The opinion of the court was delivered by: ROBERT W. GETTLEMAN
This is a case about corn, clams, copying and confusion. The story begins decades ago, when plaintiff Dorr-Oliver Incorporated ("Dorr-Oliver")
invented a new way to process corn using centrifugal force. Prior to these inventions, the corn wet milling industry separated the germ, fiber, starch and gluten (protein) from corn kernels through a time-consuming settling process.
In the 1950s Dorr-Oliver introduced a number of new devices, including the hydrocyclone starch washer, into which the "slurry" (the mixture of water and processed corn) was passed to separate the starch from the gluten in the final stages of the separation process. This "starch washing" procedure employed great numbers of small hydrocyclones arranged inside a series of machines known as "clamshells," the machines at issue in this litigation. The slurry is injected into the machine at high pressure, and passes through as many as 480 stationary hydrocyclones known as "cyclonettes." The centrifugal force thus created inside the cyclonettes separates the starch and the gluten, the former directed to an "underflow" chamber and the latter to an "overflow" chamber. The separated starch and gluten are then sent to the next stage in the process.
Because Dorr-Oliver is claiming that defendants infringed an alleged trademark right to the name "clamshell" and to Dorr-Oliver's alleged trade dress in the outer design of the "clamshell," it is necessary to understand the appearance of the machine. For those readers who are not using computers to access this opinion, a picture of a clamshell taken from Defendants' Exhibit 339 and 340 (drawings of defendant Fluid-Quip, Inc.'s machine) is attached as Appendix A. For the rest of the readers, the court will attempt to describe the device.
The clamshell starch washer comes in two sizes, the smaller holding 280 cyclonettes and the larger holding 480. Since the larger unit was displayed by both Dorr-Oliver and defendants at the trial, this description will relate to that size. The machine is made of stainless steel, is generally round in shape, and is approximately forty inches in diameter. To the court's eye, it more closely resembles a bagel or an inflated inner tube than it does a clam in outward appearance. Each side is identical and bolted to a center core. If one pictures a forty inch metallic bagel sliced in half, each half attached to a cylindrical core of approximately the same diameter, with a spoked or ribbed hatch in the middle, all supported by two large feet, with various pipe fittings sticking out the sides, one could picture this machine.
The word "clamshell" was and is not registered by Dorr-Oliver or anyone else as a trademark for that particular type of starch washing machine. There is no evidence in the record indicating how the name "clamshell" came to be used to describe the Dorr-Oliver machine, although the court infers that, despite the court's observation that the machine looks more like a bagel than a clam, at least some people in the corn wet milling industry felt otherwise.
For a number of years, even after its patents had expired on its clamshell starch washer, Dorr-Oliver was the only manufacturer and supplier of this device. In the United States, there are only twelve customers with twenty-seven corn wet milling plants in this market. Each of these customers owns and uses Dorr-Oliver clamshell starch washers, more than 600 of which had been sold prior to 1991. The nature of these machines, which have no moving parts, is such that they appear to last almost forever; it is uncontested that all of the machines sold by Dorr-Oliver, even those manufactured as early as the 1950s, are still in use.
Defendant Fluid-Quip, Inc. ("Fluid-Quip"), an Ohio corporation with its principal place of business in Springfield, Ohio, was founded in 1987 and originally manufactured equipment for the paper and pulp industry. In 1991, Fluid-Quip entered the corn wet milling market, first with replacement parts and later with its own clamshell starch washer. Fluid-Quip's clamshell was admittedly copied from Dorr-Oliver's. Fluid-Quip's president and part owner, defendant Andrew Franko ("Franko"),
admits that he and employees of one of Fluid-Quip's manufacturer's representatives, defendant Pic Tek, Inc. ("Pic Tek"),
measured Dorr-Oliver clamshells and conformed Fluid-Quip's model to the exact dimensions of Dorr-Oliver's. Fluid-Quip says it did so as a response to requests by customers that Fluid-Quip build a clamshell that was fully interchangeable with Dorr-Oliver's. In fact, one of those customers, Cargill, delivered the smaller model of a Dorr-Oliver clamshell to Fluid-Quip to assist with the measurements.
