Tag Archives: breach of contract

The “Dip & Squeeze®” Battle Continues

by: Kelly A. Williams, a shareholder at Picadio Sneath Miller & Norton, P.C.

On January 7, 2015, the District Court for the Western District of Pennsylvania denied H.J. Heinz Company’s latest motion for summary judgment in Wawrzynski v. H.J. Heinz Company, 2015 U.S. Dist. LEXIS 1682 (W.D. Pa. Jan. 7, 2015). This suit is centered on whether Heinz used Mr. Wawrzynski’s ideas for condiment packaging in developing its “Dip & Squeeze®” package. In a somewhat unusual intellectual property case, Mr. Wawrzynski did not sue for patent infringement, although he had a patent for similar packaging. Instead, he sued for breach of implied contract and unjust enrichment.

HeinzThe facts giving rise to the suit are these. Mr. Wawrzynski asserts that he met with Heinz to discuss his patented ideas for condiment packaging called “The Little Dipper,” which would allow users to squeeze the condiment out or allow a user to dip food into the condiment. Mr. Wawrzynski alleged that he “intended that if someone used his design and/or his marketing materials that he would be paid for his efforts.” Mr. Wawrzynski also alleged that he was asked to develop 100 samples incorporating his design and marketing ideas for some focus groups.   Mr. Wawrzynski alleges that Heinz suddenly and mysteriously stopped communicating with him, and he later received a letter from Heinz stating that it was no longer interested in his ideas. A few months later, Heinz started selling ketchup in the “Dip and Squeeze” package.

Mr. Wawrzynski sued Heinz for breach of implied contract and unjust enrichment based on Heinz’s alleged use of his ideas for the new package and/or for marketing the new package, without compensating him. The complaint also mentioned Mr. Wawrzynski’s patent for his condiment packaging. Heinz counterclaimed claiming that it did not infringe Mr. Wawrzynski’s patent and that his patent was invalid. Mr. Wawrzynski admitted that Heinz was not infringing upon his patent and agreed not to sue based upon the patent. Thereafter, Mr. Wawrzynski moved to dismiss the counterclaim(s), and Heinz simultaneously moved for summary judgment on the grounds that Mr. Wawrzynski’s state law claims were preempted by federal patent law. The district court denied the motion to dismiss the counterclaim, ruling that the complaint made allegations based on his patent. However, the district court granted summary judgment to Heinz, finding that Mr. Wawrzynski’s state law claims were preempted. The district court also granted Heinz summary judgment on its counterclaim.

Mr. Wawrzynski appealed and the case went to the Federal Circuit, which has jurisdiction over patent actions. It does not have jurisdiction over pure state causes of action. Heinz argued that Mr. Wawrzynski’s suit was based on patent infringement. The Federal Circuit disagreed given that the complaint only had the two state law claims and lacked allegations of infringement. Consequently, the Federal Circuit transferred the case to the Third Circuit.

The Third Circuit vacated the district court’s summary judgment ruling. The Third Circuit ruled that the district court erred in considering Mr. Wawrzynski’s patent as grounds for dismissal. The case then went back to the district court.

Heinz moved for summary judgment again on the grounds that Mr. Wawrzynski could not prove his common law theories of breach of implied contract and unjust enrichment.

The district court denied Heinz’s motion based upon Pennsylvania law, which recognizes an implied relationship or implied contract where a defendant “has used for its benefit any property of the plaintiff in such manner and under such circumstances that the law will impose a duty of compensation therefor.” Thomas v. R. J. Reynolds Tobacco Co., 350 Pa. 262, 38 A.2d 61, 63 (Pa. 1944). Based on the facts of Thomas, the district court concluded that the Pennsylvania Supreme Court in Thomas held that “[a] relationship between two parties can be inferred when a plaintiff has property rights in an advertising idea which a defendant appropriates.”   However, to have a property right to an idea, the idea must be concrete, as well as “novel and new.” Thus, in Wawrzynski, the issue is whether Mr. Wawrzynski provided Heinz with novel, or original ideas, which Heinz did not already envision: 1) a condiment container with dual functionality; and 2) a successful advertisement and/or marketing method for a dual-functional container. This issue, whether Mr. Wawrzynski provided Heinz with novel ideas, created an issue of fact based upon the record in the case, which precluded entering summary judgment on either implied contract or unjust enrichment, as the issue was the same for Mr. Wawrzynski’s unjust enrichment claim.

The case is currently scheduled for a jury trial beginning on March 30, 2015.

In addition to the court’s opinion, the following sources were used in this blog: