*1 unreliable, internally confusing, incon- Universal’s GIC and EMC lines and its Further, Id. at 654. Collez- display sistent.” of Universal’s furniture at the Oc- . delay producing the first sum- ione’s High tober 2004 Point market: shortly hampered trial mary until before ability accu- investigate Universal’s IV.
racy. reasons, For these affirm we applied The district court the cor judgment court’s liability damages.9 legal required rect standard when it Uni AFFIRMED gross prof versal to establish Collezione’s infringement its from the and then shifted prove
the burden to Collezione to its de Moreover, expenses.
ductible we discern
no clear error the court’s conclusion that failed to meet this burden. The
Collezione GEORGIA PACIFIC comprehensive findings court’s were based CONSUMER PRODUCTS, LP, parties’ on its extensive examination of the Plaintiff- Appellant, presentations credibility and on the of wit nesses, particularly equivocal testimo v. ny findings of Frankel. These factual are CORPORATION, VON DREHLE entitled to our deference. corporation, North Carolina Nor did the district court Defendant-Appellee. abuse its discretion rejecting Collez proffered ione’s calculations as unreliable. Georgia Products, Pacific Consumer given was opportunities Collezione several LP, Plaintiff-Appellee, proof to offer reliable of deductible ex penses, yet repeatedly failed to do so. Its Corporation, Von Drehle a North “[djistriet
appellate contention that Corporation, Carolina court, ... as the finder of fact should have Defendant-Appellant. reviewed the documents and calculated gross profits and net in each of the 09-1942, Nos. 09-2054. furniture,” fringing pieces of Br. of Appel Appeals, United States Court lant gross demonstrates a misunder Fourth Circuit. standing is the infringer’s burden to —it prove expenses. deductible 17 U.S.C. Argued May 2010. 504(b). Finally, the court did err Aug. Decided 2010. finding infringement Collezione’s was willful, particularly given Collezione’s ad initially
mission that it set out to imitate part Collezione claims that Injunction desks or entertainment centers applies Appellant overbroad because it to furniture EMC or GIC. Br. of 70. Universal respond argument. within the 20000 and 20200 collections that did not We as- infringe the district court did not find to Uni- sume that there can be no copyrights. partic- pieces versal’s GIC and EMC nonexistent Universal’s furniture. ular, Consequently, permanent Collezione maintains that it sells enter- we affirm the in- (other infringing junction only tainment centers than the for the furniture within Collez- armoires) actually and desks within these col- ione’s 20000 and 20200 lines lections, infringes and that copyrights. Universal does not sell Universal's *3 Demm, Stephen Patrick
ARGUED: Williams, LLP, Richmond, Hunton & Vir- Al- ginia, Appellant/Cross-Appellee. PLLC, Allan, Firm, P. Allan Law bert Charlotte, Carolina, Appel- North lee/Cross-Appellant. ON BRIEF: Thom- Slater, Jr., III, Gary Maynard, as G. John Williams, III, George Sibley, P. Hunton & LLP, Richmond, Virginia; Mark Ar-G. *4 LLP, nold, Husch Sanders St. Blackwell Louis, Missouri, Appellant/Cross-Ap- for Stephen Curry, L. North Little pellee. Arkansas; Thomas, Rock, Michael P. Pat- Dixon, LLP, Harper Hickory, rick & Carolina, Appellee/Cross-Appel- North lant. KEENAN, Judge,
Before Circuit HAMILTON, Judge, Senior Circuit WILSON, SAMUEL G. United States Judge District for the District of Western Virginia, sitting by designation. OPINION HAMILTON, Judge: Senior Circuit Products, Georgia-Pacific Consumer LP (G-P), Georgia successor-in-interest to Pa- cific Corporation, leading design- of, alia, paper prod- inter er/manufacturer dispensers products ucts and for such away-from-home setting the home and the etc). hotels, stadiums, restaurants, (e.g., implicates products This case two related first introduced G-P in October 2002— the enfl/F&tíon paper touchless towel ® eriifmtion ( Dispenser) high-quality, with a (NC Deceptive Trade Practices Act UDT- specifically for use designed feel fabric-like operation problem-free PA), Ultimately, N.C. Gen.Stat. 75-1.1. enM&tíon Dispensers © summary judgment cross-motions for (en/1/Totion ©Toweling). Although G- claims, all respect of G-P’s actually P sells en/Sf&tion® granted summary judgment district court distributors, who, in supply janitorial in favor of The district court also VD. end-user respective turn it to their sell summary judgment in granted favor G- stadiums, hotels, restau- (e.g., customers respect P with to VD’s counterclaim. etc.), rants, only leas- en/f/TStfon Dispensers appeals to such dis- G-P now the district court’s es who, turn, tributors, permitted are summary judgment ruling respect respective them to their end-user sublease above, four claims forth set and VD leases and subleases ex- customers. The cross-appeals summary district court’s en/ff&tíon pressly provide ruling with judgment single to its eniW&tíon Toweling can be used follow, For counterclaim. reasons we Dispensers and stickers on inside grant vacate district court’s of sum- eniWStíon reinforce *5 ® mary in favor judgment of VD with re- limitation. the spect contributory to G-P’s claims for en/fl8tfon every The face of Dis-© infringement trademark and unfair compe- registered four trademarks penser bears Act, tition under the Lanham unfair com- @ G-P—Gn/VJótíon owned petition under North Carolina common ,Georgia-Pacific ®, » 4^® law, and tortious interference with con- . and —or <2D® law, tract under North Carolina common Collectively, we refer to the first three of proceedings and remand for further con- Marks,” “the G-P these trademarks as opinion. sistent with this We affirm the the three trademarks at issue on which are appeal. grant summary court’s judg- district ment in favor of G-P with to VD’s 8, 2005, July
