United States District Court, Southern District of New York
March 20, 2000
EPPENDORF-NETHELER HINZ GMBH, PLAINTIFF,
ENTERTON COMPANY ESTABLISHMENT, NATIONAL LABNET COMPANY, INC., AND MARSH BIOMEDICAL PRODUCTS, INC., DEFENDANTS.
The opinion of the court was delivered by: Motley, District Judge.
OPINION GRANTING PARTIAL SUMMARY JUDGMENT
This case involves claims of trademark infringement involving two types
of laboratory equipment. Defendants have filed a motion for summary
judgment to dismiss the claim regarding one of these two products. For
the reasons outlined below, this court now grants defendants' motion on
the basis of laches.
This case involves allegations of trademark infringement involving
laboratory equipment. The pieces of equipment in question are hand-held
devices used to transfer small amounts of liquid. The two products are
dispenser syringes and pipettes. The pipettes in question are small lumen
glass tubes open on both ends. Dispenser syringes are disposable plastic
tips which fit onto the end of the pipettes. Dispenser syringes serve to
draw in or expel measured amounts of fluid. Only the dispenser syringes
are the subject of defendants' motion for summary judgment.
The plaintiff is Eppendorf-Netheler-HINZ GmbH ("Eppendorf"), a German
company which manufactures medical and laboratory equipment. The
defendants are PZ HTL SA ("HTL"), National Labnet Company, Inc.
("Labnet") and Marsh Biomedical Products, Inc. ("Marsh"). HTL is a Polish
company which manufactures laboratory equipment including dispenser
syringes. HTL was previously owned by Enterton Company Establishment, the
party named in the above case caption. Labnet is a New Jersey corporation
that markets HTL's dispenser syringes in the United States. In some
situations Labnet sells HTL's dispenser syringes through dealers, one of
which is defendent Marsh. Eppendorfs claims against HTL and Labnet
involve only dispenser syringes. Eppendorfs claims against Marsh involve
pipettes and dispenser syringes. As the summary judgment motion involves
only dispenser syringes, granting this motion serves to dismiss the
entire case against HTL and Labnet but only part of the case against
Eppendorf markets dispenser syringes under the trademarked names
"Combitips" and "Eppendorf Combitips". HTL's dispenser syringes are sold
in the United States under the trademarked name "Combi-Syringe".
Eppendorf alleges that defendants' products employ Eppendorf's designs and
infringe on plaintiffs proprietary rights.
Plaintiff brings this action under the Lanham Act, 15 U.S.C. § 1051
et seq., as well as common law unfair competition, and deceptive trade
practices and trademark and trade dress dilution in violation of New York
General Business Law.
STANDARD FOR SUMMARY JUDGMENT
This circuit recognizes the value of summary judgment to expedite the
process of litigation. See Quinn v. Syracuse Model Neighborhood Corp.,
613 F.2d 438, 445 (2d Cir. 1980). The mechanism of summary judgment
promotes judicial economy by preventing further litigation on an issue
with an unalterably predetermined outcome. The standard for summary
judgment ensures that issues are efficiently resolved without
compromising the rights of the non-moving party.
Summary judgment may be granted only if the moving
party can 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. The court
must draw all reasonable inferences and resolve all
ambiguities in favor of the non-moving party.
Ametex Fabrics, Inc. v. Just In Materials, Inc., 140 F.3d 101, 107 (2d
Cir. 1998) (internal citations omitted). Thus, the mere existence of a
factual dispute between partiies does not preclude summary judgmeent when
the dispute is not genuine or when
the disputed facts are immaterial. A disputed fact is immaterial when the
outcome of the case remains the same regardless of the disputed issue.
Factual questions which prove immaterial fail to preclude summary
judgment. See Knight v. U.S. Fire Insurance Co., 804 F.2d 9
, 11 (2d Cir.
1986) (noting that the existence of unresolved immaterial issues does not
suffice to defeat a motion for summary judgment).
A party may not rely on "mere speculation or conjecture as to the true
nature of the facts to overcome a motion for summary judgment". Knight
v. U.S. Fire Insurance Co., 804 F.2d 9, 11 (2d Cir. 1986).
