concluded that when asked to describe what respondents considered to be “heavy duty batteries”,
sixty-seven percent of consumers surveyed stated “the most powerful type of battery.” (PI.’s 56.1
{ 17.) In 1999, Duracell commissioned a Global Usage Study that surveyed the “attitudes,
perceptions, and preferences in the battery category across 27 countries” of more than 27,000
consumers. (P1.’s 56.121.) In that study, Duracell learned that thirty-one percent of the consumers
surveyed agreed that the phrase “heavy duty”, without any other context, meant a battery that lasted
longer than alkaline. (P1.’s 56.122.) Duracell used this information in determining what to include
and what not to include in a thirty-second commercial entitled “Robot Fight Club” (“the
Commercial”). (PI.’s 56.1 4] 23.)

The Commercial shows a ring in which four machines are preparing to battle. (P1.’s 56.1 Ex.
11.) A man outside the ring says, “Are you ready, people? We have the Incinerator, Dr. Shred, the
Black Widow. Mr. Quacker.” (P1.’s 56.1 Ex. 10, 11.) Mr. Quacker quacks innocuously. (P1.’s 56.1
Ex. 10, 11.) Four battery-operated, high-drain, motorized remote-controlled machines are inside the
ring: (1) the Incinerator, a motorized device with a panel of headlights and a flame-thrower; (2)
Dr. Shred, a motorized device with flying picks, hammers, and a rotary saw; (3) the Black Widow,
a spider-like motorized device that includes a metal body and large claws capable of grabbing large
objects; and (4) Mr. Quacker, a yellow duck with no apparent defenses. (Pl.’s 56.1 Ex. 11.)

A second man outside the ring says “Kill him!”, and Mr. Quacker speeds away from his
nemeses who give chase. (Pl.’s 56.1 Ex. 11.) Dr. Shred, the Black Widow, and the Incinerator are
operated by generic “heavy duty” batteries. (P1.’s 56.1 Ex. 11.) Dr. Shred, the Black Widow, and
the Incinerator try to catch Mr. Quacker, but they quickly conk out. (Pl.’s 56.1 Ex. 11.) A male

announcer in a voice-over states, “What lasts up to three times longer than so-called heavy duty

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CONCLUSION

For the reasons stated herein, Defendants’ Motion for Summary Judgment is denied.

IT IS SO ORDERED.
y LL. grsat_—
, John W. Darrah, Judge
United States District Court
Date: J3 2002.

9.


heavy duty batteries” is deceptive predatory in that it is also preying on the consumers’
misunderstanding of the term “super heavy duty”. Defendants rely on Clinton E. Worden and
Company v. California Fig Syrup Company, 187 U.S. 516, 528 (1903), in which the Supreme Court
held that “if the plaintiff makes any material false statement in connection with the property which
he seeks to protect, he loses his right to claim the assistance of a court in equity.”

Unclean hands is traditionally a defense to actions for equitable relief. See Original Great
American Chocolate Chip Cookie Co., Inc. v. River Valley Cookies, Ltd.,970 F.2d 273, 281 (7th Cir.
1992). Ifa plaintiff has unclean hands, a plaintiff will be denied equitable relief if such relief would
encourage or reward a wrong or defeat justice. See Hot Wax, Inc. v. Turtle Wax, Inc., 191 F.3d 813,
825 (7th Cir. 1999) (citing Precision Inst. Mfg. Co. v. Automotive Maintenance Mach. Co.,324U.S.
806, 814 (1945)). The court in Urecal Corporation v. Masters, 413 F. Supp. 873, 875 (N.D. Ml.
1976) (citing Hall v. Wright, 240 F.2d 787 (9th Cir. 1957)), held that “[i]n an unfair competition
. .. where equitable and legal claims are joined, the doctrine of ‘clean hands,’ if indicated by the
facts, should preclude recovery on both claims.”

