Court Opinion

ID: 9486998
Source: CourtListenerOpinion
Date Created: 2023-08-05 12:05:34.69869+00
Date Added: 2024-06-11T17:52:01.961457
License: Public Domain

JOHN R. GIBSON, Senior Circuit Judge,
dissenting.
I respectfully dissent.
It is regrettable, indeed astounding, that the court today rewards Gold Seal’s studied and extensive imitation of Aromatique’s trade dress. Stronger words than imitation could, in truth, well be applied to Gold Seal’s conduct.
The court today rejects the district court’s factual findings that Aromatique’s trade dress is distinctive, and holds that as a matter of law it is not distinctive. Distinctiveness, as the court recognizes, is a factual question. Op. at p. 868 (citing Prufrock, Ltd. v. Lasater, 781 F.2d 129, 132-33 (8th Cir.1986)). The court’s discussion demonstrates that it violates the teachings of Anderson v. City of Bessemer City, 470 U.S. 564, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985), to reject these findings, and substitutes its own factual findings for those of the district court. Furthermore, the court today simply ignores the district court’s finding that the trade dress is nonfunctional and proceeds to make its own findings. I believe the district court had substantial evidence upon which to base its findings of distinctiveness and nonfunctionality, and therefore such findings are not clearly erroneous. Accordingly, I would affirm the judgment of the district court.
The court today looks only to the most general lesson of Anderson. The court ignores the rule that where there are two permissible views of the evidence, the factfin-der’s choice cannot be clearly erroneous “even when the district court’s findings do not rest on credibility determinations, but are based instead on physical or documentary evidence or inferences from other facts.” 470 U.S. at 574, 105 S.Ct. at 1511-12. As Anderson explains:
The rationale for deference to the original finder of fact is not limited to the superiority of the trial judge’s position to make determinations of credibility. The trial judge’s major role is the determination of fact, and with experience in fulfilling that role comes expertise. Duplication of the trial judge’s efforts in the court of appeals would very likely contribute only negligibly to the accuracy of fact determination at a huge cost in diversion of judicial resources.
470 U.S. at 574-75, 105 S.Ct. at 1512. Contrary to the teaching of Anderson, the court today makes the trial simply a “‘tryout on the road.’ ” Id. at 575, 105 S.Ct. at 1512 (quoting Wainwright v. Sykes, 433 U.S. 72, 90, 97 S.Ct. 2497, 2508, 53 L.Ed.2d 594 (1977)).
The district court must weigh testimony of expert witnesses. Hoefelman v. Conservation Comm’n, 718 F.2d 281, 285 (8th Cir.1983). Anderson states:
[Wjhen a trial judge’s finding is based on his decision to credit the testimony of one of two or more witnesses, each of whom has told a coherent and facially plausible story that is not contradicted by extrinsic evidence, that finding, if not internally inconsistent, can virtually never be clear error.
470 U.S. at 575, 105 S.Ct. at 1512. In addition, the court today fails to recognize that we must construe the evidence in the light most favorable to the party prevailing in the district court. Craft v. Metromedia, Inc., 766 F.2d 1205, 1212 (8th Cir.1985), cert. denied, 475 U.S. 1058, 106 S.Ct. 1285, 89 L.Ed.2d 592 (1986); see Doss v. Frontenac, 14 F.3d 1313, 1319 (8th Cir.1994). The district court made numerous detailed factual findings, as well as statements on distinctiveness, secondary meaning, likelihood of confusion, and nonfunctionality in its conclusions of law that can only be considered as findings of fact, and must be reviewed as such. See Co-Rect Prods., Inc. v. Marvy! Advertising Photography, Inc., 780 F.2d 1324, 1328 n. 5 *881(8th Cir.1985) (where a court includes such statements in its conclusions of law, they are factual findings that must be reviewed under the clearly erroneous standard).
I.
