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Loggerhead Tools, LLC v. Sears Holdings Corp.

United States District Court, N.D. Illinois, Eastern Division

September 20, 2016

LOGGERHEAD TOOLS, LLC, Plaintiff,
v.
SEARS HOLDINGS CORPORATION and APEX TOOL GROUP, LLC, Defendants.

          MEMORANDUM OPINION AND ORDER

          JOHN W. DARRAH United States District Court Judge

         Plaintiff LoggerHead Tools, LLC (“LoggerHead”), filed a Second Amended Complaint against Defendants Sears Holdings Corporation (“Sears”) and Apex Tool Group, LLC (“Apex”), alleging against Sears, inter alia, claims under the Lanham Act § 43(a), Count VII; the Illinois Consumer Fraud and Deceptive Practices Act, Count VIII; the Uniform Deceptive Trade Practices Act, Count IX; and Illinois Common Law Unfair Competition, Count XIV. Sears filed a Motion for Summary Judgment [255] on those counts. For the reasons set forth more fully below, Sears' Motion for Summary Judgment [255] is granted.

         LOCAL RULE 56.1

         Local Rule 56.1(a)(3) requires the moving party to provide “a statement of material facts as to which the party contends there is no genuine issue for trial.” Ammons v. Aramark Uniform Servs., 368 F.3d 809, 817 (7th Cir. 2004). Local Rule 56.1(b)(3) requires the nonmoving party to admit or deny every factual statement proffered by the moving party and to concisely designate any material facts that establish a genuine dispute for trial. See Schrott v. Bristol-Myers Squibb Co., 403 F.3d 940, 944 (7th Cir. 2005). A nonmovant's “mere disagreement with the movant's asserted facts is inadequate if made without reference to specific supporting material.” Smith v. Lamz, 321 F.3d 680, 683 (7th Cir. 2003). In the case of any disagreement, the nonmoving party must reference affidavits, parts of the record, and other materials that support his stance. Local Rule 56.1(b)(3)(B). To the extent that a response to a statement of material fact provides only extraneous or argumentative information, this response will not constitute a proper denial of the fact, and the fact is admitted. See Graziano v. Vill. of Oak Park, 401 F.Supp.2d 918, 936 (N.D. Ill. 2005). Similarly, to the extent that a statement of fact contains a legal conclusion or otherwise unsupported statement, including a fact that relies upon inadmissible hearsay, such a fact is disregarded. Eisenstadt v. Centel Corp., 113 F.3d 738, 742 (7th Cir. 1997). Pursuant to Local Rule 56.1(b)(3)(C), the nonmovant may submit additional statements of material facts that “require the denial of summary judgment.”

         BACKGROUND

         The following facts are taken from the parties' statements of undisputed material facts submitted in accordance with Local Rule 56.1.

         Plaintiff is an Illinois limited-liability company based in Palos Park, Illinois. (DSOF ¶ 1.) Sears is a Delaware corporation based in Hoffman Estates, Illinois. (Id. ¶ 2.) Apex is a corporation based in Sparks, Maryland. (Id. ¶ 3.) LoggerHead sells a hand tool known as the Bionic Wrench. (Id. ¶ 1.) Sears retailed the Bionic Wrench in its stores starting in 2009. (Id. ¶ 5.) In February 2012, Sears began talks with Apex to create and retail a Bionic Wrench replacement to be sold under the Sears Craftsman brand. (PSOF, ¶ 17.) Apex sent LoggerHead's '579 Patent for the Bionic Wrench to a patent lawyer, John Owen. (Id. ¶ 18.) Owen identified another patented tool, Buchanan, U.S. Patent No. 2, 787, 925, that Apex could model a replacement wrench after. (Id. ¶ 19.) Owen reported to Apex that using the Buchanan design would not infringe on LoggerHead's patents. (Id. ¶¶ 19, 23.) In September 2012, Sears began retailing the Max Axess Locking Wrench (“MALW”), which was supplied by Apex. (DSOF, ¶ 6.)

         In direct to consumer (“DRTV”) advertising for the MALW, Sears stated: “[i]f you want maximum versatility in a single wrench, then you'll love the latest innovation from Craftsman, the Max Axess Locking Wrench.” (PSOF, ¶ 1.) The product packaging for the MALW shows a picture of the wrench, the term “Unique Design, ” and, underneath that, the phrase “Adapts to a wide range of fastener sizes and grips fasteners on all sides to prevent rounding.” (Id. ¶ 2.) The packaging also contains a dotted line going from the writing to the picture of the wrench. (Id.) On November 14, 2012, Sears issued a press release regarding their sale of the MALW. (DSOF, ¶ 7.)

         LEGAL STANDARD

         Summary judgment is appropriate when “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56. Courts deciding summary judgment motions must view facts “in the light most favorable to the nonmoving party only if there is a ‘genuine' dispute as to those facts.” Scott v. Harris, 550 U.S. 372, 380 (2007). A genuine dispute as to any material fact exists if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The moving party has the initial burden of establishing that there is no genuine dispute as to any material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the moving party meets this burden, “[t]he nonmoving party must point to specific facts showing that there is a genuine issue for trial.” Stephens v. Erickson, 569 F.3d 779, 786 (7th Cir. 2009). Factual disputes do “not preclude summary judgment when the dispute does not involve a material fact.” Burton v. Downey, 805 F.3d 776, 783 (7th Cir. 2015). The evidence must be such “that a reasonable jury could return a verdict for the nonmoving party.” Pugh v. City of Attica, Ind., 259 F.3d 619, 625 (7th Cir. 2001) (quoting Anderson, 477 U.S. at 248).

         ANALYSIS

         Count VII: Lanham Act

         In Count VII, LoggerHead alleges Sears engaged in false advertising under the Lanham Act, § 43(a). Specifically, LoggerHead alleges that, during Sears' promotion of the MALW, Sears falsely advertised: (1) on portions of the MALW's product packaging; (2) with statements made in a DRTV commercial; and (3) with statements contained in a press release Sears published on its website. The Lanham Act imposes civil liability for unfair competition by deceptive advertising or labeling. Lexmark Int'l, Inc. v. Static Control Components, Inc.,134 S.Ct. 1377, 1395 (2014). Deceptive advertising means ...


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