Kesters Merchandising Display International v. SurfaceQuest

• Court: Court of Appeals for the Tenth Circuit
• Decided: January 6, 2026
• Docket: 24-3112
• Status: Published

Opinion

Appellate Case: 24-3112 Document: 50-1 Date Filed: 01/06/2026 Page: 1 FILED United States Court of Appeals PUBLISH Tenth Circuit

UNITED STATES COURT OF APPEALS January 6, 2026

Christopher M. Wolpert FOR THE TENTH CIRCUIT Clerk of Court __________________________________________

KESTERS MERCHANDISING DISPLAY INTERNATIONAL, INC.,

Plaintiff - Appellant,

v. No. 24-3112

SURFACEQUEST, INC.,

Defendant - Appellee. ___________________________________________

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS (D.C. No. 2:21-CV-02300-EFM) ______________________________________

Teresa M. Young, Baker Sterchi Cowden & Rice, St. Louis, Missouri (James S. Kreamer and Megan R. Stumph-Turner, Baker Sterchi Cowden & Rice, Kansas City, Missouri, with her on the briefs), for Appellant.

Brian L. White (J. Philip Davidson, Amy M. Decker, and Ashley N. Jarmer with him on the briefs), Hinkle Law Firm, Wichita, Kansas, for Appellee. ______________________________________________

Before MATHESON, KELLY, and BACHARACH, Circuit Judges. ______________________________________________

BACHARACH, Circuit Judge. ______________________________________________

This appeal involves the use of photographs to advertise. In the

advertisements, one manufacturer allegedly marketed its products with Appellate Case: 24-3112 Document: 50-1 Date Filed: 01/06/2026 Page: 2

photographs of a competing product. The alleged marketing efforts spurred

claims of false advertising under the Lanham Act. 1

For these claims, the plaintiff must show that the defendant caused

an injury, which may be presumed or actual. At issue here is whether the

evidence would allow a reasonable fact-finder to infer an injury. We

answer no because injury isn’t presumed and the plaintiff has not presented

evidence of an actual injury.

I. SurfaceQuest markets its products with photographs of Kesters’ products.

This case involves competition between two manufacturers of

material for lightweight construction. One competitor (Kesters

Merchandising International, Inc.) sells a product called MicroLite, which

is a lightweight, seamless material used in architectural products. The

other competitor (SurfaceQuest, Inc.) mainly sells architectural film that

goes on surfaces like MicroLite.

In about 2014, Kesters and SurfaceQuest jointly marketed MicroLite

samples wrapped in SurfaceQuest film. To market the samples, Kesters

supplied SurfaceQuest with products, specification guides, and

photographs of Kesters’ products. SurfaceQuest then applied its film to the

products.

1 Other claims involved unjust enrichment and unfair competition. But these claims aren’t at issue here.

2 Appellate Case: 24-3112 Document: 50-1 Date Filed: 01/06/2026 Page: 3

Roughly two years later, SurfaceQuest decided to sell and market its

own lightweight beam wrapped in SurfaceQuest film. These marketing

efforts included advertisements using photographs of MicroLite.

II. SurfaceQuest obtains summary judgment.

In district court, Kesters sued for false advertising under the Lanham

Act, 15 U.S.C. § 1125(a)(1)(B), claiming that SurfaceQuest had

• used photographs of MicroLite,

• published a video characterizing MicroLite as SurfaceQuest’s product,

• published images from a grocery store renovation and misrepresented them as depicting SurfaceQuest products,

• placed a SurfaceQuest sticker on a MicroLite binder and falsely represented to a Kesters customer that SurfaceQuest had manufactured MicroLite,

• put a SurfaceQuest sticker on a MicroLite sample and falsely told Kesters customers that SurfaceQuest had invented MicroLite, and

• allowed a SurfaceQuest dealer to advertise with an image of MicroLite.

Both parties moved for summary judgment on Kesters’ claim under

the Lanham Act. The district court granted SurfaceQuest’s motion and

denied Kesters’.

3 Appellate Case: 24-3112 Document: 50-1 Date Filed: 01/06/2026 Page: 4

III. We conduct de novo review based on the standard for summary judgment.

We conduct de novo review, applying the standard that governed in

district court. Cypert v. Indep. Sch. Dist. No. 1-050 of Osage Cnty., 661

F.3d 477, 480 (10th Cir. 2011). Under this standard, the district court

needed to grant summary judgment if a party had shown the absence of a

genuine dispute of material fact and an entitlement to judgment as a matter

of law. Est. of Harmon v. Salt Lake City, 134 F.4th 1119, 1122 (10th Cir.

2025). Because both parties moved for summary judgment, we separately

review their motions in the light most favorable to the non-moving parties.

