SoClean, Inc. v. Sunset Healthcare Solutions, Inc.
| Decision Date | 13 August 2021 |
| Docket Number | Civil Action No. 1:20-cv-10351-IT |
| Citation | 554 F.Supp.3d 284 |
| Parties | SOCLEAN, INC., Plaintiff, v. SUNSET HEALTHCARE SOLUTIONS, INC., Defendant. |
| Court | U.S. District Court — District of Massachusetts |
H. Joseph Hameline, Matthew S. Galica, Thomas H. Wintner, Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, PC, Boston, MA, Andrew D. Skale, Pro Hac Vice, Mintz Levin Cohn Ferris Glovsky & Popeo, P.C., San Diego, CA, Brendan C. Galgay, Takeda Pharmaceuticals, Cambridge, MA, for Plaintiff.
Andrea L. Martin, Howard J. Susser, Burns & Levinson LLP, Boston, MA, Brian D. Roche, Pro Hac Vice, Jennifer Y. DePriest, Pro Hac Vice, Reed Smith LLP, John R. Labbe, Pro Hac Vice, Mark Izraelewicz, Pro Hac Vice, Michael R. Weiner, Pro Hac Vice, Thomas R. Burns, Pro Hac Vice, Tiffany D. Gehrke, Pro Hac Vice, Marshall, Gerstein & Borun, LLP., Chicago, IL, for Defendant.
TALWANI, D.J.
Plaintiff SoClean, Inc. ("SoClean") alleges that Defendant Sunset Healthcare Solutions, Inc. ("Sunset") has infringed two of SoClean's trade dress registrations by selling knockoff versions of filters that SoClean sells for its popular device for cleaning continuous positive airway pressure ("CPAP") machines. SoClean seeks a preliminary injunction enjoining Sunset from using, selling, offering for sale, or making in the United States Sunset's allegedly infringing filter or any other filters that would infringe SoClean's trade dress. Pl.'s Mot. 3 [#161]. Sunset counters that SoClean's marks are invalid since they are functional and not distinctive and that, in any event, consumers are not likely to be confused by Sunset's use of the marks. As set forth more fully below, because the United States Patent and Trademark Office ("PTO") has registered SoClean's marks on the principal register, SoClean is entitled to a presumption that its marks are non-functional and distinctive, and Sunset has not put forth sufficient evidence to rebut that presumption. Moreover, the court finds that SoClean has established a reasonable likelihood of success on the merits of its trade dress infringement claim where Sunset's identical product is likely to cause consumer confusion as to the source of the goods unless Sunset takes additional steps to distinguish its product on the marketplace. However, because Sunset may be able to cure the risk of consumer confusion with changes to its marketing of the product, the court declines to award Plaintiff its request for an injunction prohibiting the further sale of Sunset's filters. Accordingly, SoClean's Motion for Preliminary Injunction [#161] is GRANTED IN PART and DENIED IN PART as set forth further below.
SoClean is a medical device company that designs, develops, and sells automated CPAP disinfecting devices. Macarelli Decl. ¶ 3 [#165]. SoClean's devices command the lion's share of the market, accounting for 90% of the CPAP cleaning devices sold. Id.
SoClean's devices work by circulating ozone through the customer's CPAP equipment to kill germs and bacteria. Id. ¶ 4. Excess ozone is discharged from the cleaner through a port, but first passes through a replaceable filter that converts the excess ozone into oxygen. Id.
In addition to being in the business of selling the CPAP cleaning devices, SoClean has sold replacement filters for its CPAP cleaning devices since 2013. Id. ¶ 6. SoClean has invested nearly $2 million promoting its filter sales through targeted emails as well as print and digital advertisements. Id. ¶¶ 15, 16. This investment has paid off as sales of replacement filters have accounted for approximately $80,000,000 in revenue since 2017. Id. ¶ 13. SoClean owns two U.S. Trademark Registrations for its Filter design: U.S. Reg. Nos. 6,080,195 and 6,286,680. However, SoClean is proceeding only as to the ‘195 registration (the "Mark") for the purpose of this motion.1 Id. ¶ 8.
The features of the ‘195 Mark are depicted above. SoClean does not claim the color of the filter cartridge as part of its trade dress, nor does SoClean claim that Sunset infringes on its mark by virtue of the color of Sunset's filter. In line with the practices of the PTO, see Trademark Manual of Examining Procedure ("TMEP") § 1207.01(c)(iv), the elements of the Mark shown in dotted lines—the holes on the filter head and at the bottom of the filter—are not claimed as features of the Mark. The ‘195 Mark was registered on June 16, 2020.