The district court found that Aromatique’s trade dress was distinctive, as it had acquired secondary meaning, and that a likelihood of confusion was created. The court today states that “the marks at issue cannot be inherently distinctive,” and that Gold Seal’s copying “cannot support an inference of secondary meaning,” thus making a wholesale substitution of its own views for the district court’s detailed findings of fact. Slip op. at 9, 12.
The court today correctly observes that a trade dress is distinctive if it “has acquired distinctiveness by acquiring secondary meaning.” Slip op. at 8. Attempts to copy or imitate the trade dress, consumer association of the dress to a source, sales success, advertising expenditures, media coverage about the product, and the length of exclusivity of use of the trade dress should be considered in determining whether the trade dress has acquired secondary meaning, and therefore deserves protection. Thompson Medical Co. v. Pfizer Inc., 758 F.2d 208, 217 (2d Cir.1985); see Co-Rect, 780 F.2d at 1330. The district court considered, in great detail as reflected in its findings, evidence of Gold Seal’s imitation of Aromatique’s products, evidence of likelihood of confusion in the marketplace, and sales and advertising figures. However, the court today ignores the district court’s findings that Aromatique’s trade dress acquired secondary meaning.
The error of the court’s approach today is best demonstrated by considering the district court’s specific findings regarding Gold Seal’s imitation of Aromatique’s trade dress:
(a)Gold Seal presented its products in pillow-shaped packages decorated with gold foil labels and contained in double-cellophane bags gathered at the top in a “flower.” Gold Seal used identical or nearly identical textured gold and colored tie cords, and prominently displayed the words “Heber Springs” on the label.
(b) Gold Seal ... used the identical words on its packages to warn about the oil and promotion of fragrance oil. The warning language was from Aroma-tique’s 1985 flat hang tag and the fragrance promotional language was from Aromatique’s 1986 folding hang tag.
(c) Gold Seal purchased the same type of polypropylene cellophane bags from the same vendor that supplies Aroma-tique instead of another form of cellophane bag, such as polyethylene, which is cheaper.
(d) Gold Seal used the same type of red and green cords made from polypropylene fiber in the identical shades of color as Aromatique’s cords and purchased the cords from the same vendor as Aromatique.
(e) When Aromatique added a gold metallic string to its packages in 1987, it did so in part to distinguish its packages from Gold Seal’s. Gold Seal copied that change and added the same type of metallic string to its packages.
(f) When Gold Seal changed from the large round serrated label to the butterfly label in 1987, Gold Seal purchased the butterfly label from the same supplier that had helped design and supply labels for Aromatique. The labels for “The Smell of Christmas”.are red and gold while the labels for “Holiday Essence” are gold and red. While the labels for “The Smell of Spring” are gold, the labels for “Spring Essence” are gold and blue.
(g) The bottle Gold Seal used for its refresher oil was identical in shape, size, and color to the bottle Aromatique used. The label of Gold Seal’s bottle was black and gold while the label used by Aromatique was brown and gold. Gold Seal packaged the bottle in a box that was identical in shape and size to the box used by Aromatique.
(h) After Aromatique began applying a wash dye to some of the natural elements in its Christmas and Spring products, Gold Seal began dyeing its products.
*882(i) Gold Seal had a spring scent made by Inter-Continental Fragrances in Houston as a “knock off’ of the oil Aroma-tique used to create the fragrance in “The Smell of Spring.”
These key findings demonstrate Gold Seal’s persistent pattern of imitating Aroma-tique’s trade dress, as well as the distinctiveness of Aromatique’s trade dress. Evidence in the record supports each of these findings, and the court today makes no argument to the contrary. It is most significant that after Aromatique’s notification in 1985, Gold Seal ceased many of the practices. However, the district court’s findings reflect that in 1987 Gold Seal returned to using not only the red and green cords it had used before receiving Aromatique’s notice, but also added the metallic gold cord Aromatique had begun using, and began to use a similar label on the package. It was these later acts that led to the filing of this suit. In addition, although there are other manufacturers in the decorative fragrance industry, only Gold Seal’s packages are virtually identical to those of Aromatique. Despite this pattern of findings, the court today ignores Anderson and substitutes its own findings.
