1 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS HYDROX CHEMICAL CO., INC., ) Plaintiff, ) Case No: 1:13-cv-07024 ) v. ) ) Judge Ronald A. Guzmán DIVERSEY, INC., ) ) Defendant. ) ORDER For the reasons stated below, Plaintiff’s motion for summary judgment [68] is denied, and Defendant’s motion for summary judgment [59] is granted. Defendant’s motion to exclude expert testimony [56] is moot. Civil case terminated. MEMORANDUM OPINION Hydrox Chemical Company (“Plaintiff”) filed suit against Diversey (“Defendant”) on September 30, 2013, claiming federal and common law trademark infringement and unfair competition. (Compl., Dkt. # 1.) This matter is before the Court on Defendant’s Motion to Exclude Expert Testimony filed on December 1, 2014, (Def.’s Mot. Exclude # 56), Defendant’s Motion for Summary Judgment filed December 1, 2014, (Def.’s Mot. Summ. J., Dkt. # 59), and Plaintiff’s Motion for Summary Judgment filed December 22, 2014, (Pl.’s Mot. Summ. J., Dkt. # 68). For the reasons set forth below, Plaintiff’s motion for summary judgment is denied and Defendant’s motion for summary judgment is granted. Defendant’s motion to exclude the expert testimony of Rick Baldocchi is moot. 1 1 The Court finds none of Baldocchi’s expert testimony relevant to the seven likelihood of confusion factors discussed below; accordingly, Defendant is entitled to summary judgment even if such testimony is considered. The Court therefore need not address Defendant’s motion to exclude this testimony as inadmissible under Rule 702. Case: 1:13-cv-07024 Document #: 112 Filed: 03/23/15 Page 1 of 31 PageID #:3647
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1
IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS
HYDROX CHEMICAL CO., INC., ) Plaintiff, ) Case No: 1:13-cv-07024 ) v. ) ) Judge Ronald A. Guzmán DIVERSEY, INC., ) ) Defendant. )
ORDER
For the reasons stated below, Plaintiff’s motion for summary judgment [68] is denied,
and Defendant’s motion for summary judgment [59] is granted. Defendant’s motion to exclude
expert testimony [56] is moot. Civil case terminated.
MEMORANDUM OPINION
Hydrox Chemical Company (“Plaintiff”) filed suit against Diversey (“Defendant”) on
September 30, 2013, claiming federal and common law trademark infringement and unfair
competition. (Compl., Dkt. # 1.) This matter is before the Court on Defendant’s Motion to
Exclude Expert Testimony filed on December 1, 2014, (Def.’s Mot. Exclude # 56), Defendant’s
Motion for Summary Judgment filed December 1, 2014, (Def.’s Mot. Summ. J., Dkt. # 59), and
Plaintiff’s Motion for Summary Judgment filed December 22, 2014, (Pl.’s Mot. Summ. J., Dkt. #
68).
For the reasons set forth below, Plaintiff’s motion for summary judgment is denied and
Defendant’s motion for summary judgment is granted. Defendant’s motion to exclude the expert
testimony of Rick Baldocchi is moot.1
1 The Court finds none of Baldocchi’s expert testimony relevant to the seven likelihood of confusion factors discussed below; accordingly, Defendant is entitled to summary judgment even if such testimony is considered. The Court therefore need not address Defendant’s motion to exclude this testimony as inadmissible under Rule 702.
As shown above, Plaintiff’s and Defendant’s products are distinguishable in many
respects. Both parties’ labels include the word “Hydrox,” but this word appears in noticeably
different fonts and is surrounded by different elements. Plaintiff’s labels position the word
“Hydrox” immediately beside Plaintiff’s shield logo or within a blue oval, while Defendant’s
labels do not include any of these characteristic features. Instead, Defendant’s label places the
word “Hydrox” alone below – and in smaller lettering than – Defendant’s own prominent
“JohnsonDiversey” or “Diversey” logo with a water-droplet image. The clear and conspicuous
inclusion of Defendant’s own name and logo contributes to differentiating the labels. See Ziebart
Int'l Corp. v. After Market Assocs., Inc., 802 F.2d 220, 227 (7th Cir. 1986) (“Prominent display
of different names on the marks ... reduce[s] the likelihood of confusion even where ... the marks
are otherwise similar”).
