Specialized Seating v. Greenwich Industries

• Decision Date: 02 February 2007
• Docket Number: No. 05 C 1197.,05 C 1197.
• Citation: 472 F.Supp.2d 999
• Parties: SPECIALIZED SEATING, INC., Plaintiff, v. GREENWICH INDUSTRIES, L.P. d/b/a Clarin, Defendant.
• Court: U.S. District Court — Northern District of Illinois

Page 999

472 F.Supp.2d 999

SPECIALIZED SEATING, INC., Plaintiff, v. GREENWICH INDUSTRIES, L.P. d/b/a Clarin, Defendant.

No. 05 C 1197.

United States District Court, N.D. Illinois, Eastern Division.

February 2, 2007.

Anthony S. Divincenzo, Divincenzo, Schoenfield, Swartzman, Chicago, IL, for Plaintiff.

James Patrick White, John Aron Carnahan, Laurie Ann Haynie, Welsh & Katz, Ltd., Chicago, IL, Robert F. Rabin, Robbins, Salomon & Patt, Ltd., Chicago, IL, for Defendant.

MEMORANDUM OPINION FOLLOWING BENCH TRIAL

HOLDERMAN, Chief Judge.

Plaintiff Specialized Seating, Inc. ("Specialized") sells folding chairs, as does the defendant Greenwich Industries, L.P., under the name "Clarin." In this case, Specialized seeks declaratory relief invalidating registered U.S. Trademark Registration No. 2,803,875¹ owned by Clarin (Cmpl., Count I), (Dkt. No. 1), and Specialized seeks a determination that its x-frame, double-tube and channel folding chairs² do not infringe Clarin's registered trademark or common law trade dress (Cmpl., Count II).³ In addition to answering Specialized's claims, Clarin filed a counterclaim against Specialized, alleging infringement of Clarin's registered trademark and trade dress (Counterclaim, Count I), (Dkt. No. 6), and false designation of origin (Counterclaim, Count II). On July 1, 2005, Specialized moved for a preliminary injunction. (Dkt. No. 13.) On September 1, 2005, the court held an evidentiary hearing on that motion. Following that hearing, the parties settled that aspect of their dispute. (Dkt. No. 35.)

After the completion of the parties' pretrial discovery and the filing of the pretrial order, the court conducted a multi-day bench trial, at which both sides presented testimony and other evidence. After reviewing that evidence and considering the arguments of counsel, the court grants Specialized's request for declaratory judgment against Clarin on both its claims of trademark invalidity and noninfringement. The court also finds against Clarin and in favor of Specialized on each of the allegations of Clarin's counterclaim, for the reasons stated below.

FACTUAL BACKGROUND

In determining the case, the court finds the following facts.

A. The Parties and their Previous Litigation

Plaintiff Specialized is a Nevada Corporation with its principal place of business in Morton Grove, Illinois. Specialized has been in business since 1997 and sells various seating products including folding chairs. Defendant Clarin is a Delaware limited partnership with its principal place of business in Lake Bluff, Illinois. According to its sales literature, Clarin began making and selling a folding chair utilizing its x-frame with steel formed into a double-tube and channel in 1925. Clarin presently offers the double-tube and channel, x-frame folding chair with an "A-back" or a "B-back" backrest. (Tr. at 73-86.) Clarin also offers an "Arch-back" backrest only for its children's line.⁴ (Tr. at 85-86.)

The A-back has sides that are bent inward just below the lower part of the backrest, forming a shoulder-style configuration to accommodate a back panel that is smaller than the width of the chair frame. The sides of the B-back do not form a shoulder configuration but are slanted — instead of bent — inward at an angle starting just below the backrest to accommodate the smaller back panel. (Tr. at 73-74; Pl.Ex. 31; Def. Ex. 269.) Clarin's Arch-back chair's frame contains no bend or slant below the backrest. (Def.Ex.264.)

On July 22, 1993, (Def. Ex. 25 at 2), Greenwich Industries, L.P., acquired Clarin and all its intellectual property. Prior to that, Harvey Hergott held the position of General Manager with Clarin, and his son Alfred Hergott was also a Clarin employee. (Tr. at 222-23.) As part of the terms of the acquisition, Harvey Hergott agreed to be a vice president and partner in the new Clarin. Alfred Hergott also remained a Clarin employee. (Tr. at 222, 331.)

In the latter part of 1993, Harvey and Alfred Hergott left Clarin and formed AOH International ("AOH"). (Tr. at 223, 331.) AOH began competing with Clarin in the folding chair market. (Id.) AOH sold both x-frame and y-frame chairs. (Tr. at 223-24.) The x-frame chairs sold by AOH were manufactured by Frank Lin ("Lin") in Taiwan. (Tr. at 224.) Lin had been Clarin's "exclusive sales rep" in Taiwan since sometime in the late 1980s. (Tr. at 224-26.)

