Thursday, March 14, 2019

copying without infringement, falsity without materiality in adhesive case

J-B Weld Co., LLC v. Gorilla Glue Co., 2018 WL 6356768, No. 17-CV-03946-LMM (N.D. Ga. Oct. 17, 2018)

Among other things, this case is a reminder that when you sue a competitor for false advertising you can often expect counterclaims--here the only thing that (partially and provisionally) survives summary judgment.

J-B Weld sells a two-part epoxy adhesive: when epoxy resin and paste hardener are mixed together, a reaction produces a permanent adhesive bond. Both J-B Weld Original and its newer KwikWeld are sold in major retail stores and online sites.  The current Original trade dress dates from 2012, and J-B Weld defines it as: (1) two squeezable tubes in a clear blister package with the two tubes arranged in a “V-shape”; (2) red coloring on one tube and black coloring on the other tube; (3) a clear plastic blister package holding the tubes curved downward; (4) a drop-down technical information box, located between the two tubes, that has four lines of information separated by white lines; (5) a colored banner across the bottom end of the card; (6) a colored banner bar that includes “Weld” within the banner; (7) the phrase “Steel Reinforced Epoxy” and “World’s Strongest Bond” on the card; (8) a list of uses near the bottom right corner of the card; and (9) a card that is five inches.

J-B Weld’s packaging has described J-B Weld Original as a “Steel Reinforced Epoxy” and the resin tube was labeled with the word “STEEL” since 2009.  That was also when Gorilla Glue allegedly became aware that J-B Weld intended the word “steel” on its packaging to indicate the presence of an iron-containing additive. Gorilla Glue neither contacted J-B Weld about nor challenged its use of the word “steel” on its packaging until this case. J-B Weld has also featured “World’s Strongest Bond” on the packaging for all its adhesive products since 2011, including its two-part epoxy adhesive sold in a plunger syringe launched in 2012; Gorilla Glue learned of the use of the phrase when the packaging debuted. Gorilla Glue likewise didn’t object until this case.

In 2012, Gorilla Glue introduced a new Gorilla Epoxy formula, which improved performance and provided a clear, rather than yellowish, formula. It then began working on a two-part clear syringe product with methacrylate chemistry (MMA) that it referred to as “Plastic Plus” or “Heavy Duty Epoxy” during development and consumer testing. It ultimately became the two-tube adhesive product known as “GorillaWeld.” During the design process, Gorilla Glue’s Brand Manager instructed its graphic designer to develop three blister card designs, including one that was “Close to JB Weld brand” and that “should follow closely to going head to head with JB Weld and play with such elements as black and red color palate and bringing in some visual reference to steel reinforcement.” The graphic designer stated: “The objective of this project was to go straight up against the top competitor (JB Weld) and create packaging that mimics the competitor’s architecture. I was able to pull subtle elements into our package, but still keep our package looking tough and geared towards the Gorilla brand.”

The ultimate trade dress had: (1) a 5-inch-wide orange blister package card; (2) an image of a gorilla at the top next to the phrase “Gorilla Incredibly Strong”; (3) two squeezable tubes in a clear blister package in a V-shape; (4) a gray tube with red coloring on the bottom and a gorilla image next to the phrase “Gorilla Incredibly Strong” towards the top; (5) an orange tube with black coloring on the bottom and a gorilla image next to the phrase “Gorilla Incredibly Strong” towards the top; (6) a clear plastic blister package holding the tubes curved downward; (7) a drop-down technical information box located between the V-shaped tubes, that has four lines of information separated by white lines; (8) a gray banner across the bottom end of the card; (9) a gray banner across the top of the card that includes the name “GorillaWeld”; (10) the phrase “Steel Bond Epoxy” on the card; and (11) a list of materials to which GorillaWeld bonds on the card’s bottom right side.

[Note: the descriptions here are really not that helpful, though clearly carefully crafted to make J-B Weld’s case—the overwhelming fact is that the dominant colors create a completely different visual impression. Yes, they look like the same product, the way that different manufacturers’ light bulbs look like the same product, but they do not in any way look like they have the same source.]

Although whether GorillaWeld is an “epoxy” was disputed, the back of GorillaWeld’s packaging, the Safety Data Sheet (SDS), and Gorilla Glue’s website all state that GorillaWeld uses MMA chemistry.

J-B Weld sued for trademark infringement and false advertising of GorillaWeld as an epoxy adhesive containing steel. Gorilla Glue counterclaimed against (1) “World’s Strongest Bond”; and (2) “Steel Reinforced Epoxy.”

