1995 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

2-15-1995

Versa v Bifold Company

Precedential or Non-Precedential:

Docket 94-5064

Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1995

This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova

University School of Law Digital Repository. It has been accepted for inclusion in 1995 Decisions by an authorized administrator of Villanova

University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.

Recommended Citation

"Versa v Bifold Company" (1995). 1995 Decisions. Paper 50.

http://digitalcommons.law.villanova.edu/thirdcircuit_1995/50
UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

________________ 

NO. 94-5064 

________________ 

VERSA PRODUCTS COMPANY, INC. 

v. 

BIFOLD COMPANY (MANUFACTURING) LTD., 

 Appellant

___________________________________________________ 

On Appeal From the United States District Court 

For the District of New Jersey 

(D.C. Civ. No. 93-cv-02734) 

___________________________________________________ 

Argued: May 12, 1994 

Before: BECKER and LEWIS, Circuit Judges, and 

POLLAK, District Judge.

*

(Filed February 15, 1995) 

 NORMAN H. ZIVIN, ESQUIRE (ARGUED) 

 PETER D. MURRAY, ESQUIRE 

 WENDY E. MILLER, ESQUIRE 

 Cooper & Dunham 

 1185 Avenue of the Americas 

 New York, NY 10036 

 ROBERT M. AXELROD 

 Sills, Cummis, Zuckerman, Radin 

 Tischman, Epstein & Gross, P.A. 

 One Riverfront Plaza 

 Newark, NJ 07102-5400 

 Attorneys for Appellant

 

 *. The Honorable Louis H. Pollak, United States District 

Judge for the Eastern District of Pennsylvania, sitting by 

designation. 
 JEFFREY CAMPISI, ESQUIRE (ARGUED) 

 Sharkey & Campisi 

 188 Eagle Rock Avenue 

 P.O. Box 419 

 Roseland, NJ 07068 

 Attorneys for Appellee

 _______________________________________ 

 OPINION OF THE COURT

 _______________________________________ 

BECKER, Circuit Judge. 

 This is a trade dress infringement action in which plaintiff 

Versa Products Company, Inc. ("Versa") contends that defendant 

Bifold Company (Manufacturing) Ltd. ("Bifold") infringed the 

trade dress of Versa's B-316 directional control valve, a device 

commonly used in control panels of offshore oil-drilling rigs to 

facilitate emergency shutdowns, by marketing its Domino Junior 

valve, which Versa maintains copies the product configuration of 

the B-316.1 The action was brought under section 43(a) of the 

Lanham Act, 15 U.S.C. § 1125(a) (West Supp. 1994), New Jersey's 

Unfair Competition Law, 56 N.J.S.A. § 4-1 to -2 (1989), and New 

Jersey's common law of unfair competition. Following a bench 

trial the district court found that the trade dress of Versa's 

valves had met the nonfunctionality and distinctiveness 

requirements of our trade dress jurisprudence, and that there was 

 

 

1. As in Duraco Products, Inc. v. Joy Plastic Enterprises, 

Ltd., 40 F.3d 1431, 1439 (3d Cir. 1994), "we will employ the 

designation `product configuration' to refer to trade dress 

alleged in the product itself, whether in a specific feature or 

in some combination or arrangement of features, and to 

distinguish that type of trade dress from `product packaging.'" 
a likelihood of confusion of the sources of Bifold's Domino 

Junior and Versa's B-316 valves. Accordingly, the court entered 

a permanent injunction against Bifold, precluding it from selling 

its Domino Junior valve (in its present form) anywhere in the 

United States. Bifold appeals all aspects of the district 

court's rulings. 

 We need not reach the nonfunctionality and distinctiveness 

questions because the appeal may be disposed of on the likelihood 

of confusion issue, in connection with which we are called upon 

to determine whether the jurisprudence that lowers the standard 

to a "possibility of confusion" where the alleged infringer is a 

"second comer" applies in the trade dress product configuration 

context. We also must explicate the elements of the confusion 

standard in this context. We conclude that the lowered standard 

(applied by the district court) does not apply and that some but 

not all of the "Scott factors," see Scott Paper Co. v. Scott's 

Liquid Gold, Inc., 589 F.2d 1225 (3d Cir. 1978), are pertinent, 

because of policy considerations applicable in product 

configuration cases. Applying this approach we conclude that the 

district court's finding of a likelihood of confusion is clearly 

erroneous. We will, therefore, reverse the order of the district 

court and vacate the permanent injunction. 
I. FACTS AND PROCEDURAL HISTORY

 Versa, a New Jersey corporation with subsidiaries abroad, 

designs and manufactures pneumatic and hydraulic directional 

control valves. Bifold, an English corporation, competes with 

Versa and markets a line of control valves and related products 

and services to the offshore oil industry. Versa alleges that 

Bifold has engaged in unfair competition in its marketing of the 

Domino Junior -- a valve manufactured by Bifold and adapted to 

the harsh offshore oil and petrochemical environments -- by 

copying the trade dress, i.e., the distinctive appearance, of the 

product configuration of Versa's B-316 valve. 

 The most significant feature of valves designed for offshore 

applications is their stainless steel composition, used to 

withstand the corrosive effects of salt air and sour gas fumes. 

In offshore drilling platforms these valves are typically aligned 

in small control panels containing up to fifty modular valve 

bodies with a standard configuration but which, by attaching one 

of various actuators and making minor adjustments, may be adapted 

to a variety of applications. The panel design engineers devise 

the functional specifications of panels around the capacities of 

particular valves, selecting valves based on their functionality, 

reliability, availability, and price. The valves themselves are 

not visible from the front of a control panel when installed; 

only knobs, buttons, and status indicator actuators protrude. 
 A. Versa's B-316 Valve

 Versa began producing brass valves (its "V" series) in 1949. 

Versa dresses the series, consisting at present of an entire line 

of valves well known in the industry, with contoured lines and 

shaping that the district court found "form a distinctive product 

appearance that has been associated with Versa for decades." In 

the late 1970's Versa designed the B-316 line of stainless steel 

valves, the subject of this litigation. Versa initially 

fashioned them of stainless steel bar stock, and the valves were 

plain and unadorned. Because of the waste of valuable metal 

associated with the machining process and the substantial manual 

labor needed to drill each valve individually, Versa converted to 

a cast version of the valve as soon as sales levels justified the 

substantial economic investment in a casting mold. 

 The two versions of the valve serve the same function and 

are interchangeable. Versa deliberately set about to give the 

cast version of the B-316 the "Versa look," that is, to have it 

resemble in appearance the V-series of Versa valves. FF 41. 

Versa's desire to have the valve be clearly associated with Versa 

in the market was a primary impetus for its election to manufacture the cast version of the B-316. 

 The modular B-316 valve is comprised of a valve body and, 

optionally, one or more attached actuators used to manipulate the 

moving parts in the valve body. The valve is a three-way valve, 

meaning that it has three ports or openings (for the ingress or 
egress of gas or fluid), which are threaded to 1⁄4" NPT, a national 

standard and industry requirement. The ports open into an inner 

chamber in the valve body, which houses a spool moved by an 

actuator (such as a button, knob, or electronically controlled 

solenoid actuator) to open or close the port, controlling fluid 

flow. 

 The configuration and function of the actuators provided 

with a valve are driven by customer demand; however, the use of 

certain actuators (most of which Versa purchases from other 

vendors) is standard with the B-316. Versa has used the same 

knob actuator for 40 years, although many others are available. 

It also uses a particular status indicator, which indicates the 

valve's position; a particular button actuator, which is shrouded 

to prevent accidental actuation; a self-produced manual latch, 

which locks the valve spool in the open or closed position; and a 

self-produced pilot actuator, which responds to pressure in an 

attached fluid line to control the spool's position. 

 Located at each end of a valve is a flange, both of which 

serve as faces to mount the actuators and to provide a flat 

surface for attachment to the control panels; holes are drilled 

into the flanges to allow the actuators to be securely mounted. 

A longitudinal top rib runs along the top of the valve body to 

allow customers to attach solenoid (computer controlled) 

actuators, to provide strength, and to serve as a casting gate 

(an opening in the casting mold through which the molten metal is 
poured). A smaller bottom rib was added to provide parallelism 

in the product's appearance and to assist in the casting process. 

Finally, the valve has three mounting holes which are positioned 

to provide stable mounting to a panel or other flat surface. 

Each aspect of the valve serves a specific function essential to 

the valve's operation, cost, performance, or ease of manufacture. 

The design of each actuator is functional. Functionality 

dictates the overall cast design, but does not dictate its 

external appearance. 

 The B-316 valve's mold imprints the manufacturer's name 

("VERSA") and place of origin ("N.J. U.S.A.") on the valve. 

Versa also stamps a date code and rivets a metal label displaying 

the Versa name, logo, and part number onto the valve. Versa 

currently dominates the United States market for stainless steel 

valves. Aside from Bifold, only Versa sells cast stainless steel 

valves; other competitors use a cylindrical bar stock. 
 B. Bifold's DOMINO JUNIOR Series Valve

 As part of Bifold's continuing efforts to expand its product 

line, in 1985 it introduced the Domino series modular valves. 

Although originally machined from standard bar stock (like 

Versa's B-316), the Domino valves became sufficiently successful 

to warrant the investment needed to design a cast version. An 

outside casting company designed the cast version of the Domino; 

Bifold had no involvement in the process. Like a B-316, the 

Domino valve has three cylindrical ports, a top rib for housing a 

solenoid feed, flanges, and a range of actuators. 

 Because the Domino was too large for many of its customers' 

needs, however, Bifold designed the "Domino Junior" modular valve 

in 1990, producing it at first from bar stock.2 In late 1991, 

eight years after the cast version of the B-316 became available, 

Bifold introduced its cast version of the Domino Junior. Bifold 

at the time erroneously believed that Versa had a "monopoly" on 

the wellhead control panel valve market, and created the cast 

version of the Domino Junior to "bury Versa." 

 Bifold was aware of the B-316's appearance and design 

features because it had seen the product at various trade shows. 

The district court did not credit Bifold's claims that it designed the Domino Junior as a scaled down version of the Domino 

 

 

2. A fact-finding inconsistent with the tenor of the ones 

described here is that "Bifold used the Domino Junior bar stock 

valve as an excuse to justify its look-alike cast version of the 

Domino Junior product." 
and that it did not copy the B-316.3 It found instead that, 

before and during its design of the Domino Junior cast mold, 

Bifold examined and largely copied Versa's B-316 valve, a sample 

of which it had obtained through its agent in Denmark. For 

example, the court found that Bifold, which regularly uses metric 

sizes in its valves, took measurements from the B-316 and used a 

metric conversion of the B-316's imperial standard size. Bifold 

also sent a cast B-316 valve to Manchester Tool Services, which 

it selected to be the manufacturer of the cast version of the 

Domino Junior, as a model for the cast version of the Domino 

Junior. The two valves (the B-316 and the Domino Junior) are 

not, however, interchangeable in the field, and "replacing a 

Versa B-316 cast valve with a Bifold Domino Junior cast valve in 

an existing control panel could be problematic." 

 The district court also found that Bifold lacked the 

expertise to design the cast version of the Domino Junior, had 

presented misleading testimony about who produced a prototype 

drawing of the Domino Junior, and had backdated documents to 

create the false appearance that it had designed the valve. The 

court found that BSA Precision Castings, Ltd. ("BSA"), which had 

designed the cast version of the Domino valve, was involved in 

the design of the cast version of the Domino Junior valve. 

During the time that BSA participated in the design of the cast 

version of the Domino Junior, it had in its possession drawings 

 

 

3. It also did not credit the claims of Bifold's experts. 
and castings of the B-316's major components, as well as Versa's 

actuators. BSA had obtained the drawings, actuators, and actual 

samples of valve components from Versa three years earlier when 

it had provided Versa with a quote for the casting of the B-316. 

The court found that BSA used this data to design a casting of 

the Domino Junior valve as a look-alike of the Versa B-316, 

despite the fact that Bifold had asked BSA to give "due 

consideration to the appearance of the larger Domino valves." 