According to Fluid-Quip, these customers believed that they were being overcharged by Dorr-Oliver, which exercised de facto monopoly power and charged up to $ 40,000 for a clamshell. (Fluid-Quip's price for the identical machine turned out to be between $ 20,000 and $ 25,000.) From a maintenance standpoint, while the outer housing of the clamshells will last indefinitely and rarely need repair, the inner cyclonettes need to be replaced every two to three years. The cyclonettes also periodically get plugged up or possibly broken and need to be replaced.
Because clamshells were generally arranged in series of twelve, when they are disassembled for maintenance and repair the customer's practice is to do so with a number of units at the same time. Parts from one unit (e.g., the large outer housing or the hatch cover) might well be reattached to another unit. Thus, the parts from a given unit must be interchangeable with the parts of every other.
The interior of Fluid-Quip's clamshell is identical to Dorr-Oliver's, consisting of two large round center plates with holes for each of the cyclonettes (480 or 280, depending on the model), spacing pins to separate the two center plates to create the center chamber into which the slurry is pumped, and the interior of the outer housing that creates the overflow and underflow chambers for the separated gluten and starch, respectively. (See Appendix B hereto, Def. Ex. 340.) Also, the center bolt that fastens the outer housing through the center hatches on each side of the machine is identical in both models, and the ribbed center hatch itself is identical.
Prior to developing Fluid-Quip's clamshell starch washer, its president, Mr. Franko, consulted his corporate attorney and an intellectual property lawyer. Franko had a few short conversations with his corporate attorney in which he asked the lawyer if it would be proper to manufacture a piece of equipment that would have interchangeable parts with the Dorr Oliver clamshells so that it could replace the existing units. The attorney, who had never seen the product, asked if the item was patented. Franko briefly explained what part a clamshell played in the corn refinery business. After being told that Franko did not think there was an active patent, the corporate attorney briefly opined that his client could probably produce its own clamshell so long as he was not creating confusion in the marketplace, and advised Mr. Franko to consult counsel more experienced with intellectual property issues.
Following these conversations, Franko met with his intellectual property attorney on a different matter. Franko briefly discussed producing a cyclone separator that was similar to the one made by Dorr-Oliver, how long the Dorr-Oliver product had been on the market, the patent numbers on the name plate and the terms DorrClone and cyclonettes. The lawyer did not have a picture of the product, and Franko described the unit as a cluster of cyclonettes within two mating castings that are coupled together, with the cyclonettes extended parallel to the axis of the unit.
In his deposition,
the lawyer explained his customary procedure for determining whether a client would be infringing a competitor's trade dress rights was to compare the products. Franko never asked his attorney to investigate any potential trade dress or trademark infringements. Based on the above description and Franko's indication that he intended to make a cyclone separator that looked "similar" to the Dorr-Oliver cyclone separator, that lawyer also told Franko he could lawfully produce a clamshell.
Dorr-Oliver introduced into evidence a number of photographs of actual starch washing sections of its customers' corn wet milling plants. A typical photo shows several parallel lines of clamshells (as many as 36 in total) connected by various piping. The overall appearance is of a uniform, orderly grouping of these machines. Some of the photos are of groupings that include both Dorr-Oliver's and Fluid-Quip's clamshells. Mr. Franko was able to identify Fluid-Quip's units in these photos by the footplate attached to the center core of those units, since Dorr-Oliver's have no footplates.
Fluid-Quip achieved almost instant success in selling its clamshell. Although it was unsuccessful in one of its first attempts, losing a bid in 1991 for five clamshells for Cargill to a Brazilian company called Codicil,
it soon succeeded in selling thirty-six clamshells to Archer Daniels Midland ("ADM"). To date, Fluid-Quip has sold eighty-one clamshells, all to customers who own and operate Dorr-Oliver clamshells as well.
Dorr-Oliver claims that, (a) by referring to the machine as a "clamshell" and (b) by "slavishly copying" Dorr-Oliver's outer design, Fluid-Quip and Franko violated the Lanham Act (15 U.S.C. § 1051, et seq.), Illinois common law of unfair competition, the Illinois Counterfeit Trademark Act (765 ILCS 1040 et seq.), the Illinois Uniform Deceptive Trade Practices Act (815 ILCS 510/3) and the Illinois Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/10).
