United States District Court, E.D. Wisconsin
DECISION AND ORDER
LYNN
ADELMAN DISTRICT JUDGE
e-ImageData
Corp. brings this action against Digital Check Corp. d/b/a ST
Imaging and proceeds on claims of false or deceptive
advertising in violation of § 43(a) of the Lanham Act,
which provides in relevant part as follows:
Any person who, on or in connection with any goods . . .,
uses in commerce any . . . false or misleading description .
. . or . . . representation of fact, which . . . in
commercial advertising or promotion, misrepresents the
nature, characteristics, [or] qualities . . . of his or her
or another person's goods . . . or commercial activities,
shall be liable in a civil action by any person who believes
that he or she is or is likely to be damaged by such act.
15 U.S.C. § 1125(a)(1)(B). ST Imaging moves for summary
judgment, and e-Image moves for partial summary judgment on
liability as to certain of its claims under § 43(a).
On a
party's motion, I must “grant summary
judgment” on “each claim” or “part of
each claim . . . on which summary judgment is sought. . . .
if the movant shows that there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a
matter of law.” Fed.R.Civ.P. 56(a). A fact is
“material” if it “might affect the outcome
of the suit under the governing law.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A
“dispute about a material fact is ‘genuine, '
. . . if the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.” Id.
In
addressing a motion for summary judgment, “[t]he
evidence of the non-movant is to be believed, and all
justifiable inferences are to be drawn in [its] favor.”
Id. at 255. Where, as here, both parties move for
summary judgment, each is entitled to “that sympathetic
reading of the record” with respect to the other's
motion. Hotel 71 Mezz Lender LLC v. Nat'l Ret.
Fund, 778 F.3d 593, 603 (7th Cir. 2015). With these
principles in mind, I next present the underlying facts and
then describe e-Image's claims.
I.
BACKGROUND
e-Image
and ST Imaging are commercial competitors that make, promote,
and sell systems used to view and interact with materials
stored in microform. “Microform” refers to
various means of “reproducing printed matter or other
graphic material in a much-reduced size, ” which allows
for the storage of documents, books, periodicals, and images,
among other things, in “durable, extremely compact, and
easily accessible file records.” Microform,
Encyclopaedia Britannica,
https://www.britannica.com/technology/ microform (last
visited March 19, 2018). Reproducing materials in microform
usually renders them unreadable to the naked eye. The
parties' systems use hardware and software to allow users
to view materials in microform on a screen and convert those
materials into digital files that can then be saved, edited,
printed, and shared.
e-Image
and ST Imaging typically sell their systems, which cost
thousands of dollars, to institutions like libraries,
universities, and businesses. Each party sells through a
national network of resellers, which respond to direct
inquiries and requests for proposals from potential customers
in their assigned territories. These resellers compete
directly for many sales through a process that often includes
bidding, in-person product demonstrations, and hands-on
customer testing. The parties and their resellers have found
that customers base their purchasing decisions on a wide
variety of factors, including but not limited to price, ease
of use, and functionality.
Since
2006, e-Image has sold microform viewer and imaging systems
under the brand name “ScanPro, ” including the
ScanPro 1000, the ScanPro 2000, the ScanPro 3000, and the
ScanPro i9300. Since 2010, ST Imaging has sold competing
systems under the brand name “ViewScan, ”
including the ViewScan I, which ST Imaging introduced in
April of that year; the ViewScan II, which it introduced in
June 2013; and the ViewScan III, which it introduced a year
later, in June 2014.
For the
most part, e-Image's claims arise from ST Imaging's
statements about the characteristics of its ViewScan devices
to potential customers during the sales process. For
instance, an ST Imaging brochure for the ViewScan I provides
that it has a “zoom range” of “7X to 54X
Optical Zoom” and “7X to 96X Digital Auto Zoom,
” see Piery Decl. Ex. 5, ECF No. 84-8, at 5,
and brochures for the ViewScan II and the ViewScan III
provide that they have an “[o]ptical zoom lens 7X to
105X, ” see Piery Decl. Ex. 69, ECF No. 88-24,
at 7; Piery Decl. Ex. 46, ECF No. 87-28, at 7. Though, a
later brochure for the ViewScan II instead provides that it
is capable of “[o]ptical” magnification
“with digital zoom 7x to 105x.” See
Piery Decl. Ex. 70, ECF No. 88-25, at 7. The parties dispute
the meaning and accuracy of these and other representations
by ST Imaging about the “optical zoom capabilities of
its ViewScan devices.” See Pl.'s Mot., ECF
No. 78.
Similarly,
the parties dispute the meaning and accuracy of ST
Imaging's statements about the “camera megapixel
capabilities” of the ViewScan II and the ViewScan III.
See Id. For example, brochures for the ViewScan II
provide, under the heading “Camera, ” for a
“[m]aximum image size” of “80 megapixels,
” see Piery Decl. Ex. 69, supra, at
7; Piery Decl. Ex. 70, supra, at 7, while a brochure
for the ViewScan III advertises a “14 Megapixel Image
Sensor - Capable of capturing more than 56 megapixels of
data, ” see Wilbert Decl. Ex. 21, ECF No. 33,
at 3.
e-Image
also asserts false or deceptive advertising claims based on
ST Imaging's representations that its ViewScan products
are “UL Certified.” UL, or Underwriters
Laboratories, develops product safety standards, tests
products for compliance with those standards, and certifies
products that pass its tests. UL did not certify any of the
ViewScan devices until December 2015-when it certified the
ViewScan III-but brochures for all 3 devices, published
months and years earlier, indicate UL certification.
See Piery Decl. Ex. 5, supra, at 5; Piery
Decl. Ex. 46, supra, at 7; Piery Decl. Ex. 69,
supra, at 7; Piery Decl. Ex. 70, supra, at
7; see also Rennecker Dep., Piery Decl. Ex. 8, ECF
No. 84-11, at 63:19-64:11 (explaining use of a number on each
brochure indicating when it was published on ST Imaging's
website).
Lastly,
with respect to product claims, e-Image asserts that ST
Imaging has falsely or deceptively equated its ViewScan
devices with e-Image's competing ScanPro devices in
direct communications to potential customers and to its
resellers, encouraging them to equate the products when
responding to requests for proposals and bids from potential
customers. The parties dispute whether and to what extent
these statements were ...