 Although the Domino Junior and B-316 do, in fact, look quite 

similar, the district court described a number of differences 

between the two manufacturers' valves. Because the Domino 

Junior's ports extend outward from the valve body, whereas the B316's ports are flush with the valve body, the Domino Junior is 

slightly wider than the B-316. The Domino Junior ports' threads 

have metric dimensions. The Domino Junior is made of more metal 

and weighs about thirty percent more than the B-316. The stroke 

-- the distance an actuator must move the internal spool to 

switch the valve's ports -- also differs from that of the B-316. 

Because Bifold electroplates its valves, the Domino Junior body 

has a duller finish than the B-316. The Domino Junior also has 

thicker flanges and ribs than does the B-316. The valves' 

mounting holes have different centers. Bifold purchases its 

status indicators from a different company than Versa uses, and 

these indicators have a different size, appearance, and 

configuration from Versa's. Like Versa, Bifold produces its own 
manual latch, but makes it out of two cast pieces and gives it 

rounded edges, whereas Versa uses a single piece of rectangular 

bar stock material. 

 The Domino Junior valves are "block-before-bleed" (meaning 

fluid flow is completely blocked during the moment required to 

change states when the valve is activated), whereas the B-316 

includes that feature only as an option. The Domino Junior ports 

are universal (meaning that any port can be an inlet or an outlet 

port), though Bifold customizes each valve as either normally 

open or normally closed; in contrast, Versa offers universal 

application only as an option. Like Versa, Bifold casts its name 

into the Domino Junior's valve body and bolts onto it a metal 

label prominently displaying the Bifold name. 

 Despite all these differences, the court concluded that 

"[t]he Bifold Domino Junior valve and actuators are virtually 

identical in external design and visual appearance to the Versa 

B-316 valve." It found an identity in general body 

configuration, body length, flanges, distance between ports, 

valve mounting holes, actuator mounting holes, ribs, spring cap 

(which returns the spool back to its original position), buttons, 

button caps, status indicators, knobs, manual latching pins, and 

pilot caps. The valve bodies, buttons, button caps, knobs, 

status indicators, and manual latching mechanism used by other 

competitors in the industry look quite different from both the 

Domino Junior's and the B-316's. The court discounted the 
dissimilarity of the solenoid actuators attached to the valve 

bodies by Versa and Bifold because only a small portion of 

Versa's B-316 valves sold include solenoid actuators. 

 C. Marketing and Sales of the Valves

 In order to determine whether Bifold had engaged in unfair 

competition with Versa, the district court considered whether 

consumers were likely to confuse the sources of the two 

companies' valves in light of the ways in which the two valves 

are marketed and sold. The court found that valves of this sort 

are not sold off the shelf or selected on sight. Rather, both 

manufacturers sell their valves based on functional 

specifications detailed in schematic diagrams, manufacturers' 

catalogs, or specification sheets and samples available at trade 

shows and sales presentations. The valves are selected by multidigit part numbers identifying the particular variation desired. 

The purchasers and users of the valves are qualified, 

knowledgeable persons who comprehend the installation and use of 

the valves. They typically prepare specifications designating 

which manufacturer's valve they prefer to use in their system 

before placing the order. 

 Versa, the more established manufacturer, has sold over 

100,000 B-316 valves, and is currently selling over 16,000 per 

year. This gives it a fifty to fifty-five percent market share 

of valves sold for use in emergency shutdown systems in the 

United States. Bifold has only recently begun marketing its 
Domino Junior valve in the United States, and immediately stopped 

its efforts to open the United States market pending the outcome 

of this litigation. 

 Versa and its B-316 valve have an excellent reputation for 

producing a high quality product. This quality level is very 

important in emergency shutdown offshore drilling, for the 

failure of a valve could cause loss of human life and property as 

well as severe environmental damage. Versa has therefore 

subjected its B-316 valve to rigorous quality control tests, and 

the valve has performed faithfully in the field. 

 The district court found that, because of the availability 

and outstanding reputation of the B-316 cast valve for over ten 

years, the overall appearance and contours of the B-316 have come 

to distinguish the valve as Versa's (in the industry and to 

Versa's customers), with the valve body constituting the most 

defining aspect of the Versa look. The valve's overall 

appearance assists Versa in marketing its product, and Versa 

features this appearance widely in trade journals, catalogues, 

brochures, bulletins, trade shows, and sales exhibitions. The 

court also found that Versa deliberately created the B-316's 

distinctive appearance (contrasting with the other valves 

available in the market at the time) to identify the valve in the 

market as a Versa product. 

 The district court found that Bifold hired Versa's former 

regional marketing manager of six years, James Carr, III, to sell 
its new Domino Junior valve. Carr sells both Versa and Bifold 

valves, sometimes to the same customers. To solicit Domino 

Junior sales in early 1993, Carr approached Gordon Fraleigh, an 

employee of the Fraleigh Company, which for years had sold Versa 

products to customers in the petroleum industry. Carr 

represented to Fraleigh, whom he had known for many years, that 

Bifold had developed an "exact copy" of the B-316 which would 

"fit in perfect" as a substitute for the B-316, and inquired 

whether Fraleigh would like to distribute the Domino Junior. 

Thereupon, Fraleigh became confused as to the relationship 

between Versa and Bifold. Bifold has also contemplated 

contacting other Versa distributors to sell its valves. 
 D. Likelihood of Confusion

 Beyond the confusion on Fraleigh's part, the district court 

found that some, but not all, consumers of the B-316 valves are 

sophisticated, and that the likelihood of confusion as to the 

source of the Domino Junior is enhanced with respect to the 

unsophisticated consumers. This finding is undercut by the 

district court's finding, see supra p.12, that the purchasers are 

knowledgeable and understand the valves. We note, however, that 

these findings might be resolved by noting that the latter 

finding assumes expansion of Versa's market. Indeed, the opinion 

later suggests that any unsophisticated consumers exist only as 

"potential new customers" in "untapped" markets, that is, that 

all the current customers are sophisticated. See Mem. Op. at 90. 

Because there will in those potential expansion markets be no 

likelihood of confusion based on the district court's theory 

(namely, that consumers familiar with Versa's trade dress will 

mistakenly believe Bifold is affiliated with Versa, see infra at 

68-74), we will ignore the court's "expansion" finding and 

consider only its finding that the purchasers are knowledgeable. 

 In addition, one customer forwarded to Bifold a telefax 

initially addressed to Versa. And Frank Vetter, a Vice President 

and Chief Operating Officer of Versa, testified that he was 

advised of confusion of the products at trade shows. 

 Because of the valves' "virtual identity in appearance" and 

the fact that Bifold has not sold products in the United States 
previously, the district court concluded that a Versa customer in 

the United States might reasonably assume that Versa and Bifold 

are related companies or that the Domino Junior is otherwise 

related to Versa. However, since Bifold had sold only two valves 

in the United States, both to distributors, the court found there 

had been little opportunity for Versa to document instances of 

actual confusion. 

II. THE DISTRICT COURT'S LEGAL CONCLUSIONS4

 The district court noted at the outset that Section 43(a) 

provides a cause of action for unprivileged imitation of trade 

dress -- defined as the "overall design or appearance of a 

product or its packaging" -- because it involves actual or 

potential deception. Trade dress, it held, consists not of 

individual features, but of the overall appearance of the 

product. We turn then, to the court's more specific legal 

conclusions. 

 Recognizing that unpatented functional features may be 

freely copied regardless of any likelihood of confusion -- and 

Versa has not patented the design of its B-316 valve -- the 

district court first concluded that the trade dress of the B-316 

 

 

4. Subject matter jurisdiction was grounded in the federal 

question statute, 28 U.S.C.A. § 1331 (West 1993), since Versa's 

cause of action arises under Section 43(a) of the Lanham Act, 15 

U.S.C.A. § 1125(a) (West Supp. 1994). Personal jurisdiction was 

based on the defendant's consent. The court exercised 

supplemental jurisdiction over plaintiff's pendent state law 

claim. 
was nonfunctional. The court next concluded that the B-316's 

trade dress was "inherently distinctive,"5 or, in the 

alternative, possessed acquired distinctiveness because it had 

acquired secondary meaning.6 The distinctiveness finding is 

problematic because the district court evaluated inherent 

distinctiveness using a legal standard that this court has since 

held to be improper. See Duraco Prods., Inc. v. Joy Plastic 

Enters., Ltd., 40 F.3d 1431, 1441-42 (3rd Cir. 1994) (rejecting 

the trademark distinctiveness taxonomy as the measure of inherent 

distinctiveness for trade dress in product configurations). And 

although we can scarcely blame the district court, whose analysis 

of functionality largely tracked this court's various legal 

formulations, its finding of nonfunctionality is also problematic 

in view of the conflicting formulations of functionality used, as 

 

 

5. The court concluded that the trade dress was inherently 

distinctive because it was "arbitrary," meaning it was "not 

dictated by functional considerations" (which appears to be the 

same standard that the court employed for its functionality 

inquiry). 

 

6. "Secondary meaning" denotes that the purchasing public 

associates the design of the product with a particular source. 

Secondary meaning need be proven only if the product is not 

inherently distinctive. The court held that secondary meaning 

was established by the length and continuity of the plaintiff's 

use -- here, continuously for 10 years; by the strength of the 

buyers' mental associations -- here, purchasers associate the 

appearance of the B-316 with Versa; by the extent of sales and 

advertising -- here, Versa has sold tens of thousands of B-316 

valves and has advertised widely; and, most persuasively 

according to the district court, by the evidence of intentional 

copying. 
outlined in the margin.7 Although we have misgivings about these 

two issues, it is the district court's third conclusion that 

forms the focus of our opinion today. 

 

 

7. The district court determined that a product feature is 

functional if and only if "it affects their purpose, action or 

performance, or the facility or economy of processing, handling 

or using them." Treating functionality as a matter for fact 

finding, the court placed the burden on Versa to show that "its 

trade dress serves no purpose except to identify Versa." But 

then it held that trade dress is functional only "if it is essential to the use or purpose of the article or . . . affects the 

cost or quality of the article," that a design is "essential" 

"only if it is dictated by the functions to be performed," and 

that a design is "essential to [an item's] use" only if the 

particular design of the whole assembly is essential (internal 

quotation marks omitted, emphases supplied). The court's inquiry 

thus focused on the extent to which the design feature was 

related to the usefulness of the product. Then, setting forth 

yet a third standard, the court held that a product design is 

nonfunctional if, viewed as a whole, the design "primarily serves 

a legitimate trademark purpose -- identifying the source of the 

product -- . . . even though it might also serve functional 

purposes" (internal quotation marks omitted). 

 The several standards for functionality described by the 

district court reflect varying articulations found in opinions of 

this court. Compare, e.g., Merchant & Evans, Inc. v. Roosevelt 

Bldg. Prods. Co., 963 F.2d at 635 ("`Proof of nonfunctionality 

generally requires a showing that the element of the product 

serves no purpose other than identification.'") (quoting SK&F, 

Co. v. Premo Pharmaceutical Lab., Inc., 625 F.2d 1055, 1063 (3d 

Cir. 1980)) with Merchant & Evans, Inc., 963 F.2d at 634 ("`[T]he 

question is whether a particular feature of a product is 

substantially related to its value as a product or service, i.e., 

if the feature is a part of the "function" served, or whether the 

primary value of a particular feature is the identification of 

the provider . . . .'") (quoting United States Golf Ass'n v. St. 

Andrews Sys., 749 F.2d 1028, 1033-34 (3d Cir. 1984)). 

 The district court concluded that although a large number of 

the B-316's features were functional, their combination into a 

particular form was not. It found that the B-316 valves' overall 

design did not result from "significant cost and manufacturing 

considerations," and that if the appearance of the B-316 were 

altered, "nothing of substantial value in the product [would be] 

lost." In sum, the district court found that "[t]he appearance 
 The district court held that to prevail on a trade dress 

infringement claim, a plaintiff must demonstrate a likelihood of 

confusion, but not actual confusion. It held that Versa could do 

so here if it could show that an appreciable number of buyers are 

likely to become confused as to the origin of the Domino Junior 

valve. Importantly, the court further held that the threshold 

for likelihood of confusion is lower when a newcomer (or "second 

comer") violates a long-established trade dress. 

