Saga International, Inc. v. John D. Brush & Co.

984 F.Supp. 1282 (C.D. Ca 1997)

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Nature of the Case

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Facts

D has manufactured and sold fire-resistant security storage devices, both metal, and plastic, since 1930. In 1986, D filed a complaint with the United States International Trade Commission ('ITC') against several respondents, including P alleging patent infringement, misappropriation of trade dress, and related claims. P subsequently filed this action seeking a declaration of patent invalidity and non-infringement. D counterclaimed, raising the same claims it raised before the ITC. P and D settled both this action and the ITC proceeding. As a part of the settlement, the parties stipulation to the entry of a permanent injunction. The injunction enjoins 'P, its officers, employees, agents, representatives, and others in privity' from: (a) infringing the patent in issue; (b) infringing upon D's common law trademark for insulated security chests; (c) misappropriating D's trade dress and from marketing insulated security chests in packaging confusingly similar to D's; (d) representing that its insulated security chests originate from or are sponsored by the same source as D's; and (e) from making claims that its insulated security chests protect their contents at high temperatures, unless that claim is certified by Underwriter Laboratories, Inc., or other organization found to be qualified by the court. Several days after the parties executed the settlement agreement, but before the 1986 injunction was entered, Stuhlbarg (P1) left his position as president and director of P and founded Sisco, which continued in the insulated security chest business. Until 1997, Sisco made only metal chests, which did not concern D. In July 1997, however, Sisco began to market a plastic security chest, specifically targeted at D's major customers. Sisco misappropriated D's trade dress. Sisco also allegedly claimed that its plastic safes protect their contents at temperatures up to 1550 degrees for a time period up to one-half hour, without meeting the substantiation requirements of the 1986 Order. P1 denies that he was still the president of Saga at the time the agreement was signed. They claim that the settlement agreement was not reduced to final form until after June 27, 1986, and that P1's involvement with P terminated on May 21, 1986. The parties are in agreement, however, that P1 had terminated his association with Saga by the time the injunction was entered, on August 14, 1986.