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LG Electronics U.S.A., Inc. v. Whirlpool Corp.

September 28, 2009

LG ELECTRONICS U.S.A., INC., PLAINTIFF,
v.
WHIRLPOOL CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Amy J. St. Eve United States District Court Judge

Honorable Amy J. St. Eve

MEMORANDUM OPINION AND ORDER

AMY J. ST. EVE, District Court Judge

As is often true in false advertising cases under the Lanham Act, LG and Whirlpool are fierce competitors in a lucrative product market.*fn1 This particular case involves home laundry appliances, and specifically, the recent release of the parties' respective clothes dryers that include "steam" features. These "steam" features generally are designed to refresh fabrics by removing odors and wrinkles-similar to dry cleaning at home, only "not-so-dry cleaning." LG experienced the first success in the "steam" category, entering the market in late 2005 with a steam washer. Whirlpool subsequently introduced its own steam washer and dryer, just months before LG's release of its own steam dryer. LG now alleges that Whirlpool's "steam" dryers do not actually employ steam, and thus Whirlpool's advertising of its "steam" dryer is false.

Before the Court is Defendant Whirlpool Corporation's motion for summary judgment and its motions to exclude the testimony of Robert N. Reitter and Dr. Anthony Jacobi, experts proffered by Plaintiff LG Electronics, U.S.A., Inc. In addition, LG moves to strike portions of Whirlpool's Local Rule 56.1 statement of material facts and an additional expert report issued on July 1, 2009, concurrent with its motion for summary judgment. For the reasons discussed below, the Court denies Whirlpool's motion for summary judgment and its motion to exclude Mr. Reitter's opinions. The Court grants in part and denies in part Whirlpool's motion to exclude the report and opinions of Dr. Jacobi. Having considered the issues raised in LG's motion to strike Whirlpool's Rule 56.1 statement in the context of ruling on summary judgment, the Court denies this motion as moot. The Court further denies the remainder of LG's motion relating to Whirlpool's allegedly untimely expert report.

BACKGROUND

I. Relevant Parties

Plaintiff LG Electronics U.S.A., Inc. ("LG") is the American subsidiary of LG Electronics, Inc., a Korean company that manufactures home appliances sold in the United States. (R. 280-1, LG's Rule 56.1(b) Statement ¶ 77.) LG maintains its principal place of business in Englewood, New Jersey. (Id.) Defendant Whirlpool Corporation ("Whirlpool") is a Delaware corporation with its principal place of business in Benton Harbor, Michigan. (Id. ¶ 78.) The Court exercises jurisdiction pursuant to 15 U.S.C. § 1121 and 28 U.S.C. §§ 1331 and 1338(b) based on LG's claims under the Federal Lanham Act.

II. Whirlpool's Steam Dryers

Whirlpool makes three dryer models that use the technology at issue in this case. Under the Whirlpool brand, Whirlpool markets the Duet Steam Dryer and the Cabrio Steam Dryer, and under the Maytag brand, Whirlpool markets the Bravos Steam Dryer (collectively, "Whirlpool Steam Dryers"). (R. 280-1 at ¶ 11; R. 296-1, Whirlpool's Resp. to LG's Rule 56.1(b)(3)(C) Statement ¶ 1.)*fn2 Whirlpool also manufactures Sears' Kenmore brand Elite Steam Dryer, which incorporates the same technology used in the Whirlpool Dryers, but which is not at issue in this case. (R. 280-1 at ¶ 12.)

A. How Steam Dryers Function

The Whirlpool Steam Dryers work by introducing a spray of cool or cold water into a hot, spinning dryer drum. (R. 280-1 at ¶ 13; 296-1 at ¶ 1.) This spray, or "mist," as the parties characterize it, dampens the clothing in the dryer drum. (Id.) The heat of the dryer, along with the moving air in the dryer drum, speeds the evaporation of moisture from the dampened clothing. (R. 296-1 at ¶ 1.) Temperatures inside the drum of Whirlpool dryers range from less than 60 degrees Celsius to over 100 degrees Celsius, and in certain locations, reach in excess of 140 degrees Celsius. (R. 280-1 at ¶ 16.) Clothing placed in a Whirlpool Steam Dryer generally has fewer wrinkles after completing a "steam" cycle than before the cycle. (R. 280-1 at ¶ 3.) LG contends, however, that conventional non-steam dryers produce the same effect. Specifically, LG argues that Whirlpool's technology is no different than "taking an article of clothing, throwing it into [a conventional] dryer for five minutes, taking it out, spraying it with water with a spray gun, and throwing it back into the [conventional] dryer." (R. 296-1 at ¶ 1.)

LG markets steam dryers under the Tromm model. LG's Tromm Steam Dryer includes a boiler unit outside the dryer drum that LG refers to as a "steam generator." (R. 280-1 at ¶ 21; R. 296-1 at ¶ 1.) It is undisputed that LG's dryer creates steam by boiling water and then injecting or spraying the steam into the dryer drum as a vapor. (Id.) Once LG's dryer injects steam into the dryer drum, the steam combines with cooler air in the drum and condenses into what LG calls a "hot while billowy steam." (Id. at ¶ 22.)