There are, however, features of the product lines that suggest the possibility for
confusion. As Plaintiff points out, “Hydrox” is the “critical part” of the label and accordingly
weighs more heavily in the analysis than other surrounding elements. See Henri's Food Prods.,
717 F.2d at 356. The word itself is identical on the two sets of labels, and neither combines it
with other words or phrases; in both cases, the label presents “Hydrox” as a stand-alone identifier
rather than a single word in a longer product name.2 Moreover, the fact that Virox rather than
Plaintiff is the source of the hydrogen peroxide in Defendant’s product is relegated to the bottom
of Defendant’s labels, and in a smaller font size than the other elements. Plaintiff is also correct
that some (though not all) of Plaintiff’s products are packaged in tall, white plastic bottles similar
to those used by Defendant’s Hydrox GPC, and that some (though not all) of Defendant’s labels
use a blue-on-white color scheme similar to that on Plaintiff’s labels. (Decl. David Merritt, Dkt.
2 While the name of Defendant’s product is technically “Hydrox General Purpose Cleaner with Hydrogen Peroxide” the word Hydrox is positioned above and significantly larger than the other words and is printed in a different color.
discussion”). In this day and age, virtually any product can be purchased somewhere online –
were courts to take seriously the assertion that availability of a product on the Internet constitutes
a common channel of distribution, the area and manner of concurrent use factor would weigh in
favor of nearly every trademark plaintiff. In this case, Plaintiff appears to have identified only
one website that offered both parties’ products for sale: the website for the medical supply
company Medline.3 (Pl.’s Ex. 25, Dkt. # 79.) Medline, however, was one of the three
overlapping customers noted above, and the volume of Defendant’s sales to these three
customers was so small as to be de minimis.
Accordingly, the Court finds that the area and manner of concurrent use factor favors
Defendant. The record reflects that the parties’ products were overwhelmingly sold through
different channels to different customers and for different uses, suggesting that confusion is
unlikely.
DEGREE OF CARE LIKELY TO BE EXERCISED BY CONSUMERS
Generally, the cheaper and more commonly used an item is “the more likely that
consumers will exercise a lesser degree of care and discrimination in their purchases.” CAE, Inc.,
267 F.3d at 683. Where consumers are more sophisticated the likelihood of confusion is lower,
while less sophisticated consumers are more likely to be confused as to the source of a product.
See Rust Env’t & Infrastructure, Inc. v. Teunissen, 131 F.3d 1210, 1217 (7th Cir. 1997).
Although in a forward confusion case the sophistication of both parties’ customers is relevant, in
a reverse confusion case the senior user’s customers are more important. See Wm. Wrigley, 900
F. Supp. 2d at 802.
3 Plaintiff directs the Court to a host of cleaning supply sites that offered Hydrox GPC for sale. (Pl.’s Ex. 25, Dkt. # 79.) Plaintiff, however, nowhere alleges that these sites also sold any of Plaintiff’s Hydrox-branded products.
Neither party sells directly to retail consumers, and the relevant consumers for both
parties are large commercial buyers.4 While Plaintiff’s products are relatively inexpensive,
Plaintiff’s customers are overwhelmingly hospitals and medical supply companies who buy in
bulk and who Plaintiff concedes “will exercise some degree of care.” (Pl.’s Mot. Summ. J., Dkt.
# 68 at 14.) Plaintiff offers no evidence to show that its customers are in any sense unlikely to
exercise care in making purchasing decisions. Instead, Plaintiff raises a theory of “initial interest
confusion” by buyers. While Plaintiff fails to fully articulate how this theory applies, it seems to
suggest that buyers familiar with Plaintiff’s mark will be attracted to Defendant’s Hydrox GPC
in the mistaken belief that Plaintiff supplied the hydrogen peroxide in the product – and that even
if it later becomes clear to the buyer that Plaintiff was not in fact involved, Defendant will have
benefited by using Plaintiff’s mark to attract attention to its product in the first place. To the
extent that Plaintiff believes this new theory renders the sophistication of its customers
irrelevant, such belief is mistaken. The Seventh Circuit has made clear that customer
sophistication reduces the likelihood of confusion even in an initial interest case. See, e.g.,
Syndicate Sales, Inc. v. Hampshire Paper Corp., 192 F.3d 633, 638 (7th Cir. 1999) (rejecting
initial interest confusion claim because sophisticated retailers “are in a better position than the
typical consumer either to order the correct goods, or to return the incorrect goods and receive
the intended goods”); Rust, 131 F.3d at 1217 (affirming district court’s denial of a preliminary
injunction premised on initial interest confusion, because “consumers’ sophistication given the
4 Plaintiff disputes this characterization by offering several email exchanges in which consumers contacted Plaintiff to inquire about products. (Pl.’s Ex. 1-A, Dkt. # 82.) Far from undercutting the fact that Plaintiff’s customers were institutions, however, the emails support this inference. Virtually all of the emails come from a consumer who used one of Plaintiff’s products in a hospital setting and subsequently contacted Plaintiff precisely because he or she could not find the product offered for sale directly to consumers. Plaintiff responded to at least some of these consumer inquiries by noting that Plaintiff’s products “are not currently available through any retail store” and that Plaintiff would be willing to sell directly to consumers “in case quantities only.” (Def.’s Ex. 20, Dkt. # 64.)
