The opinion of the court was delivered by: DENLOW
Plaintiffs Thomas & Betts Corporation and Thomas & Betts Holdings, Inc. (hereinafter collectively referred to as "T&B"), bring this action in five counts against defendant Panduit Corporation (hereinafter "Panduit"). Count I alleges that Panduit's metal barb oval head shaped cable tie infringes on the trade dress of T&B's cable tie in violation of 15 U.S.C. § 1125(a) (hereinafter the "Lanham Act"). Count II alleges that Panduit's use of the name BARB-TY constitutes unfair competition and seeks cancellation of Panduit's trademark registration of the term BARB-TY under 15 U.S.C. § 1064(3). T&B also alleges that Panduit's conduct violates the common law of unfair competition (Count III); the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/2 and the Uniform Deceptive Trade Practices Act, 815 ILCS 510/1 et. seq. (Count IV); and the Illinois Anti-Dilution Act, 765 ILCS 1035/15 (Count V).
T&B previously moved for a preliminary injunction which was granted by the trial court (1994 WL 714619), and later reversed by the Seventh Circuit. ( Thomas & Betts Corp. v. Panduit Corp., 65 F.3d 654 (7th Cir. 1995). Panduit now moves for summary judgment on all five counts. The Court held an extensive oral argument on July 11, 1996 and has reviewed the voluminous briefs and exhibits submitted by the parties. For the reasons set forth below, Panduit's motion for summary judgment is granted on Counts I, III, IV and V and denied as to Count II of plaintiff's complaint.
T&B and Panduit are the nation's largest suppliers of cable ties. Cable ties are nylon plastic straps used to tie together a group of cables or wire (T&B 12 N p. 26 P 1). Cable ties consist of a strap terminating at one end in a tapered tail and at the other in a head which incorporates a horizontal locking mechanism. Id. Cable ties feature two types of locking mechanisms: one-piece or two-piece. (T&B 12 N p. 26 P 2). At issue here is a two-piece cable tie. In the two-piece tie a metal barb is inserted into the head of the tie and sits in a slot transverse to the slit for the strap. Id. When the strap is pulled taut, the tension on the strap causes the flexed barb to bite into the nylon strap and hold tight.
For purposes of this motion, the following uncontested facts are adopted from the Seventh Circuit opinion. (See 65 F.3d 654). In 1965, T&B obtained a patent on the two-piece cable tie ("the Schwester patent"). That patent disclosed a two-piece cable tie with an oval head, metal barb and transverse slot. The slot, barb and head portions are elements in each of the Schwester patent's claims. The oval shape of the head is not specifically claimed but is illustrated and described in the specifications. T&B currently markets a two-piece cable tie under the trademark TY-RAP that is essentially identical to the model disclosed in the Schwester patent. Though the Schwester patent expired in 1982 and a related patent also held by T&B expired in 1986, until 1993 T&B remained the sole producer of two-piece cable ties with annual sales of almost $ 100 million worldwide.
In 1993, Panduit entered the two-piece cable tie market with the BARB-TY, an oval-headed, metal-barbed cable tie essentially identical to T&B's TY-RAP. T&B promptly sued Panduit for trade dress infringement under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). T&B claimed that its trade dress includes a rounded, low profile head configuration with a vertical slot which is aligned with the body of the cable tie and, in the case of Thomas & Betts' dominant product, includes a metal barb visible in the lower portion of the vertical slot. T&B also brought a federal unfair competition claim based on Panduit's use of the BARB-TY trademark and ancillary state law claims.
T&B moved for a preliminary injunction prohibiting Panduit from selling its BARB-TY. After an evidentiary hearing, the trial court found that "the transverse slot, the vertical slot, the steel barb and the tail or body" were all "functional parts" and thus not entitled to trade dress protection, but that the oval shape of the head was not functional and thus was protectable trade dress. The trial judge preliminarily enjoined Panduit "from further sales, advertising, promotion, or marketing of cable ties incorporating a steel barb locking mechanism with an oval shaped head and a transverse or vertical slot in the head." 1994 WL 714619 *25.
Panduit appealed and the Seventh Circuit reversed the preliminary injunction finding that T&B had not established a reasonable likelihood of success on the merits of its claim that T&B's cable tie had acquired secondary meaning and that its features are protectable trade dress. Thomas & Betts Corp. v. Panduit Corp., 65 F.3d 654 (7th Cir. 1995). Panduit now moves for summary judgment on all counts.