It is uncontroverted that in February 2021, Sunset began marketing and selling replacement filter cartridges that competed with SoClean's filters. Sunset Answer ¶ 84 [#157]; Slosar Decl. ¶ 15 [#177]. Moreover, it is uncontroverted that Sunset's filters are copies of SoClean's filters. See Sunset Opp'n 16 [#175-1] (acknowledging that Sunset was copying SoClean's filters). Indeed, internal emails show Sunset's filters were designed as "knockoffs" of SoClean's filter design, see Wintner Decl., Ex. 8, Email from Tom Munar to Melissa Allis [#163-8], and that this was consistent with Sunset's broader business strategy, see Wintner Decl., Ex. 12, Sunset Strategic Planning Mem. [#182-12]. A comparison of the two filters reveals that they are indeed indistinguishable except for a SoClean sticker on the SoClean filter.2
SoClean Mem. 12 [#162].3 Shortly after Sunset began selling its competing version of the SoClean filter, SoClean brought this action against Sunset. See Am. Compl., No. 21-cv-10131, ECF No. 5 ¶¶ 117–30 (D. Mass. Mar. 9, 2021). SoClean's amended complaint alleges that Sunset's sale of the filters infringes on SoClean's duly registered trademarks over the filter design. Am. Compl. ¶ 125. Specifically, SoClean alleges that because of Sunset's infringement, consumers "are likely to be confused into incorrectly believing there is an association, affiliation, or sponsorship between SoClean and Sunset and their replacement filters." Id. ¶ 126. This motion for a preliminary injunction followed.
Under the Lanham Act, the court is authorized to grant an injunction "according to the principles of equity and upon such terms as the court may deem reasonable" so as prevent infringement of a plaintiff's registered mark. 15 U.S.C. § 1116. Nevertheless, the issuance of a preliminary injunction before a trial on the merits can be held is an "extraordinary remedy" that shall enter only if the plaintiff makes a clear showing that it is entitled to such relief. Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 22, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008). This showing requires a movant to demonstrate: (1) that it has a reasonable likelihood of success on the merits; (2) that there is a likelihood of irreparable harm if an injunction is withheld; (3) that the balance of hardships between the parties weighs in the movant's favor; and (4) that the requested injunction would not conflict with the public interest. Kerrissey v. Com. Credit Grp., Inc., 359 F. Supp. 3d 151, 155 (D. Mass. 2019) (citing Jean v. Mass. State Police, 492 F.3d 24, 26-27 (1st Cir. 2007) ). Under the Trademark Modernization Act of 2020, a party seeking an injunction is entitled to "a rebuttable presumption of irreparable harm ... upon a finding of likelihood of success on the merits." 15 U.S.C. § 1116(a).
Sunset argues that SoClean does not have a reasonable likelihood of success on the merits on two principal grounds. First, Sunset contends that SoClean's Mark is invalid and thus SoClean's infringement claim will necessarily fail. Second, Sunset contends that there is no likelihood of consumer confusion. These two arguments are addressed in turn.
Plaintiff contends that the product design depicted in the ‘195 Mark is protectable trade dress under Section 43(a) of the Lanham Act. While the term "trade dress" was historically used in the context of trademark law to refer to the packaging and labelling of a product, courts have, under limited circumstances, broadened the reach of the Lanham Act's protections to include " ‘the design and appearance of [a] product together with the elements making up the overall image that serves to identify the product presented to the consumer.’ " I.P. Lund Trading ApS v. Kohler Co., 163 F.3d 27, 35 (1st Cir. 1998) (quoting Chrysler Corp. v. Silva, 118 F.3d 56, 58 (1st Cir. 1997) ). As the Supreme Court ruled in Qualitex Co. v. Jacobson Prod. Co., so long as the elements of the mark, be it the shape of a design or the color of the product alone, "can act as a symbol that distinguishes a firm's goods and identifies their source, without serving any other significant function," the mark is potentially eligible for protection under the Lanham Act. 514 U.S. 159, 166, 115 S.Ct. 1300, 131 L.Ed.2d 248 (1995).
Where a Mark is unregistered, the burden of proof is on the plaintiff to prove that a trade dress mark is eligible for protection because it is used in commerce, non-functional, and distinctive. Yankee Candle Co. v. Bridgewater Candle Co., LLC, 259 F.3d 25, 38 (1st Cir. 2001) (quoting Lund, 163 F.3d at 36 ). However, where, as here, the plaintiff has registered its mark on the principal register with the PTO, the mark enjoys a statutory presumption of validity (and thus is presumed to be used in commerce, non-functional, and distinctive). See 15 U.S.C. § 1115(a) ; see also J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, § 32:136 (5th ed. 2021) (). But this presumption "constitutes only prima facie and not conclusive evidence of the owner's right to exclusive use of the mark," Park ‘N Fly, Inc. v. Dollar Park & Fly, Inc., 469 U.S. 189, 200 n.6, 105 S.Ct. 658, 83 L.Ed.2d 582 (1985), and within five years of the date of registration, the marks remain contestable and the Act provides that defendants to a...
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SoClean, Inc. v. Sunset Healthcare Solutions, Inc.
...requiring "Sunset to clearly associate its online marketing and sales ... with the Sunset brand." So-Clean, Inc. v. Sunset Healthcare Sols., Inc. , 554 F. Supp. 3d 284, 308 (D. Mass. 2021). We affirm. BACKGROUND This appeal is a small part of a larger intellectual-property dispute between S......