Antitrust Law Daily Wrap Up, ADVERTISING—D. Vt.: Cookie cutter maker dodges half-baked preliminary injunction request, (Dec 31, 2014)

By Greg Hammond, J.D.

A cookie cutter manufacturer was not entitled to preliminary injunction against a competitor for failing to designate that its products were “Made in China,” allegedly in violation of the Lanham Act. In denying the motion for preliminary injunction, the federal district court in Brattleboro, Vermont determined that the plaintiff failed to demonstrate a likelihood of success on the merits or irreparable harm (Ann Clark, Ltd. v. R&M International, Corp., December 29, 2014, Murtha, J.).

Background. Ann Clark, Ltd. and R&M International, Corp. are competitors in the cookie cutter manufacturing industry. Although Ann Clark manufactures its cookie cutters in the United States, R&M manufactures its cookie cutters in China. Ann Clark filed suit against R&M, alleging that the company failed to designate certain cookie cutters as “Made in China,” in violation of the Lanham Act. R&M admitted that it failed to mark certain cookie cutters as “Made in China,” but asserted that it has taken corrective action to make sure no unlabeled cookie cutter products exist in the marketplace. Ann Clark moved for preliminary injunction.

Likelihood of success. To state a claim for injunctive relief under the Lanham Act, Ann Clark was required to demonstrate a likelihood of deception or confusion on the part of the buying public, caused by the false description or representation. The court disagreed with Ann Clark’s argument that a likelihood of confusion exists as a matter of law in this case, or that R&M’s failure to label its cookie cutters amounted to a per se violation of the Lanham Act. Further, because Ann Clark only demonstrated that some consumers care about where cookie cutters are manufactured, and not that the absence of a country of origin label is confusing, it failed to demonstrate a likelihood that it will succeed on the merits.

Irreparable harm. Also in support of its motion for preliminary injunction, Ann Clark argued that it suffered irreparable harm due to diverted sales. The court concluded, however, that there is no reason such an injury could not be remedied with monetary damages should the company prevail on its false designation of origin claim. Further, the court found that even if R&M’s mislabeling previously diverted sales from Ann Clark, the company appears to have taken substantial remedial measures to ensure its cookie cutters are now properly labeled. The motion for preliminary injunction was therefore denied.

The case number is 1:14-cv-143.

Attorneys: Mark F. Werle (Ryan Smith & Carbine, Ltd.) for Ann Clark, Ltd. John P. Sullivan (Volple and Koenig, PC) for R&M International, Corp.

Companies: Ann Clark, Ltd.; R&M International, Corp.

Cases: Advertising VermontNews