Sterilite Corp. v. Olivet Int'l

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STERILITE CORPORATION, Plaintiff, v. OLIVET INTERNATIONAL, INC., Defendant.

No. 1:22-cv-10327-JEK

United States District Court, D. Massachusetts

September 30, 2024

MEMORANDUM AND ORDER ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT, DEFENDANT'S MOTION TO EXCLUDE THREE EXPERT OPINIONS, AND PLAINTIFF'S MOTION TO EXCLUDE CERTAIN PORTIONS OF THREE EXPERT OPINIONS

JULIA E. KOBICK UNITED STATES DISTRICT JUDGE

This is a trade dress case brought by plaintiff Sterilite Corporation, a manufacturer of injection-molded plastic houseware products, against defendant Olivet International Inc., a distributor of plastic consumer goods. A product's trade dress is its “‘design and appearance,'” together with “‘the elements making up the overall image that serves to identify the product presented to the consumer.'” Yankee Candle Co. Inc. v. Bridgewater Candle Co., LLC, 259 F.3d 25, 37-38 (1st Cir. 2001) (quoting Chrysler Corp. v Silva, 118 F.3d 56, 58 (1st Cir. 1997)). Sterilite alleges that Olivet intentionally copied its cabinets drawers, and wastebasket lids and then sold those products to one of Sterilite's biggest customers, Walmart. The complaint asserts claims for trade dress infringement under the Lanham Act, 15 U.S.C. § 1125(a); dilution pursuant to M.G.L. c. 110H, § 13; common law unfair competition and tortious interference with business relationships. Following discovery, Olivet has moved for summary judgment and to exclude the opinions of three of Sterilite's experts. Sterilite has also moved to exclude certain portions of Olivet's three expert opinions.

Olivet's summary judgment motion will be granted as to the Lanham Act, dilution, and unfair competition claims regarding Sterilite's wastebasket lids, but denied as to those claims regarding Sterilite's cabinets and drawers. Drawing inferences in favor of Sterilite, a reasonable trier of fact could conclude that Sterilite's cabinets and drawers are entitled to trade dress protection as both distinctive and non-functional. On this record, however, a reasonable trier of fact could not conclude that Sterilite's wastebasket lids are distinctive. Olivet's summary judgment motion will also be denied with respect to the tortious interference claim, because a reasonable jury could conclude that Sterilite had a business relationship with Walmart, Olivet intentionally and improperly interfered with that relationship, and Sterilite was harmed as a result.

Olivet's motion to exclude Sterilite's expert evidence will be denied in its entirety. Sterilite's motion to exclude will be granted with respect to testimony from Olivet's damages expert, Juli Saitz, about the cause of Sterilite's damages, and testimony from Olivet's design expert, Paul Hatch, about the functionality of Sterilite's overall trade dress. Sterilite's motion to exclude will otherwise be denied.

BACKGROUND

The following facts, unless otherwise noted, are either undisputed or recounted in the light most favorable to Sterilite, the non-moving party. See Kinzer v. Whole Foods Mkt., Inc., 99 F.4th 105, 108 (1st Cir. 2024).^[1]

I. The Parties.

Sterilite manufactures plastic consumer products, including the five at issue in this case: its (i) 2-shelf storage cabinet, (ii) 4-shelf storage cabinet, (iii) 4-drawer storage unit, (iv) 11-gallon wastebasket lid, and (v) 13-gallon wastebasket lid. ECF 115, ¶¶ 2, 38. Sterilite claims that it has protectible unregistered trade dress for each of these products, including, among other features discussed below inset side panels, tapering handles, and curved and inset doors. Id. ¶¶ 2, 41. Since 2011, Sterilite has extensively advertised and promoted the trade dress of those products in print, within stores, through search engine optimization, and across social media platforms like Facebook, Instagram, and X (formerly known as Twitter). Id. ¶ 86. Sterilite's advertising includes its purchase of fifteen advertisements in HomeWorld Business, a trade magazine, as well as accrual advertising, involving the purchase of ads from a retailer based on a percentage of the sales revenue from Sterilite's products. Id. ¶¶ 87, 98-101.

Olivet distributes consumer products in the United States, including plastic goods. Id. ¶ 43. As relevant here, Olivet sells plastic products to Walmart, a large national retailer of consumer products. Id. ¶¶ 44, 48. Since September 2021, Olivet has sold its (i) 2-shelf storage cabinet, (ii) 4-shelf storage cabinet, and (iii) 4-drawer storage unit to Walmart, for resale under Walmart's private label brand name “Hyper-Tough.” Id. ¶¶ 44, 46, 333. Similarly, since December 2021, Olivet has sold its (iv) 11-gallon and (v) 13-gallon wastebaskets with lids to Walmart under the brand name “Mainstays.” Id. ¶¶ 44, 47. Walmart owns the Mainstays brand and sells products under this brand that are either manufactured for, or distributed to, it by suppliers like Olivet. Id. ¶ 45.

