Counter v. Inspired Technologies Inc.

725 F.Supp.2d 1319

INTERTAPE POLYMER CORP., Plaintiff-Counterdefendant,

v.INSPIRED TECHNOLOGIES, INC., Defendant-Counterclaimant.

Case No. 6:09-cv-289-Orl-31GJK.

United States District Court,M.D. Florida, Orlando Division.

July 14, 2010.

COPYRIGHT MATERIAL OMITTED.

Alfred J. Bennington, Jr., David J. Markese, Michael L. Gore, Shutts & Bowen, LLP, Orlando, FL, for Plaintiff-Counterdefendant.

Craig S. Krummen, Tiffany A. Blofield, Winthrop & Weinstine, PA, Minneapolis, MN, Leslie Anne Moore, Law Office of Terryl Blackmon Walker, Winter Park, FL, Ruth C. Osborne, McEwan, Martinez & Dukes, PA, Orlando, FL, for Defendant-Counterclaimant.

ORDER

GREGORY A. PRESNELL, District Judge.

This matter came before the Court without oral argument upon consideration of Plaintiff-Counterdefendant's, Intertape Polymer Corporation (“Intertape”), Motion for Summary Judgment (the “Motion”) (Doc. 43), ¹ Defendant-Counterclaimant's, Inspired Technologies, Inc. (“ITI”), response in opposition thereto (Doc. 63) (the “Response”), and Intertape's reply (Doc. 66).

I. Overview

The procedural history and general background of this case have been summarized in prior orders. (Docs. 29 and 71). In its instant Motion, Intertape contends that it is entitled to a judgment as a matter of law on Counts VIII, X, XI, XII, XIII, XIV and XV of ITI's Second Amended Counterclaim. (Doc. 43 at 1).

In Count VIII of its Second Amended Counterclaim, ITI asserts that Intertape violated Florida's Deceptive and Unfair Trade Practices Act, Fla. Stat. § 501.201 et seq. , by engaging in unfair competition and making false advertisements. (Doc. 40, ¶¶ 171-177). Count X asserts that Intertape violated the Lanham Act ² by infringing ITI's trademarks. (Doc. 40, ¶¶ 186-205). Count XI asserts that Intertape violated the Lanham Act by engaging in unfair competition. (Doc. 40, ¶¶ 206-218). Count XII asserts that Intertape violated the Lanham Act by making false advertisements. (Doc. 40, ¶¶ 219-231). Count XIII asserts that Intertape violated Minnesota's Deceptive Trade Practices Act, Minn.Stat. § 325D.43 et seq. , by infringing ITI's trademarks and making false advertisements. (Doc. 40, ¶¶ 232-239). Count XIV asserts that Intertape violated Minnesota's Consumer Fraud Act, Minn.Stat. § 325F.68 et seq. , by misleading consumers. (Doc. 40, ¶¶ 240-246). Finally, Count XV asserts Florida and Minnesota common law claims for trademark infringement and unfair competition. (Doc. 40, ¶¶ 247-255).

The Court has jurisdiction pursuant to, inter alia, 28 U.S.C. §§ 1331, 1332 and 1367.

II. Undisputed Facts ³ A. Intertape's Competing Product and Marketing

As the Court noted its prior Order, Intertape was the supplier of masking tape ITI used to manufacture “FrogTape,” a green colored painter's tape product consisting of masking tape and ITI's patented “Paint Block” (hereinafter “PAINT BLOCK”)-a polymer that, when applied to the edges of masking tape, absorbs paint to produce cleaner lines and edges (Doc. 71 at 1). Shortly after it agreed to act as ITI's tape supplier, Intertape began developing its own product: “Bloc-it,” a bluish-teal colored painter's tape treated with “PST 16” polymer ⁴ (hereinafter “PST” or “PST 16” ⁵ ).

According to ITI, Intertape's research and development department knew from repeated testing that Bloc-it failed to outperform FrogTape. (Doc. 63 at 2-3). Specifically, on September 19, 2008, an internal Intertape memorandum noted that FrogTape outperformed Bloc-it on painted wallboard; on March 27, 2009, an internal Intertape email revealed “higher than normal paint bleed” with Bloc-it but noted that FrogTape continued to remain within “normal standard deviation;” on April 14, 2009, an Intertape internal study revealed that its sales force was getting “mixed results” with Bloc-it and that they could not “consistently demo the tape;” and on April 16, 2009, an independent testing agency concluded that competitors' products repeatedly outperformed Bloc-it. (Doc. 63 at 2-3).

Notwithstanding the foregoing, Intertape aggressively marketed Bloc-it. On January 29, 2009, for instance, Intertape made the following comparison during a presentation to executives at Lowe's (a nationwide home improvement retailer):

Best in Class-Product Performance

• How does [Bloc-it] stack up?

