Ill. Tool Works Inc. v. Rust-Oleum Corp.
Ill. Tool Works Inc. v. Rust-Oleum Corp.
Opinion of the Court
Pending before the Court are Plaintiff's Motion For Permanent Injunction (Document No. 172), Rust-Oleum's Motion for Entry of Judgment Denying ITW Any Monetary Relief (Document No. 176), and Plaintiff's Motion for Prejudgment and Post-Judgment Interest (Document No. 174). Having considered the motions, submissions, and applicable law, the Court determines the motions should be granted in part and denied in part.
*955I. BACKGROUND
This is a false advertising case brought pursuant to the Lanham Act. Plaintiff Illinois Tool Works, Inc. ("ITW") and Defendant Rust-Oleum Corporation ("Rust-Oleum") sell competing water repellant products for use on vehicle windshields. ITW's product is named "Rain-X" and Rust-Oleum's product is named "RainBrella." As part of Rust-Oleum's advertising campaign for RainBrella, Rust-Oleum has made three statements in its advertising relevant to this lawsuit: (1) that RainBrella "Lasts 2X Longer than Rain-X" ("2X Claim"); (2) "And remember, RainBrella lasts twice as long as Rain-X. We ran it through 100 car washes to prove it." ("Twice As Long Claim"); and (3) RainBrella "Lasts Over 100 Car Washes" ("Over 100 Claim") (collectively, the "Claims").
Based on the foregoing, on July 7, 2017, ITW filed this lawsuit asserting Lanham Act claims for false and misleading advertising against Rust-Oleum. On July 16, 2018, the Court commenced a five-day jury trial. The Court submitted questions, definitions, and instructions to the jury. In response, the jury made findings that the Court received, filed, and entered into the record. The jury found in favor of ITW on all questions submitted to them.
II. LAW AND ANALYSIS
Following the jury's verdict, (1) ITW moves for a permanent injunction; (2) Rust-Oleum moves for an entry of judgment denying ITW any monetary relief; and (3) ITW moves for prejudgment and post-judgment interest. The Court addresses each motion in turn.
A. Permanent Injunction
ITW moves for a permanent injunction seeking to: (1) enjoin Rust-Oleum from disseminating the Claims in advertising materials in connection with RainBrella ("Dissemination Provision"); (2) require Rust-Oleum to recall all advertising materials which contain the Claims ("Recall Provision"); and (3) require Rust-Oleum to destroy all advertising materials containing the Claims ("Destruction Provision"). Rust-Oleum contends a permanent injunction is not proper because there is no evidence of irreparable injury to ITW and the balance of hardships does not weigh in favor of granting a permanent injunction. A plaintiff seeking a permanent injunction must establish the following elements: "(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction." eBay Inc. v. MercExchange, L.L.C. ,
1. Irreparable Injury
Rust-Oleum contends ITW did not prove irreparable injury. ITW contends it has and will continue to suffer irreparable injury if Rust-Oleum continues to make false and misleading advertising claims. The potential for ongoing harm if a defendant continues to make similar false or misleading statements and the likely impossibility of quantifying the extent of harm suffered as a result of false or misleading statements weigh in favor of finding *956irreparable injury. Eastman Chemical Co. v. PlastiPure, Inc. ,
The jury found Rust-Oleum is liable for false or misleading advertising for each of the Claims.
2. Balance of Hardships
Rust-Oleum contends the balance of hardships between Rust-Oleum and ITW does not weigh in favor of issuing a permanent injunction because ITW's proposed permanent injunction is overbroad
Preventing a party from "repeating statements a jury found to be false and misleading" weighs in favor of granting an injunction. Eastman ,
3. Remaining Elements
The Court will briefly address the remaining elements because ITW has the burden of proof on the necessity for a permanent injunction. First, ITW contends the monetary damages the jury awarded are inadequate to compensate it for its injuries because it is difficult to quantify the extent of harm to its reputation and goodwill as a result of the Claims. Fringe Ins. Benefits, Inc. v. Beneco, Inc. , No. A-13-CV-034-AWA,
Finally, "the public interest is always served by requiring compliance with Congressional statutes such as the Lanham Act." Quantum Fitness Corp. v. Quantum LifeStyle Centers, L.L.C. ,
4. Scope of Permanent Injunction
Rust-Oleum contends ITW's proposed permanent injunction is overbroad. ITW contends its proposed permanent injunction is not overbroad in this case. The scope of an injunction "is dictated by the extent of the violation established" and so a court "must narrowly tailor an injunction *958to remedy the specific action which gives rise to the order." John Doe # 1 v. Veneman ,
B. Damages
Rust-Oleum moves for an entry of judgment denying ITW any monetary damages. Damages awarded for false advertising under the Lanham Act are subject to the principles of equity and must be compensatory not punitive.
1. Profits
A plaintiff who proves false advertising may recover the defendant's profits.
The jury was instructed that it "can award ITW the profits Rust-Oleum earned as a result of its false advertising if [it] finds ITW has shown by a preponderance of the evidence that Rust-Oleum benefited from its false advertising."
The jury found ITW is entitled to recover profits in the amount of $392,406 from Rust-Oleum for Rust-Oleum's false advertisements.
2. Corrective Advertising
Rust-Oleum contends ITW is not entitled to damages for corrective advertising because ITW did not engage in pretrial corrective advertising and there was no evidence ITW plans to engage in corrective advertising in the future. ITW contends it is entitled to the jury's award of corrective advertising because there was sufficient evidence for the jury to find ITW would engage in corrective advertising in the future. Alternatively, Rust-Oleum requests the Court reduce the jury's award for corrective advertising to twenty-five percent of Rust-Oleum's advertising expenditures. Damages for corrective advertising may be awarded for costs that have been spent on pretrial corrective advertising or for prospective corrective advertising. ClearChoice Holdings, LLC v. Clear Choice Dental, PLLC , Civil Action No. H-14-03569,
The jury found ITW is entitled to an award for corrective advertising in the amount of $925,617.