In considering factors relevant to the determination of secondary meaning, the district court also found that the evidence of Aromatique’s national magazine advertisements, television exposure, and skyrocketing sales all supported its finding that Aroma-tique’s trade dress had acquired secondary meaning. The court today quibbles with the district court’s finding that Aromatique spent in excess of $562,000, but concedes that Aro-matique spent up to $250,000 in promotional and advertising expenses between February 1, 1982, and July 31,1988. The court’s statement that the amount Aromatique spent “is probably too low to accord it much probative value” demonstrates that the court is making its own findings of fact. See slip op. at 14. The court imposes its own view regarding what amount of money spent on advertising and promotion is sufficient to support an inference of secondary meaning, and further finds that $250,000 is too little to indicate secondary meaning. The court also ignores Aromatique’s phenomenal rise in sales, from approximately $239,000 in 1982 to almost $9.5 million in 1988, which strongly indicates that Aromatique’s products acquired secondary meaning. The court makes no effort to apply the clearly erroneous standard to these findings. Cf. Cicena Ltd. v. Columbia Telecommunications Group, 900 F.2d 1546, 1547 (Fed.Cir.1990) (promotional expenditures considered with direct advertising expenditures to determine existence of secondary meaning).
Another factor a court should consider in determining whether the trade dress deserves protection is the likelihood of confusion. The district court held that just as Gold Seal’s intent to copy the overall appearance of Aromatique’s products gives rise to an inference of secondary meaning, such intent also implies a likelihood of confusion. Gold Seal’s founder, Mr. Bufford, testified about his company’s efforts to “compete” with Aromatique. He admitted copying the wording on Aromatique’s package.1 Bufford hired several of Aromatique’s production employees, and his intentional copying resulted in essentially identical packaging and created actual confusion to consumers. Furthermore, the district court found that Gold Seal copied Aromatique’s trade dress, and concluded that this raised an “inescapable inference of confusing similarity.”
The district court also considered additional evidence of likelihood of confusion, including: the strength of Aromatique’s mark, the similarity with Gold Seal’s marks, Gold Seal’s intent to pass off its goods as Aromatique’s products, the type of product, conditions of purchase, competitive proximity and incidence of actual confusion. The district court found numerous incidents of actual confusion by retailers and the public as strong evidence of a likelihood of confusion. For example, a retailer of Gold Seal testified that one customer who had purchased an Aromatique product at another retailer attempted to re*883turn it to a Gold Seal dealer. This retailer also overheard some customers walking by her Gold Seal display with one remarking that the product must be from the company in Heber Springs, and referring to the butterfly on the package, and another responding that Aromatique makes potpourri in He-ber Springs.
The court today states that consumer surveys and testimony may be the only direct evidence of secondary meaning, and that no such evidence had been presented during the trial or to the patent office. This statement directly contradicts factual findings, as outlined above, that retailers testified as to actual confusion of consumers, and to the likelihood of confusion. The court today recognizes that secondary meaning may be inferred from evidence of deliberate copying, but fails to acknowledge the district court’s clear findings of Gold Seal’s imitation of Aro-matique’s trade dress and the resulting likelihood of confusion.
By completely overlooking the district court’s detailed findings in support of its conclusion that Gold Seal’s imitation, evidence of actual confusion, media coverage, and advertising expenses all indicated that Aromatique’s trade dress has acquired secondary meaning and its finding of a likelihood of confusion, the court today ignores the teachings of Anderson that when there are two permissible views of the evidence, the factfinder’s choice cannot be clearly erroneous. 470 U.S. at 574, 105 S.Ct. at 1511-12.
II.
