United States District Court, C.D. Illinois, Springfield Division
MYERSCOUGH UNITED STATES DISTRICT JUDGE
cause is before the Court on the Motion for Summary Judgment
on All Undecided Claims (d/e 168) filed by Defendants Meijer,
Inc. and Whitmor, Inc., and the Motion for Partial Summary
Judgment (d/e 189) filed by Plaintiff Design Ideas, Ltd.
Because genuine issues of material fact remain, the Motions
for Summary Judgment are DENIED.
originally filed suit in March 2015 against Defendants
Meijer, Inc. (Meijer), Whitmor, Inc. (Whitmor), and The TJX
Companies, Inc. (TJX). In November 2015, Plaintiff filed a
First Amended Complaint asserting copyright infringement under
the Copyright Act of 1976, 17 U.S.C. § 101, et
seq., unfair competition under the U.S. Trademark Act,
15 U.S.C. § 1051, et seq. (Lanham Act) and
violations of the Digital Millennium Copyright Act, 17 U.S.C.
§ 1201, et seq. (DMCA). The First Amended
Complaint also contains state law claims asserting unfair
competition, violations of the Illinois Deceptive Trade
Practices Act, 815 ILCS 510/1, the Illinois Consumer Fraud
and Deceptive Practices Act, 815 ILCS 505/2, and breach of
weeks before Plaintiff filed this action, Meijer, Whitmor,
and TJX filed a lawsuit in the Western District of Michigan
seeking a declaratory judgment that they did not violate the
Lanham Act, the Copyright Act, or the DMCA. In June 2015, the
Court enjoined the defendants from prosecuting that
declaratory judgment action. Opinion (d/e 12) (Mills, J.).
August 2016, the Court granted partial summary judgment on
liability in favor of Plaintiff on Plaintiff's copyright
claims in Count I. Opinion (d/e 115). In December 2016,
Plaintiff and Defendant TJX filed a Stipulation of Voluntary
Meijer and Whitmor (collectively referred to as Defendants)
have now filed a motion for summary judgment on all remaining
claims: Count III, Federal Unfair Competition Under the
Lanham Act; Count IV, violation of the DMCA; Count VII,
common law unfair competition; Count VIII, violation of the
Illinois Deceptive Trade Practices Act; Count IX, violation
of the Illinois Consumer Fraud and Deceptive Business
Practices Act; and Count X against Meijer for breach of the
2007 Settlement Agreement. Defendants also seek summary
judgment that the only recovery to which Plaintiff is
entitled on Count I is Defendants' profits from the sale
of CANARY CLIPS in 2013 until Defendants stopped selling
CANARY CLIPS in August 2014, which total $14, 095.64.
seeks summary judgment on Count III, the trademark claim, and
Count IV, the DMCA claim. Although Plaintiff asserts in its
reply that Plaintiff is entitled to summary judgment on
Counts VII, VIII, and IX, Plaintiff has forfeited that
argument by not raising the claims in its motion for summary
judgment and memorandum in support thereof. See Narducci
v. Moore, 572 F.3d 313, 324 (7th Cir. 2009)
(“[T]he district court is entitled to find that an
argument raised for the first time in a reply brief is
the cross-motions for summary judgment, the parties dispute
many of the facts in this case. Moreover, Plaintiff failed to
strictly comply with Local Rule 7.1(D)(1)(b) and (2)(b),
which require including as exhibits all relevant documentary
evidence and providing citations for the documentary evidence
that supports each fact or disputed fact. Plaintiff has,
however, supplied much of the missing documentary evidence in
its reply. Therefore, the Court will disregard only those
“facts” for which the Court could not find
documentary support or which did not contain a citation to
the document evidence unless Defendants nonetheless admitted
is in the business of creating, manufacturing, and
distributing decorative gift items and housewares. One such
item is the SPARROWCLIP, which is a clothespin with a bird
design on top. Plaintiff claims to own intellectual property
rights in both the SPARROWCLIPS design and the trademark.