 The district court then seemed to apply the ten factors for 

likelihood of confusion that this court enumerated in Scott Paper 

Co. v. Scott's Liquid Gold, Inc., 589 F.2d 1225 (3d Cir. 1978). 

See CL 57. Under Scott, the threshold issue is the question of 

similarity of product appearances, and the court found that the 

Domino Junior's appearance was "virtually identical" to the B-

(..continued) 

of the Versa B-316 valve presents a particular combination and 

arrangement of design elements that are original to plaintiff's 

valve, that identify it as a valve of Versa . . . and that 

distinguish it from other valves. This arrangement of features 

is not required by the function of the valve itself and is 

entitled to protection." Pointing to other competing valves, the 

court found that Bifold could compete with Versa's B-316 without 

copying Versa's particular configuration. 

 A party entering a market, the court continued, has a duty 

"to so name and dress his product as to avoid likelihood of users 

confusing it with the product of the first comer." Since, in its 

view, Bifold had overtly and intentionally copied Versa's trade 

dress in direct competition with Versa, the court concluded that 

Bifold had infringed Versa's trade dress and engaged in unfair 

competition. While Bifold could produce a valve with three ports 

with modular actuators and solenoid feeds, the court said, Bifold 

could not copy the particular, arbitrary combination and 

arrangement of design elements that identify and distinguish 

Versa valves. 
316's and hence that there was a likelihood of confusion. The 

district court reasoned that Bifold's clear designation on the 

product that it was the manufacturer, while relevant to Bifold's 

duty to take reasonable steps to prevent deception, was only one 

factor to be assessed in resolving the confusion issue. 

 The district court found that "[a]n intent to copy trade 

dress and/or finding of copying by a junior user is often alone 

dispositive of a finding of likelihood of confusion," and that 

since Bifold had copied Versa's design there was a likelihood of 

confusion. The court also found a likelihood of confusion 

because of the "competitive proximity" of the goods, which 

"strongly favors a finding of confusion," since the court found 

that the Domino Junior can replace the B-316 at the point of 

conception of the panels.8

 Although the district court concluded that Versa was not 

entitled to damages because Bifold had only sold two of its 

valves in the United States, it granted Versa permanent 

injunctive relief on the ground that the company's good will was 

threatened by Bifold's attempt to reap the benefits of Versa's 

reputation (by basing the appearance of the Domino Junior on a 

 

 

8. The court additionally considered the "strength" of 

Versa's trade dress, evidence (albeit slim) of actual confusion, 

the method in which the valves are sold, and the labeling of 

Bifold's Domino Junior. Finally, the court also essentially held 

that New Jersey's Unfair Competition Law, 56 N.J.S.A. § 4-1 to -2 

(1989), and its common law of unfair competition parallel the 

unfair competition cause of action under Section 43(a), and hence 

that Versa prevailed on those causes of action as well. 
Versa product). The court determined that the injunction had to 

cover not only the appearance of the article actually the subject 

of the lawsuit, but also all "confusingly similar" appearances. 

It therefore crafted an injunction enjoining Bifold from 

manufacturing, selling, etc., any cast valve which "has an 

external design and visual appearance confusingly similar to the 

cast Versa B-316 valve, described herein and shown in Exhibit A." 

Order and Injunction at 5.9

 The court then held Versa to be entitled to attorneys' fees. 

Recognizing that attorneys' fees can be awarded to the 

"prevailing party" only in "exceptional cases," the court found 

Bifold's deliberate and willful infringement to be exceptional. 

This appeal followed. We have jurisdiction under 28 U.S.C. § 

1132. 

 

 

9. The court concluded its opinion with the caveat that, 

should its injunction be overturned, "an alternate albeit less 

efficacious course can be considered," namely, attaching a metal 

label providing "made in England" and "not a Versa product" onto 

the Domino Junior. Mem. op. at 92 n.3. 
III. DISCUSSION

 To obtain trade dress protection for the B-316 under section 

43(a) of the Lanham Act, Versa had to prove that (a) the design 

was non-functional, (b) the design was inherently distinctive or 

distinctive by virtue of having acquired secondary meaning, and

(c) there was a likelihood of confusion. See Two Pesos, Inc. v. 

Taco Cabana, Inc., 112 S. Ct. 2753, 2758 (1992).10 As discussed 

supra, the district court found that Versa had met each of these 

requirements, and it therefore permanently enjoined Bifold from 

copying the B-316's trade dress and ordered Bifold to pay 

attorney's fees. We limit our discussion to the final element 

Versa needed to establish to prevail on its trade dress 

infringement claim -- the likelihood of consumer confusion as to 

the source of Bifold's Domino Junior. 

 Such consumer confusion is, of course, at the heart of 

trademark law. See, e.g., Freixenet, S.A. v. Admiral Wine & 

Liquor Co., 731 F.2d 148, 151 (3d Cir. 1984). Likelihood of 

confusion is a factual matter, subject to review for clear error, 

see Ciba-Geigy Corp. v. Bolar Pharmaceutical Co., 747 F.2d 844, 

851 (3d Cir. 1984), which exists when, "giving all due deference 

to the opportunity of the trial judge to evaluate the credibility 

of witnesses and to weigh the evidence," Litton Sys., Inc. v. 

Whirlpool Corp., 728 F.2d 1423, 1445 (Fed. Cir. 1984) (emphasis 

 

 

10. New Jersey statutory and common law of unfair 

competition require essentially the same elements. See SK&F, 

Co.,625 F.2d at 1065. 
omitted) (citing Inwood Lab., Inc. v. Ives Lab., Inc., 456 U.S. 

844, 855, 102 S. Ct. 2182, 2188 (1982)), we are "left with a 

definite and firm conviction that a mistake has been committed," 

Anderson v. Bessemer City, 470 U.S. 564, 573, 105 S. Ct. 1504, 

1511 (1985). 

 A. "Likelihood" vs. "Possibility" of Confusion

 Generally, "the law does not require that a competitor 

insure against all possible confusion or the likelihood thereof." 

CHARLES E. MCKENNEY & GEORGE F. LONG, III, FEDERAL UNFAIR COMPETITION: 

LANHAM ACT § 43(A) § 3.08[1], at 3-71 (1989, Release #5, May 1994) 

[hereinafter MCKENNEY & LONG, FEDERAL UNFAIR COMPETITION]. Rather, a 

plaintiff may prevail in a trade dress infringement action only 

if it shows that an appreciable number of ordinarily prudent 

consumers of the type of product in question are likely to be 

confused as to the source of the goods. See, e.g., Nikon, Inc. 

v. Ikon Corp., 987 F.2d 91, 94 (2d Cir. 1993); West Point Mfg. 

Co. v. Detroit Stamping Co., 222 F.2d 581, 589 & n.2 (6th Cir. 

1955). "The mere possibility that a customer may be misled is 

not enough." Surgical Supply Serv., Inc. v. Adler, 321 F.2d 536, 

539 (3d Cir. 1963). 

 Although this usual formulation of trade dress infringement 

requires a showing of a likelihood or probability of confusion, 

this standard has been relaxed in some cases. Where an alleged 

infringer was new to an area and the plaintiff was wellestablished, this court has at times replaced the "likelihood of 
confusion" requirement with a lower "possibility of confusion" 

standard. These cases have all involved actions for trademark or 

tradename infringement, not trade dress, and certainly not trade 

dress alleged in a product configuration. See Merchant & Evans, 

Inc. v. Roosevelt Bldg. Prods. Co., 963 F.2d 628, 637-38 (3d Cir. 

1992) (considering "possibility of confusion" with respect to "a 

name or mark," in particular, a "`Z' logo" alleged to be 

confusingly similar to a "`Zip-Rib' trademark"); Country Floors, 

Inc. v. Partnership Composed of Gepner & Ford, 930 F.2d 1056, 

1065 (3d Cir. 1991) (directing application of "possibility of 

confusion" standard to "Country Tiles" and "Country Floors" names 

or marks); Telechron, Inc. v. Telicon Corp., 198 F.2d 903, 908-09 

("a case of a first coined word and a second coined word 

resembling it"). We must therefore consider whether the 

"possibility of confusion" standard should govern product 

configuration trade dress cases. Since unfair competition law 

regarding product configurations will diverge substantially in 

its incidents from the law regarding product packaging, Duraco, 

40 F.3d at 1439, we begin our consideration by examining the 

rationale underlying the "possibility of confusion" cases. 

 Telechron, Inc. offered some explanation for the lowering of 

the requirements for showing trademark infringement in certain 

situations. In that case the plaintiff used the name "Telechron" 

starting in 1919 as a trademark for its electric clocks and other 

timing and switching devices. The defendant Telicon Corporation 
began marketing radio and television sets under the "Telicon" 

name for the first time in 1946. Agreeing with the district 

court, this court held that "`Telicon' is a colorable imitation 

of `Telechron' within the conception of trade-mark infringement." 

Telechron, Inc., 198 F.2d at 908. 

 In an opinion by Judge Hastie, the court explained that the 

"`degree of resemblance necessary to constitute an infringement 

is incapable of exact definition.'" Telechron, Inc., 198 F.2d at 

908 (quoting McLean v. Fleming, 96 U.S. (6 Otto) 245, 251 

(1877)). We emphasized the strong aural similarity of the marks 

and the evidence of actual confusion, concluding that the 

evidence was "adequate substantiation of tendency to confusion 

inherent in the obvious similarity of the words themselves." 

Telechron, Inc., 198 F.2d at 908. Only then, expressly as an 

additional consideration, did we observe that this was "a type of 

case where a court properly requires the second comer to stay 

clearly away from the original mark," and thus that "`any 

possible doubt of the likelihood of damage should be resolved in 

favor of the [first user].'" Id. at 908-09 (quoting Lambert 

Pharmacal Co. v. Bolton Chem. Corp., 219 F. 325, 326 (S.D.N.Y. 

1915) (Learned Hand, J.)). 

 We recognize that application of the "keep clear" policy 

embodied by the trademark "possibility of confusion" standard 

would not be entirely senseless in the context of alleged 

infringement of trade dress, even where the dress consists not in 
a product's packaging but in a nonfunctional product 

configuration. To the extent that product configurations are 

protectable, a Johnny-come-lately copier arguably creates a 

greater risk than one who more promptly markets a copy that 

consumers will be misled by a substantially identical 

configuration into thinking the newcomer's product to be that of 

the established business, for there will have been more time for 

the public to come to associate that configuration with a single 

source. In and of itself, however, that is no reason to change 

the measure of confusion (from "probability" to "possibility") 

required to make out a Lanham Act violation. Rather, it is at 

most a factor properly taken into account in assessing the 

likelihood of confusion. 

 The trademark "possibility of confusion" standard must 

therefore be supported by other considerations. We believe that 

the primary reasons for lowering the measure of confusion when a 

newcomer copies an established trademark are the general lack of 

legitimate reasons for copying a competitor's mark, see, e.g., 

American Chicle Co. v. Topps Chewing Gum, Inc., 208 F.2d 560, 

562-63 (2d Cir. 1953) ("`Why [the defendant] should have chosen a 

mark that had long been employed by [the plaintiff] and had 

become known to the trade instead of adopting some other means of 

identifying its goods is hard to see unless there was a 

deliberate purpose to obtain some advantage from the trade which 

[the plaintiff] had built up.'"), and the high degree of reliance 
by consumers on trademarks as indicators of the source of 

products. Whether or not these considerations translate to the 

realm of product packaging, we think that with respect to product 

configurations the significance of each of the factors is greatly 

diminished. 

