Select Comfort Corporation v. Baxter

Background

Plaintiffs manufacture and sell adjustable air beds under the “Sleep Number” brand. Their registered trademarks include SLEEP NUMBER, WHAT’S YOUR SLEEP NUMBER, SELECT COMFORT, and COMFORTAIRE. The defendants also sell adjustable air beds under the “Personal Touch” and “Personal Comfort” brands and are not authorized retailers, distributors, or sellers of Sleep Number products.

Plaintiffs sued in 2012, asserting trademark infringement, trademark dilution, false advertising, unfair competition, and related state-law claims. The defendants filed a counterclaim seeking a declaration that plaintiffs had no trademark rights in the phrase NUMBER BED. Plaintiffs alleged that defendants used plaintiffs’ trademarks or confusingly similar variations in online advertising, including pay-per-click advertisements, to divert consumers searching for plaintiffs’ products.

At the original trial, the jury found that defendants did not infringe plaintiffs’ rights in the registered marks identified in the opinion, that defendants’ use of NUMBER BED was not unfair competition, and that plaintiffs did not have trademark rights in NUMBER BED. The jury also found for plaintiffs on seven false-advertising claims and awarded $155,721 on those claims. The Eighth Circuit later reversed and vacated the judgment as to the trademark-infringement and false-advertising claims, left undisturbed the portions concerning dilution and the alleged NUMBER BED trademark, and remanded for further proceedings.

Summary judgment on trademark infringement

Both sides moved for partial summary judgment, a procedure allowing judgment without a trial when there is no genuine dispute about a fact that could affect the outcome. Plaintiffs argued that the strength of the SLEEP NUMBER mark, defendants’ use of identical or similar terms, evidence of actual confusion, and other likelihood-of-confusion factors established infringement as a matter of law. Defendants argued that no genuine factual dispute supported infringement and that the previous jury’s non-infringement finding should control.

The court denied both parties’ motions on the trademark-infringement claim. It explained that the Eighth Circuit had held that “initial-interest confusion”—confusion that may occur before a purchase—could apply and that the earlier jury instructions improperly limited the analysis to confusion at the time of purchase. The court concluded that factual issues remained for a jury to weigh under the relevant likelihood-of-confusion factors, including evidence of initial-interest and actual confusion.

The court also denied defendants’ argument that plaintiffs’ lack of trademark rights in NUMBER BED barred any infringement claim involving advertisements that used those words. The court distinguished between owning trademark rights in NUMBER BED itself and whether defendants’ use of NUMBER BED, in combination with other terms, was confusingly similar to plaintiffs’ SLEEP NUMBER mark. The latter question remained for the jury.

Unfair competition

Defendants argued that the unfair-competition claim was not included in the remand or, alternatively, should be dismissed because plaintiffs did not own trademark rights in NUMBER BED. The court concluded that the unfair-competition claim had necessarily been remanded because the original jury instructions limited confusion to the time of purchase, while the Eighth Circuit held that initial-interest confusion could be relevant.

The court held that plaintiffs’ lack of trademark rights in NUMBER BED did not resolve whether defendants’ use of that phrase in advertising was likely to confuse consumers about the source of the products. The court therefore denied defendants’ motion on the unfair-competition claim and left that issue for the jury.

Permanent injunction

Defendants separately moved for a permanent injunction seeking, among other relief, a declaration that plaintiffs did not own rights in NUMBER BED and an order preventing plaintiffs from asserting that they owned rights in that phrase or that defendants’ use of it infringed plaintiffs’ marks.

The court denied the motion. It found that any injunction concerning whether the advertising was confusingly similar to SLEEP NUMBER was premature because that question remained for a new jury trial. The court also denied the requested relief concerning ownership of NUMBER BED because the jury had already determined that plaintiffs did not have trademark rights in that phrase, and because defendants had not shown irreparable harm or that the balance of equities and public interest favored an injunction. The court stated that it did not reach the parties’ alternative arguments concerning injunctive relief.

Order

The court denied plaintiffs’ Motion for Partial Summary Judgment, denied defendants’ Motion for Partial Summary Judgment, and denied defendants’ Motion for a Permanent Injunction. The remaining trademark-infringement and unfair-competition questions were left for a new jury trial.