Court Opinion

ID: 9482099
Source: CourtListenerOpinion
Date Created: 2023-08-05 08:40:10.352308+00
Date Added: 2024-06-11T17:48:45.667960
License: Public Domain

KENNEDY, Circuit Judge,
dissenting.
I respectfully dissent because the majority opinion does more than protect consumers against a likelihood of confusion as to the source of goods; it protects the source of the goods, Ferrari, against plaintiff’s copying of its design even if the replication is accompanied by adequate labelling so as to prevent consumer confusion. I believe the majority commits two errors in reaching this result. The majority first misconstrues the scope of protection afforded by the Lanham Act by misapplying the “likelihood of confusion” test and reading an anti-dilution provision into the language of section 43(a). The majority then affirms an injunction that is overbroad. The product of these errors is a remedy that provides defendant with absolute protection in perpetuity against copying its unpatented design. This remedy is contrary to the language and purpose of the Lanham Act and runs afoul of Supreme Court precedent. Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 109 S.Ct. 971, 103 L.Ed.2d 118 (1989); Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234, 84 S.Ct. 779, 11 L.Ed.2d 669 (1964); Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 84 S.Ct. 784, 11 L.Ed.2d 661 (1964).
I. Section 43(a) and Trade Dress Protection
The majority invokes the appropriate test to determine whether protection is available for an unregistered trademark pursuant to section 43(a) of the Lanham Act. Kwik-Site Corp. v. Clear View Mfg. Co., 758 F.2d 167 (6th Cir.1985) (secondary meaning; likelihood of confusion; and non-functionality of trade dress). While I agree that Ferrari’s designs have acquired secondary meaning and are primarily non*1249functional, I disagree with the majority’s construction and application of the likelihood of confusion test and their conclusion that the Lanham Act protects against dilution of a manufacturer’s goods.
This Circuit applies an eight-factor test to determine whether relevant consumers in the marketplace will confuse one item with another item. Frisch’s Restaurants, Inc. v. Elby’s Big Boy, Inc., 670 F.2d 642 (6th Cir.), cert. denied, 459 U.S. 916, 103 S.Ct. 231, 74 L.Ed.2d 182 (1982). The majority correctly points out one purpose this test is not designed to accomplish: “Where the copying by one party of another’s product is not done to deceive purchasers and thus derive a benefit from another’s name and reputation, but rather to avail oneself of a design which is attractive and desirable, a case of unfair competition is not made out.” West Point Mfg. v. Detroit Stamping Co., 222 F.2d 581, 586 (6th Cir.) (emphasis added), cert. denied, 350 U.S. 840, 76 S.Ct. 80, 100 L.Ed. 749 (1955). This passage properly notes that the statute is triggered when a copier attempts to “palm off” his replica as an original. In other words, the protection afforded by the Lan-ham Act is primarily to potential purchasers. The protection accruing to a producer is derivative of and only incidental to this primary protection: a producer can market his goods with the assurance that another may not market a replica in a manner that will allow potential purchasers to associate the replica with the producer of the original. Unfortunately, the majority merely pays lip service to this fundamental tenet in its application of the eight-factor test.
The majority never clearly defines the target group that is likely to be confused. Although West Point counsels that purchasers must be deceived, the majority concludes that the target group is the “public.” The majority errs to the extent that its analysis shifts from potential purchasers to the broader more indefinite group of the “public.”
The eight-factor test contemplates that the target group is comprised of potential purchasers. For example, the importance of one factor — evidence of actual confusion — is determined by the kinds of persons confused and degree of confusion. “Short-lived confusion or confusion of individuals casually acquainted with a business is worthy of little weight....” Homeowners Group, Inc. v. Home Marketing Specialists, Inc., 931 F.2d 1100, 1110 (6th Cir.1991) (quoting Safeway Stores, Inc. v. Safeway Discount Drugs, Inc., 675 F.2d 1160, 1167 (11th Cir.1982)). Two other factors obviously refer to potential purchasers: the marketing channels used and the likely degree of purchaser care and sophistication. Thus, three of the eight factors expressly focus on the likelihood of confusion as to potential purchasers.
Other courts have made clear that section 43(a) is concerned with the welfare of potential purchasers in the marketplace. See Kwik-Site, 758 F.2d at 178 (referring to “intending purchasers” when discussing likelihood of confusion); see also Coach Leatherware Co. v. AnnTaylor, Inc., 933 F.2d 162, 168 (2d Cir.1991) (stating that plaintiff must prove that “purchasers are likely to confuse the imitating goods with the originals”); West Point, 222 F.2d at 592 (referring to “purchasers exercising ordinary care to discover whose products they are buying....” (quoting Reynolds & Reynolds Co. v. Norick, 114 F.2d 278 (10th Cir.1940))).
