Summary
The Eleventh Circuit reviews a trademark and false-advertising dispute between Deltona Transformer Corporation and The NOCO Company concerning NOCO’s use of the terms “Battery Tender” and “battery tender.” The court holds that Deltona’s marks were not generic, affirms liability findings in part, reverses in part, and remands for a new trial on damages. The opinion also addresses disgorgement, a permanent injunction, and the pleading and trial of the false-advertising claim.
Topics
Practice areas
Questions Presented
- Whether Deltona's federally registered marks were generic and therefore unprotectable.
- Whether NOCO's use of Deltona's marks, excluding mere behind-the-scenes keyword bidding, was likely to cause consumer confusion and constituted trademark infringement under the Lanham Act and Florida common law.
- Whether NOCO's conduct violated the Florida Deceptive and Unfair Trade Practices Act and whether Deltona was entitled to monetary relief under that statute.
- Whether the district court improperly instructed the jury on a false-advertising claim that was neither adequately pleaded nor tried by consent.
- Whether the district court properly ordered disgorgement of NOCO's profits.
- Whether the district court properly issued and scoped a permanent injunction, including its prohibition on use of the word "tender."
- Whether the $1.3 million lump-sum damages award could stand when it potentially included damages attributable to rejected or improperly submitted theories.
Holdings
- The evidence was sufficient for a reasonable jury to find that "Battery Tender" and "Deltran Battery Tender" were not inherently generic and that "Battery Tender" had acquired secondary meaning associating it with Deltona. The evidence was also sufficient to support the finding that the mark had not become generic by 2020.
- NOCO's use of "battery tender" in the text of its Amazon advertisements, in product descriptions, and in communications with customers and marketing firms was supported by sufficient evidence of likely consumer confusion and constituted trademark infringement under the Lanham Act and Florida common law. Mere behind-the-scenes keyword bidding, without display or reference to Deltona's mark in the resulting advertisement, did not constitute trademark infringement.
- The evidence supported NOCO's FDUTPA liability because FDUTPA incorporates violations of the Lanham Act and the legal standards for the relevant unfair-competition claim are the same. But Deltona was not entitled to actual monetary damages under FDUTPA because its claimed harm to reputation and goodwill constituted consequential rather than actual damages, and Deltona did not establish direct loss of battery-tender sales.
- The district court erred by instructing the jury on false advertising under section 43(a)(1)(B) because Deltona did not adequately plead that distinct claim and NOCO did not expressly or impliedly consent to trying it. The false-advertising verdict was therefore reversed.
- The district court acted within its discretion in ordering NOCO to disgorge $12,135,943.70 because NOCO's infringement was willful and deliberate.
- The district court acted within its discretion in issuing a permanent injunction and in prohibiting NOCO from using the word "tender" in selling, marketing, advertising, or promoting its products, even though "tender" alone was not a registered mark.
- The $1.3 million lump-sum damages award could not stand because the record did not permit the court to determine how much of the award was attributable to keyword bidding, FDUTPA, or the improperly submitted false-advertising theory. The award was vacated and remanded for a new trial on damages.
Key quotations
“Keyword bidding doesn’t constitute trademark infringement for a simple reason: It’s not “likely to cause consumer confusion with the plaintiff’s mark.”” (21-22)
“This is wheelhouse trademark infringement; NOCO’s conduct was likely to mislead consumers into thinking that it sold “battery tenders.”” (24)
“We hold that Deltona failed to adequately plead false advertising.” (35-36)
“In crafting its injunction, the district court recognized and addressed precisely that possibility: “Defendant has made abundantly clear by its previous behavior that if it is given any loophole, it will use it to infringe.”” (41)
“Because we can’t determine the extent to which the $1.3 million damages award reflects liability for any of those claims or theories, we vacate the damages award and remand for a new trial on damages.” (43-44)
Factual background
Deltona developed and sold battery-maintaining vehicle chargers and owned federally registered marks for "Battery Tender" and "Deltran Battery Tender." Beginning in 2014, NOCO marketed similar chargers using Deltona's marks in Amazon advertising, product descriptions, keyword campaigns, and communications with customers and marketing firms. Deltona presented evidence of consumer confusion and of NOCO's knowledge that the term was trademarked, including internal communications and repeated use of the marks after cease-and-desist letters.
Procedural history
Deltona sued NOCO in the Middle District of Florida under the Lanham Act, Florida common law, and FDUTPA. A jury found that Deltona's marks were protectable, that NOCO infringed them and violated FDUTPA, that NOCO engaged in false advertising, and that Deltona was entitled to $1.3 million in actual damages and $5.75 million in punitive damages. The district court later ordered NOCO to disgorge $12,135,943.70 and entered a permanent injunction. The Eleventh Circuit affirmed the liability determinations for trademark infringement and FDUTPA, affirmed disgorgement and the injunction, reversed the false-advertising verdict, and vacated the damages award for a new trial on damages.
Remand instructions
Vacate the $1.3 million damages award and conduct a new trial on damages consistent with the holdings that keyword bidding alone is not trademark infringement, FDUTPA damages cannot be recovered on Deltona's theory, and the false-advertising claim was neither properly pleaded nor tried. The liability findings for trademark infringement and FDUTPA, the disgorgement order, and the permanent injunction remain affirmed.