United States District Court, W.D. Pennsylvania
CYNTHIA REED EDDY, Magistrate Judge.
Before the Court is Plaintiff Groupe SEB USA, Inc.'s Motion for Preliminary Injunction against Defendant Euro-Pro Operating LLC pursuant to Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), and common law unfair competition under Pennsylvania law. (ECF No. 3). Plaintiff seeks to enjoin Defendant until final hearing from engaging in false advertising and unfair competition, making any statements or claims regarding the alleged false statements, selling any of its packages which contain the alleged false statements, and a temporary recall of all products that contain the alleged false statements. For the reasons that follow, Plaintiff's Motion for preliminary injunction will be granted.
I. Procedural History
On January 29, 2014, Plaintiff filed a complaint with this Court. (ECF No. 1). The following day, on January 30, 2014, Plaintiff filed a Motion for Preliminary Injunction. (ECF No. 3). Defendant filed a brief in response to said motion on February 26, 2014. (ECF No. 21). A day-long hearing on the motion was held on March 19, 2014 during which evidence was admitted and testimony from several witnesses was presented. Tr. Vol. I (ECF No. 50); Tr. Vol II. (ECF No. 46); Minute Entry filed on March 20, 2014 (ECF No. 40).
The Court heard testimony from the following witnesses: (1) Marcel Klose (test engineer at independent laboratory); (2) Clemens Auth (Plaintiff's head of quality laboratory); (3) Scott Pollard (Plaintiff's marketing director); (4) Abid Kemal (Defendant's expert in scientific testing and mechanical engineering); (5) Jennifer McCabe (Defendant's general counsel); (6) David Stephens (Defendant's senior director of sales and trade marketing); and (7) Gary Ford (Defendant's marketing expert). Following the hearing, the parties were ordered to attend mediation, however, despite good-faith efforts by all parties, the parties were unable to settle the dispute. (ECF No. 42). The parties were also ordered to file supplemental proposed findings of fact and conclusions of law, which were received on April 16, 2014. (ECF Nos. 47, 48). In determining that a preliminary injunction should be granted, the Court has considered all of the evidence introduced at the evidentiary hearing, the declarations of the witnesses, the affidavits of record, the arguments made in the parties' briefs as well as at the hearing, and the supplemental proposed findings of fact and conclusions of law.
II. Findings of Fact
Plaintiff Groupe SEB USA, Inc. distributes and sells various branded small household appliances, including cookware, kitchen electrics, and domestic care products throughout the United States. At issue in this case are two models of Plaintiff's steam irons that are sold under the brand name Rowenta, which is the number one selling brand of steam irons in the United States (measured by dollar value of sales). Defendant Euro-Pro is a leading manufacturer, marketer, and distributer of various household appliances, including steam mops, vacuums, and small kitchen and household appliances. Two models of Defendant's Shark brand steam irons are at issue in this action.
In mid-October 2013, Plaintiff became aware that Defendant was selling new models of Shark brand steam irons at brick and mortar retail stores. Specifically, Plaintiff became aware that Shark Professional Steam Irons, Model GI405-55 ("Shark 405"), and Shark Ultimate Professional Steam Irons, Model GI505-55 ("Shark 505") contain statements on their packaging and hang tags making comparisons to the Rowenta Focus, Model No. DW5080 ("Rowenta DW5080"), and the Rowenta Steamium, Model No. DW9080 ("Rowenta DW9080"). The Shark 405 contains the statement "MORE POWERFUL STEAM vs. Rowenta® at half the price" on the front of the packaging in the bottom right corner. The bottom of the package contains a disclaimer in fine print that states, " Based on independent comparative steam burst testing to Rowenta DW5080 (grams/shot)." The front of the packaging also contains a statement in the top right corner that says "#1 MOST POWERFUL STEAM*." There is a disclaimer regarding this statement on the bottom of the package in fine print that states, "*Offers more grams per minute (maximum steam setting while bursting before water spots appear) when compared to leading competition in the same price range, at time of printing."
The packaging of the Shark 505 contains essentially the same statements on the front of its packaging: "MORE POWERFUL STEAM vs. Rowenta® at half the price" in the bottom right corner and "#1 MOST POWERFUL STEAM* " in the upper right corner on the front of the packaging. Regarding the "MORE POWERFUL STEAM vs. Rowenta® at half the price" statement, the bottom of the packaging contains a disclaimer stating" Based on independent comparative steam burst testing to Rowenta DW9080 (grams/shot)." There is also a disclaimer on the bottom of the packaging in fine print for the "#1 MOST POWERFUL STEAM*" statement which reads, "*Offers more grams per minute (extended steam burst mode before water spots appear) when compared to leading competition in the same price range, at time of printing."
Additionally, both the Shark 405 and Shark 505 have hang tags, which are attached to the product on store displays and also packaged inside the box with the product. Both hang tags contain the statement that the Shark model has "MORE POWERFUL STEAM vs. Rowenta® at half the price." Likewise, underneath both statements, on the same side of the hang tag, there is a disclaimer that states "based on independent comparative steam burst testing" to the respective Rowenta model in "(grams/shot)."
