Keurig Incorporated v. Sturm Foods Inc.

Filing 337

MEMORANDUM OPINION. Signed by Judge Sue L. Robinson on 9/13/2012. (nmfn)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

KEURIG, INCORPORATED,

)
)
)

Plaintiff,
v.

STURM FOODS, INC.,
Defendant.

)
)
) Civ. No. 10-841-SLR
)
)
)
)

John W. Shaw, Esquire, Karen E. Keller, Esquire, Jeffrey T. Castellano, Esquire and
David M. Fry, Esquire of Shaw Keller LLP, Wilmington, Delaware. Counsel for Plaintiff.
Of Counsel: Michael A. Albert, Esquire, Gerald B. Hrycyszyn, Esquire, Christopher W.
Henry, Esquire and Chelsea A. Loughran, Esquire of Wolf, Greenfield & Sacks, P.C.

Richard L. Horwitz, Esquire, David E. Moore, Esquire and Bindu A. Palapura, Esquire of
Potter Anderson & Corroon LLP, Wilmington, Delaware. Counsel for Defendant. Of
Counsel: Craig S. Fochler, Esquire, Scott R. Kaspar, Esquire, Aaron J. Weinzierl,
Esquire and Allen A. Arntsen, Esquire of Foley & Lardner LLP.

MEMORANDUM OPINION

Dated: September 13, 2012
Wilmington, Delaware

~~Judge
I. INTRODUCTION

Keurig, Inc. ("plaintiff') filed this action against Sturm Foods, Inc. ("defendant")
on October 1, 2010. (D.I. 1) Plaintiff manufactures a popular line of single-serve
beverage brewing machines under the "Keurig" brand name, along with the
corresponding beverage cartridges for use in said machines. Defendant manufactures
and sells beverage cartridges for use in plaintiff's machines under the "Grove Square"
brand name. In its second amended complaint, plaintiff alleges that defendant's
products infringe United States Patent Nos. 7,165,488 ("the '488 patent") and 6,606,938
(the '938 patent) (counts I & II). Plaintiff's second amended complaint also asserts a
variety of non-patent claims against defendant. These include: 1) trademark
infringement under 15 U.S.C. § 1114 (count Ill); 2) false designation of origin under 15
U.S.C. § 1125(a) (count IV); 3) trade dress infringement under 15 U.S.C. § 1125(a)
(count V); 4) false advertising under 15 U.S.C. § 1125(a) (count VI); 5) dilution under 15
U.S.C. § 1125(c) (count VII); 6) unfair competition under the Delaware uniform
deceptive trade practices act, 6 Del. C. 1953 § 2531, et seq. ("DUDTPA") (count VIII);
7) unfair competition under Delaware common law (count IX); 8) false advertising under
15 U.S.C. § 1125(a) (count X); and unfair competition under 15 U.S.C. § 1125(a) (count
XI). (D.I. 41) In its answer, defendant has asserted a variety of counterclaims,
including: unfair competition (count I federal; count II common law); violation of the
DUDTPA (count Ill); and cancellation of federal trademark registrations based on
genericness (count IV). (D. I. 60) Defendant also asserts a variety of affirmative
defenses, including unclean hands. (/d.)

Having denied plaintiff's motion for a preliminary injunction and defendant's
motion to dismiss (0.1. 59), the court is now confronted with eleven competing summary
judgment-related motions. These include:
1) plaintiff's motion for partial summary judgment that use of Sturm Foods Inc.'s
cartridges in Keurig brewers meets each and every limitation of the asserted claims
(0.1. 180);
2) defendant's motion for summary judgment on patent issues (0.1. 183);
3) defendant's motion for partial summary judgment on its counterclaims for
unfair competition and affirmative defense of unclean hands (0 .I. 186);
4) defendant's cross motion for summary judgment of noninfringement (0.1. 199);
5) plaintiff's cross motion for summary judgment on patent issues (0.1. 202);
6) defendant's motion for summary judgment on counts Ill, IV, V, VIII and X
(trademark infringement, false designation, trade dress infringement, OUOTPA and
false advertising respectively) (0.1. 206);
7) plaintiff's cross motion for summary judgment on non-patent issues (0.1. 209);
8) defendant's motion to strike improper evidence and argument from Keurig's
opposition to defendant's motion for summary judgment on counts Ill, IV, V, VIII and X
(0.1. 245);
9) plaintiff's motion to dismiss for lack of standing and subject matter jurisdiction
(0.1. 253);
10) defendant's motion to strike Robert L. Klein's expert report on genericism
and to exclude his corresponding expert testimony (0.1. 274); and

2

11) defendant's motion to strike Robert L. Klein's expert report on trademark
confusion survey methodology and results and to exclude his corresponding expert
testimony (0.1. 277).
The court has jurisdiction pursuant to 28 U.S.C. §§ 1331, 1338 and 1367.
II. BACKGROUND
Plaintiff has patented and sells, along with its licensees, a commercially popular
line of single-serve beverage brewers. (0.1. 188 at Ex. 6, pg. 17) Plaintiff and its
licensees also manufacture beverage cartridges, known as "K-Cups," for use in these
brewers. (/d. at pg. 37) K-Cups are sold under various brand names including, for
instance, Gloria Jeans, Cafe Escapes, Green Mountain and Van Houtte. (/d. at Ex. 1,
pgs. 18-19) K-Cups come in an assortment of varieties; for instance, some K-Cups
produce coffee and others produce hot chocolate or tea. While many K-Cups contain
ground coffee and/or a filter, not all do. (0.1. 210 at 30) The term "Keurig" and the
terms "K-Cup" and "K-Cups" are trademarked by plaintiff.
In 2010, defendant introduced a Grove Square line of beverage cartridges for
use in Keurig brewers. (0.1. 187 at 3-4 (citing 0.1. 188 at Ex. 5)) The Grove Square
packaging includes the phrase: "*For use by owners of Keurig coffee makers." (0.1.
207 at 7)
As discussed, at issue are two of plaintiff's patents on its brewer technology.
The '488 patent, titled "Brew Chamber for a Single Serve Beverage Brewer," was
issued January 23, 2007. The one claim asserted, dependent claim 29, is reproduced
below along with independent claim 22 upon which it relies:
22. A method for forming a beverage, comprising:

