Prof Goldman: GP’s Effort to Control Towel Dispenser Refills Fails in 8th Circuit

After a decision by the Fourth Circuit seemed to open the door for businesses to use contributory trademark law to block the sale of complementary goods, a recent case in the Eighth Circuit adopts what I think is a more reasonable approach. In both cases, the plaintiff and the technology at issue were the same, but the outcomes are completely different.

Plaintiff Georgia Pacific (GP) employs the following strategy to try and prevent competitors from offering cheaper paper towels for the paper towel dispensers it manufactures. It leases its hands-free enMotion brand paper towel dispensers to distributors who in turn lease the dispensers to businesses like restaurants and gas stations. In its leases, GP conditions any use of the dispensers on exclusive use of GP brand paper towels. GP also places a sticker on the dispensers warning any sublessees that only GP-brand replacement towels may be used.

Prior 4th Circuit decision on paper towel dispensers here.