Shortly after Harvey Hergott left Clarin in 1993, Clarin sued him in state court in Lake County, Illinois, alleging several grounds: violation of the Illinois Trade Secrets Act, breach of fiduciary duty, conversion, violation of the Uniform Deceptive Trade Practices Act, violation of § 1125(a) of the Lanham Act (unrelated to present lawsuit), tortious interference, fraud, constructive trust, and appropriation of corporate opportunity. (Def. Ex. 25; Tr. at 227, 231.) Clarin amended its complaint several times and a settlement was reached on September 13, 1996, where Hergott admitted to all the allegations in Clarin's Fourth Amended Complaint, which named as defendants: AOH, Harvey Hergott, and another individual named Harvey Cohen. (Def. Ex. 25; Tr. at 295-97.) Alfred Hergott, who was not named as a defendant to the lawsuit, agreed, as did Harvey Hergott, not to compete with Clarin in the double-tube and channel and x-frame chair market for a five-year period. (Def. Ex. 24 at 5-6; Tr. at 233-36, 331.) Harvey and Alfred Hergott wholly complied with this settlement agreement. (Tr. at 235, 331.)

In 1999, Alfred Hergott formed Specialized Seating, Inc. (Tr. at 330.) Harvey Hergott joined Specialized in November 2001. (Tr. at 239.) In 2002, after the five-year covenant not to compete had expired, Specialized began to sell x-frame chairs. (Tr. at 240, 330.) The chairs offered by Specialized incorporated a double-tube and channel, x-frame design with a back similar to the B-back design used by Clarin. (Tr. at 240, 355-57.) Specialized's chairs, however, differed in several ways from Clarin's asserted trade dress and the depiction in Clarin's registered trademark. For example, rather than using a single cross bar between the front legs, Specialized's folding chairs contained a K-brace.⁵ (Tr. at 324-25, 342, 351.) Further, Specialized's folding chairs had a different frame for the seat cushion than that used by Clarin and Specialized's folding chairs have different ganging brackets than Clarin's, although both companies' ganging brackets are in the channel of the chair frame between the double-tube. (Tr. at 285-86, 347, 350.) In addition, Clarin does not make a chair that incorporates all elements of the folding chair depicted in its registered trademark; rather, the Clarin chair that most closely resembles the folding chair depicted in the registered trademark is the Model 2617. (Def.Ex.266.) Even that particular Clarin chair model, however, does not have a flat channel cross-bar between the legs. Instead, it has cross bars that are "embossed," meaning a raised line is imprinted across the middle of the flat channel.⁶ (Tr. at 74-79.) This embossing adds strength to the Clarin chair's cross bars. (Tr. at 79; Def. Ex. 209, Ex. 6 at 2571.)

In 2002, Clarin filed suit against Specialized in federal district court, alleging common-law trademark infringement by Specialized of Clarin's B-back chair design. See Greenwich Industries, L.P. v. Specialized Seating, Inc., No. 02-C-5000, (N.D.Ill.). That case, which was assigned to District Judge Suzanne Conlon, was dismissed with prejudice with leave to reinstate within a period of time when counsel informed Judge Conlon that the case had been settled. (Tr. at 333.) No written settlement agreement was ever signed by all the parties, but Clarin did not reinstate the lawsuit and the time for Clarin to do so expired.

B. Clarin's Patents

From 1926 and continuing through 1964, Clarin obtained and held several now-expired U.S. patents related to its x-frame folding chair. The first patent, No. 1,600,248, ("the '248 patent"), issued on September 21, 1926, claimed an invention for a folding chair that folded flat with its back legs folding inside the front legs. The patent provided that "Our invention pertains to a folding chair, and has for its main object to provide a light and durable chair constructed from thin, light metal or similar, suitable material, and which chair is so shaped and arranged as to provide a maximum of strength with a minimum of material." (Pl.Ex.2, pg.1, ln.1-7.) The patent disclosed in the specification the functionality of a double-tube and channel frame:

The legs and also the frame part 13 are preferably constructed from thin metal bars which have curved portions extending lengthwise thereof, for reinforcement, and we preferably provide this reinforcement by curving both longitudinal edges of each bar, thus forming hollow or cylindrical portions extending lengthwise of each member and suitably spaced ...

(Id. at pg. 1, ln. 47-55.) In addition, the '248 patent's specifications discussed that a cross bar connecting the legs at their lower portions acts "as bracing and spacing members for the legs." (Id. at pg. 1, In. 56-60.)

Clarin's second U.S. Patent, No. 1,943,058 ("the '058 patent"), issued in 1934, claimed an invention whereby the arrangement of the elements of the x-frame allowed the chair to collapse automatically on falling to the floor. (Pl.Ex. 3, pg.1, In. 5-10.) This automatic collapsing feature of an x-frame chair was disclosed in the patent as a significant safety advantage in case of an emergency when such chairs are used in large auditoriums. (Id. at pg. 1, 19-23.)

In 1938, Clarin obtained a U.S. Patent, No. 2,137,803 ("the '803 patent"), for the covering of the tips of the chair legs consisting of "a foot in the form of a block of solid rubber or other flexible material and a fastener for securing the foot to the lower end of the chair leg" of its double-tube and channel x-frame chair. (Pl.Ex.4, pg.1, col.1, In.3-6.) The novelty...