Kroni Inc. v. Kohler Company
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Opinion
USCA1 Opinion
United States Court of Appeals
For the First Circuit
____________________
No. 98-1334
I.P. LUND TRADING ApS and KROIN INC.,
Plaintiffs, Appellees,
v.
KOHLER CO. and ROBERN, INC.,
Defendants, Appellants.
____________________
No. 98-1492
I.P. LUND TRADING ApS and KROIN INC.,
Plaintiffs, Cross-Appellants,
v.
KOHLER CO. and ROBERN, INC.,
Defendants, Cross-Appellees.
____________________
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Nancy Gertner, U.S. District Judge]
____________________
Before
Torruella, Chief Judge,
Boudin and Lynch, Circuit Judges.
____________________
David H. Gibbs, with whom Cornelius J. Moynihan, John
V. Snellings, Jason C. Kravitz, and Peabody & Brown were on
briefs, for plaintiffs.
Hugh Latimer, with whom Michael L. Sturm, Karyn K.
Ablin, Wiley, Rein & Fielding, Stephen H. Lash, Jager, Smith &
Stetler, James R. Kieckhefer, and Kohler Co. were on briefs,
for defendants.
____________________
December 22, 1998
____________________
LYNCH, Circuit Judge. This is an appeal from the
district court's issuance of a preliminary injunction enjoining
defendants Kohler Company and Robern, Inc. from selling the
Kohler Falling Water faucet, a faucet resembling plaintiff
Lund's VOLA faucet. The VOLA faucet mounts on a wall, has been
in the design collection at the Museum of Modern Art, and has
a certain cachet among those who enjoy bathrooms and kitchens
beautiful. Kohler intended to produce a faucet like Lund's,
but not identical to it, and hence designed the now-enjoined
Falling Water faucet. There were two basic claims before the
trial court: that the Falling Water faucet "diluted" the VOLA
faucet's trade dress within the meaning of the Federal
Trademark Dilution Act of 1995 ("FTDA"), 15 U.S.C. 1125(c),
and that the Falling Water faucet infringed the VOLA's trade
dress. Lund won a preliminary injunction on the first ground,
but not on the second. See I.P. Lund Trading ApS v. Kohler
Co., 11 F. Supp. 2d 112, 127 (D. Mass. 1998) ("Lund I").
This difference in results was not anomalous. The
district court found, as to the infringement claim, that while
the VOLA faucet was not inherently distinctive, it had acquired
secondary meaning and thus was protectable, but that there was
no infringement because there was no confusion on the part of
consumers. In contrast, under the FTDA, where no confusion
need be shown, the court found the VOLA faucet was famous and
that Kohler's faucet diluted the identity of the VOLA faucet.
This case presents complex issues arising in areas of
intellectual property law recently extended and not yet well
demarcated. Few courts of appeals have yet interpreted the
FTDA and this court has never addressed certain key issues,
under both the infringement and FTDA claims, necessary to the
resolution of the case. The district court wrote thoughtfully,
and, particularly as to the FTDA issues, without much appellate
guidance. The claim for protection here comes not from
traditional marks such as names but from the very design of the
faucet itself -- that design is said to give the faucet its
identity and distinctiveness. Although Lund may have been able
to obtain a design patent and so protect its VOLA faucet in
that way, at least for a period of fourteen years, see 35
U.S.C. 173, it chose not to. Rather, it chose to turn for
protection to legal doctrines of trademark and trade dress,
originally crafted without product designs in mind. The trade
dress of product designs, unlike other forms of trade dress,
cannot be separated from the product itself. Kohler has raised
serious constitutional concerns, saying that this use of the
FTDA against a competing product essentially gives a perpetual
monopoly to product design, a perpetual monopoly prohibited by
the Patent Clause.
Kohler and Robern (collectively "Kohler") argue that
the district court erred in its determination that plaintiffs
I.P. Lund Trading ApS and Kroin Incorporated (collectively
"Lund") demonstrated a likelihood of success on the merits of
their claim under the FTDA that the Falling Water faucet
dilutes the trade dress of Lund's VOLA faucet. Lund cross-
appeals, arguing that the district court erred in determining
that Lund was unlikely to succeed on the merits of its
infringement claim. We affirm the denial of the preliminary
injunction on the infringement claim. We vacate the grant of
the injunction on the FTDA claim.
Several questions of first impression are resolved in
this opinion. We hold that the burden of showing non-
functionality of a product for which trade dress protection is
sought rests on the party seeking that protection. Here that
is the plaintiff Lund. In analyzing inherent distinctiveness
in the context of product design, we hold that while the well-
known Abercrombie test provides a useful analogy, strict
application of the test is not required; we reiterate this
court's adherence to the Seabrook Foods test. We emphasize
that, in any case where the trade dress is said to arise from
the product design, there must be separate analyses as to (1)
whether a design is inherently distinctive and (2) whether it
has nonetheless acquired distinctiveness through secondary
meaning. As to secondary meaning said to stem from the design
of the product itself, we hold that the plaintiff must show
that the primary significance of the design is to signify its
source.
Under the FTDA, we hold that a party who wishes to
establish fame of the trade dress for which protection is
sought bears a significantly greater burden than the burden of
establishing distinctiveness for infringement purposes. The
FTDA creates an exceptional anti-dilution remedy for truly
famous marks. Once this greater burden of establishing fame
has been met under the FTDA, the issue of dilution must be
addressed. We reject the use of the "Sweet factors" as the test
for dilution and instead require an inquiry into whether target
customers will perceive the products as essentially the same.
We hold that the dilution standard is a rigorous one, and Lund
has not shown that it is likely to succeed.
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USCA1 Opinion
United States Court of Appeals
For the First Circuit
____________________
No. 98-1334
I.P. LUND TRADING ApS and KROIN INC.,
Plaintiffs, Appellees,
v.
KOHLER CO. and ROBERN, INC.,
Defendants, Appellants.
____________________
No. 98-1492
I.P. LUND TRADING ApS and KROIN INC.,
Plaintiffs, Cross-Appellants,
v.
KOHLER CO. and ROBERN, INC.,
Defendants, Cross-Appellees.
____________________
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Nancy Gertner, U.S. District Judge]
____________________
Before
Torruella, Chief Judge,
Boudin and Lynch, Circuit Judges.
____________________
David H. Gibbs, with whom Cornelius J. Moynihan, John
V. Snellings, Jason C. Kravitz, and Peabody & Brown were on
briefs, for plaintiffs.
Hugh Latimer, with whom Michael L. Sturm, Karyn K.
Ablin, Wiley, Rein & Fielding, Stephen H. Lash, Jager, Smith &
Stetler, James R. Kieckhefer, and Kohler Co. were on briefs,
for defendants.
____________________
December 22, 1998
____________________
LYNCH, Circuit Judge. This is an appeal from the
district court's issuance of a preliminary injunction enjoining
defendants Kohler Company and Robern, Inc. from selling the
Kohler Falling Water faucet, a faucet resembling plaintiff
Lund's VOLA faucet. The VOLA faucet mounts on a wall, has been
in the design collection at the Museum of Modern Art, and has
a certain cachet among those who enjoy bathrooms and kitchens
beautiful. Kohler intended to produce a faucet like Lund's,
but not identical to it, and hence designed the now-enjoined
Falling Water faucet. There were two basic claims before the
trial court: that the Falling Water faucet "diluted" the VOLA
faucet's trade dress within the meaning of the Federal
Trademark Dilution Act of 1995 ("FTDA"), 15 U.S.C. 1125(c),
and that the Falling Water faucet infringed the VOLA's trade
dress. Lund won a preliminary injunction on the first ground,
but not on the second. See I.P. Lund Trading ApS v. Kohler
Co., 11 F. Supp. 2d 112, 127 (D. Mass. 1998) ("Lund I").
This difference in results was not anomalous. The
district court found, as to the infringement claim, that while
the VOLA faucet was not inherently distinctive, it had acquired
secondary meaning and thus was protectable, but that there was
no infringement because there was no confusion on the part of
consumers. In contrast, under the FTDA, where no confusion
need be shown, the court found the VOLA faucet was famous and
that Kohler's faucet diluted the identity of the VOLA faucet.
This case presents complex issues arising in areas of
intellectual property law recently extended and not yet well
demarcated. Few courts of appeals have yet interpreted the
FTDA and this court has never addressed certain key issues,
under both the infringement and FTDA claims, necessary to the
resolution of the case. The district court wrote thoughtfully,
and, particularly as to the FTDA issues, without much appellate
guidance. The claim for protection here comes not from
traditional marks such as names but from the very design of the
faucet itself -- that design is said to give the faucet its
identity and distinctiveness. Although Lund may have been able
to obtain a design patent and so protect its VOLA faucet in
that way, at least for a period of fourteen years, see 35
U.S.C. 173, it chose not to. Rather, it chose to turn for
protection to legal doctrines of trademark and trade dress,
originally crafted without product designs in mind. The trade
dress of product designs, unlike other forms of trade dress,
cannot be separated from the product itself. Kohler has raised
serious constitutional concerns, saying that this use of the
FTDA against a competing product essentially gives a perpetual
monopoly to product design, a perpetual monopoly prohibited by
the Patent Clause.
Kohler and Robern (collectively "Kohler") argue that
the district court erred in its determination that plaintiffs
I.P. Lund Trading ApS and Kroin Incorporated (collectively
"Lund") demonstrated a likelihood of success on the merits of
their claim under the FTDA that the Falling Water faucet
dilutes the trade dress of Lund's VOLA faucet. Lund cross-
appeals, arguing that the district court erred in determining
that Lund was unlikely to succeed on the merits of its
infringement claim. We affirm the denial of the preliminary
injunction on the infringement claim. We vacate the grant of
the injunction on the FTDA claim.
Several questions of first impression are resolved in
this opinion. We hold that the burden of showing non-
functionality of a product for which trade dress protection is
sought rests on the party seeking that protection. Here that
is the plaintiff Lund. In analyzing inherent distinctiveness
in the context of product design, we hold that while the well-
known Abercrombie test provides a useful analogy, strict
application of the test is not required; we reiterate this
court's adherence to the Seabrook Foods test. We emphasize
that, in any case where the trade dress is said to arise from
the product design, there must be separate analyses as to (1)
whether a design is inherently distinctive and (2) whether it
has nonetheless acquired distinctiveness through secondary
meaning. As to secondary meaning said to stem from the design
of the product itself, we hold that the plaintiff must show
that the primary significance of the design is to signify its
source.