Both LG and Whirlpool pair their steam dryers with steam washers and sell these appliances for a premium price when compared to conventional non-steam appliances. (R. 296-1 at ¶ 3.) The respective steam washers marketed by each of the parties use an internal boiler to create steam that is then injected into the washer drum. Indeed, the parties do not dispute that:

(1) the washers marketed by both LG and Whirlpool use "steam"; and (2) LG's dryer with the incorporated boiler uses "steam." Instead, the parties dispute the precise scope of "steam" and whether Whirlpool's Steam Dryers also employ "steam" sufficient to justify their respective names.

B. Development of the Steam Laundry Market

LG introduced its Tromm Steam Washer in late 2005. In January 2006, Consumer Reports magazine issued a new evaluation of home laundry appliances that ranked LG's Tromm Steam Washer as its top choice, a position previously "dominated" by Whirlpool appliances. (R. 296-1 at ¶ 13.) Whirlpool employee Scott Slabbekoorn, who was involved with the development of Whirlpool's Duet Steam Washer, testified that "there was a lots of [ ] noise in the market about the [LG] steam washer," that steam "definitely had an effect," and that LG obtaining the number one ranking in Consumer Reports "escalated the priority" of Whirlpool's development of a steam washer. (Id. at ¶ 14.) In June 2006, Whirlpool's Global Tech Lead in Drying Systems, Don Tomasi, sent an email to his team stating, "LG is now rated as #1 for [North American Region] washers - yuk! Lets [sic] continue to work together to assure this does not happen on dryers. Our work on energy, blower system, dispensing, heat system, sensing, etc - to achieve the customer attributes is very important." (R. 281 at Ex. 24.)

Whirlpool thereafter developed a dryer designed to "[p]rovide wrinkle reduction and odor reduction within the clothes dryer." (R. 281 at Ex. 29; R. 296-1 at ¶ 20.) Whirlpool's internal documents describe the technology as a "refresh" cycle "designed to provide a warm up stage of some time, a water spray stage of some time, a drying stage of some time, and a cool down stage of some time." (R. 281 at Ex. 29.) According to a Whirlpool email, by December 2006, Whirlpool decided to accelerate the introduction of its "Myst Dryer project ('steam' in the dryer)," from Fall 2007 to Spring 2007-timing "driven by the desire to have something in the news about Whirlpool and Kenmore brands and their innovation at the same time LG will be entering into Sears." (Id. at Ex. 38.) Shortly thereafter, in January 2007, Whirlpool changed the name of its project from "Duet Myst" to "Duet Steam." (Id. at Ex. 45.) By accelerating the introduction of the Duet Steam product, Whirlpool offered an initial release in the Spring of 2007 and a full launch in the fall of 2007-beating LG's own steam dryer to the market. (R. 280-1 at ¶¶ 10; 20.)

Whirlpool advertises its steam dryers through print media, television, internet, and point-of-sale placements. (R. 296-1 at ¶ 51.) The advertising claims challenged by LG include:

(1) "Naturally steam out wrinkles and odors with the touch of a button. The new Duet Steam dryer features two cycles-Enhanced Touch-Up and Quick Refresh-that infuse clothing with steam to refresh and dewrinkle;"

(2) "The pure power of steam-Nothing beats the power of steam to get rid of wrinkles. The Duet Steam dryer naturally steams out wrinkles in just minutes, while removing any lingering odors;"

(3) The Duet Steam Dryer (I) "naturally steams away tough stains," (ii) "steams out tough wrinkles and odors," and (iii) uses the "pure power of steam;"

(4) "How does the addition of steam work to enhance cleaning performance?" The Duet Steam Dryer: (I) "naturally steams away tough stains," (ii) provides a setting of "20 minutes of steam and tumbling;"

(5) "The Whirlpool Duet Steam laundry pair, a whole new way to care for your clothes from start to finish, with the pure power of steam. Just another laundry innovation from Whirlpool."

(R. 116-1, Second Am. Compl. ¶¶ 21--25).

III. Various Definitions of "Steam"

Whirlpool has offered the following definitions of steam from multiple dictionaries:

1. "vapor arising from a heated surface," (R. 280-1 at ¶¶ 31--32);

2. "the invisible vapor into which water is converted when heated to the boiling point: water in the state of vapor-compare DRY STEAM, WATER VAPOR, WET STEAM," (id. at ¶ 32);

3. "the mist formed by the condensation on cooling of water vapor: visible vapor," (id.);

4. "the vapor phase of water," (id. at ¶ 33); and

5. "Steam...can be generated by evaporation of water at subcritical pressures, by heating water above the critical pressure, and by sublimation of ice . . . . Steam is generated from water by boiling flash evaporation, and throttling from high to low pressure. The phase change occurs along the saturation line with the specific volume of steam larger than that of the boiling water. . . . At ...


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