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SECOND EARTH ENTERPRISES v. ALLSTAR PROD. MKTG. CO

March 6, 1989

SECOND EARTH ENTERPRISES, INC., ET AL.
v.
ALLSTAR PRODUCT MARKETING CO., ET AL.


Jan E. DuBois, United States District Judge.


The opinion of the court was delivered by: DUBOIS

JAN E. DUBOIS, UNITED STATES DISTRICT JUDGE.

 I. INTRODUCTION

 This action is brought under Section 43(a) of the Lanham Trademark Act, 15 U.S.C. § 1125(a), and under Pennsylvania common law, for unfair competition, misappropriation of trade secrets, fraud, breach of fiduciary duty, quantum meruit and promissory estoppel. The matter is before the Court at this time on plaintiffs' Motion for Preliminary Injunction.

 Plaintiffs, Second Earth Enterprises, Inc. and Marc C. Seiver, t/a Second Earth and Second Earth Enterprises (hereinafter referred to collectively as "Second Earth"), market disposable lighters wrapped in a prismatic foil under the trade-name "Light-Ups," and writing pens wrapped in a prismatic foil under the trade-name "Light-Writes." Defendants Alan Dorfman and Allstar Product Marketing Company (hereinafter referred to collectively as the "Pennsylvania Defendants") are novelty and impulse product merchandisers which market disposable lighters wrapped in a prismatic foil under the trade-name "Lazer Lighter." Defendants Charles A. Budd, Jr., Unique World of Merchandise, Budd-Lin International, Inc. and Innovative Touch, Inc. (hereinafter referred to collectively as the "New Jersey Defendants") market disposable lighters wrapped in a prismatic foil under the trade-name "Lazer Visions," and writing pens wrapped in a prismatic foil under the trade-name "Lazer Writer."

 None of the parties manufacture the disposable lighters, writing pens or the prismatic foil. All of the parties buy the lighters and pens and the prismatic foil separately, and wrap the lighters and pens with the foil themselves. In addition, all of the parties purchase prismatic foil manufactured and sold by The Diffraction Company.

 Second Earth seeks to preliminarily enjoin the Pennsylvania Defendants and the New Jersey Defendants from selling any disposable lighters or pens wrapped in prismatic foil manufactured by The Diffraction Company. The claim for injunctive relief pursuant to Fed. R. Civ. P. 65(a) is based on alleged Trade Dress infringement under the Lanham Trademark Act, 15 U.S.C. § 1125(a), and unfair competition under the Pennsylvania common law.

 The Motion for a Preliminary Injunction will be denied.

 II. BACKGROUND

 The Pennsylvania Defendants have been in the novelty and impulse merchandising business since 1983. Some time in the Spring of 1986, plaintiff Marc C. Seiver first contacted defendant Alan Dorfman to determine whether Mr. Dorfman would be interested in marketing or selling novelty products produced by Mr. Seiver and his company, Second Earth. Mr. Dorfman and Mr. Seiver cooperated in at least one business venture between the Spring of 1986 and November of 1986.

 Mr. Seiver does not claim that he has a protectable interest in prismatic foil or disposable lighters. Moreover, he does not claim a protectable interest in lighters wrapped in prismatic foil. Indeed, the parties have stipulated that a disposable lighter wrapped in prismatic foil was marketed as early as 1971 by the Ronson Company, and Glint Corporation started marketing Mini-Bic disposable lighters wrapped in prismatic foil in 1986, prior to any sales of Light-Ups. Rather, Mr. Seiver claims that the protectable interest is his idea to wrap certain prismatic foil manufactured by The Diffraction Company around a disposable lighter, causing the lighter to "light up."

 In early 1987, Mr. Seiver first placed Light-Ups on the market. In the Fall of 1987, Mr. Dorfman contacted Mr. Seiver and advised that he was interested in purchasing Light-Ups from Second Earth and reselling the product to retailers. From this time until February, 1988, Mr. Seiver and Mr. Dorfman attempted unsuccessfully to negotiate an agreement controlling the marketing of Light-Ups. At a meeting between Mr. Seiver and Mr. Dorfman held on February 5, 1988, Mr. Dorfman refused to sign any non-competition or non-disclosure agreement proposed by Mr. Seiver concerning Light-Ups or any other product wrapped in prismatic foil. On February 10, 1988, the Pennsylvania Defendants submitted a purchase order to Second Earth for wrapping 11,400 lighters with prismatic foil.

 On February 14, 1988, at a trade show in New York City, Mr. Seiver discovered that Mr. Dorfman was displaying lighters wrapped by Second Earth under the trade-name "Lazer Lighter." The evidence is unclear as to when the Pennsylvania Defendants began marketing the foil wrapped lighters as Lazer Lighters.

 Also on February 14, 1988, at the same trade show, Mr. Seiver first met defendant Charles A. Budd, Jr. Mr. Seiver contacted Mr. Budd again in March, 1988 and started a business relationship with the New Jersey Defendants; at that time, the New Jersey Defendants began selling Light-Ups and Light Writes supplied by Second Earth as independent sales representatives. The New Jersey Defendants never signed a non-competition or non-disclosure agreement with Second Earth.

 In July 1988, Second Earth terminated its relationship with the New Jersey Defendants after receiving information that the New Jersey Defendants were misrepresenting their relationship with Second Earth to retailers. After the termination of the relationship with Second Earth, the New Jersey Defendants began marketing prismatic foil wrapped lighters under the trade-name "Lazer Visions" and prismatic foil wrapped pens under the trade-name "Lazer Writer."

 Light-Ups, Lazer Lighter and Lazer Visions lighters are all nearly identical looking lighters. The disposable lighters employed in all three products are similarly shaped, although the lighter marketed by the Pennsylvania Defendants has more defined edges. The prismatic foil used in the three products is marketed by The Diffraction Company. Many of the foil designs are identical. None of the individual wrapped lighters bears the product or company name, although the lighter manufacturer is identified.

 Lazer Writer and Light Write pens are also identical to each other. The basic pen is manufactured by the same company. Both products are wrapped with prismatic foil manufactured by The Diffraction Company.

 Originally, the packaging of the lighters was similar. The lighters were, for the most part, marketed in packages of fifty units; the packages were supplied by the lighter manufacturer. The header cards used with the packages all employed silk screening on a piece of prismatic foil. The Lazer Visions and the Light-Ups were further similar because they both used header cards with solid letters and solid ...


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