Under the FTDA, we hold that a party who wishes to
establish fame of the trade dress for which protection is
sought bears a significantly greater burden than the burden of
establishing distinctiveness for infringement purposes. The
FTDA creates an exceptional anti-dilution remedy for truly
famous marks. Once this greater burden of establishing fame
has been met under the FTDA, the issue of dilution must be
addressed. We reject the use of the "Sweet factors" as the test
for dilution and instead require an inquiry into whether target
customers will perceive the products as essentially the same.
We hold that the dilution standard is a rigorous one, and Lund
has not shown that it is likely to succeed. While we
acknowledge serious constitutional concerns about application
of the FTDA to a dilution claim against a competing product
which does not confuse consumers, the resolution of the case
obviates the as applied constitutional issue, and we decline to
address any residual facial challenge.
I. Standard of Review
The district court "enjoys considerable discretion"
in determining whether to grant a preliminary injunction, but
its decision "must be supported by adequate findings of fact
and conclusions of law." TEC Eng'g Corp. v. Budget Molders
Supply, Inc., 82 F.3d 542, 544-45 (1st Cir. 1996); see alsoCamel Hair & Cashmere Inst. of America, Inc. v. Associated Dry
Goods Corp., 799 F.2d 6, 12-13 (1st Cir. 1986). "On appellate
review of the grant or denial of a preliminary injunction, the
deferential standard of 'abuse of discretion' applies to
judgment calls, by the district court, such as those that
involve the weighing of competing considerations." Public
Serv. Co. v. Patch, No. 98-1764, 1998 WL 823177, at *5 (1st
Cir. Dec. 3, 1998). As explained in Ocean Spray Cranberries,
Inc. v. Pepsico, Inc., 160 F.3d 58 (1st Cir. 1998), "[t]he
usual rubric refers to abuse of discretion . . . but this
phrasing is most pertinent to issues of judgment and the
balancing of conflicting factors; rulings on abstract legal
issues remain reviewable de novo, and findings of fact are
assessed for clear error." Id. at 61 n.1 (citations omitted).
If findings are made under incorrect standards, little or no
deference is due those findings. Cf. Uno v. City of Holyoke,
72 F.3d 973, 978 (1st Cir. 1995). Further, "[a]buse of
discretion occurs . . . when a material factor deserving
significant weight is ignored, when an improper factor is
relied upon, or when all proper and no improper factors are
assessed, but the court makes a serious mistake in weighing
them." Foster v. Mydas Assocs., Inc., 943 F.2d 139, 143 (1st
Cir. 1991) (internal quotation marks omitted).
A party seeking a preliminary injunction must
establish that 1) it is substantially likely to succeed on the
merits of its claim; 2) absent the injunction there is "a
significant risk of irreparable harm"; 3) the balance of
hardships weighs in its favor; and 4) the injunction will not
harm the public interest. TEC Eng'g Corp., 82 F.3d at 544
(discussing a claim for trade dress infringement). In the
trademark context, "irreparable harm may be shown even in the
absence of actual injury to plaintiff's business based on
plaintiff's demonstration of a likelihood of success on the
merits on its claim." Calamari Fisheries, Inc. v. The Village
Catch, Inc., 698 F. Supp. 994, 1013 (D. Mass. 1988) (citing
Camel Hair & Cashmere Inst., 799 F.2d at 14). There is no
argument that the district court applied the wrong test for
injunctive relief; there is considerable dispute over the
subsidiary tests which the court applied in determining whether
there was probability of success on the various elements of the
claims.
II. Facts and Procedural History
Lund, a Danish corporation, manufactures bathroom and
kitchen fixtures and accessories, including faucets. Lund has
been a family-owned corporation since its establishment in
1873. In 1969, Lund introduced the VOLA faucet, designed by
the noted architect Arne Jacobsen. The faucet, which has
received numerous awards over the past quarter-century, is
Lund's principal revenue-producing product. Lund has sold a
total of more than 600,000 VOLA faucets. The faucet has been
regularly advertised and featured in numerous magazines. Kroin
Incorporated is the sole United States distributor of the VOLA.
Kohler is the largest supplier of plumbing fixtures
in this country, selling hundreds of types of kitchen and
bathroom fixtures. In 1994, Kohler contacted Lund regarding
the possibility of selling the VOLA faucet under Kohler's name.
In 1995, Kohler purchased eight VOLA faucets from Lund for the
purpose of testing the faucets to see if they fit in a sink
that Kohler planned to introduce and to ensure that the faucets
complied with United States regulations. Kohler claims that it
tested the faucets and found that they did not meet U.S.
regulations regarding water flow capacity and resistance to
hydrostatic pressure, a contention Lund contests, and as to
which there was conflicting evidence.
Kohler gave a VOLA faucet to Erich Slothower, an
industrial designer employed by Kohler. Slothower then
designed the Falling Water faucet, which Kohler introduced for
sale at a price lower than that of the VOLA faucet. Slothower
testified that he examined the VOLA carefully prior to
designing the Falling Water, but that he attempted to make the
Falling Water faucet different from the VOLA. Kohler's large
size and well-established distribution channels mean that the
Falling Water is likely to be more easily available, in
addition to being less expensive.
The district court found a number of similarities
between the VOLA and the Falling Water faucets. Both are
"single-control, wall-mounted faucets" with handles that
"utilize a thin cylindrical lever to adjust water temperature
and volume"; both have "spouts and aerator holders . . . of
uniform diameter," with the spouts "bend[ing] downward at right
angles softened by a curve"; and "both faucets offer spouts in
almost exactly the same three lengths." Lund I, 11 F. Supp. 2d
at 116. Both faucets fit no-hole sinks. In contrast, most
sinks sold in the United States are "three-hole" sinks, with one
hole each for the water spout and the hot and cold spigots.
However, the district court also found dissimilarities between
the faucets, including differences in the faucets' handles, a
rounded lever on the Falling Water faucet compared to a flat
lever on the VOLA, and a rounded bonnet -- a piece that
connects the faucet to the wall -- on the mounting end of the
Falling Water spout, compared to no bonnet on the VOLA. Seeid. The court also found that the housemarks, "VOLA" and
"Kohler," are clearly dissimilar and are prominently displayed
on the faucets. See id. at 123.
Co-defendant Robern, which Kohler acquired in August
1995, also purchased a number of VOLA faucets. Before being
acquired by Kohler, Robern purchased 218 VOLA faucets from
Kroin for use in a sink module. Robern apparently promoted its
sink module pictured with the VOLA faucets. At approximately
the same time as Kohler acquired Robern, Kroin refused to sell
additional VOLA faucets to Robern, claiming that Robern was
selling the faucets to Kroin's customers at prices below those
Kroin was charging. One year later, Robern announced plans to
market its sink module with the Falling Water faucet. Lund
produced evidence that Robern has continued to use pictures of
the VOLA in promotional materials, despite the fact that it has
replaced the VOLA with the Falling Water faucet in its sink
modules.
Kohler introduced the Falling Water faucet to the
market in 1996. Lund filed suit on February 27, 1997, alleging
trade dress infringement under Section 43(a) of the Lanham Act
and trade dress dilution under the FTDA. Kohler denied any
violations and argued that the FTDA was unconstitutional as
applied to product designs. The district court held an
evidentiary hearing on April 16 and 30, 1997.
The court ruled on the motion for a preliminary
injunction in three stages. In a February 5, 1998 Memorandum
and Order, the court found that Lund had demonstrated a
substantial likelihood of success on its dilution claim, and so
enjoined Kohler from selling its Falling Water faucet. SeeLund I, 11 F. Supp. 2d at 127. At the same time, the court
found that Lund had failed to show likelihood of success on its
claim of trade dress infringement, and it reserved decision on
the question of the constitutionality of the FTDA pending
additional briefing. See id.
On February 12, 1998, the district court stayed the
preliminary injunction pending resolution of Kohler's claim
that application of the FTDA to product designs violates the
Patent Clause.
In an order dated March 31, 1998 and a memorandum
dated April 2, 1998, the district court found that Kohler's
constitutional argument was unlikely to succeed on the merits,
lifted the stay on the injunction, and ordered Lund to post a
bond of $250,000. See I.P. Lund Trading ApS v. Kohler Co., 11
F. Supp. 2d 127, 134-35 (D. Mass. 1998) ("Lund II").
The district court also denied Kohler's request to
stay the injunction pending appeal to this court. On April 29,
1998, this court rejected Kohler's request for a stay pending
appeal.
III. Purposes of Trademark and Trade Dress Protection
The basic building blocks of the analysis are worth
reiterating. Section 43(a) of the Lanham Act provides
protection against the use of "any word, term, name, symbol, or
device" that "is likely to cause confusion, or to cause mistake,
or to deceive" as to the source of a product. 15 U.S.C.
1125(a). Trade dress includes "the design and appearance of [a]
product together with the elements making up the overall image
that serves to identify the product presented to the consumer."
Chrysler Corp. v. Silva, 118 F.3d 56, 58 (1st Cir. 1997)
(alteration in original) (quoting Fun-Damental Too, Ltd. v.
Gemmy Indus. Corp., 111 F.3d 993, 999 (2d Cir. 1997)) (internal
quotation marks omitted). The new law, the FTDA, Lanham Act
section 43(c), grants protection to "famous" marks against any
use of the mark that "causes dilution of the distinctive quality
of the mark." 15 U.S.C. 1125(c).
To resolve the issues presented, we go back to the
underlying purposes of trademark and trade dress infringement
and dilution protections. The various intellectual property
protection mechanisms serve related but distinct ends. These
distinct ends inform the selection of appropriate tests under
the different sections of the Lanham Act. These distinctions
are also particularly pertinent to Kohler's constitutional
claim that dilution protection of trade dress of product design
amounts to an unconstitutional perpetual monopoly under the
Patent Clause of the Constitution. The Patent Clause itself
describes the "exclusive Right" given as being for "limited
Times." U.S. Const. art. I, 8, cl. 8. "The laws of patents,
copyright, trade secrets, trademarks, unfair competition, and
misappropriation balance the conflicting interests in
protection and dissemination differently in different contexts
through specific rules that determine just who will receive
protection, of just what kind, under what circumstances, and
for how long." DeCosta v. Viacom Int'l, Inc., 981 F.2d 602, 605
(1st Cir. 1992).
A primary purpose of trade dress or trademark
protection is to protect that which identifies a product's
source. See Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159,
162 (1995) (noting that "the statutory definition of a trademark
. . . requires that a person 'us[e]' or 'inten[d] to use' the
mark '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, even if that source is
unknown'" (alterations in original) (quoting 15 U.S.C. 1127)).