 First, the mere copying of product configurations does not 

suggest that the copier was necessarily trying to capitalize on 

the goodwill of the source of the original product. See Duraco, 

40 F.3d at 1453; see also infra at 40-48 (discussing implications 

of defendant's intent to copy). A presumption to the contrary 

would be mandated, if ever, only in the narrow class of cases 

where both (1) a product configuration is desirable to consumers 

primarily because of the configuration's inherent or acquired 

identification with the original source, and (2) the copier 

adopts affirmatively misleading labelling and/or marketing for 

the copied product, cf. Quaker Oats Co. v. General Mills, Inc., 

134 F.2d 429, 432 (7th Cir. 1943) ("The pirate flies the flag of 

the one he would loot. The free and honorable non-pirate flies 

the colors of his own distinctive ensign."). 

 Second, although a product's trade dress in the form of its 

configuration could function as an indicator of the product's 

source, product configurations in general are not reliable as 

source indicators, for functional configurations are not 

protected and thus may be freely copied, see Duraco, 40 F.3d at 

1441, 1448-49, 1451, and inherently distinctive configurations 
will be rare, see id. at 1446. Since substantially identical 

products are often sold by different manufacturers under 

different names, consumers are accustomed to relying on product 

packaging and trademarks to identify product sources. Indeed, if 

any modification of the likelihood of confusion standard is 

justified in the product configuration context, the standard 

might well be heightened, perhaps to a "high probability of 

confusion." Nevertheless, we see no need to adopt such a 

standard today, preferring for now merely to reject the 

"possibility of confusion" standard for product configuration 

infringement cases, and adhering to the conventional "likelihood 

of confusion" standard. 

 B. The Scott Factors in the Product Configuration Context

 Having concluded that the appropriate standard in this 

product configuration trade dress infringement action is a 

likelihood of confusion, we must determine what that inquiry 

entails in this context. Although the law of trade dress in 

product configurations will differ in key respects from the law 

of trademarks or of trade dress in product packaging, settled law 

provides the starting point for our analysis. 

 We stated in Ford Motor Co. v. Summit Motor Prods., Inc., 

930 F.2d 277, 297 (3d Cir.), cert. denied, 112 S. Ct. 373 (1991), 

that the analysis of the likelihood of confusion requires a court 

to evaluate a number of factors: 

 (1) the degree of similarity between the owner's mark and 

the alleged infringing mark; (2) the strength of [the] 

owner's mark; (3) the price of the goods and other factors 
indicative of the care and attention expected of consumers 

when making a purchase; (4) the length of time [the] 

defendant has used the mark without evidence of actual 

confusion arising; (5) the intent of the defendant in 

adopting the mark; (6) the evidence of actual confusion; (7) 

whether the goods, though not in competition, are marketed 

through the same channels of trade and advertised through 

the same media; (8) the extent to which the targets of the 

parties' sale efforts are the same; (9) the relationship of 

the goods in the minds of the public because of the 

similarity of function; (10) other facts suggesting that the 

consuming public might expect the prior owner to manufacture 

a product in the defendant's market. 

Id. at 293 (citing Scott Paper Co. v. Scott's Liquid Gold, Inc., 

589 F.2d 1225, 1229 (3d Cir. 1978)); accord Charles Jacquin et 

Cie, Inc. v. Destileria Serralles, Inc., 921 F.2d 467, 474-75 (3d 

Cir. 1990); cf. RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 21 (Tent. 

Draft No. 2, Mar. 23, 1990). This test was developed not for 

product configuration cases but for "cases of alleged trademark 

infringement and unfair competition by a producer of a noncompeting product," see Fisons Horticulture, Inc. v. Vigoro 

Indus., Inc., 30 F.3d 466, 473 (3d Cir. 1994), and not all of the 

factors will be appropriate for or function the same way with 

respect to trade dress inhering in a product configuration, so we 

consider them in turn. 
1. Similarity of Appearance (Scott Factor 1)

 In trademark infringement cases, the first and primary 

factor to be considered in the likelihood of confusion inquiry is 

"the degree of similarity between the owner's mark and the 

alleged infringing mark." See Ford Motor Co., 930 F.2d at 293. 

In trade dress infringement cases where product packaging is at 

issue, the corresponding factor is the similarity of the 

protectable trade dress. Similarity of appearance is properly 

considered paramount in trademark and product packaging trade 

dress infringement cases, for unless the allegedly infringing 

mark or dress is substantially similar to the protectable mark or 

dress, it is highly unlikely that consumers will confuse the 

product sources represented by the different marks or trade 

dresses. 

 For the same reason, substantial similarity of appearance is 

necessarily a prerequisite to a finding of likelihood of 

confusion in product configuration cases. Unlike in trade mark 

or product packaging trade dress cases, however, a finding of 

substantial similarity of trade dress in a product configuration 

does not by itself strongly suggest a likelihood of confusion. 

Consumers have grown accustomed to relying on trademarks as 

trustworthy indicators of the source of the product: that is the 

point of a trade mark. Perhaps to a somewhat lesser extent, 

consumers also rely on other aspects of product packaging to 

identify the manufacturer. Such behavior is rational, for in a 
trade mark or product packaging case, all the consumer usually 

has to go on to identify the source of the product is the 

trademark and packaging (and any marketing featuring that mark or 

packaging). 

 In a product configuration trade dress infringement case, by 

contrast, consumers do not have to rely on a potentially 

distinctive configuration to identify the source of the 

product;11 rather, they can generally look to the packaging, 

trademarks, and advertising used to market the product, which are 

typically much less ambiguous. Consumers therefore have less 

need, and so are much less likely, to rely on a product 

configuration as an indicator of the product's source. 

Accordingly, they are less likely to be confused as to the 

sources of two products with substantially similar 

configurations. Thus, in trade dress infringement suits where 

the dress inheres in a product configuration, the primary factors 

to be considered in assessing likelihood of confusion are the 

product's labeling, packaging, and advertisements.12 "The most 

common and effective means of apprising intending purchasers of 

 

 

11. The product configuration may have acquired 

distinctiveness, or it may be inherently distinctive. 

 

12. This observation is consistent with our discussion of 

the Scott factors (also known as the Lapp factors, after 

Interpace Corp. v. Lapp, Inc., 721 F.2d 460 (3d Cir. 1983)) in 

Fisons Horticulture, Inc., 30 F.3d at 476 n.11, where we stated: 

"The weight given to each factor in the overall picture, as well 

as its weighing for a plaintiff or defendant, must be done on an 

individual fact-specific basis." 
the source of goods is a prominent disclosure on the container, 

package, wrapper, or label of the manufacturer's or trader's name 

. . . [and when] that is done, there is no basis for a charge of 

unfair competition." Venn v. Goedert, 319 F.2d 812, 816 (8th 

Cir. 1963), quoted in Litton Sys., Inc., 728 F.2d at 1446. 

 Indeed, except where consumers ordinarily exercise virtually 

no care in selecting a particular type of product (as may be the 

case with inexpensive disposable or consumable items, cf. Venn, 

supra (cookies)), clarity of labeling in packaging and 

advertising will suffice to preclude almost all possibility of 

consumer confusion as to source stemming from the product's 

configuration. Cf. Bose Corp. v. Linear Design Labs, Inc., 467 

F.2d 304, 309 (2d Cir. 1972) ("The presence of [the source's] 

name on the product [stereo speaker cabinets] goes far to 

eliminate confusion of origin.") (emphasis supplied); id. at 310 

("[T]here is hardly likelihood of confusion or palming off when 

the name of the manufacturer is clearly displayed."). 
2. Strength of the Owner's Mark (Scott Factor 2)

 In trademark cases, the strength of the owner's mark 

directly affects the likelihood that consumers will be confused 

as to the sources of products bearing substantially similar 

marks. Strength includes both "[d]istinctiveness on the scale of 

trademarks" and "[c]ommercial strength, or marketplace 

recognition." Fisons Horticulture, Inc., 30 F.3d at 479. A 

strong trademark is thus one that carries widespread, immediate 

recognition that one producer (even if unknown) is associated 

with the mark, and so with the product. If a second comer adopts 

a mark substantially identical to a strong mark, there is a 

correspondingly high likelihood that consumers will mistakenly 

associate the newcomer's product with the owner of the strong 

mark. The same may be said of a "strong" trade dress consisting 

of a product's packaging. 

 But these observations do not translate literally into the 

product configuration context. As we have explained elsewhere, 

the trademark distinctiveness scale is ill-suited for application 

to trade dress inhering in a product configuration. See Duraco, 

40 F.3d at 1440-42. Having rejected the distinctiveness scale in 

this context, we are left with commercial strength as the measure 

of trade dress strength in a product configuration. Yet strength 

of a product configuration must mean more than the ability of 

large numbers of consumers to identify the configuration as 

coming from a particular producer. This would sanction too much 
reliance by consumers on product designs that, lacking the 

protection of a patent, are in large measure copyable at will. 

Cf. Duraco, 40 F.3d at 1447-48 (criticizing the "capable of 

distinguishing" interpretation of distinctive trade dress). 

 Rather, "strength" of product configuration as relevant to 

determining likelihood of confusion on the part of ordinarily 

careful consumers should be found only if consumers rely on the 

product's configuration to identify the producer of the good. 

This may perhaps be the case with products purchased largely 

because of their appearance, such as "Carebears," cf. American 

Greetings Corp., 807 F.2d at 1142. Such focus, however, is not 

generally found in and should not be encouraged in the industrial 

design context, where product appearance typically plays a lesser 

role in buyers' selection processes. Hence, to differentiate 

between these types of product configuration cases, courts should 

require evidence of actual reliance by consumers on a particular 

product configuration as a source indicator before crediting that 

configuration's "strength" toward likelihood of confusion. 
3. Attention Expected of Consumers (Scott Factor 3)

 The third Scott factor is "the price of the goods and other 

factors indicative of the care and attention expected of 

consumers when making a purchase." "The greater the care and 

attention, the less the likelihood of confusion." Fisons 

Horticulture, Inc., 30 F.3d at 476 n.12. We believe that this 

factor takes on enhanced importance when a claim is made for 

infringement of trade dress in a product configuration, both as a 

result of the intersection of the patent laws with the Lanham 

Act, and as a function of the difference between a trademark and 

a product configuration. 

 The penumbra of the federal patent laws restricts the degree 

to which courts may grant legal recognition of consumer reliance 

on product configurations as source indicators, for their limited 

scope of protection impliedly imposes restraint on the workings 

of Section 43(a). Accordingly, we must bear in mind the Supreme 

Court's counsel that "mere inability of the public to tell two 

identical articles apart is not enough to support an injunction 

against copying . . . that which the federal patent laws permit 

to be copied." Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 

225, 232, 84 S. Ct. 784, 789 (1964).13 "[T]he federal policy, 

 

 

13. We recognize that we deal here not only with state 

unfair competition law but also with a federal statute. It is 

therefore true that the Supremacy Clause does not, as in Sears, 

Roebuck & Co., 376 U.S. at 225, and Compco Corp. v. Day-Brite 

Lighting, Inc., 376 U.S. 234, 84 S. Ct. 779 (1964), operate to 

bar Section 43(a) from protecting trade dress in the form of the 

product configuration of Versa's B-316 valve. 
found in Art. I, § 8, cl. 8, of the Constitution and in the 

implementing federal statutes, of allowing free access to copy 

whatever the federal patent and copyright laws leave in the 

public domain," Compco Corp. v. Day-Brite Lighting, Inc., 376 

U.S. 234, 237, 84 S. Ct. 779, 782 (1964), is "an ever-present 

consideration," MCKENNEY & LONG, FEDERAL UNFAIR COMPETITION § 5.03, at 

5-25. 

 Furthermore, one expects a consumer exercising ordinary care 

to ascertain the source of a product to rely much more on 

packaging, trademarks, and advertising, which if not deceptive 

tend to reveal the product's source unambiguously, than on the 

product configuration, which usually does not contain an explicit 

statement of the producer's identity. While it might be shown 

that consumers in fact rely on a particular product's 

configuration to identify its source, such deviation from the 

normal pattern (i.e, from reliance on trademarks, packaging, and 

advertising) would be rare. Because clear labeling thus should 

generally be legally and factually sufficient to remedy confusion 

where unpatented product configurations are at issue, clarity of 

labeling (and marketing) must be taken into account in 

considering whether there is a likelihood that consumers 

exercising ordinary care will be confused as to the sources of 

substantially identical products. 