- Frog Tape

• Powder edge treated

- Must be stored in special container

- Subject to moisture contamination and product failure

• Superior Fine Structure Crepe backing

• Unique adhesive formulation

• Good bleed resistance

- [Bloc-it]

• Edge treated with PST 16

- Not a powder-will not flake off

>> Does not require special handling

• Superior Fine Structure Crepe backing

• Unique adhesive formulation

• Industry leading bleed resistance

(Doc. 58-7 at 14). ⁶

Other materials provided to, or designed for, retailers stated that Bloc-it “Solves paint bleed problem” and “allows for CLEAN EDGES Every time.” (Doc. 61-2 at 2-3). Furthermore, on September 11, 2009, Intertape issued a press release to investors (among others) stating:

NYSE SYMBOL: ITP

TSX SYMBOL: ITP

INTERTAPE POLYMER GROUP ROLLS OUT BLOC-IT[ ], A PREMIUM EDGE TREATED PAINTERS' MASKING TAPE

MONTREAL, QUEBEC AND BRADENTON, FLORIDA (September 11, 2009)-[Intertape] is making life a whole lot easier for painters in paint line masking with the launch of its new Bloc-It[ ] ultra premium painters' tape. Painters now have Bloc-it[ ] masking tape as a choice they can count on for clean crisp paint lines every time.

“Not until recently has masking tape changed much at all,” says James Apap Bologna, Vice-President of Consumer sales at [Intertape]. [Intertape]'s new Bloc-It[ ] Ultra Premium Masking Tape utilizes a proprietary chemistry, PST 16, on the edge of the tape which blocks paint, STOPS THE BLEED and ensures clean lines every time. This process is designed to enhance the already high standards of [Intertape's] masking tapes and deliver performance results not yet seen in a masking tape.

Bleed is one of the most common problems with painter's tape. Paint seeps under the tape's edge causing messy lines and uneven workmanship which results in the painter having to go back and touch up the rough spots with a brush. Bloc-It[ ]'s PST 16 technology solves the bleed-through problem.

“The PST 16 technology is completely absorbed into the paper to deliver a consistent performance,” explained Apap Bologna, “promoting smooth, clean line [sic] with no bleed through. When the painter pulls the tape off the wall, the line is picture perfect, crisp and straight.” Bloc-It[ ] has UV resistance for performance up to 14 days of direct sunlight and much longer when used indoors....

Bloc-It[ ] incorporates [Intertape's] fine crepe paper that conforms easily around bends, corners and curves and is available in cut case packaging and free standing floor displays for easy customer access.

Bloc-It[ ] joins the already extensive line of ProMask[ ] tapes together with the wide range of packaging, duct and speciality tapes that complete the [Intertape] Consumer line.

About Intertape Polymer Group

Intertape Polymer Group is a recognized leader in the development and manufacture of specialized polyolefin plastic and paper based packaging products ....

Safe Harbor Statement

Certain statements and information included in this press release constitute forward-looking information within the meaning of applicable Canadian securities legislation and the Federal Private Securities Litigation Reform Act of 1995 .... While these statements are based on certain factors and assumptions which management considers to be reasonable based on information currently available to it, they may prove to be incorrect ....

(Doc. 61-3 at 2).

B. The Parties' Marks

ITI has federally registered trademarks for “Frog Tape” (hereinafter “FROG TAPE”) ⁷ and “Paint Block” (hereinafter “PAINT BLOCK”), Registration Nos. 3,245,314 and 3,234,253, respectively, and has been using same in commerce since November 21, 2006. ⁸ (Docs. 40-5 at 2 and 40-7 at 2). ITI also contends that it has common law rights to these registered marks and to the following frog design logo (which ITI used on, inter alia, its web site, product packaging, and company vehicles):

(Doc. 40-4 at 3). ⁹

ITI also contends that it has common rights to the following “It WORKS” (hereinafter “IT WORKS”) design mark (within which “IT” refers to Inspired Technologies, Inc. and “O” contains ITI's company logo):

(Doc. 40-4 at 2). Other than a picture of an ITI company vehicle bearing the IT WORKS design, ITI has not introduced any evidence of how it uses IT WORKS in connection with FrogTape or other ITI products.

On January 9, 2009, Intertape submitted an application to the U.S. Patent and Trademark Office for registration of the word and design mark “BLOC IT PAINTERS TAPE” (hereinafter “BLOC IT”). U.S. Trademark Application Serial No. 77,646,259; (Doc. 40-8 at 2). ¹⁰ On June 1, 2010, the mark was registered, Registration No. 3,796,838, and Intertape has been using same in commerce since March 31, 2009. ¹¹ The design mark for “BLOC IT PAINTERS TAPE” consists of: ¹²

Registration No. 3,796,838 (black and white image available on Westlaw's TradeMarkScan and at the USPTO); also available at Bloc-It, http:// www. bloc- it. com (last visited July 11, 2010).

In addition to the foregoing, on February 19, 2009, Intertape submitted an application to the U.S. Patent and Trademark Office for registration of the word and design mark “LILI LOW-ENVIRONMENTAL IMPACT LINE FROM INTERTAPE” (hereinafter the “LILI” mark). U.S. Trademark Application Serial No. 77,673,873; (Doc. 40-10 at 2). As of July 11, 2010, the application remained pending and had been published for opposition. The following comprises the design for the LILI mark:

(Doc. 40-10 at 22). ¹³

Intertape has never used the LILI mark in connection with Bloc-it. As the text of the mark suggests, LILI is associated with Intertape's environmental stewardship program and, more particularly, a...