Select Comfort Corporation v. Baxter et al

Filing 775

MEMORANDUM OPINION AND ORDER - Plaintiffs' Motion for Partial Summary Judgment (Doc. No. 742 ) is DENIED. Defendants' Motion for Partial Summary Judgment (Doc. No. 748 ) is DENIED. Defendants' Motion for a Permanent Injunction (Doc. No. 754 ) is DENIED. (Written Opinion) Signed by Judge Donovan W. Frank on 7/26/2022. (las)

CASE 0:12-cv-02899-DWF-TNL Doc. 775 Filed 07/26/22 Page 1 of 22

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Select Comfort Corporation; and
Select Comfort SC Corporation,

Civil No. 12-2899 (DWF/TNL)

Plaintiffs,
v.

MEMORANDUM
OPINION AND ORDER

John Baxter; Dires, LLC d/b/a
Personal Touch Beds and Personal Comfort
Beds; Digi Craft Agency, LLC; Direct
Commerce, LLC d/b/a Personal Touch
Beds; Scott Stenzel; and Craig Miller,
Defendants.
Andrew S. Hansen, Esq., Elizabeth A. Patton, Esq., Ellie J. Barragry, Esq., and Randall J.
Pattee, Esq., Fox Rothschild LLP, counsel for Plaintiffs.
Barbara P. Berens, Esq., Carrie L. Zochert, Esq., Berens & Miller, PA, counsel for
Defendant John Baxter.
Cassandra B. Merrick, Esq., Christopher W. Madel, Esq., Jennifer M. Robbins, Esq.,
Madel PA, counsel for Defendants Dires, LLC, d/b/a Personal Touch Beds and
Personal Comfort Beds, Digi Craft Agency, LLC; Direct Commerce, LLC d/b/a Personal
Touch Beds, Scott Stenzel, and Craig Miller.
INTRODUCTION
This matter is before the Court on a Motion for Partial Summary Judgment filed
by Plaintiff Select Comfort Corporation (“Sleep Number”)1 (Doc. No. 742), a Motion for

1

Select Comfort Corporation changed its named to Sleep Number Corporation. For
ease of reference, the Court refers to Sleep Number and both plaintiffs as “Plaintiffs” or
“Sleep Number.”

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Partial Summary Judgment filed by Defendants John Baxter, Dires, LLC, Craig Miller,
and Scott Stenzel (“Defendants”) (Doc. No. 748), and a Motion for Permanent Injunction
brought by Defendants (Doc. No. 754). For the reasons discussed below, the Court
denies all three motions.
BACKGROUND
The factual and procedural background of this litigation is extensively set forth in
prior orders and will not be repeated in full here.
Plaintiffs manufacture and sell adjustable air beds and related products marketed
under the “Sleep Number” brand. Plaintiffs sell their products online, over the phone,
and through company-owned stores. Plaintiffs’ registered trademarks include SLEEP
NUMBER, WHAT’S YOUR SLEEP NUMBER, SELECT COMFORT, and
COMFORTAIRE. Defendants also sell adjustable air beds and market their products
under the “Personal Touch” and “Personal Comfort” brands. Defendants sell these
products online and over the phone. Defendants are not authorized retailers, distributors,
or sellers of Sleep Number products.
Plaintiffs initiated this lawsuit in 2012, asserting claims against Defendants for
trademark infringement, trademark dilution, false advertising, unfair competition, and
related state-law claims. (See Doc. No. 53, Second Amended Complaint (“SAC”).)
Defendants filed a counterclaim seeking a declaration that Sleep Number does not have
trademark rights in the phrase NUMBER BED. (Doc. No. 60 ¶¶ 9-19.) In short,
Plaintiffs allege that Defendants use Plaintiffs’ trademarks or confusingly similar