Because the court has previously found, and the parties have since stipulated, that there was no actual confusion at the point of sale (more about this below), Dorr-Oliver cannot seek damages based on its own lost profits. Thus, Dorr-Oliver seeks an award of Fluid-Quip's profits under 15 U.S.C. § 1117(a), a trebling of damages under the Illinois Counterfeit Trademark Act, attorneys' fees, costs, prejudgment interest and injunctive relief.
For the reasons discussed below, based on the evidence presented at trial to the court sitting without a jury, the court finds that Dorr-Oliver has no trademark right to the name "clamshell." The court finds, however, that Dorr-Oliver does have a protectable trade dress right to the design of the outer housing of its clamshell starch washer, and that defendants infringed that right. The court does not find that this is an "exceptional" case of trade dress infringement or that Fluid-Quip's or Franko's conduct was malicious, fraudulent, deliberate, willful or in bad faith, as those terms are used in the context of trademark law. These basic findings compel a judgment in favor of Dorr-Oliver against defendants for trade dress infringement under the Lanham Act, Illinois common law, the Illinois Uniform Consumer Fraud and Deceptive Business Practices Act and the Illinois Deceptive Trade Practices Act, but not under the Illinois Counterfeit Trademark Act. Accordingly, Dorr-Oliver is entitled to an award of damages and injunctive relief, as more fully discussed below.
Expanding on patent and copyright protection, the Lanham Act provides plaintiffs protection from the deceptive and misleading use of their trademarks and their products' trade dress. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 112 S. Ct. 2753, 120 L. Ed. 2d 615 (1992). In Two Pesos, the Supreme Court resolved conflicting lower court opinions acknowledging that parties seeking relief for alleged trade dress infringement are not required to have registered the product with the United States Patent and Trademark Office to bring an action under the Lanham Act. Id. at 2757.
The Seventh Circuit defines "trade dress" as "the total image of a product, including features such as size, shape, color or color combinations, texture, graphics, or even particular sales techniques." Computer Care v. Service Systems Enterprises, Inc. 982 F.2d 1063, 1067 (7th Cir. 1992). To prove trade dress infringement, Dorr-Oliver must establish that: (1) its trade dress is "inherently distinctive" or has acquired "secondary meaning"; and, (2) the similarity of defendant's trade dress to Dorr-Oliver's product creates a "likelihood of confusion" on the part of consumers. Two Pesos, 112 S. Ct. at 2758.
The Seventh Circuit adds a third element to the equation: that Dorr-Oliver's trade dress is "non-functional." Computer Care, 982 at 1068. This added element is actually an affirmative defense on which Fluid-Quip bears the burden of proof. Id.
Dorr-Oliver claims that it has a common law trademark right in the name "clamshell" as it applies to its Type C starch washer. According to Dorr-Oliver, the fact that for decades the term applied only to Dorr-Oliver's machine (Dorr-Oliver alone made a clamshell starch washer until the early 1990s) compels a finding that the term is suggestive rather than generic or descriptive, and that the term has acquired a secondary meaning. Dorr-Oliver correctly points out (by referring to a real clam shell, Plaintiff's Exhibit 439) that the clamshell starch washer neither looks precisely like a clam nor does it operate like the two halves of a clam (closing together on a central axis like the shovel referred to in a dictionary definition cited by defendants).
Try as it might, Dorr-Oliver cannot overcome common sense or the evidence. As to the former, it has been earlier noted that while the court might liken the shape of the machine in question to a bagel, clams like beauty are apparently in the eye of the beholder. Although a clam is typically not perfectly round and opens and closes in a clam-like manner, the application of the name clamshell to this equipment seems perfectly natural. When one observes row upon row of these machines in a starch washing plant, it is not at all difficult to picture rows of clams arising uniformly from the ocean floor. That this image appeared to an early observer of Dorr-Oliver's starch washers is most likely.
The evidence presented at trial drives home the court's conclusion that the term clamshell is merely descriptive or generic. First, there is no evidence that Dorr-Oliver ever coined the term clamshell to describe its product. Nor did Dorr-Oliver ever seek to register the mark or claim any proprietary right to it in its commercial literature, its invoices, or on the name plates attached to each machine. Indeed, the name plates indicate that DorrClone is a registered trademark, but do not include the term clamshell. Dorr-Oliver's sales brochures also mention that DorrClone is a registered trademark, but make no claim as to the term clamshell. Moreover, when Dorr-Oliver's attorneys first wrote to Fluid-Quip in the summer ...