On after one G-P’s counterclaim under the UDTPA. (VD), NC Corporation competitors, von Drehle marketing selling and to distribu started paper toweling specifically an
tors inferior I. manufactured VD use analyzing In novo de whether dis- en/W&tion Dispensers, in G-P © granting summary trict court erred in civil brought present against action VD, in judgment favor we view the facts VD, alleging following four causes of (1) appeal: action at issue on unfair com and draw all reasonable inferences there- 43(a) § petition in violation of of the Lan G-P, light from the most favorable to as Act, 1125(a); § ham 15 U.S.C. contrib nonmoving party. v. Donald Garofolo utory violation Assocs., Inc., B. Heslep Act, §of 32 of the Lanham 15 U.S.C. (4th Cir.2005). G-P’s claims are based 1114(1); unfair in viola upon following facts. law; tion of common and North Carolina many years, designed, For G-P has (4) tortious interference with contractual manufactured, and sold what those relationships in violation of North Carolina paper industry call “uni- dispenser towel common law.1 counterclaimed for vio companies, in- dispensers.” lation of the North Carolina Unfair and versal Other initially named Carolina Janitorial Inc. has since been dismissed from the case G-P also Supply, Inc. a defendant. & Maintenance party appeal. and is not on Supply, Carolina Janitorial & Maintenance YD, manufacture, stating sticker-notice inside of it eluding design, also such dispenser property “is the of Georgia-Pa dispensers. sell universal Universal dis- “may only dispense cific” and be used to accept to pensers accept and are intended trademark-bearing products identified manufactur- paper toweling multiple (J.A. 36). on Although its exterior.” G-P However, ers. with the introduction enMStion uses mark enMStion sought ® Dispensers, G-P ® enMStion Dispensers,2 it uses dispenser to introduce a non-universal tied Georgia-Pacific .marks @ i.e., directly to the G-P one that Marks — many of its other with, and only operate intended would G-P ^4»® products, Brawny paper such as towels in which the restroom visitor would one Quilted paper. Northern ® toilet No enMStion expect dispense, to Towel- tably, dispute does way, sought create a ing. enMStion ©Dispensers have been branded-dispenser situation akin to a extremely product an successful for G-P branded Coca-Cola ® soda fountain dis- many and that commercial facilities penser, dispense which the user expects United States have install only genuine products. Coca-Cola ® enMStion Dispensers. ed © Turning specifics G-P leases enMStion® enMStion Dispensers, they dis- pre-printed to distributors via a lease pense a pre-measured amount of agreement furnished G-P. Such lease toweling upon activation of an electronic agreement grants permission a distributor sensor, having motion without the user enMStion to sublease Dispensers “to © manner, any touch the thus *6 the end-user customers that ap- shall be providing hygienic experience a superior to (J.A. 1086). proved by G-P....” A typi- paper dispenser that of a manual towel example cal of supply this chain is when requiring otherwise the user touch enMStion Dispensers G-P leases ® dispenser. At the time of their introduc- distributor, a in turn who subleases them 2002, enMStion tion in October Dis-® operator to a hotel use the hotel’s electronic, pensers only were the hands- public Notably, although restrooms. G-P free, paper towel dispensers available argues party that it is a to the subleases marketplace. between distributors and the end-user cus- G-P high- invented (ie., sublessees), tomers the record end enMStion Dispenser with the support finding. does not such a ® intent that it operate would non Also to reinforce its desire to create a enMStion standard, ten-inch Towel ® dispenser branded situation akin to the ing, toweling which a has soft-fabric like ® fountain dispenser, Coca-Cola soda by using through-air-dried feel created a agreements lease between G-P and its dis- (TAD) process. Although packaging provided that tributors enMStion® enMStion Toweling bears the G ® Dispensers property would remain the enMStion marks, P Toweling itself ® “only G-P and G-P branded towels no identifying bears source marks. To enMStion ... be in” shall used Dis-® reinforce G-P’s desire to create a branded pensers of other unauthorized “[u]se —-the dispenser akin situation to the Coca-Cola product(s) strictly .prohibited.” is Id. ® soda dispenser, Moreover, fountain ev agreements provided, the lease enMStion ery Dispenser part: bears a relevant enMStion les.enMSt/On 2. ©Dispensers, soap dispenser. In addition to ©foam also manufactures a touch- By knew about and its sales Dispensers by Others Use of inspected en/VI&tion had personnel sublease the Dis- Distributor shall 2.1 Then, July Dispensers. spe- customers that to the end-user pensers cifically developed a ten-inch forth by G-P and set approved be shall (VD’s Dispensers en/VI&tion use (“Cus- “A” attached hereto in Exhibit Toweling). Notably, VD’s 810-B 810-B tomers”). Dispensers All subleases quality a lower solely upon the shall be to Customers eri/Vf&tion a Toweling, than Agreement and conditions of terms slick, scratchy July In a 2004 e- feel. Registration Form the Sublease and of mail, Raymond von Drehle VD Chairman Form”) (“Sub hereto which is attached all industrial told five members as Addendum receiving team that each would “be sales fully Form must be exe- 2.2 The Sub two rolls of the ten-inch hardwound which for each Customer cuted Distributor dispenser” fit will