The opinion of the court was delivered by: Grady, District Judge.
Before the court are cross-motions for summary judgment. For
the following reasons, defendant's motion is granted and
plaintiffs motion is denied.
Plaintiff Bretford Manufacturing, Inc., ("Bretford") is an
Illinois corporation that, among other things, manufactures
desks, work stations, tables, and other furniture.
Since 1990, Bretford has been engaged in the production,
advertising, and sale of the CONNECTIONS series computer
furniture for office, school, and institutional use. The
CONNECTIONS series has been sold exclusively under the trade
name and mark BRETFORD®. The CONNECTIONS series computer work
table features a three-quarter inch thick tabletop and legs that
connect to the tabletop in the form of a "V". The V-shape of the
Bretford CONNECTIONS series work table legs is the subject of
the instant law suit.
Defendant Smith System Manufacturing Company ("Smith"), a
Delaware corporation, also manufactures desks, work stations,
tables and other furniture. In 1996, Smith developed the
FLEXLINE series of computer work tables, using the leg design of
Bretford's CONNECTIONS table as a basis for developing its
FLEXLINE tables. While the FLEXLINE table is quite similar to
the CONNECTIONS table, the FLEXLINE table has a slightly thicker
top and thicker molding. Further, FLEXLINE tables currently have
labels with the Smith logo affixed to the modesty panel, though
the tables were not so labeled initially.*fn1
Bretford was the only manufacturer to make a computer table
with a V-shaped leg from 1990 until 1997. Bretford claims that
as the exclusive manufacturer of computer tables featuring the
V-shaped leg, it aggressively marketed the design, spending over
$4,000,000 on advertising and promotional materials focused on
the leg. Smith admits that it modeled its line after Bretford's
to better compete with Bretford in the institutional user
market. Both parties, as well as several dealers, are in
agreement that uniformity is important to end-users such as
schools when purchasing decisions are made. Smith states that it
copied the Bretford design, in part, to appeal to consumers
seeking to purchase new computer desks to match the ones already
in their schools. Smith disputes that Bretford aggressively
marketed the V-design because Bretford only provides two
examples of promotional literature where the V-design is
mentioned. See Plaintiff's Appendix, at Tab 3.
How Computer Work Tables Reach End-Users*fn2
Both companies sell computer tables to schools and other
institutional end-users, largely through dealers, distributors,
and wholesalers (collectively, "dealers").*fn3 Dealers use
catalogs provided by manufacturers or their own catalogs, which
include inserts paid for by the manufacturers, to present to
customers and institutional users the products they sell.
"Catalog Allowances," or the payment to dealers of money in
exchange for space in their
catalogs, are among manufacturers' largest annual promotional
expenditures. Smith states that its merchandise never appears in
a catalog where it is not featured on a dedicated page,
prominently featuring its company name and trademarks as well as
pictures of the product being sold. Bretford does not dispute
Smith's statement, but claims that manufacturers do not have
control over the advertisements created by dealers. Bretford's
CONNECTIONS table has appeared in dealer catalogs without the
Bretford or CONNECTIONS marks or logos.
In a typical sales transaction, an end-user, such as a school,
first formulates a bid specification, setting forth the
requirements of the equipment the end user seeks to purchase.
This is typically done with the assistance of a dealer or
manufacturer's sales representative, using the manufacturer's
specification sheet, catalogs and promotional materials as a
guide.*fn4 In the educational furniture market, dealers make
suggestions as to the language of the bid request. A bid may
specifically identify a manufacturer, or it may simply describe
a particular item. Bid requests regularly specify that
"equivalents" may be bid.
Once the end-user completes its bid specification it typically
sends the specification out to several dealers. The dealers
contact manufacturers, like Bretford or Smith, and the
manufacturers quote prices to the dealers. The dealers determine
their mark-up on each item, then complete and submit the bid
sheet to the end-user. Bid sheets typically disclose the name of
the manufacturer and the model number of the furniture.*fn5
When a bid is successful, a purchase order issues from the
end-user to the successful dealer, usually specifying the
manufacturer and model numbers of the products being purchased.
The manufacturer's name and model are repeated in the invoice
and shipping list sent to the end-user.
When a purchaser orders either Bretford's or Smith's
furniture, the furniture is delivered in boxes that display the
name of the manufacturer. Bretford marks its computer table
shipping containers with a label approximately 12 inches long
and four inches high. The label states Bretford's name, the
model number of the contents, and a brief description of the
product. In addition to the computer table, the shipping
container contains an assembly instruction sheet with the
BRETFORD name on it. Likewise, Smith ships its FLEXLINE tables
in boxes prominently featuring a 12 inch by three inch SMITH
SYSTEM company name and logo, and a packing list attached to the
box contains in its heading the SMITH SYSTEM company name,
address, and telephone and fax numbers, as well as a description
of the contents.
Events Precipitating This Lawsuit
In late 1996 or early 1997, the Dallas, Texas Independent
School District issued a request for proposals to supply 300
computer work centers. The bid request specified Bretford tables
as the reference product but allowed that substitutes could be
bid. Various dealers bid on the contract, providing the school
district with samples. In April, 1997 the Dallas Independent
School District awarded the contract to J & S Equipment, a Texas
dealer, which agreed to provide Smith FLEXLINE computer tables
to meet the specifications.