The court today also finds Aromatique’s packaging to be functional, and therefore unprotected. Purely functional packaging, such as a cardboard box or glass jar, is unprotected. See In re Water Gremlin Co., 635 F.2d- 841, 844 (C.C.P.A.1980) (protecting container designed to provide access to lead sinkers). In general, functionality requires that a design “cannot practically be duplicated through the use of other designs.” Restatement (Third) of Unfair Competition § 17, cmts. a & b (Tent.Draft No. 2 1990). A feature is essential and therefore functional “only if the feature is dictated by the functions to be performed.” Stormy Clime Ltd. v. ProGroup, Inc., 809 F.2d 971, 975 (2d Cir.1987) (quoting Warner Bros., Inc., v. Gay Toys, Inc., 724 F.2d 327, 331 (2d Cir.1983)); Brunswick Corp. v. Spinit Reel Co., 832 F.2d 513, 519 (10th Cir.1987) (if the feature must be “slavishly copied in order to have an equally functional product, then the feature is not entitled to protection”).
Our cases make clear that functionality or nonfunctionality is a question of fact to be reviewed under a clearly erroneous standard. Prufrock, Ltd. v. Lasater, 781 F.2d 129, 132-33 (8th Cir.1986); Truck Equip. Serv. Co. v. Fruehauf Corp., 536 F.2d 1210, 1217-19 (8th Cir.), cert. denied, 429 U.S. 861, 97 S.Ct. 164, 50 L.Ed.2d 139 (1976).
Today the court makes no effort to review the findings of the district court bearing upon nonfunctionality, but simply makes its own findings of fact. Indeed, the court today does not even refer to the findings of the district court with respect to the functionality issue, nor to the conclusions the district court reached based upon those findings. The district court specifically found that Aromatique had shown through expert and lay witnesses that there are numerous other ways to package potpourri or decorative room fragrances, factoring in expense, visibility and aroma, and that upholding the protection of the combination of the elements composing Aroma-tique’s trade dress would not hinder competition in the potpourri decorative fragrance industry. These findings go directly to the determinative issue with respect to functionality, namely “whether protection against imitation will hinder the competitor in competition.” Truck Equip., 536 F.2d at 1218; see also Woodsmith Publishing, Inc. Co. v. Meredith Corp., 904 F.2d 1244, 1247 n. 6 (8th Cir.1990). The court today completely fails to mention these factual findings, much less analyze them under the clearly erroneous standard.
Moreover, the court exhaustively makes its own findings of fact on the several specific features of the trade dress, rather than considering the total image or the overall impression created. By dwelling in detail on the separate features- of the trade dress rather than on the whole dress and the overall *884impression, the court accepts an argument of Gold Seal that directly conflicts with decisions in this Circuit. See Woodsmith, 904 F.2d at 1247; General Mills, Inc. v. Kellogg Co., 824 F.2d 622, 627 (8th Cir.1987).
As the district court recognized, but the court today largely ignores, functional elements that are separately unprotectable can be collectively protected as part of the trade dress. Computer Care v. Service Sys. Enters., Inc., 982 F.2d 1063, 1071 (7th Cir.1992). The district court also correctly recognized that functionality is not decided solely on whether individual elements are nonfunctional, but also on whether a distinctive visual impression has been created. Id.; Qualitex Co. v. Jacobson Prods. Co., Inc., 13 F.3d 1297, 1303 (9th Cir.1994) (in a trade dress case, the court must look at the product as a whole); White Swan, Ltd. v. Clyde Robin Seed Co., 729 F.Supp. 1257, 1260 (N.D.Ca. 1989). The district court made findings relating to alternative designs, as we have observed, that although trade dress may have utilitarian attributes, it may be deemed nonfunctional where such alternative designs are available. The district court found that Aro-matique had established by a preponderance of the evidence that the trade dress was nonfunctional, that a feature of trade dress is nonfunctional when it is adopted for purposes of identification and individuality and not because it is related to basic consumer demands in connection with the product, and that functional elements separately unpro-teetable can be protected together as part .of trade dress with the focus not on individuality, but on whether a distinctive visual impression had been created. While this discussion is contained in the conclusions of law, we must treat the statements as findings of fact. See Co-Rect, 780 F.2d at 1328 n. 5. These statements are supported by substantial evidence in the record that the overall image and impression of Aromatique’s trade dress is an arbitrary embellishment, and that the arrangement of features of the dress creates a distinctive commercial impression.