Trade dress first: the overall impression wasn’t similar.  Much explanation of why omitted, focusing on colors and their arrangement.  J-B Weld urged the court to find similarity “despite the brand names, logos, and color schemes.” But “it is precisely the prominent display of distinctive brand names and logos coupled with the use of radically different color schemes that negates any possibility of consumer confusion in this case—thus precluding a finding of similarity.” This wasn’t a swap of one name and logo for another, but a “radically different color scheme” and a prominent use of a distinctive logo “to cure the effect of any visual similarity.”

J-B Weld offered as actual confusion evidence three employees’ testimony.  One indicated that a Loctite sales rep asked if J-B Weld made Gorilla Glue’s “twin tube product for [Gorilla Glue]”; another had an encounter with a Loctite rep who asked if J-B Weld was “private labeling for GorillaWeld” after seeing the packaging; and another indicated a buyer from O’Reilly’s Auto Parts asked if J-B Weld had “anything to do with” Gorilla Glue’s product. These were admissible hearsay, going to state of mind and not the truth of the matter asserted.  But “[i]nquiries indicating that ‘consumers perceive a difference between the designations and are skeptical of the existence of a connection between users’ may not establish the existence of actual confusion.” Those inquiries indicate that the speakers actually know there’s a difference. They were inquiring into whether there was a possible collaboration, but they weren’t confused about source nor did they believe that there was a collaboration (if they did, they wouldn’t have needed to ask).  And there was no other evidence of confusion.

Intent: the Eleventh Circuit has held that: “If it can be shown that a defendant adopted a plaintiff’s mark with the intention of deriving benefit from the plaintiff’s business reputation, this fact alone may be enough to justify the inference that there is confusing similarity.” But the court here noted that “there is a difference between ‘intentional copying’ and adopting a design ‘with the intent of deriving benefit from’ another person’s design.”  Intent to copy aspects of a trade dress doesn’t show intent to derive benefit from J-B Weld’s reputation through confusion.  [Not unrelatedly, Gorilla Glue didn’t adopt J-B Weld’s mark, even if it copied aspects of that alleged mark.]  And bad intent is neither necessary nor sufficient for infringement. The instructions to Gorilla Glue’s graphic designer didn’t reveal an infringing/confusing intent. As she herself stated, “I was able to pull subtle elements [of J-B Weld’s Dress] into our package, but still keep our package looking tough and geared towards the Gorilla brand.” “The Eleventh Circuit has noted that public policy favors permitting companies to imitate the products of competitors—so long as there is no intent to deceive consumers as to the maker or origin of the product.”  Gorilla Glue intended to compete, for sure, but its use of its own well-known color scheme and distinct logo “clearly indicates that Gorilla Glue did not intend to confuse consumers as to GorillaWeld’s origin.”  In addition, certain design features may have had non-trademark functions, such as the V-shape showing consumers that the components need to be mixed together and preventing leakage. “Where, as here, ‘there may have been many other motivations for Defendant’s actions,’ intentional copying does not necessarily indicate a desire to capitalize on another’s goodwill.”

The remaining factors changed nothing. Gorilla Glue was entitled to summary judgment on the infringement claim.

False advertising based on Gorilla Glue’s use of the phrase “steel bond epoxy”: The court started with “epoxy.” Literal falsity requires an unambiguous message and is a “demanding” standard.  J-B Weld argued that Gorilla Glue’s use of “epoxy” is literally false because “epoxy refers to a polymer containing one or more epoxy groups.” Even if the court accepted that definition, the claim failed for lack of materiality. “[T]he presence of a false statement alone is not sufficient to prove materiality.”  J-B Weld’s consumer survey didn’t show materiality; it failed to show that consumers even understood “epoxy” as chemically defined. J-B Weld’s expert didn’t question survey respondents about whether an “epoxy resin has a specific type of chemistry to it”: as he said, “Do you really think [consumers] care at the end of the day if it takes two things, you put it together, and it stays there? They’re happy.” J-B Weld’s speculation that Gorilla Glue’s prior attempts to launch an MMA product under the name “Plastic Plus” and alleged repositioning of the product as an epoxy indicated that “epoxy” was material were insufficient.

