertisements of Sylvania stated that the "Sun Gun" provided as much light as the plaintiff's bar light; that this statement was untrue and thereby disparaged the plaintiff's product by indicating that it produced no more light than the smaller "Sun Gun."
Count III — The false advertising violated an Illinois criminal statute prohibiting untrue, deceptive or fraudulent advertisements (Ill.Rev.Stat.1959, ch. 38 § 249a), and violated the Federal Trade Commission Act, 15 U.S.C. § 45(a).
Count IV — The defendant violated the anti-trust laws of the United States by monopolizing the relevant market through the conduct set out in Counts I and II and by a course of acquisition which lessened competition substantially.
Count V — The defendant violated the Lanham Act, Section 43(a) by representing falsely the amount of light which its product produced.
General, and drastic, loss of business has been alleged; loss of specific sales has not been alleged.
This case was reassigned from Judge Robson to this Court. While he had the case, Judge Robson had occasion to pass on the four counts of the original complaint, which are represented by the first four counts of the amended complaint. On December 12, 1961, Judge Robson denied the defendant's motions for summary judgment on Counts I and II; he held that the counts stated claims upon which relief could be granted, but he stated that the motion for summary judgment could be renewed if further discovery showed that no genuine issue of fact existed. Discovery procedures have been pursued, and summary judgment can now be reconsidered.
Judge Robson granted defendant's motion dismissing Count III. In regard to the portion which alleged a claim based on the violation of an Illinois criminal statute, Ill.Rev.Stat.1959, ch. 38 § 249a, he held that the claim must be dismissed because, (a) there is no provision for civil liability in the statute, and (b) no civil liability to this plaintiff could be implied from the statute because the class of persons which the statute protected was consumers and not competitors. See Heimgaertner v. Benjamin Mfg. Co., 6 Ill.2d 152, 155, 128 N.E.2d 691 (1955).
As to the claim based upon Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45, Judge Robson ruled that a private cause of action could not be brought; he relied upon Moore v. N. Y. Cotton Exchange, 270 U.S. 593, 46 S.Ct. 367, 70 L.Ed. 750 (1926), and Samson Crane Co. v. Union Nat. Sales, 87 F. Supp. 218 (D.Mass.1949).
I feel that Judge Robson's ruling was correct and can see no reason to disturb it; therefore, Count III of the amended complaint must be dismissed.
Count IV of the original complaint was also dismissed by Judge Robson; this count has been amended significantly and will be discussed below.
The case is now before me on plaintiff's motion for summary judgment as to liability on Counts I, II and V, as well as defendant's motion for summary judgment on Counts I, II, IV and V.
Counts I, II and V.
Counts I, II and V depend upon the same facts and can be discussed together in considering defendant's motion for summary judgment.
The following facts are uncontradicted:
1. Equal light — The following are representative of the defendant's advertising and press releases:
2. Constancy of light output — The defendant has claimed:
(a) That the light output of its light never changed throughout the life of the lamp.
(b) That a photoflood light output declines as use of the bulb continues.
(c) That the defendant's bulb does not blacken or go dim with age as does a photoflood bulb.
3. Beam coverage — The defendant claimed:
"The beam * * * floods an area greater than the coverage of the widest wide angle lens."
4. Rated life — The following are representative of the defendant's advertising and press releases:
5. General statements — The following are representative of the general statements of comparison which the defendant made concerning the Sun Gun and the light bar:
6. At no time did the defendant mention any manufacturer of light bars by name; the only references were to light bars in general.
7. Manufacturers other than the plaintiff make and sell light bars; manufacturers other than the defendant make and sell single source lights.
8. The plaintiff has not alleged or shown that any specific customers stopped buying its product as the result of the defendant's advertising and sales promotion.
Certain facts have not been established, but for the purposes of the defendant's motion, the Court will assume that the following could be established by the plaintiff:
1. The Sun Gun does not give light equal to the bar light.
2. The center-beam candlepower of the Sun Gun is less than 35,000.
3. The light output of the Sun Gun does not maintain a constancy over the life of the bulb.
4. The beam coverage of the Sun Gun does not give coverage greater than the coverage of the widest wide angle lens.
5. The rated life of the Sun Gun lamp is not more than two times that of the light bar bulb.
Common Law Disparagement.
The essence of the plaintiff's claim for disparagement is stated in its reply brief (p. 35):
In order to bring a suit for disparagement, the plaintiff must allege and prove that (a) the statements referred to the plaintiff by name or the public knew that the statements referred to the plaintiff, and (b) statements were made by the defendant which disparaged the plaintiff or its product. National Refining Co. v. Benzo Gas Motor Fuel Co., 20 F.2d 763, 767, 55 A.L.R. 406 (8th Cir. 1927).
(a) The complaint does not allege, and the facts adduced in connection with the motion for summary judgment do not show, that the defendant ever mentioned the plaintiff by name; therefore, the plaintiff would have to show that the references to light bars were believed to refer to its light bars by members of the public exposed to the defendant's statements. However, I cannot hold, in considering the motion for summary judgment, that there is no issue of fact in this regard.
(b) Nevertheless, I can come to some conclusion concerning the disparaging character of the defendant's statements on the basis of the materials presented in the motions for summary judgment. The Court, in National Refining Co. v. Benzo Gas Motor Fuel Co., supra, at page 769, analyzed the cases on this subject and found that there were three classes of statements:
(1) Those which referred to the rival's goods and imputed to the rival dishonesty or reprehensible business methods in connection with the goods; here it is not necessary to allege special damages since some damage can be presumed;
(2) Those where the statement concerns the quality of the goods without attributing dishonest or reprehensible business methods to the manufacturer, in which case special damages had to be alleged in order to prove that the statements were, in fact, damaging; and
(3)...
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