3

providing a beverage forming device having a housing with a receptacle
accessible to a user, the receptacle having an opening to receive a beverage
cartridge, and the receptacle opening having a center axis extending from a
center of the opening;
moving the receptacle from a vertical position, in which the center axis
extends vertically and intersects a lid in a closed position, to a forwardly
inclined position in which the opening of the receptacle to receive a cartridge
faces away from the lid, and the center axis does not intersect the lid in an
open position;
moving the lid to the open position;
providing a beverage cartridge in the receptacle while the receptacle is in the
forwardly inclined position;
moving the receptacle to the vertical position;
moving the lid to the closed position in which the lid cooperates with the
receptacle to at least partially enclose the beverage cartridge; and
providing a liquid into the beverage cartridge to produce a beverage.
29. The method of claim 22, further comprising piercing the beverage
cartridge with an inlet probe when the lid is moved to the closed position.
The '938 patent, titled "Two Step Puncturing and Venting of Single Serve Filter
Cartridge in Beverage Brewer," was issued August 19, 2003. Claims 6, 7 and 8,
asserted in this case, are reproduced below:
6. A method of brewing a beverage from a beverage medium contained in a
disposable cartridge, comprising the following steps, in sequence:
(a) piercing the cartridge with a tubular outlet probe to vent the cartridge
interior;
(b) piercing the cartridge with a tubular inlet probe;
(c) admitting heated liquid into the cartridge interior via the inlet probe for
combination with the beverage medium to produce a beverage; and
(d) extracting the beverage from the cartridge interior via the outlet probe.
7. The method of claim 6 wherein step (a) is achieved by resiliently urging the
cartridge against the outlet probe.
8. The method of claim 7 wherein the cartridge is resiliently urged against the
outlet probe in response to movement of the inlet probe towards the cartridge.

Ill. STANDARD

4

A court shall grant summary judgment only if "the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if any,
show that there is no genuine issue as to any material fact and that the moving party is
entitled to judgment as a matter of law." Fed. R. Civ. P. 56( c). The moving party bears
the burden of proving that no genuine issue of material fact exists. See Matsushita

Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n.10 (1986). "Facts that
could alter the outcome are 'material,' and disputes are 'genuine' if evidence exists from
which a rational person could conclude that the position of the person with the burden
of proof on the disputed issue is correct." Horowitz v. Fed. Kemper Life Assurance Co.,
57 F.3d 300, 302 n.1 (3d Cir. 1995) (internal citations omitted). If the moving party has
demonstrated an absence of material fact, the nonmoving party then "must come
forward with 'specific facts showing that there is a genuine issue for trial."' Matsushita,
475 U.S. at 587 (quoting Fed. R. Civ. P. 56( e)). The court will "view the underlying facts
and all reasonable inferences therefrom in the light most favorable to the party
opposing the motion." Pa. Coal Ass'n v. Babbitt, 63 F.3d 231, 236 (3d Cir. 1995). The
mere existence of some evidence in support of the nonmoving party, however, will not
be sufficient for denial of a motion for summary judgment; there must be enough
evidence to enable a jury reasonably to find for the nonmoving party on that issue. See

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). If the nonmoving party fails
to make a sufficient showing on an essential element of its case with respect to which it
has the burden of proof, the moving party is entitled to judgment as a matter of law.
See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

5

IV. DISCUSSION
A. Patent Exhaustion

Plaintiff has moved for summary judgment on the issue of infringement of the
'488 and '938 patents. Although defendant raised a variety of defenses to the motion,
the court focuses on the issue of patent exhaustion, which is determinative. The court
begins its analysis by an examination of Quanta Computer, Inc. v. LG Electronics, Inc.,
553 U.S. 617 (2008)- a case to which both parties cite in support of their positions.

1. Quanta Computer, Inc. v. LG Electronics, Inc.
In Quanta, LG Electronics Inc. ("LGE") purchased a portfolio of computer
technology patents, including one system and two method patents that related to a
computer's memory and data usage. LGE then licensed those patents to Intel
Corporation ("Intel") via a license agreement. The agreement permitted Intel to
manufacture and sell microprocessors and chipsets that used the LGE patents.
Further, with respect to third party purchasers of Intel products, the agreement
stipulated that such products would be licensed by LGE and, therefore, be noninfringing; however, the license did not extend to any product made by combining an
Intel product with a non-lntel product. Quanta, aware of this stipulation, purchased
microprocessors and chipsets from Intel and manufactured computers using these Intel
parts in combination with non-lntel parts in ways that practiced the LGE patents. LGE
filed a complaint alleging that the combinations infringed. On these facts, the Supreme
Court was tasked with deciding "whether patent exhaustion applies to the sale of