II. SUMMARY JUDGMENT STANDARD
Summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). Celotex Corporation v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986).
When reviewing the record on summary judgment, the court must draw all reasonable inferences in the light most favorable to the nonmovant. Hill v. Burrell Communications Group, Inc., 67 F.3d 665, 667 (7th Cir. 1995). To avert summary judgment, however, plaintiff "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S. Ct. 1348, 1356, 89 L. Ed. 2d 538, (1986). A dispute about a material fact is genuine only if the evidence presented is such that a reasonable jury could return a verdict for the nonmovant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986). A summary judgment proceeding is not a vehicle for the resolution of factual disputes; it is designed to determine whether there is any material dispute of fact that requires a trial. Id. If no reasonable jury could find for the party opposing the motion, it must be granted. Hedberg v. Indiana Bell Tel. Co., 47 F.3d 928, 931 (7th Cir. 1995).
The question in this case arises at the intersection of the Nation's patent and trademark laws and raises a host of novel and fascinating legal issues. First, the case raises the question of what weight should be given to factual findings made in connection with the motion for preliminary injunction when deciding the current motion for summary judgment. Second, the principal issue concerns the relationship between the Patent Act and the Lanham Act and whether the oval head disclosed in T&B's expired utility patent can be protected as trade dress under the Lanham Act. Third, the Court considers the propriety of Panduit's BARB-TY trademark. Finally, we consider the state law claims of unfair competition and deceptive trade practices.
Panduit advances several arguments in support of its motion for summary judgment on the federal claims raised in Counts I and II. First, Panduit claims that T&B cannot receive trademark protection in the oval head shape of its cable tie contained in its expired utility patent because that would contravene the public's right to copy and to use inventions once a patent expires. Second, Panduit argues that it is entitled to judgment on T&B's trademark claims because the oval head shape of the cable tie is functional and therefore cannot qualify for trade dress protection. Third, Panduit argues that even if the oval head is deemed non-functional, in which case it may be entitled to trademark protection, T&B has failed to show that the oval head shape of the TY-RAP cable tie has acquired secondary meaning. Panduit also argues that T&B has failed to show that T&B's TY-RAP cable ties will be confused with Panduit's BARB-TY cable ties. Finally, Panduit asserts that T&B may not prohibit its use of the term BARB-TY to describe their cable tie.
The Court will discuss each of these arguments in turn while viewing the evidence and drawing all inferences in the light most favorable to T&B. Under the standards for summary judgment, such an examination of the facts is required. Thereafter, the Court will consider the state law claims raised in Counts III through V.
A. WEIGHT TO BE GIVEN TO PREVIOUS FINDINGS OF CONTESTED FACT
The first issue is what weight this Court should assign in deciding Panduit's motion for summary judgment to the trial court's or Seventh Circuit's factual findings in their preliminary injunction rulings. Because parties are held to different standards of proof in preliminary injunction hearings than in motions for summary judgment, and because findings of fact at the preliminary injunction stage are not as fully fleshed out as at the summary judgment stage, this Court will not rely on the trial court's or Seventh Circuit's findings of contested facts in deciding Panduit's motion for summary judgment. (Emphasis Added). University of Texas v. Camenisch, 451 U.S. 390, 395, 101 S. Ct. 1830, 1834, 68 L. Ed. 2d 175 (1981) ("... the findings of fact and conclusions of law made by a court granting a preliminary injunction are not binding at trial on the merits").
The Seventh Circuit has announced this rationale, stating:
Communications Maintenance, Inc. v. Motorola, Inc., 761 F.2d 1202, 1205 (7th Cir. 1985); see also, Lac Du Flambeau Band of Lake Superior Chippewa Indians v. Stop Treaty Abuse-Wisconsin, Inc., 991 F.2d 1249, 1258 (7th Cir. 1993) ("Caution is also necessary because a motion for summary judgment raises a different decisional question for the judge than does a motion for a preliminary injunction").
B. RELATIONSHIP BETWEEN PATENT AND TRADEMARK LAW
The principal issue before the Court is whether the subject of an expired utility patent, T&B's two-piece cable tie with an oval head, may be entitled to trade dress protection under the Lanham Act or whether Panduit has an absolute right to copy T&B's expired cable tie patent. Secondarily, the Court will consider whether any fact questions are raised or whether this issue can be decided as a matter of law.