In the instant case, although Defendants have been enjoined from airing the Commercial, the
equitable and legal claims are still joined. However, there is a genuine issue of material fact as to
whether Energizer’s hands are unclean. There is a factual dispute as to whether Energizer is also
trading on the consumers’ misunderstanding of the term “heavy duty”. Energizer also sells zinc
carbon batteries labeled “heavy duty”, knowing that consumers believe the term to mean a powerful
battery. Energizer, however, maintains that it informs consumers, through the packaging and the
price, that its “heavy duty” batteries are to be used in low-drain devices and that it does not advertise

that its zinc carbon batteries are better than alkaline batteries. Therefore, Energizer argues, its hands

-6-


batteries?” (Pl.’s 56.1 Ex. 10, 11.) Mr. Quacker then appears on screen, and two Duracell
CopperTop batteries are shown in his chest as the male announcer says, “The new, improved
Duracell CopperTop.” (Pl.’s 56.1 Ex. 10, 11.) The ring is shown where Mr. Quacker has emerged
the victor in this battle royale while his enemies sit motionless. (P1.’s 56.1 Ex. 11.) The Commercial
ends with a picture of a large Duracell CopperTop battery. (Pl.’s 56.1 Ex. 11.) Underneath the
CopperTop are the words “Lasts Up to 3 Times Longer. [sic] vs. Heavy Duty & Super Heavy Duty
Batteries”. (P1.’s 56.1 Ex. 10, 11.) The words “Lasts Up to 3 Times Longer” are in larger type than
“vs, Heavy Duty & Super Heavy Duty Batteries”. (Pl.’s 56.1 Ex. 10, 11.) Over this visual, the
announcer states, “It lasts up to three times longer.” (Pl.’s 56.1 Ex. 10, 11.)

Duracell’s CopperTop batteries do not, under any circumstances, last three times longer than
any of its alkaline competitors. (Pl.’s 56.1 13.)

Energizer filed suit against Defendants, alleging that the Commercial is deceptive because
it creates the impression that Duracell CopperTop batteries last longer than all other batteries,
including Energizer’s products, by preying on consumer’s misconception of the term “heavy duty”
as meaning highest quality. (Compl. {J 29, 34.) Energizer sought injunctive relief and monetary
damages. Injunctive relief has been granted in this case. Energizer’s claim for monetary damages
remains.

DISCUSSION

Defendants argue that summary judgment is appropriate because (1) Energizer is not entitled
to any legal or equitable relief under the unclean hands doctrine and (2) Energizer cannot prove that
the Commercial caused consumer confusion.

Defendants argue that Energizer has unclean hands because Energizer’s promotion of “super

-5-


is literally true or ambiguous, “a plaintiff must prove that the statement is misleading in context by
demonstrated actual consumer confusion.” Hot Wax, 191 F.3d at 820 (citing B. Sanfield, 168 F.3d
at 971-72). Consumer confusion is a question of fact. See Scandia Down Corp. v. Euroquilt, Inc.,
772 F.2d 1423, 1427-28 (7th Cir. 1985).

The Commercial does not appear to be literally false. Substantial evidence has been
presented, and there is no dispute, that alkaline batteries, such as the Duracell CopperTop, are better
and longer-lasting than “heavy duty” or “super heavy duty” batteries for high-drain applications, such
as the ones shown in the Commercial. Therefore, Energizer must prove that the Commercial is
misleading in context by showing actual consumer confusion.

There are genuine issues of material fact as to whether the statement in the Commercial is
misleading in context and whether the Commercial confuses or is likely to confuse a substantial
segment of the advertisement’s audience. See Hot Wax, 191 F.3d at 819. As was mentioned above,
itis undisputed that alkaline batteries are, in fact, better than “heavy duty” or “super heavy duty” zinc
carbon batteries for high-drain applications. Energizer has presented substantial evidence that
Defendants knew that consumers understood the term “heavy duty battery” to mean “the most
powerful battery” and to mean that such a battery would Jast longer than alkaline batteries.
Therefore, there is a genuine issue of material fact as to whether the statement in the Commercial
is misleading in context and whether there is actual, or a likelihood of, confusion of a substantial

segment of the audience. Summary judgment is also denied on this ground.

-8-


Minute Order “2m (06/97)

United States District Court, Northern District of Dlinois

varie Magistrate Jue John W. Darrah “than Assigned Judge

CASE NUMBER 01. C9720 DATE 5/23/2002
CASE ENERGIZER HOLDINGS, INC. vs. DURACELL, INC.
TITLE

[In the following box (a) indicate the party filing the motion, ¢.g,, plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature

of the motion being presented]

MOTION:

DOCKET ENTRY:

a) oO Filed motion of [ use listing in “Motion” box above.]

