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American Hardware Manufacturers Association v. Reed Elsevier

January 4, 2010

AMERICAN HARDWARE MANUFACTURERS ASSOCIATION, PLAINTIFF,
v.
REED ELSEVIER, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Judge Blanche Manning

MEMORANDUM AND ORDER

The parties have filed numerous motions for summary judgment. This order addresses the motion filed by plaintiff American Hardware Manufacturers Association on the false advertising and trademark-related claims of its Second Amended Complaint against defendant Reed Elsevier Inc.

BACKGROUND

As the court has detailed in other orders, for 25 years American Hardware and Reed jointly held an annual trade show for the hardware and home improvement industries. After the 2003 show, the parties severed their relationship and agreed to compete against each other by conducting their own, separate trade shows in 2004. The break-up was widely reported, and those in the industry expected only one of the two shows to survive.

American Hardware's claims against Reed stem from Reed's efforts to publicize its 2004 event. The following facts about Reed's conduct are undisputed except where noted.

1. Announcement of Buyers and Exhibitors

To help generate interest in its show, Reed conducted a news conference on August 10, 2003, at which Reed vice-president Robert Cappiello spoke. About a month later, industry trade publication HOME CHANNEL NEWS reported on the news conference and quoted Cappiello as having announced that the first buyer to register to attend Reed's show was PRO Group, a prominent purchasing group. In fact, PRO Group had not registered to attend Reed's show and its president contacted Cappiello to complain about the article. In response, Cappiello contacted HOME NEWS CHANNEL and asked it to correct the article. HOME NEWS CHANNEL ran a correction in the October 6, 2003, edition of its publication, reporting that, according to Reed, the first buyer to register was not PRO Group, but rather was Distribution America, another prominent purchaser. However, the correction was also inaccurate because, like PRO Group, Distribution America had not registered to attend Reed's show.

In the meantime, Reed also attempted to raise interest in its show among hardware suppliers by making various announcements on its website and in other publications that General Tools and Great American Marketing would be exhibitors at its 2004 show. Reed contends that these statements were true when made because both General Tools and Great American had signed an "Application & License Agreement for Exhibition Participation" requesting space at Reed's 2004 show. However, American Hardware asserts that the applications were incomplete and did not commit General Tools or Great American to exhibit at Reed's show, and therefore Reed's references to General Tools and Great American as exhibitors were false.

2. Use of American Hardware's Marks

In addition to allegations of false advertising, American Hardware contends that Reed used its INTERNATIONAL HARDWARE WEEK and AMERICAN HARDWARE MANUFACTURERS ASSOCIATION service marks while promoting Reed's 2004 show. Specifically, American Hardware contends that Reed used the marks (1) on a website that touted Reed's 2004 show as being held in conjunction with International Hardware Week, and (2) in a magazine entitled "Data Book 2004," again touting Reed's 2004 show as being held in conjunction with International Hardware Week as well as being sponsored by American Hardware. Reed admits that the marks appeared as alleged, but asserts that the use was inadvertent, occurred in a publication and on a website not aimed at those in the hardware industry, and would not have led to confusion because Reed's split with American Hardware was widely reported within the hardware industry.

ANALYSIS

As a result of Reed's allegedly false statements and misuse of American Hardware's marks, American Hardware sued Reed for, among other things, (1) false advertising under the Lanham Act (Count VII) based upon statements that (a) PRO Group, Inc. and Distribution America had been first to register to attend Reed's show, and (b) General Tools and Great American had been among the first to sign up to exhibit at Reed's show, and (2) trademark violations and unfair competition under the Lanham Act (Count VIII) and Illinois common law (Counts IX and X) based upon use of the INTERNATIONAL HARDWARE WEEK and AMERICAN HARDWARE MANUFACTURERS ASSOCIATION marks.

American Hardware now seeks summary judgment on its false advertising, unfair competition, and trademark violation claims against Reed, arguing that the undisputed facts establish that Reed ...


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