These issues require the Court to harmonize the Patent Act and the Lanham Act. In performing the task of reconciling these two statutes, we have been instructed by the Supreme Court that "where two statutes are capable of coexistence, it is the duty of the court, absent a clearly expressed intention to the contrary, to regard each as effective." Ruckelshaus v. Monsanto Company, 467 U.S. 986, 1018, 104 S. Ct. 2862, 2881, 81 L. Ed. 2d 815 (1984). Clearly, Congress intends both the Patent Act and the Lanham Act to coexist. An analysis of these two statutes and their purposes will help frame our discussion.
Article I, § 8, cl. 8, of the Constitution gives Congress the power "to promote the Progress of Science and the useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." In Aronson v. Quick Point Pencil Co., 440 U.S. 257, 262, 99 S. Ct. 1096, 1099, 59 L. Ed. 2d 296 (1979), the Supreme Court described the policies underlying the federal patent law as follows:
First, patent law seeks to foster and reward invention; second, it promotes disclosure of inventions to stimulate further innovation and to permit the public to practice the invention once the patent expires; third, the stringent requirements for patent protection seek to assure that ideas in the public domain remain there for the free use of the public.
The patent statutes require that a patent describe the exact scope of the invention and its manufacture to "secure to [the patentee] all to which he is entitled, [and] to apprise the public of what is still open to them." McClain v. Ortmayer, 141 U.S. 419, 424, 12 S. Ct. 76, 77, 35 L. Ed. 800 (1891). Our current system provides that a patent document contain two distinct elements. The first is a specification describing the invention "in such full, clear, concise, and exact terms as to enable any person skilled in the art ... to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention." 35 U.S.C. § 112. The second element is that the patent "conclude with one or more claim" particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention." Id. "A claim covers and secures a process, a machine, a manufacture, a composition of matter, or a design, but never the function or result of either, not the scientific explanation of their operation." 6 Lipscomb, Walker on Patents § 21:17, at 315-16.
If an applicant can satisfy these requirements and is willing to reveal to the public the substance of his discovery and "the best mode ... of carrying out his invention," 35 U.S.C. § 112, the inventor is granted " the right to exclude others from making, using, or selling the invention throughout the United States," for a period of 17 years. 35 U.S.C. § 154. Thus, the inventor may keep his invention secret and reap its fruits indefinite. In consideration of its disclosure and the consequent benefit to the community, the patent is granted. An exclusive enjoyment is guaranteed for seventeen years, but upon expiration of that period, the knowledge of the invention inures to the people, who are thus enabled without restriction to practice it and profit by its use. United States v. Dubilier Condenser Corp., 289 U.S. 178, 186-87, 53 S. Ct. 554, 557, 77 L. Ed. 1114 (1933). The federal patent laws embody a careful balance between the need to promote innovation and the recognition that imitation and refinement through imitation are necessary to invention and constitute the lifeblood of a competitive economy. Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 146, 109 S. Ct. 971, 975, 103 L. Ed. 2d 118 (1989). "Copying is not only good, it is a federal right -- a necessary component to the patent system's grant of limited monopolies." Thomas & Betts Corporation v. Panduit Corp., 65 F.3d 654, 657 (7th Cir. 1995).
Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), provides a federal cause of action for unprivileged imitation, including trade dress infringement. The Supreme Court identified the policies promoted by federal trademark law in Park ' N Fly, Inc. v. Dollar Park and Fly, Inc., 469 U.S. 189, 198, 105 S. Ct. 658, 663, 83 L. Ed. 2d 582 (1985):
The Lanham Act provides national protection of trademarks in order to secure to the owner of the mark the good will of his business and to protect the ability of consumers to distinguish among competing producers. National protection of trademarks is desirable, Congress concluded, because trademarks foster competition and the maintenance of quality by securing to the producer the benefits of good reputation.
"Trademark law is aimed at assisting consumers in identifying the source of the goods, a goal served by granting an indefinite monopoly to the user of a particular unique symbol that connects a product with its source." Thomas & Betts Corp. v. Panduit Corp., 65 F.3d 654, 657 (7th Cir. 1995).
T&B is seeking trademark protection for the oval head of its cable tie contained in the expired Schwester utility patent. Utility patents are issued for "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof." 35 U.S.C. § 101. As explained by Professor Herbert F. Schwartz:
A utility patent consists of a cover page that lists pertinent information, a written description, and one or more claims. The written description, sometimes referred to as the specification and drawings, describes the invention, the preferred embodiment of the invention, and how to make and use it, so that the public has available the information needed to practice the invention. On expiration of the patent, the public may practice the invention freely. The claims of the patent define the metes and bounds of the patent owner's exclusive rights during the life of the patent.