6

components of a patented system that must be combined with additional components
in order to practice the patented methods." /d. at 621.
The Court began its analysis by emphasizing that "[t]he longstanding doctrine of
patent exhaustion provides that the initial authorized sale of a patented item terminates
all patent rights to that item." /d. at 625. It then turned its attention to LGE's argument
that exhaustion does not apply to method claims. The Court dismissed this argument,
noting that "[o]ur precedents do not differentiate transactions involving embodiments of
patented methods or processes from those involving patented apparatuses or
materials. To the contrary, this Court has repeatedly held that method patents were
exhausted by the sale of an item that embodied the method." /d. at 628-629. The
Court went on to explain that
eliminating exhaustion for method patents would seriously undermine the
exhaustion doctrine. Patentees seeking to avoid patent exhaustion could
simply draft their patent claims to describe a method rather than an
apparatus. Apparatus and method claims may approach each other so
nearly that it will be difficult to distinguish the process from the function of the
apparatus. By characterizing their claims as method instead of apparatus
claims, or including a method claim for the machine's patented method of
performing its task, a patent drafter could shield practically any patented item
from exhaustion.
/d. at 629-630 (citations and quotations omitted). In short, the Court emphasized the

danger of allowing parties to undertake "end-run[s] around exhaustion." /d. at 630.
The Court then turned its attention to Quanta's contention that, "although sales
of an incomplete article do not necessarily exhaust the patent in that article, the sale of
the microprocessor and chipsets exhausted LGE's patents in the same way the sale of
the lens blanks exhausted the patents in [U.S. v. Univis Lens Co., 316 U.S. 241

7

(1942))." 553 U.S. at 630. As explained by the Quanta Court, manufacturers in Univis

sold lens blanks - "rough opaque pieces of glass of suitable size, design and
composition for use, when ground and polished, as multifocal lenses in eyeglasses" - to
wholesalers that would grind the blanks into the patented finished lenses. /d. at 627.
Based upon those facts, the Supreme Court in Univis held that the sale of lens blanks
exhausted patents on the finished lenses, concluding "that the traditional bar on patent
restrictions following the sale of an item applies when the item sufficiently embodies the
patent-even if it does not completely practice the patent-such that its only and
intended use is to be finished under the terms of the patent." 1 /d. at 627-28.
With the Univis holding in mind, the Court in Quanta "consider[ed] the extent to
which a product must embody a patent in order to trigger exhaustion." The Court
observed that,
[j]ust as the lens blanks in Univis did not fully practice the patents at issue
because they had not been ground into finished lenses, Quanta observes,
the Intel Products cannot practice the LGE Patents-or indeed, function at
all-until they are combined with memory and buses in a computer system.
If, as in Univis, patent rights are exhausted by the sale of the incomplete
item, then LGE has no postsale right to require that the patents be practiced
using only Intel parts.
1

The Quanta Court further elaborated on the Univis decision by declaring:

The [Univis] Court explained that the lens blanks "embodi[ed] essential
features of the patented device and [were] without utility until ... ground and
polished as the finished lens of the patent." The Court noted that, "where
one has sold an uncompleted article which, because it embodies essential
features of his patented invention, is within the protection of his patent, and
has destined the article to be finished by the purchaser in conformity to the
patent, he has sold his invention so far as it is or may be embodied in that
particular article."
Quanta, 553 U.S. at 627-28.

8

/d. at 630. Ultimately, the Court agreed with Quanta, "find[ing] that Univis governs this
case" and the doctrine of patent exhaustion applied. /d. at 631, 638. According to the

Quanta Court, "[t]he authorized sale of an article that substantially embodies a patent
exhausts the patent holder's rights and prevents the patent holder from invoking patent
law to control postsale use of the article. . . . Intel's microprocessors and chipsets
substantially embodied the LGE Patents because they had no reasonable noninfringing
use and included all the inventive aspects of the patented methods." /d. at 638.

2. Analysis
Both parties rely on Quanta in support of their respective positions. Plaintiff
argues that, in accordance with Quanta, patent exhaustion only exists when a product
has 1) no reasonable non-infringing uses and 2) includes all inventive aspects of the
patent. (0.1. 203 at 8-11) Defendant responds by arguing that the two-pronged test is
not applicable to the case at bar because the brewers are completed products. (D. I.
223 at 5-6)
The court agrees with defendant. Univis and Quanta dealt with patent
exhaustion and the sale of "incomplete" items. Unlike those cases, plaintiff sells a
product that completely practices the patent. There is no dispute that the brewers,
unlike the lens blanks in Univis, are sold in a completed form in accordance with the
patents. There is no need to determine the extent to which the brewers embody the
patent when the brewers are sold in a completed form. For this reason, the court
agrees with defendant that the two-prong test is inapplicable; instead, the "long-

9

standing doctrine" that an "initial authorized sale of a patented item terminates all patent
rights to that item" is applicable. /d. at 625.
Plaintiff argues it is improper for the court to look to the apparatus claims in
making a decision on exhaustion, as opposed to undertaking a claim by claim analysis
and focusing on the method claims at issue. (0.1. 203 at 11) As the Quanta Court
explained, however, "[o]ur precedents do not differentiate transactions involving
embodiments of patented methods or processes from those involving patented
apparatuses or materials. To the contrary, this Court has repeatedly held that method
patents were exhausted by the sale of an item that embodied the method." /d. at 628629. Given that plaintiff explicitly argues that the method claims at issue are infringed
through the use of the patented apparatuses (0.1. 181 at 2), the court has no trouble
concluding that use of the brewers embodies the methods at issue.
Further, as discussed above, the Quanta Court has warned about the dangers of
parties attempting an "end-run" around the exhaustion doctrine via the use of method
claims. The purpose of the patent exhaustion doctrine is to ensure that a patentee
surrenders its statutory monopoly after it has received compensation for an article sold
that embodies its patent. Were the court to find that the method claims were not
exhausted because different types of cartridges - one time use versus reusable - could
be utilized in a brewer, plaintiff would profit from brewer sales without forfeiting the right
to sue those individuals who purchased plaintiff's products. In other words, depending
on the type of cartridge utilized by a Keurig brewer owner, plaintiff could sue a
purchaser of its product. That outcome is contrary to the spirit of the doctrine and