(2) oO Brief in support of motion due

(3) a Answer brief to motion due. . Reply to answer brief due.

(4) Oo Ruling/Hearingon___——setfor___—_at

(5) oO Status hearing[held/continued to] {set for/re-set for]on___setfor___—_at

(6) im} Pretrial conference{held/continued to} [set for/re-set for]on__setfor__— ss at__
(7) a Trial[set for/re-set for] on __at

(8) o [Bench/Jury trial] [Hearing] held/continued to__at

(9) oO This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

COFRCP4(m) (General Rule 21 CIFRCP41(a)(1) CO FRCP41(a)(2).

do) of [Other docket entry] Status hearing held. Enter Memorandum Opinion And Order. Defendants’

motion for summary judgment is denied.

(1) @ [For further detail see order attached to the original minute order.)

No notices required, advised in open court.

No notices required. number of notices

Notices mailed by judge's staff.

Notified counsel by telephone. MAY 2 8 2002

date docketed
ov | Docketing to mail notices, fr FL

Mail AO 450 form, docketing deputy initials

Copy to judge/magistrate judge.

pamthy BELTS date maited notice
courtroom Qh tyes

LG deputy’s
initials

Date/time received in ; _
central Clerk’s Office railing deputy initials



are clean. There is a genuine issue of material fact as to whether Energizer, despite its announced
efforts to the contrary, is contributing to and profiting from the consumers’ confusion. Summary
judgment is, therefore, denied on this ground.

Defendants next argue that summary judgment is appropriate because Energizer cannot show
that the Commercial caused consumer confusion.

Section 43(a) of the Lanham Act provides that:

{a]ny person who, on or in connection with any goods or services, or any container

for goods, uses in commerce any word, term, name, symbol, or device, or any

combination thereof, or any false designation of origin, false or misleading

description of fact, or false or misleading representation of fact, which .. . in
commercial advertising or promotion, misrepresents the nature, characteristics,
qualities, or geographic origin of his or her or another person’s goods, services, or
commercial activities, shall be liable in a civil action by any person who believes that
he or she is or is likely to be damaged by such act.
15 U.S.C. § 1125(a)(1)(B).

To establish a claim for false advertising under section 43(a) of the Lanham Act, Energizer
must prove that: (1) Defendants made a false statement of fact in a commercial advertisement about
its or another’s product; (2) the statement actually deceives or is likely to deceive a substantial
segment of the advertisement’s audience; (3) “the deception is material . . . in that it is likely to
influence the purchasing decision”; (4) Defendants caused the statement to enter interstate
commerce; and (5) Defendants’ statement injured or is likely to injure Energizer by direct diversion
of sales from it to Defendants or by loss of goodwill associated with its batteries. Hot Wax, Inc. v.
Turtle Wax, Inc., 191 F.3d 813, 819 (7th Cir. 1999) (citing B. Sanfield, Inc. v. Finlay Fine Jewelry
Corp., 168 F.3d 967. 971 (7th Cir. 1999)). If such a statement is literally false, a plaintiff does not

need to show actual deception or likelihood of deception. Hot Wax, 191 F.3d at 820. Ifthe statement

-7-


nm

of Delaware with its principal place of business in Boston, Massachusetts. (Def.’s 56.1 { 2.)
Gillette’s Duracell division is the United States’ largest manufacturer of alkaline batteries, like the
Duracell CopperTop. (Def.’s 56.1 2, 6.) The majority of alkaline batteries are sold by Duracell,
Energizer, and Rayovac. (Pl.’s 56.1 94.) Ninety-five percent of the domestic consumer disposable
battery market is comprised almost entirely of batteries utilizing alkaline technology. (Pl.’s 56.1
18.)

Zinc carbon batteries are a poor quality product that are significantly inferior to alkaline
batteries. (Def.’s 56.1 7.) Zinc carbon batteries are sold for a much lower price than alkaline
batteries. (PI.’s 56.1 3.) Consumers have overwhelmingly rejected zinc carbon batteries in favor
of alkaline batteries. (Pl.’s 56.1 6.) In addition to lasting a much shorter time than alkaline
batteries, in certain applications, such as certain high-drain, remote-controlled motorized toys, zinc
carbon batteries do not work at all. (P1.’s 56.1 12.)

