–Dan Kelly, Attorney
Back in September of 2010, I discussed a couple of then-recent cases about Georgia-Pacific’s trademark lawsuits over the “stuffing” of non-Georgia-Pacific paper towels into GP’s proprietary dispensers. By way of brief review, the Eighth Circuit affirmed a lower court decision out of the Western District of Arkansas holding that the practice of “stuffing” does not constitute trademark infringement. The Fourth Circuit had held that GP was entitled to a trial on the issue of trademark infringement in its case in the Eastern District of North Carolina.
Just this past Monday, GP won its jury trial in North Carolina, and the jury awarded GP about $790,000 in damages. Unfortunately, being a jury trial, there is no written opinion to review or report upon. I suspect that there will be an appeal.
So the obvious question is this: how can GP lose its case in Arkansas, lose the subsequent appeal, then go on to win in North Carolina on substantially the same facts and claims? Well, that’s a good question, and one that may feature in an appeal of the North Carolina case. There is a principle in law called “issue preclusion.” The idea is that once a party has tried a particular legal issue on particular facts, others may rely upon the outcome of that decision and hold it against the party that tried the issue. Here, GP lost on its trademark infringement claim in Arkansas, therefore, in theory, it should lose that issue on the same facts in North Carolina. Unfortunately, the defendant in the North Carolina case, in the court’s opinion, waited too long to raise the defense of issue preclusion, so the court denied application of the doctrine.
In my first week of law school, my Torts professor stressed the importance of procedural posture in each case and how it can affect outcomes. This case is a good example, and the possible negative impact of the delay is amplified by a few other GP cases pending around the country:
- On Sept. 8, 2011, GP survived a motion to dismiss a suit in the Southern District of Ohio where the motion was based upon applying issue preclusion from the Arkansas / 8th Circuit case.
- On Nov. 4, 2011, GP lost a motion to dismiss a stuffing suit in the Northern District of Ohio based upon the application of issue preclusion from the Arkansas / 8th Circuit case. GP is currently appealing to the Sixth Circuit Court of Appeals. (The other Ohio case above is currently stayed pending the outcome of the appeal, which is likely to be binding in that case.)
- Another case pending in the District of Nevada is stayed until at least next month. This case has been stayed since late 2010, initially awaiting the outcome of the 8th Circuit appeal, and now likely awaiting the outcome of the 6th Circuit appeal.
It looks like the North Carolina jury award will not be the final word in this matter, and even if it is, I have a difficult time believing that $800k will cover GP’s attorneys fees in five federal lawsuits and three appeals (possibly four). It appears that GP is questing to have paper towel dispensers treated like soda fountains–insuring that the product in the machine matches the label on the front. Unfortunately, as the 8th Circuit pointed out, even GP will sell towels for use in others’ dispensers.
We shall stay tuned to see if the score changes…