“Steel bond”: J-B Weld argued misleadingness: a false suggestion that GorillaWeld contains steel. Again, assuming that its survey showed misleadingness, it still didn’t show materiality. The survey simply showed respondents both J-B Weld Original and GorillaWeld, and then asked which of the two products contained steel. (Amazon also originally categorized GorillaWeld as a “metal-filled epoxy” on its website, but a retailer’s misclassification wasn’t evidence of consumer deception.)  Nor would the court presume deception from Gorilla Glue’s deliberate conduct because the Eleventh Circuit hasn’t adopted that rule and in any case Gorilla Glue’s acts weren’t of an “egregious nature.” 

J-B Weld pointed to some 2009 evidence from Gorilla Glue employees noting that steel or a similar filler would provide “some advantage from a marketing standpoint.” But that old evidence wasn’t a direct indication of what actual consumers would do today.  [Quite notable how differently courts treat evidence of advertisers’ beliefs about consumers in advertising cases versus trademark cases. There’s no question that a substantial number of courts would treat similar evidence about the appeal of, e.g., a particular trade dress as indicating both an intent to deceive and likely success in doing so. I think those courts are wrong, but it’s also a bit bizarre to presume that active competitors in a market have no idea what might appeal to consumers.] Summary judgment for Gorilla Glue.

Counterclaims: J-B Weld argued that claims based on “steel reinforced” should be dismissed based on laches. In Georgia, the borrowed period for assessing laches is four years. Gorilla Glue argued that its awareness of the phrase did not ripen into a provable claim until the present litigation. The court agreed. In 2009, its reverse engineering attempts led to a report from an adhesive manufacturer in 2009 stating that the “one puzzle in this adhesive is presence of iron powder in the formula. It does not appear to add anything to the properties ... one clue to iron powder ... can be found in the name ‘steel’ that labels the resin.” But that didn’t mean that Gorilla Glue knew or should have known that it had a provable claim for false advertising simply based on a comment from a third-party that the presence of iron in JB Weld Original was “puzzling.” Even if it did delay, Gorilla Glue raised a material issue on excusability, because the parties weren’t directly competing on two-tube epoxy products until GorillaWeld was launched.  The Eleventh Circuit has held that delay is reasonable where a plaintiff waits to sue until coming into direct competition.

And there was a genuine dispute of material fact on literal falsity.  Gorilla Glue had evidence that the “presence of ‘steel’ in JB Weld glues has no significant overall reinforcing effect,” while J-B Weld’s expert said that the addition of steel “strengthens the adhesive, supports the adhesive, allows those steel-containing products to provide enhanced performance and improved mechanical behavior.”  [Is that the question?  I thought it was whether there was “steel” in there in the first place.] Anyway, could be literally false or misleading, although the court had “reservations” about ultimate materiality and would allow additional briefing on the matter. J-B Weld’s motion for summary judgment denied.

Claims based on “World’s Strongest Bond” were not only barred by laches, but also failed as a matter of law. Gorilla Glue learned of J-B Weld’s use of the phrase in 2011, discussed challenging it in 2013, and did nothing. Unlike with “steel reinforced,” J-B Weld was using the phrase on all its products, including those in direct competition with Gorilla Glue.  Gorilla Glue argued that it didn’t sue because a comparison between its Gorilla Epoxy product and J-B Weld’s competing ClearWeld showed comparable bond strengths. “Yet if the two products had comparable bond strengths, … it stands to reason that J-B Weld’s product could not literally create the ‘World’s Strongest Bond,’ because another product could create that very same bond.”

J-B Weld also showed prejudice because it “extensively used the J-B Weld Packaging Statements and built its brand around them,” spending millions on advertising and marketing its products between 2012-2017—all of which prominently feature the phrase “World’s Strongest Bond.” Gorilla Glue argued that there was no prejudice because J-B Weld knew from the beginning that it was a wrongdoer and had no testing supporting its claims. But J-B Weld argued that the phrase was puffery; it could hardly be said that J-B Weld would have spent the same amount of money and effort “notwithstanding any threat of litigation from Gorilla Glue.” [Really?  They might have changed that one phrase; the advertising/marketing is for the products as a whole, not a single phrase.]

Gorilla Glue argued that laches didn’t apply because it sought only injunctive relief, but that’s only the rule where the public interest in preventing consumer deception outweighs the effect of a plaintiff’s delay in bringing suit. Without strong evidence of likely or actual confusion, laches applied.

Anyway, “World’s Strongest Bond” was nonactionable puffery—exaggerated and general. Gorilla Glue argued that the strength of an adhesive bond is measurable and thus falsifiable. But it was too general, not a “detailed factual claim.”

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