10

inappropriate on the given facts. 2 As explained by the court in Static Control
Components, Inc. v. Lexmark lnt'/, Inc., 615 F. Supp. 2d 575, 582 (E.D. Ky. 2009), a
review of Supreme Court precedent on the law of patent exhaustion "reveals that the
Court has consistently held that patent holders may not invoke patent law to enforce
restrictions on the postsale use of their patented products. After the first authorized
sale to a purchaser who buys for use in the ordinary pursuits of life, a patent holder's
patent rights have been exhausted." Here, plaintiff is attempting to institute a postsale
restriction that prevents non-Keurig cartridges from being used in Keurig brewers.
Supreme Court precedent prevents plaintiff from undertaking such an end run.

B. Non-Patent Issues
1. Plaintiff's motion to dismiss defendant's counterclaim IV for
lack of standing or subject matter jurisdiction
Count IV of defendant's counterclaims seeks to cancel plaintiff's registration of
the terms "K-Cup" and "K-Cups" due to their alleged generic use. (0.1. 60

at~

25-30)

In response to this claim, plaintiff has filed a motion to dismiss count IV for lack of
standing and subject matter jurisdiction. (0.1. 253)
Section 14 of the Lanham Act permits a "petition to cancel a registration of a
mark" made by "any person who believes that he or she will be damaged ... by the
registration of the mark." 15 U.S.C.A. § 1064. To establish standing, both parties
acknowledge that a party must show a "real interest" in the outcome of a preceding, i.e.,

2

Keep in mind that it is the brewer and the use of the brewer that are claimed,
not the cartridge itself.

11

"a direct and personal stake in the outcome of the opposition [to the registration]," such
as a direct injury, as opposed to the interest of a mere intermeddler. Ritchie v.

Simpson, 170 F.3d 1092, 1095-96 (Fed. Cir. 1999); (D.I. 255 at 5293 at 14-15). As the
Federal Circuit explained in Cunningham v. Laser Golf Corp., 222 F.3d 943, 945 (Fed.
Cir. 2000), standing "requires only that the party seeking cancellation believe that it is
likely to be damaged by the registration," and a "belief in likely damage can be shown
by establishing a direct commercial interest."
Plaintiff emphasizes that the "K-Cup" and "K-Cups" marks have not been
asserted in the case; it is the "KEURIG" mark that is at issue. Defendant argues it has
a real, or direct commercial, interest in the "K-Cup" and "K-Cups" marks because it is a
direct competitor to Keurig. (D. I. 293 at 15-16) Direct competition alone, however, is
insufficient. See Windsurfing lnt'llnc. v. AMF Inc., 828 F.2d 755, 758 (Fed. Cir. 1987).
And while the K-Cup mark has been put at issue in these proceedings, defendant has
not attempted to use that mark or something similar; for this reason, the court finds that
defendant has no direct commercial interest relative to the "K-Cup" registration. 3
Accordingly, defendant lacks standing to sue on counterclaim IV. 4
2. Cross motions for summary judgment on defendant's
counterclaims

3

For instance, while false advertising claims have been made by defendant with
respect to the contents and make-up of K-Cups, these allegations center on plaintiff's
means of advertising and do not implicate how the fact of the registration itself
damages defendant.
4

Because the court finds that defendant lacks standing, the court will not
address the merits of defendant's genericness claims.

12

Defendant filed counterclaims for unfair competition under Section 43(a) of the
Lanham Act, a common law unfair competition claim, and a DUDTPA claim. (D.I. 60 at
31-33) In its motion for summary judgment on those claims, defendant argues that
plaintiff falsely represents that all of its K-Cups contain 1) a filter and 2) ground coffee.
(D.I. 187 at 17)
In order to prevail on false advertising claims, the parties agree that defendant
must prove the following: 1) plaintiff has made false or misleading statements as to its
own product; 2) there is actual deception or at least a tendency to deceive a substantial
portion of the intended audience; 3) the deception is material in that it is likely to
influence purchasing decisions; 4) the advertised goods traveled in interstate
commerce; and 5) there is a likelihood of injury to the plaintiff in terms of declining
sales, loss of good will, etc. (D.I. 187 at 15; D.l. 210 at 29); see also Johnson &
Johnson-Merck Consumer Pharm. Co. v. Rhone-Poulenc Rorer Pharm., Inc., 19 F.3d

125, 129 (3d Cir. 1994 ). There are two different theories of recovery for false
advertising under§ 43(a): "(1) an advertisement may be false on its face; or (2) the
advertisement may be literally true, but given the merchandising context, it nevertheless
is likely to mislead and confuse consumers." Castro/, Inc. v. Pennzoil Co., 987 F.2d
939, 943 (3d Cir. 1993). The test for literal falsity is an objective one for the court's
determination. "[l]f a defendant's claim is untrue, it must be deemed literally false"
regardless of the advertisement's impact on the buying public. /d. at 943-44. Further,
"only an unambiguous message can be literally false," and "[a] literally false message
may be either explicit or conveyed by necessary implication when, considering the

