Deltona Transformer Corporation v. NOCO Company, --- F.4th
----, 2026 WL 2236806, No. 24-13590 (11th Cir. Aug. 4, 2026)
Competitors aren’t generally allowed the same freedom as consumers
to “genericize” a term. Here, the 11th Circuit finds no error in a district
court’s holding that “battery tender” wasn’t generic, despite calling the
product category at issue by that name throughout the opinion (“specialized
vehicle-battery chargers called ‘battery tenders’”—they recognize when a battery
is fully charged so they don’t overcharge and degrade it, an innovation when
introduced). [What is the name of this specialized subcategory, if not “battery
tender”? This is an exercise for the reader because the court sure won’t tell
you, but moments in the opinion offer “battery-maintaining chargers” or “trickle
chargers.”]
Deltona federal registrations for “Battery Tender” and
“Deltran Battery Tender.” NOCO made similar charges and advertised its own products
as “battery tenders.” A jury found for Deltona on its federal and state
infringement claims, and further concluded that NOCO had engaged in false
advertising in violation of federal law. The court of appeals kicked out some
of the theories—specifically, based on keyword purchases and Lanham Act false
advertising—and remanded to recalculate damages.
The allegedly infringing conduct: (1) bidding on Deltona’s
marks as “keywords” and using them to trigger NOCO’s ads in Amazon search
results; (2) using the term “battery tender” in the text of its own Amazon ads;
(3) incorporating the term “battery tender” in its product descriptions on
Amazon; and (4) holding out its chargers as “battery tenders” in communications
with marketing firms and customers.
Category (1) couldn’t infringe, but the rest could. NOCO’s
position was summarized by a sales manager: An email drafted by Nook and sent
by a NOCO sales manager to a potential customer said, “We understand Battery
Tender is a well known brand, but most customers usually refer to the function
(battery tender meaning a trickle charger), than the actual brand.” Internal
documents showed that NOCO was willing to use “tender” and “battery” in ways
that were “passive aggressive.”
The director of advertising at a company that handles
Deltona’s marketing testified that one of its customer-service agents spoke to
a consumer who had initially reached out to NOCO and was “very confused” when
one of its employees “referr[ed] to [NOCO’s] products as a battery tender
charger.” And an email exchange in the record shows that a retailer considering
whether to stock a new line of battery tenders reached out to NOCO with an
inquiry about Deltona’s product.
The jury held that Deltona was entitled to actual damages of
$1.3 million and that NOCO had committed intentional misconduct or gross
negligence, entitling Deltona to punitive damages of $5.75 million. The
district court ordered NOCO to disgorge profits of over $12 million and issued
a permanent injunction. The injunction prohibited NOCO from “selling,
marketing, advertising, [or] promoting” its products using the terms “Battery
Tender,” “Deltran Battery Tender,” “Deltran,” or “Tender,” the latter of which
was included because “[t]here was abundant evidence that [the company’s] use of
‘tender’ on its own was done in a way that caused customer confusion and
infringed [Deltona’s] Marks.” The injunction exempted keyword purchases and
comparative advertising.
Deltona had a genericity survey, but the jury could have
rejected it. The marks weren’t inherently generic because they were registered;
they were descriptive with acquired secondary meaning. “The fact of registration
puts a heavy thumb on the scale against genericness.” [Does that mean that the
burden is clear and convincing evidence? Or something else?]
“Battery tender”
entails some level of abstraction—“tend[
]” is more a metaphorical than literal description of what a battery tender
does, which is to preserve the battery by maintaining its charge. That makes
“battery tender” more like “vision center”—which might sell glasses and contact
lenses but doesn’t literally sell “vision”—than, say, “liquor store”—which is
nothing more than a store that sells liquor. Indeed, the term “battery tender”
might even be suggestive; it “suggest[s] characteristics of the good[ ]” and
seems to require at least some “effort of the imagination” to understand how
the product works.
Sigh. Nothing has “inherent” meaning with the partial exception
of onomatopoeia.
