Wednesday, September 19, 2012, 12:42 PM

11th Circuit Affirms District Court Ruling in Favor of Defendants in Stormwater Filtration "Baffle Boxes" Trademark Case

The U.S. Court of Appeals for the Eleventh Circuit has issued its ruling in a trademark dispute between two competing manufacturers of baffle boxes -- stormwater filtration devices that "remove debris, trash, oil and other pollutants from stormwater before the stormwater reaches lakes, rivers, and streams."[1]  The Court adopted a position taken by the Sixth Circuit that the first five factors of the likelihood of confusion test are irrelevant where a defendant has represented the plaintiff's product to be his own work.

Suntree Technologies, Inc. ("Suntree") brought suit in 2009 against Ecosense International, Inc. ("Ecosense"), Ecosense president George Dussich, and general contractor Derrico Construction Corporation ("Derrico"), alleging that Ecosense urged Derrico to use Suntree's name in its bid for a Stormwater Quality Retrofit Project for the City of West Melbourne, Florida ("CWM Project") but to then "substitute" Ecosense's baffle boxes once the business was awarded to Derrico.  Suntree and Derrico settled their claims early in the litigation, and Derrico offered declarations and testimony in support of Suntree throughout the proceeding.

Suntree and Ecosense filed cross-summary judgment motions on Suntree's claims of false designation of origin and false advertising under the Section 43(a) of the Lanham Act, common law trademark infringement and unfair competition, and deceptive and unfair trade practices pursuant to the Florida Deceptive and Unfair Trade Practices Act ("FDUPTA").  The district court denied Suntree’s summary judgment motion and granted of Ecosense's summary judgment motion, concluding that Suntree failed to present evidence of actual or likelihood of confusion.[2]  Suntree appealed.  

On September 5, 2012, in an opinion authored by the Honorable Arthur L. Alarcón, U.S. Circuit Judge for the Ninth Circuit, sitting by designation, the three-judge panel affirmed the Middle District of Florida Court's grant of summary judgment in favor of Ecosense.

In the fall of 2008, the City of West Melbourne, Florida, solicited bids for the CWM Project, and the specification in the bid documents delivered to general contractors included the following:  “NUTRIENT SEPARATING BAFFLE BOXES TO BE PROVIDED BY SUNTREE TECHNOLOGIES, INC. OR APPROVED EQUAL.”[3]  In addition, the bid specifications explicitly stated that any proposed substitutes or “or equal” items on the listed specifications would not be considered until after the job was awarded to a contractor.  Thus, the City of West Melbourne decided to use Suntree’s name in the specifications in order to save the expense of pre-approving proposed substitutes.[4] 

Derrico, a general contractor, submitted a bid significantly lower than any other bidder.  Derrico listed Suntree as the proposed baffle box manufacturer, because Derrico “did not know if an alternate would be accepted after award so [they] had to be covered to install [Suntree’s] product” if necessary.[5]  The CWM Project was awarded to Derrico, and Derrico requested and obtained approval to install Ecosense’s baffle boxes as an “or equal” substitute to Suntree’s products.[6]  The City of West Melbourne then asked Ecosense for a presentation to educate the city on how to properly clean and maintain the baffle boxes.  Ecosense’s power point presentation included pictures from a nearby city, which depicted both Ecosense and Suntree baffle boxes, though Suntree’s name was not included in the presentation.[7]   

Suntree contended that the undisputed facts warranted a grant of summary judgment in its favor or, in the alternative, warranted a denial of Ecosense’s motion because “a series of disputed facts” remained to be decided by a jury.  Suntree argued that the district court erred in concluding that Suntree failed to demonstrate that Derrico directly infringed its trademark by using Suntree’s name in its bid, and that Ecosense contributorily infringed its trademark by inducing Derrico’s use of Suntree’s name in the bid. 

The Court started by stating that “the Lanham Act protects trademark owners from infringement and unfair competition by ‘prohibiting the use in interstate commerce of any ‘word, term name, symbol or device, … or any false designation of origin … which is likely to cause confusion … as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person.’’”[8]  The Court then noted that “the legal standards we apply to [the FDUPTA] claim are the same as those we have applied under section 43(a) of the Lanham Act.”[9]  Once a plaintiff has shown it has federal trademark rights in the mark or name in question, the courts look to the likelihood of confusion factors as outlined in AmBrit, Inc. v. Kraft, Inc., 812 F.2d 1531 (11th Cir. 1986): “strength of the trade[mark], the similarity of [the marks], the similarity of the product[s], the similarity of retail outlets and purchasers, the similarity of advertising media used, the defendant’s intent, and actual confusion.”[10]

Here, Suntree contended that Ecosense was attempting to "pass off" Suntree's products as its own.  In such a case, the Court noted that the first five factors of the likelihood of confusion test are irrelevant, and thus only the last two factors were disputed and relevant to this case.[11]  The Court stated that the dispositive issue is whether any evidence showed that “Derrico used Suntree’s reputation to win the bid and then used a ‘bait-and-switch’ tactic to substitute Ecosense’s baffle boxes for those of Suntree.”[12]  The Court affirmed the district court’s finding that Suntree failed to present any evidence that Derrico intended to confuse the City of West Melbourne as to whose baffle boxes would be installed.[13]  The Court found no actual or likelihood of confusion on the part of the City, which listed Suntree as the standard but allowed for the substitution of approval equals.  Because Suntree presented no evidence that Derrico directly infringed its trademark by including Suntree’s name in the bid, Suntree’s claims against Ecosense failed, as well.[14]

The Court also evaluated Suntree’s claims of false advertising with respect to Ecosense’s power point presentation and brochures, which Suntree contended represented Suntree’s baffle boxes as Ecosense’s own.  The Court concluded that Suntree failed to present any evidence that the presentations and brochures were disseminated to potential customers rather than existing customers, and thus the materials did not qualify as “commercial advertising and promotion” within the meaning of the false advertising statute, 15 U.S.C. § 1125(a).  Thus, the Court affirmed the district court’s grant of summary judgment in favor of Ecosense.[15]

[1] Suntree Techs., Inc. v. Ecosense Int'l, Inc. et al., No. 11-13916, __ F.3d __, 2012 U.S. App. LEXIS 18658, at *2 (11th Cir. Sept. 5, 2012).
[2] Suntree Techs., Inc. v. Ecosense Int'l, Inc. et al., No. 6:09-cv-01945-JA-GJK, 2011 U.S. Dist. LEXIS 78642 (M.D. Fla. July 20, 2011).
[3] Suntree Techs., 2012 U.S. App. LEXIS 18658, at *3.
[4] Id. at *4.
[5] Id. at *6.
[6] Id.
[7] Id. at *7.  It was also revealed during discovery that Ecosense distributed a brochure to customers during 2008 and 2009 which included photos of a maintenance worker looking into the hatch of a an open Suntree baffle box.  Once Suntree point out that the photo was of its box, Ecosense destroyed all copies of the brochure except for an exemplar for the litigation.
[8] Id. at *13, citing Tana v. Dantana’s, 611 F.3d 767, 772-73 (11th Cir. 2010) (quoting 15 U.S.C. § 1125(a)).
[9] Id. at *14.
[10] Id. at *17-18.
[11] Id. at *22, citing Johnson v. Jones, 149 F.3d 494 (6th Cir. 1998).
[12] Id. at *18-19.
[13] Id. at *19.
[14] Id. at *21.
[15] Id. at *27.

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