Plaintiff’s replicas are not likely to confuse potential purchasers. Plaintiff’s vehicles display an “R” on the parking lenses and vent windows. No symbols or logos affiliated with Ferrari are displayed. Roberts informs all purchasers that his product is not affiliated with Ferrari. In light of these distinctions, and the high degree of customer care and sophistication that normally accompanies such a purchase — defendant’s vehicles at issue sell for a minimum of $230,000, as well as the distinctly different marketing channels employed by the parties, I find the evidence insufficient to prove a likelihood of confusion by potential purchasers in the marketplace.
To be sure, some courts have expanded the application of the likelihood of confusion test to include individuals other than point-of-sale purchasers. These courts *1250have included potential purchasers who may contemplate a purchase in the future, reasoning that in the pre-sale context an “observer would identify the [product] with the [original manufacturer], and the [original manufacturer]^ reputation would suffer damage if the [product] appeared to be of poor quality.” Polo Fashions, Inc. v. Craftex, Inc., 816 F.2d 145, 148 (4th Cir.1987); see Mastercrafters Clock & Radio Co. v. Vacheron & Constantin-Le Coultre Watches, Inc., 221 F.2d 464 (2d Cir.), cert. denied, 350 U.S. 832, 76 S.Ct. 67, 100 L.Ed. 743 (1955); Role v. Watch, U.S.A., Inc. v. Canner, 645 F.Supp. 484 (S.D.Fla.1986).
In applying the test in this manner, these courts appear to recognize that the deception of a consumer under these circumstances could dissuade such a consumer from choosing to buy a particular product, thereby foreclosing the possibility of point-of-sale confusion but nevertheless injuring the consumer based on this confusion. The injury stems from the consumer’s erroneous conclusion that the “original” product is poor quality based on his perception of a replica that he thinks is the original. These cases protect a potential purchaser against confusion as to the source of a particular product. Hence, even when expanding the scope of this test, these courts did not lose sight of the focus of section 43(a): the potential purchaser. The majority applies the likelihood of confusion test in a manner which departs from this focus.
The cases which have expanded the scope of the target group are distinguishable from the instant case, however. In Rolex, the counterfeit watches were labelled “ROLEX” on their face. Similarly, the Master-crafters court found that the clock was labelled in a manner that was not likely to come to the attention of an individual. It is also noteworthy that the Second Circuit has limited Mastercrafters “by pointing out that ‘[i]n that case there was abundant evidence of actual confusion, palming off and an intent to deceive.’ ” Bose Corp. v. Linear Design Labs, Inc., 467 F.2d 304, 310 n. 8 (2d Cir.1972) (quoting Norwich Pharmacal Co. v. Sterling Drug, Inc., 271 F.2d 569 (2d Cir.1959), cert. denied, 362 U.S. 919, 80 S.Ct. 671, 4 L.Ed.2d 739 (1960)). No evidence was introduced in the instant case to show actual confusion, palming off or an intent to deceive and, as previously noted, plaintiff does not use any name or logo affiliated with Ferrari on its replicas.
Further, these cases conclude that the proper remedy is to require identification of the source of the replica, not prohibit copying of the product. See West Point, 222 F.2d at 589 (stating that under such circumstances “the only obligation of the copier is to identify its product lest the public be mistaken into believing that it was made by the prior patentee”); see also Coach Leatherware, 933 F.2d at 173 (Winter, J., dissenting in part) (stating that “[a copier] thus has every right to copy [a product] so long as consumers know they are buying [the copied product]”). Accordingly, even if I were to conclude that plaintiff’s copies created confusion in the pre-sale context, I would tailor the remedy to protect only against such confusion; this would best be accomplished through adequate labelling. The majority’s remedy goes well beyond protection of consumers against confusion as to a product’s source. It protects the design itself from being copied. See supra at 1239.
In sum, the relevant focus of the eight-factor test should be upon potential purchasers in the marketplace. Plaintiff’s replicas present no likelihood of confusion because plaintiff provides adequate labelling so as to prevent potential purchasers, whether in the pre-sale or point-of-sale context, from confusing its replicas with Ferrari’s automobiles. The majority errs by expanding the target group to include the “public,” an expansion unsupported by the language and purpose of the Lanham Act. To the extent that the majority expands the target group, the test increasingly protects the design from replication and the producer from dilution, rather than the potential purchaser from confusion.1
*1251The majority does more than implicitly recognize a dilution cause of action by its misapplication of the eight-factor test; it expressly reads such a cause of action into the statute. To justify this interpretation, the majority points out that Congress deleted the word “purchasers” from the statutory language in 1967. According to the majority, this congressional act demonstrates that Congress intended “to protect against the cheapening and dilution of the genuine product, and to protect the manufacturer’s reputation.” I fail to see how this one congressional act leads to such a conclusion.