Deltona’s co-founder made up the term based on an analogy to
a ship’s tender. [But if he made it up to identify this new category and
distinguish it from prior types of chargers, that shouldn’t matter—“dry ice” didn’t
have to be the term for solid carbon dioxide.] The court says that, “as a matter
of historical fact, it’s not accurate to say that ‘battery tender’ referred
from the very beginning simply to ‘a kind of battery-charging device,’” but
doesn’t explain what the generic word was at the very beginning.
NOCO’s consumer survey found that 78% of 558 respondents
reported that they believed that “Battery Tender [was] a type of product”
rather than a reference to a particular brand. The jury was free to reject
that, though; Deltona had challenged the survey’s methodology on the ground
that it included people who might simply have been “exposed” to battery tenders
[generic use again!] “from shopping near [them]” when walking through an
automotive store or department.
The court then held that keyword bidding alone can’t be
trademark infringement because the use of the plaintiff’s mark for
keyword-bidding purposes occurs “behind the scenes.” [Twenty years later, they
figure this out. Sincerely: thanks, Abitron!] Likelihood of confusion
“turn[s] on what the consumer s[ees] on the screen and reasonably believe[s],
given the context.” (Citing Eric Goldman and the Second, Ninth, and Fifth
Circuit cases to similar effect.)
Use in product titles and product descriptions on Amazon,
however, was potentially infringing, as was use in communications with
marketing firms and consumers, so that part of the award was upheld. Unlike
keyword advertising, “[t]he inclusion of ‘battery tender’ in the description
automatically not only affected Amazon search results but also drove shoppers
searching for Deltona’s battery tenders to NOCO chargers without alerting them
in any way—through a ‘sponsored’ tag or otherwise—that they weren’t really
looking at battery tenders.”
“A reasonable jury certainly could have concluded that these
explicit statements to customers—that ‘battery tender’ was a generic term—were
likely to confuse them.” (Confuse them about what? Not about source or sponsorship,
given the statement that it was generic.)
The Florida Deceptive and Unfair Trade Practices Act damages
award was also problematic, even though the Lanham Act violation could also violate
FDUTPA. Monetary relief in the form of actual damages is available only to a
“person who has suffered a loss as a result of a violation of this part,” and Florida
law generally defines actual damages as “the difference in the market value of
the product or service in the condition in which it was delivered and its
market value in the condition in which it should have been delivered.” Thus,
Deltona couldn’t base its damages on “harm to its reputation or goodwill,” because
consequential damages like that aren’t compensable under FDUTPA.
Finally, the district court erred by instructing the jury on
false advertising under the Lanham Act based on the same conduct. Deltona’s
complaint alleged unfair competition and false designation of origin under the
Lanham Act; it never separately articulated a false advertising theory. It was
not enough to use the phrase “misleading description and representation of
fact,” when read in conjunction with the complaint’s “numerous allegations
involving advertisements” and its generic citation to § 43(a), to warrant a
separate jury instruction on false advertising under § 43(a)(1)(B). In context, the complaint clearly referred to §
43(a)(1)(A). NOCO neither expressly nor impliedly consented to trying a
false-advertising claim.
The court of appeals had “substantial and ineradicable
doubt” whether the jury was properly guided, so that part of the judgment was
reversed.
Disgorgement was appropriate, given the willful conduct. [Recalculation
doesn’t seem to be required because of how disgorgement is assessed—even kicking
out the keyword advertising doesn’t seem to matter (though you’d think that
sales made through keyword ads alone wouldn’t have the right causal
relationship).]
Also ok: an injunction extending a ban on standalone use of “tender.”
“[E]ven though NOCO seems to have ceased its misconduct, the record shows that
it has, after brief interludes, repeatedly returned to infringing Deltona’s
marks.” “In fashioning relief against a party who has transgressed the
governing legal standards, a court of equity is free to proscribe activities
that, standing alone, would have been unassailable.”
But the damage award needed to be reassessed, so remand for
a new trial it was.
No comments:
Post a Comment