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Allegheny Coupling Co. v. Betts Industries

March 18, 2010

ALLEGHENY COUPLING COMPANY, PLAINTIFF,
v.
BETTS INDUSTRIES, INC., DEFENDANT.



The opinion of the court was delivered by: McLAUGHLIN, Sean J., J.

MEMORANDUM OPINION

This matter is before the Court upon a motion for summary judgment filed by Defendant Betts Industries, Inc. ("Defendant" or "Betts") against Plaintiff Allegheny Coupling Company ("Plaintiff" or "Allegheny Coupling"). For the reasons which follow, Defendant's motion for summary judgment is granted and this action is dismissed.

I. BACKGROUND

Allegheny Coupling, founded in 1955, markets and sells industrial couplings and fittings. (Deposition of Raymond V. Heelan ("Heelan Depo."), p. 40). Allegheny Coupling does not own or operate any production facilities or produce its own products. Rather, it engages various "job shops" to produce its product line, including H&H Metal Specialty, Inc. ("H&H") and Rand Machine Company ("Rand"). (Heelan Depo., p. 36). The "Allegheny" portion of the company's name is derived from the Allegheny region of Western Pennsylvania where the company is situated. (Heelan Depo., p. 40).

Prior to 1997, a sister company, Allegheny Valve, marketed and sold various valve products including mechanical emergency valves, gate valves and operators for the truck tank industry. Like Allegheny Coupling, it utilized job shops such as H&H to produce component parts and products. (Heelan Depo., pp. 38-40).

Betts Industries, Inc. ("Betts") was founded in 1901 as a foundry and job shop and eventually grew to become a manufacturer of its own proprietary products for the highway cargo tank industry. (Affidavit of Rodney E. Betts, ¶¶ 3-6). Prior to 1997, Betts manufactured 3-inch and 4-inch mechanical emergency valves for Allegheny Valve. (Deposition of Richard Betts ("Betts Depo."), pp. 18-22). Design drawings for the mechanical valves were prepared and maintained by Allegheny Valve and depicted the various component parts of each of their products. Betts obtained the valve bodies necessary to manufacture the mechanical emergency valves directly from H&H.

On May 30, 1997, Betts entered into a purchase agreement with respect to Allegheny Valve's line of products.*fn1 (Heelan Depo., pp. 43, 53-55). Following this transaction, H&H stopped stamping the name "Allegheny" or "Allegheny Valve" upon the mechanical emergency valves that it manufactured and replaced the stamp with one that embossed the name "Betts" on the valve. (Deposition of Brian Cici ("Cici Depo."), pp. 60-61). From 1983 through approximately 2004, Betts alleges that it purchased various parts necessary for the production of its own products directly from H&H.

Allegheny Coupling specifically asserts trademark protection for the phrases "Allegheny Coupling," "Allegheny Coupling Co." and "Allegheny Coupling Company." On March 23, 2006, Allegheny Coupling filed a request with the United States Patent and Trademark Office ("USPTO") to register its mark on the USPTO's Principal Register. Registration on the Principal Register is reserved for arbitrary/fanciful or suggestive marks, or descriptive marks that have acquired secondary meaning, and constitutes prima facia evidence of the validity of a trademark and the owner's exclusive right to use it in commerce. See 15 U.S.C. §1057(b). On September 7, 2006, the USPTO refused Allegheny Coupling's request to register its mark "because the mark is primarily geographically descriptive of the origin of applicant's goods and/or services." (Heelan Depo. Ex. 13). Allegheny Coupling did not respond or object to the USPTO's refusal to register its mark resulting in a declaration by the USPTO that the application for registration had been "abandoned." (USPTO Notice of Abandonment, June 29, 2007).

Allegheny Coupling subsequently requested registration of its mark on the USPTO's Supplemental Register. The Supplemental Register is for marks comprised of descriptive terms that may be capable of acquiring secondary meaning. It provides none of the presumptions provided by registration on the Principal Register and does not constitute a determination that a mark is entitled to protection. See 15 U.S.C. §§ 1091-96. Allegheny Coupling's application for the Supplemental Register was approved by the USPTO on June 26, 2007. In approving the request for Supplemental Registration, the USPTO required Allegheny Coupling to disclaim "the generic phrase 'coupling co.'" (Heelan Depo. Ex. 13).

On March 24, 2006, Plaintiff filed the instant action seeking damages and injunctive relief. Plaintiff's Third Amended Complaint, filed on December 7, 2007, asserts claims for trademark infringement under the Lanham Act, 15 U.S.C. § 1125(a)(1) (Count I), trade dress infringement under the Lanham Act, 15 U.S.C. § 1125(a) (Count II), and various state and common law claims including unjust enrichment and theft of product. Allegheny Coupling contends that it owns the designs and tooling for those products manufactured by H&H and sold directly to Betts and, therefore, H&H's direct sales of those products to Betts constituted trademark infringement and theft of product:

Upon information and belief, Betts Industries has, over a period of years, purchased numerous Allegheny products from and in collusion with H & H Metal Specialty Inc. of Jamestown, a job shop for Allegheny (H & H), the result of which has been to defraud Allegheny of its rightful sales income. Upon information and belief, these products have included Allegheny Marks or trade dress configuration, or the Allegheny Marks or trade dress configuration have been deliberately altered or removed. (Third Amended Complaint, ¶ 13) Following discovery, Plaintiff voluntarily withdrew the trade dress claim. (See Plaintiff's Brief in Opposition, p. 10).

On March 31, 2009, Defendant filed a motion seeking summary judgment as to the remaining trademark infringement and state law claims. On June 12, 2009, Plaintiff filed a brief in opposition. This matter is ripe for review.

II. STANDARD FOR REVIEW

Federal Rule of Civil Procedure 56(c)(2) provides that summary judgment shall be granted if the "pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Rule 56(e) further provides that when a motion for summary judgment is made and supported, "an opposing party may not rely merely on allegations or denials in its own pleading; rather, its response must -- by affidavits or as otherwise provided in this rule -- set out specific facts showing a genuine issue for trial. If the opposing party does not so respond, summary judgment should, if appropriate, be entered against that party."

A district court may grant summary judgment for the defendant when the plaintiff has failed to present any genuine issues of material fact. See Fed. R. Civ. P. 56(c); Krouse v. American Sterilizer Company, 126 F.3d 494, 500 n.2 (3rd Cir. 1997). The moving party has the initial burden of proving to the district court the absence of evidence supporting the non-moving party's claims. Celotex Corp. v. Catrett, 477 U.S. 317 (1986); Country Floors, Inc. v. Partnership Composed of Gepner and Ford, 930 F.2d 1056, 1061 (3rd Cir. 1990). Further, "[R]ule 56 enables a party contending that there is no genuine dispute as to a specific, essential fact 'to demand at least one sworn averment of that fact before the lengthy process of litigation continues.'" Schoch v. First Fidelity Bancorporation, 912 F.2d 654, 657 (3rd Cir. 1990) (quoting Lujan v. National Wildlife Federation, 497 U.S. 871 (1990)).

The burden then shifts to the non-movant to come forward with specific facts showing a genuine issue for trial. Matsushita Elec. Indus. Company v. Zenith Radio Corp., 475 U.S. 574 (1986); Williams v. Borough of West Chester, Pa., 891 F.2d 458, 460-461 (3rd Cir. 1989) (the non-movant must present affirmative evidence - more than a scintilla but less than a preponderance - which supports each element of his claim to defeat a properly presented motion for summary judgment). The non-moving party must go beyond the pleadings and show specific facts by affidavit or by information contained in the filed documents (i.e., depositions, ...


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