From February 2009 through May 2016, Plaintiff sold its
SPARROWCLIPS to over 750 customers with sales over $615, 000.
May and August 2012, Meijer placed five orders for
SPARROWCLIPS from Plaintiff. At some point, Defendants became
interested in manufacturing a bird clip. Meijer admits it
purchased retail quantities of SPARROWCLIPS from Plaintiff
and that it hired Whitmor to produce the
copies. The parties dispute whether Meijer
directed Whitmor to directly copy Plaintiff's
September 2012, Whitmor sent a set of Plaintiff's
original SPARROWCLIPS that Whitmor purchased from The
Container Store to a Chinese manufacturer, Sunny Living.
Whitmor asked Sunny Living if it had a mold of the goods and
sought pricing. Sunny Living had a mold producing exact
duplicates of SPARROWCLIPS. The Sunny Living factory had only
used the mold to manufacture bird clips that were shipped to
Japan and never shipped bird clips from that mold to the
Living asked Whitmor what colors Meijer wanted for the copies
of the SPARROWCLIPS. Whitmor instructed Sunny Living to copy
the colors used in Plaintiff's SPARROWCLIPS sold at The
Container Store. Defendants did not inquire whether Plaintiff
had authorized that mold or attempt to learn the origin of
the Sunny Living mold.
January and May 2013, Whitmor imported retail quantities of
“Canary Plastic Clothespins”-CANARY CLIPS- from
China. Whitmor also offered CANARY CLIPS to Target and TJX.
sold CANARY CLIPS in a plastic bag with a header card. When
Meijer and Whitmor sold CANARY CLIPS, Meijer included its
tradename, Wholesale Merchandisers, Inc.. and Whitmor
included its name, Whitmor, on the packaging. Neither Meijer
nor Whitmor provided any identifying information on the
CANARY CLIP itself. The information provided by Meijer and
Whitmor on the packaging was meant for and applied to the
packaging for the CANARY CLIPS, not the clip itself.
sold SPARROWCLIPS in various types of packaging, including a
plastic box and a plastic bag with a header card.
Plaintiff's packaging for SPARROWCLIPS contains both the
name SPARROWCLIPS and its source, Design Ideas:
“SPARROWCLIPS, DESIGN IDEAS © 2008 Design Ideas
Ltd.” or SPARROWCLIPS, DESIGN IDEAS” and
“© 2011 Design Ideas Ltd.” The fonts,
background designs, and background colors on the header cards
used by Defendants and Plaintiff are different.
addition, Plaintiff's SPARROWCLIPS have imbedded on each
individual clip the author's name and Plaintiff's
tradename: “p.waiwiriya for design ideas.” This
information was not imbedded in the CANARY CLIPS.
contend, and Plaintiff disputes, that Whitmor's Vice
President, Scott Felsenthal, reached out to outside counsel
to ensure that its own distribution of the clips was
appropriate. The parties also dispute that, based on
counsel's response, Felsenthal expanded his search to
include a search of copyright registration and that he did
not find registrations related to the SPARROWCLIPS design or
bird clips or clips. Whitmor never contacted Plaintiff to ask
whether SPARROWCLIPS were trademarked or copyrighted.
stopped selling CANARY CLIPS around August 2014, shortly
after receiving Plaintiff's cease and desist letters.
Meijer's profits on the sale of CANARY CLIPS did not
exceed $4, 809.78. Whitmor's profits on the sale of
CANARY CLIPS did not exceed $9, 285.86.
submitted a copyright application to the U.S. Copyright
Office for the SPARROWCLIPS on April 4, 2013. The Copyright
Office issued a registration certificate on May 29, 2013.
February 5, 2016, Plaintiff filed an application to register
the mark “SPARROWCLIPS.” On September 13, 2016,
the United States Patent and Trademark Office (PTO) issued a
trademark registration for SPARROWCLIPS.
filed its application for registration under Section 2(f) of
the Lanham Act, certifying that the SPARROWCLIPS had acquired
distinctiveness based on five years of continuous use in
commerce. In the application, Plaintiff stated:
Applicant believes its SPARROWCLIPS mark is inherently
distinctive. The bird design on the goods is not of any
particular type of bird, and the mark is unitary.
