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NATIONWIDE TARPS INC. v. MIDWEST CANVAS CORP.
October 16, 2002
NATIONWIDE TARPS, INC. D/B/A NTI GLOBAL, A NEW YORK CORPORATION, PLAINTIFF,
MIDWEST CANVAS CORPORATION, AN ILLINOIS CORPORATION, DEFENDANT
The opinion of the court was delivered by: David N. Hurd, District Judge
MEMORANDUM-DECISION and ORDER
Plaintiff Nationwide Tarps, Inc. ("NTI") commenced the instant action
against Defendant Midwest Canvas Corporation ("MCC") asserting claims for
violations of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a).
MCC asserts counterclaims for a violation of section 43(a) of the Lanham
Act, defamation, prima facie tort, and unfair competition and trade
NTI has made a motion seeking (1) partial summary judgment on its
Lanham Act claims; (2) a preliminary injunction precluding MCC from
making certain representations concerning its product; (3) a temporary
injunction requiring MCC to recall certain of its products and place them
in the possession of a third party to prevent continued damage to NTI and
to ensure a source of payment of any damages awarded to NTI; and (4)
summary judgment dismissing MCC's counterclaims. MCC opposes.
Oral argument was heard on November 30, 2001, in Albany, New York.
Decision was reserved.
NTI and MCC are in the business of selling concrete insulating
blankets. Concrete insulating blankets are often used for cold weather
concreting. Because concrete may not properly cure in low temperatures,
during periods of rapid temperature change, or in other adverse weather
conditions, concrete insulating blankets are used to hold in the heat of
hydration produced by the curing concrete.
Generally speaking, there are two different types of insulation
— mass insulation and reflective insulation. (See Pl.'s Resp. 7.1
Statement at ¶¶ 23, 25.) Mass. insulation restricts the flow of heat
through the product's mass. See 61 Fed. Reg. 13659 at n. 4. Reflective
insulation restricts heat by reflecting back radiant heat and, thus, is
installed facing an air space. See id.; Pl.'s Resp. 7.1 Statement at
¶ 25. A measurement of insulation's effectiveness is expressed as a
"thermal resistance" value or "R" value. See, e.g., 16 C.F.R. § 460.5
("R-value measures resistance to heat flow."). The higher the R value,
the better the product's insulating ability. See, e.g.,
16 C.F.R. § 460.12(c).
While NTI and MCC sell some similar products, unlike NTI, MCC sells an
insulating blanket, known as its Space Age blanket, that has one or more
layers of heat reflective metal foil or aluminized-coated woven
polyethylene. MCC began selling its Space Age blankets in or about 1994.
MCC claimed, and continues to claim, that its Space Age blankets have
rather high R values. Beginning in approximately 1996, MCC placed a
product label on certain of its blankets indicating that the Space Age
blanket had an R value of 6.32 with the "Reflective Side Down to
Concrete." (Oct. 12, 2001, Handwerker Aff. at Ex. GH-6 ("Handwerker
Aff.".)) MCC's product literature in or about 1998 stated that its R
values were tested with a 3 inch air space. Id. at Ex. GH-5. MCC's 2000
product literature states that "Space Age . . . with reflective aluminum
test out to an R=6.93 using 3" air spaces." Id. at Ex. GH-4. In 2001,
MCC's advertising literature provided that "[t]he products were tested
for their effective ability to radiate, convect and conduct heat by
products towards a three-inch airspace." Id. at GH-3. Since
approximately August 2001, MCC has placed a product label on its blankets
stating that the product was tested "toward a three-inch air space."
Id. at GH-7 and GH-8.
In December 2000, NTI commenced the instant action contending that
MCC's statements regarding the R value of its products are false and,
therefore, violate section 43(a) of the Lanham Act. In January 2001, NTI
sent letters to its customers and potential customers, including MCC's
customers, stating, in part, as follows:
NTI Global is concerned that your business may be
affected by a dispute between NTI and Midwest Canvas
concerning the insulating blankets manufactured by
Midwest. The purpose of this letter is to insure that
you have notice of the following:
NTI Global has entered into a Federal lawsuit against
Midwest Canvas. This lawsuit alleges that Midwest
Canvas has intentionally misrepresented the "R" value
of their insulating blankets. NTI has and will
vigorously pursue this action;
As a part of the Federal legal action, NTI will
strongly pursue efforts to correct the false
reputation within the marketplace which Midwest has
created for its insulating blankets through their
NTI's efforts to correct the market may have a
negative affect on your business in the event you
continue to use the alleged "R" values provided by
Midwest. NTI expects that their efforts will lead to
publicity directed to construction companies, trade
organizations and state governments concerning the
misrepresentations made by Midwest.
In March 2001, MCC filed its Answer to NTI's Complaint. In the
Answer, MCC denied that it violated the Lanham Act and asserted
counterclaims for defamation, a violation of section 43(a) the Lanham
Act, prima facie tort, and unfair competition and trade deception based
on NTI's January 2001 letter.
III. SUMMARY JUDGMENT STANDARD
A moving party is entitled to summary judgment "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 a judgment as
a matter of law." Fed.R.Civ.P. 56(c). The ultimate inquiry is whether a
reasonable jury could find for the nonmoving party based on the evidence
presented, the legitimate inferences that could be drawn from that
evidence in favor of the nonmoving party, and the applicable burden of
proof. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). In
determining a motion for summary judgment, all inferences to be drawn
from the facts contained in the exhibits and depositions "must be viewed
in the light most favorable to the party opposing the motion." United
States v. Diebold, Inc., 369 U.S. 654, 655 (1962); Hawkins v. Steingut,
829 F.2d 317, 319 (2d Cir. 1987). Nevertheless, "the litigant opposing
summary judgment `may not rest upon mere conclusory allegations or
denials' as a vehicle for obtaining a trial." Quinn v. Syracuse Model
Neighborhood Corp., 613 F.2d 438, 445 (2d Cir. 1980) (quoting SEC v.
Research Automation Corp., 585 F.2d 31, 33 (2d Cir. 1978)).
A. NTI's Motion for Summary Judgment on its Lanham Act Claims
Any person who, on or in connection with any goods or
services . . . 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 . . . (B) in commercial
advertising or promotion, misrepresents the nature,
characteristics, qualities, or geographic origin of
his or her or another person's goods, services, or
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