Suntree Technologies, Inc. v. Ecosense International, Inc.
802 F.Supp.2d 1273, 2011 U.S. Dist. LEXIS 78642, 2011 WL 2893623 (2011)
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Rule of Law:
Under the Lanham Act, using a competitor's trademark truthfully in a bid to identify the competitor's product as a benchmark for an 'or equal' substitution does not create a likelihood of confusion and is not infringement. Additionally, using a competitor's product image in materials not disseminated for promotional purposes, without evidence of consumer confusion or harm, does not constitute actionable reverse passing off or false advertising.
Facts:
- Suntree Technologies, Inc. ('Suntree') and EcoSense International, Inc. ('EcoSense') are competing manufacturers of baffle boxes, which are stormwater treatment structures.
- In 2008, the City of West Melbourne solicited bids for a project requiring nine baffle boxes, with specifications requiring 'Suntree’s boxes or equal'.
- Derrico Construction Corporation ('Derrico') submitted the winning bid, listing Suntree as the proposed baffle box supplier.
- After being awarded the contract, Derrico successfully requested approval from the project engineer to substitute EcoSense's baffle boxes as an 'or equal' product, following a thorough review by the engineer.
- At a city's request, EcoSense later created a maintenance presentation on how to clean baffle boxes, which included unlabeled photographs of both Suntree's and EcoSense's products because both were installed in the city used for demonstration.
- EcoSense gave the presentation to two existing customers and posted a link to it on its website for less than a month.
- During litigation, an old EcoSense product brochure was discovered which contained a single, unlabeled picture of a Suntree baffle box; upon discovery, EcoSense destroyed all copies.
Procedural Posture:
- Suntree Technologies, Inc. filed a lawsuit against EcoSense International, Inc. and its President, George Dussich, in the U.S. District Court for the Middle District of Florida.
- The complaint alleged claims of contributory and direct trademark infringement, false advertising under the Lanham Act, and related state law claims of unfair competition and deceptive trade practices.
- Both Suntree and the Defendants (EcoSense and Dussich) filed cross-motions for summary judgment.
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Issue:
Do a competitor's actions, including being substituted for a trademark holder in a government contract specifying 'brand name or equal' and using the trademark holder's product images in a maintenance presentation and a limited-run brochure, constitute contributory trademark infringement, reverse passing off, or false advertising under the Lanham Act?
Opinions:
Majority - John Antoon II
No. The defendants' actions did not violate the Lanham Act. Suntree’s claims for contributory infringement, direct infringement, and false advertising all fail. First, the contributory infringement claim fails because there was no underlying direct infringement by Derrico. Derrico’s use of Suntree’s name in its bid was a truthful, nominative use to identify Suntree's product as the benchmark specified in the bid documents. This use did not create a likelihood of confusion, particularly with a sophisticated consumer like the City, which was fully aware of and approved the substitution process. The court rejected Suntree's theory of 'initial interest confusion,' noting it is not actionable in the Eleventh Circuit, and even if it were, the facts do not support it. Second, the direct infringement claim for 'reverse passing off' based on the maintenance presentation and brochure also fails. Suntree did not prove a likelihood of confusion or that it was harmed. The court found no evidence that EcoSense intended to pass off Suntree's products as its own; the inclusion of the photos was incidental and for training, not marketing. There was no evidence of actual consumer confusion, and Suntree failed to demonstrate any harm resulting from the limited use of the images. Finally, the false advertising claim fails because the maintenance presentation and brochure do not qualify as 'commercial advertising or promotion' under the Lanham Act. Applying the four-part Gordon & Breach test, the court found the presentation was for training existing customers, not influencing new sales, and neither item was disseminated sufficiently to the relevant public. Even if they were advertisements, Suntree failed to prove the essential elements of deception, materiality (effect on purchasing decisions), or injury.
Analysis:
This decision reinforces the high bar for proving trademark infringement and false advertising claims between sophisticated commercial competitors, particularly in the context of government procurement. It clarifies that in the Eleventh Circuit, 'initial interest confusion' that is dispelled before a sale is not an actionable theory of infringement. The court's adoption of the Gordon & Breach test provides a clear framework for determining what constitutes 'commercial advertising or promotion,' narrowing the scope of the Lanham Act's false advertising provisions to exclude materials with limited dissemination or non-promotional purposes. This case serves as a strong defense for nominative fair use and competitive business practices that, while aggressive, do not mislead the consumer.