"The purpose of trademark laws is to prevent the use of the same
or similar marks in a way that confuses the public about the
actual source of the goods or service." Star Fin. Servs., Inc.v. Aastar Mortgage Corp., 89 F.3d 5, 9 (1st Cir. 1996).
Traditional trademark and trade dress law thus encourages
production of products of high quality "and simultaneously
discourages those who hope to sell inferior products by
capitalizing on a consumer's inability quickly to evaluate the
quality of an item offered for sale." Qualitex, 514 U.S. at
164. More importantly for our purposes, trademark and trade
dress protection serves to protect both the trademark or trade
dress owner and the public by avoiding confusion or mistake.
In contrast, dilution statutes, and the FTDA in
particular, protect only the trademark or trade dress owner and
are not concerned with possible confusion on the part of
consumers. See J. Gilson, Trademark Protection and Practice 5.12 (1998). Any protection of the public intended by the
FTDA is indirect at best. "Anti-dilution statutes have
developed to fill a void left by the failure of trademark
infringement law to curb the unauthorized use of marks where
there is no likelihood of confusion between the original use
and the infringing use." L.L. Bean, Inc. v. Drake Publishers,
Inc., 811 F.2d 26, 30 (1st Cir. 1987). Filling this void,
Congress passed the FTDA in 1995 both to provide uniform
national protection against dilution and to bring this
country's law into conformity with international agreements.
See H.R. Rep. No. 104-374, at 3-4 (1995), reprinted in 1995
U.S.C.C.A.N 1029, 1030-31.
IV. Prerequisites for Protection from Infringement and
Dilution
Despite different purposes being served, claims for
protection against trademark and trade dress infringement, on
the one hand, and dilution, on the other, share three common
elements before the analyses diverge. Those elements are that
marks (a) must be used in commerce, (b) must be non-functional,
and (c) must be distinctive. While all such marks may be
protected against infringement, under the FTDA only famous and
distinctive marks are eligible for protection against dilution.
No requirement for fame is present in trademark and trade dress
infringement.
A. Use in Commerce
There is no dispute that both Lund's and Kohler's
faucets have been used in commerce, thus satisfying the first
requirement for protection against both infringement and
dilution. See 15 U.S.C. 1125(a),(c).
B. Functionality
1. Legal Standards
To be protected under the Lanham Act, a trademark or
trade dress must not be functional. See Two Pesos, Inc. v.
Taco Cabana, Inc., 505 U.S. 763, 775 (1992). If the trade
dress is functional, it receives no protection under trademark
law. The functionality doctrine has considerable economic and
legal significance. "The functionality doctrine prevents
trademark law, which seeks to promote competition by protecting
a firm's reputation, from instead inhibiting legitimate
competition by allowing a producer to control a useful product
feature." Qualitex, 514 U.S. at 164. Thus, the functionality
doctrine marks the boundaries of trade dress protection.
As discussed later, "if functional features were
given trademark or trade dress protection, such protection
would clearly clash with the objectives of federal functional
patent law." 1 J. McCarthy, McCarthy on Trademarks and Unfair
Competition 7:64 (4th ed. 1996). The rule against functional
features being protected as symbols of origin "is obviously to
prevent the grant of perpetual monopoly by the issuance of a
trade-mark in the situation where a patent has either expired,
or . . . cannot be granted." Sylvania Elec. Prods., Inc. v.Dura Elec. Lamp Co., 247 F.2d 730, 732 (3d Cir. 1957).
The core inquiry into whether trade dress is
functional requires examination of the effects that granting
protection to a product will have on the ability of others to
compete. Thus, in Inwood Laboratories, Inc. v. Ives
Laboratories, Inc., 456 U.S. 844 (1982), the Court stated that
a functional product feature is one that "is essential to the
use or purpose of the article or [that] . . . affects the cost
or quality of the article." Id. at 851 n.10. In Qualitex, the
Court added that the inquiry into functionality turns in part
on whether granting protection to a mark "would permit one
competitor . . . to interfere with legitimate (nontrademark-
related) competition through actual or potential exclusive use
of an important product ingredient." Qualitex, 514 U.S. at
170.
The fact that a product contains some functional
elements does not, however, preclude Lanham Act protection.
"[A] particular arbitrary combination of functional features,
the combination of which is not itself functional, properly
enjoys protection." Taco Cabana Int'l, Inc. v. Two Pesos, Inc.,
932 F.2d 1113, 1119 (5th Cir. 1991), aff'd, 505 U.S. 763
(1992). The crucial inquiry is into the effect that granting
protection will have on the opportunity of others to compete.
As the parties note, this court has not previously
decided whether a showing of non-functionality is an element of
the claim of the party seeking protection, or whether
functionality is an affirmative defense on which the defending
party has the burden. See TEC Eng'g Corp., 82 F.3d at 546 n.3.
In Fisher Stoves, Inc. v. All Nighter Stove Works, Inc., 626
F.2d 193 (1st Cir. 1980), this court, although not resolving
the issue, stated that it was "not at all clear" that the
district court erred when it placed the burden of proof on the
plaintiff. Id. at 195. Other circuit courts which have
decided the issue are split. Compare Sunbeam Prods., Inc. v.
West Bend Co., 123 F.3d 246, 251 (5th Cir. 1997) (holding that
plaintiffs bear the burden), cert. denied, 118 S. Ct. 1795
(1998), Woodsmith Publ'g Co. v. Meredith Corp., 904 F.2d 1244,
1247 (8th Cir. 1990), Rachel v. Banana Republic, Inc., 831 F.2d
1503, 1506 (9th Cir. 1987), Ambrit, Inc. v. Kraft, Inc., 812
F.2d 1531, 1535 (11th Cir. 1986), Kwik-Site Corp. v. Clear View
Mfg. Co., 758 F.2d 167, 178 (6th Cir. 1985), and CIBA-GEIGY
Corp. v. Bolar Pharm. Co., 747 F.2d 844, 854 (3d Cir. 1984),
with Computer Care v. Service Sys. Enters., Inc., 982 F.2d
1063, 1068 (7th Cir. 1992) (holding that defendants bear the
burden), Brunswick Corp. v. Spinit Reel Co., 832 F.2d 513, 520
(10th Cir. 1987), and LeSportsac, Inc. v. K Mart Corp., 754
F.2d 71, 75-76 (2d Cir. 1985). See generally 1 McCarthy
7:72. The Lanham Act itself provides no guidance on the
issue, and the caselaw contains little discussion of the
rationale for allocating the burden of proof to plaintiffs or
defendants.
We hold that the party alleging trademark
infringement and dilution bears the burden of proving non-
functionality of those elements of the physical object that the
plaintiff claims constitute the mark and for which the
plaintiff is seeking protection. Several rationales support
the burden being placed on those seeking protection, here the
plaintiff. Functionality, or, more precisely, a showing of
non-functionality of the elements for which protection is
sought, is an essential component of the protection the law
gives to trademarks and trade dress. A showing of non-
functionality is essential because the doctrine prevents
trademarks from limiting legitimate competition. Put
differently, "functionality" plays an important role in
preventing a constitutional problem between the Lanham Act and
patent law. Moreover, Congress did not intend to provide
Lanham Act protection to functional aspects of products, seeTwo Pesos, 505 U.S. at 775, and thus it would be anomalous if
the burden were not placed on the party seeking protection.
Such an assignment of the burden of proof ensures that
trademarks serve their intended purpose of identifying product
sources.
A plaintiff's product is known best by plaintiff
itself. A contrary result, placing the burden on defendant,
could lead to untoward results. It could also lead to
unwarranted litigation. If protected elements of a product are
indeed functional, and the burden of showing non-functionality
is placed on plaintiff, plaintiff will have incentives not to
bring unwarranted actions hoping that defendants will fail to
raise or prove functionality as an affirmative defense. It
would be far easier for plaintiffs to obtain protection for
functional aspects of their products -- and thus limit
legitimate competition -- if defendants were to bear the burden
of proof, as defendants might lack the ability or incentive to
pursue the issue fully. There is value in minimizing the
chances of the issue not being properly raised or presented.
2. Application of Functionality Doctrine
The district court did not make a specific finding on
functionality and the record on the important issue of
functionality is unclear. Although Lund I commented that "[n]o
one argues that the VOLA design is 'functional,' as that term
is used in trademark law," Lund I, 11 F. Supp. 2d at 120 n.12,
Kohler did in fact argue in a filing that "to the extent that
some features on the respective faucets may somewhat resemble
each other, these features are either functional in nature and
thus not protectable under the Lanham Act or so commonly used
in the plumbing industry that they are obvious -- not
distinctive of a particular product" (emphasis added). Thus
Kohler did not waive the issue. We cannot say that it is
obvious no aspect of the VOLA is functional; indeed some
aspects give the appearance of being functional and so the
issue is a real one. There are significant dissimilarities
between the two faucets, and at least some of the similarities
that do exist are suggestive of functionality. Nonetheless, we
will assume at this stage of the case that there is some non-
functional residuum based on the aesthetic unity and
proportions of the VOLA.
The issue of functionality plays a key role in this
case. In the absence of a finding of non-functionality of the
aspects of the VOLA for which protection is sought, and in
light of our placing the burden of proof on plaintiff, there
can be no trademark or trade dress protection. If the VOLA
design or aspects of it are functional, then the only source of
exclusive rights would be in a utility patent. Trademark and
trade dress law cannot be used to evade the requirements of
utility patents, nor the limits on monopolies imposed by the
Patent Clause. This also means that in the absence of a
finding of non-functionality, no protection is available under
the FTDA and no injunction may issue under the FTDA, a point to
which we return later.
But there is another reason that the functionality
analysis must be undertaken. There is a relationship between
functionality and distinctiveness:
If a feature is functional, it is likely that all
similar articles will have a similar functional
feature, and one seller's feature is not likely to
evoke any response in buyers that it is unique or is
a distinctive symbol of origin.
1 McCarthy 7:64. It is also clear that even if a functional
feature has achieved secondary meaning as an indication of
origin, that feature is not protectable under trademark or
trade dress law. See Fisher Stoves, 626 F.2d at 195-96; 1
McCarthy 7:66.
