TSI Prods., Inc. v. Armor All/STP Prods. Co.
| Decision Date | 23 September 2019 |
| Docket Number | No. 3:18-cv-1682 (MPS) (CONSOLIDATED),No. 3:17-cv-1131 (MPS) (LEAD),3:18-cv-1682 (MPS) (CONSOLIDATED),3:17-cv-1131 (MPS) (LEAD) |
| Court | U.S. District Court — District of Connecticut |
| Parties | TSI PRODUCTS, INC., Plaintiff, v. ARMOR ALL/STP PRODUCTS CO., SPECTRUM BRANDS HOLDING CO., INC., GUY ANDRYSICK, and ROBERT DeRIDDER, Defendants. ARMOR ALL/STP PRODUCTS CO., Plaintiff, v. TSI PRODUCTS, INC., MICHAEL QUEST, and WILLIAM QUEST, Defendants. |
TSI Products, Inc. ("TSI")—plaintiff in the consolidated suit, No. 3:18-cv-1692—brings claims against Armor All/STP Products Company, Spectrum Brands Holdings, Inc., Guy Andrysick, and Robert DeRidder (collectively "Armor All" or "Consolidated Defendants") for trademark infringement, unfair competition, and false advertising under the Lanham Act, 15 U.S.C. §§ 1114 et seq., for restraint of trade, monopolization, and attempted monopolization under the Sherman Act, 15 U.S.C. §§ 1 et seq., and for violations of the Connecticut Unfair Trade Practices Act ("CUTPA"), Conn. Gen. Stat. §§ 42-110a et seq.
Consolidated Defendants move to dismiss TSI's Second Amended Complaint ("SAC"), ECF No. 96, in its entirety under Fed. R. Civ. P. 12(b)(6) for failure to state a claim. Mot. to Dismiss, ECF No. 102. Because I find that TSI has stated a plausible claim under each of its seven counts, I deny the motion to dismiss.
The factual allegations below are drawn from TSI's Second Amended Complaint ("SAC") and are accepted as true for the purpose of adjudicating this motion.
Both TSI and Armor All create and sell do-it-yourself refrigerant products and recharge kits, which permit car owners to recharge their vehicle air conditioning ("AC") systems on their own, without the services of a professional mechanic. SAC, ECF No. 96 ¶¶ 26, 55. Refrigerant and recharge kits are sold in many automotive specialty stores in the United States, such as Advance Auto Parts, AutoZone, O'Reilly Auto Parts, NAPA, and Pep Boys, as well in as in the automotive departments of stores such as Walmart, Meijers, and Home Depot. Id. at ¶¶ 198-99.
TSI places do-it-yourself refrigerant products in "two subcategories: non-value-added refrigerant and value-added automotive AC recharge kits." Id. ¶ 178. Id. ¶¶ 180-81. Both TSI and Armor All sell value-added products. Id. ¶¶ 55.
Armor All sells refrigerant—including the A/C Pro Professional Formula and the A/C Pro Ultra Synthetic Formula—that contains additives and lubricants. Id. ¶¶ 123-24. Armor Allalso sells recharge kits consisting of refrigerant, a hose and trigger dispenser, and a gauge that measures the pressure on the low side of a car's AC system. Id. ¶ 61. TSI, similarly, offers value-added refrigerant and recharge kits. Id. ¶ 204. "Instead of a low-pressure-measuring gauge, some of TSI's AVALANCHE/AC AVALANCHE products are sold with [] Smart Clips, which instead of measuring the low-side pressure of the AC system, measure the vent temperature of the air in the passenger compartment to target the correct fill." Id. ¶ 145. "TSI's Smart Clips are constructed out of a thermochromic material that changes color due to changes in temperature." Id. ¶ 211.
TSI sells its refrigerant and recharge kits under the brand names AVALANCHE, AC AVALANCHE, and BLACK DIAMOND AVALANCHE. Id. ¶ 25. TSI is the owner of the AVALANCHE word mark, registered under Registration No. 4,823,588. Id. ¶¶ 27, 31-33. TSI has continuously sold refrigerant products under the AC AVALANCHE mark since January 31, 2015 and holds trademark rights in the work mark AC AVALANCHE used in connection with refrigerant products. Id. ¶¶ 28-30. TSI also holds trademark rights in the BLACK DIAMOND AVALANCHE word mark, registered under Registration No. 5,065,364. Id. ¶¶ 34-36.
