Thomas & Betts Corp. v. Panduit Corp., 94 C 2656.

• Decision Date: 18 May 1999
• Docket Number: No. 94 C 2656.,94 C 2656.
• Citation: 48 F.Supp.2d 1088
• Parties: THOMAS & BETTS CORPORATION and Thomas & Betts Holdings, Inc., Plaintiffs, v. PANDUIT CORPORATION, Defendant.
• Court: U.S. District Court — Northern District of Illinois

Page 1088

48 F.Supp.2d 1088

THOMAS & BETTS CORPORATION and Thomas & Betts Holdings, Inc., Plaintiffs, v. PANDUIT CORPORATION, Defendant.

No. 94 C 2656.

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

May 18, 1999.

Marc Fogelberg, McBride, Baker & Coles, Chicago, IL, for plaintiffs.

Sidney David, Keith E. Gilman, Stephen F. Roth, Lerner, David, Littenberg, Krumholz & Mentlik, LLP, Westfield, NJ, for plaintiffs.

Roy E. Hofer, Gary M. Ropski, John T. Gabrielides, Stephanie S. Conis, Brinks Hofer Gilson & Lione, Chicago, IL, for defendant.

Mark D. Hilliard, Robert A. McCann, Panduit Corp., Tinley Park, IL, for defendant.

MEMORANDUM OPINION AND ORDER

MORTON DENLOW, United States Magistrate Judge.

The saga continues. After several trips between this Court and the Seventh Circuit Court of Appeals, the case is back. The Seventh Circuit previously reversed this Court's grant of summary judgment to Panduit on Count II and remanded for further proceedings. Panduit Corporation (hereinafter "Panduit") now brings a motion to dismiss Count II of the complaint filed by Plaintiffs Thomas & Betts Corporation and Thomas & Betts Holdings, Inc. (hereinafter collectively "T & B"). Panduit contends the Court no longer has jurisdiction over Count II. The Court disagrees. For the reasons set forth below, Panduit's motion to dismiss Count II is denied.

I. BACKGROUND FACTS

T & B and Panduit are the nation's largest suppliers of cable ties. Cable ties are nylon plastic straps used to tie together cables or wires. T & B obtained a utility patent on the two-piece cable tie in 1965, which expired in 1982. T & B also obtained a design patent on the cable tie in 1966, which expired in 1980. In late 1993, Panduit began to produce a cable tie similar to that of T & B, sold under the trademark "BARB-TY." Panduit's cable tie is substantially similar in appearance to T & B's cable tie.

T & B brought this action in five counts against Panduit. Count I alleges that Panduit's metal barb oval head shaped cable tie infringes on the trade dress of T & B's cable tie in violation of Section 43(a) of the Lanham Act. 15 U.S.C. § 1125(a). Count II alleges that Panduit's registration and use of the trademark BARB-TY constitutes unfair competition under the Lanham Act, 15 U.S.C. § 1125(a)(1)(A), and seeks cancellation of Panduit's trademark registration of the term BARB-TY. T & B also alleged that Panduit's conduct violates the common law of unfair competition in Count III; the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/2, and the Uniform Deceptive Trade Practices Act, 815 ILCS 510/1, in Count IV; and the Illinois Anti-Dilution Act, 765 ILCS 1035/15, in Count V.

T & B previously brought a motion for a preliminary injunction which was granted by the trial court in Thomas & Betts Corp. v. Panduit Corp., No. 94 C 2656, 1994 WL 714619 (N.D.Ill.Dec.19, 1994), and later reversed by the Seventh Circuit, Thomas & Betts Corp. v. Panduit Corp., 65 F.3d 654 (7th Cir.1995). The case was then transferred to this Court which granted summary judgment against T & B on Counts I, III, IV, and V. Thomas & Betts Corp. v. Panduit Corp., 935 F.Supp. 1399 (N.D.Ill. 1996) ("T & B I"). This Court subsequently granted summary judgment against T & B with regard to Count II. Thomas & Betts Corp. v. Panduit Corp., 940 F.Supp. 1337 (N.D.Ill.1996) ("T & B II"). On appeal, the Seventh Circuit reversed the grant of summary judgment on Counts I and II. Thomas & Betts Corp. v. Panduit Corp., 138 F.3d 277 (7th Cir.1998) ("T & B III"). No appeal was taken regarding Counts III through V and they are no longer part of the case.

II. ANALYSIS OF COUNT II

Panduit now brings a motion to dismiss Count II for lack of subject matter jurisdiction. Fed.R.Civ.P. 12(b)(1). A review of the history of Count II is a necessary background.

A. Count II of the Complaint.

Count II is captioned "Unfair Competition Under 15 U.S.C. § 1125(a) and Withdrawal Of Application For Registration (or Cancellation of Registration Under 15 U.S.C. § 1064(3))" and consists of several components. In Count II, T & B alleges the term "barb tie" has become associated with Thomas & Betts' products, "although this term is also a generic expression for identifying two-piece self-locking cable ties having a metal locking device or a barb." (Compl. ¶ 26.) According to T & B, the term BARB-TY is virtually indistinguishable from and phonetically identical to the "barb tie" designation which is uniquely associated with Thomas & Betts' cable ties. (Compl. ¶ 27.) As a result, T & B believes Panduit is using the BARB-TY trademark to trade on T & B's reputation. (Compl. ¶ 29.) In sum, T & B asserts all of the above allegations demonstrate a violation of 15 U.S.C. § 1125(a)(1)(A) because Panduit's use of the term BARB-TY as a trademark for its cable ties constitutes a false designation of origin, "which is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of Panduit with Thomas & Betts or as to the origin, sponsorship or approval of Panduit's two-piece self-locking cable ties, or the commercial goods or activities of others." (Compl. ¶ 28.)