United States v. Sup. Ct. of N.M., 839 F.3d 888, 906–07 (10th Cir. 2016).

IV. Kesters needed to establish an injury.

The district court granted summary judgment to SurfaceQuest based

on the lack of an injury. Kesters challenges this ruling, but acknowledges

that it needed to prove an injury. See Lexmark Int’l, Inc. v. Static Control

Components, Inc., 572 U.S. 118, 133, 140 (2014) (requiring proof of an

injury under the Lanham Act). That injury needed to involve a direct

diversion of sales or a loss of goodwill. Bimbo Bakeries USA, Inc. v.

Sycamore, 29 F.4th 630, 644 (10th Cir. 2022).

V. Injury isn’t presumed.

In district court, SurfaceQuest contended that Kesters hadn’t

presented evidence of an injury. In response, Kesters asserted that the

4 Appellate Case: 24-3112 Document: 50-1 Date Filed: 01/06/2026 Page: 5

district court should presume an injury. A presumption exists when the

plaintiff proves that

• the “defendant has falsely and materially inflated the value of its product (or deflated the value of the plaintiff ’s product)” and

• the “plaintiff and defendant are the only two significant participants in a market or submarket.”

Vitamins Online, Inc. v. Heartwise, Inc., 71 F.4th 1222, 1240 (10th Cir.

2023).

Kesters argues on appeal that the district court should have presumed

injury based on the use of literally false advertisements in a limited

market. For the sake of argument, we can assume that SurfaceQuest’s

advertisements were literally false. 2 Even with this assumption, however,

Kesters failed to create a genuine dispute of material fact regarding the

presence of a limited market.

Kesters points out that the presumption may apply to a sparsely

populated market even if more than two competitors exist. But a market is

sparsely populated only when the other participants are insignificant. Id. at

1240 & n.6. Otherwise, the court can’t assume that the plaintiff ’s lost sales

would go to the defendant. Id.

2 We can also assume, without deciding, that the use of literally false advertisements would satisfy the first requirement for an injury. Vitamins Online, 71 F.3d at 1240. 5 Appellate Case: 24-3112 Document: 50-1 Date Filed: 01/06/2026 Page: 6

In district court, SurfaceQuest showed the existence of multiple

competitors; and Kesters failed to respond with any argument or evidence

about their insignificance. But on appeal, Kesters insists that it did present

such evidence, pointing to an affidavit by Mr. Jacob Walters that

accompanied a reply brief supporting Kesters’ own motion for summary

judgment. Kesters didn’t mention this affidavit when responding to

SurfaceQuest’s motion for summary judgment and failed to include the

affidavit in the exhibits accompanying the response. So the district court

didn’t mention the affidavit when ruling on SurfaceQuest’s motion for

summary judgment.

Kesters argues that the district court should have considered the

affidavit when ruling on SurfaceQuest’s motion. But this argument reflects

a misunderstanding of the district court’s obligation when ruling on cross-

motions for summary judgment. When both parties seek summary

judgment, the District of Kansas treats the motions separately. See United

States v. Davison, 768 F. Supp. 3d 1324, 1329 (D. Kan. 2025) (explaining

that “[c]ross summary judgment motions should be evaluated as two

separate motions”); see also Banner Bank v. First Am. Title Ins. Co., 1916

F.3d 1323, 1326 (10th Cir. 2019) (“Cross-motions for summary judgment

are treated as two individual motions for summary judgment and are held

to the same standard . . . .”). So the district court didn’t err by separately

considering each motion.

6 Appellate Case: 24-3112 Document: 50-1 Date Filed: 01/06/2026 Page: 7

Granted, the district court can consider both motions in the same

hearing or rule on them together in the same order. See EEOC v. UPS

Ground Freight, 443 F. Supp. 3d 1270, 1276 (D. Kan. 2020) (stating that

the court can address “the legal arguments together” when cross-motions

for summary judgment overlap). But the district court must separately

consider each motion on its own. Banner Bank, 916 F.3d at 1326. So the

district court appropriately decided SurfaceQuest’s motion based on all of

the evidence presented in connection with that motion. The Walters

affidavit didn’t appear anywhere in that evidence.

Even if we were to consider the evidence that Kesters presented in

support of its own motion, however, that evidence wouldn’t include the

Walters affidavit. Kesters presented the affidavit for the first time in a

reply brief. But that brief was too late. See Lowther v. Child. Youth & Fam.

Dep’t, 101 F.4th 742, 759 (10th Cir. 2024) (“Our case law forbids the

district court from relying on new arguments or materials to decide a

summary judgment motion unless the opposing party is provided an

opportunity to respond.” (quoting Geddes v. United Staffing All. Emp. Med.

