Wiehoff v. GTE Directories Corp.

851 F. Supp. 1329, 1994 U.S. Dist. LEXIS 4641, 67 Fair Empl. Prac. Cas. (BNA) 243
CourtDistrict Court, D. Minnesota
DecidedFebruary 24, 1994
DocketCiv. No. 3-91-770
StatusPublished
Cited by1 cases

This text of 851 F. Supp. 1329 (Wiehoff v. GTE Directories Corp.) is published on Counsel Stack Legal Research, covering District Court, D. Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wiehoff v. GTE Directories Corp., 851 F. Supp. 1329, 1994 U.S. Dist. LEXIS 4641, 67 Fair Empl. Prac. Cas. (BNA) 243 (mnd 1994).

Opinion

ORDER

DOTY, District Judge

This matter is before the court on the motion of K mart Corporation (“K mart”) to dismiss plaintiff Susan M. Maxwell’s (“Maxwell”) complaint. Because both parties have presented materials to the court outside the pleadings, K mart’s motion may be deemed a motion for summary judgment. Based on a review of the file, record and proceedings herein, the court denies K mart’s motion to dismiss and grants the motion for summary judgment.1

BACKGROUND

This case concerns various systems used to connect shoes which do not have laceholes, buckles or other apertures through which a filament can be threaded to join the shoes. Maxwell is the owner of record and named inventor of United States Patent No. 4,624,-060 (“’060 patent” or “Maxwell patent”). The patent claims a “system for connecting mated pairs of shoes to prevent separation and possible mismatching when offered for sale in self-service stores.” Maxwell patent, abstract. Maxwell filed an application for a patent on October 6, 1983, and a patent was issued on November 25, 1986.

The ’060 patent describes a system that threads a filament through “fastening tabs” secured between the inner and outer soles of each shoe of a mated pair. Maxwell’s shoe connection system securely joins mated shoes together without damaging the shoes. The tabs used to attach the shoes are not visible when the shoes are worn and do not irritate the wearer. In 1985, Maxwell granted Target Stores a non-exclusive license to use the attachment system on shoes purchased for resale. Once Target began using Maxwell’s shoe connection system, other discount retailers, including the defendants, followed suit.

Maxwell filed suit alleging that defendants K mart and Melville Corporation (“Melville”), as well as others, sold shoes using attachment systems that violated the ’060 patent. Melville has an exclusive license with K mart Corporation to operate the shoe departments in all K mart stores. Melville operates the shoe departments through its Meldisco subsidiaries. Melville owns 51 percent of the common stock of Meldisco and elects three members of the board of directors. K mart owns the remaining stock and elects the fourth board member. During the term of the license, Melville, may not transfer its Meldisco stock without K mart’s approval.

Under the licensing agreement, K mart leases space in its stores to Melville for the purpose of selling shoes and related merchandise. K mart also provides certain services to Melville, including check out and return service. Melville pays rent to K mart in three ways: (1) Melville pays rent based on a fixed percentage of gross sales, subject to a minimum annual rental fee based on the square footage Melville occupies in the K mart store; (2) Melville pays an excess rental fee based on gross profits on sales exceeding a certain amount; and (3) Melville pays a fixed fee based on the relative amount of space it occupies to defray overhead costs incurred by K mart in operating the stores. K mart also derives income from the operation of the shoe departments in the form of dividends from Meldisco.2

Melville owns all the shoes and related merchandise in the shoe departments. Melville controls the selection, manufacturing, [1347]*1347shipment, receiving, displaying, coding and pricing of shoes and related merchandise. Under the license agreement, however, Melville agrees to comply with K mart’s policy of matching lower prices from other stores. Melville employees staff and manage the shoe departments, although K mart employees perform the physical sale at the cash registers. Complaints and returns are also handled, at least initially, by K mart employees.

The proceeds from the shoe sales, after deduction of K mart’s fees and advances, go to Melville. Melville employees receive compensation and benefits from Melville and Melville withholds and pays all payroll taxes associated with its employees. K mart provides cash advances to Melville for payroll and limited local payments. K mart recoups the advances through deductions from Melville’s weekly statements. K mart reports income from the Melville shoe operations as license fees and rental income, not as sales revenues.

The license agreement provides that K mart accepts all applications of persons seeking employment and, upon request, makes the applications available to Melville. Melville employees must attend K mart sales meetings and adhere to K mart’s dress code and general standards of conduct. Melville employees also receive a K mart employee discount, the cost of which is divided between Melville and K mart.

K mart sells certain footwear, including toddler shoes and specialty athletic shoes, in other departments in its stores. The license agreement prevents Melville from selling these types of shoes in K mart stores. Presumably because the toddler and athletic shoes have laceholes or other apertures, there is no allegation that any of these shoes infringe the Maxwell patent.

K mart also sells a line of goods under the Jaclyn Smith trademark. K mart has the right to use the mark in connection with a line of apparel as well as accessories. At first, the Jaclyn Smith trademark was used only for apparel. K mart also has the right to sell shoes bearing the Jaclyn Smith mark. Melville, as K mart’s licensee, sells shoes under the trademark. Maxwell contends that shoes sold by Melville under the Jaclyn Smith mark use a shoe attachment system that infringes her patent.

DISCUSSION

A motion to dismiss for failure to state a claim tests the sufficiency of the complaint. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974). When analyzing a motion to dismiss, the court looks to the complaint as pled. The complaint must be liberally construed and viewed in the light most favorable to the plaintiff. The court will dismiss a complaint only when it appears the plaintiff cannot prove any set of facts that supports the claim. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957).

Both K mart and Maxwell have presented materials to the court outside the pleadings. Thus, the motion may properly be considered a motion for summary judgment. Fed.R.Civ.P. 12(c). The court should grant summary judgment “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). This standard mirrors the standard for judgment as a matter of law under Federal Rule of Civil Procedure 50(a), which requires the trial court to enter judgment as a matter of law if there can be but one reasonable conclusion as to the verdict. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). There is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. Id. at 249, 106 S.Ct. at 2510-11.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Wiehoff v. GTE Directories Corp.
851 F. Supp. 1329 (D. Minnesota, 1994)

Cite This Page — Counsel Stack

Bluebook (online)
851 F. Supp. 1329, 1994 U.S. Dist. LEXIS 4641, 67 Fair Empl. Prac. Cas. (BNA) 243, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wiehoff-v-gte-directories-corp-mnd-1994.