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ALEXANDER BINZEL CORP. v. NU-TECSYS CORP.

January 23, 1992

ALEXANDER BINZEL CORPORATION, Plaintiff,
v.
NU-TECSYS CORPORATION and KARL-HEINZ BINZEL, Defendants.


HOLDERMAN


The opinion of the court was delivered by: JAMES F. HOLDERMAN

JAMES F. HOLDERMAN, District Judge:

 Plaintiff Alexander Binzel Corp. ("Binzel") brought this action against defendants Nu-Tecsys Corp. ("Nu-Tecsys") and Karl Heinz Binzel alleging trademark and trade dress infringement. The magistrate judge recommended that Binzel's motion for preliminary injunction be granted in part. After a careful review of the facts and for the reasons set forth herein, Binzel's motion for preliminary injunction is denied.

 FACTS

 Binzel is the exclusive authorized United States distributor and assembler of genuine Binzel welding equipment manufactured by Alexander Binzel GmbH of Cologne, Germany ("Binzel Germany"). Binzel Germany owns United States trademarks for the Binzel logo and the Binzel name. At least in Europe, Binzel Germany has sold unmarked products for a number of years. This practice continues to date. Karl-Heinz Binzel, a former officer and stockholder of Binzel, is president and owner of defendant Nu-Tecsys. Nu-Tecsys has commenced selling various Metallic Inert Gas ("MIG") welding equipment consisting of "virtually identical copies of both Binzel red-handled and blue-handled MIG welding guns." (Complaint, para. 19.) Some of the MIG welding equipment distributed by Nu-Tecsys and sold under the Nu-Tecsys name and in Nu-Tecsys packaging "bears the Binzel product trade dress, the Binzel trademark and/or the Binzel logo." *fn1" (Complaint, para. 20.)

 On Binzel's motion for preliminary injunction, the magistrate judge issued a report and recommendation of August 20, 1991 ("Report") recommending that defendants be enjoined from using trademarked Binzel parts as components of their products, but denying other aspects of the requested injunctive relief. The parties have objected to various aspects of the Report. Those objections are discussed below.

 DISCUSSION

 I. TRADE DRESS CLAIM

 Proof of trade dress infringement requires a showing that, inter alia, the plaintiff's trade dress is inherently distinctive or has acquired secondary meaning. Roulo v. Russ Berrie & Co., 886 F.2d 931, 935 (7th Cir. 1989). Binzel does not contend that its trade dress is inherently distinctive, but that it has acquired secondary meaning. Secondary meaning requires that the public associates the dress with a single source. Id. at 936. The magistrate judge found this "single source" requirement unsatisfied by Binzel's trade dress claim. See Report at 60 (The "fatal weakness in [Binzel's] trade dress claim is its failure to provide evidence that consumers associated the trade dress of its MIG guns with a single source, the Binzel companies.") This court agrees with the magistrate judge on this point.

 The factual findings by the court below reveal that the Nu-Tecsys handles were actually purchased from Binzel and Binzel affiliates. (Report at paras. 39-46; see Defendants' Ex. 27-30: invoices of sales to Nu-Tecsys from Binzel affiliates.) The magistrate judge determined that "defendants have deliberately copied the Binzel trade dress and used genuine Binzel components on Nu-Tecsys' MIG guns in order to create the impression that Nu-Tecsys' MIG guns are genuine Binzel products." (Report at para. 93.) The court shares defendants' confusion over the magistrate judge's conclusion that defendants intentionally copied the Binzel trade dress. The fact that the MIG handles, the subject of the trade dress, were purchased from Binzel and its affiliates vitiates Binzel's allegations of intentional copying. The sale of these handles by Binzel companies to Nu-Tecsys demonstrates a willingness and implies an authorization by Binzel to permit Nu-Tecsys to use Binzel handles in its business. Binzel cannot now charge that handles legitimately purchased by Nu-Tecsys cannot be used by Nu-Tecsys without fearing allegations of deliberate copying. Moreover, even if such sales have ceased since February 1990, Binzel has not established that its trade dress has developed secondary meaning in the short time since February 1990.

 Binzel also sells welding guns to a number of customers who then resell them under private labels. (Report at paras. 36, 61.) One of those arrangements involves a MIG gun having a black handle with the same configuration as the red handle used by Nu-Tecsys. An Illinois appellate court explained the harm that private labeling has on a plaintiff's attempt to establish secondary meaning:

 We are aware of [no authority] which has held that a secondary meaning can be established when a plaintiff permits those who distribute his product and use his package to apply their own proprietary labels to it and therefore lead the consumer to believe the product is not the plaintiff's but that of another in whose store the product is sold. Rather the rule is to the contrary. A plaintiff who would enjoin others from imitation under trademark and unfair competition laws should not himself be guilty of misrepresenting the source of his own article.

 Filter Dynamics Int'l, Inc. v. Astron Battery, Inc., 19 Ill. App. 3d 299, 311 N.E.2d 386, 395 (2d Dist. 1974). The ...


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