Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_05-cv-01065/USCOURTS-casd-3_05-cv-01065-1/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 35:271 Patent Infringement

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28 1 05cv1065

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

AERUS LLC,

Plaintiff,

v.

PROTEAM, INC.,

Defendant, ______________________________________

AND RELATED COUNTERCLAIMS

______________________________________

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Civil No: 05CV1065-B (WMc) 

ORDER ON PROTEAM’S

MOTION FOR PARTIAL

SUMMARY JUDGMENT ON

UNFAIR COMPETITION

CLAIMS AND AERUS’ MOTION

TO STRIKE

Defendant ProTeam, Inc. (“ProTeam”) moves the Court for partial summary

judgment on the unfair competition claims Counts VI and IX put forward by Plaintiff

Aerus, LLC (“Aerus”). Additionally, Aerus has moved to strike ProTeam’s reply brief

for the instant motion and supplemental documents submitted in support thereof as

untimely filed and served. For the reasons herein, the Court GRANTS-IN-PART and

DENIES-IN-PART both motions.

I. FACTUAL BACKGROUND

Aerus (formerly known as Electrolux) sells cleaning products and services,

including a line of upright vacuum cleaners to commercial distributors. Defendant

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ProTeam sells floor care products, including vacuum cleaners, to the janitorial and

sanitation industry. In the period between 2000-2001, when ProTeam sold back-pac and

hip-vac models of vacuum cleaners, but not upright models, Aerus approached ProTeam

with a potential relationship whereby ProTeam would sell Aerus’ upright models. In

July 2001, the two companies entered a marketing agreement to this effect. In spring

2003, Aerus informed ProTeam that it was terminating the agreement and on May 12,

2003, the companies signed a termination, transition and release agreement. In summer

2004, ProTeam introduced onto the market its own line of upright vacuum cleaners,

ProForce 1500 and 1500 XP. 

In September 2004, Aerus brought suit against ProTeam alleging patent

infringement, trade dress infringement (under federal law and state law), common law

unfair competition and breach of contract. Aerus filed its original complaint in the

Northern District of Texas. On May 9, 2005, the Texas court granted ProTeam’s motion

to transfer venue to this Court. In 2006-2007, Aerus amended its complaint several

times; presently pending is its Third Amended Complaint filed on March 13, 2007,

which includes allegations of patent infringement, trade dress infringement (under

federal and state law), common law unfair competition, breach of contract, unjust

enrichment, intentional interference with prospective economic relations, false

advertising, fraudulent inducement and violation of California Business and Professions

Code § 17200.

In March 2007, ProTeam moved this Court for summary judgment on Aerus’

trade dress and patent infringement claims. The Court denied ProTeam’s motion on the

patent infringement claim, finding issues of material fact remained. The Court granted

ProTeam’s motion on the trade dress claim because Aerus failed to demonstrate a

material issue of fact on the essential element of non-functionality. The Court found

that the elements of Aerus’ purported trade dress were simply a compilation of

functional features and therefore, not protectable under the Lanham Act. Aerus moved

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for reconsideration of the Court’s order granting summary judgment on trade dress

infringement; this motion was denied.

II. STANDARD OF LAW

Federal Rule of Civil Procedure 56(c) provides that summary judgment is

appropriate 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 judgment as a matter of law.” In

considering the motion, the court must examine all the evidence in the light most

favorable to the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257

(1986). If the Court is unable to render summary judgment upon an entire case and finds

that a trial is necessary, it shall if practicable grant summary adjudication for any issues

as to which, standing alone, summary judgment would be appropriate. Fed. R. Civ. P.

56(d).

When the moving party does not bear the burden of proof, summary judgment is

warranted by demonstration of an absence of facts to support the non-moving party’s

case.” Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). Summary judgment must be

granted if the party responding to the motion fails “to make a sufficient showing on an

essential element of her case with respect to which she has the burden of proof.” Id. at

323. 

III. ANALYSIS

A. Procedural Issue - Aerus’ Motion to Strike ProTeam’s Reply

The instant motion for partial summary judgment was originally calendared for

hearing August 13, 2007. As such, pursuant to Local Rule 7.1, ProTeam’s reply brief

was due to the Court and to be served on the opposing party five court days prior, on

August 6. ProTeam, however, served and filed its reply brief on August 7. It then

attempted to file additional supporting documentation for its reply on August 8. In

response, Aerus moves to strike ProTeam’s reply and supporting documentation.

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 Aerus has agreed to dismiss with prejudice its claim in Count VI for unfair competition under

Texas law. (Aerus Opp. Br. at 6 n.4.)

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It is within the Court’s discretion to decide whether untimely documents should

be considered. As further discussed herein, the Court reviewed ProTeam’s reply. In

doing so, this consideration led to no prejudice against Aerus because the Court did not

consider any arguments therein which were not first raised in ProTeam’s opening brief. 

See Fox v. Citicorp Credit Services, Inc., 15 F.3d 1507, 1514 n.6 (9th Cir. 1994) (noting

that an issue first raised in a reply brief is ordinarily not considered out of fairness to the

non-moving party who has had no chance to respond). The Court, however, rejected the

supplemental documents to ProTeam’s reply, finding it to be unnecessary as well as

untimely. Therefore, to this extent, Aerus’ motion to strike is DENIED-IN-PART (as

to the reply brief) and GRANTED-IN-PART (as to new arguments raised in the reply

brief and as to the supplemental documents).

B. The Motion for Partial Summary Judgment

The instant motion concerns state law claims related to unfair competition, in

particular Count VI - unfair competition under California state law1

 - and Count IX -

violation of California Business and Professions Code § 17200. ProTeam moves for

partial summary judgment on these claims.

