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by Stan Hammer
In its second published opinion vacating the judgment of
the district court, the Fourth Circuit recently ordered that a jury's verdict
awarding Georgia-Pacific nearly $800,000 in damages for trademark infringement
be reinstated. Georgia-Pacific
Consumer Prods., LP v. Von Drehle Corp., No. 12-1444 (4th Cir. Mar. 14,
2013) [an enhanced version of this opinion is available to lexis.com
subscribers]. The Fourth Circuit's decision is the final chapter in
a long-running battle centering on the "stuffing" of Georgia-Pacific's
"enMotion®" paper towel dispensers, found in an automated public restroom near
you, with von Drehle's toweling. We've previously blogged about the
dispute, which has been litigated across three federal circuits, here
After the Fourth Circuit vacated the district court's
grant of summary judgment of noninfringement, holding that there was sufficient
evidence for a jury to find restroom users were likely confused regarding the
source of the paper towels emerging from the enMotion® dispensers, von Drehle
sought leave to amend its answer in order to assert preclusion defenses based
on a Western District of Arkansas decision. That decision held that Myers
Supply, Inc., a distributor that sold von Drehle's paper towels, was not liable
for contributory trademark infringement. The district court denied the motion
for leave to amend, reasoning that it was "unduly delayed," given that the
Arkansas decision was issued 16 months prior.
Undeterred, von Drehle again sought leave to amend its
answer two months before the scheduled date of the jury trial, this time based
on a Northern District of Ohio ruling granting summary judgment in favor of
Four-U-Packaging, Inc.-another distributor of von Drehle towels-on a similar
claim of contributory trademark infringement. In that decision, the
district court agreed with Four-U-Packaging that Georgia Pacific's claims
were barred under a claim preclusion theory by the ruling in Myers.
Relying on the Four-U-Packaging decision, von Drehle also moved for
summary judgment based on its preclusion defenses. The district court never
ruled on either motion prior to trial.
After the jury found von Drehle liable for trademark
infringement and awarded Georgia-Pacific some $791,431 in damages, the district
court decided to entertain von Drehle's preclusion defenses based on Four-U-Packaging,
raised yet again in its motion for judgment as a matter of law. The district
court said that Four-U-Packaging "revived" the preclusion defenses that
first became available after Myers, and ultimately held
Georgia-Pacific's trademark claims were barred by collateral estoppel and res
The Fourth Circuit again vacated the district court's
judgment. "We conclude that the district court acted in an 'arbitrary manner,'
and, thus, abused its discretion, in relying on the Four-U decision to
'revive' the preclusion defenses that substantively were based on Myers." Given
that the Four-U decision did not reach the merits of Georgia-Pacific's
trademark claim, it "did not have any preclusive effect independent
of the Myers decision, and did not provide a separate basis for timely
assertion of the preclusion defenses."
In addition to ordering the district court to reinstate
the jury's verdict, the Fourth Circuit directed the district court to consider
Georgia-Pacific's requests for injunctive and other appropriate relief on
Read more at Virginia IP Law by
Troutman Sanders LLP.
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