ZW USA, Inc. v. PWD Sys., LLC
| Decision Date | 22 September 2016 |
| Docket Number | Case No. 4:14–CV–1500–CEJ |
| Citation | 208 F.Supp.3d 1025 |
| Parties | ZW USA, INC. Plaintiff, v. PWD SYSTEMS, LLC, Defendant. |
| Court | U.S. District Court — Eastern District of Missouri |
Ben T. Lila, Gordon E. Gray, III, Mandour and Associates, APC, San Diego, CA, for Defendant.
Brendan Zee-Cheng, Jennifer E. Hoekel, Jessica M. Mendez, Richard L. Brophy, Armstrong Teasdale, LLP, St. Louis, MO, for Defendant.
This matter is before the Court on plaintiff's motion for partial summary judgment and defendant's motion for summary judgment, pursuant to Fed. R. Civ. P. 56(a). Responses have been filed, and the issues are fully briefed.
Plaintiff ZW USA, Inc. and defendant PWD Systems, LLC are competitors in the dog waste disposal industry. Both companies market dog waste disposal bags, which they sell to a variety of customers: individual dog owners, wholesalers, contractors, dog waste removal services, veterinary clinics, apartment complexes, property managers, home owners associations, airports, marinas, and campgrounds. They also sell dog waste disposal bag stations, which are dispensers from which dog owners may obtain the bags.
It is undisputed that dog owners benefit from retrieving the disposal bags by using only one hand and with minimal distraction or effort from the primary task of controlling a leashed dog. The purchasers of these bags also benefit from reducing the incidence of mistakenly dispensed and unused bags, as may happen if a hurried user reaches for a bag and accidentally takes more than one from the dispenser. Hence, the parties agree, a market exists for dog waste disposal dispensers and bags that are designed to permit retrieval of only one bag at a time with one hand.
Among the basic types of dog waste disposal bags are "roll bags" and "wicket bags," which are also called "header bags." The primary difference between header bags and roll bags is the dispensing mechanism they use. Roll bags are packaged in a single roll, with perforations to facilitate tearing a single bag from the roll as it is dispensed from the dispensing station. Evidence has been submitted that some roll bags and dispensers are designed to allow the user to tear an individual bag from the roll with a "single pull" of the hand (i.e. , in "one pull"). [Doc. #79–7 at 2–14, 17–21]1 Other designs of roll bags and dispensers allegedly do not include this "one-pull" feature. See id.
Wicket bags are hung by the top from prongs or hooks inside or on a dispenser. Like some versions of roll bags, all wicket bags appear to be designed to allow a user to retrieve a single bag with one pull of the hand. The dispute in this case centers on plaintiff and defendant's marketing and sale of competing wicket bags that both employ this "one pull" or "single pull" feature.
Doing business as Zero Waste USA, plaintiff markets and sells wicket bags on its company-branded website and on several other websites. According to plaintiff, the company began to market and sell wicket bags under the name "ONEPUL" by September 9, 2010, and under the name "SINGLPUL" by October 30, 2010. [Doc. #85 at 6] Plaintiff has marketed wicket bags using several variations of those terms: SINGLPUL® BAGS, SINGLPul® Bags, SINGLPul® Header Bags, ONEPul® bags, ONEPul® Bags, ONEPul® Bags, and ONEPul® DOG WASTE BAGS. [Doc. #79–5 at 2–6]. Plaintiff has also marketed its dog waste disposal bag dispensing system as the ONEPul® Bag Dispenser. Id. It also claims to have "originated the ONE–PULL STRAP technology" that "restricts dispensing" dog waste disposal bags "to ONLY one-bag-at-a-time! " [Doc. #79–4 at 2–5] (emphasis in original).
On October 22, 2013, plaintiff applied for federal trademark protection inthe terms ONEPUL and SINGLPUL. [Doc. #84–4 at 7–10] Neither party submitted copies of plaintiff's applications to register the trademarks. On August 5, 2014, the United States Patent and Trademark Office (USPTO) granted plaintiff's applications to register ONEPUL (#4,581,881) and SINGLPUL (#4,581,879). Id. Plaintiff filed this suit shortly after the USPTO issued the registrations.
The registrations cover the use of such marks "without claim to any particular font, style, size, or color" for "fixed dispensers of metal for pet waste bags" and for "plastic bags for disposing of pet waste." Id. The USPTO accepted that both marks were first used in commerce on October 30, 2010. Id. It is undisputed that the USPTO granted plaintiff's applications without first requiring plaintiff to submit proof that ONEPUL or SINGLPUL had "become distinctive of" plaintiff's "goods in commerce," pursuant to 15 U.S.C. § 1052(f).
