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TM Infringement For Selling Generic Paper Towels?

Cases and Courts

Georgia-Pacific Consumer Products LP v. Myers Supply, No. 09-2980 (8th Cir. Sep. 15, 2010).
Georgia-Pacific Consumer Products, LP v. von Drehle Corp., Nos. 09-1942, 09-2054 (4th Cir. Aug. 10, 2010).

Georgia-Pacific manufactures paper-towel dispensers and disposable paper towels. It has a federal trademark, “enMotion” on its touch-less paper-towel dispenser which uses a 10-inch-wide paper-towel roll. Georgia-Pacific does not sell the enMotions, but leases them to distributors and purports to require its distributors to sell only Georgia-Pacific towels to sublessees of the enMotion dispensers.

Not surprisingly, sublessees are interested in purchasing less expensive 10-inch-wide paper towel rolls manufactured by others for use in their enMotion dispensers and some distributors are willing to sell such off-brand paper-towels to such sublessees.

Georgia-Pacific has been suing such distributors, but not merely for breach of their lease agreement. Instead they also bring claims for contributory trademark infringement, alleging that putting generic towels in the enMotion dispensers creates a likelihood of confusion as to the brand of the towels (which have no TM printed on them) and thus selling generic towels to sublessees that a distributor knows will place them in enMotion dispensers constitutes contributory trademark infringement.

Last month the Fourth Circuit said “maybe” to Georgia-Pacific’s theory and vacated the district court’s grant of summary judgment in favor of the distributor, in part because the district court limited its likelihood of confusion analysis to distributors and their customers, without analyzing the likelihood of confusion among the non-purchasing public using the dispensers and whether such confusion would adversely affect the plaintiff’s reputation among those with whom it interacts. But the court notes in footnote 6 that there remain genuine issues of material fact that will require resolution below, so it remains possible that those facts, once resolved, might not support a likelihood of confusion.

The Eighth Circuit today addressed the same issue with a different distributor and things went so poorly for Georgia-Pacific, that they might just need to throw in the towel. Here the district court had fully considered the evidence relating to confusion by bathroom consumers, distinguishing this from the Fourth Circuit case, and the district court had found no likelihood of confusion. Without direct trademark infringement by the sublessee, there could be no contributory trademark infringement by the distributor. The Eighth Circuit affirmed, putting Georgia-Pacific’s case in the waste bin.

This gives me hope for the remand to Judge Boyle in the Eastern District of North Carolina, who will hopefully reach the same result as his colleague from the Western District of Arkansas and put an end to this nonsense.

This is not a “Cyberlaw” case, but it is yet another example of what we see all too frequently in cyberlaw cases: the owner of an intellectual property right covering one thing seeks to leverage that right in an anti-competitive fashion to achieve a monopoly in a domain in which it holds no exclusive rights. Here it is trademark misuse, in other contexts, it is copyright misuse or patent misuse. What we need to see, however, is a concomitant rise in courts holding that such behavior constitutes misuse, so that these exclusive rights can properly serve the innovation-spurring and fair competition purposes they purport to serve.

Categories: Contract, Trademark.

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