2

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variations thereof, including variations that include the phrase “Number Bed”2, in various
methods of online advertising to “bait and switch” consumers by diverting consumers
searching for Plaintiffs’ products to Defendants’ own website and phone lines. Such
online advertising includes pay per click (“PPC”), organic search, and display. Plaintiffs
further assert that Defendants exploit initial confusion caused by Defendants’
advertisements by failing to dispel confusion or making false representations when
customers contact Defendants’ call centers.
In 2015, the parties filed cross-motions for summary judgment. In a 2016 order,
the Court denied Plaintiffs’ motion for summary judgment on the issue of pre-sale,
initial-interest confusion and granted Defendants’ motion on the same, concluding that
Plaintiffs would have to show a likelihood of confusion at the time of purchase to prevail
on their trademark infringement claim. (Doc. No. 270 at 26.) In so holding, the Court
noted that in Sensient Technologies Corp. v. SensoryEffects Flavor Co., 613 F.3d 754
(8th Cir. 2010), the Eighth Circuit neither expressly adopted nor rejected the initialinterest confusion theory but had declined to apply it in a case involving sophisticated
consumers. (Id. at 25.) The Court then found that retail purchasers of mattresses were
sophisticated consumers and that a theory of initial-interest confusion would not apply.
(Id.) The Court also concluded that fact issues precluded summary judgment on the issue
of trademark infringement, leaving that question to the jury. (Id. at 31.) Similarly, the

2

The Court refers to Defendants’ advertising that contains the phrase “Number
Bed” as “Number Bed Advertising.”

3

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Court determined that Defendants’ NUMBER BED counterclaim should be determined
by the jury. (Id. at 21.)3
The case went to trial in September and October 2017. At trial, evidence showed,
among other things, that Defendants used PPC online advertising, whereby they
purchased keywords and search terms identical to Plaintiffs’ trademarks (i.e., “Sleep
Number”) and variants thereof so that Defendants’ advertisements are displayed to
consumers searching for those terms. Specifically, after such a search, Defendants’ PPC
advertising containing Plaintiffs’ trademarks or variations of the marks would appear.
For example, resulting advertisements displayed include: “Sleep 55% Off Number
Beds”; “Number Bed Sleep Sale 60% -Closeout Sale”; “Sleep 60% Off Number Sale |
PersonalComfortBed.com”; “Sleep 50% Off Number Beds”; and links to
personalcomfortbed.com/vSleepNumber. Plaintiffs also introduced survey evidence
showing actual confusion and instances of actual confusion via call-center recordings or
transcripts from call-center interactions and messages. Defendants submitted evidence to
challenge the strength of Plaintiffs’ marks and argued that their keyword advertisements
in search engine results offered comparisons to Plaintiffs’ products and were not
confusing. The parties offered different perspectives on the evidence with respect to the
remaining factors to be considered in the likelihood of confusion analysis, see, e.g.,
SquirtCo v. Seven-Up Co., 628 F.2d 1086 (8th Cir. 1980), and other issues in case.
The Court provided the jury with instructions. The jury instructions reflected the
Court’s ruling on initial-interest confusion:
3

The Court made additional rulings that are not pertinent to the pending motions.
4

