Hot Wax, Inc. v. Turtle Wax, Inc., 97 C 3646.

27 F.Supp.2d 1043

HOT WAX, INC., Plaintiff, v. TURTLE WAX, INC. Defendant.

No. 97 C 3646.

United States District Court, N.D. Illinois, Eastern Division.

October 19, 1998.

COPYRIGHT MATERIAL OMITTED

Dion Joseph Sartorio, Tribler, Orpett, Palmer & Crone, P.C., Chicago, IL, John Peter Maniatis, Tressler, Soderstrom, Maloney & Priess, Chicago, IL, for Hot Wax, Inc.

J. Patrick Herald, John Christopher Filosa, Philip J. Zadeik, David Jonathan Davis, Patricia O'Brien, Sanjiv D. Sarwate, Baker & McKenzie, Chicago, IL, for Turtle Wax, Inc.

John J. Arado, Craig S. Fochler, Michael Lee McCluggage, Wildman, Harrold, Allen & Dixon, Chicago, IL, Max C. Fischer, Stowell, Friedman & Vernon, Chicago, IL, for Blue Coral, Inc.

Michael J. Abernathy, Margaret A. McGreal, Bell, Boyd & Lloyd, Chicago, IL, for Stone Soap Co., Inc.

Ross A. Anderson, Whyte, Hirschboeck & Dudek, Milwaukee, WI, for Cleaning Systems, Inc.

Timothy M. McCarthy, Jerome G. McSherry & Associates, Chicago, IL, for Warsaw Chemical Company, Inc., defendant.

Matthew Sean Elvin, Ross & Hardies, Chicago, IL, Arthur F. Radke, Hefter & Radke, Chicago, IL, Steven M. Greenspan, J. Michael Amrein, Day, Berry & Howard, Hartford, CT, for Simoniz U.S.A., Inc.

Michael J. Abernathy, Margaret A. McGreal, Bell, Boyd & Lloyd, Chicago, IL, for Grace-Lee Products, Inc.

Edward M. Olson, Michael J Sugameli, Velardo, Sugameli & Olson, P.L.C., Troy, MI, for Cul-Mac Industries, Inc.

Daniel Glen Suber, Jason Reding Schulze, Daniel G. Suber & Associates, Chicago, IL, for S/S Car Care.

MEMORANDUM OPINION AND ORDER

CASTILLO, District Judge.

Plaintiff Hot Wax sues defendant Turtle Wax for false advertising under § 43(a) of the Lanham Act, 15 U.S.C. § 1125. Hot Wax alleges that Turtle Wax falsely markets and advertises certain products as waxes, when in fact the products do not contain any wax. The parties have submitted cross-motions for summary judgment.

Hot Wax contends that it is entitled to judgment as a matter of law because its experts have determined — and the defendant's expert has admitted — that the products in question do not contain wax. In light of this admission, Hot Wax insists that there is no factual dispute that Turtle Wax's labeling and marketing of these products are literally false. Turtle Wax counters that while these products do not contain "wax" under the chemical definition proffered by Hot Wax, more modern and less scientific definitions of the term encompass Turtle Wax' products. Moreover, Turtle Wax asserts that the doctrine of laches bars the plaintiff's claim because its twenty-year delay in bringing this action was both unreasonable and prejudicial.

FACTS

In the late 1960s and early 1970s, the plaintiff successfully marketed its Hot Wax products to carwashes nationwide. These products contained carnauba wax, which provided both polish and protection. However, due to the physical characteristics of wax, Hot Wax encountered significant costs in incorporating wax into their carwash products.

Turtle Wax entered the carwash supply industry in the mid-1970s, in direct competition with Hot Wax. The genesis of this suit arises from five Turtle Wax products — Polish Wax, Sealer Wax, Polyshell Triple Shine, Foaming Sealer Wax, and Poly Sealant. While Turtle Wax marketed these products as waxes, contain neither beeswax nor carnauba wax. Instead, they contain certain mineral seal oils or wax emulsions that are less costly to produce than traditional wax ingredients. Because they were less expensive than the Hot Wax products, Turtle Wax eventually dominated, dramatically reducing Hot Wax's presence in the market. In doing so, Turtle Wax expended significant resources and capital in making their products more convenient to use, ship, and recognize. Turtle Wax built and expanded its car wash business to offer products covering all aspects of the washing process. Turtle Wax is currently recognized as an industry leader.

