Lanham Act Reverse Passing Off Claims Fail in Stormwater Contract Case

A construction contract that allows substitution of a product by a lesser-know “equal” is a poor basis for infringement and unfair competition claims under the federal Lanham Act or Florida state law, according to the Eleventh Circuit Court of Appeals.

Suntree Technologies, Inc. v. Ecosense International, Inc., No 11-13916 (11th Cir. Sept. 5, 2012) is good example of the manner in which some parties will try to use trademark law, such as a reverse passing off claim, to stifle competition – as opposed to protecting its mark as an identified.  The effort fell flat in this case, although clearly not until significant resources were invested in a lawsuit of questionable merits.

Trademark Infringement Claimed In Contract Bid

Plaintiff Suntree is the manufacturer of baffles, stormwater treatment structures that separate debris and various types of pollutants from stormwater as they pass through.  The baffles are vaults of sorts, with various levels and controls.  The City of Rockledge, Floridaspecified the baffles of Suntree, the best-know manufacturer of its industry, or “approved equal” in a construction contract.

Suntree baffles were specified as components of a public stormwater contract — mentioned by name in the bid specifications and the defendants’ bid – but subject to the potential to replace an “equal” at lesser cost.

Reverse Passing Off Claim Rejected

The winner of the bid substituted baffles made by the defendant Ecosense, with the approval of the city.  Suntree sued, but its claims did not withstand summary judgment and the 11th Circuit affirmed, finding no evidence either of actual confusion or a likelihood of confusion.

Suntree claimed that the contractor had used its mark in the submission of its bid and that it had engaged in unfair competition because it submitted the bid with the plan of substituting another manufacturer’s product after winning the contract.  The court rejected this theory, since there was no evidence that anyone was fooled – of likely to be fooled – about the source of the baffles.

The court also rejected claims that defendant tried to pass off Suntree’s products as its own, known as reverse passing off.  Here again, the court found that there was intent to confuse potential customers and that the city’s engineers were not fooled.  Similarly, the use of photos of Suntree’s baffles was not actionable as false advertising when they were immediately removed after complaints from Suntree.

Trademark law protects words, symbols and other identifiers of source.  It is not a bar on competition and there are often circumstances in which others – even competitors – can legitimately use a mark without its owners consent.  The issue will always turn on whether the use was confusing, misleading or an unfair attempt to profit from another’s goodwill.