13

advertisement in its entirety, the audience would recognize the claim as readily as if it
had been explicitly stated." Novartis Consumer Health Inc. v. Johnson & JohnsonMerck Consumer Pharm. Co., 290 F.3d 578, 586-87 (3d Cir. 2002) (quoting Clorox Co.
v. Procter & Gamble Commercial Co., 228 F.3d 34, 35 (1st Cir. 2000)) (internal

quotations omitted). Conversely, "[w]hen the challenged advertisement is implicitly
rather than explicitly false, its tendency to violate the Lanham Act by misleading,
confusing or deceiving should be tested by public reaction." Castro/, 987 F.2d. at 943.
Defendant argues that plaintiff has made literally false statements with respect
to K-Cups containing filters and ground coffee. (D. I. 187 at 17) In support of its
position, defendant points the court to brewer packaging. (D.I. 187 at 7-11 (citing D.l.
188 at exs. 12; 13)) The various brewer packages contain photos of a K-Cup with
reference to the K-Cups "paper filter," "technically advanced filter" and "internal filter."
(/d.) With reference to ground coffee, the various packages also state that: 1) "the KCup design holds fresh roasted coffee;" "K-Cups contain the ideal grind and measure of
fresh 100% Arabica beans;" and "Each K-Cup contains the perfect grind and measure."
(/d.) Defendant also points the court to a Green Mountain press release celebrating
Keurig's 101h anniversary; the release states the following: "The K-Cup serves as a
mini-brewer complete with a filter and fresh ground coffee[.]" (/d. at ex. 15)
Plaintiff does not deny that certain K-Cups do not contain a filter or coffee. (D.I.
210 at 30) Plaintiff does dispute that it has made literally false statements, explaining
that its advertising

14

is not rendered false by [its] sales of K-Cup portion packs that do not contain
filters and/or ground coffee. . . . Keurig advertises and provides customers
with information describing what is contained within the typical (and flagship)
coffee K-Cup portion pack . . . Notably, however, Keurig never claims that
each and every K-Cup portion pack sold (including, non-coffee catridges)
contains ground coffee and a filter- indeed, there are a number of beverage
products that contain no coffee (e.g., tea) and some that are powdered
beverages (e.g., hot chocolate), and, therefore, need no filter in order to
successfully create a beverage.
(D.I. 210 at 30-31)
Both parties look to the court's decision in Schering-Piough Healthcare Products,
Inc. v. Neutrogena Corp., 2010 WL 1992247,(D. Del. May 18, 2010). In ScheringPlough, a commercial featured a close up of a suntan lotion bottle that "prominently

display[ed] the 'with Helioplex® broad spectrum uva*uvb protection' logo." /d. at *1.
There was no dispute that the product did not contain the Helioplex® technology. /d. at
*3. Defendant argued that Helioplex® technology was "sufficiently elastic" to
encompass a different, but similar, lotion formula. /d. The court rejected this argument,
finding that defendant had not "subsequently provided the public a contrary or
expanded representation and, therefore, the public has no basis on which to perceive
the 'flexibility' in the formula advocated by defendant." /d. The court went on to say,
"[d]efendant's message is unambiguous and explicit, insofar as it provided the public
with a specific formula for Helioplex®, and its labeling and advertisements for [the lotion
at issue] clearly represented that Helioplex® was present. In the absence of
Helioplex®, defendant's labeling and advertisements were literally false." /d. (citation
omitted).

15

In reliance on this case, defendant contends that plaintiff's statements "were
unambiguous[ly] and explicit[ly]" false. (0.1. 187 at 16) Plaintiff, on the other hand,
asserts that: "[T]he consuming public [bears] a 'flexible' understanding that powdered
beverages such as hot cocoa or chai latte do not include ground coffee and need not
be filtered. Keurig's advertising about the contents of its coffee brewing system,
including its coffee K-Cup portion packs and the technology utilized to brew this coffee
is not rendered false by the existence of portion packs that do not, and need not,
contain ground coffee or filters." (0.1. 210 at 32)
The court finds that the above-discussed statements regarding filters and ground
coffee are not unambiguously false. None of the statements assert that every K-Cup
contains a filter and ground coffee. 5 Moreover, when viewed in the proper context- i.e.,
the brewer packaging (as opposed to a package containing cartridges)- it is clear that
these statements (including the "each K-Cup ... " statement) are meant to generally
describe how the brewing process works; they are not meant to explain how the

process works with respect to specific beverage cartridges. Keurig has not placed the
above-described statements on the K-Cup packaging - such as hot chocolate
packaging - and a consumer would be well aware that non-coffee-based products such as hot chocolate - would not contain coffee or need a filter. Accordingly, the court

5

While the "each K-Cup contains the perfect grind and measure" statement
arguably indicates as much, for the reasons discussed below, the court finds that it
does not unambiguously do so.

16

grants summary judgment for plaintiff to the extent that the statements placed at issue
are not literally false.
3. Cross motions for summary judgment on defendant's affirmative
defense of unclean hands

Defendant argues that plaintiff should be prevented, via the doctrine of unclean
hands, from asserting false advertising and unfair competition claims against it given
plaintiff's own "unclean" conduct. (D.I. 187 at 17-18) Defendant bases its unclean
hands defense on a finding that plaintiff engaged in false advertising and unfair
competition. Because the court has found that plaintiff has not made any literally false
statements, the court will not invoke the equitable doctrine of unclean hands to bar
plaintiff from asserting its false advertizing and unfair competition claims against
defendant.
4. Defendant's motion for summary judgment on counts Ill, IV, V, VIII
and X6
6

Relevant to this motion is defendant's motion to strike certain improper
evidence and argument that plaintiff relied on in opposition to defendant's motion for
summary judgment on these counts. (D. I. 245) Specifically, defendant seeks to
exclude: 1) the testimony of Orlando Soto ("Soto") regarding Grove Square cartridge
failure rates; and 2) plaintiff's recent customer complaint logs. (D.I. 246 at 1)
The court denies defendant's motion to strike the testimony of Orlando Soto as it
relates to testing that he did of Grove Square beverage cartridges. Clearly Mr. Soto's
testing was identified as potentially relevant evidence at the preliminary injunction stage
of these proceedings. Despite the above, he was not formally identified as an expert
witness consistent with the deadlines of the Rule 16 scheduling order. In ruling on
defendant's objections to plaintiff's untimely identification of Soto as an expert,
Magistrate Judge Thynge- to whom discovery disputes had been referred- determined
that Mr. Soto could not be used as an expert, but could give his "lay opinion" concerning
his observations with respect to the testing of the Grove Square cartridges. (D.I. 247,
ex. C) Neither party appealed from that determination. The court declines to entertain