the GP enMotion be in which are to location “[g]ive them to us some feedback directed Form Execution of the Sub installed. (J.A. 1706) your customers ASAP.” ownership of the Dis- (internal omitted). not transfer does quotation marks his or Cus- case, G-P to Distributor pensers deposition Ray- in this Chairman tomer. von Drehle testified that inherent in mond “go his direction was that his sales staff Id. Toweling] sample show to dis- [the under the corporation organized VD is tributors, customers, have it them use Carolina, principal with its laws of North ...in in the enMotion order to in Hickory, North Car- place of business (J.A. 1721). their feedback. He also get G-P, VD manufactures olina. Like feedback, that if he did receive he testified away-from-home for the products towel was, it but that could not remember what not relevant exception one market. With positive, he assumed that it was because products VD sells its appeal, to this negative have remembered feed- he would *7 throughout the continental United States back. who, in janitorial supply distributors to 2004, newly In with its devel August
turn, end-user customers such as sell to on-line, VD em oped Toweling 810-B Notably, although and restaurants. hotels through campaign, on a sales its barked actually products sells its to distribu- VD Toweling personnel, put to its 810-B sales tors, to directly products markets its it to in the hands of distributors resale personnel customers via its sales end-user customers to “stuff’ end-user conjunction in by themselves or either en/VI&tion Dispensers.3 in The rec ® making of distributors personnel the sales First, point. no doubt on this ord leaves on customers to in-person sales calls such developed began at time sell purchase products them to encourage Toweling, en/VI&tion ® ing its 810-B Raymond Brothers from the distributors. only paper were the towel dis Dispensers Drehle, von who von Drehle and Steven pensers accept on the market which could VD, Second, in run fifty-percent toweling. stake VD’s each hold a ten-inch wide Raymond serving Raymond as von Drehle and VD company, Chairman Virginia and North Manager Sales president. and Steven as its VD’s chairman Toweling “stuffing.” loading as B VD and G-P describe 3. Both en/OI&tion Dispensers with VD's 810- ® Thomas, Dispensers well some of Toweling, Carolina Duke as as with VD’s 810-B staff, other sales on occasion even VD’s post-purchase created confusion as to the Toweling to “the referred VD’s 810-B toweling among source of such restroom (J.A. 1712). 1338, 1965, enMotion towel.” visitors, creating potential thus Third, VD’s President Steven von Drehle harm reputation goodwill. its On this deposition August testified his on issue, the record contains the results of 2006, that [tow- VD “intends for the 810-B empirical three studies from which a rea- dispens- to be stuffed in the enMotion el] jury sonable could stuffing find that VD’s (J.A. ers,” 1399), “every and that roll of enM&tion® 810-B Dis- the 810-B towel that [has been] sold to pensers significant created a amount of date, ... in an going [is] be used enMo- consumer confusion as to the source of the (J.A. 1368). Fourth, tion dispenser,” VD’s paper toweling being dispensed. Raymond Chairman von Drehle testified in study, In survey the first a national 8, 2006, deposition August his that VD’s witness, conducted in 2005 expert G-P’s force, orally, “sales at least promoted has Dr. Eli Seggev,4 study partici 70% of the the use of the 810-B towel for use GP’s pants expected there to an be association ...,” dispenser enMotion and that VD de- degrees of various between the source signed and intended for the 810-B Towel- enM&tion and the ® enM&tion ing to be stuffed in G-P’s source of the toweling being dispensed, (J.A. 1732). Dispensers. began Since VD expected and 45% such toweling be the selling its Toweling August same brand as the In dispenser. the sec steadily increased, sales of such be- study, ond Seg conducted 2006 Dr. quality cause its lower allowed VD to sell it gev, expected 74% consumers there to than enM&tion for a price lower an degrees be association of various be Toweling. personnel, Some of VD’s sales tween the source of Dis enM&tion® however, did negative receive comments pensers and the source of the from some distributors about the lower being dispensed, expected and 47% quality of VD’s 810-B Toweling as com- toweling in enM&tion enM&tion Dispensers to pared Toweling. be the same dispenser. brand as the In early January learning after study, September third conducted in stuffing campaign, VD’s G-P sent aVD expert witness Kenneth Hol letter, informing cease and desist it that its lander, 47.9% believed that towel conduct constituted trademark infringe- paper toweling and the being ment and tortious interference with con- *8 dispensed originate would from the same tractual response relations. In a letter source. 7, 2005, dated March VD defended its con- regarding duct its 810-B Toweling legit- as appeals G-P the district grant court’s of competition imate and denied that such summary judgment in favor of VD with conduct infringed Georgia-Paeific’s intel- respect contributory to its trademark in- property rights lectual or interfered with fringement competition and unfair claims rights. its contractual Act, under the Lanham its unfair competi- tion claim under North Carolina common argued below and ar- continues to law, VD, gue appeal on and its inducing and tortious interference with con- enM&tion facilitating the stuffing of tractual relationships claim under North ty- Seggev 4. Marketing Dr. has a Ph.D. in and Quantitative Syracuse Methods from Universi-
449
Toweling
its
cross-appeals
law.