C. Distinctiveness
The third prerequisite for protection is
distinctiveness. In order to receive trade dress protection,
a product must either be inherently distinctive or have
acquired secondary meaning. See Two Pesos, 505 U.S. at 769;
TEC Eng'g Corp., 82 F.3d at 545. The inquiry into
distinctiveness turns on the total appearance of the product,
not on individual elements. Cf. Sunbeam, 123 F.3d at 251
(stating that "'trade dress' refers to the total image and
overall appearance of a product"). The district court found,
within the usual preliminary injunction standards about
likelihood of success, that the VOLA faucet was not inherently
distinctive but that it had acquired secondary meaning.
1. Inherently Distinctive Marks
In analyzing whether a product's mark is distinctive,
courts have often divided marks into the five categories set
forth in Abercrombie & Fitch Co. v. Hunting World, Inc., 537
F.2d 4 (2d Cir. 1976): 1) generic, 2) descriptive, 3)
suggestive, 4) arbitrary, and 5) fanciful. See Two Pesos, 505
U.S. at 768 (discussing Abercrombie); Abercrombie, 537 F.2d at
9. Suggestive, arbitrary, and fanciful marks are deemed
inherently distinctive; descriptive marks receive protection
only upon a showing that they have acquired secondary meaning;
and generic marks are not protectable. Abercrombie itself
addressed words, the usual form of mark. The Abercrombie test
has been used in some other areas of trade dress, such as
product packaging and the overall appearance of a restaurant.
See Two Pesos, 505 U.S. at 768-69, 773.
Courts have struggled with whether the Abercrombietest, originally designed for words, should be imported
wholesale into that specialized area of trade dress claimed to
come from product design. Although the Supreme Court in Two
Pesos endorsed the Abercrombie test in the context of non-
verbal trade dress not involving product designs, at least two
circuits have been skeptical of the appropriateness of the test
in the product design context. See Knitwaves, Inc. v.
Lollytogs Ltd., 71 F.3d 996, 1007-08 (2d Cir. 1995); Duraco
Prods., Inc. v. Joy Plastic Enters., Ltd., 40 F.3d 1431, 1445-
49 (3d Cir. 1994); 1 McCarthy 8:12. Indeed, these courts,
questioning whether a product design can ever be inherently
distinctive, apply a more rigorous standard for determining
inherent distinctiveness of product designs than they do for
determining the inherent distinctiveness of more traditional
forms of trade dress. See Knitwaves, 71 F.3d at 1008-09
(requiring that a product design serve primarily to indicate a
product's source); Duraco Prods., 40 F.3d at 1449 (requiring
product designs to be "(i) unusual and memorable; (ii)
conceptually separable from the product; and (iii) likely to
serve primarily as a designator of origin of the product"). The
problem with applying traditional trademark or trade dress
classifications to product designs arises because "one cannot
automatically conclude from a product feature or configuration
-- as one can from a product's arbitrary name . . . -- that, to
a consumer, it functions primarily to denote the product's
source." Duraco Prods., 40 F.3d at 1441.
Parting from the skeptics, the Eighth Circuit has
rejected any differentiation between product designs and other
forms of trade dress. See Stuart Hall Co. v. Ampad Corp., 51
F.3d 780, 787-88 (8th Cir. 1995). The Stuart Hall court argued
that the Second and Third Circuit tests would effectively
eliminate the possibility that a product design could be
inherently distinctive, collapsing the inherent distinctiveness
inquiry into the secondary meaning inquiry. See id. at 787
("The requirement of source-identification applies not to
whether a trade dress is inherently distinctive, but to whether
it has a secondary meaning."). Such an outcome would directly
contradict the Supreme Court's holding in Two Pesos that
inherently distinctive trade dress is protectable even absent
a showing of secondary meaning. See id. at 788 (citing Two
Pesos, 505 U.S. at 769-70).
The district court here applied the Second Circuit's
Knitwaves test. It examined whether the VOLA's design was
"likely to serve primarily as a designator of origin of the
product." Lund I, 11 F. Supp. 2d at 120 (quoting Knitwaves, 71
F.3d at 1008) (internal quotation marks omitted). Like the
court in Knitwaves, the district court did so by looking to
whether the VOLA's creators intended the design to serve as a
source indicator. See id.; see also Knitwaves, 71 F.3d at 1009
("As Knitwaves' objective in the two sweater designs was
primarily aesthetic, the designs were not primarily intended as
source identification. Those sweater designs therefore fail to
qualify for protection of trade dress inherent in product
design."). The court found that the VOLA's design was "not
'primarily' intended as source identification" because "Lund's
design objective was 'primarily aesthetic,'" and thus "the
design of the VOLA faucet cannot be considered inherently
distinctive." Id.
Lund argues that the district court was in error
because it was obligated by Supreme Court precedent to apply
the Abercrombie test. Lund argues that application of the
wrong test produced the wrong result. Lund points to other
decisions in the District of Massachusetts which have rejected
the Knitwaves and Duraco Products tests and adopted the
Abercrombie analysis in the product design context. See Big
Top USA, Inc. v. Wittern Group, 998 F. Supp. 30, 46-47 (D.
Mass. 1998); Lainer v. Bandwagon, Inc., 983 F. Supp. 292, 300
(D. Mass. 1997).
We do not believe that the Supreme Court's
endorsement of the Abercrombie test in Two Pesos requires a
strict application of the Abercrombie test in all contexts,
particularly where product design is involved. The Supreme
Court stated only that "[m]arks are often classified in" the
five Abercrombie categories. Two Pesos, 505 U.S. at 768. The
Court did not mandate the application of the Abercrombie test;
rather, it affirmed the use of the Abercrombie factors in the
case before it. See id. at 768-69. The holding of Two Pesoswas that plaintiffs seeking protection for inherently
distinctive trade dress are not required to demonstrate
secondary meaning. See id. at 770. Unless the Court decides
to carve out an exception to this rule for claims about product
design, which we deem unlikely, then the holding must be
honored. And so we agree with the Eighth Circuit that the test
for inherent distinctiveness should not be altered to the
degree that it eviscerates the distinction between inherently
distinctive trade dress and trade dress that has acquired
secondary meaning. We do not believe, however, that analysis
of the problem using different factors than the Abercrombiefactors results in such an outcome.
This court has previously relied on the test set
forth in Seabrook Foods, Inc. v. Bar-Well Foods Ltd., 568 F.2d
1342 (C.C.P.A. 1977), to determine whether a product design is
inherently distinctive, and we do so again. In Wiley v.
American Greetings Corp., 762 F.2d 139 (1st Cir. 1985), this
court stated that inherent distinctiveness of a product design
should be determined by reference to
whether [the design] was a "common" basic shape or
design, whether it was unique or unusual in a
particular field, whether it was a mere refinement of
a commonly-adopted and well-known form of
ornamentation for a particular class of goods viewed
by the public as dress or ornamentation for the
goods, or whether it was capable of creating a
commercial impression distinct from the accompanying
words.
Id. at 141 (alteration in original) (quoting Seabrook Foods,
568 F.2d at 1344) (internal quotation marks omitted). We also
agree with one commentator's analysis that "[i]n reality, all
three [Seabrook Foods] questions are merely different ways to
ask whether the design, shape or combination of elements is so
unique, unusual or unexpected in this market that one can
assume without proof that it will automatically be perceived by
customers as an indicator of origin -- a trademark." 1 McCarthy
8:13. Although the plaintiff in Wiley brought suit under
state common law, we find the test equally applicable to claims
brought under the Lanham Act.
The Seabrook Foods test is largely consistent with
the Second Circuit's Knitwaves test for inherent
distinctiveness, that is, whether the design "is likely to serve
primarily as a designator of origin of the product." Knitwaves,
71 F.3d at 1008 (quoting Duraco Prods., 40 F.3d at 1449)
(internal quotation marks omitted); see also Landscape Forms,
Inc. v. Columbia Cascade Co., 113 F.3d 373, 378 n.3 (2d Cir.
1997) (rejecting an argument that the Knitwaves and Seabrook
Foods tests are inconsistent).
In contrast to the Second Circuit, however, we
believe that Two Pesos obliges courts to maintain a clear
distinction between the inquiry into secondary meaning and the
inquiry into inherent distinctiveness. Cf. Knitwaves, 71 F.3d
at 1008. Although plaintiffs seeking to demonstrate that a
product design is inherently distinctive may find that their
task is a difficult one, Two Pesos makes clear that this
opportunity remains open. Product designs are unlike many more
traditional subjects of trademark protection, "which almost
automatically tell a customer that they refer to a brand,"
Qualitex, 514 U.S. at 162-63, and it is therefore unlikely that
many product designs will be found to be inherently
distinctive. Nevertheless, plaintiffs seeking trade dress
protection for product designs are entitled to attempt to show
that their designs are so unique as to be primarily perceived
as indicating the product's origin. Cf. 2 McCarthy 15:9 ("A
design or shape, or a trade dress that is so fanciful as to be
inherently distinctive can function as a mark without the need
for proof of secondary meaning. The issue is whether this
shape is so different or unusual for this type of goods or
services that its distinctiveness can be assumed.").
Applying Knitwaves, the district court did make a
finding as to inherent distinctiveness. It found that the
VOLA's design is not "likely to serve primarily as a designator
of origin of the product." On this record that finding cannot
be said to be clearly erroneous. One aspect of the test
applied in reaching this conclusion is, nonetheless,
problematic. The district court relied on evidence as to
Lund's intent. But the plaintiff's intent is not entitled to
much weight in a determination of whether a product design is
inherently distinctive. See 1 McCarthy 8.13 (stating that
"the intent of the designer is a very weak indicator of the
likely reaction of potential customers"); cf. Landscape Forms,
113 F.3d at 377 n.3 ("If Knitwaves forced courts to decide
whether a manufacturer's purpose was to create either something
of beauty or something indicative of source, we agree the task
would often prove impossible."). The district court may,
however, have given little weight to this factor in reaching
its conclusion.
The district court used the Knitwaves test, which is
consistent with this Circuit's Wiley/Seabrook test, to reach
its conclusion. There is adequate evidence in the record to
support the district court's determination there was little
probability of success in demonstrating that the VOLA's design
inherently and primarily serves to identify the faucet's
source.
2. Secondary Meaning
The second method for demonstrating that a product's
trademark or trade dress is distinctive and thus protectable is
through a showing that the mark has acquired secondary meaning.
"To establish secondary meaning, a manufacturer must show that,
in the minds of the public, the primary significance of a
product feature or term is to identify the source of the
product rather than the product itself." Inwood Lab., 456 U.S.
at 851 n.11.
