“Rarely does an infringement case reveal such explicit evidence of bad faith.”
Those scathing words were issued not by one judge, but a three-judge panel in the Second Circuit — after hearing an appeal on a motion to dismiss in Car-Freshner Corporation v. American Covers, LLC, d/b/a Energizer, among others.
The case started in the Northern District of New York, over car air fresheners — those little tree-shaped things that make everything smell better than it should. Car Freshner Corporation, or CFC, is the dominant player in the space, with over 70% of the market share. Energizer Products occupies much of the same retail space, but yearly sales are only about one million dollars in the United States. It all started with Energizer’s effort to tap into a bigger piece of the pie by making a product with a similar name to CFC’s best-selling scents:
- CFC sells air fresheners called BLACK ICE and BAYSIDE BREEZE.
- Energizer decided to sell a dual-scented freshener, with the names of the two scents (MIDNIGHT BLACK and ICE STORM) typographically aligned to say MIDNIGHT BLACK/ICE STORM.
- Separately, CFC claimed Energizer was infringing on a scent called BAYSIDE BREEZE with its scent BOARDWALK BREEZE.
Notice I didn’t say alleged effort to grab the competitor’s customers. That’s because discovery in this case produced emails between the CEO of Handstands (acquired by Energizer) and other staff members in which they explicitly formulated this plan to imitate CFC.
- “[We should] get as close to the BLACK ICE name as we can, without running into legal issues.”
- “[W]e do want to avoid the Car Freshner/Exotica [infringement lawsuit] situation, obviously.”
- “If we really wanted to have some fun [they] could also look at a dual [scent] with a BLACK ICE variant – along the lines of Midnight Black / Ice Storm.”
- “Intent has always been to draw close to the BAYSIDE BREEZE in fragrance and concept…[o]bviously we don’t want to tell our customers this.”
While the emails above reveal fragments of a strategy, the court put them all together to produce this account of what really took place:
So they decided to precede the words “Black Ice” in CFC’s mark with the word “Midnight,” an adjective that could readily be understood as intensifying the “Black” that it modified. (These employees spoke of “the ‘blackness’ [being] more important than the ‘ice’ piece to the name.”) Then, they decided to take the word “Storm” from their existing scent “Ice Storm” and have it follow CFC’s words “Black Ice” and voilà: “Midnight Black Ice Storm,” which was, as they said, “as close to the Black Ice name as we can [get].”
Incriminating staff emails aside, it is important to note that this all took place in the Second Circuit — one of only three federal circuit courts that have bestowed upon themselves the ability to throw out trademark infringement cases “as a matter of law” — that is, based on their own judgment rather than a jury’s. Still using the standard, eight-factor Polaroid test to accomplish this, the Second Circuit handed down a decision partially denying and partially granting defendant’s motion to dismiss: BLACK ICE was deemed to be infringed, but for BAYSIDE BREEZE vs. BOARDWALK BREEZE, the court found no infringement, partly because Bayside and Boardwalk are different words.
Although the notion that this is a “matter of law” rather than the subjective determination of judges bothers me, it is encouraging that trademark infringement in Second Circuit cases can be determined without the expense and uncertainty of going to trial.
A compelling detail were those extraordinary employee emails. I guess the good news is that, even if you’re left with a smoking gun — and your employees provide blatant evidence to your legal adversaries — it doesn’t mean you necessarily lost. In this case, despite the emails, BOARDWALK BREEZE was deemed non-infringing.
Still, we reiterate that age-old advice: Don’t say it in writing.
Mark S. Kaufman
Kaufman & Kahn
kaufman@kaufmankahn.com
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