17

a. Counts Ill, IV & VIII: trademark infringement, false
designation and unfair competition under the DUDTPA

further argument at this juncture of the proceedings.
With respect to defendant's motion to strike plaintiff's "post-October 1, 201 0
summary" (0.1. 245), the court finds that the "agreement" contained in plaintiff's
responses to an August 10, 2011 meet and confer (D. I. 247, ex. Eat 2) is ambiguous at
best and not practiced consistently (see, e.g., D. I. 283). Moreover, although Magistrate
Judge Thynge protected from production defendant's consumer complaint log on the
basis of the agreement, to apply that logic to plaintiff's consumer complaint log makes
no sense in the context of the case, where consumer confusion is at the heart of the
case and no such evidence existed at the time suit was initiated in October 2010, since
defendant had just launched its products. To the extent, if any, that such evidence has
not been vetted through discovery because of confusion over this one sentence
agreement, the court will discuss the remedies with the parties at the pretrial
conference.
Also relevant is defendant's motion to strike Robert L. Klein's expert report on
trademark confusion survey methodology and results and to exclude his corresponding
expert testimony (D. I. 277). The court denies said motion. In the first instance, the
court finds Mr. Klein qualified to design, conduct or testify on the subject of his report.
Having read the cases cited by defendant in which Mr. Klein's methodology was
criticized, nonetheless, Mr. Klein was deemed an expert in this field in said cases.
With respect to the criticisms leveled at Mr. Klein's report at bar, the court finds
them unpersuasive. Indeed, the court concludes that the universe selected was
correct, that is, any consumer who buys beverage cartridges for use in a Keurig brewer.
The suggestion that the universe should have been limited to only "potential purchasers
of 'Grove Square' products" would have produced a meaningless survey, in the context
of the issues in dispute, especially when one considers that defendant is targeting the
larger universe. With respect to defendant's criticism that Mr. Klein used a control from
the real world in a setting that approximated a real world display of beverage cartridges,
said methodology surely made the survey more, not less, reliable. See, e.g., Bd. of
Regents v. KST Elec., Ltd., 550 F. Supp. 2d 657, 676 (W.O. Tex. 2008) ("It is difficult to
understand how it would bias the results to show the general consuming public the
mark in the typical circumstances in which the public would confront that mark in the
marketplace, rather than showing them it in a manner in which they would likely not
confront it."). Finally, the court concludes that the survey questions were appropriately
structured to address the issue at bar. Any of the above (or remaining) criticisms
leveled at Mr. Klein's expert testimony go to the weight and may be judged by the jury.

18

The packaging for defendant's product has the following statement on it: "For
use by owners of Keurig® coffee makers." Defendant argues that the use of the
trademarked term "Keurig" causes no customer confusion and, therefore, summary
judgment is appropriate on counts Ill, IV and VIII. (D. I. 207 at 14)
Both parties agree that claims for trademark infringement, false designation and
a violation of the DUDTPA are maintained by proving: (1) the mark is valid and legally
protectable; (2) plaintiff owns the mark; and (3) defendant's use of plaintiff's mark to
identify goods or services is likely to create confusion concerning the origin of the goods
or services. 7 Sanofi-Aventis v. Advancis Pharm. Corp., 453 F. Supp. 2d 834, 847 (D.
Del. 2006) (citing, inter alia, Freedom Card, Inc. v. JPMorgan Chase & Co., 432 F.3d
463, 470 (3d Cir. 2005)); (D.I. 207 at 13; D. I. 224 at n8); see also Checkpoint Sys. v.

Check Point Software Tech., 269 F.3d 270, 279 (3d Cir. 2001 ); A&H Sportswear, Inc. v.
Victoria's Secret Stores, Inc., 237 F.3d 198, 210 (3d Cir. 2000). Likelihood of confusion
exists when consumers viewing a mark would probably assume that the product or
service it represents is associated with the source of a different product or service
identified by a similar mark. Checkpoint, 269 F.3d at 280; Victoria's Secret, 237 F.3d at
211. The parties further acknowledge that a likelihood of confusion is analyzed by
reference to relevant Lapp8 factors. (D.I. 207 at 13; D.l. 224 at 10) These include:

7

Elements 1 and 2 do not appear to be disputed in this motion; only element 3,
the likelihood of confusion, is put at issue on defendant's motion.
8

lnterpace Corp. v. Lapp, Inc., 721 F.2d 460, 463 (3d Cir. 1983).