 Much as courts are required to police the boundaries of 

similarity within which a jury may be permitted to find a 
likelihood of confusion under the Lanham Act, Country Floors, 

Inc., 930 F.2d at 1063, courts must also establish the perimeters 

of ordinary care that constrain likelihood of confusion. The 

following non-exhaustive considerations should guide a court's 

determination of the standard of ordinary care for a particular 

product. Inexpensive goods require consumers to exercise less 

care in their selection than expensive ones. The more important 

the use of a product, the more care that must be exercised in its 

selection. In addition, "the degree of caution used . . . 

depends on the relevant buying class. That is, some buyer 

classes, for example, professional buyers . . . will be held to a 

higher standard of care than others. Where the buyer class 

consists of both professional buyers and consumers, . . . . the 

standard of care to be exercised by the reasonably prudent 

purchaser will be equal to that of the least sophisticated 

consumer in the class." Ford Motor Co., 930 F.2d at 293. 
4. Actual Confusion or Lack Thereof (Scott Factors 4 & 6)

 The fourth Scott factor is "the length of time defendant has 

used the mark without evidence of actual confusion arising." 

While we hold that this factor applies to product configuration 

cases as well as to trade mark and product packaging cases (for 

it is obviously relevant), we take this opportunity to underscore 

the role of the "lack of actual confusion" factor. If a 

defendant's product has been sold for an appreciable period of 

time without evidence of actual confusion, one can infer that 

continued marketing will not lead to consumer confusion in the 

future. The longer the challenged product has been in use, the 

stronger this inference will be. 

 "Evidence of actual confusion" (the sixth Scott factor 

bearing on likelihood of confusion) is similarly relevant: the 

more evidence of actual confusion that a plaintiff can muster, 

the stronger the likelihood of confusion in the future, but lack 

of evidence of actual confusion (at least where the time period 

that the two products have been in competition is short or "when 

the particular circumstances [do not] indicate such evidence 

should have been available," AMF Inc. v. Sleekcraft Boats, 599 

F.2d 341, 353 (9th Cir. 1979)) does not raise an inference that 

there is no likelihood of confusion. As the case law makes 

clear, proof of actual confusion is not required for a successful 

trade dress infringement action under the Lanham Act. Ford Motor 

Co., 930 F.2d at 292 (quoting Opticians Ass'n v. Independent 
Opticians, 920 F.2d 187, 195 (3d Cir. 1990)); accord 2 J. THOMAS 

MCCARTHY, TRADEMARKS AND UNFAIR COMPETITION § 23:2 (2d ed. 1984); id. § 

23:20. 

 We see no reason that these factors would not also apply to 

product configuration cases. However, we emphasize again, see

supra at 35-37, that to make out unfair competition a plaintiff 

must show a likelihood that a consumer exercising ordinary care 

to discover the identity of the source would suffer confusion or 

be mistaken because of the appearance of the allegedly infringing 

product configuration. Thus, instances of actual confusion may 

not weigh in favor of a finding of likelihood of confusion unless 

the confused consumer was acting with the care expected of 

consumers purchasing the type of good at issue. See G.D. Searle 

& Co. v. Hudson Pharmaceutical Corp., 715 F.2d 837, 840 & n.6 

(1983) (ignoring testimony of witness who "was not acting as a 

reasonably prudent consumer of the type of goods in issue when 

purchasing the product"). 
5. Defendant's Intent (Scott Factor 5)
 The fifth Scott factor is "the intent of the defendant in 

adopting the mark." Whatever merit this factor may have in the 

context of trade mark and product packaging trade dress cases, we 

doubt that it is an appropriate consideration in a trade dress 

infringement case where the trade dress is alleged in the product 

configuration itself. In the likelihood of confusion inquiry in 

trademark cases and product packaging trade dress cases, we do 

not focus on a defendant's bare intent to adopt a mark or product 

packaging substantially identical to a plaintiff's mark or 

packaging, since there is little basis in fact or logic for 

supposing from a defendant's intent to copy (without more) that 

the defendant's actions will in fact result in confusion. Thus, 

what we have held is that a defendant's intent to confuse or 

deceive consumers as to the product's source may be highly 

probative of likelihood of confusion. See American Home Prods. 

v. Barr Lab., Inc., 834 F.2d 368, 371 (3d Cir. 1987) (product 

packaging case -- color of pain relief medication); see also

Fisons Horticulture, Inc., 30 F.3d at 479-80 (identifying "intent 

of promoting confusion and appropriating the prior user's good 

will" as appropriate inquiry in forward confusion cases) 

(internal quotation marks omitted) (trademark case -- marks 

"Fairway" and "Fairway Green"); Sands, Taylor & Wood Co. v. 

Quaker Oats Co., 978 F.2d 947, 960 (7th Cir. 1992) ("[T]he 

defendant's intent is relevant to the issue of likelihood of 

confusion only if he intended to palm off his products as those 
of another." (internal quotation marks omitted) (trademark case 

-- words "Thirst Aid" used in advertising campaign); First Brands 

Corp. v. Fred Meyer, Inc., 809 F.2d 1378, 1385 (9th Cir. 1987) 

("Intent of a defendant in adopting his trade dress is a critical 

factor, since if the trade dress were adopted with the intent of 

depriving benefit from the reputation of the plaintiff, that fact 

alone may be sufficient to justify the inference that there is a 

confusing similarity.") (emphasis supplied) (product packaging 

case -- color and shape of antifreeze jug). 

 Because American Home Products involved a claim that the 

color of a rival producer's ibuprofen tablet infringed the trade 

dress of the plaintiff's Advil tablet, we believe that the case 

is closer to a product packaging case than a product 

configuration case. Even were we to consider it a product 

configuration case, however, American Home Products is consistent 

with our present discussion of defendant's intent. Judge Seitz's 

opinion did not hold that independent significance must be 

accorded a defendant's mere intent to copy; rather, it held that 

"intent to confuse might be highly probative of likelihood of 

confusion" and that "[a]t most, defendant's intent is a factor

tending to suggest likelihood of confusion." American Home 

Prods., Inc., 834 F.2d at 371 (emphases supplied). In what 

follows, we simply clarify this circuit's intent-to-confuse rule 

for product configuration cases, delineating the circumstances 

under which a defendant's intent to confuse or deceive consumers 
may be considered a factor in the likelihood of confusion 

inquiry. 

 We realize that some courts have adopted a broader rule 

holding that a defendant's intent to copy strongly supports an 

inference of likelihood of confusion. See, e.g., Bauer Lamp Co. 

v. Shaffer, 941 F.2d 1165, 1172 (11th Cir. 1991); Mobil Oil Corp. 

v. Pegasus Petroleum Corp., 818 F.2d 254, 258 (2d Cir. 1987). 

Like the intent-to-confuse rule, this intent-to-copy rule relies 

essentially on a (rebuttable) presumption of efficacy -- although 

the intent-to-copy rule requires a double inference, see, e.g., 

Perfect Fit Indus., Inc. v. Acme Quilting Co., 618 F.2d 950, 954 

(2d Cir. 1980) ("If there was intentional copying the second 

comer will be presumed to have intended to create a confusing 

similarity of appearance and will be presumed to have 

succeeded.") -- since the defendant's intent standing alone 

(without reference to the defendant's competence and the nature 

of the defendant's actions) reveals little about the probable 

outcome of the defendant's conduct.14

 

 

14. Thus we must disagree with one commentary, which, 

relying on case law (but not attempting to defend or explain its 

assertion), states: "Once intent to benefit or capitalize under 

Section 43(a) is found, the presumption or inference of 

likelihood of confusion logically ensues." MCKENNEY & LONG, FEDERAL 

UNFAIR COMPETITION § 3.08[11][c] (emphasis supplied). Indeed, we 

note that this treatise contains a passage that, at least when 

generalized, illustrates the fallacy of the intent presumption: 

"the fact of likelihood of confusion [or lack thereof] among 

members of the relevant trade and purchasing public may be 

discerned by a court even if a defendant intended to realize a 

contrary result." Id. § 3.08[11][a]. 
 The justification for these inferences in a trade mark or 

product packaging case is that there is little or no competitive 

need to copy another's distinctive symbol or presentation to sell 

one's product, and that anyone who does so is most likely trying 

to cash in on the competitor's good will attached to the 

competitor's mark or packaging in order to sell his or her own 

product. See, e.g., 2 MCCARTHY, TRADEMARKS AND UNFAIR COMPETITION

§ 23.33 ("[W]e can readily read into defendant's choice of a 

confusingly similar mark the intent to get a free ride upon the 

reputation of a well known mark."). This presumption largely 

duplicates the weight given to the substantial-identity-ofappearance factor (Scott factor 1) in the likelihood of confusion 

inquiry, and the extra weight assigned to the intent to deceive 

is somewhat punitive. Cf. 2 MCCARTHY, TRADEMARKS AND UNFAIR COMPETITION

§ 23.32 ("Where there is hard evidence of defendant's intention 

to get a free ride on plaintiff's reputation, the court is free 

to engage in the traditional rhetoric which accompanies punishing 

the evildoer[.]"). 

 Although these two types of inference from defendant's 

intent do not directly serve the purpose of preventing consumer 

confusion or misappropriation of a producer's good will -- either 

of which might arise from good faith or bad faith actions -- the 

inferences may serve as a deterrent to infringement. But where 

product configurations are concerned, we believe there is little 
room for deterrence if appropriate labeling and marketing are 

undertaken. 

 One primary purpose of the Lanham Act is to foster fair 

competition. See, e.g., Merchant & Evans, Inc., 963 F.2d at 640 

n.13 (citing Park 'N Fly, Inc. v. Dollar Park and Fly, Inc., 469 

U.S. 189, 193, 105 S. Ct. 658, 661 (1985), and Jay Dratler, Jr., 

Trademark Protection for Industrial Designs, 1988 U. ILL. L. REV. 

887, 926 n.10). Indeed, we have said that prevention of unfair 

competition is the doctrinal basis for trade dress infringement 

suits under the Act. American Greetings Corp., Inc., 807 F.2d at 

1140-41 & n.2. Where product configurations are concerned, we 

must be especially wary of undermining competition. Competitors 

have broad rights to copy successful product designs when those 

designs are not protected by (utility or design) patents. It is 

not unfair competition for someone to trade off the goodwill of a 

product, see Kellogg Co. v. National Biscuit Co., 305 U.S. 111, 

121, 59 S. Ct. 109, 115 (1938); it is only unfair to deceive 

consumers as to the origin of one's goods and thereby trade off 

the good will of a prior producer. See also Duraco, 40 F.3d at 

1445. 

 Unless very narrowly tailored, deterrents to copying of 

product designs -- as opposed to product packaging or trademarks 

-- would inhibit even fair competition, thus distorting the 

Lanham Act's purpose. We believe that the best way to further 

Congress's intent is to limit carefully the scope of any possible 
deterrence of competition. Cf. Merchant & Evans, Inc., 963 F.2d 

at 640 ("[C]ourts should tailor trademark remedies to decrease 

the likelihood of confusion without unnecessarily inhibiting 

competition."). Recognizing that trade mark and trade dress 

cases on one hand and patent cases on the other do not involve 

identical considerations, we nevertheless turn for guidance in 

this task to patent cases concerning defendants' intent, for, as 

we have noted, we must decide product configuration cases so as 

harmonize with the federal patent laws. See supra at Error! 

Bookmark not defined.-36. 

 In patent infringement cases, a defendant's bad intent is 

relevant in at least two contexts. First, under the doctrine of 

inequitable conduct, infringement claims may be rendered 

unenforceable if a plaintiff intended to deceive the Patent 

Office by failing to disclose material evidence. See, e.g., 

Braun, Inc. v. Dynamics Corp. of America, 975 F.2d 815, 822 (Fed. 