In Count II, T & B also claims that, because of "barb tie's" association with T & B's products and generic quality, Panduit obtained its registration of the trademark BARB-TY fraudulently and did not have the right to register the mark BARB-TY. (Compl. ¶¶ 32-33.) To support this allegation, T & B reviews Panduit's application history before the U.S. Patent and Trademark Office ("PTO") for the BARB-TY mark. Panduit's Application Serial No. 74/331,294, covering the mark was allowed on July 13, 1993. (Comp. ¶ 30.) T & B asserts Panduit failed to advise the PTO of the significance of the term "barb tie" while making its application. (Comp. ¶ 31.) This is in direct contravention to 15 U.S.C. § 1064(3) according to T & B. (Comp. ¶ 33.)

T & B claims damages from the registration of the BARB-TY mark arising out of a misrepresentation as to the source of the cable tie or in connection with the way the mark is used. (Comp. ¶ 35.) In addition, as part of its prayer for relief, T & B seeks an order pursuant to 15 U.S.C. § 1119 directing the PTO Commissioner to cancel the BARB-TY registration. (Comp. ¶ B, p. 17.)

B. T & B I, 935 F.Supp. 1399 (N.D.Ill. 1996).

Although there were earlier opinions in this case, Count II was first addressed on the merits in this Court's August 15, 1996 decision in connection with Panduit's motion for summary judgment. T & B I, 935 F.Supp. 1399, 1418 (N.D.Ill.1996). The Court denied Panduit's motion for summary judgment on Count II because the record was incomplete. Id. The parties were given an opportunity to further brief and argue the issue. Id.

C. T & B II, 940 F.Supp. 1337 (N.D.III.1996).

On October 17, 1996, following additional briefing and oral argument, the Court entered its decision granting summary judgment to Panduit on Count II. T & B II, 940 F.Supp. 1337 (N.D.Ill.1996). In the decision, this Court analyzed two separate claims under Count II: 1) T & B's claim that Panduit's use of the BARB-TY trademark constitutes a misleading use and violates § 43(a)(1) of the Lanham Act, 15 U.S.C. § 1125 (the "unfair competition claim"); and 2) T & B's claim that Panduit's trademark be canceled pursuant to § 14 of the Lanham Act, 15 U.S.C. § 1064,¹ because of either the genericness of the term "barb tie" (the "genericness issue") or the fraudulent procurement of the BARB-TY mark (the "fraudulent procurement of trademark claim"). Id. at 1339.

With respect to the first issue, this Court granted summary judgment to Panduit because Panduit's use of the term BARB-TY did not violate § 43(a)(1) of the Lanham Act as a matter of law because the term "barb tie" is not generic and the BARB-TY trademark does not create confusion as to source. Id. at 1339-1343. The Court held the term barb tie was not generic and the primary designation of the product is the term cable tie. Id. at 1341. The Court next held Panduit's use of the term BARB-TY is not likely to cause confusion with T & B's TY-RAP cable ties. Id. at 1342. The Court stated "even assuming arguendo that the term `barb tie' is a generic term, Panduit's actions would not violate the Lanham Act." Id. T & B produced no evidence to show that consumers refer to its products as barb ties. Id. The Court distinguished the three cases relied upon by T & B² because in each of those cases, "a trademarked term became generic after prolonged use by the sole manufacturer." Id. at 1343. T & B has never had a trademark in the term "barb tie" and T & B had failed to show the public has come to know the product as a barb tie. Id. The Court made three findings with respect to the false designation of origin claim. First, T & B failed to submit sufficient evidence to show the term "barb tie" has a source indicating quality as to T & B; second, T & B failed to demonstrate the term "barb tie" is a generic or principal designation of a cable tie; and, third, the Court found the term "barb tie" and its phonetic equivalent BARB-TY, will not likely confuse the general public. Id. at 1343.

With respect to the second issue, this Court held that Panduit's BARB-TY trademark should not be canceled pursuant to § 14 of the Lanham Act, 15 U.S.C. § 1064, because the term "barb tie" is not generic and because no fraud was committed against the U.S.Patent and Trademark Office. Id. at 1343-4.

D. T & B's Appeal Brief on Count II.

T & B appealed this Court's grant of summary judgment to Panduit on Counts I and II. In its brief to the Seventh Circuit, T & B's Statement of Issues regarding Count II read as follows:

2. Did Magistrate Judge Denlow err in granting summary judgment against T & B on its claim to cancel Panduit's trademark registration by finding the term Barb-Ty to be non-generic?

(Panduit's Mem. in Resp. to T & B's Surreply in Opp'n to Panduit's...