F.3d 789 (7th Cir. 2002) (“We believe that this two-prong approach to the strength of mark
determination would adequately address [defendant’s] concern of ‘perverse results’”); Humanly
Possible, Inc. v. Manpower, Inc., No. 11 C 4977, 2013 WL 633332, at *6-7 (N.D. Ill. Feb. 19,
2013) (applying Third Circuit test and granting summary judgment for defendant where mark
was conceptually weak and there was little evidence of commercial strength). Accordingly, the
Court examines (1) whether the evidence shows Defendant’s sale of Hydrox GPC caused a
strong marketplace association between Defendant and the term “Hydrox”; and (2) whether
“Hydrox” as applied to the goods at issue is conceptually strong.
With regard to commercial strength, there is no evidence in the record that Defendant’s
marketing and sale of Hydrox GPC caused consumers to associate “Hydrox” with Defendant.
Hydrox GPC was produced for two years and sold for a total of just under $6 million. (Decl.
Peter Teska, Dkt. # 62, Ex. 1.) The fact that Defendant successfully sold Hydrox GPC is,
however, not enough to support a finding that confusion is likely. Reverse confusion arises when
the junior user exploits its superior size to flood the market with goods and advertising and
thereby induces consumers to associate the mark with the junior user. See Sands, 978 F.2d at 957
(explaining that reverse confusion arises when a “large junior user saturates the market” with
infringing goods); Wm. Wrigley, 900 F. Supp. 2d at 798 (defining a reverse confusion case as one
in which the junior user “uses its size and market power to overwhelm a senior, but smaller,
mark user”). There is simply no evidence in the record of large-scale marketing or promotion
sufficient to firmly link the term “Hydrox” with Defendant in the minds of consumers.5 Plaintiff
5 The situation in this case is readily distinguishable from Wm. Wrigley, the case Plaintiff cites as analogous. In Wm. Wrigley, the record reflected that defendant’s chewing gum was the third most popular gum in the nation and that the defendant had promoted it nationwide – including advertisements in Rolling Stone. See Wm. Wrigley, 900 F. Supp. 2d at 802-03. There is no evidence Hydrox GPC was ever promoted so vigorously or achieved such market success. Moreover, despite the extensive evidence of market saturation, the court in Wm. Wrigley concluded only that the strength of the mark factor “weighs marginally in favor” of the plaintiff. Id. at 803.
has conducted no consumer surveys or pointed to any advertising or marketing materials from
which the court could conclude that Defendant’s use of the mark was commercially strong.
Plaintiff argues that commercial strength is demonstrated by the fact that Defendant
chose the name Hydrox intentionally from among all other options, as well as by evidence of an
unrelated trademark dispute between Defendant and the producer of a product called “Hydrax.”
(Pl.’s Reply, Dkt. # 100, at 9-10.) Neither of these facts establishes commercial strength. The
record reflects only that Defendant’s marketing department preferred the name Hydrox because
of its “brand equity.” (Pl.’s Ex. 19, Dkt. # 77 at 57.) This shows at best only that Defendant
hoped the name would resonate with consumers, not that this effort succeeded or was likely to.
The fact that a third party demanded Defendant cease and desist using the “Hydrox” name
because it was too similar to “Hydrax” says nothing about the commercial strength of Hydrox
GPC. Such evidence, again, suggests only that some unrelated third party feared Defendant’s use
of the mark had the possibility of gaining commercial traction.