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PLAINTIFFS’ CLAIM OF TRADEMARK INFRINGEMENT
Plaintiffs claim that Defendants’ advertising constitutes trademark
infringement. Plaintiffs have the burden of proving infringement by a
preponderance of the evidence.
The Lanham Act recognizes a cause of action for infringement of a
federally registered mark where use of a mark is likely to cause confusion,
mistake, or deception. To establish trademark infringement, the owner of a
trademark must demonstrate that the defendant’s alleged infringing was
likely to cause confusion among consumers regarding the origin,
sponsorship, affiliation or approval of the defendant’s product.
For their claims that Defendants infringed their trademarks,
Plaintiffs must prove by a preponderance of the evidence that Defendants
used Plaintiffs’ trademarks or a similar word or phrase in connection with a
product and that use is likely to cause confusion as to the origin,
sponsorship, affiliation or approval of the product. The core element of
trademark infringement is whether Defendants’ use of a term creates a
likelihood that the consuming public will be confused. Plaintiffs must
prove that a likelihood of confusion is probable, not merely possible.
LIKELIHOOD OF CONFUSION FACTORS
In determining whether there is a likelihood of confusion at the time
of purchase, you may consider the following six factors:
1.
the strength of the trademark;
2.
the similarity between Plaintiffs’ trademark and the allegedly
infringing term or terms;
3.
the degree to which the allegedly infringing product competes
with Plaintiff’s products;
4.
whether Defendants intended to confuse the public;
5.
the degree of care reasonably expected of potential customers
and the type of product, its cost, and conditions of purchase; and
6.
evidence, if any, of actual confusion.
However, no one factor should control the outcome of your analysis.
The factors guide the analysis, but the ultimate determination of whether
confusion at the time of purchase is likely is not to be mechanically
determined through rigid application of the factors. The ultimate inquiry
always is whether, considering all of the circumstances, a likelihood exists
that consumers, at the time they are purchasing Defendants’ product, will
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be confused. The factors are useful only to the extent they answer the
ultimate question.
The question to be answered is whether an appreciable number of
relevant consumers are likely to be confused.
Plaintiffs must prove a likelihood of confusion at the time of
purchase. Your analysis of whether Plaintiffs have established likelihood
of confusion at the time of purchase must occur in a context that recognizes
how consumers encounter the products and how carefully consumers are
likely to scrutinize the words at issue.
If you find by a preponderance of the evidence that Plaintiffs have
proved a likelihood of confusion at the time of purchase, then and only then
may you find Defendants liable for trademark infringement. You will then
consider the question of damages under separate instructions.
UNFAIR COMPETITION
Plaintiffs claim that Defendants’ use of the phrase NUMBER BED
in advertising constitutes unfair competition under § 43(a) of the Lanham
Act. Your verdict must be for Plaintiffs and against Defendants if all of the
following elements have been proved by a preponderance of the evidence:
1. That the public recognizes NUMBER BED in connection with
the sale of Plaintiffs’ products as identifying Plaintiffs’ products
and distinguishing the products from those of others; and
2. That such recognition has occurred before the defendant entered
the market in which the Plaintiffs sell their products; and
3. Defendants’ use of NUMBER BED in connection with its
products is likely to cause confusion about the source of the
products among persons using ordinary care and prudence in the
purchase of the products; and
4. Plaintiffs have been or are likely to be injured by Defendants’
use.
You may consider the factors identified in the instruction on
likelihood of confusion with respect to Plaintiffs’ Trademark Infringement
in addressing this claim.

6

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If the elements above are fulfilled, you should find for Plaintiffs on
this claim regardless of whether NUMBER BED is a registered mark or
even registerable. Even phrases that cannot be registered trademarks
because they are generic (or for any other reason) may form the basis of an
unfair competition claim where the phrase in question is so associated with
the plaintiff’s goods that the use of the same or similar marks by another
company constitutes a representation that its goods came from the same
source. The key to finding unfair competition is a determination that the
materials used by the defendant created a likelihood of confusion,
deception, or mistake on the part of the consuming public. If you find that
the elements are not met, you should find for Defendants.
(Doc. No. 568 (“Jury Instructions”) at 14-16 (emphasis added), 28-29 (emphasis added).)
The jury returned a verdict, making the following relevant findings:
Trademark Infringement: Defendants did not infringe Select Comfort’s
trademark rights in SLEEP NUMBER, WHAT’S YOUR SLEEP NUMBER?, SELECT
COMFORT, or COMFORTAIRE. (Doc. No. 575 (“Special Verdict”) at 2-3.)
Unfair Competition: Defendants’ use of NUMBER BED did not constitute
unfair competition. (Id. at 8.)4
Counterclaim: In considering Defendants’ Counterclaim, the jury determined
that Select Comfort does not have trademark rights in NUMBER BED. (Id. at 64.)
The parties submitted post-trial motions, which the Court denied. Final judgment
was entered on December 16, 2018. (Doc. Nos. 702-03.)

4

In addition, regarding dilution, the jury found that the SLEEP NUMBER mark is
famous, but also that Defendants had not diluted the mark. With respect to Plaintiffs’
false advertising claims, the jury found in favor of Plaintiffs on seven of the asserted
fifteen statements. Finally, the jury awarded Plaintiffs $155,721 in damages on the false
advertising claims based on a wrongful benefit received.

