The opinion of the court was delivered by: MORAN
The Pampered Chef, Inc. (Pampered Chef), a cookware retailer, brought this two-count action against Magic Kitchen, Inc. (Magic Kitchen), also a cookware retailer, in which it alleged that Magic Kitchen has copied the layout, price format, product number format and general appearance of Pampered Chef's catalogs and sales materials, thereby breaching Pampered Chef's exclusive copyrights on those materials (Count I); and that Magic Kitchen has intentionally violated Pampered Chef's exclusive right to use the "trade dress" of its catalog and any colorable imitation thereof in an effort to receive an unfair competitive advantage in violation of Section 43 of the Lanham Act, 15 U.S.C. § 1125(a).
Defendant Magic Kitchen has moved for summary judgment on both counts. For the reasons stated below, we grant this motion in its entirety.
Pampered Chef, an Illinois corporation formed in 1980, is engaged in the business of distributing and promoting kitchen-related products through home shows, printed publications and a network of kitchen consultants. Doris Christopher (Christopher) is Pampered Chef's president and founder. Today, Pampered Chef has approximately 35,000 kitchen consultants employed on a commission basis and reaps in excess of $ 200 million in annual sales. In connection with this business, in 1990 Pampered Chef began publishing a catalog to advertise its products and for use by its home consultants during their demonstrations. To date, the following nine catalogs have been published and have all been protected by copyright:
Title Registration Number
The Pampered Chef Catalog (1991) TX 3 545-739
The Pampered Chef Catalog (1992) TX 3 545-740
The Pampered Chef Catalog (1993) TX 3 545-738
The Pampered Chef Catalog Spring/Summer (1994) TX 4 395-903
The Pampered Chef Catalog Fall/Winter (1994) TX 4 395-902
The Pampered Chef Catalog Spring/Summer (1995) TX 4 395-901
The Pampered Chef Catalog Fall/Winter (1995) TX 4 395-905
The Pampered Chef Catalog Spring/Summer (1996) TX 4 395-900
The Pampered Chef Catalog Fall/Winter (996) TX 4 395-905
Magic Kitchen, founded in 1995, also promotes and distributes kitchen-related products through home shows, printed publications and a network of consultants. Its president and founder is Ursula Kaiser (Kaiser). It currently has three employees. In 1995 Magic Kitchen published its first catalog (the 1995 Catalog).
Shortly thereafter, on September 14, 1995, Pampered Chef's attorney, Michael Hierl (Hierl), wrote a letter to Magic Kitchen claiming that Magic Kitchen's 1995 Catalog infringed certain of Pampered Chef's copyrights. On October 10, 1995, George Bullwinkel (Bullwinkel), counsel for Magic Kitchen, met with Hierl and informed him that only 3,000 copies of the 1995 Catalog had been distributed. At this point the parties apparently entered into a temporary "stand-still" agreement regarding the distribution of the 1995 Catalog while they tried to reach a more concrete settlement of the dispute. On November 17, 1995, Hierl sent a letter proposing settlement terms to Bullwinkel on behalf of Pampered Chef. Part of the agreement would have permitted Magic Kitchen to distribute no more than 3,000 additional copies of the 1995 Catalog and required that the remaining supply, a total of 96,000 catalogs, be delivered to Pampered Chef for destruction. On December 1, 1995, Bullwinkel responded that Magic Kitchen would continue to distribute the remaining stock of catalogs, apparently without limit, but would extensively redesign its catalog before releasing another issue. At this point the communications between the parties stopped, without a settlement agreement being reached but apparently with a commitment by Magic Kitchen to redesign its catalog. (Magic Kitchen currently acknowledges that it made this promise and claims that the next issue of its catalog was quite different from the 1995 Catalog.) The parties agree that approximately 60,000 issues of the 1995 Catalog were ultimately distributed.
In 1997, Magic Kitchen came out with its "new" catalog (the 1997 Catalog), which in reality is quite similar to its 1995 Catalog. On January 21, 1997, Kaiser sent a copy of the revised Magic Kitchen catalog to Christopher. On February 18, 1997, Pampered Chef filed this lawsuit.
I. Summary Judgment Standard
A motion for summary judgment may be granted where the pleadings and evidence present no genuine issues of fact and the movant is consequently entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Renovitch v. Kaufman, 905 F.2d 1040, 1044 (7th Cir. 1990). The movant must point to those portions of the record which demonstrate the absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). Summary judgment should be entered against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. Id. at 322. The reviewing court shall draw all reasonable inferences in favor of the non-movant. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 26 L. Ed. 2d 142, 90 S. Ct. 1598 (1970); Bank Leumi Le-Israel, B.M. v. Lee, 928 F.2d 232, 236 (7th Cir. 1991). When it is clear that the plaintiff cannot carry her burden of persuasion at trial on one or more elements, summary judgment is appropriate for the defendant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986).