stuff
810-B
common
Carolina
enfíflcñtíon summary judg-
grant
Dispensers,
court’s
of
G-P’s
to its
un-
in favor of G-P with
under the Lanham Act and its
ment
claims
alleging violation of the NC
competition claim
North Car-
counterclaim
fair
under
analyzed
UDTPA.
under
olina common law must be
judicially created
of contribu-
the
doctrine
II.
tory
infringement,
trademark
derived from
in
contributory trademark
G-P’s
of
the common law
torts. See Inwood
claims
competition
and unfair
fringement
Inc.,
844,
Labs.,
Labs.,
Inc. v. Ives
456 U.S.
Act
com
the Lanham
and its unfair
under
853-54,
2182,
102 S.Ct.
Id.
S.Ct. 2182.
pass
generic
off
eyclandelate as
PASMOL.
trial,
After a bench
the district court
generic
found the
manufacturers were not
852-53,
(internal
Id. at
understanding of requirements case, subsequent the Court charac- the New York Drug Law, Substitution holding terized ultimate in Inwood as Ultimately, Supreme Court reversed the intentionally facturers had not induced the Second Circuit on the basis that pharmacists generic drugs to mislabel nor *10 findings court's generic that the factual manu- had supply continued to eyclandelate phar- to
451 Toweling expensive or a less alternative “that a manufacturer distrib- as observing enM&tion And, Toweling. leaving to the owner of a be held liable to utor could intentions, Presi- no doubt as to VD’s VD a intentionally if it induced trademark dent von Drehle testified his Steven to the chain of distribution down merchant and a half had deposition, year a after G-P that of the trade- product off its pass VD, that sent its cease and desist letter to supply or if continued to a mark owner’s it the 810-B to be VD “intends for [towel] readily passed off be which could product (J.A. dispensers,” in the enMotion stuffed it merchant whom knew particular to a 1399), “every roll the and that of 810-B mislabeling with the product the was towel that sold ... been] [is] to date [has Sony Corp. owner’s mark.” trademark of to in an going dispens- be used enMotion Studios, Inc., City 464 Am. v. Universal (J.A. 1368). er.” 417, 19, 774, n. 104 S.Ct. 78 439 U.S. (1984). 574 L.Ed.2d Because VD cannot be liable for contributory infringement trademark with analytical journey step The next in our in corresponding out direct trademark teachings the of Inwood to the apply tois Inwood, 853-54, fringement, 456 at U.S. Assuming present facts of the case. ar- 2182, stop analyt 102 S.Ct. the next on our stuffing that guendo to journey requires ical us decide whether enM&tion Dispensers with VD’s the record contains sufficient evidence for Toweling by end-user customers 810-B find, by jury preponder a to a reasonable infringement under constitutes evidence, stuffing ance of the that Act, contains suffi- the Lanham the record Dispensers enMotion ® with VD’s jury evidence for a reasonable to cient Toweling by 810-B customers end-user find, in- contributory under test for infringement constitutes trademark under Inwood, that fringement announced VD the Lanham Act. We would decide this contributory trademark in- liable for affirmative, question in the if this record fringement. specifically, assuming More contains sufficient evidence from which a arguendo stuffing that find, jury could prepon reasonable a enM&tion® evidence, (1) derance that: trademark in- constitutes (2) trademarks; more possesses one or contains fringement, record sufficient end-user used or more of customers one jury to evidence for reasonable find (4) trademarks; commerce; such infringement directly induced such sale, sale, offering connection supply product distribu- continued advertising goods, distribution or knowing tors such was likely in a manner cause confusion taking place. candidly admits that it 1114(1), §§ public. relevant U.S.C. Toweling for developed spe- its 810-B 1125(a); PETA, 364; 263 F.3d at Perini purpose cific of end-user customers stuff- Const., Corp. Perini 915 F.2d which ing Dispensers, dis- enM&tion (4th Cir.1990); AMP, n. Foy, Inc. v. on the market pensers were ones (4th Cir.1976) (“North time to ten-inch wide towel- accept at the Carolina of unfair is not law Moreover, supports a ing. the record find- dissimilar the federal law of trademark ing personnel Yellowbrix, that VD’s sales made in- infringement....”); Inc. v. Solutions, Inc., calls person F.Supp.2d sales on distributors and end- Yellowbrick (“The (E.D.N.C.2001) 575, 583 Car customers to market VD’s 810-B North user generic clearly Id. at 102 S.Ct. macists whom the manufacturers erroneous. drugs mislabeling generic were knew were *11 second, third, competition common law of unfair in olina The and fourth elements context of the trademarks and tradenames met on the present By are also record. similar of trademark is to the federal law stuffing Dispensers with en/M&tion® infringement.”). Toweling, VD’s 810-B end-user customers or more of used one the G-P in Marks
The first element of test is met on in connection commerce with the distribu- present the Lanham the record: Under ie., goods, tion of the VD’s word, distribution of Act, any name, a trademark includes Toweling. This no dif- symbol, or individual to situation is by device used an a identify distinguish goods placing and his “from ferent from hotel a Coca-Cola those or others and lobby manufactured sold brand fountain in its goods, to indicate the even if source of the complimentary consumption pa- the itsof source is unknown.” U.S.C. trons, surreptitiously while it with stocking § 1127. recently As we explained: that, generic question cola. There is no
