Andy Gold on Optimum Technologies, Inc. v. Henkel Consumer Adhesives, Inc.
Imagine that a product distributor surreptitiously manufactures a product that directly competes with a product it has been distributing. Imagine that the "new" product looks like the "old" product, bears the same UPC Code as the "old" product, and is placed by retailers on shelves bearing the tags of the "old" product. Imagine too that the website of the distributor contains descriptions of the "old" product next to pictures of the "new" product, and that the website directs customers looking for the "old" product to stores that only sell the "new" product. This was the fact pattern in Optimum Technologies, Inc. v. Henkel Consumer Adhesives, Inc., 496 F.3d 1231 (11th Cir. 2007), in which the distributor escaped liability. In examining the case, distributor liability, contributory trademark infringement, and damage experts, Andrew Gold writes:
Optimum sued HCA for trademark infringement under 15 U.S.C. § 1114(1); unfair competition and trade dress infringement under § 43(a) of the Lanham Act; unfair trade practices under the Georgia Uniform Deceptive Trade Practices Act; breach of confidential relationship; breach of fiduciary duty; fraudulent concealment; fraud; and negligent misrepresentation.
On HCA’s Motion for Summary Judgment, the District Court differentiated between claims that arose out of sales of the respective products at retail stores, and claims that arose out of HCA’s website. With respect to retail stores, the [District] Court found that there was no evidence that the alleged infringements at the retail level were attributable to HCA. In short, the [District] Court found that any confusion arising out of the placement of products or the mislabeling of products at the retail level was caused by the retail stores, not by HCA.
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In affirming Summary Judgment with respect to the trademark infringement and unfair competition claims at the retail sales level, the Court of Appeals stated that “the pivotal question for us on appeal is whether these alleged unauthorized “uses” of the mark at the retail level should be attributable to defendant-appellee HCA, as the distributor of both the “Lok-Lift” and “Hold-It” products.” While acknowledging that HCA’s actions may have resulted in confusion in at least some retail stores, and while that confusion may have resulted in the unintentional co-mingling of the respective products on some store shelves, the Court [of Appeals] found that the alleged misuses of the “Lok-Lift” mark were attributable to the retail stores, not to HCA.