Cir. 1992); Allen Organ Co. v. Kimball Int'l, Inc., 839 F.2d 

1556, 1567-68 (Fed. Cir. 1988). Second, a plaintiff may receive 

increased damages where a defendant willfully infringed its 

patent. See, e.g., Braun, Inc., 975 F.2d at 822; E.I. du Pont de 

Nemours & Co. v. Phillips Petroleum Co., 849 F.2d 1430, 1440 

(Fed. Cir. 1988). In either case, however, the plaintiff must 

prove by clear and convincing evidence that the defendant had the 

relevant bad intent. See, e.g., Braun, Inc., 975 F.2d at 822 

(intent to deceive Patent Office and willful infringement); Allen 
Organ Co., 839 F.2d at 1567 (intent to deceive Patent Office); 

E.I. du Pont de Nemours & Co., 849 F.2d at 1440 (willful 

infringement). Although in the present context we are not 

dealing with increased damages or actions taken by the Patent 

Office, product configuration trade dress cases nonetheless 

implicate patent-like restrictions on competition. Like the 

doctrine of inequitable conduct, a heightened evidentiary 

standard would serve to ensure that deviations from the "the 

federal policy . . . of allowing free access to copy whatever the 

federal patent and copyright laws leave in the public domain," 

Compco Corp., 376 U.S. at 237, 84 S. Ct. at 782, are not casually 

countenanced. And much as the burden of proof for willful 

infringement assures that competitors are not penalized by 

increased damage awards without compelling evidence, we think it 

similarly important to competitors -- as well as the public -- 

that competition not be hobbled by monetary damages or injunctive 

prohibitions absent similarly compelling evidence. 

 Accordingly, for all the foregoing reasons, we hold that in 

the product configuration context, a defendant's intent weighs in 

favor of a finding of likelihood of confusion only if intent to 

confuse or deceive is demonstrated by clear and convincing 

evidence, and only where the product's labeling and marketing are 

also affirmatively misleading. Of course, a plaintiff might 

succeed in proving likelihood of confusion without evidence of 

affirmative deception. We only hold that, to be considered as 
evidence of a likelihood of confusion in a product configuration 

case, the defendant's intent must meet the conditions we have set 

forth. 

6. Marketing Considerations (Scott Factors 7-10)

 The remaining factors identified by Scott as bearing on the 

likelihood of confusion address various aspects of the marketing 

of the products. In the product configuration context, none of 

these four factors tends to establish a probability of confusion, 

rather than a mere possibility, and thus we conclude that they 

should be treated as necessary but insufficient conditions for 

showing a likelihood of confusion. 

 The seventh Scott factor is "whether the goods, though not 

competing, are marketed through the same channels of trade and 

advertised through the same media." We believe that this factor, 

which is explicitly formulated for application to non-competing 

products, serves primarily to establish the possibility of 

confusion and carries little weight toward establishing the 

probability of confusion; if not shown, it may exonerate a 

defendant, but if established, it merely allows the plaintiff's 

case to go forward. Moreover, it will rarely need to be 

considered in a product configuration trade dress infringement 

case, for the goods at issue will almost by definition be in 

competition. 

 "The extent to which the targets of the parties' sale 

efforts are the same" is the eighth Scott factor. Like the 
marketing channel inquiry, this factor was developed largely for 

non-competing products, see, e.g., Interpace Corp. v. Lapp, Inc., 

721 F.2d 460, 462-63 (3d Cir. 1983); Scott Paper Co., 589 F.2d at 

1229-30, and relates more to the possibility than the probability 

of confusion. Particularly in a product configuration case, this 

factor should be considered necessary but not sufficient: If 

different consumers buy the defendant's product and the 

plaintiff's product, the defendant will typically win; if 

substantially overlapping audiences buy the products, the 

plaintiff does not automatically win, but will usually have the 

opportunity to further develop its case for likelihood of 

confusion. 

 "The relationship of the goods in the minds of the public 

because of the similarity of function" and "other facts 

suggesting that the consuming public might expect the prior owner 

to manufacture a product in the defendant's market" are the ninth 

and tenth Scott factors for determining likelihood of confusion. 

Bearing in mind that these factors also were developed for noncompeting products, we believe that they are largely superfluous 

in product configuration cases. The requisite similarity of 

trade dress in the product designs themselves would in most cases 

presuppose a similarity of function between the products at 

issue. Hence, some measure of so-called "competitive proximity" 

will always be present in product configuration trade dress 

infringement cases and therefore, while a necessary condition for 
there to be a likelihood of confusion, this factor is not a 

sufficient condition, nor does it by itself create a strong 

presumption that confusion is likely to ensue. 

 C. The Balance of the Modified Scott Factors Here

 In this case, "[t]he dispositive issue is . . . consumer 

confusion as to source. Regardless of how much secondary meaning 

it possesses, a product's trade dress will not be protected from 

an imitator that is sufficiently different in its features to 

avoid such confusion." Freixenet, S.A. v. Admiral Wine & Liquor 

Co., 731 F.2d at 151. For the reasons we explained above, we 

believe that the district court committed legal error in 

initially applying a "possibility of confusion" standard, and, 

applying the (modified) Scott factors, we conclude that it 

clearly erred in inferring from the evidence and testimony that 

an appreciable number of buyers are likely to be confused as to 

the origin of Bifold's Domino Junior valve. See CL 55, 62, 64. 

1. The Governing Standard: Likelihood of Confusion

 The district court held that 

 [a] lower standard for "likelihood of confusion" is applied 

where a newcomer to an area already occupied by a long 

established entity is the alleged violator. The Third 

Circuit uses the phrase "possibility of confusion" to 

describe this standard. 

CL 56 (citations omitted). As we explained above, see supra at 

23-28, this standard is inapplicable in product configuration 

cases. We decline, however, to reverse on this basis. 

 Although the district court announced the "possibility of 

confusion" standard in its Conclusions of Law, it appears that 
the court might not have relied on the lowered threshold in 

finding for the plaintiff. None of the other "Conclusions" 

bearing on the issue of confusion included the "possibility" 

language; those that mentioned any measure used "likelihood" of 

confusion, the correct standard. Accordingly, in an excess of 

caution, we treat Conclusion of Law 56 as surplusage, and review 

the judgment for clear error with respect to the conclusion that 

Bifold's actions present a likelihood of confusion, Ciba-Geigy 

Corp., 747 F.2d at 851. We apply the Scott factors as modified, 

see supra Section II.B. 

2. Viability of the District Court's Similarity Fact Finding

 The district court correctly identified the similarity of 

product appearances (Scott factor 1) as the threshold inquiry in 

ascertaining likelihood of confusion. However, it improperly 

imported the trade mark/product packaging standard for the weight 

to be assigned this factor, holding that "if the overall 

impression created by the trade dress is essentially the same, it 

is very probable that the products are confusingly similar." 

From there, it apparently reasoned that because "[t]he overall 

appearance of the Versa B-316 valve and the Bifold Domino Junior 

valve is virtually identical[,] there is a likelihood of 

confusion." See also CL 64 ("Bifold Domino Junior valves have a 

very similar appearance to Versa B-316 valves; there is a 

likelihood of confusion."). 
 Despite the appreciable differences between the valves' 

appearances, see supra at 10-11, we do not hold the district 

court's finding of similarity of appearance to be clearly 

erroneous. But in a product configuration case, the similarity 

of the product designs does not alone give rise to a strong 

inference of likelihood of confusion, see supra at 30-32, since 

the greatest weight must be given to the primary means by which 

consumers identify the products' sources: packaging, trademarks, 

and advertising. Accordingly, the similar appearance of the two 

valves' designs allows Versa to argue -- but does not establish 

-- a likelihood of confusion. The district court's findings 

concerning the trade channels and advertising media used by 

Bifold and Versa (Scott factor 7) and Bifold's targeting of the 

same customer group (Scott factor 8) similarly do little to 

establish likelihood of confusion. 
3. Intent, Competitive Proximity, and Likelihood of Confusion

 Compounding its error regarding the effect of the similarity 

of the valves' appearances, the court asserted that "[a]n intent 

to copy trade dress and/or finding of copying by a junior user is 

often alone dispositive of a finding of likelihood of confusion." 

Even as concerns trade marks and product packaging, however, only 

an intent to deceive or confuse consumers can suffice to raise a 

presumption of likelihood of confusion in this circuit. See

supra at 41. Moreover, in a product configuration case the 

defendant's intent (Scott factor 5) is not relevant to the issue 

of likelihood of confusion absent affirmatively misleading 

labeling and marketing. Here, Bifold's identification of its 

Domino Junior valves is by no means misleading, see supra at 11; 

infra at Error! Bookmark not defined.-65, and thus Bifold's 

intent should not be considered. 

 Similarly, the district court erred in holding that "[w]hen 

products are used in the same application, such a competitive 

proximity of goods strongly favors a finding of likelihood of 

confusion" (emphasis supplied). This proposition finds no 

support in the two decisions of this court cited by the district 

court, see Interpace Corp., 721 F.2d at 462; Scott Paper, 589 

F.2d at 1229, and at all events it is not applicable where trade 

dress consists in a product configuration, as our previous 

discussion explains. See supra at Error! Bookmark not defined.. 
4. Strength of the Trade Dress and Likelihood of Confusion

 Turning to the Scott factors that are relevant to the 

likelihood of confusion in this product configuration case, we 

first note that the "strength" of Versa's trade dress in its B316 valves' configuration (Scott factor 2) may not support a 

conclusion of likelihood of confusion because there is no 

evidence that consumers rely on the appearance of the B-316 valve 

to identify it. See supra at 33-34. To the contrary, all the 

evidence shows that consumers order valves by multi-digit part 

and model numbers peculiar to the manufacturer. In selecting the 

valves buyers do not specify the desired appearance but rather 

designate functional specifications listed in schematic diagrams, 

specification sheets, and manufacturers' catalogues. Such 

precision in ordering is necessary, for Versa offers many 

variations of its valves. Thus, the "strength" of the B-316's 

trade dress does not bolster Versa's case for a likelihood of 

confusion. 
5. The Evidentiary Role of Actual Confusion

 This brings us to evidence of actual confusion (Scott

factor 6) or the lack thereof (Scott factor 4). The district 

court correctly noted that Versa need not prove actual confusion, 

only a likelihood of confusion. Although the district court did 

not address the pertinent evidence in its Conclusions of Law or 

explicitly rely there on evidence of actual confusion, we will 

address the Findings of Fact arguably relevant to actual 

confusion that might support the district court's conclusion of 

likelihood of confusion. Our examination confirms that the 

district court's ultimate conclusion was clearly erroneous, not 

supported by record evidence, let alone evidence cited anywhere 

in the opinion. 
 a. Carr's Involvement Reflects No Actual or Likely 

Confusion

 The district court commenced the "Likelihood of Confusion" 

section of its Findings of Fact by discussing Bifold's "sole 

sales representative in the United States." The court found (and 

there is record evidence to support) that Bifold hired James 

Carr, III, a former Versa regional marketing manager; that Carr 

has already tried to sell Bifold products to Gordon Fraleigh, a 

Versa distributor who knew Carr for a number of years while Carr 

was a regional sales manager for Versa; and that Carr told 

Fraleigh that the Bifold valve was an "exact copy" of the Versa 

B-316, as a result of which there was confusion in Fraleigh's 

(heightened by Carr's former relationship with Versa) mind as to 

the relationship between Versa and Bifold. 

