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TSI Products, Inc. v. Armor All/STP Products Co.

United States District Court, D. Connecticut

September 23, 2019

TSI PRODUCTS, INC., Plaintiff,


          Michael P. Shea, U.S.D.J.

         TSI Products, Inc. (“TSI”)-plaintiff in the consolidated suit, No. 3:18-cv-1692-brings claims against Armor All/STP Products Company, Spectrum Brands Holdings, Inc., Guy Andrysick, and Robert DeRidder (collectively “Armor All” or “Consolidated Defendants”) for trademark infringement, unfair competition, and false advertising under the Lanham Act, 15 U.S.C. §§ 1114 et seq., for restraint of trade, monopolization, and attempted monopolization under the Sherman Act, 15 U.S.C. §§ 1 et seq., and for violations of the Connecticut Unfair Trade Practices Act (“CUTPA”), Conn. Gen. Stat. §§ 42-110a et seq.

         Consolidated Defendants move to dismiss TSI’s Second Amended Complaint (“SAC”), ECF No. 96, in its entirety under Fed.R.Civ.P. 12(b)(6) for failure to state a claim. Mot. to Dismiss, ECF No. 102. Because I find that TSI has stated a plausible claim under each of its seven counts, I deny the motion to dismiss.

         I. Factual Allegations

         The factual allegations below are drawn from TSI’s Second Amended Complaint (“SAC”) and are accepted as true for the purpose of adjudicating this motion.

         A. Refrigerant Products

         Both TSI and Armor All create and sell do-it-yourself refrigerant products and recharge kits, which permit car owners to recharge their vehicle air conditioning (“AC”) systems on their own, without the services of a professional mechanic. SAC, ECF No. 96 ¶¶ 26, 55. Refrigerant and recharge kits are sold in many automotive specialty stores in the United States, such as Advance Auto Parts, AutoZone, O’Reilly Auto Parts, NAPA, and Pep Boys, as well in as in the automotive departments of stores such as Walmart, Meijers, and Home Depot. Id. at ¶¶ 198-99.

         TSI places do-it-yourself refrigerant products in “two subcategories: non-value-added refrigerant and value-added automotive AC recharge kits.” Id. ¶ 178. “[T]he non-value-added refrigerant category consists mainly of cans of R-134a refrigerant, without any included additives, tools, gauges, or hoses. . . . [T]he category of value-added automotive AC recharge kits consist of cans of R-134a refrigerant that also typically contain some combination of additives, lubricants, hoses, gauges, or other tools.” Id. ¶¶ 180-81. Both TSI and Armor All sell value-added products. Id. ¶¶ 55.

         Armor All sells refrigerant-including the A/C Pro Professional Formula and the A/C Pro Ultra Synthetic Formula-that contains additives and lubricants. Id. ¶¶ 123-24. Armor All also sells recharge kits consisting of refrigerant, a hose and trigger dispenser, and a gauge that measures the pressure on the low side of a car’s AC system. Id. ¶ 61. TSI, similarly, offers value-added refrigerant and recharge kits. Id. ¶ 204. “Instead of a low-pressure-measuring gauge, some of TSI’s AVALANCHE/AC AVALANCHE products are sold with [] Smart Clips, which instead of measuring the low-side pressure of the AC system, measure the vent temperature of the air in the passenger compartment to target the correct fill.” Id. ¶ 145. “TSI’s Smart Clips are constructed out of a thermochromic material that changes color due to changes in temperature.” Id. ¶ 211.

         B. TSI’s Trademark Rights

         TSI sells its refrigerant and recharge kits under the brand names AVALANCHE, AC AVALANCHE, and BLACK DIAMOND AVALANCHE. Id. ¶ 25. TSI is the owner of the AVALANCHE word mark, registered under Registration No. 4, 823, 588. Id. ¶¶ 27, 31–33. TSI has continuously sold refrigerant products under the AC AVALANCHE mark since January 31, 2015 and holds trademark rights in the work mark AC AVALANCHE used in connection with refrigerant products. Id. ¶¶ 28–30. TSI also holds trademark rights in the BLACK DIAMOND AVALANCHE word mark, registered under Registration No. 5, 065, 364. Id. ¶¶ 34–36.

         TSI holds trademark rights in the mountain logos used along with its AVALANCHE and AC AVALANCHE brands and its BLACK DIAMOND AVALANCHE brand. Id. ¶¶ 37–38. These logos are part of the trade dress associated with the three word marks, and the design appears on the products’ labels and promotional materials. Id. at ¶¶ 39, 41. TSI has consistently used the mountain logo in connection with the sale of AVALANCHE and AC AVALANCHE products since January 2015, Id. at ¶ 40, and in connection with the sale of BLACK DIAMOND AVALANCHE products since April 2015, Id. at ¶ 42.

         C. Armor All’s Keyword Advertising

         Armor All markets its brands, including its A/C PRO brand of refrigerant, online. Id. ¶ 135. As part of its online advertising, Armor All purchased “AC AVALANCHE” as a Google ad word. Id. ¶ 138. As a result, a Google search for “AC AVALANCHE” as of the date of TSI’s original complaint yielded an advertisement for Armor All’s AC/Pro website at the top of the search results. Id. ¶ 139–40. When a user clicked on the advertising link, the consumer was directed to the A/C Pro website. Id. ¶ 144. Armor All “made no effort to distinguish themselves and their products from TSI, either in the Google ad itself or on the linked AC Pro Website webpage.” Id. ¶ 152.

