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Duo-tint Bulb & Battery v. Moline Supply

OPINION FILED FEBRUARY 25, 1977.

DUO-TINT BULB & BATTERY CO., INC., PLAINTIFF-APPELLANT AND COUNTERDEFENDANT-APPELLEE,

v.

MOLINE SUPPLY COMPANY ET AL., DEFENDANTS-APPELLEES AND COUNTERPLAINTIFFS-APPELLANTS.



APPEAL from the Circuit Court of Rock Island County; the Hon. WILBUR S. JOHNSON, Judge, presiding.

MR. JUSTICE STOUDER DELIVERED THE OPINION OF THE COURT:

Plaintiff, Duo-Tint Bulb & Battery Co., Inc., brought an action in the circuit court of Rock Island County against the defendants, Moline Supply Co., and other individual defendants, jointly and severally, for damages, attorney's fees and an injunction. The action was based on an alleged violation of the Illinois Uniform Deceptive Trade Practices Act and the related common law (Ill. Rev. Stat. 1975, ch. 121 1/2, pars. 311-317). Moline Supply Company filed a counterclaim against plaintiff under the same Act alleging that Duo-Tint had engaged in unfair and deceptive trade practices by wilfully disparaging Moline Supply and making false representations to Moline Supply's customers. Following a bench trial, the trial court found in favor of the defendants on plaintiff's complaint and in favor of plaintiff on defendants' counterclaim. No findings of fact or an opinion were rendered by the trial court. Appeals were taken by the respective parties from the trial court's decisions denying liability under the complaint and the counterclaim.

Plaintiff is engaged in the business of providing retail merchants with flashlights and replacement flashlight bulbs. The individual flashlight bulbs are purchased in quantity by Duo-Tint from various manufacturers and then repackaged in a bulb dispenser box. The purpose of the bulb box is to provide the retail merchant with a complete assortment of flashlight bulbs, with the more popular bulbs being supplied in greater amounts while a representative sample of the less frequently used bulbs is also included. A reorder card is provided in each box and in the event the supply of a particular type of bulb becomes exhausted the merchant need only fill out the card and drop it in the mail. Upon receipt of the card, Duo-Tint ships a new full bulb dispenser box to the merchant who places the old unit in the mailing carton and mails the old box back to Duo-Tint. The bulbs remaining in the old bulb box are inventoried by Duo-Tint and an offsetting credit given to the customers for the bulbs remaining. A salesman also makes regular calls on the merchant, replenishing the depleted inventory by a procedure similar to that above. The merchant can also arrange to have Duo-Tint ship a new bulb box at regular intervals without the use of the reorder card, the old bulb box being returned to Duo-Tint with the appropriate credit. Upon receipt of a bulb dispenser box from Duo-Tint, the box is the sole property of the customer, with Duo-Tint retaining no interest in them. Included with each box was a bulb information chart, listing the contents of the box by manufacturer and the manufacturer's assigned bulb number.

To assist in selling these flashlight bulbs, Duo-Tint retained various sales representatives who were assigned exclusive territories and contacted prospective new accounts and serviced existing accounts. Prior to 1972, defendants Kirk, Lange and Kruzel were associated with Duo-Tint as sales representatives. None of these sales representatives were paid on a straight commission basis, no deductions for taxes or social security were made and they paid their own expenses. The status of defendants Kirk, Lange and Kruzel perhaps would be best described as that of independent contractors. It appears that the status of these men was an issue at trial, but it is no longer disputed that they were not employees of Duo-Tint.

In 1971 a dispute arose between the director of marketing for Duo-Tint, Gerald Thomas, and each of the defendant sales representatives over the sales of outside product lines by these representatives to Duo-Tint customers. Late in 1971 Thomas attempted to induce Kirk, Lange and Kruzel to sign a covenant not to compete, but the men refused to sign. When these defendants refused to stop carrying outside product lines or sign the covenant not to compete, they were terminated as sales representatives for Duo-Tint. No contention is made on this appeal that these men were not free to compete with plaintiff or were prevented by their prior association with plaintiff from contacting and soliciting plaintiff's customers.