 This depiction of the facts, however, is misleading. It 

presents only a snapshot of Fraleigh's mental processes, taken 

from a particular angle at a single instant in time. Examining 

Fraleigh's uncontested testimony from a different angle reveals 

the situation more fully: First, the telephone call in question 

occurred sometime around the early part of 1993, but Fraleigh 

knew that Carr left Versa's employ in 1990. Thus, at the time of 

this call, Fraleigh knew Carr was not with Versa; indeed, during 

the call, Carr told Fraleigh that he was with Bifold, an English 

company, and he did not say that Bifold was connected with Versa 

or that its valves were made by Versa. Second, Fraleigh's 

employer, the Fraleigh Company, distributes the products of about 
seventy companies, including Versa, and before the call in 

question Carr had phoned Fraleigh representing various non-Bifold 

product lines competitive with Versa. Fraleigh was apparently 

confused only because he had not previously seen duplicate 

products in the fluid power industry and because Carr had once 

been a Versa representative. 

 Moreover, a slightly broadened temporal focus exposes the 

manifest error in the district court's fact finding. Initially, 

we note that Fraleigh's testimony reveals that he did not even 

know whether Carr was referring to Bifold's Domino Junior valve. 

Nor did Fraleigh see the valve, for he and Carr conversed by 

telephone. Fraleigh's testimony, then, cannot be evidence that 

the appearance of the Domino Junior was so like Versa's trade 

dress that it would confuse consumers as to the sources of the 

valves. Furthermore, Fraleigh testified that, because of his 

confusion, he called Versa Products to find out what was going 

on. Versa's sales manager, Joe Sudol, explained that Bifold was 

a competing company from England that had copied the B-316. 

Indeed, he asked Fraleigh to try to get information on Bifold's 

valve. 

 Plainly, then, Fraleigh's testimony does not represent an 

instance of "actual confusion." It reflects only fleeting 

uncertainty as to the relationship between Bifold and Versa, not 

a mistaken belief that there was any affiliation between the two 

companies. Fraleigh was able with minimal effort to procure the 
modicum of information he needed to dispel his uncertainty.15 We 

believe that Fraleigh acted as a prudent distributor-customer of 

these sorts of valves, and as a result was not confused in the 

Lanham Act sense.16

 

 

15. In the absence of evidence to the contrary, it is also 

most likely that Carr himself would have told Fraleigh the truth 

-- that Bifold is an unaffiliated competitor of Versa -- had 

Fraleigh asked. Courts may not simply presume that individuals 

will lie in direct violation of trademark and unfair competition 

laws. Indeed, Versa's counsel conceded that "I'm not and cannot 

offer to this Court that we have proof of a distributor that has 

done that [i.e., falsely indicated that Bifold is associated with 

Versa's products]." Nor did Versa even offer other instances in 

this industry where such misrepresentation had occurred. (Versa 

Vice-President and Chief Operating Officer Frank Vetter opined 

only that "it becomes very easy for a Bifold perhaps distributor 

[sic] to go in and, as you might hear later on in testimony, 

[say] that this valve is a direct interchange with a Versa valve, 

it fits in the same place, it performs the same function." This 

is a far cry from evidence that distributors mispresent the 

sources of the valves they sell. The district court therefore 

correctly characterized such testimony as "highly speculative," 

and Versa's expert witness Gerald Murphy as not qualified to 

"opine as to whether somebody's going to lie or not." 

 Pharmaceutical cases relying on possible substitution of one 

maker's drug for another by pharmacists filling prescriptions are 

not to the contrary. In such cases, the finding of likelihood of 

confusion is supported by evidence that improper substitution 

commonly occurs in prescription filling, and that the minuscule 

markings on pills with similar trade dress are sufficiently 

difficult to read by many customers that the markings do not 

reduce the likelihood of confusion. See, e.g., SK&F, Co., 625 

F.2d at 1059 & n.2, 1061. 

 

16. Thus, aside from its bearing on the channels of trade 

and target audiences, see supra at 48-49, evidence that Carr has 

still been able to get access to Versa valve products and has 

recently sold Versa valves to the same customers to whom he will 

be selling Bifold valves is irrelevant to likelihood of 

confusion. 
 b. The Wentworth Fax Reflects No Actual Confusion

 Second, the district court asserted that at least one 

customer has forwarded to Bifold a telefax that was initially 

addressed to Versa. The fax from Trevor Wentworth opened with 

the following statement: " Derek reference our telecon this 

morning here are the requirements for the above referenced 

project." The original addressee was Versa, "Attention: Dave," 

and after those names were crossed out, the same fax was sent to 

Bifold, "Attention: Derek Close"; the fax number -- "Auto" -- 

was unchanged. But this fax may have been a request for 

competitive bids,17 including only Versa's part numbers because 

Wentworth had spoken to Bifold's sales representative by 

telephone and had not yet been sent any spec sheets; or (although 

unlikely) it might reflect a customer so befuddled that he could 

not remember to whom he had spoken that morning, and thus not a 

customer exercising ordinary care. At all events, there is no 

evidence that the customer had even seen the appearance of 

Bifold's Domino Junior valve to be able to confuse it with 

Versa's trade dress on its B-316 valve. For these reasons, and 

because there was no testimony at trial concerning this 

unexplained fax, the district court clearly erred when it used 

this evidence to buttress its conclusion that there was confusion 

-- actual or likely -- as to the sources of the valves or the 

relationship (or lack thereof) between Versa and Bifold.18

 

 

17. Bifold explains on appeal, and Versa does not contest, 

that the fax "was a request for a price quote, and the customer 
 c. The Hearsay Evidence Constitutes No Evidence of 

Confusion

(..continued) 

was seeking competitive bids." Br. of Appellant, at 38. We do 

not, however, determine that this explanation is true; rather, we 

cite it only as a possibility. There was no explanation offered 

at trial, for the district court at the outset admitted (without 

discussion) all documentary evidence appearing on a list prepared 

by either party and not objected to. 

 

18. Since the fax referred to B-series and V-series valves 

and was sent initially to Versa, we believe that the competitive 

bid explanation is the only plausible one in the absence of 

evidence to the contrary. By contrast, a fax sent initially to 

Versa but asking for a quote on Domino Junior valves would 

suggest confusion. 
 Third, the district court erred in relying on hearsay 

evidence for the proposition that there was actual confusion. 

The district court recorded as a finding of fact that "When Mr. 

Frank Vetter was asked by Bifold's attorney for examples of 

actual confusion between Bifold's Domino Junior valve and Versa's 

B-316 valve, Mr. Vetter related that he had been advised of 

confusion at trade shows." We agree that the record reflects 

Vetter's response. But his answer is pure hearsay: Vetter's 

testimony upon which the district court relied was that "I have 

been advised by our sales manager in Europe that there was 

confusion at trade shows, that people had indicated that the 

valves resembled, were identical and they would lead to 

confusion." Vetter could not even identify the people allegedly 

confused, instead referring Bifold's attorney to "the brief." 

Moreover, Vetter's response only proves that people thought the 

valves' appearances were similar, not that they were actually 

confused by the similar appearances. In this light, even if 

Vetter's testimony were not hearsay, it still would not 

demonstrate confusion as to the sources of the valves engendered 

by the similarity in appearance of the valves. 

 The district court similarly erred in making a finding of 

fact that "Hans Albert, Sales Manager for Versa, B.V., 

substantiated that he had discussions with people at the 

Stavanger, Norway trade show regarding the issue of confusion, 

including Mr. Ellingston of Hark & Ellingston, a major competitor 
in Norway[,] and Mr. Ungerskruge, an employee of a company named 

Holter that manufacture[s] wellhead control panels." Again, this 

testimony is hearsay, to which Bifold objected. Versa then 

offered it solely to prove that Alberts had a conversation with 

two identifiable people, and the district court ruled that 

Albert's testimony must not concern the substance of the 

conversation. Accordingly, this testimony has no bearing on the 

issue of the likelihood of consumer confusion as to the sources 

of the valves, and it was therefore error for the district court 

to include it as the basis for a finding of fact. Even were the 

substance of the testimony admissible, Vetter testified only that 

he spoke with people "with regard to the issue of confusion." 

Thus, the testimony is not probative of a likelihood of confusion 

as to source as a result of the alleged trade dress infringement. 
 d. Summary Concerning Actual Confusion

 In sum, we believe that there was no evidence of actual 

consumer confusion as to source upon which the district court 

could have relied to find a likelihood of confusion. Moreover, 

as the district court found, "[o]nly two Domino Junior valves 

have been sold to date in the United States and those have been 

sold to Versa's sales representative so that there has been 

little, if any, opportunity to develop evidence of further 

confusion in the United States." Accordingly, evidence of actual 

confusion or lack thereof does not weigh in favor of or against a 

finding of likelihood of confusion. We turn to the final 

relevant Scott factor. 

6. Labeling, Care Expected of Consumers, and Likelihood of 

Confusion

 As noted above, the third Scott factor is "the price of the 

goods and other factors indicative of the care and attention 

expected of consumers when making a purchase." As we have 

described, this factor is fundamental in product configuration 

cases, where the most important facts are the marketing and 

labeling of the similarly configured products. As we now 

explain, the district court clearly erred in not finding these 

factors dispositive in this case. 

 The district court was technically correct in stating that 

"[t]he fact that the source of the product is clearly designated 

on the product does not establish that plaintiff has failed to 

demonstrate a likelihood of confusion as such an element is 
simply one factor to be assessed when resolving the confusion 

issue." However, it failed to appreciate the converse 

proposition, that a court need not consider all these elements 

when some are dispositive. See Freixenet, S.A., 731 F.2d at 

151-52. Here, as the court properly observed, "[i]n selling a 

competing valve, Bifold's duty is to take reasonable steps to 

prevent deception." Under the circumstances, Bifold more than 

adequately met its duty to take reasonable steps to prevent 

deception. 

 a. Bifold's Extensive Labeling Precludes Likelihood of 

Confusion

 Although the configurations of Versa's B-316 and Bifold's 

Domino Junior valves are quite similar in appearance, we deal 

here with a product configuration case, and thus the labeling of 

the products takes on a heightened importance. See supra at 

Error! Bookmark not defined.-32. The facts found by the district 

court clearly show that Bifold took entirely reasonable and 

adequate steps to prevent confusion. 

 The district court found that "[t]he name VERSA and the 

place of origin, `N.J., U.S.A.,' are cast into the metal [of the 

B-316 valve body] to identify Versa as the valve's source." 

Moreover, "[e]very valve body that Versa sells bears a label 

displaying the VERSA name, logo and part number." Similarly, the 

court noted that "Bifold casts its name into the DOMINO JUNIOR 

valve body, and bolts onto the body a metal label displaying the 

BIFOLD name." 
 But this brief recitation fails to convey the adequacy of 

Bifold's efforts. "In the case of a relatively high-priced, 

single-purchase article, . . . there is hardly likelihood of 

confusion or palming off when the name of the manufacturer is 

clearly displayed." Merchant & Evans, Inc., 963 F.2d at 636 

(internal quotation marks omitted); see also Bose Corp., 467 F.2d 

at 310 (same). Here, the metal label bolted onto the Domino 

Junior valves does more than "display[] the BIFOLD name." The 

name appears in a logo of sorts in a font markedly different from 

that used in the Versa logo. The label also contains Bifold's 

part number and a valve serial number, the place of origin 

(Wigan, England), Bifold's telephone number, and its fax number. 

Moreover, this is not a case where "[t]he items are relatively 

inexpensive and consumers cannot be expected to examine the 

labels carefully," Scott Paper Co., 589 F.2d at 1230, and even a 

quick glance at the permanently affixed label reveals that Bifold 

is the source of the Domino Junior valve. Thus, Bifold's labeling 

will suffice to dispel any confusion about the valve's source 

that the configuration of the Domino Junior valve might otherwise 

engender in purchasers who exercise ordinary care. 

 b. The Manner in Which the Valves Are Sold Virtually 

Precludes Likelihood of Confusion

 In addition to the clear labeling, the manner in which the 

valves are marketed further nullifies any likelihood of 

confusion. As the district court found: 

 The Versa B-316 and Bifold DOMINO JUNIOR valves are not sold 

on a shelf or selected on sight. Buyers order the valves 
based on functional specifications as shown on schematic 

diagrams, manufacturer's catalogs or specification sheets 

and samples available at trade shows and sales 

presentations. 