         D. Armor All Use of TSI’s Mountain Logo

         Armor All “had access to TSI’s AC AVALANCHE/AVALANCHE mountain logo, as it had been used since 2015 in TSI’s products sold in the very same stores selling [Armor All’s] products, often in close proximity.” Id. ¶ 156. Prior to 2017, Armor All did not “utilize any mountain imagery in its packaging of ARCTIC FREEZE products, ” Id. ¶ 157, but it did begin using a mountain logo on those products in 2017, Id. ¶ 159. The mountain logo used on the ARCTIC FREEZE packaging “looks confusingly similar” to the mountain logo on TSI’s products, Id. ¶ 161–65; TSI alleges on information and belief that Armor All’s use of the mountain logo “causes customer confusion as to the source of the goods, ” Id. ¶ 168.

         E. Armor All’s Misrepresentations regarding Refrigerants and AC Recharge Kits

         Armor All has published advertising for its recharge kits and refrigerant products online, on its product packaging and promotional materials, and in videos and commercials. Id. ¶ 66. In this advertising, Armor All makes a No. of statements about its recharge kits, including that they have the following characteristics and benefits:

• “Our kits come with everything you need to recharge your system with no additional tools or equipment, ” Id. ¶ 76,
• “All-in-One Kit, ” Id. ¶ 77,
• “Easy as 1, 2 . . . Squeeze, ” Id. ¶ 77,
• “Extends A/C/ Life, ” Id. ¶¶ 78, 80, 84,
• “fast and accurate recharging, ” Id. ¶¶ 79, 81,
• “The trigger dispenser and measuring gauge make filling your system to the proper level fast and easy, ” Id. ¶ 82,
• “fast, easy and accurate recharging, ” Id. ¶ 83,
• “Protects System, ” Id. ¶ 84,
• “easy, convenient, and accurate recharging, ” Id. ¶ 85,
• “Bringing back the cool to your car’s air-conditioning is a breeze with A/C Pro, ” Id. ¶ 86,
• “just three easy steps, ” Id. ¶ 87.

         Armor All also makes statements about its refrigerant formula, including:

• “#1 Rated Coldest Air” and “#1 Coldest Air, ” Id. ¶ 110,
• “Formula with 2X cooling boosters v. the next leading brand of AC recharge kits: independently tested to deliver the coldest air from your vehicle’s AC, ” Id. ¶ 111,
• “A/C PRO ultra synthetic refrigerant kit features a specially designed formula that helps a vehicle’s A/C produce the coldest air, ” Id. ¶ 112.

         TSI alleges that all of these statements are false or misleading. Id. ¶¶ 89-109, 118-32.

         F. Armor All’s Anticompetitive Conduct

         Value-added automotive AC recharge kits-those that include refrigerant in addition to some combination of additives, lubricants, hoses, gauges, or other tools-is one of “two subcategories” in the larger sector for do-it-yourself automotive AC recharge products. Id. ¶¶ 178, 181. In the smaller “market for value-added auto AC recharge kits in the United States, ” Armor All had an estimated market share of 88% in 2017. Id. ¶ 193. TSI is Armor All’s largest competitor in terms of market share, with approximately 10% share; all other competitors combined constitute only 2% market share. Id. ¶¶ 194-96.

         Prior to TSI’s entry into the value-added AC recharge kit market in 2015, Armor All did not face substantial competition in that market. Id. ¶ 201. After TSI launched its products in 2015, the two companies have competed “on the basis of both price and innovation.” Id. ¶ 207. TSI alleges on information and belief that Armor All experienced “downward pricing pressure” between 2015 and 2017 “in the face of competition from TSI, ” but has been able to “raise their prices to levels that approach their pre-competition pricing” since 2017. Id. ¶¶ 213-14.

         TSI alleges on information and belief that Armor All made an agreement with retailer Advance Auto in August 2016 in which Armor All “offered to pay Advance Auto cash remuneration, product discounts, and/or some other value in exchange for Advance Auto’s agreement to renege on its agreement with TSI and refuse to allocate shelf space to TSI’s products.” Id. ¶ 223-24. Advance Auto did not purchase any TSI products or allocate any shelf space to TSI products in 2017 or 2018. Id. ¶ 226-29.

         In 2018, TSI also learned from a representative of retailer Pep Boys that “Pep Boys had received a payment from [Armor All] . . . for display and channel allocation for [Armor All products] . . . [and] to keep TSI’s competing . . . products off Pep Boys’ shelves.” Id. ¶ 232. Pep Boys did not allocate any shelf space to TSI products in 2018 and has indicated that it will not do so in 2019, due to payments received from Armor All. Id. ¶ 233.

         After TSI launched its AVALANCHE products in 2015, attorneys representing Armor All’s predecessor sent TSI a letter in November 2015, alleging that TSI’s products infringed two of the predecessor’s patents. Id. ¶ 243. TSI “was forced to retain counsel and respond to the letter” in December 2015 and to send a follow-up letter in January 2016. Id. ¶¶ 246, 248. Neither Armor All nor its predecessor responded to either letter. Id. ¶¶ 247, 249. TSI alleges on information and belief that neither Armor All nor its predecessor had a “good faith belief that TSI infringed” either patent. Id. ΒΆ 251. TSI also alleges on information and belief that Armor All ...

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