Toyo Tire Corp. v. Atturo Tire Corp.

TOYO TIRE CORPORATION, et al., Plaintiffs, v. ATTURO TIRE CORPORATION, et al., Defendants.

Case No. 14-cv-00206

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

February 9, 2021

Judge Mary M. Rowland

MEMORANDUM OPINION AND ORDER

Plaintiffs Toyo Tire Corporation and Toyo Tire U.S.A. Corp. (collectively, "Toyo"), brought this action against Defendants Atturo Tire Corporation ("Atturo") and Svizz-One Corporation Ltd. ("Svizz-One") asserting a number of claims including that Defendants infringed the trade dress on Toyo's Open Country Mountain Tires ("OPMT" tires). The allegedly infringing tire is Atturo's Trail Blade M/T. Atturo responded with seven counterclaims. Toyo and Atturo have both filed motions for summary judgment.

Atturo moves for summary judgment on the issues of trade dress functionality, secondary meaning, and likelihood of confusion. Atturo requests a finding that it is not liable for trade dress infringement under the Lanham Act or for violation of the Illinois Deceptive Trade Practices Act. For the reasons stated below, Atturo's motion [619] is granted.¹

SUMMARY JUDGMENT STANDARD

Summary judgment is proper where "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A genuine dispute as to any material fact exists if "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 (1986). The substantive law controls which facts are material. Id. After a "properly supported motion for summary judgment is made, the adverse party must set forth specific facts showing that there is a genuine issue for trial." Id. at 250 (internal quotations omitted).

The Court "consider[s] all of the evidence in the record in the light most favorable to the non-moving party, and [] draw[s] all reasonable inferences from that evidence in favor of the party opposing summary judgment." Skiba v. Ill. Cent. R.R. Co., 884 F.3d 708, 717 (7th Cir. 2018) (internal citation and quotations omitted). The Court "must refrain from making credibility determinations or weighing evidence." Viamedia, Inc. v. Comcast Corp., 951 F.3d 429, 467 (7th Cir. 2020) (citing Anderson, 477 U.S. at 255). In ruling on summary judgment, the Court gives the non-moving party "the benefit of reasonable inferences from the evidence, but not speculative inferences in [its] favor." White v. City of Chi., 829 F.3d 837, 841 (7th Cir. 2016) (internal citations omitted). "The controlling question is whether a reasonable trier of fact could find in favor of the non-moving party on the evidence submitted insupport of and opposition to the motion for summary judgment." Id. (citation omitted).

When cross-motions for summary judgment are filed, the Court construes all facts and draws all reasonable inferences in favor of the party against whom the motion was filed. Indianapolis Airport Auth. v. Travelers Prop. Cas. Co. of Am., 849 F.3d 355, 361 (7th Cir. 2017). The Court treats the motions separately. Marcatante v. City of Chi., 657 F.3d 433, 439 (7th Cir. 2011). See also Kreg Therapeutics, Inc. v. VitalGo, Inc., 919 F.3d 405, 416 (7th Cir. 2019) ("Each cross movant for summary judgment bears a respective burden to show no issue of material fact with respect to the claim.").

BACKGROUND²

I. Relevant Procedural History

Toyo filed this lawsuit against Atturo and Svizz-One in January 2014, alleging design patent infringement and trade dress infringement and dilution. (Dkt. 1). Atturo responded to Toyo's complaint with seven counterclaims. (Dkt. 39). Toyo's remaining claims against Atturo and Svizz-One are for trade dress infringement under the Lanham Act, 15 U.S.C. § 1125(a), and violation of the Illinois Deceptive Trade Practices Act, 815 ILCS 510/1, et. seq. ("IDTPA") (Dkt. 1, Cts. II & VI). Toyo's other claims were dismissed with prejudice in 2014 and 2017. (see Dkts. 26, 38, 384).

On July 23, 2018, this Court granted Atturo's motion for sanctions, barring Toyo from asserting that the trade dress is the two-dimensional surface layer of the tread blocks.³ (Dkt. 502). Instead the Court limited Toyo to the trade dress it had disclosed during fact discovery: "the overall visual appearance and impression conveyed by the commercial Open Country M/T tire tread design," the elements of which were "the three-dimensional shoulder blocks, center blocks, grooves, stone ejectors, and sipes of the OPMT tread." (Id.; DSOF Function. ¶¶5-6). The Court's sanctions order limiting Toyo to the three-dimensional version of its product design led to the Court's Daubert ruling excluding the opinions of Toyo experts Michael Rappeport [405], Larry Chiagouris [411], and Charles Patrick [413] who had each opined about a two-dimensional version of the trade dress. (Dkt. 564).⁴