7

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The parties appealed several issues to the Eighth Circuit Court of Appeals, the
primary issue being the Court’s application of the initial-interest doctrine.5 See Select
Comfort Corp. v. Baxter, 996 F.3d 925 (8th Cir. 2021). The Eighth Circuit addressed the
open issue of initial-interest confusion and held that “a theory of initial-interest confusion
may apply in our circuit.” Id. at 935. The Court acknowledged that “per Sensient, the
theory of initial-interest confusion cannot apply . . . where the relevant average
consumers are sophisticated at the level of the careful professional purchasers who were
at issue in Sensient” and noted that “a finding of consumer sophistication typically will
rest with the jury.” Id. at 936. The Eighth Circuit then explained that it is inappropriate
to cabin the likelihood of confusion analysis to any one point in time and that authority is
mixed regarding consumer confusion in the context of internet shopping and mattress
purchases, making it appropriate for the jury to determine the level of consumer
sophistication. Id. at 936-37. Thus, the Eighth Circuit concluded that a jury question
existed as to the issue of consumer sophistication and that summary judgment on the
5

Plaintiffs appealed the Court’s summary judgment decision and the jury’s verdict
on trademark infringement and unfair competition, arguing that the Court’s decision on
pre-sale confusion was incorrect. See Select Comfort Corp., 996 F.3d at 932. Plaintiffs
also appealed the Court’s jury instructions, arguing that the Court misapplied the burden
of proof on Defendants’ cross claim seeking a declaration that Plaintiffs held no
trademark rights in NUMBER BED. Id. at 941. Plaintiffs renewed their arguments in
support of their motion as a matter of law on the false advertising claims as to certain
statements for which Plaintiffs argued that Defendants admitted literal falsity.
Defendants challenged the jury instructions on the false advertising claims, arguing that
the instructions improperly shifted the burden of proof by applying an erroneous
presumption as to the elements of the false advertising claims. Other issues on appeal
included the admission of expert testimony regarding survey evidence, the use of a trial
exhibit of an adjustable airbed, and the refusal to permit amendment of Defendants’
counterclaim.

8

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theory of initial-interest confusion was in error.6 The Eighth Circuit then remanded the
trademark infringement claim for proceedings consistent with its opinion, while making
“no comment as to how a finding of confusion at times other than the moment of
purchase might affect the analysis of remedies and the determination of damages.” Id. at
938.
Next, the Eighth Circuit held that the Court correctly placed the burden of proof
on Defendants’ cross claim seeking a declaration that Plaintiffs held no trademark rights
in NUMBER BED on Plaintiffs. Id. at 941. And while not pertinent to the present
motions, the Eighth Circuit concluded that it was error to instruct the jury on the false
advertising claims in a manner that shifted the burden of proof on the materiality element
based on a finding of literal falsity and reversed and remanded for a new trial the seven
false advertising claims on which Plaintiffs prevailed. Id. at 940. In conclusion, the
Eighth Circuit stated:
We reverse and vacate the judgment as to the infringement and false
advertising claims. We leave undisturbed those portions of the judgment
dealing with the dilution claims and the alleged “NUMBER BED”
trademark. We otherwise remand for further proceedings consistent with
this opinion.
Id. at 942.
DISCUSSION
The parties have filed cross-motions for partial summary judgment. Plaintiffs
move for summary judgment on the trademark infringement claim, arguing that in light
6

Similarly, the Eighth Circuit concluded that the corresponding jury instruction on
initial-interest confusion was in error.

9

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of the SLEEP NUMBER mark’s undisputed fame and the Eighth Circuit’s adoption of
the initial-interest doctrine, coupled with the evidence of confusion submitted at trial, no
triable fact issues exist as to the validity and distinctiveness of the mark or whether the
relevant factors weigh in favor of the issue of likelihood of confusion. Defendants also
move for summary judgment on the remanded trademark infringement claim, arguing the
opposite—that no genuine issue of material fact exists to support the claim that
Defendants have infringed any trademark rights belonging to Plaintiffs. In addition,
Defendants argue that any part of the trademarking infringement claim that related to
“NUMBER BED” should be dismissed, and to the extent that the unfair competition
claim has been remanded, it should also be dismissed. Separately, Defendants move for a
permanent injunction. The Court addresses the motions below.
I.

Summary Judgment
Summary judgment is appropriate if the “movant shows that there is no genuine

dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). Courts must view the evidence and all reasonable inferences in the
light most favorable to the nonmoving party. Weitz Co. v. Lloyd’s of London, 574 F.3d
885, 892 (8th Cir. 2009). However, “[s]ummary judgment procedure is properly
regarded not as a disfavored procedural shortcut, but rather as an integral part of the
Federal Rules as a whole, which are designed ‘to secure the just, speedy and inexpensive
determination of every action.’” Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986)
(quoting Fed. R. Civ. P. 1).