Nor are judges any longer required to submit a
question to a jury merely because some evidence has
been introduced by the party having the burden of
proof, unless the evidence be of such a character that
it would warrant the jury in finding a verdict in
favor of that party. Formerly it was held that if
there was what is called a scintilla of evidence in
support of a case the judge was bound to leave it to
the jury, but recent decisions of high authority have
established a more reasonable rule, that in every
case, before the evidence is left to the jury, there
is a preliminary question for the judge, not whether
there is literally no evidence, but whether there is
any upon which a jury could properly proceed to find a
verdict for the party producing it, upon whom the onus
of proof is imposed.
Anderson v. Liberty Lobby lnc., 477 U.S. 242
, 251, 106 S.Ct. 2505, 91
L.Ed.2d 202 (1986) (internal citations omitted).
The possibility that a material issue of fact may
exist does not suffice to defeat the motion; upon
being confronted with a motion for summary judgment
the party opposing it must set forth arguments or
facts to indicate that a genuine issue not merely one
that is colorable of material fact is present.
Gibson v. American Broadcasting Companies, 892 F.2d 1128
, 1132 (2d Cir.
This circuit recognizes the equitable defense of laches to prevent
defendants from being unfairly prejudiced when plaintiffs inexcusably
delay in taking action. "Defendant's proof in its laches defense must
show that plaintiff had knowledge of defendant's use of its marks, that
plaintiff inexcusably delayed in taking action with respect thereto, and
that defendant will be prejudiced by permitting plaintiff inequitably to
assert its rights at this time." Saratoga Vichy Spring Co. v. Lehman,
625 F.2d 1037, 1040 (2nd Cir. 1980) (internal citations omitted). "This
defense is available against both Lanham Act claims and New York state
law claims of trademark infringement and unfair competition to) bar both
injunctive relief and damages" Harley-Davidson, Inc. v. O'Connell,
13 F. Supp.2d 271, 279 (N.D.N.Y. 1998).
Plaintiff filed the complaint in this case in June of 1998. It is
undisputed that HTL's dispenser syringes had been introduced into the
United States market by 1990. It is also undisputed that Eppendorf
possessed actual knowledge of this foray into the United States market at
least as early as 1990. As early as June of 1991 an internal Eppendorf
memorandum documents Eppendorf's awareness that HTL's dispenser syringes
were being sold in competition with Eppendorfs own product in the United
In 1992 Eppendorf and HTL entered into negotiations to explore the
possibility of developing a joint venture to manufacture dispenser
syringes. This project never came to fruition and negotiations were
abandoned by early 1995. in 1996 HTL brought suit against Eppendorf in
Germany alleging breach of the joint venture agreement. The complaint was
dismissed at the trial court level in 1998 and HTL filed an appeal.
Plaintiff delayed eight years from the time it actually knew that HTL
dispenser syringes were being sold in the
United States until it brought the present legal action. "The Lanham Act
does not provide a specific statute of limitations In the absence of such
a specific statute, ao analogous statute of limitations may be applied."
Fourth Toro Family Limited Partnership v. PV Bakery, lnc.,
88 F. Supp.2d 188, 195 (S.D.N.Y. 2000).
The Second Circuit has recently held that a
presumption of laches applies in a trademark action if
the plaintiff fails to bring suit within the six-year
statute of limitations applicable to state-law fraud
in New York. This six-year period begins to run as
soon as the plaintiff discovers the facts which create
the cause of action.
Harley-Davidson, Inc. v. O'Connell, 13 F. Supp.2d 271, 279 (N.D.N Y
1998) (internal citations omitted). Plaintiffs delay in bringing this
suit entitles defendants to the presumption of laches. Plaintiff has not
proffered sufficient evidence to rebut this presumption.
Defendants' laches motion prevails even if the presumption of laches is
not applied as defendants have satisfied the necessary standard to
affirmatively plead laches. As discussed above, a showing of laches
requires three factors: 1) plaintiffs knowledge, 2) unreasonable delay,
3) prejudice to defendants. The first factor is undisputed as neither
party denies plaintiffs actual knowledge of defendants' activities. The
court now addresses whether plaintiffs eight year delay was unreasonable
and whether it was prejudicial to defendants. The court finds that no
genuine issue of material fact exists for any of these factors so the
court may grant defendants' motion for partial summary judgment based on
Plaintiff cannot excuse its delay in bringing the present action.
