Southern Snow Mfg. Co. v. Snow Wizard Holdings, Inc., Civil Action Nos. 06–9170

• Decision Date: 18 April 2011
• Docket Number: Civil Action Nos. 06–9170,10–791.,09–3394
• Citation: 829 F.Supp.2d 437
• Parties: SOUTHERN SNOW MANUFACTURING CO. v. SNOW WIZARD HOLDINGS, INC., et al.
• Court: U.S. District Court — Eastern District of Louisiana

829 F.Supp.2d 437

SOUTHERN SNOW MANUFACTURING CO.

v.SNOW WIZARD HOLDINGS, INC., et al.

Civil Action Nos. 06–9170

09–3394

10–791.

United States District Court, E.D. Louisiana.

April 18, 2011.

Mark Edw. Andrews, Andrews Arts & Sciences Law, LLC, New Orleans, LA, for Plaintiff.

Jack Edward Morris, Jack E. Morris, Attorney at Law, Kenneth L. Tolar, Kenneth L. Tolar, APLC, Metairie, LA, Brad Elliot Harrigan, Simeon B. Reimonenq, Jr., Lugenbuhl, Wheaton, Peck, Rankin & Hubbard, Brock Darren Dupre, U.S. Attorney's Office, New Orleans, LA, for Defendants.

ORDER AND REASONS

JAY C. ZAINEY, District Judge.

Before the Court are a Motion for Partial Summary Judgment on Most Main Claims (Rec. Doc. 228) filed by plaintiffs Southern Snow Manufacturing Co., Inc., Parasol Flavors, LLC, and Simeon, Inc., and a Motion for Partial Summary Judgment on False Advertising Claims (Rec. Doc. 281) filed by defendant SnoWizard, Inc. The motions are before the Court on the briefs without oral argument.¹ For the reasons that follow, Plaintiffs' motion is DENIED and Defendant's motion is GRANTED.

I. BACKGROUND

Plaintiff Southern Snow and defendant SnoWizard are both engaged in the business of manufacturing ice-shaving machines and flavoring concentrates, and selling these products to vendors of “snowball” flavored ice confections. SnoWizard successfully registered a federal trademark for the snowball flavor ORCHID CREAM VANILLA. SnoWizard then sent Southern Snow a cease and desist letter asserting that Southern Snow was infringing the trademark. In response Southern Snow filed suit claiming that SnoWizard had obtained the trademark for ORCHID CREAM VANILLA by providing false information to the trademark registering authority. Southern Snow also included unfair competition claims for flavors ORCHID CREAM VANILLA and WHITE CHOCOLATE & CHIPS, and the term SNOBALL.² Southern Snow separately brought an administrative cancellation action against ORCHID CREAM VANILLA in the U.S. Patent and Trademark Office (“USPTO”). SnoWizard asserted counterclaims for ORCHID CREAM VANILLA and WHITE CHOCOLATE & CHIPS. In January 2008, Civil Action 06–9170 was stayed pending action on ORCHID CREAM VANILLA by the USPTO Trademark Trial and Appeal Board (“TTAB”). In December 2009 the TTAB rendered its decision cancelling the registration for ORCHID CREAM VANILLA after finding the term to be merely descriptive.³

In 2009, plaintiff Parasol Flavors, LLC filed Civil Action 09–3394 after SnoWizard sent it a cease and desist letter. This lawsuit involved trademarks pertaining to flavors SNOSWEET®, HURRICANE, PRALINE, KING CAKE, BUTTERED POPCORN, MUDSLIDE, GEORGIA PEACH, DILL PICKLE, CAKE BATTER, and BUTTERCREAM. SnoWizard filed counterclaims in that action and the parties filed cross motions for summary judgment. Judge Lemmon was assigned the case at the time and she dismissed all of SnoWizard counterclaims as to HURRICANE, PRALINE, KING CAKE, BUTTERED POPCORN, MUDSLIDE, GEORGIA PEACH, DILL PICKLE, CAKE BATTER, and BUTTERCREAM, finding those terms to be generic and therefore unprotectable as trademarks. SNOSWEET® was not part of the ruling. (09–3394, Rec. Doc. 56). Judge Lemmon later transferred Civil Action 09–3394 to this Section for consolidation with 06–9170.

In March 2010, Southern Snow and Simeon, Inc. filed Civil Action 10–791 against SnoWizard for infringement of SOUTHERN SNOW® and FLAVOR SNOW® and challenging the validity of SnoWizard's trademarks for CAJUN RED HOT, CHAI LATTEA, COOKIE DOUGH, MOUNTAIN MAPLE®, SNOFREE®, SNOSOUR®, SNOBALLS (design), SWISS ALMOND COCO, TIRAMISU, and ZEPHYR. SnoWizard filed counterclaims in that action for cancellation of SOUTHERN SNOW® and FLAVOR SNOW® and for infringement of MOUNTAIN MAPLE®, CAJUN RED HOT, and GEORGIA PEACH.⁴

SnoWizard also filed counterclaims in each of the actions for attorney's fees for groundless, bad-faith, and harassing main claims. Civil Action 10–791 was consolidated with 06–9170 and 09–3394.

Plaintiffs are seeking monetary and injunctive relief under the Lanham Act, as well as state law recovery pursuant to La. R.S. § 51:1405, et seq. (LUTPA) ⁵ and Louisiana Civil Code article 2315.

