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Bodum USA, Inc. v. A Top New Casting, Inc.

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

May 10, 2017

BODUM USA, INC., Plaintiff,
v.
A TOP NEW CASTING, INC., Defendant.

          MEMORANDUM OPINION AND ORDER

          MATTHEW F. KENNELLY, UNITED STATES DISTRICT JUDGE

         Plaintiff Bodum USA, Inc. (Bodum) has sued defendant A Top New Casting, Inc. (A Top) for trade dress infringement. Bodum alleges that A Top infringed Bodum's CHAMBORD® trade dress by selling and promoting a French press coffeemaker that copies the look and overall appearance of Bodum's CHAMBORD® coffeemaker. A Top maintains that Bodum relinquished its rights to enforce its trade rights when it granted a third-party company a purportedly "naked" license to the CHAMBORD® design. A Top has moved for summary judgment on the basis of this affirmative defense. For the reasons stated below, the Court denies A Top's motion.

         Background

         A French press coffeemaker is a non-electric, manually operated coffeemaker that usually consists of a cylindrical beaker or carafe, a handle affixed to the cylinder, a base, and a lid with a piston or "plunger" attached to a filter screen. During the brewing process, a user adds heated water to coffee grounds lying in the carafe and presses the plunger downward, allowing the filter to separate the brewed coffee from the used coffee grounds. According to Bodum, the distinctive characteristics of its CHAMBORD® French-press coffeemaker include the design of the metallic stand that holds the carafe, the design of the handle, the distinctive bands affixing the handle to the carafe, the shape of the knob on the plunger, and the carafe's dome-shaped lid.

         In 1996, Bodum brought a trade dress infringement lawsuit against Culinary Parts Unlimited, Inc., another seller of French press coffeemakers. Bodum alleged that certain coffeemakers Culinary Parts sold and promoted under its BONJOUR® brand copied the look and overall appearance of the CHAMBORD® products. In 1997, as a part of an agreement settling the claims raised in that lawsuit, Bodum granted Culinary Parts a non-exclusive license to use the CHAMBORD® trade dress on certain BONJOUR® products. According to A Top, after Bodum granted that license, it failed to exercise reasonable control over the nature and quality of the BONJOUR® products that incorporated the CHAMBORD® trade dress. Thus, A Top argues, Bodum granted an uncontrolled or "naked" license, thereby abandoning any rights it had to enforce the CHAMBORD® trade dress. See Eva's Bridal Ltd. v. Halanick Enters., Inc., 639 F.3d 788, 790-91 (7th Cir. 2011) (trademark owner abandoned trademark rights by granting license to use mark without retaining any control over licensee).

         Bodum argues that it continues to exercise reasonable control over the nature and quality of the BONJOUR® coffeemakers and thus denies that the license it granted to Culinary Parts was a naked license. The chief executive officer of Bodum's parent company testified that, around the time Bodum entered into the licensing agreement with Culinary Parts, it obtained samples of BONJOUR® products and conducted factory testing, including analysis of the steel and glass used in the products. Bodum also relies upon the language of the licensing agreement, section 4 of which provides:

4. Quality Control
A. Licensed Merchandise shall substantially and reasonable conform to the level of quality with respect to materials and workmanship as Licensee's current Monet product models.
B. Licensee will comply with all laws, rules, regulations and requirements of any governmental or administrative body which may be applicable to the manufacture, advertising, merchandising, packaging, publicity, promotion, sale, distribution, shipment, import and export of the Merchandise and its componentry.
C. For purposes of monitoring quality, Licensee agrees to provide Licensor, [sic] a sample of each model of Licensed Merchandise, upon request, provided Licensed Merchandise is not commercially available to Licensor.

Def.'s Stmt. of Mat. Facts ¶ 20. The licensing agreement also allows either party to terminate the agreement in the event the other party fails to perform any of its material obligations. According to Bodum, therefore, it would have the right to terminate the licensing agreement if licensed products using the CHAMBORD® trade dress failed to conform to the level of quality that Culinary Parts' Monet coffeemakers displayed at the time the parties entered into their agreement.[1]

         Bodum maintains that it has continued to exercise its contractual right to monitor the quality of the licensed products. In addition to its initial factory inspection of the BONJOUR® products, Bodum emphasizes that its outside counsel, David Bennett, has examined the licensed products every year since 1997 at an annual houseware display show. Bennett has become familiar with the design and operation of French press coffeemakers through his representation of Bodum in over a dozen trade dress lawsuits. He says that each year he inspected the licensed products and did not notice any change in their quality. Specifically, during Bennett's annual examinations of the products, he visually inspected the coffeemaker's frame, feet, handle, lid, safety lid, carafe, and plunger; visually inspected and felt the steel and glass used in the product components; and opened the lid and tested the plunger. In addition to finding no change in the quality of the licensed products, Bennett has stated that he is unaware of any products liability actions alleging defects in the licensed products since the licensing agreement has been in effect. Bodum also notes that during that period the United States Consumer Product Safety Commission has not issued a recall of any of the licensed products.

         A Top denies that the licensing agreement grants Bodum adequate control over the BONJOUR® products. Specifically, A Top notes that Bodum lacks any express right to inspect or supervise the licensee's operations, and A Top points to another section of the agreement indicating that Bodum shall have no responsibility for the operation of the licensee's business. A Top also denies that Bennett's inspections of the licensed products constituted adequate quality control. According to A Top, Bennett is unqualified to assess manufacturing or design quality. Even if he were qualified, A Top argues, adequate quality control requires testing the products in a factory, as Bodum did initially when it entered into the licensing agreement. In addition, A Top points to deposition testimony from Bodum executives as evidence that Bodum failed to exercise any control over the quality of the BONJOUR® products. A Top notes that the chief executive officer of Bodum's parent company could not remember the last time he saw a BONJOUR® product being tested and could not point to any records or evidence of quality control taking place at Bodum's factory. A Top also cites the testimony of Bodum's current chief executive officer, who responded "No" when asked whether Bodum has "any control over the quality of [the licensee's] products." Def.'s Stmt. of Mat. Facts ¶ 22. Bodum explains that the current chief executive officer may be unfamiliar with the license agreement because he has only held his position since January 2016, and there has been no need to report BONJOUR® quality issues to Bodum management during his tenure.

         A Top has moved for summary judgment, arguing that Bodum's naked licensing of the CHAMBORD® design bars Bodum's claim that A Top has infringed the CHAMBORD® trade dress by promoting and selling its own French ...


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