II. Atturo's Motion

Atturo's summary judgment motion requests that the Court find as a matter of law that (1) Toyo's asserted OPMT trade dress is functional; (2) Toyo's asserted trade dress did not acquire secondary meaning by the time Atturo began using its allegedly infringing Trail Blade M/T tire in 2012; and (3) there is not a likelihood of confusion as to the source or affiliation of Atturo's Trail Blade M/T tire. Atturo moves forsummary judgment on all of these elements but argues that each is dispositive on its own. (Dkt. 619-1 at 19). Toyo does not dispute that each of these elements is dispositive on its own. (Dkt. 648 at 11). However, Toyo responds that Atturo's motion should be denied because Toyo has protectable trade dress rights in its OPMT tire and Atturo infringed those rights.

ANALYSIS

"The Lanham Act permits a civil action against any person who uses 'any word, term, name, symbol, or device' 'in connection with any goods or services' in a manner which 'is likely to cause confusion' as to the source of those goods or services." Bodum USA, Inc. v. A Top New Casting Inc., 927 F.3d 486, 491 (7th Cir. 2019) (quoting 15 U.S.C. § 1125(a)(1)(A)). "As with any other trademark, infringement of a product's trade dress is actionable under the [Lanham] Act." Id. Trade dress is the "the design or packaging of a product that is so distinctive as to identify the manufacturer or source." Arlington Specialties, Inc. v. Urban Aid, Inc., 847 F.3d 415, 418 (7th Cir. 2017). However "product design almost invariably serves purposes other than source identification." Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S. 205, 213, 120 S. Ct. 1339, 1344 (2000). For that reason "[t]he Supreme Court has cautioned against overextending trade dress protection." Flexible Steel Lacing Co. v. Conveyor Accessories, Inc., 955 F.3d 632, 643 (7th Cir. 2020) (discussing the different aims of trademark and patent law).⁵

A plaintiff claiming trade dress infringement must show that the trade dress is non-functional, it acquired "secondary meaning," and that the defendant is using the trade dress in a way that is likely to cause confusion as to the source of the goods. See Minemyer v. B-Roc Representatives, Inc., 678 F. Supp. 2d 691, 698 (N.D. Ill. 2009). In this case Toyo claims that it owns a trade dress in "the overall visual appearance and impression conveyed by the commercial Open Country M/T tire tread design." (DSOF Function. ¶5). The elements of that asserted trade dress are the three-dimensional shoulder blocks, center blocks, grooves, stone ejectors, and sipes of the OPMT tread. (Id. ¶6).

I. Functionality

"When the trade dress is unregistered (as [Toyo's] is), the party seeking protection has the burden to show it is not functional." Arlington Specialties, 847 F.3d at 418. A product feature is functional "if it is essential to the use or purpose of the article or if it affects the cost or quality of the article...Even if a product feature does not satisfy that definition, it can still be functional if it is a competitive necessity, that is, if its exclusive use would put competitors at a significant non-reputation-related disadvantage." Id. at 419 (internal citations and quotations omitted). "Functionality is a factual question, but the bar for functionality is so low that it can often be decided as a matter of law." Id. at 419-20 (internal citation omitted); see also Flexible Steel, 955 F.3d at 643.

Factors informing whether a trade dress is functional include: "(1) the existence of a utility patent, expired or unexpired, that involves or describes the functionality of an item's design element; (2) the utilitarian properties of the item's unpatented design elements; (3) advertising of the item that touts the utilitarian advantages of the item's design elements; (4) the dearth of, or difficulty in creating, alternative designs for the item's purpose; [and] (5) the effect of the design feature on an item's quality or cost." Bodum, 927 F.3d at 492 (citation omitted). Atturo argues that Toyo cannot meet its burden of proving the non-functionality of its asserted trade dress because the OPMT tread design is essential to the use and purpose of the OPMT tire and affects both the cost and quality of the tire.

A. Utilitarian Properties of the Design

Atturo relies on testimony from Toyo's own witnesses and its unrebutted experts to establish that the elements of Toyo's tire tread design are essential to the tires' use and purpose. Specifically Atturo cites the testimony of (1) Toyo's 30(b)(6) witness, (2) two other Toyo witnesses with knowledge of the design and functionality of the OPMT tread, and (3) Atturo's unrebutted functionality expert Dr. Joseph Walter.

Toyo's Rule 30(b)(6) witness Amy Coleman⁶ testified that the shoulder blocks, center blocks, and grooves of the OPMT all "provide traction." (DSOF Function. ¶¶18,23, 28).⁷ She testified that OPMT's stone ejectors serve a purpose and "affect the availability of the tread design of the OPMT to provide traction." (Id. ¶34)...