to divert business from a competitor when motivated to further its own business, and not solely by malice. Soderlund Bros., Inc. v. Carrier Corp., 278 Ill. App. 3d 606, 615, 663 N.E.2d 1, 8, 215 Ill. Dec. 251 (1995). Fraud and deceit are among those "acts of competition, which are never privileged." Id. at 615, 663 N.E.2d at 8. As discussed above, there is ample evidence to support the inference that Berry's World and Berry engaged in fraudulent and deceitful behavior to disrupt plaintiff's contractual relationship with Class Act by impersonating an authorized dealer. (See 12(N) PP 129-35). Thus, there is a genuine issue of material fact as to whether defendants are entitled to the affirmative defense of competitor's privilege.
Fourth, defendants argue that plaintiff will not incur any damages because Class Act has expressed a clear interest in maintaining a business relationship with plaintiff in spite of the breach. Defendants asserted the same argument in support of their motion for summary judgment on the contractual relations claim. Similarly, this Court finds that the fact that it was plaintiff's decision to terminate its business relationship with Class Act is inconsequential where the decision was based upon a breach of contract induced by defendants.
Finally, defendants argue that plaintiff has presented no evidence of its alleged damages arising from the loss of future sales to Class Act. (Def. Reply Memo. p. 11). While it is true that plaintiff's 12(N) statement and supporting memorandum are devoid of any reference to the specific damages incurred as a result of plaintiff's loss of future sales to Class Act, it can be reasonably inferred from the nature of plaintiff's contractual relationship with Class Act that plaintiff incurred damages as a result of the termination of that relationship. It will be plaintiff's burden at trial to prove these damages with specificity. At the summary judgment stage, it is defendants' burden to demonstrate that there is no genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). Defendants have not met this burden with respect to element of damages. Accordingly, defendants' motion for summary judgment on count II is denied.
II. COUNTS IV, V, VI and VII: TRADEMARK INFRINGEMENT
Counts IV, V, VI and VII of plaintiff's complaint are based upon allegations of trademark infringement. In Count IV, plaintiff alleges violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILKS. 505 et seq., ("ICFDBPA"), against Berry's World and Berry. In Count V, plaintiff asserts a claim under the Illinois Deceptive Business Practices Act, 815 ILKS. 510 et seq., ("IDTPA"), against Berry's World. In Counts VI and VII, plaintiff alleges violations of sections 32 and 43 of the Lanham Act in violation of 15 U.S.C. § 1051 et seq, and False Designation of Origin and Sponsorship Affiliation in violation of 15 U.S.C. § 1125(a), against Berry's World and Berry.
Defendants argue that summary judgment should be granted on these counts for two reasons: First, Berry's World only sells genuine goods. Second, there was no likelihood of confusion that Berry's World was an authorized dealer. Each of these arguments are addressed below.
A. Sale of Genuine Goods
Defendants maintain that "it is not trademark infringement to use a mark informatively to identify genuine goods." (Def. Memo. p. 14). In Sebastian Int'l, Inc. v. Longs Drug Stores Corp., 53 F.3d 1073 (9th Cir. 1995), a case upon which defendants rely heavily, the Ninth Circuit held that "when a purchaser resells a trademarked article under the producer's trademark, and nothing more, there is no actionable misrepresentation under the statute." Id. at 1076 (emphasis added). However, the court in Sebastian expressly limited its holding to the mere stocking and reselling of trademarked products. Id. The court distinguished such acts from the use of the producer's trademark on display and in advertising, and the use of the producer's promotional literature. Id. Here it is undisputed that Berry's World and Berry used plaintiffs trademark and promotional materials in it advertising and displays. On two occasions, defendants distributed plaintiff's trademarked pamphlets and posters as a promotional tool. (12(N) PP 111, 114). Such materials are typically used by authorized dealers only. (Id. at P 112). Defendants also display signs bearing plaintiff's trademark in Berry's World and on its storefront and prominently feature the Collections in the store using signs bearing plaintiff's trademark. (12(N) PP 116-19). For example, defendants have situated a 20-inch-by-10-inch cardboard sign advertising one of plaintiff's promotions at the display case for the Collections at Berry's World. In addition, defendants use plaintiff's trademarked materials in its advertising. (Id. at PP 120-21). Thus, defendants' resale of plaintiff's genuine trademarked products does not shield them from charges of trademark infringement where they use plaintiff's trademark and promotional materials in its displays and advertising. See Sebastian, 53 F.3d at 1076.
