Web Printing Controls Co. v. Oxy-Dry Corp.

Web Printing Controls Company, Inc. (WPC) (plaintiff) manufactured printing equipment. As a start-up company in the late 1970s that had no sales force, WPC entered into an oral marketing agreement (the oral agreement) with Oxy-Dry Corporation (defendant), an established, well-known manufacturer and distributor in the printing market. Pursuant to the oral agreement, Oxy-Dry would purchase WPC’s products and resell them to the customer at a mark-up, while WPC would deliver the products and provide the customer with related technical services. During the parties’ relationship, Oxy-Dry began to misbrand WPC’s products, such as by covering WPC’s trademark on a product with a combined Oxy-Dry/WPC trademark, and by otherwise claiming credit for the quality of WPC’s products. After WPC objected to Oxy-Dry’s conduct, the parties reduced the oral agreement to writing, a clause of which specified that Oxy-Dry would use only WPC’s trademark when selling WPC products. Oxy-Dry, however, resumed its misbranding practices. This time, Oxy-Dry’s conduct resulted in termination of the parties’ commercial relationship. Despite only minimal evidence of actual confusion resulting from Oxy-Dry’s misbranding practices, WPC conducted a marketing campaign to prevent such confusion. WPC’s campaign succeeded, increasing WPC’s sales even though Oxy-Dry launched its own brand of competing equipment. WPC sued Oxy-Dry for reverse passing off under 15 U.S.C. § 1125(a) (Lanham Act § 43(a)). After a bench trial, the district court entered a judgment in Oxy-Dry’s favor. The district court reasoned that because WPC sought monetary relief, WPC had to prove actual confusion and resulting injury. The district court held that WPC had failed to produce sufficient evidence of actual confusion and that WPC’s Lanham Act claim therefore failed. WPC appealed.