Energizer manufactures zinc carbon batteries under the name “Eveready Super Heavy Duty.”
(Def.’s 56.1 5.) The packaging for Energizer’s Super Heavy Duty product does not mention its
zinc carbon composition. (Def.’s 56.1 7.) In using the label “heavy duty”, Energizer does not
compare the “Super Heavy Duty” batteries’ performance to alkaline batteries and does not suggest
that they are appropriate for high-drain devices. (Pl.’s 56.1 4 9.)

Duracell also manufactures and sells a zinc carbon battery labeled “Mallory Super Heavy
Duty” in the United States. (P1.’s 56.1 J 1.) Other sellers of zinc carbon batteries labeled “heavy
duty” or “super heavy duty” include Rayovac and Panasonic. (Pl.’s 56.1 § 2.)

Duracell commissioned numerous studies to determine what consumers understood the term

“heavy duty batteries” to mean. (PI.’s 56.1 J 16.) One such study, commissioned in July 2001,

3-


....” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Thus, although the moving party on a
motion for summary judgment is responsible for demonstrating to the court why there is no genuine
issue of material fact, the non-moving party must go beyond the face of the pleadings, affidavits,
depositions, answers to interrogatories, and admissions on file to demonstrate, through specific
evidence, that there remains a genuine issue of material fact and show that a rational jury could
return a verdict in the non-moving party’s favor. Celotex, 477 U.S. at 322-27; Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 254-56 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 586-87 (1986); Waldridge v. American Hoechst Corp., 24 F.3d 918, 923 (7th Cir. 1994).

Disputed facts are material when they might affect the outcome of the suit. First Ind. Bank
y. Baker, 957 F.2d 506, 507-08 (7th Cir. 1992). When reviewing a motion for summary judgment,
a court must view all inferences to be drawn from the facts in the light most favorable to the
opposing party. Anderson, 477 U.S. at 247-48; Popovits v. Circuit City Stores, Inc., 185 F.3d 726,
731 (7th Cir. 1999), However, a metaphysical doubt will not suffice. Matsushita, 475 U.S. at 586.
If the evidence is merely colorable or is not significantly probative or is no more than a scintilla,
summary judgment may be granted. Anderson, 477 U.S. at 249-50.

BACKGROUND

The undisputed facts taken from the parties’ Local Rule 56.1(a) & (b) statements of material
facts' (referred to herein as “Pl.’s 56.1” and “Def.’s 56.1”) and exhibits are as follows.

Energizer is a corporation organized under the laws of Missouri with its principal place of

business in St. Louis, Missouri. (Def.’s 56.1 4] 1.) Gillette is a corporation organized under the laws

"Defendants did not file a response to Energizer’s Statement of Additional Facts.
Therefore, these paragraphs are deemed as admitted.

2-


IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION
ENERGIZER HOLDINGS, INC., )
)
) Case No. 01 C 9720
Plaintiff, )
) Hon. John W. Darrah
v. )
) \)
DURACELL, INC. and ) yun .
THE GILLETTE COMPANY, ) % g ww
) wn
Defendants. )

MEMORANDUM OPINION AND ORDER

Plaintiff, Energizer Holdings, Inc. (“Energizer”), filed a four-count complaint against
Defendants, Duracell, Inc. (“Duracell”) and the Gillette Company (“Gillette”) (collectively
‘Defendants”), alleging violations of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (2002)
(Count I); the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 Ill. Comp. Stat.
505/2 (2002) (Count II); the Illinois Uniform Deceptive Trade Practices Act, 815 Ill. Comp. Stat.
510/2 (2002) (Count IE); and an Illinois state law claim of unfair competition (Count IV).

Defendants move for summary judgment pursuant to Federal Rule of Civil Procedure 56 on
Count I. For the reasons stated herein, Defendants’ Motion for Summary Judgment is denied.

LEGAL STANDARD

Summary judgment is appropriate when there remains no genuine issue of material fact and
the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Cincinnati Ins, Co.
y. Flanders Elec. Motor Serv., Inc., 40 F.3d 146, 150 (7th Cir. 1994). “One of the principal purposes

of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses

-l-