Plaintiff has introduced no evidence to suggest that it was somehow
prevented from asserting its rights prior to 1998. Plaintiff has argued
that its delay should be excused because it warned HTL of possible action
in the context of the joint venture negotiations. This is not a
sufficient affirmative step to enforce plaintiffs rights and thereby
justify the delay in filing the present lawsuit. Courts within this
circuit have ruled that the doctrine of laches barred claims brought by
plaintiffs who slept on their rights to a lesser extent and for a shorter
duration than did Eppendorf. Conopco, Inc. v. Campbell Soup Co.,
95 F.3d 187 (2nd Cir. 1996) involved a false advertising claim regarding
the comparison of two popular brands of tomato sauce. In that case the
Second Circuit upheld the defense of laches. The plaintiffs delay in
bringing that suit was only five years, a full three years less than the
delay in the present action. Also, in Conopco the plaintiff made two
formal challenges to the advertisements prior to filing suit. After a
mere one year delay, the Conopco plaintiff lodged a complaint with the
three major television networks that aired the relevant commercials. This
complaint prompted the Conopco defendant to modify the text of its
advertisements. Two years later, the Conopco plaintiff lodged a complaint
with the Better Business Bureau's National Advertising Division. The
Conopco plaintiffs actions clearly represent more formal and more
intimidating notice than Eppendorf alleges it provided HTL, Labnet, or
Marsh before bringing the present action. Prior to bringing this lawsuit
Eppendorf took minimal action to protect its proprietary rights. For the
purposes of defendants' motion for summary judgments this court will fully
accept Eppendorf's account of its alleged warning to HTI, despite the
absence of contemporaneous documentation of such. The court accepts as
true Eppendorfs contention that, in the course of the joint venture
negotiations Eppendorf warned HTL that Eppendorf believed HTL's sale of
dispenser syringes infringed on Eppendorfs proprietary rights and that
Eppendorf might take action to enforce these rights. However Eppendorf
concedes that its warnings were not designed to send a harsh or
threatening message to HTL. "In order not to impair the negotiations,
Eppendorf soft-pedaled its remarks to [HTL]". PI.'s Mem. of Law at 5. Such
a warning, which even plaintiff describes as "soft-pedaled", does not
amount to a sufficient timely act by plaintiffs to protect its
proprietary rights and defeat the present laches defense.
Plaintiff also attempts to excuse its delay by arguing that it
reasonably discounted defendants' potential threat to Eppendorfs market
share. "HTL, based in Poland, also had limited capacity and as a result
would not be able to send large quantities to the U.S. In addition,
Poland was not known as a source of high-quality and high-precision
equipment in the laboratory and medical field". Pl's Mem of Law at 3.
Plaintiffs arguments are unpersuasive. It is unreasonable and self
serving for a medical supplies company to simply rest on the unsupported
assertion that potential competitors from an entire country lack the
Teutonic reputation for precision necessary to mount a credible challenge
to Eppendorfs market share. Plaintiffs argument that it need not fear
expansion of HTL's manufacturing capacity is also unfounded. Eppendorf
argues that a reasonable businessperson need not expend resources to take
action to protect its trademark against de minimis infringement. The
situations in which courts have excused plaintiffs' delays because
defendants' infringements were de minimis involved much smaller
operations than HTL's. See generally Lambda Electronics, Corp. v. Lambda
Technology, inc., (S.D.N.Y. 1981) (excusing plaintiffs delay when
defendant was a fledgling enterprise which engaged in no advertising);
see Schieffelin & Co. v. Jack Co. of Boca, 850 F. Supp. 232, 253
(S.D.N.Y. 1994) (excusing delay when the court described defendant as "an
unsophisticated individual operating virtually out of his garage"). In
contrast, HTL had manufactured dispenser syringes for large scale sale in
Europe since the mid-1980s. Eppendorf had reason to anticipate that HTL
could quickly develop significant sales of dispenser syringes in the
United States, as in fact HTL did during the 1990s. HTL's manufacture of
dispenser syringes was clearly not a fledgling endeavor such that a
reasonable businessperson would dismiss its potential for competition as
Defendants would be unfairly prejudiced if plaintiff were allowed to
pursue its untimely claim. Two types of prejudice are frequently discussed
in inches motions, both of which defendants have shown here.