Via their instant motion for partial summary judgment, Plaintiffs seek injunctive relief (and orders cancelling any registrations) ⁶ with respect to 22 of SnoWizard's trademarks: ORCHID CREAM VANILLA, WHITE CHOCOLATE & CHIPS, SNOBALL, SNOSWEET®, HURRICANE, KING CAKE, BUTTERED POPCORN, GEORGIA PEACH, PRALINE, MUDSLIDE, CAKE BATTER, DILL PICKLE, BUTTERCREAM, CAJUN RED HOT, CHAI LATTEA, COOKIE DOUGH, MOUNTAIN MAPLE®, SNOFREE®, SNOSOUR®, SNOBALLS (design), SWISS ALMOND COCO, TIRAMISU, and ZEPHYR. Plaintiffs urge the Court to find that these marks are generic and therefore incapable of serving as trademarks. With respect to SNOSWEET®, SNOFREE®, and ZEPHYR, Plaintiffs urge invalidity based on the assertion that SnoWizard has never made any qualifying sales with these names.

Plaintiffs' validity challenge to 22 of SnoWizard's claimed trademarks is really only a first stop on the road to the injunctive and other equitable relief that Plaintiffs ultimately seek via this motion.⁷ The unfair competition statutory scheme of the Lanham Act allows for injunctive relief in cases of “false advertising” where the defendant has made false statements of fact. The “false statement of fact” that Plaintiffs rely upon are the trademark assertions that SnoWizard has made as to various product names by appending a TM or ® symbol. According to Plaintiffs, if the statement, i.e., the assertion of a trademark, is literally false, then competitive injury is assumed and injunctive and equitable relief are available even without establishing a specific amount of actual loss.⁸ In essence, once the Court declares each of the foregoing marks to be generic (or otherwise unprotectable), and therefore incapable as a matter of law of serving as a trademark, then Plaintiffs will have established that the claims of trademark brandished to customers are statements of fact that are literally false as to those marks.

SnoWizard, both in its opposition to Plaintiffs' motion and in its memorandum in support its own motion for partial summary judgment, challenges Plaintiffs' unfair competition/false advertising claims on several fronts. First, SnoWizard argues that neither the Lanham Act nor the LUTPA creates a cause of action for the act of improperly asserting trademark rights through the use of the TM symbol because use of the TM symbol does not create a false representation. Second, SnoWizard has taken great pains to address each of the 22 trademark names individually to persuade the Court that they are not generic in nature. Finally, SnoWizard contends that Plaintiffs cannot show that any alleged misrepresentation actually caused customers to be misled.

Trial in this matter is set for Monday, July 18, 2011.

II. DISCUSSION1. Lanham Act—Unfair Competition—False Advertising

The unfair competition claims at issue in the parties' motions are claims of false advertising and they have their genesis in Section 43(a) of the Lanham Act.⁹ Section 43(a) of the Act provides in relevant part:

Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which—

in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities,

shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.

15 U.S.C.A. § 1125(a)(1)(B) (West 2009). This section provides protection against a “myriad of deceptive commercial practices,” including false advertising or promotion. Seven–Up Co. v. Coca–Cola Co., 86 F.3d 1379, 1383 (5th Cir.1996) ( quoting Resource Dev. v. Statue of Liberty–Ellis Island Found., 926 F.2d 134, 139 (2nd Cir.1991)). Section 43(a) of the Lanham Act has been characterized as a remedial statute that should be broadly construed. Id. ( citing Gordon & Breach Science Pub. v. Am. Inst. of Physics, 859 F.Supp. 1521, 1532 (S.D.N.Y.1994)). While the congressional purpose for the Lanham Act is to provide remedies for unfair and misleading use of trademarks, it is now clear that § 43(a) extends beyond mere trademark protection. Schlotzsky's, Ltd. v. Sterling Purch. & Nat'l Distrib. Co., 520 F.3d 393, 399 (5th Cir.2008) ( citing Procter & Gamble Co. v. Amway Corp., 242 F.3d 539, 563 (5th Cir.2001); Dastar Corp. v. Twentieth Cent. Fox Film Corp., 539 U.S. 23, 123 S.Ct. 2041, 156 L.Ed.2d 18 (2003)).

However, Section 43(a) “does not have boundless application as a remedy for unfair trade practices.” Dastar, 539 U.S. at 29, 123 S.Ct. 2041 ( quoting Alfred Dunhill, Ltd. v. Inter. Cigar Co., 499 F.2d 232, 237 (2nd Cir.1974)). “[B]ecause of its inherently limited wording, Section 43(a) can never be a federal ‘codification’ of the overall law of ‘unfair competition,’ ” but can only apply to certain unfair trade practices prohibited by its text. Id. ( quoting 4 J. McCarthy, Trademarks & Unfair Competition § 27:7, p. 27–14 (4th ed. 2002)).

The plaintiff must establish five elements to make out a prima facie case of false advertising under the Lanham Act:

(1) A false or misleading statement of fact about a product;

(2) Such statement either deceived or had the capacity to deceive a substantial segment of potential consumers;

(3) The deception was material, in that it is likely to influence the customer's purchasing decision;

(4) The product is in interstate commerce; and (5) The plaintiff has been or is likely to be injured as a result of the statement at issue.¹⁰

IQ Prods. Co. v. Pennzoil Prods. Co., 305 F.3d 368, 375 (5th Cir.2002) ( citing Pizza Hut, Inc. v. Papa John's...