19

(1) degree of similarity between the owner's mark and the alleged
infringing mark;
(2) strength of the owner's mark;
(3) price of the goods and other factors indicative of the care and attention
expected of consumers when making a purchase;
(4) length of time the defendant has used the mark without evidence of
actual confusion;
(5) intent of the defendant in adopting the mark;
(6) evidence of actual confusion;
(7) whether the goods, though not competing, are marketed through the
same channels of trade and advertised through the same media;
(8) the extent to which the targets of the parties' sales efforts are the
same;
(9) the relationship of the goods in the minds of consumers because of
the similarity of function; and
(1 0) other facts suggesting that the consuming public might expect the
prior owner to manufacture a product in the defendant's market or that he
is likely to expand into that market.
lnterpace Corp. v. Lapp, Inc., 721 F.2d at 463. Not all factors (especially factors 1 and
2) are relevant in a nominative fair use context such as this. Century 21 Real Estate
Corp. v. Lendingtree, Inc., 425 F.3d 211, 224 (3d Cir. 2005). No single Lapp factor is
determinative in a likelihood of confusion analysis, and each factor must be weighed
and balanced against the others. See Kos Pharm., Inc. v. Andrx Corp., 369 F.3d 700,
709 (3d Cir. 2004); Checkpoint, 269 F.3d at 280.
Despite the above analysis being a clear issue of fact for the jury to decide,
defendant has asked the court to find for it on summary judgment. See e.g., David's
Bridal, Inc. v. House of Brides, Inc., 2010 WL 323306, at *6 (D.N.J. Jan. 20, 2010) ("In

20

[Facenda v. N.F.L. Films, Inc., 542 F.3d 1007, 1024 (3d Cir. 2008)], the Third Circuit
held that the overall weighing of the Lapp factors is a question of fact, and that factual
disputes over particular factors should be resolved at trial."); Brown & Brown, Inc. v.
Cola, 745 F. Supp. 2d 588, 617 (E.D. Pa.,2010) ("Ultimately, likelihood of confusion is,
at its core, a question of fact."). Because plaintiff has raised genuine issues of material
fact in response, 9 the court declines to grant summary judgment on this record.
b. Count V: trade dress infringement

Section 43(a) of the Lanham Act, which establishes a cause of action for trade
dress infringement, 10 provides that:

[A] person who shall ... use in connection with any goods or services ...
any false description or representation, including words or other symbols
tending falsely to describe or represent the same ... shall be liable in a civil
action by any person ... who believes that he is or is likely to be damaged
by the use of such false description or representation.

9

For instance, with respect to factor four, actual confusion (a highly relevant
factor), plaintiff has produced survey, consumer testimonial and consumer complaint
evidence which suggests that defendant's use of the word "Keurig®" on its packaging is
misleading.
10

"Trade dress refers to the design or packaging of a product which serves to
identify the product's source. It is the total image or overall appearance of a product,
and includes, but is not limited to, such features as size, shape, color or color
combinations, texture, graphics, or even a particular sales technique. The purpose of
trade dress protection is to secure the owner of the trade dress the goodwill of his
business and to protect the ability of consumers to distinguish among competing
producers." McNeil Nutritionals, LLC v. Heartland Sweeteners, LLC, 511 F.3d 350, 357
(3d Cir. 2007) (citations and quotations omitted).

21

15 U.S.C. § 1125(a). "To establish trade dress infringement under the Lanham Act, a
plaintiff must prove that: (1) the allegedly infringing design is non-functional; (2) the
design is inherently distinctive or has acquired secondary meaning; and (3) consumers
are likely to confuse the source of the plaintiff's product with that of the defendant's
product." McNeil Nutritionals, LLC v. Heartland Sweeteners, LLC, 511 F.3d at 357.
"This three-part inquiry alone, however, is insufficient when the plaintiff in a trade dress
action seeks protection under the Lanham Act for a series or line of products or
packaging. '[W]hen protection is sought for an entire line of products, [the Third
Circuit's] concern for protecting competition is acute."' Rose Art Indus., Inc. v.
Swanson, 235 F.3d 165, 172 (3d. Cir. 2000) (quoting Landscape Forms, Inc. v.
Columbia Cascade Co., 113 F.3d 373, 380 (2nd Cir. 1997)). This concern led to the
development of the "consistent overall look" standard:
Because of the broad reach that protection of trade dress for a series or line
of products would embrace, [the Third Circuit] will require this more stringent
test before the non-functionality/distinctiveness/likelihood of confusion test
is applied. A plaintiff, seeking protection for a series or line of products, must
first demonstrate that the series or line has a recognizable and consistent
overall look. Only after the plaintiff has established the existence of
recognizable trade dress for the line or series of products should the trial
court determine whether the trade dress is distinctive, whether the trade
dress is nonfunctional, and whether the defendant's use of plaintiffs trade
dress is likely to cause consumer confusion.
Rose Art Indus., Inc., 235 F.3d at 173.
Defendant first argues that plaintiff has no consistent overall look across its KCup product lines. (D.I. 207 at 9) Plaintiff readily acknowledges as much, but correctly

22

notes that "the law permits Keurig's covered 'product line' to be narrower than the
entirety of its [K-Cup] product offerings." (0.1. 224 at 27) (citing Rose Art, 235 F.3d at
173 ("[T]he plaintiff in a trade dress action under section 43(a) of the Lanham Act is free
to seek trade dress protection for whatever products or packaging it sees fit. A plaintiff
can seek trade dress protection either for a single product or for a whole line of
products. Moreover, in seeking protection for the trade dress of a line of products, the
plaintiff can define the line as it sees fit.")).
Plaintiff, in is complaint, has defined its trade dress as such:
[1] an image of single-serve beverage cartridges, with at least one beverage
cartridge depicted on its side and one beverage cartridge depicted right-side
up, and a tagline below the image of the cartridges that states they are for
use in Keurig brewers, [2] an image of spilled coffee beans, [3] an indication
of the coffee's roast strength on a graded bar with shading varying from light
to dark, along with an indication whether the coffee is caffeinated, [4]
perforations for opening the package that form an opening that is tapered in
a vshape and ending in a u-shaped tab, [5] prominent lettering displaying the
name of the beverage, and [6] another face of the packaging providing a
product story.
(0.1. 41 at ,-r 57) Plaintiff concedes that the entire line of K-Cup offerings fails to
conform to this look. Nevertheless, plaintiff points to its Green Mountain line of K-Cups
and argues that it does contain the above discussed characteristics. Having reviewed
the packaging identified by plaintiff, the court agrees that the Green Mountain
packaging contains all of the features addressed above. (0.1. 224 at 27-28) Therefore,

