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Energizer Brands, LLC v. Proctor & Gamble Co.

United States District Court, E.D. Missouri, Eastern Division

October 27, 2017

ENERGIZER BRANDS, LLC, Plaintiff,
v.
THE PROCTOR & GAMBLE COMPANY, THE GILLETTE COMPANY, and DURACELL U.S. OPERATIONS, INC. Defendants.

          MEMORANDUM AND ORDER

          AUDREY G. FLEISSIG, UNITED STATES DISTRICT JUDGE.

         This trademark infringement action is before the Court on the motion (ECF No. 65) for summary judgment filed by Defendant Duracell U.S. Operations, Inc. (“Duracell”), the only remaining Defendant in this case. For the reasons stated below, Duracell's motion will be granted.

         BACKGROUND

         For purposes of the motions before the Court, the record establishes the following. Plaintiff Energizer Brands, LLC (“Energizer”), is the owner of two federally registered trademarks[1] for batteries, consisting of a pink toy bunny banging on a drum bearing the word “Energizer” (the “Energizer Bunny”). In certain areas outside of the United States, Duracell also uses a trademark for batteries that consists of a pink toy bunny (the “Duracell Bunny”). Duracell does not have a trademark registration for the Duracell Bunny in the United States.

         In 1992 and 1995, the parties' predecessors-in-interest entered into agreements (collectively, the “Agreement”) that restrict and limit the use of the Duracell Bunny on packaging in the United States. The Agreement provides that, “DURACELL agrees not to use the DURACELL Bunny on its product packaging” within the “United States of America, its territories and possessions and the facilities of its armed forces.” ECF No. 70-3 at 5. The Agreement further provides that “[t]o the extent any party exercises control either by share ownership, license agreement, or otherwise, over a third party, such party will not permit any such third party to do anything pursuant to or in breach of this Agreement such party could not itself do.” ECF No. 70-3 at 6.

         In 2015 and 2016, Energizer discovered batteries in packaging bearing the Duracell Bunny being offered for sale in the United States, both online and in brick-and-mortar retail outlets, including a Phillips 66 gas station in Colorado and several Menard, Inc. (“Menards”) stores in Missouri. In total, Energizer identified more than 30 entities selling Duracell Bunny Products, and informed Duracell or its parent company, The Procter & Gamble Company (“P&G”), of this fact.

         Specifically, on September 28, 2015, Energizer informed P&G that Duracell Bunny products were being sold at the Phillips 66 gas station in Colorado, sent P&G a photograph of the packaging at issue (the label of which is written in Chinese language characters) and requested the removal and destruction of these Duracell Bunny products identified for sale in the United States. ECF No. 70-1. On October 9, 2015, P&G responded, stating that P&G “does not, and has not, used, sold, and/or distributed the packaging as embodied within the representative photos within the United States, ” that the products were “diverted, gray market, or counterfeit, ” that P&G had “begun an investigation in an attempt to identify how such packaging may have been directed toward the United States market, ” and that “such products have a detrimental effect on the sales of Duracell branded batteries[, ] [b]ut . . . the scourge of diverted goods, gray market goods, and counterfeit goods is often difficult to trace and more importantly stop, particularly in the case of China.” ECF No. 70-2 at 4-5. After hearing nothing more from P&G over the next month, Energizer inquired further, and on November 23, 2015, P&G emailed Energizer that it had “nothing further to add” and that it “consider[ed] the matter closed.” Id. at 2.

         Energizer then filed this lawsuit on February 18, 2016. Energizer asserts the following claims against Duracell: breach of contract (Count 1); direct and contributory trademark infringement under 15 U.S.C. § 1114 (Counts 2 and 3); direct and contributory unfair competition, false representation, and false designation of origin under 15 U.S.C. § 1125(a) (Counts 4 and 5); direct and contributory trademark dilution under 15 U.S.C. § 1125(c) (Counts 6 and 7); trademark infringement and unfair competition under Missouri common law (Count 8); and trademark dilution under Mo. Rev. Stat. § 417.061 (Count 9).[2]

         On March 3, 2017, after discovery, Plaintiff voluntarily dismissed with prejudice its direct trademark liability claims (Counts 2, 4, 6, and 9 in full, and Count 8 in part). Therefore, all that remains are the breach of contract claim (Count 1), the contributory trademark liability claims (Counts 3, 5, and 7), and the unfair competition claim under Missouri common law (Count 8 in part).

         In July 2016, approximately five months after Energizer filed this lawsuit, Duracell sent letters to some of the entities identified by Energizer as retailers selling the allegedly infringing products, including Menards and Phillips 66. These letters stated that “Duracell does not use, or authorize others to use, the Duracell Bunny on any product packaging in the United States, ” that if batteries in such packaging are available in the United States, they “may be counterfeit, or . . . diverted goods that are intended for sale only in particular foreign territories, ” and that Duracell had “become aware that DURACELL-branded battery products in packaging bearing the Duracell Bunny may be available in some of [the entities'] retail outlets in the United States.” See, e.g., ECF No. 87-31 at 2. Duracell ended these letters by asking the entities to “immediately stop advertising, distributing, and reselling such products” and to contact Duracell to discuss the issue. Id.; accord ECF Nos. 87-44, 87-45 & 87-46.

         A corporate representative of Menards testified in a deposition in this case that Duracell does not own or have any control over Menards, does not control from whom Menards can buy products, and does not have any agreement with Menards requiring Menards to buy Duracell products only directly from Duracell. ECF No. 67-10 at 3-4. However, the Menards representative further testified that Menards took action “immediately” on the day it received Duracell's letter, and that Menards “value[s] its relationship” with Duracell and was “willing to cooperate” with requests from Duracell. ECF No. 87-30 at 6-7.

         Likewise, other entities responded to Duracell's letter by voluntarily complying with Duracell's request. Some also identified the suppliers of the Duracell Bunny products being sold in their stores; these suppliers were entities other than Duracell. See, e.g., ECF No. 87-49 & 87-50. On April 27, 2017, Duracell filed a complaint in the United States District Court for the Northern District of Illinois against a company called “JRS Ventures, Inc., ” alleging that this company was “knowingly engaged in the unauthorized importation and/or distribution of gray market Duracell batteries” and that this company was “not an authorized distributor of Duracell products or displays[.]” ECF No. 87-64 at 2, 7.

         Duracell filed the present motion for summary judgment on July 14, 2017.

         ARGUMENTS ...


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