Moreover, purchasers cannot buy Versa B-316 or Bifold Domino 

Junior valves by name only. B-316 valves can be purchased only 

by specifying a multi-digit part number pursuant to Versa's 

comprehensive part numbering system. Similarly, Bifold requires 

the use of its own part numbering system, with the numbers 

obtainable only by reference to a Bifold specification sheet. 

Finally, as the district court also found, "[t]he purchasers and 

users of Versa's B-316 valves are qualified, knowledgeable 

personnel who understand how the valves are to be installed and 

operated." 

 The appearance of these valves simply plays no role in the 

ordering process, which instead requires the use of detailed 

technical specifications and lengthy, manufactuer-specific part 

numbers. Under these circumstances, we find it utterly 

inconceivable that one of -- let alone an appreciable number of 

-- the professional buyers of these valves will be confused, by 

the appearance of the Domino Junior, as to the valves' 

manufacturers or the relationship between them. 

 c. Summary of the Labeling and Care Expected of Consumers

 The foregoing evidence must be viewed as virtually 

precluding any likelihood of confusion. These valves are not 

bought by children or casual consumers, nor are they purchased 

solely by name. There is no likelihood of confusion -- indeed, 
virtually no possibility that the appearance of the Bifold Domino 

Junior valve body will mislead purchasers into thinking that they 

are ordering a Domino Junior valve from Versa or a B-316 valve 

from Bifold, and the enormous safety concerns surrounding the 

applications where these valves are used increase the already 

great care used by purchasers of these valves.19 Typically, they 

are found in offshore oil drilling control applications, 

hazardous and demanding environments where loss of human life, 

major environmental damage (and consequent liability), and huge 

property loss may be at stake if a valve does not function 

properly in an emergency shutdown. Because of the dire 

consequences of using an improper valve, engineers who design the 

control panels would be expected to exercise a high degree of 

caution in selecting valves, and thus would be highly unlikely to 

mistake a Versa B-316 for a Bifold Domino Junior. 

 Therefore, in light of the importance of the valves, the 

process by which they are purchased, the sophistication of the 

consumers, and the clarity of Bifold's labeling, there is no 

likelihood (or even a realistic possibility) of consumer 

confusion as to the source of Versa's or Bifold's valves, and we 

 

 

19. Although Versa intended its witnesses' testimony to 

highlight the hazards of confusing a Versa valve with a Bifold 

valve -- which would be product confusion, not source confusion 

as required for a Lanham Act violation -- the testimony is 

nonetheless indicative of the care that ordinarily prudent valve 

consumers may be expected to use. 
conclude that the district court's contrary finding was clearly 

erroneous. 

7. Private Labeling Theories Do Not Support Likelihood of 

Confusion

 We must still address one additional theory under which the 

district court found a likelihood of confusion: the private 

labeling theory. The district court concluded, ostensibly as a 

finding of fact, that 

 [g]iven the virtual identity in appearance of the Versa B316 cast valve and the Bifold DOMINO JUNIOR cast valve and 

the fact that Bifold has not previously sold products in the 

United States, anyone in the industry might reasonably 

assume that Versa had manufactured but privately labelled 

the Bifold DOMINO JUNIOR valve or that the DOMINO JUNIOR 

valve is otherwise associated with Versa. 

FF 232. The court further concluded that 

 [t]he 'second comer" Bifold DOMINO JUNIOR valve looks so 

similar to the established Versa B-316 valve that it looks 

like a private label manufactured by Versa. The two valves 

could be confused; consumers would think that there is some 

relationship between the two valves and two companies. 

FF 233 (citations omitted). Although we believe that these 

conclusions present mixed questions of fact and law, for the 

district court focused upon what consumers might "reasonably" 

assume, we need not invoke plenary review, for we are firmly 

convinced that they represent clear error, and that the theory of 

confusion in which they are grounded does not support a claim 

under the Lanham Act or New Jersey law. 

 In FF 232, the district court concluded from coincidence of 

similarity of appearance and recency of entry into a market that 
consumers might reasonably assume private labelling or some other 

relationship between the Domino Junior and Versa valves. The 

district court is correct that the Lanham Act protects against 

confusion not only as to source but also as to connection between 

manufacturers of similar products. See, e.g., Institute for 

Scientific Info., Inc. v. Gordon & Breach, Science Publishers, 

Inc., 931 F.2d 1002, 1007 (3d Cir. 1991). But the court's 

inference would potentially subject any new competitor with a 

product whose appearance resembles that of an established product 

to an injunction on this private labeling theory. We have simply 

been presented with no evidence that "private labeling" occurs 

today on a scale significant enough to justify such a sweeping 

extension of the law of unfair competition. 

 Even a presumption of more limited scope would not support 

the district court's inference. Where product configurations are 

at issue, consumers are not generally likely to jump to the 

"private labeling" conclusion; consider for example Oreo and 

Hydrox brand sandwich cookies, which are strikingly similar in 

appearance. Consumers would not have assumed upon later 

emergence of one brand that the first producer had marketed a 

slight variation of its cookie under a private label. Rather, as 

in situations like the present one, consumers generally are more 

likely to conclude, quite reasonably, that a competitor has 

entered the market with a substantially identical product. 
 Second, the record evidence does not support the district 

court's conclusion. Versa's counsel's opening statement at trial 

fairly summarized the content of Gerald Murphy's testimony, which 

formed the sole evidentiary basis for the district court's 

private labeling conclusion: 

 Mr. Murphy [Versa's expert witness] will also tell that as a 

result of his experience, look-alike products are naturally 

associated by way of operating characteristics and 

reputation. Just because the valves look alike, the Bifold 

Domino Junior valve will command attention from sales 

representatives and others that it would not otherwise 

obtain. That it will get sales opportunities from people in 

this industry that otherwise would not be available to the 

Bifold Domino Junior product, except for the fact that the 

Bifold Domino Junior product looks exactly like the Versa B316 product and is then able to trade off the reputation of 

the Versa B-316 product. 

What Versa and the district court have failed to come to grips 

with is the precept that "[e]xploiting the `goodwill of the 

article,' Kellogg Co., 305 U.S. at 121, 59 S. Ct. at 115 -- the 

attractive features, of whatever nature, that the product holds 

for consumers -- is robust competition; only deceiving consumers, 

or exploiting the good will of another producer, is unfair

competition." Duraco, 40 F.3d at 1445 (one emphasis omitted). 

Moreover, and most importantly, all of Murphy's non-speculative 

testimony supported (as Versa said in its opening) a finding of 

exploitation of the goodwill of, at most, the Versa B-316 

product, not the Versa identification itself. 

 Murphy testified about past situations where misfortunes 

involving valves of one producer led to sales difficulties for 

other manufacturers of similar valves. He did not testify about 
incidents where one producer copied another's trade dress, but 

rather about instances where negative perceptions associated with 

a particular type of valve were transferred to valves of the same 

type made by other manufacturers. Thus, his testimony showed the 

possibility of the ill will of one valve's diminishing the good 

will of a similar valve. But even had Murphy testified that the 

valves he was discussing had confusingly similar trade dress -- 

which he did not -- that would not suffice to show that consumers 

abandoned the type of valve that had manifested defects because 

they thought all valves of that type came from related sources. 

Rather, consumer may have abandoned the valves because they 

assumed that all valves of a similar type shared "operating 

characteristics." 

 It is true that in Badger Meter, Inc. v. Grinnell Corp., 13 

F.3d 1145 (7th Cir. 1994), the Court of Appeals for the Seventh 

Circuit relied in part on a private labeling theory to uphold a 

finding of likelihood of confusion in a trade dress infringement 

suit by a water meter manufacturer against a competitor who 

copied the appearance of one line of meters. There, however, the 

defendant was known within the relevant market to have previously 

sold water meters of another manufacturer under its own label. 

Id. at 1152. Here, in contrast, there is no evidence that Bifold 

is known in the American market as having a history of selling 

other valve manufacturers' products under its own label. Thus 

Versa may not rely on the inference that consumers familiar with 
an established defendant with a known history of private labeling 

will assume that it is selling an established plaintiff's product 

under a private label agreement. 

 Unable to avail itself of the Badger Meter inference, Versa 

attempts to ensnare Bifold by arguing that because Bifold is not

yet known in the American market, valve purchasers may assume 

that Versa has manufactured the Domino Junior but is selling it 

under a private label. A rule sanctioning this inference would 

tend to strangle competition by adopting what is in essence a 

presumption that consumers will believe an established business 

has a greater market share than it really does. The district 

court's conclusion that "anyone in the industry might reasonably 

assume that Versa had manufactured but privately labelled the 

Bifold DOMINO JUNIOR valve or that the DOMINO JUNIOR valve is 

otherwise associated with Versa," represents a dramatic extension 

of the law of unfair competition, one which we cannot believe 

that Congress intended or that New Jersey would adopt. 

 We doubt that a company truly concerned about the quality of 

its valves and its putatively distinctive product configuration 

would use private labeling. The use of private labeling 

undermines a claim that a product's appearance denotes its 

source, because consumers will be less likely to associate the 

multifariously labeled product with a single source. See, e.g., 

Tone Bros., Inc. v. Sysco Corp., 23 U.SP.Q.2d 1184, 1190-91 (S.D. 

Iowa 1992), and cases cited therein. And if Versa were to 
contend that all the purchasers know that in fact Versa 

manufactures the valves identified by a private label, we are not 

certain what the private labelling would accomplish. Moreover, 

it would seem that any manufacturer employing private labeling 

for its product necessarily exercises control over that practice, 

and if it is the plaintiff's actions that cause the confusion, 

the plaintiff will not be heard to complain. Cf. Weil Ceramics & 

Glass, Inc. v. Dash, 878 F.2d 659, 676 (3d Cir. 1989) (Becker, 

J., concurring) ("[The plaintiff] has in effect engineered the 

possibility of a likelihood of confusion and therefore 

infringement in this case. This is not the sort of injury 

trademark infringement actions under the Lanham Act were intented 

to remedy."). We decline to establish a rule that would allow a 

plaintiff to expand its own rights by using private labeling to 

assure a design monopoly even despite adequate labeling by 

competitors. 

 We have explained elsewhere that "the primary concern 

[behind the trademark act] was to protect consumers and trademark 

holders from spurious imitations." Id. at 673 (Higginbotham, J., 

for the court). Where, as here, a second comer has taken steps 

to conspicuously label its product (however similar to that of an 

established manufacturer), the newcomer has hardly represented 

its product to be that of its competitor, and so has not offered 

a "spurious imitation." Thus, even if there were evidence that 

Versa uses private labeling, we do not believe that it could form 
the basis for a finding of likelihood of confusion. As it is, 

however, there is absolutely no evidence that Versa or any other 

competitor of Bifold's in the offshore oil well industry uses 

private labeling. Accordingly, the district court clearly erred 

when it accepted Versa's argument that Bifold's labeling will not 

prevent consumer confusion.20

IV. CONCLUSION

 To have prevailed in its action for trade dress 

infringement, Versa needed to show the existence of a likelihood 

that an appreciable number of consumers of the relevant type of 

valves would probably be confused as to the source of Bifold's 

Domino Junior valve or its affiliation (or lack thereof) with 

Versa. Upon reviewing the trial record, with due regard for the 

labeling actually used by Bifold, we conclude that Versa failed 

to meet its burden, and that the district court's finding that 

Versa had shown a likelihood of confusion is clearly erroneous. 

We therefore will reverse the order of the district court, and 

vacate the permanent injunction and award of attorneys' fees 

against Bifold. 

 

 

20. New Jersey's commmon law and statutory prohibitions of 

unfair competition (which address, inter alia, "passing off" 

one's goods as those of another manufacturer and unprivileged 

imitation) generally parallel the federal cause of action for 

unfair competition under section 43(a) of the Lanham Act. See

SK&F, Co., 625 F.2d at 1065 (3d Cir. 1980). Thus, "private 

labeling" does no more work for Versa under its state law unfair 

competition claim (see supra at 2, 22 & n.10) than it does under 

federal law.