23

the court finds that, at the least, a genuine issue of material fact exists with respect to
the existence of a consistent overalllook. 11
Alternatively, defendant asserts that, even if a consistent overall look exists,
there is no issue of fact regarding the existence of a likelihood of confusion. (0.1. 207 at
11) "A likelihood of confusion exists when consumers viewing the defendant's trade
dress probably would assume that the product it represents is associated with the
source of a different product identified by the plaintiff's similar trade dress. The
likelihood of confusion between two trade dresses is a question of fact." McNeil, 511
F.3d at 357. In deciding this question of fact, the Lapp factors are again employed. 12

11

To the extent that the discussed line is no longer utilized by plaintiff or plaintiff
is asserting a new trade dress, the court will address that argument further at the
parties' pretrial conference. (See 0.1. 249 at 1-2)
12

In the trade dress context, these include the following (although not every
factor is necessarily relevant to every case):
(1) the degree of similarity between the plaintiff's trade dress and the
allegedly infringing trade dress;
(2) the strength of the plaintiff's trade dress;
(3) the price of the goods and other factors indicative of the care and
attention expected of consumers when making a purchase;
(4) the length of time the defendant has used its trade dress without
evidence of actual confusion arising;
(5) the intent of the defendant in adopting its trade dress;
(6) the evidence of actual confusion;
(7) whether the goods, though not competing, are marketed through the
same channels of trade and advertised through the same media;
(8) the extent to which the targets of the parties' sales efforts are the
same;

24

The "single most important factor" in determining likelihood of confusion is trade dress
similarity and the proper test is not side-by-side comparison but whether the trade dresses
create the same overall impression when viewed separately of each other. /d. at 359.
Again, summary judgment is not appropriate on this fact-intensive inquiry. To the
extent that defendant asks the court to decide whether the "overall impression" of the two
packages is the same, the court will not undertake an inquiry properly reserved for the trier
of fact. Further, plaintiff has raised issues of fact on other relevant factors; for instance,
plaintiff has introduced evidence suggesting that defendant's marketing team originally set
out to model their packaging off the Green Mountain packaging display. (0.1. 225 at ex.
U)

c. Count X: false advertising
Count X of plaintiff's complaint alleges a violation of Section 43(a) of the Lanham
Act, 15 U.S.C. § 1125(a). According to plaintiff, defendant's use of the phrase "For use
by owners of Keurig® coffee makers" is false and/or misleading because the Strum
cartridges often fail to work properly with Keurig brewers and, therefore, defendant has
misinformed the public with respect to the effectiveness of Strum cartridges in Keurig

(9) the relationship of the goods in the minds of consumers because of
the similarity of function;
(1 0) other facts suggesting that the consuming public might expect the
plaintiff to manufacture a product in the defendant's market, or that the
plaintiff is likely to expand into that market.

McNeil, 511 F.3d at 358.

25

brewers. (0.1. 41 at mf1 03-121) As discussed above, in order to prevail on this claim,
plaintiff must prove, among other things, that defendant made a literally false and/or
misleading statement. See, supra pg. 13-14.
While defendant argues for summary judgment on this claim, plaintiff has set
forth genuine issues of material fact that prevent such a finding. The court again
declines to find the "For use by owners of Keurig® coffee makers" to be literally false by
implication (i.e., unambiguously false) for the reasons already addressed in its previous
opinion. 13 With respect to whether the statement misleads the public into believing that
the cartridges will work more consistently than they actually do, plaintiff has presented
evidence which suggests that the Strum cartridges fail at a significantly higher rate than
those manufactured by plaintiff and that said failure rate would be unanticipated and
unacceptable to consumers. (0.1. 224 at 25-26) To the extent that defendant objects
to the admissibility of this evidence, the court has already ruled that such evidence may
be proffered at trial.

V. CONCLUSION
For the foregoing reasons, the court:
1. Grants defendant's patent-related motions (0.1. 183 and 0.1. 199) to the
extent that they assert the defense of patent exhaustion; plaintiff's patent-related
13

"While the court agrees that defendant's statement necessarily implies that its
cartridges are functionally suitable for use with Keurig coffee makers, it does not
necessarily imply that they are up to the same quality standards as the Keurig branded
cartridges." (0.1. 58 at 19)

26

motions (D. I. 180 and D. I. 202) are denied to the extent they conflict with the court's
ruling in this regard.
2. Grants plaintiff's motion to dismiss for lack of standing (D. I. 253); defendant's
motion to strike Robert Klein's expert report on genericism (D. I. 274) is thereby mooted.
3. Denies defendant's motion for partial summary judgment on its counterclaims
for unfair competition and affirmative defense of unclean hands (D. I. 186).
4. Grants plaintiff's cross motion for summary judgment on non-patent issues
(D. I. 209) to the extent that its advertising is deemed to be not literally false.
5.

Denies defendant's motion for summary judgment on counts Ill, IV, V, VIII

and X (trademark infringement, false designation, trade dress infringement, DUDTPA
and false advertising respectively) (D.I. 206).
6. Denies defendant's motion to strike improper evidence and argument from
plaintiff's opposition to defendant's motion for summary judgment on counts Ill, IV, V,
VIII and X (D.I. 245).
7. Denies defendant's motion to strike Robert L. Klein's expert report on
trademark confusion survey methodology and results and to exclude his corresponding
expert testimony (D. I. 277).
An appropriate order shall issue.

27