A trademark puts purchasing public the case, such a the hotel is using the Coca- on notice that all goods bearing the Cola ® trademark to service its customers trademark: originated from the commerce) (ie., distributing generic source; equal same quali- are cola in a Coca-Cola ® brand fountain dis- Thus, ty. a only protects trademark not penser. goodwill the represented particular element, brings This us to the fifth marks, but also allows consumers readi- centerpiece which was the parties’ of the ly recognize products and their legal battling below. The fifth element source, preventing confusion consumer upon alleged infringer focuses whether the between products and between sources used plaintiffs the trademark in a manner products. likely cause confusion in the relevant Co., George & v. Imagination LLC Enter- (or public. who is Just the relevant public Ltd., (4th tainment 392-93 put differently) relevant audience to it (internal Cir.2009) quotation marks and ci- hotly the most appeal. debated issue on omitted). tations reg- Given that G-P has Below, the district court held that was the istered G-P marks United summary judgment entitled to favor Office, Patent States and Trademark from G-P’s contributory trade- record, summary judgment reason- mark and unfair jury find, by able could a preponderance of claims under the Lanham un- Act and its evidence, marks dis- fair competition claim under North Car- played en/M&tion Dispensers olina common law on the that no basis protectable are valid and trademarks. See existed that marketing evidence Brittingham Jenkins, F.2d selling of its 810-B Toweling stuffing (4th Cir.1990) (under 1057(b), § 15 U.S.C. Dispensers caused con- en/M&tion® “a certificate registration of a mark fusion for distributors or the end-user prima serves as evidence that facie In so holding, customers. registrant mark, owns registered has rejected court G-P’s legal theory that rest- registered properly it under the Lanham room who Act, visitors consume and is entitled to use in its exclusive en/M&tion hotels, commerce”; thus, under U.S.C. 1115(a), stadiums, restaurants, etc., “registration presump- creates a constitute registrant’s tion audience for ownership purposes of the relevant of the mark, subject any applicable legal required analysis. or likelihood-of-confusion defects”). equitable defenses or On appeal, defends the district court’s
453 Cir.1976) (in limiting its likelihood-of-con- that it is at while contends reasoning, plaintiffs Fourth to whether or not inquiry Circuit fusion with well-established odds post-purchase that recognizing likely by to be confused precedent customers were under the Lan- AMP, can be actionable confusion the word defendant’s use of district ham Act. narrow a test court used too for determin- confusion; ing inquiry likelihood of should district agree with G-P
We additionally focused on of have likelihood of limiting in its likelihood court erred public would danger that such use confuse pur- who inquiry to distributors confusion reconsideration); general; in remanded respec- and their chased (Third) Competi- transitory Restatement While tive end-user customers. of Unfair (1995) (“To satisfy § the likeli- 20 actionable confusion will not tion cmt. b be public element, Fourth hood of confusion Circuit ... threaten the commer- confusion must makes for the factfinder to mark, case law room the owner cial interests of of the non-purchas- among confusion consider but it is not limited to confusion of in- in the likelihood-of-confusion ing public persons doing directly with the business that public if it can confu- quiry “be shown actor.”); McCarthy, 4 Thomas J. McCar- plaintiffs adversely affect sion will thy Competition on Trademarks & Unfair among its ability reputation to control his (4th 2009) (“In 1962, Congress 23:7 ed. investors, laborers, lenders, or other group in the Lanham Act language struck out plaintiff interacts.” Perini with whom confusion, required which mistake or de- F.2d Corp., 915 at 128. ception as to ‘purchasers of the source of Fashions, example, in Inc. v. origin goods For Polo such services.’ Sever- (4th Inc., Cir.1987), 145 Craftex, 816 F.2d expansion al courts noted this of the have likeli the trademark owner demonstrated sup- infringement test of and held that it confusion, including post-sale con hood of infringement ports finding of when even fusion, products between its trademarked deceived.”) (footnote non-purchasers are manufactured and counterfeit shirts omitted). Lyons Partnership, L.P. v. Cf. defendant, anyone seeing the because Costumes, Inc., Morris 243 F.3d 802- bearing plaintiffs shut trade counterfeit (4th Cir.2001) (relevant in inquiry de by its logo being marked worn owner termining costume rented cos- whether not see label on the would the defendant’s company intrinsically was tume rental neck, but inside back would in design popular similar children’s tele- logo plaintiffs trademarked on the see (ie., Barney) vision character that was Thus, at 148. it front of shirt. Id. support protected by copyright, would likely identify would was the observer finding of based on copyright plaintiff, plain and the the shirt similarity, was cos- substantial whether damage if reputation tiffs would suffer