Magic Kitchen first argues that Count I of Pampered Chef's complaint is barred by estoppel and laches.
"For estoppel to apply in a copyright action, the copyright owner must be aware of the infringing conduct and yet act in a way that induces the infringer reasonably to rely upon such action to his detriment." Chi-Boy Music v. Charlie Club, Inc., 930 F.2d 1224, 1228 (7th Cir. 1991). In other words, estoppel will only apply in this case if the facts (viewed in the light most favorable to Pampered Chef) reveal that Pampered Chef was aware of the infringing conduct but nonetheless took some action designed to encourage or mislead Magic Kitchen. See Bourne Company v. Hunter Country Club, Inc., 990 F.2d 934, 937 (7th Cir. 1993), cert. denied, 510 U.S. 916, 126 L. Ed. 2d 256, 114 S. Ct. 308 (1993).
Magic Kitchen first claims that Pampered Chef engaged in misleading behavior and/or caused Magic Kitchen to rely to its detriment when Pampered Chef failed to object to the distribution of the 1995 Catalog. Magic Kitchen claims this alleged "failure" led it to believe that continued distribution of those catalogs would be acceptable. As a result, Magic Kitchen argues that Pampered Chef should be estopped from pursuing any action relating to the 1995 Catalog. We disagree.
The correspondence between the parties' attorneys unambiguously establishes that Pampered Chef believed that Magic Kitchen's 1995 Catalog violated its copyrights and demanded that Magic Kitchen cease its use and distribution of the catalogs immediately. See Letter from Pampered Chef's Counsel Michael A. Hierl to Magic Kitchen, September 14, 1995. Although Magic Kitchen is not really specific about how exactly Pampered Chef's behavior was misleading, perhaps it believes Pampered Chef should be estopped because it proposed a settlement that would have allowed 3,000 more of the 1995 Catalogs to be distributed. In the same proposal, however, Pampered Chef demanded that the remaining 94,000 catalogs be delivered to its offices for destruction. In light of these facts we do not think Magic Kitchen could have been mislead into believing that Pampered Chef had no objection to the further use of the 1995 Catalog.
Magic Kitchen next argues that when Pampered Chef objected to Magic Kitchen's catalog, its comments were not sufficiently precise and consequently led Magic Kitchen to design a new catalog, which failed to meet Pampered Chef's approval. Magic Kitchen apparently believes that, as a result, Pampered Chef is estopped from attacking the redesigned catalog. Again we disagree. Pampered Chef specifically informed Magic Kitchen that any redesigned catalog should have "a different size, a different cover page layout, a different 'welcome' inside cover page layout, different product layout photographs throughout the catalog, different text, and a different back cover page." See Michael Hierl's Letter to Magic Kitchen Counsel, November 17, 1995. These demands are not misleading and clearly state what Magic Kitchen would have to do in the next catalog to avoid a copyright infringement suit. Moreover, we fail to see why Magic Kitchen believes it was Pampered Chef's responsibility to provide Magic Kitchen with guidance on designing a non-infringing catalog. In any event, if Pampered Chef had actually agreed that a new catalog meeting its demands would be immune from a copyright infringement claim, and if Magic Kitchen had actually designed a new catalog according to those standards, then perhaps Magic Kitchens' argument would prevail. Neither of these events, however, came to pass. Consequently, we find nothing about Pampered Chef's behavior, or Magic Kitchen's reasonable expectations, that would lead us to conclude that Pampered Chef is estopped from bringing this case.
Defendants also argue that the doctrine of laches applies to bar Pampered Chef from bringing this action. Magic Kitchen argues that Pampered Chef waited until February 1997 to bring the instant action, when the original alleged violation occurred two years earlier in 1995, and that this delay caused prejudice to Magic Kitchen.
We do not agree that this delay was impermissible. First, as the Seventh Circuit has observed, "two years has rarely, if ever, been held to be a delay of sufficient length to establish laches." Piper Aircraft Corporation v. Wag-Aero, Inc., 741 F.2d 925, 932 (7th Cir. 1984). In this case, the period at issue is actually less than two years (from September 1995 to February 1997). Second, the essence of the doctrine of laches is to prevent potential plaintiffs from making "unreasonable, inexcusable, and prejudicial" delays in bringing their actions. Piper, 741 F.2d at 932. It was not until the publication of Magic Kitchen's 1997 Catalog that Pampered Chef realized Magic Kitchen had not extensively revised its ...