While some have suggested that the primary
significance test is too stringent, particularly for product
design cases, we reject any lesser test. The Supreme Court has
consistently used "primary significance." As the Court said in
a case concerning a product design (the shape of a shredded
wheat cereal biscuit), secondary meaning occurs when "the
primary significance . . . in the minds of the consuming public
is not the product but the producer." Kellogg Co. v. National
Biscuit Co., 305 U.S. 111, 118 (1938). Where protection of the
product design itself is at issue, there is every reason to
hold to the usual stringent primary significance test in order
to minimize constitutional concerns.
Secondary meaning may be "established in a number of
ways," and courts may weigh a number of factors, including the
length or exclusivity of use of a mark, "the size or prominence
of [plaintiff's] enterprise," and the existence of substantial
advertising by plaintiff. President & Trustees of Colby
College v. Colby College-New Hampshire, 508 F.2d 804, 807-08
(1st Cir. 1975). Other factors include the product's
"[e]stablished place in the market" and "[p]roof of intentional
copying." 2 McCarthy 15:30; see also Boston Beer Co. Ltd.
Partnership v. Slesar Bros. Brewing Co., 9 F.3d 175, 182 (1st
Cir. 1993) (listing factors). Secondary meaning may be
determined with reference to a particular trade or "branch of
the purchasing public." See Colby College, 508 F.2d at 808
(quoting G. & C. Merriam Co. v. Saalfield, 198 F. 369, 373 (6th
Cir. 1912)) (internal quotation marks omitted).
The district court found that Lund had a likelihood
of success of showing that the VOLA had achieved secondary
meaning, noting that "there is sufficient evidence in the record
. . . to conclude that purchasers of high-end bathroom
fixtures, including interior designers, now know the VOLA by
sight." Lund I, 11 F. Supp. 2d at 121. The district court also
found that "[e]nough money and effort has been invested in
promoting the VOLA's design that it is recognizable as coming
from a unique source, albeit through a variety of distributors,"
and that "the primary significance of the VOLA design, to the
relevant public, is as a high-end product, coming from Lund."
Id.
Kohler challenges the district court's determination
that the VOLA has most likely acquired secondary meaning. We
review the district court's findings of fact for clear error.
The district court's conclusion is doubtful for
several reasons. First, as noted, there was no analysis of
functionality and there is a relationship between functionality
and secondary meaning.
Second, the context suggests otherwise -- the
district court found, under separate but related doctrines,
that the faucets were mostly dissimilar. Cf. 2 McCarthy
15:38 (stating that copying may give rise to an inference of
secondary meaning). The court found that there was no customer
confusion. It is in this barren context that the claim is made
that something in the design which is not functional serves
primarily to signify the source of the faucet and not primarily
to signify that it is an aesthetically pleasing faucet.
Third, little is present of the evidence
traditionally relied on (but which admittedly is not a sine qua
non) for a finding of secondary meaning. The secondary meaning
analysis is primarily a subjective one, looking into the minds
of potential customers. Customer survey evidence, while not
required, is a valuable method of showing secondary meaning.
See Boston Athletic Ass'n v. Sullivan, 867 F.2d 22, 32 n.9 (1st
Cir. 1989); Colby College, 508 F.2d at 809. As the district
court correctly noted, the purported survey evidence was
unreliable. The expert testimony, which involved one expert
testifying for each side, was contradictory.
Fourth, the VOLA has been sold by a number of
different companies in this country and has not been advertised
here as coming from Lund. This situation is akin to the use of
different marks to identify a single product. "When a product
. . . design is sold by the authority of plaintiff under
several different word marks . . ., it is more difficult for
plaintiff to prove acquisition of secondary meaning - that is,
that the shape or design identifies a single source." 1
McCarthy 8:14 (emphasis in original).
Finally, while such testimony is entitled to little
weight because the focus is on the understanding of prospective
purchasers, the testimony is that Lund did not intend in
designing the product that the design signify source.
It is true that the VOLA product has been much
advertised or featured, but at times without any source
attribution or with attribution to different sources.
Lund relies heavily on the testimony of Corbin, a
retailer presented as Lund's expert. Corbin stated that the
VOLA was "perceived as a high-end product, a very simple and
elegant product; one that is generally known by name as either
a Kroin faucet or Jacobsen faucet; . . . a design icon . . . ."
But to say it is a design success is not to say that the
primary significance of the design is to signify its source.
In the end we need not resolve the point. Lund lost
on the infringement preliminary injunction and for other
reasons, even if Lund had shown secondary meaning, it has not
shown itself entitled to relief under the FTDA.
V. Infringement
Establishing trademark infringement requires a
showing that prospective buyers of the product in question --
here, high-end faucets -- are likely to be confused as to the
product's source. See 15 U.S.C. 1125(a); Two Pesos, 505 U.S.
at 769; TEC Eng'g Corp., 82 F.3d at 545; Purolator, Inc. v.
EFRA Distribs., Inc., 687 F.2d 554, 559 (1st Cir. 1982); cf.International Ass'n of Machinists & Aerospace Workers v.
Winship Green Nursing Ctr., 103 F.3d 196, 201 (1st Cir. 1996)
("[T]he law has long demanded a showing that the allegedly
infringing conduct carries with it a likelihood of confounding
an appreciable number of reasonably prudent purchasers
exercising ordinary care."). Establishing infringement also
requires a showing that the plaintiff uses, and thus owns, the
mark in question, and that the defendant's mark is similar to
or the same as the plaintiff's mark. See DeCosta, 981 F.2d at
605. A plaintiff is not entitled to a preliminary injunction
on a trademark infringement claim unless it can persuade the
district court that it is likely to be able to demonstrate
consumer confusion. See WCVB-TV v. Boston Athletic Ass'n, 926
F.2d 42, 44 (1st Cir. 1991).
This court has identified eight factors to be weighed
in determining likelihood of confusion:
(1) the similarity of the marks; (2) the similarity
of the goods; (3) the relationship between the
parties' channels of trade; (4) the relationship
between the parties' advertising; (5) the classes of
prospective purchasers; (6) evidence of actual
confusion; (7) the defendant's intent in adopting its
mark; and (8) the strength of the plaintiff's mark.
. . . No one factor is necessarily determinative,
but each must be considered.
Boston Athletic Ass'n, 867 F.2d at 29 (quoting Volkswagenwerk
Aktiengesellschaft v. Wheeler, 814 F.2d 812, 817 (1st Cir.
1987)) (citations and internal quotation marks omitted). The
factors are non-exclusive, however, and are not always apt to
the particular facts of a case. See Winship Green, 103 F.3d at
201. In addition, the first factor, similarity, "is determined
on the basis of the total effect of the designation, rather
than a comparison of individual features." Pignons S.A. de
Mecanique de Precision v. Polaroid Corp., 657 F.2d 482, 487
(1st Cir. 1981) (internal quotation marks omitted).
The district court applied these eight factors and
determined that, taken together, the factors weighed against a
finding of a likelihood of consumer confusion. The court found
that the strength of the VOLA's mark and the similarity of the
VOLA and the Falling Water products were factors that favored
the plaintiffs, but that the class of prospective purchasers,
the channels of trade, the defendant's intent, and the
dissimilarity of the VOLA and Falling Water marks all favored
the defendants. The court found that the two remaining factors
did not weigh in favor of either party.
Lund argues that the district court misapplied the
eight factors listed above, saying the court committed four
errors. First, Lund argues that the district court accorded
consumer sophistication excessive weight, particularly in
reaching its determination that the channels of trade and the
classes of prospective consumers made confusion less likely.
Second, Lund argues that the court erred in its determination
that the dissimilarity of the marks weighed against a finding
of consumer confusion. Third, Lund argues that the district
court erred when it found that Kohler's intention not to copy
the VOLA weighed against a finding of consumer confusion.
Fourth, Lund argues that the district court ignored evidence of
actual consumer confusion.
Review of factual determinations is for clear error.
We have carefully considered each of Lund's arguments, and are
unpersuaded that the district court's determination as to the
probability of success on each of these points was erroneous.
However, we clarify two matters.
First, little weight should be given to the
determination that Kohler did not intend to copy the VOLA. In
Chrysler, this court commented that "[s]trictly, intent, or lack
thereof, does not affect the eyes of the viewer." Chrysler, 118
F.3d at 59 n.3. We added that "[p]roof of bad intent may,
psychologically, hurt as an admission," but "[p]roof of good
intent does not change appearance." Id. Similarly, in Star
Financial Services we commented that "a finding of good faith
is no answer if likelihood of confusion is otherwise
established." Star Fin. Servs., 89 F.3d at 11 (quoting Colby
College, 508 F.2d at 811-12) (internal quotation marks
omitted). Thus a finding of no intent to copy may not outweigh
other factors that suggest a likelihood of confusion.
Second, the district court's discussion of post-sale
confusion was based on an erroneous premise. In finding that
post-sale confusion was unlikely, the court commented that
"there is little or no chance that [the faucets] will be resold
to unwary consumers." Lund I, 11 F. Supp. 2d at 123. Post-sale
confusion refers not to the resale of the original product,
however, but to the risk that non-purchasers, who themselves
may be future consumers, will be deceived. See 3 McCarthy
23:7 (noting that "[t]he damage to the senior user . . . is that
consumers could acquire the prestige value of the senior user's
product by buying the copier's cheap imitation," and that in
such a case, "[e]ven though the knowledgeable buyer knew that
it was getting an imitation, viewers would be confused"). For
example, in a case involving counterfeit Rolex watches, the
court commented that
[i]ndividuals examining the counterfeits, believing
them to be genuine Rolex watches, might find
themselves unimpressed with the quality of the item
and consequently be inhibited from purchasing the
real time piece. Others who see the watches bearing
the Rolex trademarks on so many wrists might find
themselves discouraged from acquiring a genuine
because the items have become too common place and no
longer possess the prestige once associated with
them.
Rolex Watch U.S.A., Inc. v. Canner, 645 F. Supp. 484, 495 (S.D.
Fla. 1986). In other words, even if the purchaser of a Falling
Water faucet knew that she was buying the Kohler faucet and not
the VOLA, the district court could still find a likelihood of
confusion if subsequent viewers of the faucet would believe it
to be a VOLA. Cf. Keds Corp. v. Renee Int'l Trading Corp., 888
F.2d 215, 222 (1st Cir. 1989) (noting that "point of sale
confusion was not the only issue" because "prospective
consumers, viewing the clothes on other people, would be
confused as to the origin of the goods"). However, because the
district court's determination of no likelihood of post-sale
confusion does not appear to have been a key factor in its
decision, we do not believe it undercuts the court's conclusion
regarding probability of success on the merits.