Nonetheless, Applicant submits herewith a 2(f) claim for
SPARROW, since it has used the mark since 2008, as well as a
disclaimer of CLIPS. However, if the Examining Attorney
believes either or both are not necessary, applicant requests
the Examining Attorney to delete them from the application.
Thank you kindly.
examining attorney reviewing the SPARROWCLIPS application did
not delete the Section 2(f) claim from the SPARROWCLIPS
application. In the PTO's Trademark Snap Shot Publication
Stylesheet, the field titled “Section 2F In Part”
is marked “YES.” The Registration Certificate
states: “SEC. 2(F) As to ‘SPARROW.'”
The following facts pertain to Plaintiff's breach of
contract claim. In 2007, Plaintiff and Meijer entered into a
Settlement Agreement to resolve a controversy between the
parties related to another line of Plaintiff's products.
Meijer denied in the Agreement that it infringed
Plaintiff's products. The Agreement required that
Plaintiff purchase merchandise identified in an attachment to
the Agreement totaling $250, 753 and to purchase additional
merchandise totaling $1, 000, 000 by September 30, 2009. The
parties agree that Meijer satisfied all of its purchase
obligations under the Agreement.
Settlement Agreement also required Meijer “not [to]
purchase, order, create, manufacture, sell, or distribute any
other goods identical or substantially the same as Design
Ideas' . . . (iii) containing any Design Ideas
intellectual property or  use any Design Ideas intellectual
property, or (iv) use any Design Ideas intellectual property
. . . except as provided herein” Agreement ¶ 2(b)
(d/e 172-14). Plaintiff alleges that Meijer breached this
section of the Agreement with its conduct related to its
infringing CANARY CLIPS.
8 of the Agreement provided: “The parties hereby agree
to cooperate with each other in furtherance of the purpose,
terms[, ] and provisions of this Agreement[.]”
Agreement ¶ 8 (d/e 172-14). Plaintiff contends that
Paragraph 8 requires Meijer to further the purposes of the
Agreement and that a major purpose of the Agreement was
“ongoing, future sales, which is shown by the express
terms [of the Agreement] . . .” Defs. SOF ¶ 145
(d/e 169); Pl. Resp. at 5 (d/e 178).
claims, and Defendants deny, that Meijer threatened Plaintiff
with a loss of business should Plaintiff continue to defend
its intellectual rights in the SPARROWCLIPS. Plaintiff
further claims, and Defendants deny, that Meijer actualized
the threat as shown by the lost sales after Plaintiff refused
to drop the instant enforcement and that Meijer instructed
Meijer's buyers to cease business with Plaintiff. The
parties do agree, however, that, in 2015, after the present
lawsuit was filed, Meijer stopped product development efforts
with Plaintiff and only agreed to continue purchasing three
product programs that were already in place.
judgment is proper if the movant shows that no genuine
dispute exists as to any material fact and that the movant is
entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a).
The movant bears the initial responsibility of informing the
court of the basis for the motion and identifying the
evidence the movant believes demonstrates the absence of a
genuine issue of material fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986). No. genuine issue of
material fact exists if a reasonable jury could not find in
favor of the nonmoving party. Brewer v. Bd. of Trs. of
the Univ. of Ill., 479 F.3d 908, 915 (7th Cir. 2007).
When ruling on a motion for summary judgment, the court must
consider the facts in the light most favorable to the
nonmoving party, drawing all reasonable inferences in the
nonmoving party's favor. Blasius v. Angel Auto.,
Inc., 839 F.3d 639, 644 (7th Cir. 2016).
case, the parties filed cross-motions for summary judgment
pursuant to Rule 56 of the Federal Rules of Civil Procedure.
Therefore, this Court must view all facts and draw all
reasonable inferences in the light most favorable to the
Plaintiff when reviewing Defendants' Motion and in the
light most favorable to the Defendants when reviewing