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Bodum USA, Inc. v. La Cafetière

March 24, 2009

BODUM USA, INC., PLAINTIFF,
v.
LA CAFETIÈRE, INC., DEFENDANT.



The opinion of the court was delivered by: Matthew F. Kennelly United States District Judge

MEMORANDUM OPINION AND ORDER

MATTHEW F. KENNELLY, District Judge

Bodum USA, Inc. has sued La Cafetière, Inc., for infringement of its trade dress in violation of 15 U.S.C. § 1125(a), common law unfair competition, and violations of the Illinois Uniform Deceptive Trade Practices Act, 815 ILCS § 510/2(a). Bodum alleges that La Cafetière sold, promoted, and advertised products that were imitations of Bodum's distinctive "Chambord" trade dress. La Cafetière has moved for summary judgment on two distinct grounds. First, La Cafetière contends that a 1991 stock purchase agreement authorizes its activities. Second, it contends that the suit is barred by the doctrines of laches and equitable estoppel.*fn1 For the reasons set forth below, the Court grants the first motion and denies the second as moot.

Background

On a motion for summary judgment, the Court draws "all reasonable inferences from undisputed facts in favor of the nonmoving party and [views] the disputed evidence in the light most favorable to the nonmoving party." Harney v. Speedway SuperAmerica, LLC, 526 F.3d 1099, 1104 (7th Cir. 2008).

Bodum and La Cafetière manufacture and distribute French-press coffee makers. A French-press coffee maker is a non-electric device, consisting of a carafe and a mesh plunger attached to a lid, that brews coffee using hot water. The user mixes coffee grounds and water in the carafe and then, after allowing the coffee to brew, pushes down on the plunger. The plunger presses the grounds to the bottom of the carafe, leaving freshly brewed coffee at the top.

Beginning in the 1950s, Société des Anciens Etablissements Martin S.A. ("Martin") distributed a very successful French-press coffee maker called the Chambord. Martin owned the design patent for the device, as well as a trademark in the Chambord name, and it also owned the rights to the Melior design and trademark, another well-known French-press model. Louis-James De Viel Castel was the majority shareholder of Martin from at least the 1980s.

In 1983 Mr. Viel Castel and Jørgen Jepsen Bodum joined with another individual to establish Bodum, Inc. Bodum, Inc. acquired the rights to distribute the Chambord design in the United States pursuant to an oral license agreement between Peter Bodum A/S and Martin. By 1991, Bodum-related entities had acquired all the shares of Bodum, Inc.

Prior to 1991, Household Articles Limited, a company registered in the United Kingdom and owned by Viel Castel, distributed French-press coffee makers in the U.K. One of its products, sold under the name "La Cafetière," was similar to Martin's Chambord. Bodum contends that this model "embodied the Chambord design." SPA Resp. at 3.

In 1991, Bodum Holdings purchased all of the shares of Martin pursuant to a stock purchase agreement. Negotiations for the contract went on for some time. Early in the negotiations Mr. Viel Castel, Martin's majority shareholder, insisted that any agreement place no restrictions on the activities of Household. Mr. Bodum discussed this matter with Mr. Viel Castel during negotiations and "was satisfied with the answers he received on questions regarding" Household. SPA Resp., Ex. 4H at LaCaf00918. Bodum contends that Mr. Bodum understood that Household would be restricted to its then-current market share, which he thought was the U.K. and a limited presence in Australia.

Article Four of the initial draft of the agreement, dated July 19, 1991, provided that:

In consideration of the compensation paid to Stockholder for the stock of [Martin,] Stockholder guarantees that he shall not-for indefinite period of time-be engaged directly or indirectly in any commercial business related to manufacturing or distributing [Martin's] products. . .

Notwithstanding article 4 [Bodum Holdings] agrees that Stockholder through Household . . . can manufacture and distribute any products within the United Kingdom. It is expressly understood that Household [ ] is not entitled, directly or indirectly to distribute products outside the United Kingdom.

SPA Mot. at 16-17. These passages make up the first and fourth paragraphs of Article Four. The next draft of the agreement, dated July 24, 1991, changed the limitation period to five years and replaced the fourth paragraph with the following language:

Notwithstanding Article 4 [Bodum Holdings] agrees that Stockholder through Household . . . can manufacture and distribute any products within the United Kingdom. It is expressly understood that Household [ ] is not entitled, directly or indirectly to distribute products outside the United Kingdom. It is expressly understood that Household [ ] is not entitled, directly or indirectly, globally to manufacture and/or distribute coffee-pots under the trade marks and/or brand names of "Melior" and "Chambord". [Bodum Holdings] agrees that Household [ ] with the limitation mentioned in the previous sentence outside of the United Kingdom on markets where Household [ ] prior to signing of this Agreement has proved to [Bodum Holdings] ...


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