B. Likelihood of Confusion
"The 'keystone' of trademark infringement is 'likelihood of confusion' as to source, affiliation, connection or sponsorship of goods or services among the relevant class of customers and potential customers." Sands, Taylor & Wood Co. v. Quaker Oats Co., 978 F.2d 947, 957 (7th Cir. 1992), cert. denied, 507 U.S. 1042, 113 S. Ct. 1879, 123 L. Ed. 2d 497 (1993). Section 32 of the Lanham Act expressly forbids conduct which results in confusion, providing that:
Any person who shall, without the consent of the registrant - (a) use in commerce any reproduction, counterfeit, copy or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to ... shall be liable in a civil action by the registrant for the remedies hereinafter provided.
15 U.S.C. § 1114(1).
Whether a likelihood of confusion exists is a question of fact. Forum Corp. of North America v. Forum Ltd., 903 F.2d 434, 439 (7th Cir. 1990). The Seventh Circuit considers the following factors when determining the likelihood of confusion: the degree of similarity in appearance and suggestion; the similarity of the products (or services) for which the name is used; the area and manner of concurrent use; the degree of care likely to be exercised by consumers; the strength of the complainant's mark; actual confusion; and an intent on the part of the alleged infringer to palm off his products (or services) as those of another. McGraw-Edison v. Walt Disney Prod., 787 F.2d 1163, 1167-68 (7th Cir. 1986); see also American Academy of Disability Evaluating Physicians Assoc. v. American Disability Evaluation Research Institute, 1991 U.S. Dist. LEXIS 9305, 90 C 6038, 1991 WL 128513, *9 (N.D. Ill. July 10, 1991) (Conlon, J.). Under Illinois law, claims under the ICFDBPA and the IDTPA are to be resolved according to principles set forth under the Lanham Act. See Dorr-Oliver Inc. v. Fluid-Quip, Inc., 894 F. Supp. 1190, 1203-1204 (N.D. Ill. 1995); Spex, Inc. v. Joy of Spex, Inc., 847 F. Supp. 567, 579 (N.D. Ill. 1994); see also James Burrough Ltd., 540 F.2d 266 at 274-75 ("Illinois Courts look to federal case law and apply the same analysis to state infringement claims.").
Defendants argue that there could be no likelihood of confusion because Berry's World offers the Collections at ten percent (10%) below the retail price--a practice, they argue, that an authorized dealer would not engage in. In support of this proposition, Berry's World offer the testimony of Frank Pellico, a collector, who stated that he would not confuse Berry's World with an authorized dealer because Berry's World "gives 10 percent off." (Defendants' Response to 12(N) Statement Ex. N, Pellico Dep. 14:16-15:8). However in light of the significant amount of paraphernalia bearing plaintiff's trademark that defendants use in their advertising, displays, on Berry's World's storefront, and in promotional giveaways, and the evidence that certain authorized dealers were actually confused, (12(N) PP 104, 129-35), this Court finds that whether there is a likelihood of confusion is a disputed issue inappropriate for summary judgment. Defendants' motion for summary judgment on counts IV, V, VI and VII of plaintiff's complaint is thus denied.
WHEREFORE, for the foregoing reasons, the Defendants' Motion for Summary Judgment on Counts I, II, IV, V, VI, and VII is denied.
David H. Coar
U.S. District Court Judge
Dated: January 10, 1997