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Ziebart International Corp. v. Z Technologies Corp.

United States District Court, E.D. Michigan, Southern Division

March 13, 2018

Ziebart International Corp., Plaintiff,
Z Technologies Corp., Defendant.




         This case arises out of the fractured business relationship between Ziebart International, Corp. and Z Technologies, Corp. Pursuant to leave of the Court, the parties have filed a second round of summary judgment motions. For the reasons stated below, both plaintiff's and defendant's motions for summary judgment are denied.

         I. Background

         In this case, the Court permitted the parties to engage in two rounds of summary judgment briefing. In an opinion and order dated January 23, 2017, the Court denied defendant's motion for summary judgment, granted in part and denied in part plaintiff and third party defendant Pure Asphalt Corp.'s motion for summary judgment, and granted Pure Asphalt Corp.'s motion for judgment on the pleadings. (Dkt. 80.) In that opinion and order, the Court recounted the facts of this case, and will primarily rely on that recitation of facts here. See Ziebart Int'l Corp. v. Z Techs. Corp., No. 15-CV-11745, 2017 WL 282395 (E.D. Mich. Jan. 23, 2017).

         In 1996, plaintiff sold its chemical subsidiary, Ziebart Products Group, Inc. (“ZPG”) to The Sentry Corporation, which then became known as Z Technologies, Inc. (Dkt. 1 at 6; Dkt. 56-2 at 8.) As part of the sale, the parties entered into the following agreements that addressed, among other things, use of trade names, trademarks, disclosure of information, and other intellectual property: Asset Purchase Agreement; License Agreement; Non-Competition and Non-Disclosure Agreement; and Supply Agreement. (Dkt. 1 at 4-6; Dkt. 52 at 19-23; Dkt. 66-10 at 2.)

         The primary agreement was the Asset Purchase Agreement (“APA”). This agreement transferred all of ZPG's manufacturing equipment, property, and know-how to defendant, including the equipment and processes for manufacturing the product known as Formula Q. In its exact language, it involved the sale of “all of the assets of Seller currently used by Seller at the Facility or elsewhere in connection with the business conducted at the Facility which are necessary, important or useful to the business conducted at the facility as set forth in Schedule 2.1, ” where “Seller” was defined as ZPG. (Dkt. 93-1 at 11-12.) Any reference to Ziebart in the APA used the name Ziebart. (Id. at 7.) Importantly, neither party could locate and produce Schedule 2.1 during the course of this litigation, and the parties disagree about its contents.

         Pursuant to the License Agreement, defendant was permitted to license and use specified trademarks, service marks, and trade names owned by plaintiff for sale to automobile manufacturers. (Dkt. 56-4 at 3- 4.) The intellectual property to be licensed to defendant was supposed to be attached to the License Agreement as Exhibit A, but neither party provided it to the Court.

         The parties also entered into a Supply Agreement, which generally made defendant the exclusive manufacturer of Formula Q, among other products, for sale by plaintiff. (Dkt. 56-6 at 3.) That agreement reserved plaintiff's right to control the quality of the chemical it purchased from defendant, reject shipments that did not meet its standards, and find an alternative supplier if necessary. (Id.)

         In 2011, after the parties' business relationship had deteriorated, plaintiff learned defendant's website was potentially infringing several of plaintiff's trademarks. (Dkt. 56 at 16; Dkt. 56-16 at 7.) The parties settled this dispute in 2012, and entered into a Settlement Agreement. (Dkt. 95-2.) The Agreement prohibited defendant from using plaintiff's trademarks on its website. (Id.) Subsequently, in 2015, plaintiff learned defendant was using the name Ziebart in the meta tags[1] of its website. Plaintiff brings a breach of contract claim alleging that the references to its trademarks in the meta tags of defendant's website constitute a breach of the Settlement Agreement.

         II. Defendant's Motion for Summary Judgment

         Defendant asks the Court to grant summary judgment on three issues. First, it seeks a determination that it purchased the trademark for Formula Q in the 1996 APA. Second, it moves the Court to affirm that since it owns the trademark for Formula Q, it cannot be subjected to liability for trademark infringement. Finally, it seeks judicial cancellation of Ziebart's 2015 application for the Formula Q trademark.

         Plaintiff responds by arguing that it never sold the Formula Q trademark to defendant, and that defendant's motion is based on a misreading of the documents surrounding plaintiff's 1996 sale of ZPG to defendant.

         A trademark is “any word, name, symbol, or device . . . used by a person . . . to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods . . .” 15 U.S.C. § 1127. The Lanham Act protects a trademark owner from infringement, regardless of whether the trademark is registered with the Patent and Trademark Office. Fuji Kogyo Co., Ltd. V. Pacific Bay Int'l., Inc., 461 F.3d 675, 682-83 (6th Cir. 2006). It does so in order to prevent customer confusion and ensure the quality of goods in the market by prohibiting ...

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