copyrighted expressed tume and character appeared poor quality. the shirt to be substantially ideas similar manner Mut. Ins. See also Beacon Co. Id. young perspective of intended audience of (1st Group, Ins. OneBeacon children, perspective rather than from Cir.2004) (citing support hold Perini adults, though pur- costume even was inquiry confusion ing that likelihood of adults). chased case not limited actual or court Having decided district purchasers, also oth potential but includes limiting its of confusion erred likelihood threatens trademark ers whose confusion mark); purchased who 810- inquiry distributors owner’s commercial interest (4th respective B their Toweling and end-user at AMP F.2d (6) customers, holders; intent; we are confronted with two the defendant’s First, confusion; actual sequential questions. quality we of the must ask *13 (9) defendant’s product; sophisti- whether the proffered G-P has sufficient evi- consuming cation public.” George of the & jury dence for a reasonable to find likeli- Co., LLC, at 575 F.3d the Because among hood of restroom confusion visitors nature of the trademark paper toweling as to the source of the claim stuffing ertffl&tion at issue is a branded dis- being dispensed from Dis- ® penser with generic product, some of pensers dispensers when such are stuffed these entirely factors are either irrelevant Toweling. with If 810-B the answer to or slightly relevant. For example, question yes, is we must then ask (i.e., the similarity of the two marks com- whether G-P proffered has sufficient evi- marks) irrelevant, peting to consumers is jury dence for a reasonable to find that the Toweling because VD’s no 810-B bore among likelihood of confusion such rest- say, trademarks. it to pur- Suffice adversely room visitors will affect G-P’s poses of VD’s surviving motion for sum- laborers, reputation lenders, among its in- mary judgment, we conclude that has vestors, or group other with whom G-P forecast evidence sufficient for a reason- Co., interacts. See Beacon Mut. Ins. 376 jury able to find a likelihood of confusion (“[t] F.3d at 15 fact that injury he the tois among restroom visitors as to the source a company’s or reputation goodwill, rather paper toweling being the dispensed sales, than’ directly to its does not render Dispensers when en/W&tion ® actionable.”); the any confusion less Bal- such dispensers are stuffed with 810-B Indus., ance Dynamics Corp. v. Schmitt Toweling. The record contains sufficient (6th Cir.2000) (dam- 204 F.3d evidence for jury a reasonable to find that ages may be awarded actual confusion G-P’s strong, they marks are appear on goodwill causes harm to under Lan- the front of enffltSiion ® Dispensers, ham Act even if no lost sales have been Toweling VD’s 810-B is inferior shown); Int’l Club Chicago, Kennel Inc. Toweling, but nonethe- enfflotíon ® Star, Inc., v. Mighty less intentionally was oper- made to fit and (7th Cir.1988) (“the owner of a mark is ate in Dispensers. More- enMot/on damaged by a later use of a similar mark over, the record contains the results of placets] which reputation the owner’s be- three empirical studies from which a rea- yond control, though its no loss in busi- jury sonable could find that stuffing VD’s ness is (emphasis shown” and alteration in enlülotíon 810-B Toweling in Dis- (internal original) quotation marks omit- pensers significant creates a amount of ted)). actual consumer confusion as to the source the answering question, first we paper toweling the being dispensed. factors, look at nine some of may which be See, supra, example, Part I. For in the irrelevant under the circumstances of the study, first survey a national conducted in “(1) present strength case: the or distinc by witness, expert G-P’s 70% of the tiveness of plaintiffs mark actually as study participants expected there to an be (2) used the marketplace; the similarity degrees association of various between enfí/I&tíon (3) consumers; the two marks to source of Dispensers and similarity of or goods services that the the source of toweling being dispensed, identify; marks the similarity of the with expecting 45% such toweling to be the markholders; facilities used dispenser. same brand as the The other similarity advertising used the mark- two similarly probative, studies were Second, although proof that VD’s 810-B September study conducted Toweling is inferior to enffl&tion® Hollander witness Kenneth expert surveyed Toweling unnecessary be- order to estab- those showing that 47.9% of among that confusion restroom visitors paper towel lish lieved that who use enfíff&tíon being dispensed Toweling would stuffed Thus, adversely the same source. will originate from with VD’s laborers, question previ- we sequential reputation among first affect to the G-P’s forth, investors, suffi- proffered lenders, G-P has ously groups set or other *14 to find jury interacts, a reasonable cient evidence for that whom G-P the record shows among restroom of confusion likelihood from at actually complaints received of the tow- visitors as to the source the inferi- the distributor level about least dispensed being eling com- quality or of its 810-B Dispensers, when to eni&fiSüon Third, pared Toweling. GMVfStion® ® are stuffed with 810-B dispensers such process that the TAD the record shows Toweling. enf&ftStíon in manufacturing used Toweling gives superior it a fabric-like feel sequen respect