The defendant was incorporated in February 23, 2012, and it does business as BagSpot. In May 2012, defendant began purchasing wicket bags from a third-party supplier.2 By 2013, it began selling wicket bags and roll bags on its website and by phone. Defendant is not licensed or authorized to use plaintiff's trademarks.
On its website and in its advertisements defendant refers to the wicket bags it markets and sells as "one pull" or "one-pull" bags. It has used various formulations of those words to refer to the wicket bags: BagSpot® One–Pull Bags, BagSpot One–Pull Bags, BagSpot One Pull Bags, One Pull Bags, ONE–PULL BAGS, One–Pull Bags, One–Pull bags, One—Pull bags, One—Pull style, One-pull style bags, One–Pull style Bags, and Single pull bags. [Docs. ##79–1 at 2; 82–2 at 5–6, 25–44] (all terms as in original). These bags are advertised as fitting "most header/wicket/one-pull style dispensers." [Doc. #82–2 at 6]
None of those terms appear on defendant's bags themselves, which are instead branded with defendant's phone number, website, and trademarked BagSpot® label. Id. Though plaintiff contends the subject terms are all "identical," plaintiff has not argued—and no evidence was submitted—that defendant has ever marketed its bags using plaintiff's trademarked terms ONEPUL or SINGLPUL, or any variant in capitalization thereof. Nor has plaintiff alleged or introduced evidence that defendant has ever employed any form of the unhyphenated, single-word terms "onepull" or "singlepull."
Rather, plaintiff primarily notes the alleged similarities between the trademark ONEPUL and the defendant's use of "One Pull" in advertisements and on its website. In response to defendant's motion for summary judgment, plaintiff did not submit any relevant data, survey evidence, expert witness depositions or affidavits, or a deposition, declaration, or affidavit from anyone not affiliated with the parties.3 Plaintiff states that it has spent more than $1.5 million for advertising the ONEPUL and SINGLPUL trademarks since it first began using them. Defendant contests that figure, because it appears to represent plaintiff's entire advertising expenditures over several years, rather than advertising unique to the subject trademarks. In any event, the Court assumes here that plaintiff's statement as to the amount it has spent on advertising the trademarks is accurate. Plaintiff also introduces evidence of its sales and revenues from ONEPUL and SINGLPUL bags.
As other evidence of its claims, plaintiff points to an excerpt from Ruth Springer's deposition. Springer explained that on defendant's website, several references to "One Pull Bags" are highlighted hyperlinks that direct website patrons to the portion of the webpage where consumers may purchase those bags. [Doc. #92–3 at 25] Those hyperlinks to "One Pull Bags" on defendant's website are capitalized so that customers will "notice" them, according to Springer. Id.
Additionally, defendant has purchased the keyword "Zerowaste" from Google Adwords, which means that a user's Google search for plaintiff's company will also identify defendant's website as a potentially relevant link. Defendant has also paid Google to display advertisements for its products among the banners that appear in the search results when users query for plaintiff's company. It is undisputed here that such practices are common in online advertising.4
Plaintiff further alleges that defendant has "taken multiple customers directly from" plaintiff, including the cities of Brentwood, Olivette, and Washington, Missouri, and a homeowners association in Virginia. Viewed in the light most favorable to plaintiff, the evidence shows that those entities were previously customers of plaintiff until they began purchasing defendant's products. That, plaintiff argues, proves those customers' decisions to change bag suppliers were "caused by" or "because of" defendant's use of the "One Pull" terms. But plaintiff has introduced no evidence why those customers switched suppliers in the competitive market for dog waste disposal products. There is no evidence in the record from those customers relevant to their decisions to switch bag suppliers, nor was evidence submitted that those customers ever saw defendant's advertisements, its website, or called its phone number.
Finally, plaintiff admits it has no evidence of actual consumer confusion between its ONEPUL trademark and defendant's marketing of "One Pull" bags. Instead plaintiff argues that "consumers do not recognized the term ‘one-pull’ as describing wicket bags." It offers no evidence to support this, only conjecture and speculation from its own employees and its counsel.
Plaintiff asserts the following claims: (1) infringement of a federally registered trademark under the Lanham Act, 15 U.S.C. § 1114 ; (2) Missouri common law trademark infringement; (3) Missouri common law unfair competition; and (4) violation of Missouri's anti-dilution statute, Mo. Rev. Stat. § 417.061. It seeks an injunction forbidding defendant from infringing on its marks, an accounting of defendant's profits from the infringement and unfair competition, treble damages, and attorney's fees.
Defendant asserts counterclaims for cancellation of plaintiff's trademarks and for declaratory relief, based on two...
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