Plan, 469 F.3d 919, 928 (10th Cir. 2006))); see also Modaine v. Am. Drug

Stores, Inc., 408 F. Supp. 2d 1169, 1203 (D. Kan. 2006) (“The Court will

not consider new arguments in a party’s reply brief.”).

Even if we were to consider the affidavit, however, it would not

create a genuine dispute of material fact on a presumption of injury. That

7 Appellate Case: 24-3112 Document: 50-1 Date Filed: 01/06/2026 Page: 8

presumption would be available only if Kesters and SurfaceQuest had been

the only significant participants in the market. See p. 5, above. To

determine the scope of the market, we examine “cross-elasticity of

demand,” which measures the substitutability of products. Vitamins Online,

71 F.4th at 1240. “A high cross-elasticity of demand indicates that products

are substitutes; a low cross-elasticity of demand indicates that the products

are not substitutes and, as a result, do not compete in the same market.” Id.

(quoting Lenox MacLaren Surgical Corp. v. Medtronic, Inc., 762 F.3d 114,

1120 (10th Cir. 2014)).

Kesters concedes that the Walters affidavit didn’t address cross-

elasticity of demand. Oral Arg. at 8:28–8:54. To the contrary, the affidavit

addressed only similarities between the products made by Kesters and

SurfaceQuest. But these similarities didn’t necessarily affect the ability to

substitute products. See Telecor Commc’ns, Inc. v. Sw Bell Tel. Co., 305

F.3d 1124, 1132 (10th Cir. 2002) (stating that “[r]easonable

interchangeability does not depend upon product similarity”). So a single

market may include companies making dissimilar products. See Vitamins

Online, 71 F.4th at 1241 (stating that multiple manufacturers will often

“make up a relevant market, even if there are differences between the

manufactured products”).

Because Kesters did not present any evidence or arguments as to

cross-elasticity of demand, the factfinder couldn’t limit the significant

8 Appellate Case: 24-3112 Document: 50-1 Date Filed: 01/06/2026 Page: 9

participants to Kesters and SurfaceQuest. So the district court couldn’t

presume an injury to Kesters.

VI. No evidence exists of an actual injury.

Because the court couldn’t presume an injury, Kesters needed to

show an actual injury from SurfaceQuest’s deceptive advertising. Lexmark

Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 133 (2014).

Kesters alleges an actual injury by losing a chance to sell items to a

store called Hy-Vee. In 2021, Hy-Vee sought bids for separate projects

involving the beauty departments, produce departments, and health

markets. Kesters successfully bid for this work and completed the projects

for the beauty and produce departments. But Kesters lost the bid for the

health markets and attributes the loss to SurfaceQuest’s false advertising.

The Lanham Act protects against actual injuries in the form of lost

profits. See id. at 134 (concluding that the plaintiff ’s lost sales were

cognizable under the Lanham Act). But Kesters must prove “a causal

connection” between SurfaceQuest’s false advertising and an actual injury.

Vitamins Online, 71 F.4th at 1238; see also Lexmark Int’l, Inc., 572 U.S. at

133 (concluding that the plaintiff ordinarily must show injury “flowing

directly from the deception wrought by the defendant’s advertising”).

Kesters didn’t present evidence that it had lost a bid for Hy-Vee as a

result of SurfaceQuest’s false advertisements. For example, Kesters

presented no evidence that

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• SurfaceQuest had obtained the Hy-Vee projects that Kesters allegedly lost;

• SurfaceQuest had shown its marketing materials to Hy-Vee; or

• Hy-Vee had seen any of SurfaceQuest’s marketing materials.

Absent such evidence, the district court couldn’t reasonably infer a causal

connection between SurfaceQuest’s false advertising and Kesters’ loss of

the bid.

Because Kesters did not provide any evidence of an injury from false

advertising, SurfaceQuest was entitled to summary judgment on the

element of an actual injury.

VII. The award of summary judgment to SurfaceQuest renders Kesters’ motion moot.

Like SurfaceQuest, Kesters moved for summary judgment on its

claim under the Lanham Act. We’ve concluded that the district court didn’t

err in granting summary judgment to SurfaceQuest on this claim. That

conclusion moots Kesters’ argument that it should have obtained summary

judgment. We thus affirm the denial of Kesters’ motion. Murray ex rel.

Murray v. Montrose Cnty. Sch. Dis. RE-1J, 51 F.3d 921, 931 (10th Cir.

1995).

** *

Viewed in the light most favorable to Kesters, the evidence does not

support the existence of an injury. So the district court didn’t err in

10 Appellate Case: 24-3112 Document: 50-1 Date Filed: 01/06/2026 Page: 11

granting summary judgment to SurfaceQuest on the claim of false

advertising. This ruling rendered Kesters’ motion moot.

Affirmed.