Ed Holbus, Hot Wax' president, admits that he was aware of the nature of Turtle Wax's products since the mid-1970s. Despite this awareness, Holbus waited until 1993 to even reduce his grievances to writing, and even then only to sporadically complain to Turtle Wax and others that Turtle Wax created a virtual monopoly by producing "cheater waxes." In early 1995, Holbus sent a letter to the Wisconsin Division of Trade and Consumer Protection of the Department of Agriculture, Trade and Consumer Protection [the "Consumer Department"] claiming that Turtle Wax was "misrepresenting their product by calling it `wax' and was deceiving consumers". The Consumer Department disagreed and, in February 1995, informed Holbus that

[a]lthough, [sic] the products you listed may not fit the chemical definition of "wax," this term has taken on a new meaning in modern English. According to Webster's Ninth New Collegiate Dictionary, "Wax" has come to mean: "A pliable or liquid composition used esp. in uniting surfaces, excluding air, making patterns or impressions, or producing a polished surface." We do not believe it would be possible to hold sellers of car wash products to a strict chemical definition of a word that has come to mean much more in everyday usage.

Holbus filed the instant action on behalf of Hot Wax in 1997, seeking damages and injunctive relief. In support of its claim, Hot Wax relies upon the testimony of several experts. Arthur Keller, a chemist with S.C. Johnson Wax for over thirty years, developed car wash products similar to those at issue. Mr. Keller opined that mineral seal oil, found in the Sealer Wax and Poly Sealant products, is not a wax. Rather, Mr. Keller explained that these products are known in the industry as rinse aids that merely help cars dry faster and temporarily enhance water beading. Similarly, Dr. Stephen Duerr concluded that none of the Turtle Wax products in question contain any natural or synthetic waxes. Dr. Duerr relied upon Hawley's Condensed Chemical Dictionary,¹ which defines waxes as low melting organic mixture[s] or compounds[s] of high molecular weight, solid at room temperature and generally similar in composition to fats and oils except that it contains no glycerides. Some are hydrocarbons, others are esters of fatty acids and alcohols.... Common properties are water repellancy, smooth texture, low toxicity, freedom from objectionable odor and color.

Dr. Duerr notes that none of the ingredients in Turtle Wax's products are solid at room temperature, and thus the ingredients are not waxes.

In response, Turtle Wax argues that Hot Wax's proffered definition of wax is too narrow. Claiming that the lay definition of what a wax is and does encompass their products, Turtle Wax charges that Hot Wax improperly relies upon overly-formalistic, chemical definitions of wax to attack Turtle Wax's products. Turtle Wax notes that when it entered the competitive car wash supply market, the competition used — and continues to use — the term "wax" to identify products that do not contain natural or synthetic waxes. Turtle Wax also introduced customer-survey results indicating that customers get exactly what they expect when they purchase these Turtle Wax products — polish, shine, and protection.

The defendant's expert witness, Professor Carr of Northwestern University, testified that while the Polyshell Triple Shine Products contain neither natural nor synthetic wax, they are applied in conjunction with Sealer Wax. The Sealer Wax and Poly Sealant products contain mineral seal oil — a hydrocarbon that, according to Carr, satisfies even Duerr's limited definition of a wax. In addition, the Polish Wax and Cherry Polish Wax products contain "Intermediate 303", a mixture formed by combining natural carnauba wax and montan wax in order to create a wax "emulsion". Moreover, Dr. Carr's testing reveals that the Turtle Wax products do polish and shine, and offer extended water repellant protection. Because these products repel water and offer both car protection and polish, Carr opines that these products are waxes. See Def.'s Rsp. to S.J. at 6 ("the term wax is properly defined as a substance that cleans, shines and protects").

Hot Wax counters that while some waxes are hydrocarbons, not all hydrocarbons are waxes. Moreover, while waxes clean, shine, and protect, Hot Wax contends that a substance is not wax merely because it accomplishes these goals. Hot Wax also challenges the Turtle Wax products' effectiveness, pointing to Dr. Duerr's testing that demonstrates only limited protection. While the plaintiff attacks Turtle Wax's substantial customer-survey evidence as incomplete, Hot Wax has not submitted its own evidence of customer confusion or dissatisfaction.

ANALYSIS

I. Summary Judgment Standards

Summary judgment is proper only when the record shows that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). A genuine issue for trial exists when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In ascertaining whether a genuine issue of material fact exists, the court must "view the evidence presented through the prism of the substantive evidentiary burden," "while reviewing all evidence and drawing inferences in the non-movant's favor." Liberty Lobby, 477 U.S. at 254, 106 S.Ct. 2505. This Court's sole duty is to determine whether sufficient evidence exists to support a verdict in the non-movant's favor; credibility determinations, weighing evidence, and drawing reasonable inferences are jury functions. Id. at 255, 106 S.Ct. 2505.

When parties submit cross-motions for summary judgment, the Court is not required to grant judgment as a matter of law for one side or the other. Heublein, Inc. v. United States, 996 F.2d 1455, 1461 (2d Cir. 1993). The Court must evaluate each party's motion on its own...