Dorr-Oliver, Incorporated v. Fluid-Quip, Incorporated and Andrew Franko

94 F.3d 376, 39 U.S.P.Q. 2d (BNA) 1990, 1996 U.S. App. LEXIS 22612, 1996 WL 492591
CourtCourt of Appeals for the Seventh Circuit
DecidedAugust 29, 1996
Docket95-4097
StatusPublished
Cited by79 cases

This text of 94 F.3d 376 (Dorr-Oliver, Incorporated v. Fluid-Quip, Incorporated and Andrew Franko) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dorr-Oliver, Incorporated v. Fluid-Quip, Incorporated and Andrew Franko, 94 F.3d 376, 39 U.S.P.Q. 2d (BNA) 1990, 1996 U.S. App. LEXIS 22612, 1996 WL 492591 (7th Cir. 1996).

Opinion

FLAUM, Circuit Judge.

Plaintiff Dorr-Oliver, Inc. (“Dorr-Oliver”) filed suit in district court, claiming that defendants Fluid-Quip, Inc. (“Fluid-Quip”), and its president and majority stockholder, Andrew Franko, copied the trade dress of an industrial machine sold by Dorr-Oliver, in violation of the Lanham Act, 15 U.S.C. § 1051, et seq., and various state law provisions. After a bench trial, the district court ruled that Dorr-Oliver had established the infringement of its trade dress. Consequently, the court enjoined Fluid-Quip from selling its infringing product and awarded Dorr-Oliver monetary relief representing Fluid-Quip’s profits from sales of the infringing machine. The defendants appeal the district court’s decision on a number of grounds. We hold that Dorr-Oliver failed to establish a likelihood of consumer confusion and therefore reverse the judgment of the district court.

I.

The dispute in the current case requires us to take a sojourn into the field of the corn wet milling industry. Corn wet milling plants process corn by separating the four elements of the corn kernel — germ, fiber, starch, and protein. The separated elements are then sold and used to make food products, such as corn oil and corn starch. In the 1950’s Dorr-Oliver invented a new method for separating starch from protein through the use of centrifugal force. This “starch washing” process employs a series of machines, known as “starch washers,” to accomplish the goal of separation. The mixture of starch and protein is pumped through the starch washers under high pressure and is distributed through hundreds of small, stationary, tapered, plastic tubes called “cyclo- *378 nettes.” Centrifugal force is created in the cyclonettes, causing the starch and protein to exit through opposite ends of the cyclonettes and into separate outlet ports of the starch washer.

Dorr-Oliver manufactures and sells different kinds of starch washers, which vary in their outward appearance. Dorr-Oliver’s claim of trade dress infringement is based on the external design of one type of starch washer, known as the “DorrClone Type C” or the “clamshell.” The clamshell was developed and introduced by Dorr-Oliver in the late 1950’s under its registered “DorrClone” trademark. The clamshell housing is made of east steel and, in the words of the district court, resembles a forty-inch diameter bagel with a cylindrical core plugged into its center. 1 Various pipes protrude from the “bagel,” which is supported vertically above the ground by two legs. 2 Each clamshell sold by Dorr-Oliver has a nameplate displaying the “Dorr-Oliver” name, the DorrClone trademark, and the numbers of several expired patents relating to the machine. The name “Dorr-Oliver” is also cast into both sides of the clamshell’s outer housing. The other Dorr-Oliver starch washer models bear no resemblance to the clamshell.

The market for clamshell starch washers is very limited. In the United States, there are only twelve purchasers of clamshells for twenty-seven corn wet milling plants. All twelve businesses in the clamshell-purchas-ing market own and operate Dorr-Oliver clamshells. The clamshells need only be purchased once because their steel outer-housings last indefinitely. The plastic cyclonettes contained in the clamshells, however, periodically need to be replaced. In 1989 Fluid-Quip began selling replacement parts for various kinds of equipment used in the corn wet milling industry. Yet for many years, long after its patents on the clamshell had expired, Dorr-Oliver remained the sole producer and supplier of the clamshell. Dorr-Oli-ver’s customers apparently tired of paying monopoly prices for the clamshells. In 1991, Fluid-Quip was approached by several of Dorr-Oliver’s customers, who asked whether Fluid-Quip could produce and supply clam-shells at a more reasonable price. The customers desired that Fluid-Quip’s clamshells be completely interchangeable with those of Dorr-Oliver. 3 Consequently, they provided Fluid-Quip with access to the Dorr-Oliver clamshells located at their plants. Fluid-Quip measured the Dorr-Oliver clamshells and, in August of 1991, marketed its own clamshell with the precise dimensions of Dorr-Oliver’s machine. The interior of Fluid-Quip’s clamshell is identical to Dorr-Oliver’s and utilizes the same starch washing process. Moreover, although there are minor differences in the outer housings of the two manufacturer’s clamshells, the district court found, and we agree, that the general external appearance of the two clamshells is practically identical. The Fluid-Quip name, however, is east into all seven removable sections of the clamshell’s outer housing and also appears on a nameplate attached to the housing.

At the time Fluid-Quip entered the market, Dorr-Oliver clamshells sold for about $40,000, while Fluid-Quip charged approximately half that amount. Oftentimes in the industry, customers purchase several clam-shells at once, spending hundreds of thousands of dollars. The evidence at trial showed that the twelve companies in the market are very careful when making purchasing decisions regarding clamshells. In *379 the typical clamshell sales process, the supplier initially provides the customer with a preliminary bid. Before deals are closed the supplier usually engages in extensive discussions and negotiations with the customer’s upper-level management and engineers, which can last months or even years. In all of its discussions and negotiations, Fluid-Quip clearly informed its potential customers that it was not associated in any way with Dorr-Oliver. Thus, rather than misrepresenting the source of its product, Fluid-Quip truthfully held itself out as an alternative source of clamshells.

Companies in the corn wet milling industry commonly conduct tours of their plants in which people can view clamshells and other equipment involved in the milling process. Often plant managers and engineers participate in reciprocal tours of each other’s plants. Additionally, tours have been given at these plants for various international companies in the corn wet milling industry. Representatives of foreign companies also have visited Dorr-Oliver’s headquarters, and Dorr-Oliver has led tours of plants for these representatives. No evidence was offered at trial, however, showing that any of these foreign companies have ever purchased a clamshell from either Dorr-Oliver or Fluid-Quip.

Dorr-Oliver filed suit against Fluid-Quip, asserting that, under the Lanham Act and state law, 4 it had exclusive rights in the design of the clamshell’s outer housing and the use of the word “clamshell” in connection with starch washers. After a six-day bench trial, the district court concluded that Dorr-Oliver had no trademark rights in the word “clamshell.” On the other hand, the court determined that Dorr-Oliver did have a pro-tectable trade dress in the outer design of the clamshell, which Fluid-Quip had infringed. The court therefore ruled in favor of Dorr-Oliver on its Lanham Act claim and enjoined Fluid-Quip from selling its clam-shell starch washers. 5

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94 F.3d 376, 39 U.S.P.Q. 2d (BNA) 1990, 1996 U.S. App. LEXIS 22612, 1996 WL 492591, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dorr-oliver-incorporated-v-fluid-quip-incorporated-and-andrew-franko-ca7-1996.