In terms of conceptual strength, the Court finds that “Hydrox” is not conceptually strong
for use with hydrogen peroxide and products containing it. The term Hydrox is clearly a
contraction of “hydrogen peroxide,” and is thus merely descriptive – or at best, suggestive – of
the goods at issue.6 Plaintiff also manufactures products that have nothing to do with hydrogen
peroxide, such as isopropyl rubbing alcohol. (Decl. David Merritt, Dkt. # 63, Ex. 2.) However,
Plaintiff’s reverse confusion theory alleges that consumers will be confused as to whether or not
the hydrogen peroxide in Hydrox GPC was supplied by Plaintiff; the other goods Plaintiff
6 Plaintiff’s argues that Hydrox is conceptually strong because it is a wholly fanciful or arbitrary mark, and disputes that “the HYDROX mark is merely a shortened form of HYDrogen PerOXide.” (Pl.’s Reply, Dkt. # 100, at 16.) The Court finds unpersuasive Plaintiff’s arguments that the mark “fails to actually suggest hydrogen peroxide because it is missing the ‘PER’” and that “‘Hydr’ might just as easily be construed as referring to water (as in ‘hydro’) and ‘ox’ to the animal. That would be descriptive of a ‘water ox.’” (Pl.’s Mot. Summ. J., Dkt. # 68 at 16-17.) Plaintiff does not sell aquatic beasts of burden. Plaintiff sells hydrogen peroxide. Consumers confronted with Plaintiff’s mark in a marketplace context can hardly fail to realize from whence the term “Hydrox” was derived.
“judicial estoppel, an admission, waiver, or simply hoisting [the plaintiff] by its own petard”);
Petro Stopping Centers, L.P. v. James River Petroleum, Inc., 130 F.3d 88, 94 (4th Cir. 1997)
(finding confusion unlikely based partly on plaintiff’s own representations to the USPTO arguing
that the mark was widely used).
Accordingly, because there is no evidence that Defendant’s use of the Hydrox mark can
be considered commercially strong and because the mark is conceptually weak, this factor favors
Defendant.
7 It is telling that Baldocchi, a longtime veteran of the chemical industry himself, testified in his deposition that when he met Ramanandan his first thoughts were of the famous cookies that share Plaintiff’s name. (Decl. David Merritt, Dkt. # 63, Ex. 16 at 59, lns. 3-5) (“First thing that came to my mind when I met Ram was Hydrox Cookies.”)
Other than Baldocchi’s testimony, Plaintiff offers no evidence of consumer confusion.8
The record reflects that no surveys were conducted and no customer testimonials were gathered.
Given the fact that Defendant’s Hydrox GPC was sold for nearly three years, the failure of
Plaintiff to produce any evidence on this issue is telling. See Libman, 69 F.3d at 1361 (noting
that where defendant had sold thousands of allegedly infringing brooms, “if confusion were
likely, one would expect at least one person out of this vast multitude to be confused, or more
precisely one would expect [plaintiff] to have been able to find one such confused person”).
For these reasons, this factor weighs heavily in favor of Defendant.
INTENT OF DEFENDANT
While evidence of a defendant’s intent to “palm off” its products as plaintiff’s goods is
among the most important factors under a forward confusion theory, it is irrelevant in a reverse
confusion case. See Sands, 978 F.2d at 961 (holding district court erred in considering
defendant’s intent, because this factor “is essentially irrelevant in a reverse confusion case”).
Whether Defendant knew of Plaintiff’s mark prior to using the “Hydrox GPC” and thus acted in
bad faith is only relevant in assessing damages, an issue not before the Court on these cross
motions for summary judgment. See Wm. Wrigley, 900 F. Supp. 2d at 803 (“Whether Wrigley
knowingly ignored Swerve IP’s trademark is relevant—just in balancing the harms”). Because
intent is not relevant at the liability stage of a reverse confusion case, this factor cuts in favor of
neither party.
8 Plaintiff also insists that John Rau, a former Diversey executive, conceded in his deposition that confusion was likely if the two parties’ products were sold to the same hospital. The Court disagrees with this interpretation of Rau’s testimony, as he made very clear that he thought confusion unlikely due to the very different uses of the products. (Pl.’s Ex. 23, Dkt. # 78 at pg. 99 ll. 8-10) (“So I wouldn’t think it would be too confusing because they would be used very differently in the hospital.”) Even if this testimony could be read as an opinion that confusion was likely, unsupported speculation by a former employee of Defendant in response to a hypothetical question hardly constitutes evidence of actual confusion.