10

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The moving party bears the burden of showing that there is no genuine issue of
material fact and that it is entitled to judgment as a matter of law. Enter. Bank v. Magna
Bank of Mo., 92 F.3d 743, 747 (8th Cir. 1996). The nonmoving party must demonstrate
the existence of specific facts in the record that create a genuine issue for trial. Krenik v.
Cty. of Le Sueur, 47 F.3d 953, 957 (8th Cir. 1995). A party opposing a properly
supported motion for summary judgment “must set forth specific facts showing that there
is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986).
A.

Trademark Infringement

To assess the likelihood of confusion as required for a showing of infringement, a
list of nonexclusive factors is considered in determining whether the relevant average
consumers for a product or service are likely to be confused as to the source of a product
or service or as to an affiliation between sources based on a defendant’s use. See
Anheuser-Busch, Inc. v. Balducci Publ’ns, 28 F.3d 769, 774 (8th Cir. 1994). The factors
include: (1) the strength of the owner’s mark; (2) the similarity of the owner’s mark and
the alleged infringer’s mark; (3) the degree to which the products compete with each
other; (4) the alleged infringer’s intent to “pass off” its goods as those of the trademark
owner; (5) incidents of actual confusion; and (6) the type of product, its costs and
conditions of purchase. SquirtCo, 628 F.2d at 1091. “Under SquirtCo, no one factor
controls, and because the inquiry is inherently case-specific, different factors may be
entitled to more weight in different cases.” Cmty. of Christ Copyright Corp. v. Devon
Park Restoration Branch of Jesus Christ’s Church, 634 F.3d 1005, 1009 (8th Cir. 2011).

11

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Evidence of actual confusion is strong proof of a likelihood of confusion. See Hubbard
Feeds, Inc. v. Animal Feed Supplement, Inc., 182 F.3d 598, 602 (8th Cir. 1999).
Plaintiffs move for summary judgment on the liability portion of its trademark
infringement claim based on Defendants’ use of the SLEEP NUMBER mark (which is
famous and incontestable), including Defendants’ use of the phrase NUMBER BED.
Plaintiffs argue that Defendants’ use of their exact marks, as well as their use of
NUMBER BED and other terms confusingly similar to SLEEP NUMBER, establishes
infringement as a matter of law. In particular, and in light of the Eighth Circuit’s
adoption of initial-interest confusion, Plaintiffs argue that this issue is ripe for
adjudication and that Defendants’ strategy to create confusion among potential buyers
through misleading advertising satisfies the likelihood of confusion standard on summary
judgment. In support, Plaintiffs submit that evidence of Defendants’ use of the SLEEP
NUMBER mark, as well as other words and phrases similar enough to cause confusion
(including the phrase NUMBER BED), plus evidence of actual confusion, is
overwhelming and conclusive of likelihood of confusion, and further that the remaining
SquirtCo factors support a finding of a likelihood of confusion. In this vein, Plaintiffs
maintain that the evidence shows that the SLEEP NUMBER mark is strong, that there is
a high level of similarity between SLEEP NUMBER and Defendants’ use of those words
or variations thereof, that the parties’ products directly compete, and that Defendants
intended to, and did, cause confusion.
Defendants oppose Plaintiffs’ motion and move separately for summary judgment
in their favor, arguing that the scope of the remand permits the Court to rule on the
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initial-interest confusion on summary judgment and that they are entitled to judgment in
their favor on the trademark infringement claim. Defendants submit that there is no
genuine issue of material fact to support Plaintiffs’ claim that Defendants have infringed
their trademark rights. In support, Defendants maintain that all of the evidence necessary
for a factfinder to consider trademark infringement based on initial-interest confusion
was before the jury in the first trial, as the Court did not limit the introduction of such
evidence, and that Plaintiffs did, indeed, introduce evidence of earlier confusion.
Defendants argue that because the jury already heard this evidence and was instructed to
consider all of the SquirtCo factors, including consumer sophistication, the Court should
accept the jury’s conclusion of non-infringement on the remanded trademark
infringement claim. Even considering the Eighth Circuit’s decision on initial-interest
confusion, Defendants argue that the jury instructions were carefully crafted so that the
jury would consider the entire purchasing context and did not instruct the jury that a sale
must be completed for confusion to be actionable.7
After careful consideration of the parties’ arguments, the Court denies both
parties’ motions as to Plaintiffs’ trademark infringement claim. While Defendants are
correct that the jury was instructed to consider all of the SquirtCo factors, the Eighth
Circuit determined that it was error to limit the infringement instruction to require
confusion at the time of purchase. In addition, the Eighth Circuit noted that the “jury
7

Defendants also argue that any part of the trademark infringement claim that
relates to NUMBER BED should be dismissed based on the jury’s determination that
Plaintiffs have “no trademark rights” in the phrase NUMBER BED. The Court addresses
this argument in § I.B. below.