The district court correctly found that Lund was
unlikely to prevail on the merits of its infringement claim,
and so correctly denied the preliminary injunction on those
grounds.
VI. Dilution
Lund obtained the preliminary injunction against
Kohler's distribution and promotion of the Falling Water faucet
based on the district court's finding of likelihood of success
under the new federal anti-dilution statute, the FTDA, which
became effective in 1996. The injunction rested on the
conclusion that Lund had established a likelihood of success of
showing two essential elements. The first is that the "mark,"
that is, the VOLA product design as an identifying mark, was
"famous." The second is that Kohler's Falling Water faucet
"diluted" Lund's mark. Both the terms "famous" and "dilution"
are terms of art given specific rigorous meanings by the FTDA.
We start with the language of the Act. The FTDA
provides:
The owner of a famous mark shall be entitled, subject
to the principles of equity and upon such terms as
the court deems reasonable, to an injunction against
another person's commercial use in commerce of a mark
or trade name, if such use begins after the mark has
become famous and causes dilution of the distinctive
quality of the mark, and to obtain such other relief
as is provided in this subsection.
15 U.S.C. 1125(c)(1).
The FTDA created a new "federal cause of action to
protect famous marks from unauthorized users that attempt to
trade upon the goodwill and established renown of such marks
and, thereby, dilute their distinctive quality." H.R. Rep. No.
104-374, at 3, reprinted in 1995 U.S.C.C.A.N at 1030. Congress
acted against a "patch-quilt system" of state law protection in
which approximately twenty-five states had laws prohibiting
trademark dilution. Id. While creating a federal cause of
action, Congress expressly did not preempt state law, but
attempted to create uniformity through the availability of a
federal cause of action. A second consideration -- protection
of famous marks of U.S. companies abroad -- also motivated
Congress. See id. at 4, reprinted in 1995 U.S.C.C.A.N at 1031.
Enactment of the FTDA was consistent with agreements which were
part of the Uruguay Round of the General Agreement on Tariffs
and Trade (specifically, the Agreement on Trade-Related Aspects
of Intellectual Property Rights, including Trade in Counterfeit
Goods ("TRIPS")) and the Paris Convention. Enactment of the law
was also thought to be of value to the U.S. in bilateral and
multi-lateral trade negotiations. See id.
Sponsors of the bill articulated the type of problem
the Act was meant to solve:
[T]his bill is designed to protect famous trademarks
from subsequent uses that blur the distinctiveness of
the mark or tarnish or disparage it, even in the
absence of a likelihood of confusion. Thus, for
example, the use of DuPont shoes, Buick aspirin, and
Kodak pianos would be actionable under this bill.
141 Cong. Rec. S19306, S19310 (daily ed. Dec. 29, 1995)
(statement of Sen. Hatch). Thus the archetypal problems
involved non-competing products as to which there could, by
definition, be no confusion and a world-famous brand name which
was either tarnished or blurred by its application to a
different product which was obviously trading on the good will
of that name.
The language of the FTDA itself is, however, not
limited to addressing these archetypal problems. A few
observations are in order. First, the Act applies to products
which are competitors (as is true of the faucets here) as well
as to products which are totally dissimilar and are not
competitors. Second, the Act applies to a famous "mark" and
does not restrict the definition of that term to names or
traditional marks. In the absence of such a restriction, the
Act applies to all types of marks recognized by the Lanham Act,
including marks derived from product designs. Kohler's
argument that the Act cannot, as a matter of statutory
interpretation, be applied to product design is rejected.
Third, the Act applies even where there is no customer
confusion, a point with consequences discussed later. Fourth,
the additional protection afforded by the Act requires that a
mark go beyond what is required for ordinary Lanham Act
protection. Only those marks which are "distinctive and famous"
are protected. 15 U.S.C. 1125(c)(1). As set forth in the
1987 Trademark Review Commission Report, the precursor of the
1996 Act, this language reflected "the policy goal that to be
protected, a mark had to be truly prominent and renowned." 3
McCarthy 24.91 (citing The United States Trademark
Association Trademark Review Commission Report and
Recommendations to USTA President and Board of Directors, 77
Trademark Rep. 375, 459-60 (1987)). With this background, we
turn to the district court's two essential conclusions.
A. Fame and Distinctiveness
The requirements of commercial use, non-
functionality, and distinctiveness are common to both the
infringement claim and the FTDA dilution claim. In order to
fall within the sphere of protection against dilution the FTDA
adds an additional requirement: the FTDA grants protection only
to famous marks. See 15 U.S.C. 1125(c); cf. Gilson
5.12[1][a] (calling the FTDA "a major breakthrough for an
elite category of trademark owners"). The FTDA provides a non-
exclusive list of eight factors that courts should consider in
determining whether a mark is "distinctive and famous." 15
U.S.C. 1125(c)(1). The eight statutory factors are:
(A) the degree of inherent or acquired
distinctiveness of the mark;
(B) the duration and extent of use of the mark in
connection with the goods or services with which the
mark is used;
(C) the duration and extent of advertising and
publicity of the mark;
(D) the geographical extent of the trading area in
which the mark is used;
(E) the channels of trade for the goods or services
with which the mark is used;
(F) the degree of recognition of the mark in the
trading areas and channels of trade used by the
marks' owner and the person against whom the
injunction is sought;
(G) the nature and extent of use of the same or
similar marks by third parties; and
(H) whether the mark was registered under the Act of
March 3, 1881, or the Act of February 20, 1905, or on
the principal register.
Id. The district court found likelihood of success on the
claim that the VOLA's design was a famous mark. Kohler
challenges this finding.
Both the text and legislative history of the original
bill in 1988 and the FTDA itself indicate a congressional
intent that courts should be discriminating and selective in
categorizing a mark as famous. For example, the Senate
Judiciary Committee Report on the 1988 precursor bill said the
Committee wished "to underscore its determination that the new
dilution provisions should apply only to . . . very unique
marks." 3 McCarthy 24:92 n.6 (quoting S. Rep. No. 100-515,
at 41-42) (internal quotation marks omitted). The Trademark
Review Commission noted that the showing of fame required
employment of a "higher standard" than fame among an
"appreciable number of persons" in order to be "eligible for
this extraordinary remedy." Id. n.8 (quoting The United States
Trademark Association Trademark Review Commission Report, 77
Trademark Rep. at 461) (internal quotation marks omitted). One
commentator has referred to this category of famous marks as
"Supermark[s]." See Gilson 5.12[1][a]. As the Restatement
(Third) of Unfair Competition notes:
A mark that evokes an association with a specific
source only when used in connection with the
particular goods or services that it identifies is
ordinarily not sufficiently distinctive to be
protected against dilution.
Restatement (Third) of Unfair Competition 25 cmt. e (1995).
The record here reflects that there was not
sufficient attention paid to the heightened fame standard that
the FTDA establishes. The district court found that "in its
market, the VOLA's design is famous and distinctive" based on
its prior analysis under the infringement claim that "the VOLA
mark is strong, and has acquired secondary meaning in its
market; and it has been used for some twenty years in this
country." Lund I, 11 F. Supp. 2d at 125. Both the Restatement
(Third) of Unfair Competition and the state anti-dilution
statutes against the background of which Congress enacted the
FTDA make clear that the standard for fame and distinctiveness
required to obtain anti-dilution protection is more rigorous
than that required to seek infringement protection. SeeRestatement (Third) of Unfair Competition 25 cmt. e. As one
commentator has stated:
Certainly, the mere acquisition of secondary meaning
to achieve trademark status in a non-inherently
distinctive designation is nowhere near sufficient to
achieve the status of "famous mark" under the anti-
dilution statute. The acquisition of secondary
meaning merely establishes the minimum threshold
necessary for trademark status: section 43(c)
requires a great deal more.
3 McCarthy 24:91; see also Gilson 5.12[1][c][ii] ("A
trademark can certainly be distinctive without being famous,
but it cannot be famous without being distinctive.").
We do not understand the district court's conclusion
about fame, despite some ambiguity, to have rested solely on
its conclusion that the VOLA faucet was distinctive (because it
had acquired secondary meaning); any such per se analysis would
be erroneous. But it appears that the district court did not
apply the more rigorous definition of fame under the FTDA.
While one can posit a case having very strong facts which
support a distinctiveness finding based on secondary meaning
and then using those facts to support the separate, more
rigorous analysis of fame, the facts in this case do not have
such strength. Lund has a difficult case to establish fame
through the product design of the VOLA faucet, and this record
is not strong. There has been no use by Kohler of the VOLA
name, or any other name by which the faucet is known. Kohler's
use, if any, is of a like product design. There is little to
suggest that this product design, itself unregistered and not
inherently distinctive, is so strong a mark and so well
publicized and known that it has achieved the level of fame
Congress intended under the Act. Consumer surveys could be
used as evidence of such fame, but consumer surveys are absent
from this case. Additionally, although some marks, such as
COCA-COLA, may be so famous as to be judicially noticed, seeGilson 5.12[1][c][iii], the VOLA faucet is far from being a
candidate for such judicial notice.
Further, national renown is an important factor in
determining whether a mark qualifies as famous under the FTDA.
Although the district court found that "in the world of interior
design and high-end bathroom fixtures, the VOLA is renowned,"
Lund I, 11 F. Supp. 2d at 126, and that the faucet has been
featured and advertised in national magazines and displayed in
museums, whether the VOLA's identifying design is sufficiently
famous to qualify for the FTDA's protection is far from clear.
In light of the rigorous standard for fame, we find that Lund
has not met its burden of showing likelihood of success.
B. Dilution
Under the FTDA, even if a mark is famous there is no
relief unless that mark has been diluted. As the district
court noted, there are two types of dilution recognized:
blurring and tarnishing. This case involves no claim of
tarnishing, an area in which Congress expressed a strong
interest. Further, in light of the finding of no customer
confusion, only a particular type of blurring may be involved.
The intellectual origins of the dilution doctrine are
traced to a 1927 Harvard Law Review article, which urged
protection against "the gradual whittling away or dispersion of
the identity and hold upon the public mind of the mark or name
by its use upon non-competing goods." Schecter, The Rational
Basis of Trademark Protection, 40 Harv. L. Rev. 813, 825
(1927). Although the origins of the doctrine are concerned
with non-competing goods, Congress used language in the FTDA
which extends dilution protection even to competing goods.
