Skil Corporation v. Rockwell International Corp.

375 F. Supp. 777, 183 U.S.P.Q. (BNA) 157, 1974 U.S. Dist. LEXIS 8659
CourtDistrict Court, N.D. Illinois
DecidedMay 6, 1974
Docket74 C 22
StatusPublished
Cited by67 cases

This text of 375 F. Supp. 777 (Skil Corporation v. Rockwell International Corp.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Skil Corporation v. Rockwell International Corp., 375 F. Supp. 777, 183 U.S.P.Q. (BNA) 157, 1974 U.S. Dist. LEXIS 8659 (N.D. Ill. 1974).

Opinion

OPINION

AUSTIN, District Judge.

This is an action to enjoin alleged violation of Section. 43(a) of the Lanham Act (15 U.S.C.A. § 1125(a)), 1 to enjoin various forms of unfair competition, and to obtain an accounting of gains and profits derived from defendant’s illegal activities, as well as judgment for compensatory damages. Original federal jurisdiction of the Lanham Act claim is predicated upon 15 U.S.C.A. § 1121, 2 and 28 U.S.C.A. § 1338(a). 3 Pendent federal jurisdiction is alleged with respect to the unfair competition claims under Illinois law, relying upon 28 U.S.C.A. § 1338(b). 4

The gist of the action is that the business of the plaintiff (“Skil”) was and is presently being injured by advertisements of the defendant (“Rockwell”), in that such advertisements make false and misleading factual statements and comparisons of the companies’ respective products which compete with each other in interstate commerce. The case is presently before the Court to resolve those questions raised by defendant’s motion to dismiss the action partly for failure of the Complaint to state a claim upon which relief may be granted and partly for lack of subject-matter jurisdiction.

I.

The alleged facts, which must be taken as true in deciding the pending motion, are as follows:

Skil and Rockwell are Delaware corporations which manufacture, advertise *780 and sell various portable electric tools, including drills and jigsaws, for the home consumer market in direct competition with each other in Illinois and in interstate commerce under their respective trademarks and tradenames. Plaintiff has invested large sums of money on research, development, inventions, patents and trademarks for its products and also in the development of public acceptance and goodwill associated with those products.

Since September 1, 1973, Rockwell has been conducting a national and local advertising and promotional campaign in such media as television commercials, trade journals, popular consumer magazines, brochures, form reply letters to the public and printed product test summaries available on request. An estimated eighty million people have seen some or all of these advertisements.

The theme of Rockwell’s campaign centers upon product testing done by an independent testing concern which tested, under supposedly normal use conditions, a variety of similar consumer electric drills and jigsaws manufactured by Skil and Rockwell and two other companies. In the course of this advertising campaign, Skil’s tradename and trademark has been named and clearly depicted in the form of product photographs. In its related communications, Rockwell has made certain factual statements in comparative and absolute terms concerning the qualities and relative performance of its own products and those of Skil. These statements are alleged to be false, misleading, deceptive and incomplete.

Because of these deceptive and misleading statements and comparisons, Skil has suffered a loss of present and potential customers and a decline in its goodwill. Skil further alleges it has suffered serious and irreparable damage to its tradename, trademark and sales.

Count I of the Complaint seeks injunctive and other equitable relief, recovery of damages and an accounting of profits, and an award of costs plus attorneys fees under Section 43(a) of the Lanham Act (15 U.S.C.A. § 1125(a)). Federal jurisdiction of this count is alleged to exist by virtue of 28 U.S.C.A. § 1338(a) and 15 U.S.C.A. § 1121.

Counts II through IV allege that Rockwell’s activities constituted false advertising, unfair competition, and public disparagement of the quality of Skil products. The relief sought is the same as in Count I. Pendent federal jurisdiction allegedly exists by virtue of 28 U. S.C.A. § 1338(b).

Count V alleges that Rockwell’s advertising campaign is in violation of the Illinois Deceptive Practices Act (12iy2 I. R.S. §§ 311-317, 5 which confers upon *781 Skil a private cause of action. Again, the same relief as in Count I is sought.

II.

Defendant Rockwell moves to dismiss Count I of the Complaint for failure to state a claim upon which relief may be granted under the Lanham Act. Rockwell also moves to dismiss Counts II through V for lack of subject-matter jurisdiction, since they are founded upon state law and diversity of the parties’ citizenship is lacking. Thus, if Count I is dismissed, there is no basis for federal jurisdiction of the remaining counts under either 28 U.S.C. § 1338(b) or the common law doctrine of pendent jurisdiction.

Accordingly, the outcome of the pending motion to dismiss depends upon the answer to one question: Does Section 43(a) of the Lanham Act give rise to a cause of action whereby a manufacturer may sue its competitor who, in its advertisements, has made false descriptions and representations of material facts concerning its own product and that of the plaintiff in comparing their relative attributes, where: (a) the goods travel in interstate commerce, (b) the misrepresentations are likely to deceive consumers to the extent that their decision to buy may be affected, and (e) the plaintiff is damaged thereby? In view of the language of the Act itself and the case law in this Circuit and elsewhere, the issue must be resolved in the affirmative.

III.

A. Cause of Action Under the Lanham Act

Enacted in 1946, Section 43(a) of the Lanham Act created a new federal statutory remedy for various types of unfair competition in interstate commerce. 6 It grew out of a recognition by Congress of the necessity to break with the restrictive guidelines laid down in such relics as American Washboard Co. v. Saginaw Manufacturing Co. 7 because of foreign trademark and patent treaty *782 commitments. 8 Furthermore, Congress undoubtedly recognized and intended to remedy the destructive effect that Erie v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938) had upon the development of a uniform federal common law of unfair competition which was essential in a nation where interstate commerce was dominant. 9 Nevertheless, presumably because of the case law which preceded enactment of Section 43(a), the response to the provision was sluggish — so much so that at least one Judge surmised that the practicing bar had yet to realize the potential impact of the statute. Maternally Yours v. Your Maternity Shop, 234 F.2d 538, 546 (2d . Cir. 1956) (Clark, C.

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Bluebook (online)
375 F. Supp. 777, 183 U.S.P.Q. (BNA) 157, 1974 U.S. Dist. LEXIS 8659, Counsel Stack Legal Research, https://law.counselstack.com/opinion/skil-corporation-v-rockwell-international-corp-ilnd-1974.