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rejected the trademark infringement claims as to the registered trademarks based on the
jury instruction that limited the possibility of a likelihood of confusion to the time of
purchase.” Select Comfort Corp., 966 F.3d at 932. The evidence presented in the first
trial and in the record on the present motions, does not entitle either party to summary
judgment on Plaintiffs’ trademark infringement claim, as fact issues remain and it will be
up to the jury to weigh the evidence with respect to all of the relevant factors with an
instruction allowing for initial-interest confusion. This claim remains appropriately
decided by a jury.
B.

NUMBER BED

Defendants argue that because the jury found, and the Eighth Circuit affirmed, that
Plaintiffs do not own trademark rights in the phrase NUMBER BED, they are entitled to
summary judgment on Plaintiffs’ trademark infringement claim to the extent that any
portion of the claim relies on Defendants’ use of the term NUMBER BED. In short,
Defendants submit that because the jury found that Plaintiffs do not have trademark
rights in NUMBER BED, Plaintiffs cannot assert a trademark claim based on the use of
that phrase. Defendants argue that the Eighth Circuit not only foreclosed any argument
that NUMBER BED is a protectable trademark, but also any argument that Defendants’
use of the words NUMBER BED is likely to cause confusion with any of Plaintiffs’
marks, including the SLEEP NUMBER mark.
Plaintiffs argue that the Eighth Circuit’s decision with respect to the Defendants’
counterclaim did not affect the separate trademark infringement ruling. Plaintiffs
underscore that the Eighth Circuit, after reversing the judgment in part, only “[left]
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undisturbed those portions of the judgment dealing with . . . the alleged ‘NUMBER BED’
trademark.” Id. at 942. Plaintiffs contend that the issue of the NUMBER BED trademark
relates exclusively to Defendants’ counterclaim seeking a declaration that Plaintiffs do
not have trademark rights in that phrase. Plaintiffs maintain that if the Eighth Circuit had
intended for its holding on the NUMBER BED trademark to undermine Plaintiffs’
separate, affirmative claim for trademark infringement based on its trademark rights in
the SLEEP NUMBER mark, it would have noted that or explicitly found the error on
initial-interest confusion to be harmless.
On this point, the Court agrees with Plaintiffs. After the jury returned a verdict
finding that Defendants did not infringe Plaintiffs’ trademark rights, the Eighth Circuit
reversed and vacated the jury verdict. The Eighth Circuit further concluded that “given
the strength of the Plaintiffs’ evidence on the issue of confusion, we cannot conclude that
the summary judgment and instructional errors were harmless.” Id. at 938. And while
the Eighth Circuit made “no comment as to how a finding of confusion at times other
than the moment of purchase might affect the analysis of remedies and the determination
of damages,” it is apparent that fact issues remain and a new trial is warranted. The new
trial will task the jury with determining whether Defendants’ use of Plaintiffs’
trademarks—or phrases that are confusingly similar to such trademarks—is likely to
cause confusion. This determination will be made with the aid of jury instructions that
permit the application of pre-sale, initial-interest confusion. Here, Plaintiffs’ have
asserted an affirmative trademark infringement claim based on their rights in the SLEEP
NUMBER trademark. Defendants’ use of phrases found to be confusingly similar to the
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SLEEP NUMBER trademark, including words used in Number Bed Advertising, is a
remaining question in this case.8 The issue resolved with respect to Defendants’
counterclaim was whether Plaintiffs had trademark rights in NUMBER BED, not whether
any use of the words NUMBER BED in advertising infringed other trademarks, namely
the SLEEP NUMBER trademark. Accordingly, the Court denies Defendants’ motion for
summary judgment on the trademark infringement claim.
C.

