Dentsply International, Inc. v. Dental Brands for Less LLC

Background

Dentsply produces and sells dental-supply products through authorized dealers. Its products carry trademarks that Dentsply owns. Dental Brands also sells dental-supply products, including Dentsply products, but was not authorized to sell Dentsply products in the United States. Dental Brands admitted that its Dentsply products were “gray goods.”

Dentsply’s remaining claims included federal trademark infringement, federal false advertising and related claims, federal and state trademark dilution, state tortious interference with contracts, state unfair competition, and state deceptive-trade-practices claims. The court considered cross-motions for summary judgment, which asks whether the evidence shows that no reasonable jury could find for the opposing party.

Federal Trademark Infringement — Count I

Both parties sought summary judgment. The court denied both motions. Dentsply established that it owned the trademarks at issue, but the parties disputed whether Dental Brands’ products were materially different from Dentsply’s authorized products and whether consumers would consider those differences important when buying the products.

Dentsply identified differences involving warranties, customer service, and packaging. Dentsply relied on a survey indicating that dentists cared about those differences. Dental Brands argued that the product inside the packaging was identical and that dentists cared mainly about the lower price. The court held that this conflicting evidence created a material factual dispute for a jury. The court also stated that survey evidence was not always required and reserved definitive rulings on the parties’ evidentiary objections for trial or pretrial motions.

Federal False Advertising — Count II

Dental Brands’ motion for summary judgment on the false advertising claim was denied. The court held that a reasonable factfinder could conclude that Dental Brands’ advertising was false or misleading, material, placed in interstate commerce, and injurious to Dentsply.

The court reasoned that consumers viewing Dental Brands’ online advertisements using Dentsply’s trademarks could believe Dental Brands was selling the same products as Dentsply. A jury could instead find that the products differed in material ways and that the advertising diverted sales from Dentsply’s authorized dealers.

Federal and State Trademark Dilution — Counts III and IV

Dental Brands’ motion for summary judgment was granted on the federal and state trademark-dilution claims. Federal dilution law requires a mark to be widely recognized by the general consuming public. New York law similarly requires a mark to be extremely strong or distinctive.

The record showed awareness of Dentsply’s trademarks within the dental industry, but it did not show recognition by the general public. The court therefore held that Dentsply could not establish the required fame or distinctiveness as a matter of law.

Tortious Interference with Contracts — Count V

Dental Brands’ motion for summary judgment was granted. Under New York law, this claim requires evidence that the defendant intentionally caused a third party to breach a valid contract. The court found no evidence that Dental Brands took steps to interfere with contracts between Dentsply and its foreign or domestic distributors.

State Unfair Competition — Count VII

Dental Brands’ motion for summary judgment was denied. New York common-law unfair competition requires bad-faith misappropriation for commercial advantage. The court held that the evidence supporting Dentsply’s federal trademark claim also allowed a reasonable jury to find that Dental Brands sought to capitalize on Dentsply’s reputation, goodwill, and possible consumer confusion.

State Deceptive Trade Practices — Count VIII

Dental Brands’ motion for summary judgment was denied. The court found sufficient evidence for a jury to determine that Dental Brands’ sales were consumer-directed deceptive acts, materially misleading, and injurious. A jury could find that consumers expected products bearing Dentsply’s trademark to comply with Dentsply’s quality-control and product-recall measures, while Dental Brands’ products did not comply with those measures.

Issue Preclusion

Dental Brands argued that an earlier Pennsylvania proceeding involving a different gray-goods seller barred Dentsply’s trademark, unfair-competition, and dilution claims. The court rejected that argument. It explained that the earlier claims had been dismissed because the pleadings were insufficient and therefore had not been actually litigated and resolved. The court also held that a preliminary-injunction ruling, which assesses the likelihood of success rather than finally deciding the claims, does not ordinarily preclude later litigation.

Disposition

The court denied Dentsply’s motion for summary judgment. It denied Dental Brands’ motion as to Count I, the federal false advertising claim in Count II, state unfair competition in Count VII, and state deceptive trade practices in Count VIII. It granted Dental Brands’ motion as to federal and state trademark dilution in Counts III and IV and tortious interference with contracts in Count V. The court stated that a separate trial-ready order would issue. The conclusion contains apparent typographical errors labeling some surviving claims by count; the body of the opinion identifies state unfair competition as Count VII and state deceptive trade practices as Count VIII. Judge Lorna G. Schofield signed the opinion.