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Gallagher v. Funeral Source One Supply and Equipment Co.

United States District Court, D. New Hampshire

November 4, 2015

Robert P. Gallagher, et al.
v.
Funeral Source One Supply and Equipment Co., Inc., et al. Opinion No. 2015 DNH 207

MEMORANDUM AND ORDER

PAUL BARBADORO, District Judge.

Robert Gallagher and his firm, Instrument Design and Manufacturing Co. ("IDM"), sued Funeral Source One Supply and Equipment Co., Inc. ("FS1") and Affordable Funeral Supply, LLC ("AFS") for (1) patent infringement, (2) trade dress infringement, (3) violations of the New Hampshire Consumer Protection Act; and (4) unjust enrichment. The defendants have moved for summary judgment.

I. BACKGROUND

Gallagher owns and operates IDM. He also owns a design patent for a funeral industry product known as an "Injector Needle Driver."[1] IDM sells Gallagher's patented driver and other funeral-related items. At all relevant times, however, neither Gallagher nor IDM marked the driver with its patent number.[2] Doc. No. 58-1 ¶9.

FS1 is a Tennessee corporation that buys and resells products to retail customers in the funeral industry. FS1's president and sole employee is Tillman R. Ward. AFS is a Pennsylvania company that buys and sells funeral-related products to distributors and retail customers. AFS has three employees, including its founder, Jonathan Klein.

In approximately February 2012, AFS began to sell injector needle drivers virtually identical to Gallagher's patented design. AFS reportedly purchased the drivers (fifty in total) from Ridan International, a Pakistan-based company. Doc. No. 58-1 ¶¶11-18. AFS marketed the drivers, which Gallagher alleges are "counterfeit" or "knockoff" versions of his device, on its own website, and on third-party websites, including eCrater.com and Amazon.com. Id. at ¶¶26, 29. In total, AFS sold 48 allegedly infringing drivers. Id. at ¶32. AFS completed its final relevant sale on January 21, 2014. Id. at ¶28.

From some unspecified date until September 2011, FS1 bought Gallagher's patented Injector Needle Drivers from IDM. Id. at ¶36. Beginning in February 2012, however, FS1 began buying the allegedly infringing drivers from AFS. FS1 bought a total of 25 allegedly infringing drivers from AFS, and then resold them to other customers. Id. at ¶¶27, 33. FS1 made its last relevant sale on March 4, 2014.[3]

During a January 17, 2014 telephone conversation between Gallagher and Ward (FS1's president), Gallagher asked why FS1 had not purchased Gallagher's injector needle driver for several years. The parties disagree on how the conversation proceeded thereafter. According to the defendants, Ward responded "that FS1 had been purchasing needle injector guns elsewhere, because the price was better." Doc. Nos. 58-1 ¶38; 35-2 ¶21 (Ward's affidavit). Gallagher claims instead that Ward said that "he was not selling the counterfeit" (i.e. the driver that closely resembled Gallagher's design) and that the counterfeit was "a sample, [and] a piece of junk." Doc. Nos. 79 ¶12; 58-7 at 3. The parties agree, however, that "Gallagher told Ward that [Gallagher's] injector needle driver was patented, " but that "Gallagher did not provide the [patent] number at that time." Doc. No. 79 ¶12. The parties further agree that, later on January 17, Ward and Gallagher exchanged emails in which Gallagher thanked Ward "for the heads up on the Driver" and said "[d]on't forget to send me a picture of the driver and who's selling it." Doc. Nos. 79 ¶12; 35-2 ¶25.

On March 1, 2014, Gallagher notified Amazon and eCrater by email that "the injector needles they were selling... were not genuine but were unauthorized copies of Gallagher's design." See Doc. Nos. 63-7 (Amazon correspondence); 63-8 (eCrater correspondence). Gallagher included the driver's patent number in his complaints. On March 3, 2014, eCrater forwarded Gallagher's complaint to AFS, and deactivated the driver's product page on its website. See Doc. No. 63-8.

Three days later, on March 6, 2014, Gallagher emailed both FS1 and AFS, stating that "[i]t has come to [my] attention you have sold and are selling counterfeit copies of [my] patented Injector Needle Driver TM.' You must immediately stop selling the illegal copies and remove all [of my] products from your web site store and any other location where the counterfeit and or [my] items are posted for sale." Doc. No. 58-1 ¶42-43. Thereafter, on March 8, 12, 18, 19, 20, 24 and 25, 2014, Gallagher's wife, Christine Gallagher, tried to purchase a driver from AFS. AFS, however, cancelled all of Mrs. Gallagher's orders.

Gallagher and IDM brought this action on March 20, 2014. AFS removed the image of the allegedly counterfeit driver from its website on April 10, 2014. Doc. No. 35-1 ¶49.

II. STANDARD OF REVIEW

Summary judgment is appropriate when the record reveals "no genuine dispute as to any material fact and [that] the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). The evidence submitted in support of the motion must be considered in the light most favorable to the nonmoving party, drawing all reasonable inferences in its favor. See Navarro v. Pfizer Corp., 261 F.3d 90, 94 (1st Cir. 2001).

A party seeking summary judgment must first identify the absence of any genuine dispute of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). A material fact "is one that might affect the outcome of the suit under the governing law.'" United States v. One Parcel of Real Prop. with Bldgs., 960 F.2d 200, 204 (1st Cir.1992) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). If the moving party satisfies this burden, the nonmoving party must then "produce evidence on which a reasonable finder of fact, under the appropriate proof burden, could base a verdict for it; if that party cannot produce such evidence, the motion must be granted." Ayala-Gerena v. Bristol Myers-Squibb Co., 95 F.3d 86, 94 (1st Cir.1996); see Celotex, 477 U.S. at 323.

III. ANALYSIS

Gallagher's core claims are that the defendants infringed his design patent and his protected trade dress by selling the allegedly counterfeit drivers. He also alleges that defendants violated New Hampshire's Consumer Protection Act by "passing off" the counterfeit drivers as IDM drivers. Finally, he asserts that defendants are liable for unjust enrichment because they profited from the sale of the counterfeit drivers.

Defendants present different challenges to each of Gallagher's claims. They argue that the patent infringement claim fails because Gallagher is not entitled to relief for the alleged infringements. They contend that the trade dress claim fails because the driver's product design is not protectable trade dress. They argue that the Consumer Protection Act claim cannot succeed because defendants' alleged conduct does not qualify as the "passing off" of counterfeit goods. Finally, they challenge the ...


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