C. Prejudgment and Post-judgment Interest
ITW moves for prejudgment and post-judgment interest. Rust-Oleum contends prejudgment interest is not appropriate in this case because the jury did not award ITW lost profits.
As to post-judgment interest, an award of post-judgment interest is governed by
III. CONCLUSION
Based on the foregoing, the Court hereby *961ORDERS that Plaintiff's Motion For Permanent Injunction (Document No. 172) is GRANTED IN PART AND DENIED IN PART. The permanent injunction is denied as to recalling RainBrella product and granted as specified in the final judgment. The Court further
ORDERS that Rust-Oleum's Motion for Entry of Judgment Denying ITW Any Monetary Relief (Document No. 176) is GRANTED IN PART AND DENIED IN PART . The motion is denied as to the jury's award of disgorgement of profit in the amount of $392,406 and granted as to Rust-Oleum's request to reduce the corrective advertising award to $329,505.75. The Court further
ORDERS that Plaintiff's Motion for Prejudgment and Post-Judgment Interest (Document No. 174) is GRANTED IN PART AND DENIED IN PART. The motion is denied as to prejudgment interest and granted as to post-judgment interest. The Court further
ORDERS that Illinois Tool Works Inc. shall recover $721,911.75 from Rust-Oleum Corporation. The Court further
ORDERS that Illinois Tool Works Inc. shall recover post-judgment interest on all amounts allowable by law at the rate of 2.66%, from the date of judgment until the date of payment.
The Court will issue a separate Final Judgment and Permanent Injunction.
Jury Charge , Document No. 157.
Jury Charge , Document No. 157 at 11, 13, 15.
Jury Charge , Document No. 157 at 11, 13, 15.
See Plaintiff's Motion for Permanent Injunction , Document No. 172 at 2.
Rust-Oleum also contends a permanent injunction is not proper because there was insufficient evidence that ITW suffered harm and that the Over 100 Claim was material. The Court views the record in favor of upholding the jury verdict. Pizza Hut, Inc. v. Papa John's Int'l, Inc. ,
The Court considers Rust-Oleum's contentions as to the scope of ITW's proposed permanent injunction infra Part II.A.4.
Jury Charge , Document No. 157 at 11, 13, 15.
The Recall Provision states:
Defendant, Rust-Oleum Corporation, its officers, agents, servants, employees, and attorneys, and other persons who are in active concert or participation with any of the above, are permanently enjoined from:
1. disseminating, in any form or medium in connection with Defendant's RainBrella product or its equivalent, any claim that the RainBrella product: (a) "Lasts 2X Longer" than or lasts twice as long as Plaintiff's RAIN-X product; (b) "Lasts 2X Longer" than or twice as long as the product of a "leading competitor"; or (c) any variation thereof.
2. disseminating, in any form or medium in connection with Defendant's RainBrella product or its equivalent, any claim that: (a) "Rainbrella lasts twice as long as RAIN-X. We ran it through 100 car washes to prove it" or (b) any variation thereof; and
3. disseminating, in any form or medium in connection with Defendant's RainBrella product or its equivalent, any claim that the Rainbrella product: (a) "Lasts Over 100 Car Washes"; (b) "Protects Through 100 Car Washes"; or (c) any variation thereof.
[ Proposed] Order Granting Permanent Injunction Against Defendant , Document No. 172-2 at 2-3.
Rust-Oleum also alleges it has removed the Claims from various online sources. The standard for determining whether a permanent injunction is unnecessary because of a defendant's voluntary actions is "stringent, and it is only met if 'subsequent events [make] it absolutely clear that the allegedly wrongful behavior could not reasonably be expected to recur.' " T-Mobile US, Inc. v. AIO Wireless LLC ,
Rust-Oleum also contends ITW is not entitled to monetary damages because ITW did not prove the threshold element that ITW suffered any harm due to the Claims. Having found there is sufficient evidence to uphold the jury's finding that ITW was harmed by the Claims, the Court need not address this contention as to damages. See supra Part II.1 at n.5.
Jury Charge , Document No. 157 at 19.
Jury Charge , Document No. 157 at 19.
Jury Charge , Document No. 157 at 19.
Jury Charge , Document No. 157 at 22.
Jury Charge , Document No. 157 at 21.
See Rust-Oleum's Motion for Entry of Judgment Denying ITW Any Monetary Relief , Document No. 176 at 9.
$329,505.75 divided by $1,318,023 Rust-Oleum spent on advertising equals twenty-five percent.
Rust-Oleum does not dispute an award of post-judgment interest.
Post-Judgment Interest Rates - 2018 , U.S. District & Bankr. Cts. , S. District Tex. , http://www.txs.uscourts.gov/page/post-judgment-interest-rates-2018 (last modified October 26, 2018).
Also pending before the Court are Defendant's Motion to Strike Plaintiff's Reply in Support of Its Motion for Permanent Injunction (Document No. 180) and Defendant's Motion to Strike Plaintiff's Reply in Support of Motion for Prejudgment and Post-Judgment Interest (Document No. 187). Having considered the motions, submissions, and applicable law, the motions are denied.
Reference
- Full Case Name
- ILLINOIS TOOL WORKS INC. v. RUST-OLEUM CORPORATION and Wipe New, LLC
- Cited By
- 1 case
- Status
- Published