to the second With fourth, Toweling. And to VD’s 810-B prof whether G-P has question' i.e., tial — testimony, deposition his VD Chairman for a reasonable fered sufficient evidence that Raymond von Drehle conceded that the likelihood of confusion jury to find enM&t/on if were stuffed visitors will adverse among such restroom poor quality paper with a towel or resulted labor reputation among its ly affect G-P’s a poor operation dispenser, of such such investors, ers, lenders, groups or other likely affect how an end- situation would in the interacts —-we hold with whom G-P user, inference, reasonable a rest- First, ability to affirmative. without visitor, room would evaluate G-P’s hands- quality of the used control the product. free G-P is sub Dispensers, in enfflStion proffered Because G-P has sufficient ject injury reputation to the risk of to the evidence, light viewed in the most favor Zino of the G-P Marks. See Davidoff SA G-P, find, (2d jury for a reasonable to able to Corp., 571 F.3d Cir. v. CVS evidence, 2009) (“Where preponderance a of alleged infringer has respect of to each element favor G-P trademark holder’s interfered with the contributory infringe trademark of G-P’s quality, the trademark ability to control competition unfair claims under ment and defeated because of holder’s claim is not Lanham Act and its unfair goods that the sold were failure to show law, North common claim under Carolina the interfer defective. That is because grant court’s we vacate the district legiti trademark holder’s ence with the summary judgment of VD with quality unreasonably favor steps mate to control respect to those claims and remand for subjects the trademark holder to the risk mark.”); reputation proceedings of its further consistent with this injury to the Petroleum, opinion.6 Shell Oil Co. v. Commercial (4th Cir.1991) III. (“[T]he goods is irrel quality actual challenges next the district
evant; that a G-P quality it is the control of maintain.”). summary in fa grant judgment court’s holder is entitled to minimum, do, that, given at a highly This we cannot 6. We note that G-P makes a unusual request we court inappropriate that order summary judgment because judgment in its favor on these claims enter genuine of material fact. there are issues remanding proceedings. for further without respect particular to its present vor of VD with North Car Of relevance to the appeal, Supreme olina common law claim for tortious inter Court of North Car- premises ference with contract.7 G-P olina has elaborated on when a defendant’s justified: with interference is upon alleged claim VD’s interference enlPTGtion leases and subleases. frequent expressions ju- There are summary To overcome motion for opinions dicial to the effect that malice is claim, judgment to this requisite liability in an action in- proffer had to evidence sufficient for a ducing a breach of contract. It is not find, jury preponder reasonable a however, necessary, allege prove (1) evidence, ance of a G-P had personal actual malice in the sense of party gave valid contract with third hatred, will, spite ill or in order to make it contractual rights; VD knew of the out a recovery compensa- case contract; intentionally induced the tory damages against the outsider for contract; party third perform not to *15 tortiously inducing the breach of the justification; VD acted without and third person’s plaintiff. contract with the thereby G-P was damaged. Embree The term in “malice” is used this con- Group, Rafcor, Const. Inc. v. 330 sense, in legal nection and denotes (1992). 487, 916, N.C. 411 S.E.2d 924 Un doing the intentional of the harmful act law, der North Carolina whether a defen legal justification.... without A mali- justified dant’s depends upon conduct is worse, cious motive makes a bad act but surrounding circumstances the inter which, it cannot wrong make that in its ference, conduct, the defendant’s motive or essence, own is lawful. advanced, sought interests to be Abeles, 667, Childress v. 240 N.C. 84 social in protecting interest the freedom of 176, (1954) (internal S.E.2d 182 quotation defendant, action of the and the contractu omitted). marks al party. interests of the other Id. “Gen erally speaking, interference with contract granted The district court sum justified if it legitimate mary is motivated a in judgment favor of with re purpose, business plaintiff as when the spect to G-P’s tortious interference with defendant, outsider, an competi are contract claim on the basis that VD’s in tors.” Id. justified “Numerous authorities have legitimate terference was as com recognized petition. business We vacate the district court’s justifiable constitutes judgment interference an with respect to this claim and other’s business relations and is not action remand for proceedings further with limit long able so it First, is carried on in further ing instructions. because the record ance of one’s own interests and support finding means cannot a that G-P had that are Peoples lawful.” Sec. Ins. contractual relationships with the end-user Life Hooks, 647, v. customers,8 Co. 322 N.C. 367 S.E.2d this claim is limited to whether (1988). tortiously interfered G-P’s eon claim, briefly challeng- 7. G-P also any argument mentions that it is ent on the which has ing grant summary judg- the district court’s different elements than a tortious interference Mgt. Corp. ment with to its