Plaintiff's Rowenta DW5080 and DW9080 and Defendant's Shark 405 and Shark 505 can be purchased either online or in retail stores. In this judicial district and throughout the United States, Rowenta steam irons are sold alongside Shark steam irons. Although the Rowenta DW5080 and DW9080 are in different price ranges than the Shark 405 and Shark 505, respectively, the two brands compete with each other because they are sold online and in retail stores in the same spaces, sometimes next to each other. Moreover, the fact that Defendant chose to specifically compare its Shark models to the Rowenta models on the front of the packages demonstrates that the two brands are competitors.
Once Plaintiff discovered that the Shark 405 and Shark 505 contain the above statements on the packaging and hang tags in October 2013, Plaintiff conducted internal testing at its lab in Germany. The German laboratory conducted steam performance tests comparing five steam irons, including the Shark 505 and the Rowenta DW9080. The tests performed by the laboratory measured (1) the variable steam rate in grams per minute (grams/minute) according to International Electrical Corporation ("IEC") 60311 protocol for each steam iron and (2) the mass of a shot of steam of each iron in grams per shot (grams/shot) according to IEC 60311 protocol for each steam iron. The IEC is a non-profit, non-governmental international standards organization that prepares and publishes international standards for all electrical, electronic and related technologies, collectively known as "electrotechnology." The IEC is the world's leading international organization in its field, and its standards are adopted as national standards by its members. Among the international standards that the IEC has prepared and published are standards for steam iron testing. Specifically, the IEC's protocol for steam iron testing is IEC 60311.
The results of the variable steam measurement test according to IEC 60311 protocol in terms of grams per minute show that the Rowenta DW9080 and Shark 505 had the same performance, with each measuring 37 grams per minute. The results of the mass of a shot of steam test according to IEC 60311 in terms of grams per shot showed that the Rowenta DW9080 outperformed the Shark 505, measuring 1.34 grams per shot and 1.00 grams per shot, respectively.
As a result of the findings in its internal tests, Plaintiff sought independent testing to determine whether the claims made on the Shark 405 and Shark 505 were false. On or about November 4, 2013, Plaintiff requested that SLG Prüf-und Zertifizierungs GmbH ("SLG"), an independent laboratory located in Hartmannsdorf, Germany, conduct tests in accordance with IEC 60311 protocol with respect to the Rowenta DW9080, Rowenta DW5080, Shark Lightweight Professional Steam Iron, Model GI305-55 ("Shark 305"), Shark 405, and Shark 505. SLG prepared a thirty-eight page report titled Prüfbericht/ Test Report 1297-13-WW-13-PB002 ("SLG Test Report") after conducting the various tests, which was transmitted to Plaintiff on December 5, 2013.
The SLG Test Report shows that the Rowenta DW5080 had better steaming rate performance results than the Shark 405 in terms of grams per minute in accordance with IEC 60311. Additionally, said report shows that the Rowenta DW9080 had better steaming rate performance than the Shark 505 in terms of grams per minute in accordance with IEC 60311. SLG also tested the mass of a shot of steam in accordance with both IEC 60311 and the Shark's user manual in terms of grams per shot, which is the test specified in the disclaimers on the packaging of the Shark 405 and Shark 505 with respect to the "MORE POWERFUL STEAM vs. Rowenta® at half the price" statement. Regarding this measurement, the results of the SLG Test Report show that the Rowenta DW5080 outperformed the Shark 405 overall, and the Rowenta DW9080 outperformed the Shark 505 overall.
The SLG Test Report was completed by Annett Monden, who was unable to testify at the hearing due to personal health reasons. Thus, Plaintiff introduced the test through Ms. Monden's colleague, Marcel Klose, who stated that he did not participate in the test, but was familiar with the procedures used by Ms. Monden. During his testimony, Mr. Klose was accompanied by Frank Rebhan, who is listed on the SLG Test Report as "Head of department consumer product testing, " and who Mr. Klose described as his "superior." The SLG Test Report was reviewed by Mr. Rebhan as well.
At the hearing, Defendant's counsel raised concerns about the accuracy of the report's translation. Plaintiff's counsel responded that she had a certified translation of the German version of the SLG Report, which would be provided to Defendant's counsel. Since the hearing, Defendant's counsel has not identified any errors or discrepancies that occurred in translating the report from German to English.
"It is well established that a preliminary injunction is customarily granted on the basis of procedures that are less formal and evidence that is less complete than in a trial on the merits.'" Kos Pharmaceuticals, Inc. v. Andrx Corp., 369 F.3d 700, 718 (3d Cir. 2004) (quoting University of Texas v. Camenisch, 451 U.S. 390, 395 (1981)). The Court finds that Mr. Klose was knowledgeable and familiar with the tests conducted by Ms. Monden, and was an appropriate witness to introduce the SLG Test Report. This finding is informed by Defendant's expert ...