Schwartz, Patent Law & Practice, Second Edition, p. 7 (1995).
A review of the Schwester patent reveals that the oval head is in the drawing describing the invention of a self clinching bundling strap ("cable tie"). Furthermore, in the specification section of the patent the best mode description states that "the opposite or head-end portion 24 of the strap 23 terminates in an oval shaped clinching eyelet 26 ..." (Nancy Clarke Declaration, June 13, 1996, Ex. 12). Furthermore, in the claim portion of the patent, the oval head is referred to in paragraph 1: "What is claimed is: 1. A self clinching bundling strap comprising a head-end portion, a tapered tail-end portion and a body portion therebetween, said head-end portion having a transverse aperture therethrough ..." Id. The head-end portion is the oval head which is now in dispute. T&B's counsel candidly acknowledged in oral argument, that subject to its Lanham Act argument, "anybody has the absolute right to copy every detail in an expired patent." (7/11/96 Tr. at p. 28). Therefore, there is no dispute that under the Patent Act, Panduit had an absolute right to copy T&B's cable tie. This then brings us to the issue of whether the Lanham Act limits that right.
The issue of whether the subject of an expired utility patent could receive trademark protection was first addressed by the Tenth Circuit in Vornado Air Circulation Systems, Inc. v. Duracraft Corp., 58 F.3d 1498 (10th Cir. 1995). The plaintiff alleged that the spiral configuration of the defendant's grill design infringed the plaintiff's trade dress. After a careful review of the two statutes, the court held that "where a product configuration is a significant inventive component of an invention covered by a utility patent, so that without it the invention cannot fairly be said to be the same invention, patent policy dictates that it enter into the public domain when the utility patents [on the product] expire. To ensure that result [the component] cannot receive trade dress protection under section 43(a)." 58 F.3d at 1500. The Vornado decision applies to those situations where components of an invention covered by an expired utility patent were being copied. However, the Vornado decision did not address whether a feature, which is not specifically claimed in the patent, can receive trademark protection upon the expiration of the utility patent.
In Thomas & Betts, the Seventh Circuit distinguished the Vornado decision on its facts, but stated that "it is not clear that the differences dictate a different result." 65 F.3d at 659. The Seventh Circuit found that the oval shape of the cable tie head was not specifically claimed in the Schwester patent, while the spiral grill was a required element in at least one of the claims in the patent at issue in Vornado. The Seventh Circuit did not pass on the correctness of Vornado or Panduit's broader claim that the Lanham Act does not bar its ability to copy the Schwester patent in toto, including the oval head disclosed in the drawings and specifications. That issue is now squarely before this Court.
5. Creating Harmony Between the Patent Act and the Lanham Act
T&B argues that the proper way to harmonize the Patent Act with the Lanham Act is to recognize a right under the Lanham Act to grant trademark protection to product configurations which are part of a patent by applying traditional tests of likelihood of confusion, functionality and distinctiveness. In particular, T&B relies upon the Seventh Circuit's language in Kohler Co. v. Moen, 12 F.3d 632, 638 (7th Cir. 1993), that "courts have consistently held that a product's different qualities can be protected simultaneously, or successively, by more than one of the statutory means for protection of intellectual property." T&B argues that the successive application of the Lanham Act, following expiration of its patent, to protect the oval head of its cable tie is necessary and appropriate to enforce the strong public policies presented by the Lanham Act.
On the other hand, Panduit argues that a long line of Supreme Court cases interpreting the Patent Act require that it be permitted to copy the T&B cable tie upon expiration of the patent. Panduit argues that the way to harmonize the Patent Act and The Lanham Act upon the expiration of the patent is to allow T&B to obtain Lanham Act protection with respect to the packaging and advertising of the product, but not for the physical shape of the product and its oval head. The Court agrees.
The Court holds that the right to copy arising from the Patent Act entitles Panduit to copy the oval headed cable tie disclosed in the Schwester patent without fear of a Lanham Act violation. The Supreme Court and the Seventh Circuit have both recognized the primacy of the right to copy both before and after the adoption of the Lanham Act. Although the Lanham Act was not involved, the Court believes that the ...