1. Federal Preemption

Based on the Court’s earlier ruling that Aerus’ asserted trade dress is only a

combination of functional features not protectable under trade dress law, ProTeam now

argues that any state law protection which Aerus seeks for its products would be

preempted by federal patent law.

“Federal patent and copyright laws limit the states' ability to regulate unfair

competition.” Summit Mach. Tool Mfg. Corp. v. Victor CNC Systems, Inc., 7 F.3d

1434, 1439 (9th Cir. 1993). A plaintiff’s state law claim must be “qualitatively different

from a copyright or patent infringement claim” or else it is preempted. Id. at 1440. This

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 While such a claim would be actionable under state law unfair competition laws and the

federal Lanham act, this duality does not create a preemption issue; state claims are not preempted by

the Lanham act. See Bonito Boats, 489 U.S. at 154.

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still leaves room for many other types of unfair competition types of claims. “States may

protect businesses in the use of their trademarks, labels, or distinctive dress in the

packaging of goods so as to prevent others, by imitating such markings, from misleading

purchasers as to the source of the goods.” Bonito Boats, Inc. v. Thunder Craft Boats,

Inc., 489 U.S. 141, 154 (1989).

To the extent Aerus seeks simply to prevent ProTeam from copying the functional

features of its vacuum, this claim is preempted by federal patent law. Summit, 7 F.3d at

1440. However, Aerus’ unfair competition claims are based upon ProTeam’s alleged

“palming off” of ProTeam’s products as those of Aerus by ProTeam’s advertising and

marketing of vacuums identical to Aerus’ products, and deceiving and intentionally

misleading consumers as to source. These palming off claims go beyond federal patent

law; patent law does not include the element of consumer confusion as to the origin of a

product. Summit, 7 F.3d at 1441.2

 Thus, these claims are not preempted and ProTeam’s

motion is DENIED on this ground.

2. The Merits of Aerus’ Unfair Competition Claims

ProTeam next argues that even if Aerus’ unfair competition palming off claims

are not preempted, these claims should fail for the same reason as the failure of Aerus’

trade dress claims.

Not all “palming off” claims rely on trade dress infringement. To the extent such

claims are based in trade dress infringement however, they require the same elements as

those set out in the Lanham act. Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489

U.S. 141, 157-158 (1989); Levi Strauss & Co. v. Blue Bell, Inc., 778 F.2d 1352, 1362

(9th Cir. 1985); Lifshitz v. Walter Drake & Sons, Inc., 806 F.2d 1426, 1429 (9th Cir.

1986). The Court has already ruled that Aerus’ asserted trade dress does not meet these

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 Additionally, while ProTeam now argues that these claims also should not stand because any

false advertising it may have done ended in May 2005, this argument is only first raised in its reply

brief. As discussed herein, the Court does not consider this argument as Aerus has not been given a

chance to present its evidence in response. See Fox v. Citicorp Credit Services, Inc., 15 F.3d 1507,

1514 n.6 (9th Cir. 1994).

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requirements. Therefore, ProTeam’s summary judgment motion is GRANTED as to

any of Aerus’ unfair competition claims which rest solely on allegations of trade dress

infringement.

Beyond these trade dress-based allegations however, Aerus’ unfair competition

claims also rely on an implied theory of palming off. These claims are based on false

advertising by ProTeam including the use of testimonials from Aerus’ customers on

Proteam’s advertising materials, at trade shows and on ProTeam’s website. This type of

unfair competition claim does not require a protectable trade dress. International Order

of Job's Daughters v. Lindeburg and Co., 633 F.2d 912, 915 (9th Cir. 1980) (trademark

and trade dress infringement are only a subset of the actionable conduct under unfair

competition law).3

 The Court’s previous order on Aerus’ trade dress claims does not

affect these implied palming off claims. As such, there remains at least an issue of fact

as to unfair competition claims that are based on a theory of implied palming off. 

Proteam’s summary judgment motion is therefore DENIED on this ground.

3. Remedies under Bus. & Prof. Code § 17200

As a final ground for summary judgment, ProTeam contends that Count IX of

Aerus’ complaint cannot be maintained because it fails to plead any damages caused by

a violation of Bus. & Prof. Code § 17200. According to ProTeam, Aerus’ expert failed

to offer any opinion on damages suffered by Aerus. In response, Aerus argues that

section 17200 provides for injunctive relief, the remedy which Aerus is seeking. (Third

Amended Complaint ¶ 91 M.) Although ProTeam for the first time in its reply brief

argues that an injunction is not warranted because, according to ProTeam’s Director of

Marketing, the offending conduct has ceased, this late argument again does not provide

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Aerus an opportunity to respond and is therefore not considered. Alternatively, even in

light of this argument, Plaintiff still has a basis for injunctive relief. See Cal. Bus. &

Prof. Code § 17203 (“Any person who engages, has engaged, or proposes to engage in

unfair competition may be enjoined.”). Hence, there remains a question of fact as to an

available remedy for Aerus’ unfair competition claims and ProTeam’s motion for

summary judgement on this ground is DENIED.

IV. CONCLUSION

For the reasons herein, Aerus’ motion to strike ProTeam’s reply is DENIED-INPART and GRANTED-IN-PART. ProTeam’s motion for partial summary judgment

on Counts VI and IX of Aerus’ Third Amended Complaint is GRANTED only as to any

of Aerus’ unfair competition claims based solely on trade dress infringement and

DENIED as to the remainder of Aerus’ unfair competition claims. 

IT IS SO ORDERED.

DATED: August 13, 2007

Hon. Rudi M. Brewster

United States Senior District Court Judge

cc: Hon. William McCurine

United States Magistrate Judge

All Counsel of Record

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