TSI holds trademark rights in the mountain logos used along with its AVALANCHE and AC AVALANCHE brands and its BLACK DIAMOND AVALANCHE brand. Id. ¶¶ 37-38. These logos are part of the trade dress associated with the three word marks, and the design appears on the products' labels and promotional materials. Id. at ¶¶ 39, 41. TSI has consistently used the mountain logo in connection with the sale of AVALANCHE and AC AVALANCHE products since January 2015, id. at ¶ 40, and in connection with the sale of BLACK DIAMOND AVALANCHE products since April 2015, id. at ¶ 42.
Armor All markets its brands, including its A/C PRO brand of refrigerant, online. Id. ¶ 135. As part of its online advertising, Armor All purchased "AC AVALANCHE" as a Google ad word. Id. ¶ 138. As a result, a Google search for "AC AVALANCHE" as of the date of TSI's original complaint yielded an advertisement for Armor All's AC/Pro website at the top of the search results. Id. ¶ 139-40. When a user clicked on the advertising link, the consumer was directed to the A/C Pro website. Id. ¶ 144. Armor All "made no effort to distinguish themselves and their products from TSI, either in the Google ad itself or on the linked AC Pro Website webpage." Id. ¶ 152.
Armor All "had access to TSI's AC AVALANCHE/AVALANCHE mountain logo, as it had been used since 2015 in TSI's products sold in the very same stores selling [Armor All's] products, often in close proximity." Id. ¶ 156. Prior to 2017, Armor All did not "utilize any mountain imagery in its packaging of ARCTIC FREEZE products," id. ¶ 157, but it did begin using a mountain logo on those products in 2017, id. ¶ 159. The mountain logo used on the ARCTIC FREEZE packaging "looks confusingly similar" to the mountain logo on TSI's products, id. ¶ 161-65; TSI alleges on information and belief that Armor All's use of the mountain logo "causes customer confusion as to the source of the goods," id. ¶ 168.
Armor All has published advertising for its recharge kits and refrigerant products online, on its product packaging and promotional materials, and in videos and commercials. Id. ¶ 66. In this advertising, Armor All makes a number of statements about its recharge kits, including that they have the following characteristics and benefits:
Armor All also makes statements about its refrigerant formula, including:
TSI alleges that all of these statements are false or misleading. Id. ¶¶ 89-109, 118-32.
Value-added automotive AC recharge kits—those that include refrigerant in addition to some combination of additives, lubricants, hoses, gauges, or other tools—is one of "two subcategories" in the larger sector for do-it-yourself automotive AC recharge products. Id. ¶¶ 178, 181. In the smaller "market for value-added auto AC recharge kits in the United States," Armor All had an estimated market share of 88% in 2017. Id. ¶ 193. TSI is Armor All's largest competitor in terms of market share, with approximately 10% share; all other competitors combined constitute only 2% market share. Id. ¶¶ 194-96.
Prior to TSI's entry into the value-added AC recharge kit market in 2015, Armor All did not face substantial competition in that market. Id. ¶ 201. After TSI launched its products in2015, the two companies have competed "on the basis of both price and innovation." Id. ¶ 207. TSI alleges on information and belief that Armor All experienced "downward pricing pressure" between 2015 and 2017 "in the face of competition from TSI," but has been able to "raise their prices to levels that approach their pre-competition pricing" since 2017. Id. ¶¶ 213-14.
TSI alleges on information and belief that Armor All made an agreement with retailer Advance Auto in August 2016 in which Armor All "offered to pay Advance Auto cash remuneration, product discounts, and/or some other value in exchange for Advance Auto's agreement to renege on its agreement with TSI and refuse to allocate shelf space to TSI's products." Id. ¶ 223-24. Advance Auto did not purchase any TSI products or allocate any shelf space to TSI products in 2017 or 2018. Id. ¶ 226-29.
In 2018, TSI also learned from a representative of retailer Pep Boys that "Pep Boys had received a payment from [Armor All] . . . for display and channel allocation for [Armor All products] . . . [and] to keep TSI's competing . . . products off Pep Boys' shelves." Id. ¶ 232. Pep Boys did not allocate any shelf space to TSI products in 2018 and has indicated that it will not do so in 2019, due to payments received from Armor All. Id. ¶ 233.
After TSI launched its AVALANCHE products in 2015, attorneys representing Armor All's predecessor sent TSI a letter in November...
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