Sterilite claims that Olivet has infringed on Sterilite's trade dress by selling replicas of its cabinets, drawers, and wastebaskets to its “important customer,” Walmart. Id. ¶¶ 2, 252. In the spring of 2020, the COVID-19 pandemic disrupted the supply chain and affected Sterilite's ability to keep up with demand. Id. ¶ 260; ECF 135, at 6:8-13. Walmart, in turn, identified issues with some of Sterilite's products, but Sterilite contends that those issues merely served as “pretext for buying cheaper copies of [its] products.” ECF 115, ¶ 307. Walmart had indicated that it would buy from Olivet only if Olivet copied Sterilite's designs of the five products at issue. See, e.g., id. ¶ 332; ECF 110, at 19. After it lined up Olivet as a supplier, and once Olivet was ready to execute, Walmart discontinued Sterilite's products. ECF 115, ¶ 307. The components of Sterilite's and Olivet's products are interchangeable. Id. ¶ 331.

II. Sterilite's Cabinets.

Sterilite began selling its 2-shelf and 4-shelf storage cabinets in 1998. Id. ¶¶ 78-79. Sterilite's claimed trade dress for those cabinets consists of “(1) rectangular handles that taper in width from the top center of the unit to the side of the unit; (2) doors that have a curved inset profile; (3) side panels with their own inset profile; and (4) back panels with a geometric inset pattern, along with the shape and appearance of the product[s] as a whole.” Id. ¶ 41(a). As of late February 2024, through images and a video, Walmart's website displayed all of the trade dress elements claimed for the cabinets. Id. ¶ 119.

In September 2016, a HomeWorld advertisement featured the front panel of the 4-shelf cabinet. Id. ¶¶ 91, 340. The front and side panels of the 4-shelf cabinet were also featured in HomeWorld ads from April 2014, October 2014, and April 2015. Id. ¶¶ 92, 341. In April 2013, HomeWorld displayed the front, side, and inside panels of the 4-shelf cabinet. Id. ¶¶ 94, 342. This cabinet was also shown in two Facebook posts in 2018 and one in 2017. Id. ¶ 107. In addition, it was featured in two Instagram posts, one in 2018 and the other in 2016, and posted on X once in 2018. Id. ¶¶ 110, 113.

Similarly, in April 2011, HomeWorld displayed the front, side, and inside panels of the 2-shelf cabinet. Id. ¶ 95. Another advertisement in May 2012 featured the cabinet's front, side, top, and inside panels. Id. ¶ 96. A September 2016 HomeWorld ad showed both the front and top panels of this cabinet. Id. ¶ 91. The cabinet also appeared in a 2016 Instagram post. Id. ¶ 110.

Customers who purchased Olivet's Hyper-Tough cabinets have expressed confusion about whether they were made by Sterilite. Id. ¶ 347. In October 2022, for example, a review by “DBone” stated: “I have few of the more expensive garage storage solutions in my garage as you can see in the picture, so I have a pretty good idea what to expect from these things. This Hyper-Tough cabinet is MUCH cheaper feeling that [sic] those.” Id. ¶ 128. A customer named “Minco” wrote a similar review in May 2022, explaining: “The plastic molding it's made of is badly warped. It was easy for me to put together because I bought two when they were made by sterilite last year. The ones from sterilite work fantastic. These are horribly warped and I had to use a lock, not to keep the cabinet locked, but to keep the doors closed.” Id. ¶ 132. And in March 2022, a customer wrote that she “purchased 2 of these in 2020, and they were great,” but that “[t]hese units were warped out of the box and extremely difficult to assembl[e].” Id. ¶ 351.

III. Sterilite's Drawers.

Sterilite started selling its 4-drawer storage unit in 2002. Id. ¶ 80. Sterilite's asserted trade dress for the drawers consists of “(1) top and bottom panels that have outward curved leading edges; (2) handles that have downward curved leading edges; and (3) drawers that have curved front faces, along with the shape and appearance of the product as a whole.” Id. ¶ 41(b). As of late February 2024, all three elements could be seen in the images on Walmart's website, which included a three-dimensional view. Id. ¶ 119. The front, top, and side panels of the drawers appeared in HomeWorld ads in April 2011, November 2013, May 2016, April 2017, April 2018, January 2019, and January 2020. Id. ¶¶ 90, 93, 95, 97, 343, 345. The front and top panels of the drawers were featured in HomeWorld ads from September 2016 and April 2013. Id. ¶¶ 91, 94, 344.

Sterilite's drawers also appeared in three Facebook posts: one in 2022 and two in 2018. Id. ¶ 107. They were shown in five Instagram posts: two in 2022, two in 2018, and one in 2016. Id. ¶ 110. Sterilite posted the drawers on X twice in 2022 and twice in 2018. Id. ¶ 113. In 2022, Sterilite posted a photo of the drawers across all three social media platforms and highlighted the “heavy-duty, sleek drawer unit.” Id....