contract claim. S.N.R. North Carolina com- 141, LLC, N.C.App. law Danube Partners mon claim for tortious interference with (2008). (a.k.a. 659 S.E.2d prospective contractual relations tor- prospective tious interference with advan- tage). We need not address claim on the party 8. G-P was to the subleases be- s, however, merit pres- because G-P failed to tween distributors and end-users. claim, with distributors.9 favor of G-P on this relationships tractual Second, claim court reasoned: only prevail can on this prevails upon any if it first one of at trial speaking Without to whether such leases claims. Such unlawful its other remanded enforceable, are finds no Court facts part of VD would vitiate conduct on attempt that demonstrate GP’s justifiable interference with VD’s claim enforce such leases constituted an unfair enfífldtion Dispenser leases be deceptive practice. or The facts demon- by legitimate and distributors tween G-P that GP drafted and entered into strate (Second) Restatement competition. See agreements lease and sublease with dis- (in evaluating cmt. c. nature of Torts faith, good tributors end-users tor purposes defendant’s conduct for addition, openly, transparently. In claim, interference with contract one tious von Drehle has failed to demonstrate an is whether defendant’s con consideration injury stemming actual from the alleged unlawful; specifically duct is “Conduct deceptive practice. unfair or trade The statutory or con provisions violation of facts that von demonstrate Drehle has policy may for trary public to established competed favorably with GP the sale an improp that reason make interference towels for the enMotion ® dis- er.”). sum, goes this claim back under penser, despite attempt GP’s to enforce the limitations we have set forth. agreements. the lease and sublease GP summary judgment
is entitled to in its *16 IV. favor on von Drehle’s Unfair and Decep- tive Trade Practices Act claim. challenges the cross-appeal, On (J.A. 455). summary judg grant district court’s of respect in with to its ment favor of G-P than the Other district court’s statement According claim under the NC UDTPA.10 that agreements G-P entered into sublease VD, the NC to G-P violated UDTPA end-users, right with the district court is provisions to enforce attempting money respect analysis on the with to its Dispenser leases and the enffl8tion appeal, pointed of this claim. On VD has requiring subleases record, nothing any to in the nor cited case enlfflcftion be used law,' establishing the district court Dispensers. enfül&tíon chal VD’s granting summary judgment erred in lenge is without merit. respect with claim for favor G-P Accordingly, violation of the NC UDTPA. claim prevail upon In order to respect we affirm the district court with UDTPA, prove under the VD must NC this claim. following, by preponderance of the evi (1) deceptive an unfair or act or dence: V. competi an unfair practice or method (2) commerce, sum, G-P, affecting in or In we vacate the district court’s tion (3) injury grant summary judgment caused actual favor of VD proximately which (1) NC, respect v. Fleetwood Homes to G-P’s claims con- VD. Walker 393, 63, tributory infringement and un- 362 N.C. S.E.2d Act, (2007). competition in fair the Lanham granting summary judgment In under claim, analyzing party 10. In we view the evi- 9. was a to the leases between it light favorable to VD as the dence in the most and distributors. nonmoving party. issue, cross-appeal unfair under North Carolina Drehle did not on this (if law, common play tortious interference and the matter will have to out it is all) and, play day contract under North Carolina com- out at on another law, proceed- mon and remand for further on a perhaps, stage. different ings opinion. consistent with this With
respect cross-appeal, to VD’s we affirm the grant summary judg-
district court’s
ment in favor of G-P with to VD’s
claim alleging G-P violated the NC UDT-
PA.
VACATED AND REMANDED IN PART AND AFFIRMED IN PART. SMALLBIZPROS, INC., doing business Padgett Services, Business WILSON, Judge, concurring District Plaintiff-Appellee, specially: I concur in the decision of the court but separately
write to note one matter. MacDONALD, Frank Defendant- court, von Drehle counter- Appellant. against Georgia-Pacific claimed for viola- Act, § tions of 1 of the Sherman No. 09-50879. U.S.C. Act, § § Clayton 3 of the 15 U.S.C. United Appeals, States Court of allegedly carried out through illegal Fifth Circuit.
tying arrangements away “the home market in the United States Sept. (or ‘touchless’) ‘hands free’ dispensers of *17 (the paper hard wound ‘tying prod- towels
uct’), and the market for pa- hard wound ” (the (J.A. per towels product’).... ‘tied 228.)
at The granted district court Geor-
gia-Pacifie’s summary motion for judg-
ment on Clayton Act claim because
“end users purchasing paper [were] towels the enMotion from von
Drehle,” consequently there was no
“evidence of actual coercion the seller buyer
that forced accept the tied (J.A. 452-453.)
product.” at granted It
summary judgment on the Sherman Act
claim because “von competed Drehle has
favorably with GP in the sale of
towels dispenser” for the enMotion (J.A. 453.) injury.
could show no at Of
course, Georgia-Pacific prevail should
its Lanham Act or tortious interference remand,
claims on the district court’s rea-
soning vitality. would retain no But von