"Dilution" is defined as "the lessening of the capacity of a
famous mark to identify and distinguish good or services." 15
U.S.C. 1127; see also H.R. Rep. No. 104-374, at 3, reprinted
in 1995 U.S.C.C.A.N at 1030 (stating that dilution "applies when
the unauthorized use of a famous mark reduces the public's
perception that the mark signifies something unique, singular,
or particular"); 3 McCarthy 24:93 ("The crux is whether this
particular challenged use lessens the capacity of the famous
mark to carry out its role as a trademark -- namely, to
identify and distinguish.").
This case differs in several respects from usual
dilution cases. First, unlike most claims of dilution by
tarnishment or blurring, the aspect of its product that Lund
seeks to protect -- the design of the VOLA faucet -- likely
could have been protected by a design patent. The possibility
of obtaining a design patent is not dispositive of the
availability of trade dress protection: more than one form of
intellectual property protection may simultaneously protect
particular product features. Moreover, design patent
protection would not have provided protection identical to that
sought here. Nevertheless, the availability of design patent
protection does suggest that the claim in this case differs
fundamentally from the claims the drafters of the FTDA had in
mind -- cases where dilution protection is the only form of
protection available for a famous mark threatened by
unauthorized use of the mark that lessens the mark's capacity
to identify its source. Congress's intent to provide
protection where none previously existed is evidenced by the
House Report's statement that "[a] federal dilution statute is
necessary because famous marks ordinarily are used on a
nationwide basis and dilution protection is currently only
available on a patch-quilt system of protection, in that only
approximately 25 states have laws that prohibit trademark
dilution." H.R. Rep. No. 104-374, at 3, reprinted in 1995
U.S.C.C.A.N. at 1030.
Second, Lund is seeking protection against a direct
competitor. Although the FTDA states that dilution protection
is available against unauthorized use of a famous mark that
lessens the mark's ability "to identify and distinguish goods
or services, regardless of the presence or absence of . . .
competition between the owner of the famous mark and other
parties," 15 U.S.C. 1127 (emphasis added), dilution protection
has most often been extended to non-competing uses of a mark,
see, e.g., H.R. Rep. No. 104-374, at 3, reprinted in 1995
U.S.C.C.A.N. at 1030 (giving examples of "DUPONT shoes, BUICK
aspirin, and KODAK pianos"); 3 McCarthy 24.72 (noting "split
of authority under . . . state statutes as to whether the anti-
dilution rule is applicable where the parties are in
competition"). The FTDA recognizes the possibility that
dilution may occur in some circumstances where, although some
consumers are not confused as to the products' sources, a
competitor's use of a mark tarnishes or blurs a senior mark.
Nevertheless, such cases are likely to be exceptions to the
more common cases of dilution by non-competing marks. Dilution
laws are intended to address specific harms; they are not
intended to serve as mere fallback protection for trademark
owners unable to prove trademark infringement.
While there may be a tendency to think of dilution in
terms of confusion, Congress made it clear that dilution can
occur even in the absence of confusion. It is simple to see
why that should be so when non-competing goods are at issue.
No one would confuse Kodak pianos with Kodak film, but the use
of the name on the piano could dilute its effectiveness as a
mark for the film. But Congress did not say that there can be
dilution without confusion only among non-competing goods. As
the district court aptly noted, the analysis becomes
complicated when the concept of blurring is applied to
competing similar products.
We deal first with the approach taken by the district
court, an approach which had support in precedent. The
district court articulated the standard for determining
blurring as follows: "Lund must demonstrate that 'the use of a
junior mark has caused a lessening of demand for the product or
services bearing the famous mark.'" Lund I, 11 F. Supp. 2d at
126 (quoting Ringling Bros.-Barnum & Bailey Combined Shows,
Inc. v. Utah Div. of Travel Dev., 955 F. Supp. 605, 616 (E.D.
Va. 1997)). This, we think, is not the correct standard. As
Kohler observes, demand for one product is almost always
lessened whenever a competing product achieves a measurable
degree of success. Further, blurring has to do with the
identification of a product and that is not the same thing as
a lessening of demand.
In addressing the dilution claim, the district court
used the "Sweet factors," named after the six factors set forth
in Judge Sweet's concurrence in Mead Data Central, Inc. v.
Toyota Motor Sales, U.S.A., Inc., 875 F.2d 1026, 1035 (2d Cir.
1989) (Sweet, J., concurring), which involved a claim brought
under a New York dilution statute. Some district courts have
used these factors to examine whether dilution exists under the
FTDA. See, e.g., Ringling Bros.-Barnum & Bailey Combined
Shows, Inc. v. B.E. Windows Corp., 937 F. Supp. 204, 211-14
(S.D.N.Y. 1996); WAWA, Inc. v. Haaf, 40 U.S.P.Q.2d (BNA) 1629,
1632-33 (E.D. Pa. Aug. 7, 1996), aff'd, 116 F.3d 471 (3d Cir.
1997); Clinique Lab., Inc. v. Dep Corp., 945 F. Supp. 547, 562
(S.D.N.Y. 1996).
Kohler argues that Judge Sweet's six-factor test is
inappropriate in determining whether dilution has occurred for
purposes of the FTDA. We agree. The Sweet factors have been
criticized by both courts and commentators for introducing
factors that "are the offspring of classical likelihood of
confusion analysis and are not particularly relevant or helpful
in resolving the issues of dilution by blurring." 3 McCarthy
24:94.1. The six Sweet factors are: "1) similarity of the
marks 2) similarity of the products covered by the marks 3)
sophistication of consumers 4) predatory intent 5) renown of
the senior mark [and] 6) renown of the junior mark." Mead
Data, 875 F.2d at 1035 (Sweet, J., concurring). McCarthy urges
that only the first and fifth of Judge Sweet's factors -- the
similarity of the marks and the renown of the senior mark --
are relevant to determining whether dilution has occurred. See3 McCarthy 24:94.1; see also Hershey Foods Corp. v. Mars,
Inc., 998 F. Supp. 500, 520 (M.D. Pa. 1998) (stating that
"whether the products are similar or not adds nothing to the
analysis" because "dilution can apply to competitors"); Klieger,
Trademark Dilution: The Whittling Away of the Rational Basis
for Trademark Protection, 58 U. Pitt. L. Rev. 789, 826-27
(1997) (noting that "few of these factors bear any relation to
whether a particular junior use will debilitate the selling
power of a mark" and that "[s]o long as a mark qualifies for
dilution protection and the senior and junior uses of the mark
are not so unrelated as to foreclose the possibility of a
mental connection, blurring . . . is a foregone conclusion").
These criticisms are well taken.
The district court's finding of likelihood of
dilution by blurring depended on its use of inappropriate Sweet
factors. As McCarthy points out, use of factors such as
predatory intent, similarity of products, sophistication of
customers, and renown of the junior mark work directly contrary
to the intent of a law whose primary purpose was to apply in
cases of widely differing goods, i.e. Kodak pianos and Kodak
film. See 3 McCarthy 24:94.1.
There are difficulties with the Sweet factors even
when used with competing goods. Blurring occurs in the minds
of potential customers. Predatory intent tells little about
how customers in fact perceive products. That customers are
sophisticated may well mean less likelihood of blurring. That
customers knowingly choose to pay less to get a similar
product, and trade lower price against having a product of
greater fame, does not, contrary to Lund's argument, establish
blurring. Indeed, the district court's findings, in the
infringement context, of dissimilarity and sophistication of
the customers tend to cut against any finding of blurring. "The
familiar test of similarity used in the traditional likelihood
of confusion test cannot be the guide [for dilution analysis],
for likelihood of confusion is not the test of dilution." Id. 24:90.1. Instead, the inquiry is into whether target
customers are likely to view the products "as essentially the
same." Id.
There is a more fundamental problem here in
attempting to apply the dilution analysis to the design itself
of the competing product involved. We doubt that Congress
intended the reach of the dilution concept under the FTDA to
extend this far and our doubts are heightened by the presence
of constitutional constraints. Where words are the marks at
issue it is easy to understand that there can be blurring and
tarnishment when there is a completely different product to
which the words are applied. The congressional history
described earlier gives such examples. What is much more
difficult is to see how dilution is to be shown where some of
a design is partially replicated and the result is largely
dissimilar and does not create consumer confusion. If that is
so, as is true here, then it is difficult to see that there has
been dilution of the source signaling function of the design
(even assuming that such a function has been established
through secondary meaning).
Instead, it appears that an entirely different issue
is at stake -- not interference with the source signaling
function but rather protection from an appropriation of or free
riding on the investment Lund has made in its design. That
investment is usually given protection by patents, which have
a limited duration. See W.T. Rogers Co., 778 F.2d at 348. But
again, that free riding or appropriation appears to be of the
beauty of the object and not of the source, and may in fact be
good for consumers. As the district court observed, these
sophisticated buyers know a different source is involved and
are, accordingly, most likely purchasing because of the
aesthetics. And even if there is some appropriation or free
riding, the extent of it here is not clear. Certainly it is
not plausible to think that Congress intended to protect
aesthetic characteristics by simply assuming harm or damages
based on the fact that the plaintiff will sell less if the
defendant sells more. What is clear is that the interests here
are not the interests at the core of what Congress intended to
protect in the FTDA.
It is possible that Congress did not really envision
protection for product design from dilution by a competing
product under the FTDA, but the language it used does not
permit us to exclude such protection categorically and rare
cases can be imagined. But a broad reading of dilution would
bring us close to the constitutional edge, and we decline to
attribute such brinksmanship to Congress, and so insist on
rigorous review.
Under the interpretation of the fame and dilution
requirements for the FTDA set forth today, the requirements for
granting the preliminary injunction have not been met.
VII. Constitutionality of the FTDA
Kohler argues that the FTDA may never
constitutionally be applied to enjoin a competitor in a product
design trade dress case. Kohler's constitutional challenge
involves two steps. First, Kohler argues that applying the
FTDA to product designs grants patent-like protections for an
unlimited period of time. Second, Kohler argues that
Congress's Commerce Clause power -- the basis of Congress's
regulation of trademarks and trade dress -- cannot be used to
trump the Patent Clause. Lund responds that federal anti-
dilution legislation is fully consistent with Congress's
Commerce Clause power, and that patent and trademark laws
protect different interests and serve different goals.
The district court correctly noted that Kohler faced
a "very high preliminary injunction standard on their
[constitutional] claim," and that the statute was
"presumptively constitutional." Lund II, 11 F. Supp. 2d at
134. The court concluded that defendant Kohler was unlikely to
succeed with its argument that the FTDA is unconstitutional in
all product design contexts.
