Addressing issues of trademark infringement and breaches of various fiduciary duties, the U.S. Court of Appeals for the Eleventh Circuit affirmed the district court, holding the unauthorized use of a trademark by a retailer was not attributable to the distributor of the product. Optimum Technologies, Inc. v. Henkel Consumer Adhesives, Inc., 496 F.3d 1231 (11th Cir., Aug. 22, 2007) (Birch, J.).
Optimum manufactured a two-sided adhesive product to prevent slippage of rugs and mats on various surfaces. Optimum had the trademark for “Lok-Lift” in connection with the product. Henkel Consumer Adhesives (HCA) was a distributor of a number of consumer goods to various retailers such as Home Depot and Lowe’s. The parties agreed that HCA would distribute Optimum’s “Lok-Lift” product to its retailers.
The parties’ relationship was “uneventful” between 1994 and 1998, but HCA began internally developing its own adhesive carpet tape product called “Hold-It.” In 2002, without informing Optimum, HCA began replacing the “Lok-Lift” product at its retailers with its new “Hold-It” product. HCA used similar packaging for its replacement “Hold-It” product and continued to feature the “Lok-Lift” product on its website. Many of the retailers believed that the “Hold-It” product was simply a new version of the “Lok-Lift” product. Thus, in many instances, retailers confusingly used the products, often placing the defendant’s “Hold-It” product on shelves labeled for plaintiff’s “Lok-Lift” product. Optimum contended this created a likelihood of confusion attributable to defendant under 15 U.S.C. § 1114(1)(a).
The Eleventh Circuit held that the “pivotal question” was whether the retailers’ confusing uses were attributable to HCA, the distributor. The court affirmed the district court’s ruling that HCA did not “use” the plaintiff’s mark at the retail level, so the plaintiff failed to support the “use” requirement of a trademark infringement claim under § 1114(1)(a) or an unfair competition claim under § 1125(a). The Court determined that the defendant never used the plaintiff’s mark since the retailers were the only “users” of the product. The Court held that “[a]ny alleged confusion in this case, even if present, was not directly attributable to HCA, the alleged infringer.” The Court also declined to consider the plaintiff’s belated allegation of contributory infringement, since it was not pled and “there is no separate statutory provision for contributory trademark infringement.”