Defendant, Faye Winter, d/b/a Moline Supply Company, was contacted by Lange over the prospect of forming a business to distribute miniature light bulbs. A division of Moline Supply Co., Serv-A-Lite, was subsequently formed to carry on this business and eventually, defendants, Lange, Kirk and Kruzel, became sales representatives for Moline Supply Co. and Serv-A-Lite. This new competing firm adopted a marketing system that was a duplicate of the system previously established by Duo-Tint. Plaintiff contends that the reorder card and bulb information chart used by Moline Supply are photostatic copies of plaintiff's, a contention that is not challenged by the defendants. As concerns this appeal, perhaps the single most important physical item was the bulb dispenser box. Each of the parties bulb box is nearly identical in size and shape, with the primary distinguishing characteristic being the difference in the color of the boxes. Moline Supply's box is red with yellow lettering whereas the Duo-Tint box is blue with gold lettering. The boxes are shaped into a simple rectangular solid with the bulbs being contained in a number of drawers which are accessible from the front. While other distinguishing characteristics do exist, it is unnecessary to discuss them. For our purposes, we will treat the respective sizes and shapes of the boxes as being identical. It is undisputed that plaintiff did not attempt to patent the bulb dispenser box, nor did it obtain a copyright on either the bulb information chart or reorder card.

After affiliating with defendant Moline Supply Company, the individual defendants who had previously been associated with plaintiff began soliciting customers of plaintiff. In an effort to prevent any confusion on the part of the customers, various means were employed by all the defendants to inform each prospective customer who had been with Duo-Tint of the new affiliation between the former Duo-Tint sales representatives and Moline Supply Company. A large number of merchants were persuaded to switch purchasing their supplies of miniature light bulbs from Duo-Tint to Moline Supply.

Moline Supply's counterclaim rests on a series of incidents which occurred when the plaintiff's salesmen contacted Moline Supply customers who had been with Duo-Tint in an effort to have them revert to purchasing Duo-Tint products. The first incident occurred after a chain of retail outlets called Our Own Hardware had commenced doing business with Moline Supply. Gerald Thomas, an employee of Duo-Tint, contacted the buyer for the Our Own chain of stores and called the defendant Lange a son-of-a-bitch and said that Moline Supply was a crooked outfit which was stealing Duo-Tint's lines. The next incident occurred sometime in 1974 when a Duo-Tint representative contacted the owner of Shorter Hardware, Inc., in Lombard, Illinois. At this time, Moline Supply, through its sales representative defendant, Al Kruzel, was supplying Shorter Hardware with flashlight bulbs. When the Duo-Tint representative appeared, the owner of the store asked what had happened to Al Kruzel. The man replied that Kruzel had had a heart attack and died and that he (the representative) was replacing him. Kruzel had neither died nor had a heart attack. Thereafter, the Duo-Tint representative removed the red Moline Supply bulb dispenser and replaced it with a blue Duo-Tint dispenser. A similar occurrence happened during the same year when a bulb salesman from Duo-Tint appeared and advised the owner of the Westmore Hardware Store that Kruzel had retired, a fact that was false. Thereafter the salesman proceeded to remove the Moline Supply dispenser and leave a blue Duo-Tint dispenser in its place.

Plaintiff asserts that the foregoing facts clearly established liability under the broad spectrum of law that is called unfair competition. The statutory basis for plaintiff's complaint is founded on the provisions of the Illinois Uniform Deceptive Trade Practices Act, which provides in part:

"A person engages in deceptive trade practices when, in the course of his business, vocation or occupation, he:

(2) causes likelihood of confusion or of misunderstanding as to the source, sponsorship approval or certification of goods or services:

(3) causes likelihood of confusion or of misunderstanding as to affiliation, connection or association with or certification by another;

(12) engages in any other conduct which similarly creates a likelihood of confusion or of misunderstanding." (Ill. Rev. Stat. 1975, ch. 121 1/2, par. 312.)

Whether or not plaintiff has established a cause of action for unfair competition under the foregoing statutes and the related common law depends on whether plaintiff possesses a legally protectable interest in the bulb information chart, reorder card, bulb dispenser ...


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