Georgia Pacific Consumer Products, LP v. Von Drehle Corp.

618 F.3d 441, 2010 WL 3155646
CourtCourt of Appeals for the Fourth Circuit
DecidedAugust 10, 2010
Docket09-1942, 09-2054
StatusPublished
Cited by43 cases

This text of 618 F.3d 441 (Georgia Pacific Consumer Products, LP v. Von Drehle Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Georgia Pacific Consumer Products, LP v. Von Drehle Corp., 618 F.3d 441, 2010 WL 3155646 (4th Cir. 2010).

Opinions

OPINION

HAMILTON, Senior Circuit Judge:

Georgia-Pacific Consumer Products, LP (G-P), successor-in-interest to Georgia Pacific Corporation, is a leading designer/manufacturer of, inter alia, paper products and dispensers for such products for the home and the away-from-home setting (e.g., hotels, stadiums, restaurants, etc). This case implicates two related products first introduced by G-P in October 2002— the enfl/F&tíon ® touchless paper towel dispenser ( eriifmtion ® Dispenser) and paper toweling with a high-quality, [445]*445fabric-like feel designed specifically for use in and problem-free operation of enM&tíon © Dispensers (en/1/Totion ©Toweling). Although GP actually sells en/Sf&tion® Toweling to janitorial supply distributors, who, in turn sell it to their respective end-user customers (e.g., hotels, stadiums, restaurants, etc.), G-P only leases en/f/TStfon ® Dispensers to such distributors, who, in turn, are permitted to sublease them to their respective end-user customers. The leases and subleases expressly provide that only en/ff&tíon ® Toweling can be used in eniW&tíon ® Dispensers and stickers on the inside of eniWStíon ® Dispensers reinforce the limitation.

The face of every en/fl8tfon © Dispenser bears four registered trademarks owned by G-P — Gn/VJótíon @ , Georgia-Pacific ®, 4^® » and . —or <2D® Collectively, we refer to the first three of these trademarks as “the G-P Marks,” which are the three trademarks at issue on appeal.

On July 8, 2005, after one of G-P’s competitors, von Drehle Corporation (VD), started marketing and selling to distributors an inferior paper toweling specifically manufactured by VD for use in en/W&tion © Dispensers, G-P brought the present civil action against VD, alleging the following four causes of action at issue on appeal: (1) unfair competition in violation of § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); (2) contributory trademark infringement in violation of § 32 of the Lanham Act, 15 U.S.C. § 1114(1); (3) unfair competition in violation of North Carolina common law; and (4) tortious interference with contractual relationships in violation of North Carolina common law.1 VD counterclaimed for violation of the North Carolina Unfair and Deceptive Trade Practices Act (NC UDT-PA), N.C. Gen.Stat. § 75-1.1. Ultimately, on cross-motions for summary judgment with respect to all of G-P’s claims, the district court granted summary judgment in favor of VD. The district court also granted summary judgment in favor of GP with respect to VD’s counterclaim.

G-P now appeals the district court’s summary judgment ruling with respect to its four claims set forth above, and VD cross-appeals the district court’s summary judgment ruling with respect to its single counterclaim. For reasons that follow, we vacate the district court’s grant of summary judgment in favor of VD with respect to G-P’s claims for contributory trademark infringement and unfair competition under the Lanham Act, unfair competition under North Carolina common law, and tortious interference with contract under North Carolina common law, and remand for further proceedings consistent with this opinion. We affirm the district court’s grant of summary judgment in favor of G-P with respect to VD’s counterclaim under the NC UDTPA.

I.

In analyzing de novo whether the district court erred in granting summary judgment in favor of VD, we view the facts and draw all reasonable inferences therefrom in the light most favorable to G-P, as the nonmoving party. Garofolo v. Donald B. Heslep Assocs., Inc., 405 F.3d 194, 198 (4th Cir.2005). G-P’s claims are based upon the following facts.

For many years, G-P has designed, manufactured, and sold what those in the paper towel dispenser industry call “universal dispensers.” Other companies, in-[446]*446eluding YD, also design, manufacture, and sell universal dispensers. Universal dispensers accept and are intended to accept paper toweling from multiple manufacturers. However, with the introduction of enMStion ® Dispensers, G-P sought to introduce a non-universal dispenser tied directly to the G-P Marks — i.e., one that G-P intended would only operate with, and one in which the restroom visitor would expect to dispense, enMStion ® Toweling. In this way, G-P sought to create a branded-dispenser situation akin to a branded Coca-Cola ® soda fountain dispenser, which the user expects to dispense only genuine Coca-Cola ® products.

Turning to the specifics of enMStion ® Dispensers, they dispense a pre-measured amount of paper toweling upon activation of an electronic motion sensor, without the user having to touch the dispenser in any manner, thus providing a hygienic experience superior to that of a manual paper towel dispenser otherwise requiring the user to touch the dispenser. At the time of their introduction in October 2002, enMStion ® Dispensers were the only electronic, hands-free, paper towel dispensers available in the marketplace.

G-P invented the high-end enMStion ® Dispenser with the intent that it would operate with only nonstandard, ten-inch enMStion ® Toweling, which toweling has a soft-fabric like feel created by using a through-air-dried (TAD) process. Although the packaging of enMStion ® Toweling bears the GP marks, enMStion ® Toweling itself bears no source identifying marks. To reinforce G-P’s desire to create a branded dispenser situation akin to the Coca-Cola ® soda fountain dispenser, every enMStion ® Dispenser bears a sticker-notice inside of it stating that such dispenser “is the property of Georgia-Pacific” and “may be used only to dispense the trademark-bearing products identified on its exterior.” (J.A. 36). Although G-P uses its enMStion ® mark only with enMStion ® Dispensers,2 it uses the .marks Georgia-Pacific @ and ^4»® on many of its other products, such as Brawny ® paper towels and Quilted Northern ® toilet paper. Notably, VD does not dispute that enMStion ©Dispensers have been an extremely successful product for G-P and that many commercial facilities in the United States have installed enMStion © Dispensers.

G-P leases enMStion® Dispensers to distributors via a pre-printed lease agreement furnished by G-P. Such lease agreement grants a distributor permission to sublease enMStion © Dispensers “to the end-user customers that shall be approved by G-P....” (J.A. 1086). A typical example of this supply chain is when G-P leases enMStion ® Dispensers to a distributor, who in turn subleases them to a hotel operator for use in the hotel’s public restrooms. Notably, although G-P argues that it is a party to the subleases between distributors and the end-user customers (ie., the sublessees), the record does not support such a finding.

Also to reinforce its desire to create a branded dispenser situation akin to the Coca-Cola ® soda fountain dispenser, the lease agreements between G-P and its distributors provided that enMStion® Dispensers would remain the property of G-P and that “only G-P branded towels ... shall be used in” enMStion ®

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618 F.3d 441, 2010 WL 3155646, Counsel Stack Legal Research, https://law.counselstack.com/opinion/georgia-pacific-consumer-products-lp-v-von-drehle-corp-ca4-2010.