As an initial matter, the majority’s method of reasoning should compel it to reach a different conclusion. In 1989, Congress specifically considered and rejected adding an anti-dilution provision to the Lanham Act.2 This action, it can be asserted, demonstrates that Congress does not now consider the protection of the Lanham Act to encompass injuries to a manufacturer based on dilution. The majority cannot look to one action of Congress to bolster its position, but ignore other actions which undercut its position.
More importantly, the language of the Lanham Act does not afford such protection to producers of goods. As noted in the previous section, the Lanham Act’s protection runs to relevant consumers in the marketplace; its protection to producers is incidental to this primary protection. Requiring adequate labelling ensures that a producer will not have the poor quality of a replica imputed to its product by a confused potential purchaser. This is the only benefit accruing to a producer. Trademark dilution is not a cause of action under the Lanham Act. See Eveready Battery Co. v. Adolph Coors Co., 765 F.Supp. 440 (N.D.Ill.1991).
Based on this reasoning, the majority enforces an injunction that goes far beyond the protection granted by the Lanham Act. Among other things, the injunction prohibits plaintiff from “manufacturing, or selling, or distributing ... the Miami Spyder and the Miami Coupe and all versions thereof, including but not limited to their exterior shapes and features ” (Emphasis added). The injunction prohibits the copying of defendant’s design, rather than tailoring its protection to address the statutory danger — confusion of potential purchasers as to the source of a product. The appropriate remedy is not to prohibit the copying of a particular article, but to require adequate identification. The language of the injunction prohibits defendant from selling a car with the design of a Miami Spyder or Miami Coupe regardless of whether he adequately labels his product. For example, plaintiff would violate the injunction if he were to produce a car with a design identical to one of Ferrari’s designs, and which had inscribed on each door and the hood in block letters, “Made *1252by Roberts. Not associated in any way with Ferrari.”
The Second Circuit recently reviewed an injunction prohibiting a defendant from copying any of plaintiffs handbags. Coach Leatherware, 933 F.2d at 171. Concerned “that the grant of such broad relief chills competition excessively,” the Court stated:
[Plaintiff] produces from fifty to sixty different styles of handbags in various shapes and sizes. Though the scope of the injunction may reflect the court’s desire to conserve judicial resources and stem relitigation of substantially similar infringement claims, we are skeptical that [plaintiff] could produce evidence sufficient to support such sweeping protection for its entire line of handbags. An extensive injunction prohibiting emulation of all types of [plaintiffs bags] could have the unacceptable effect of removing non-infringing design innovations from the market.
Id. at 24-25.
I find no support in the statutory language or legislative history of the Lanham Act for the broad protection granted by the instant injunction.
II. The Sears-Compco-Bonito Boats Trilogy
The majority does not address this line of cases because it determines that federal trademark laws and federal patent laws are premised upon entirely different and mutually exclusive interests and objectives. It holds that no interrelationship exists between these laws; the availability of design patent protection does not preclude availability of Lanham Act protection. Thus, the majority concludes that this line of cases — Sears, Compco and Bonito Boats — has no relevance to federal trademark laws.
In both Sears and Compco, the Supreme Court considered whether a state’s unfair competition statute impermissibly infringed upon federal patent laws by imposing liability for copying a product which was not protected by a federal patent. Sears, 376 U.S. at 225, 84 S.Ct. at 784; Compco, 376 U.S. at 234, 84 S.Ct. at 779. In Sears, a company copied a pole lamp design and did not affix an identifying label on the lamp itself. In Compco, defendant sold lighting fixtures almost identical to plaintiff’s design. In both cases, the district court found that the designs had acquired secondary meaning and the copies created a likelihood of confusion.
Notwithstanding these conclusions, the Supreme Court reversed the lower courts and concluded that “[a]n unpatentable article, like an article on which the patent has expired, is in the public domain and may be made and sold by whoever chooses to do so.” Sears, 376 U.S. at 231, 84 S.Ct. at 789. The Court reasoned that “[t]o forbid copying would interfere with the federal policy, 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, 234 U.S. at 237, 84 S.Ct. at 782. The Court did provide one caveat to its holding:
[A] state may, in appropriate circumstances, require that goods, whether patented or unpatented, be labeled or that other precautionary steps be taken to prevent customers from being misled as to the source, just as it may protect businesses in the use of their trademarks, labels, or distinctive dress in the packaging of goods so as to prevent others, by imitating such markings, from misleading purchasers as to the source of the goods.