Unfair Competition

Defendants argue that the unfair competition claim is not part of the remand
because the claim was specific to Plaintiffs’ claim of rights in NUMBER BED and, as
such, was undisturbed by the Eighth Circuit’s order. Alternatively, Defendants argue that
to the extent that Plaintiffs’ unfair competition claim has been remanded, it should be
dismissed based on the finding that Plaintiffs do not own trademark rights in the phrase
NUMBER BED.
The jury considered whether Defendants’ use of the phrase NUMBER BED in
advertising constitutes unfair competition. This claim was governed by the instructions
related to unfair competition, which read in part:
Your verdict must be for Plaintiffs and against Defendants if all of
the following elements have been proved by a preponderance of the
evidence:

8

For example, as noted by the Eighth Circuit, Plaintiffs presented evidence that
showed Defendants had used phrases similar to Plaintiffs’ trademarks (i.e., “Sleep 55%
Off Number Beds”) in online advertisements, including uses of NUMBER BED.
Whether or not these uses in combination with other terms constitutes infringement will
be up to the jury.

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1. That the public recognizes NUMBER BED in connection with
the sale of Plaintiffs’ products as identifying Plaintiffs’ products
and distinguishing the products from those of others; and
2. That such recognition has occurred before the defendant entered
the market in which the Plaintiffs sell their products; and
3. Defendants’ use of NUMBER BED in connection with its
products is likely to cause confusion about the source of the
products among persons using ordinary care and prudence in the
purchase of the products; and
4. Plaintiffs have been or are likely to be injured by Defendants’
use.
You may consider the factors identified in the instruction on
likelihood of confusion with respect to Plaintiffs’ Trademark Infringement
in addressing this claim.
If the elements above are fulfilled, you should find for Plaintiffs on
this claim regardless of whether NUMBER BED is a registered mark or
even registerable. Even phrases that cannot be registered trademarks
because they are generic (or for any other reason) may form the basis of an
unfair competition claim where the phrase in question is so associated with
the plaintiff’s goods that the use of the same or similar marks by another
company constitutes a representation that its goods came from the same
source. . . .
(Doc. No. 568 at 28-29 (emphasis added).)
After being so instructed, the jury determined that Defendants’ use of NUMBER
BED did not constitute unfair competition.
As discussed above, the Eighth Circuit confirmed the application of pre-sale,
initial-interest confusion and remanded Plaintiffs’ trademark infringement claim. While
not explicitly stated, Plaintiffs’ unfair competition claim was necessarily remanded. On
the issue of unfair competition, the jury was instructed to determine whether Defendants’
use of NUMBER BED was likely to cause confusion considering the factors identified in
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trademark instructions—which contained the requirement that confusion occur at the time
of purchase. Further, the unfair competition instruction stated that any likelihood of
confusion would have to occur “in the purchase of products.” Further, the jury was
instructed that “even phrases that cannot be registered trademarks because they are
generic (or for any other reason) may form the basis of an unfair competition claim where
the phrase in question is so associated with the plaintiff’s goods that the use of the same
or similar marks by another company constitutes a representation that its goods came
from the same source.” In light of these instructions, and because the Eighth Circuit
determined that a likelihood of confusion can be found in pre-sale, initial-interest
confusion—which is relevant to both the trademark infringement and unfair competition
claims—the unfair competition claim was necessarily vacated and remanded.
Further, the Court again notes that the issue of Defendants’ use of the phrase
NUMBER BED is separate and distinct from whether Plaintiffs have trademark rights in
NUMBER BED. While it has been determined that Plaintiffs do not have trademark
rights in NUMBER BED, whether Defendants’ use of the phrase in a way that is
confusingly similar to Plaintiffs’ marks and advertisements remains an open question.
This is consistent with the Eighth Circuit leaving undisturbed the portion of the judgment
dealing with the alleged NUMBER BED trademark—namely, the portion relating to
Defendants’ counterclaim seeking a declaration that Plaintiffs did not have trademark
rights in the phrase NUMBER BED. Conversely, Plaintiffs’ trademark infringement
claim has been remanded and will again be put before the jury. That claim encompasses
allegations that Defendants used advertisements with phrases that are confusingly similar
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to its SLEEP NUMBER mark, including phrases containing the words NUMBER BED.
The fact that Plaintiffs do not have trademark rights in the phrase NUMBER BED does
not preclude a finding that Defendants’ use of that term is confusingly similar to the
SLEEP NUMBER mark. The jury will be instructed to consider all relevant factors in
making such a determination, including evidence of initial-interest confusion and
evidence of actual confusion.
Accordingly, the Court denies Defendants’ motion on the unfair competition
claim.
II.