One form of prejudice is the decreased ability of the
defendants to vindicate themselves that results from
the death of witnesses or on account of fading
memories or stale evidence . . . Another type of
prejudice operates on the principle that it would be
inequitable in light of some change in defendant's
position to permit plaintiffs claim to be enforced.
Specifically, prejudice ensues when a defendant has
changed his position in a way that would not have
occurred if the plaintiff had not delayed.
Harley-Davidson, Inc. v. O'Connell, 13 F. Supp.2d 271, 282 (N.D.N Y
1998) (internal citations omitted). All three defendents have
demonstrated that the present claim is drastically more difficult to
defend now than it would have been had it been filed in a timely manner.
Defendants have offered sufficient evidence of unavailability of
Eppendorf (documents and employees from the relevant time period to
demonstrate the difficulty of defending this stale claim. Two
defendants, HTL and Labnet, have also proffered evidence of the second
type of prejudice resulting from their substantial expenditure of
resources and effort to develop their business in the United States.
Plaintiff unpersuasively asks this court to deny defendants the
protection of laches by alleging that defendants have acted in bad faith.
It is unsettled whether defendants bear the burden of demonstrating good
faith or whether good faith is
presumed such that plaintiff bears the burden of rebutting this
presumption. See Harley-Davidson, Inc. v. O'Connell, 13 F. Supp.2d 271,
284 (N.D.N.Y. 1998) (recognizing the lack of a clear standard and stating
"[defendants'] burden, at worst, is to show an absence of evidence of bad
intent"). Defendant is entitled to enjoy laches protection under either
standard. The similarity between HTL's and Eppendorf's dispenser syringes
does not suffice to show bad faith, especially for a simple product not
particularly amenable to dramatic differences in design. Nor does HTL's
awareness of Eppendorfs trademark suffice to show bad faith.
"Demonstration of good faith does not require that the infringer be in
total ignorance of another's mark." Harley-Davidson, Inc. v. O'Connell,
13 F. Supp.2d 271, 284 (N.D.N.Y. 1998). Plaintiff has not introduced
sufficient evidence to rebut a presumption of good faith while defendants
have demonstrated the absence of evidence of bad intent.
Plaintiff further argues that the public interest in avoiding confusion
trumps the laches defense. "No court in this circuit has addressed the
existence of this partial exception to the laches defense."
Harley-Davidson, Inc. v. O'Connell, 13 F. Supp.2d 271, 285 (N.D.N Y
1998). While the Second Circuit has not fully embraced this laches
exception, it has allowed for the possibility that a particularly
compelling public interest in avoiding confusion, where such confusion
might compromise public health and safety, could defeat an otherwise
valid laches defense in certain circumstances. See Conopco, Inc. v.
Campbell Soup Co., 95 F.3d 187, 193-194 (2nd Cir. 1996). No such
compelling public interest exists in this case. "Plainly, there is no
analytical mechanism for determining that actual confusion is significant
in one case, rampant in a second, and de minimis in a third. The trial
judge must rely upon his own common sense rather than upon any
well-articulated legal principle in such cases." Lambda Electronics
Corp. v. Lambda Technology, Inc., 515 F. Supp. 915, 927 (S.D.N.Y. 1981).
The likelihood of confusion is diminished by the fact that dispenser
syringes are not typically impulse purchases acquired by unsophisticated
consumers. Dispenser syringes are typically ordered from medical supply
companies by laboratory personnel. Plaintiff has not demonstrated a high
likelihood of confusion nor has plaintiff demonstrated potential hazards
to public health and safety likely to arise from whatever confusion that
might in fact occur. In order to fall within the narrow health and safety
laches exception, plaintiff needed to show that customers were likely to
mistakenly order HTL dispenser syringes, that these dispenser syringes
would malfunction when Eppendorf syringes would have functioned
properly, and that these malfunctions would jeopardize public health and
safety. Plaintiff has made no such showing.
For the reasons outlined above the court now grants defendants' motion
for partial summary judgment based on laches. Thus, the entire case is
dismissed as to defendants Enterton and Labnet, The case is dismissed as
to defendant Marsh only as to the claims regarding dispenser syringes.
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