Sears, 376 U.S. at 232, 84 S.Ct. at 789 (emphasis added).
The rationale of these cases was recently reaffirmed in Bonito Boats. There the Court struck down a state’s unfair competition statute prohibiting the use of a particular molding process, plug molding, to duplicate any vessel hull or component parts of a vessel made by another person without the written permission of that other person. The Court struck down this statute and concluded that a state may not substantially interfere with or offer patent-like protection to an unpatented or utilitarian or design conception because it impermissibly *1253impinges on federal patent policy. Id. 489 U.S. at 156, 109 S.Ct. at 980.
I conclude that these cases are directly relevant to the issue at hand. While the purposes of the Lanham Act and federal patent laws are not identical, I nonetheless find some overlap and congruity of purpose among these laws. Both the Lanham Act and federal patent laws affect commercial activity, particularly in the area of design patents. Patent laws confer a monopoly of limited duration upon the holder of the patent; this directly affects the marketplace. Similarly, the Lanham Act protects against certain unfair trade practices including a likelihood of confusion among potential purchasers. It is simply inaccurate to say that trademark law affects commercial activity and patent law affects private activity.
Moreover, the Supreme Court in Sears, Compeo and Bonito Boats states unequivocally that an interrelationship exists between unfair competition laws and federal patent laws. The statutes at issue in Sears, Compeo, and Bonito Boats were state unfair competition statutes similar to the Lanham Act in their purpose and objectives. By holding that these statutes conflicted with federal patent laws, the Supreme Court implicitly rejected the distinction urged by the majority. Hence, the rationale applied in this trilogy of cases to state unfair competition laws applies with equal force to federal trademark laws.
In sum, the criteria used by the majority to determine the availability and scope of protection by the Lanham Act for unpat-ented designs — an overly broad “likelihood of confusion” test and an anti-dilution theory — enlarge the Lanham Act’s scope of protection beyond its statutory language and congressional intent, and result in an injunction that runs afoul of the Supreme Court’s holdings in Sears, Compeo and Bonito Boats. Congress intended that the rights in a design should expire with their design patent. The effect of the majority’s holding is to give Ferrari the equivalent of a design patent in perpetuity.
III.
Based on these errors, I would reverse and remand this case in order that the District Court could properly apply the eight-factor test used to determine the likelihood of confusion vis-a-vis potential purchasers.

. I also note that the survey relied upon by the majority to prove a likelihood of confusion is fatally flawed. Generally, "[i]n assessing the likelihood of confusion, a court's concern is ‘the *1251performance of the marks in the commercial context.”’ Homeowners Group, Inc. v. Home Marketing Specialists, Inc., 931 F.2d 1100, 1106 (6th Cir.1991) (quoting Frisch’s Restaurants, Inc. v. Shoney’s, Inc., 759 F.2d 1261, 1266 (6th Cir.1985)). "It is the overall impression of the mark, not an individual feature, that counts.” Id. at 1109. Applied to the instant case, this means that the analysis must be based on the products as they appear in the marketplace. The ultimate question is "whether relevant consumers are likely to believe that the products or services offered by the parties are affiliated in some way.” Id. at 1107.
The survey lacks any probative value on the issue of consumer confusion because of the manner in which it was conducted. The survey was conducted by showing photographs of Ferrari’s cars and Roberts’ replicas stripped of their identifying badges. By conducting the survey in this manner, no assessment could be made of the likelihood of confusion in the “commercial context.” Purchasers of plaintiff's cars are not purchasing from photographs. Accordingly, the survey is meaningless as to the likelihood of confusion.

. The most recent amendment to the Lanham Act, the Trademark Law Revision Act of 1988, Pub.L. No. 100-667, 102 Stat. 3935 (1988) (effective Nov. 16, 1989), as originally introduced in both houses of Congress, permitted separate causes of action for dilution, disparagement and tarnishment. All of these provisions were deleted from the legislation which eventually was enacted. House Rep. 100-1028 (Oct. 3, 1988), reprinted in United States Trademark Ass’n, The Trademark Law Revision Act of 1988, The Legislative History, Reports, Testimony, and Annotated Statutory Text 277, 278 (1989); Cong.Rec. H10411, H10421 (Oct. 19, 1988).