Georgia Pacific's Effort to Control Towel Dispenser Refills Fails in 8th Circuit--Georgia Pacific v. Myers Supply (Guest Blog Post)Georgia Pacific Consumer Products LP v. Myers Supply, Inc., 2010 WL 3564834 (8th Cir. Sept. 15, 2010)
By guest blogger Mark Bartholomew
After a decision by the Fourth Circuit seemed to open the door for businesses to use contributory trademark law to block the sale of complementary goods, a recent case in the Eighth Circuit adopts what I think is a more reasonable approach. In both cases, the plaintiff and the technology at issue were the same, but the outcomes are completely different.
Plaintiff Georgia Pacific (GP) employs the following strategy to try and prevent competitors from offering cheaper paper towels for the paper towel dispensers it manufactures. It leases its hands-free enMotion brand paper towel dispensers to distributors who in turn lease the dispensers to businesses like restaurants and gas stations. In its leases, GP conditions any use of the dispensers on exclusive use of GP brand paper towels. GP also places a sticker on the dispensers warning any sublessees that only GP-brand replacement towels may be used.
In the Fourth Circuit dispute, GP claimed contributory trademark infringement against a rival paper towel manufacturer, Von Drehle. The Fourth Circuit reversed a grant of summary judgment in Von Drehle's favor. To the extent Von Drehle knowingly created its towels for use in the enMotion machines and supplied those towels to distributors knowing how they were to be used, Von Drehle could be liable for contributory trademark infringement. The Fourth Circuit was sympathetic to GP's claim that its reputation would suffer if it could not control the quality of the toweling used in its dispensers.
GP also tried its luck in the Eighth Circuit, this time suing a distributor of Von Drehle paper towels named Myers Supply. In the district court, Myers won. Although the judge found that Myers knew that its customers were stuffing the Von Drehle towels in enMotion dispensers and continued to supply the towels in the face of this knowledge, he held that GP failed to demonstrate an underlying likelihood of confusion. GP appealed, contending that the district court improperly discounted its survey evidence. The same survey evidence had been offered as evidence of confusion in the Fourth Circuit case.
The Eighth Circuit affirmed the district court. In one sense, the Eighth Circuit's decision does not represent a complete break from the Fourth Circuit. It was reviewing a district judge's finding of no likelihood of confusion after a bench trial, a decision entitled to some deference. By contrast, the Fourth Circuit overturned a grant of summary judgement...
By guest blogger Mark Bartholomew
After a decision by the Fourth Circuit seemed to open the door for businesses to use contributory trademark law to block the sale of complementary goods, a recent case in the Eighth Circuit adopts what I think is a more reasonable approach. In both cases, the plaintiff and the technology at issue were the same, but the outcomes are completely different.
Plaintiff Georgia Pacific (GP) employs the following strategy to try and prevent competitors from offering cheaper paper towels for the paper towel dispensers it manufactures. It leases its hands-free enMotion brand paper towel dispensers to distributors who in turn lease the dispensers to businesses like restaurants and gas stations. In its leases, GP conditions any use of the dispensers on exclusive use of GP brand paper towels. GP also places a sticker on the dispensers warning any sublessees that only GP-brand replacement towels may be used.
In the Fourth Circuit dispute, GP claimed contributory trademark infringement against a rival paper towel manufacturer, Von Drehle. The Fourth Circuit reversed a grant of summary judgment in Von Drehle's favor. To the extent Von Drehle knowingly created its towels for use in the enMotion machines and supplied those towels to distributors knowing how they were to be used, Von Drehle could be liable for contributory trademark infringement. The Fourth Circuit was sympathetic to GP's claim that its reputation would suffer if it could not control the quality of the toweling used in its dispensers.
GP also tried its luck in the Eighth Circuit, this time suing a distributor of Von Drehle paper towels named Myers Supply. In the district court, Myers won. Although the judge found that Myers knew that its customers were stuffing the Von Drehle towels in enMotion dispensers and continued to supply the towels in the face of this knowledge, he held that GP failed to demonstrate an underlying likelihood of confusion. GP appealed, contending that the district court improperly discounted its survey evidence. The same survey evidence had been offered as evidence of confusion in the Fourth Circuit case.
The Eighth Circuit affirmed the district court. In one sense, the Eighth Circuit's decision does not represent a complete break from the Fourth Circuit. It was reviewing a district judge's finding of no likelihood of confusion after a bench trial, a decision entitled to some deference. By contrast, the Fourth Circuit overturned a grant of summary judgement...