Kohler's constitutional attack on application of the
FTDA here is mooted by our resolution of the injunction issue.
To the extent Kohler is mounting something akin to a facial
attack, we think it better not to address constitutional issues
in the abstract. The resolution of any conflict between the
Patent Clause and the FTDA is better handled on specific facts
which present the issues with clarity, and not on the basis of
theoretical impacts.
VIII. Conclusion
Both the parties and the district court labored
through this case without the benefit of binding precedent on
a number of key and difficult issues, particularly the
interpretation of the FTDA. The denial of the preliminary
injunction on the infringement claim is affirmed. The grant of
the injunction on the FTDA claim is vacated inasmuch as there
were no findings on functionality and standards for determining
both fame and dilution under the FTDA were used which are
different from those announced today and the evidence does not
show probability of success under those standards. The case is
remanded for further proceedings not inconsistent with this
opinion. No costs are awarded.
- Concurring opinion follows -
BOUDIN, Circuit Judge, concurring. Ordinarily the
creator of something new--a useful device, a pharmaceutical
drug, an ornament, a painting--owns any such object that he or
she makes but can prevent its replication by others only
pursuant to the patent and copyright laws. A central
limitation on patent and copyright protection, stemming from
the Constitution itself, is that it is limited in time. SeeU.S. Const. art. I, 8, cl. 8; 35 U.S.C. 101, 154 (20-year
utility patent); 35 U.S.C. 171, 173 (14-year design patent);
17 U.S.C. 302-304 (various limited-time copyrights). After
the period of protection expires, copying by others is allowed.
This case presents, in addition to other problems, the threat
that the permanent injunction sought may prevent the Lund
faucet from being duplicated forever.
In substance, Lund created a faucet configuration
called VOLA that involves a downward curving water pipe
protruding from a wall (rather than the sink itself) and a
similarly protruding control rod to regulate both water flow
and temperature (instead of the usual pair of spigots). The
concept of a wall-based mechanism, and the size and shape and
relative proportions of the pipe and control rod, are pleasing
to customers. The resulting VOLA faucet configuration is
successful and recognized in the trade.
Lund has now obtained a preliminary injunction against
Kohler forbidding Kohler from selling Kohler's own faucet
system that embodies the same concept and a similar but not
identically shaped pipe and control rod. What Lund regards as
the scope of its "monopoly" is not entirely clear: all we know
is that this Kohler faucet system has been enjoined. What will
be assumed, or else the legal problems would be even greater
than they are, is that the concept of a water pipe and control
rod protruding from a wall is not sought to be prohibited but
only one whose shape and size are similar to VOLA. Even so,
a serious problem exists because the assumed protection (if the
preliminary injunction matures into a permanent one) could be
perpetual.
Lund says that this perpetual protection of its design
is permitted because its source is not a design patent --Lund
has not sought one--but rather the trademark laws. Trademarks
are ordinarily conceived as names (e.g., Kodak) or marks (the
AT&T striped circle logo), but trademarks also include so-
called "trade dress," see 15 U.S.C. 1127; and this in turn
includes the ornamental design of an article where the design
performs the traditional "source signaling" function of
trademarks. Usually, this is achieved by the "wrapping" (e.g.,
the classic Coca Cola bottle) or some ornament affixed to the
product (the star symbol on the Mercedes hood); but the design
of the product itself can sometimes qualify.
A permanent restriction on copying the design of a
product might still seem offensive to patent and copyright
policy, but at least this protection can be explained where the
replication would otherwise confuse buyers as to source,
traditionally the concern of trademark protection. The
difficulty in this case arises because Congress has removed the
requirement of confusion for protection of "famous" trademarks
and said that, in the alternative, they will be protected
against "dilution" even where no confusion exists as to source.
15 U.S.C. 1125(c). Congress was worried that even without
customer confusion as to source a famous trade name or mark,
like "Kodak," could be blurred or degraded by being attached by
others to their own products (e.g., sports clothing, dog food).
See 141 Cong. Rec. S19306, S19310 (daily ed. Dec. 29, 1995)
(statement of Sen. Hatch).
By contrast to a trademark consisting of a name or
insignia, a product design will not often qualify as a
trademark inviting protection from dilution. A trade name or
device usually identifies source, but the design of the product
itself in most cases makes the product more efficient,
attractive, or both. If more efficient, trademark protection
is foreclosed altogether under the "functionality" doctrine,
see Qualitex, 514 U.S. at 164; Two Pesos, 505 U.S. at 775; and
if attractiveness is the primary function, the product design
does not normally qualify as a candidate to achieve secondary
meaning and thus trademark status. See Inwood Labs., Inc. v.
Ives Labs., Inc., 456 U.S. 844, 851 n.11 (1982).
But conceivably in some rare case a product design
might have source signaling as its main function (perhaps the
old 1950's Cadillac tail fin might be an instance) and be
copied by a competitor (say, for Volkswagen Beetles) without
any risk of customer confusion. At that point, if the new
trademark statute is taken literally, Cadillac might then claim
a permanent monopoly on its tail fin design, subject only to a
showing that Volkswagen's use threatened to "dilute" the
strength of that tail fin as a Cadillac trademark. See 15
U.S.C. 1125(c). One may wonder whether Congress ever
contemplated such a result, but the statute's language arguably
permits it or at least does not explicitly foreclose the
possibility.
If so, much turns on how dilution is defined and
proved. The federal statute is recent, but state laws have
protected against dilution for some time, and under those
statutes there is some tendency to assume that dilution is
threatened wherever the famous trademark is copied. After all,
the concern is with the long-term "whittling away" of the
strength of the mark by other unauthorized uses, see L.L. Bean,
Inc. v. Drake Publishers, Inc., 811 F.2d 26, 30 (1st Cir.
1987), and, absent confusion, there may be no immediate damage
from any single use. Where only a word or symbol is forever
preempted, this protective approach toward the trademark may
make sense, and in all events does not pose much risk to the
policies of the patent and copyright clauses.
The situation is quite different where design of an
article is given permanent protection without any threat of
confusion. If buyers prefer articles of that design, then the
public pays a price whenever the design cannot eventually be
used by other manufacturers. In the case of patents and
copyrights, the foreclosure of competition is deemed a price
worth paying for a limited time--in order to induce such
creations--but only for a limited time. Is this policy of
time-limited protection, constitutional at its core, overcome
wherever dilution is threatened--even though no confusion can
be proved and any impairment of the trademark may be only
potential and directed primarily to protecting the seller
rather than the public?
One might point to the possible diversion of sales from
Lund to Kohler as practical harm in this very case. Yet such
diversion does not prove either confusion or dilution: a copied
product can easily take sales from the original manufacturer if
the copied product is better made or sold at a lower price or
the design is slightly better--outcomes generally beneficial to
the public. Giving weight to diversion of sales, in the
absence of confusion of customers, simply underscores that the
protection is generally similar to that afforded for patented
articles--save that the protection here may be unlimited in
time. Giving patent-like protection a new name does not avoid
constitutional limitations. Cf. Bonito Boats, Inc. v. Thunder
Craft Boats, Inc., 489 U.S. 141, 146 (1989).
The traditional interest in trademark protection is
stretched very thin in dilution cases where confusion is absent
and a professed aim is to protect the maker's investment in the
trademark. See H.R. Rep. No. 104-374, at 3 (1995), reprinted
in 1995 U.S.C.C.A.N. at 1030. And the threat to the public
interest, ordinarily countered by the time limit on patent
protection, is acute where a permanent protection is offered
not to a word or symbol but to the design of an article of
manufacture. In such an instance, it is a difficult
constitutional question whether protecting the investment can
outweigh the public interest in replication, a question best
deferred unless and until all other preconditions for
protection are resolved in favor and decision on this last
issue is absolutely necessary. See El Dia, Inc. v. Hernandez
Colon, 963 F.2d 488, 494 (1st Cir. 1992).
Related
Sunbeam Products Inc v. The West Bend Co
123 F.3d 246 (Fifth Circuit, 1997)
Kellogg Co. v. National Biscuit Co.
305 U.S. 111 (Supreme Court, 1938)
Inwood Laboratories, Inc. v. Ives Laboratories, Inc.
456 U.S. 844 (Supreme Court, 1982)
Bonito Boats, Inc. v. Thunder Craft Boats, Inc.
489 U.S. 141 (Supreme Court, 1989)
Two Pesos, Inc. v. Taco Cabana, Inc.
505 U.S. 763 (Supreme Court, 1992)
Qualitex Co. v. Jacobson Products Co.
514 U.S. 159 (Supreme Court, 1995)
Boston Beer Co. v. Slesar Bros. Brewing Co.
9 F.3d 175 (First Circuit, 1993)
Vecinos De Barrio Uno v. City of Holyoke
72 F.3d 973 (First Circuit, 1995)
TEC Engineering Corp. v. Budget Molders Supply, Inc.
82 F.3d 542 (First Circuit, 1996)
Ocean Spray Cranberries, Inc. v. PepsiCo, Inc.
160 F.3d 58 (First Circuit, 1998)
Public Service Co. of New Hampshire v. Patch
167 F.3d 15 (First Circuit, 1998)
Sylvania Electric Products, Inc. v. Dura Electric Lamp Company, Inc., and Michael Portnow
247 F.2d 730 (Third Circuit, 1957)
The President and Trustees of Colby College v. Colby College-New Hampshire
508 F.2d 804 (First Circuit, 1975)
Abercrombie & Fitch Company v. Hunting World, Incorporated
537 F.2d 4 (Second Circuit, 1976)
Fisher Stoves, Inc. v. All Nighter Stove Works, Inc.
626 F.2d 193 (First Circuit, 1980)
Pignons S. A. De Mecanique De Precision v. Polaroid Corporation
657 F.2d 482 (First Circuit, 1981)
Purolator, Inc. v. Efra Distributors, Inc., Enrique Franceschini and Enrique Franceschini, Jr.
687 F.2d 554 (First Circuit, 1982)
Ciba-Geigy Corporation v. Bolar Pharmaceutical Co., Inc.
747 F.2d 844 (Third Circuit, 1985)
Lesportsac, Inc. v. K Mart Corporation
754 F.2d 71 (Second Circuit, 1985)
Colleen A. Wiley, D/B/A Wiley Creations v. American Greetings Corp.
762 F.2d 139 (First Circuit, 1985)
Cite This Page — Counsel Stack
Bluebook (online)
Kroni Inc. v. Kohler Company, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kroni-inc-v-kohler-company-ca1-1998.