Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—E.D. Va.: Stroller manufacturer’s litigation and patent infringement threats may be North Carolina deceptive practices, (Nov 21, 2013)

By Tobias J. Gillett, J.D., LL.M.

A stroller manufacturer stated North Carolina deceptive trade practice claims against a competitor over the competitor’s threats of litigation and accusations that the manufacturer had infringed the competitor’s patent, the federal district in Norfolk, Virginia has ruled (Baby Jogger, LLC v. Britax Child Safety, Inc., November 19, 2013, Jackson, R.).

Baby Jogger, LLC and Britax Child Safety, Inc. are competing manufacturers of baby strollers. Baby Jogger filed suit against Britax, alleging that its B-Agile and BOB Motion strollers infringed its U.S. Patent No. 6,905,548 and the trade dress of its City Mini strollers. In response, Britax filed counterclaims alleging that Baby Jogger had infringed its U.S. Patent No. 6,102,431, and that Baby Jogger and its President Mark Zehfuss had engaged in tortious interference with its prospective economic expectancy and unfair and deceptive trade practices under North Carolina law. The parties filed cross-motions for summary judgment.

The court declined to grant summary judgment to Baby Jogger on Britax’s deceptive trade practices claims because genuine factual disputes remained. There was “evidence that infer[red] Baby Jogger may have engaged in unfair and deceptive practices,” including Zehfuss’s admission during deposition testimony “that he insinuated to manufacturer Sunnylove that the B-Agile strollers they were developing infringed Baby Jogger’s patent and he confronted Britax employees in public about the B-Agile stroller’s inferior and infringing qualities.” Moreover, deposition and documentary evidence indicated that Zehfuss had spoken with Buy Buy Baby representatives about the possibility of litigation against Britax.

The court also concluded that a genuine issue of material fact for the jury remained regarding whether Baby Jogger was the proximate cause of Britax’s damages. Although Baby Jogger challenged the facts regarding Zhfuss’s litigation threats and infringement accusations, as well as the admissibility of an expert’s opinion that Britax lost $1.1 million in profits, the court concluded that Britax’s evidence that Sunnylove halted the manufacturing of the B-Agile stroller and that Buy Buy Baby only sold the B-Agile stroller in six of its 66 stores when it was launched sufficed to raise a genuine issue of material fact.

Finally, the court held that Britax appropriately asserted its claims under North Carolina law. Virginia’s choice of law rules “dictated that the substantive laws of the location of the last act necessary to make the defendant liable for the tort be applied.” Here, the “last act” occurred where Britax suffered its financial injuries as a result of Baby Jogger’s alleged misconduct. Britax’s principal place of business was in North Carolina, it allegedly experienced decreased shipments to and from its North Carolina distribution center, and Buy Buy Baby refrained from submitting purchase orders for its North Carolina stores.

The case is Civil Action No. 2:12cv452.

Attorneys: Dabney Jefferson Carr, IV (Troutman Sanders LLP) for Baby Jogger LLC. William Rueger Poynter (Williams Mullen) for Britax Child Safety Inc.

Companies: Baby Jogger, LLC; Britax Child Safety, Inc.

Cases: StateUnfairTradePractices VirginiaNews