Permanent Injunction
Defendants move for a permanent injunction seeking a declaration that Sleep

Number does not own rights in the mark NUMBER BED and enjoining Sleep Number
from asserting that it owns rights in NUMBER BED or that Dires or any third parties’ use
of the mark NUMBER BED causes a likelihood of confusion with or otherwise infringes
on Plaintiffs’ marks. Defendants argue that the Court is authorized to issue the above
injunctive relief under the Declaratory Judgment Act.
The party seeking the injunctive relief bears the complete burden of proving all of
the relevant factors: (1) likelihood of success on the merits; (2) irreparable harm; (3) the
balance of hardships tip in favor of the movant; and (4) the public interest. See, e.g.,
Vision-Ease Lens, Inc. v. Essilor Int’l SA, 322 F. Supp. 2d 991, 992, 994 (D. Minn. 2004)
(discussing preliminary injunctive relief). The standard for permanent injunctive relief is
basically the same as a preliminary injunction, except a “permanent injunction requires

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the moving party to show actual success on the merits.” Oglala Sioux Tribe v. C & W
Enters., Inc., 542. F.3d 224, 229 (8th Cir. 2008).
In support of their motion, Defendants argue that Plaintiffs continue to assert
rights in NUMBER BED in communications with the Patent and Trademark Office,
Google, third party competitors, and in a state-court action. Additionally, Defendants
argue that they have been irreparably harmed by these continued assertions because the
assertions are misrepresentations, injure Defendants in the marketplace, and Defendants
should not be expected to relitigate the issue.
Plaintiffs oppose Defendants’ motion arguing that the motion is built on a false
premise—that the jury verdict finding that Plaintiffs have no trademark rights in the
phrase NUMBER BED precludes Plaintiffs from enforcing their rights in the SLEEP
NUMBER mark. Plaintiffs again stress that their claim for trademark infringement is
based on the SLEEP NUMBER mark, not NUMBER BED. Plaintiffs argue that
Defendants have failed to establish the necessary factors to warrant a permanent
injunction. In particular, Plaintiffs submit that Defendants have not succeeded on the
merits of the issue of whether their Number Bed Advertising infringes the SLEEP
NUMBER trademark, Defendants cannot demonstrate the threat of irreparable harm, and
the balance of equities and public interest do not favor an injunction.
After careful consideration, the Court finds that Defendants have failed to meet
their burden. First, for reasons discussed more fully above, the question of whether
certain advertisements, including some that use the words NUMBER BED cause a
likelihood of confusion with Plaintiffs’ SLEEP NUMBER mark remains to be
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determined by the jury in a new trial. Therefore, any motion for permanent injunction on
that point is premature. Second, with respect to the requested injunctive relief pertaining
to Plaintiffs’ ownership, and in particular, the assertion of ownership rights in the mark
NUMBER BED, is also denied. The jury determined that Plaintiffs do not have
trademark rights in the phrase NUMBER BED. Defendants assert that after the jury’s
verdict, Plaintiffs have made representations that they own trademark rights in NUMBER
BED. However, it appears that most of the cited examples of such representations show
instances where Plaintiffs have alleged that the use of NUMBER BED is confusingly
similar to the SLEEP NUMBER mark. Again, as explained above, that issue will be
decided by a jury. In addition, the Court finds that Defendants have not demonstrated
irreparable harm or that the balance of equities or public interest favor injunctive relief.
For these reasons, the Court denies Defendants’ motion for a permanent injunction.9
ORDER
Based on the foregoing, and all the files, records, and proceedings herein, IT IS
HEREBY ORDERED that:
1.

Plaintiffs’ Motion for Partial Summary Judgment (Doc. No. [742]) is

DENIED.
2.

Defendants’ Motion for Partial Summary Judgment (Doc. No. [748]) is

DENIED.

9

The Court does not reach or make any determination with respect to the alternative
arguments for or against injunctive relief.

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3.

Defendants’ Motion for a Permanent Injunction (Doc. No. [754]) is

DENIED.
Dated: July 26, 2022

s/Donovan W. Frank
DONOVAN W. FRANK
United States District Judge

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