The record supports the finding of non-functionality under the principles in Pru-frock, which states:
[W]here the feature or ... design is a mere arbitrary embellishment, a form of dress for the goods primarily adopted for purposes of identification and individuality and, hence, unrelated to consumer demands in connection with the product, imitation may be forbidden where the requisite showing of secondary meaning is made.
781 F.2d at 133.
The district court’s finding that many of the features were nonutilitarian is consistent with testimony at trial about the arbitrariness of the “flower,” the double-bagging, and the knotted cord. For example, the crowned top of the flower required careful and close attention, which increased the cost of the package and required extra room in the shipping container. Aromatique used cord which required deliberate and careful tying by hand. The cord was drawn in a square knot, leaving a small opening to allow the aroma of the potpourri to escape. Experts explained that the collocation of these nonutilitarian elements created the “Aromatique look,” and described the arrangement as protectable because a distinctive commercial impression was created. Therefore, I do not believe the district court clearly erred when it found that Aromatique’s trade dress was nonfunctional, although it may have incidental utilitarian attributes. Furthermore, I believe the district court correctly found it is nonfunctional because alternative designs are available to achieve the same utilitarian ends. See In re Morton-Norwich Prods., Inc., 671 F.2d 1332, 1341 (C.C.P.A.1982) (existence of alternative designs is a key element to determining whether there is non-functionality).
The court today states that the flowered top that results when the double-cellophane bags are tied closed, “must be one of the most common, and least arbitrary, shapes in packaging.” Op. at 874. The court states that “every Christmas fruit basket and liquor bottle wrapped in cellophane or plastic that is tied closed has a similarly shaped ‘flower.’ ” Id. at 874. I have searched the record in vain for evidence of fruit baskets and liquor bottles, but have found none. The court also believes that protecting the flower, double-bagging, and the knotted cord would impair *885competition. This directly contradicts the district court’s finding that protecting the arrangement of the elements of Aromatique’s trade dress would not hinder competition in the decorative room fragrance industry. The district court ruled that Gold Seal did not prove that Aromatique’s trade dress was functional and worthy of protection. It elaborated that a feature of trade dress is nonfunctional when it is adopted for purposes of identification and individuality, and not because it is related to basic customer demands in connection with the product. The court today simply substitutes its findings for those of the district court.
The court today rests its legal conclusion in large part on the statement in Prufrock that trade dress is functional if it serves as “an important ingredient in the commercial success of the product.” 781 F.2d at 133 (quoting Truck Equip., 536 F.2d at 1217-18 (quoting Bliss v. Gotham Indus., 316 F.2d 848, 855 (9th Cir.1963))). The court suggests that by admitting that its packaging contributes to its commercial success, Aromatique concedes that this “aesthetic functionality” standard has been met.
However, the facts in Prufrock, as well as the cases upon which it relies and decisions from other circuits, support a more narrow interpretation than that which the court today gives the aesthetic functionality issue. Courts and commentators alike have cautioned that a broad reading of this aesthetic functionality language would eviscerate the protection afforded by a trademark. See, e.g., Vuitton et Fils S.A. v. J. Young Enters., Inc., 644 F.2d 769, 772-74 (9th Cir.1981) (“[A] trademark is always functional in the sense that it helps to sell goods by identifying their manufacturer.”); John H. Harland Co. v. Clarke Checks, Inc., 711 F.2d 966, 983 n. 27 (11th Cir.1983) (rejecting instruction to jury that if a “feature of goods or of its wrappers or container appeals to the consumer and affects his or her choice, that feature is functional” because nonfunctional elements may affect consumer preferences) (emphasis in original); Animal Fair, Inc. v. Amfesco Indus., Inc., 620 F.Supp. 175, 190 (D.Minn.1985) (court should not view a feature as functional simply because it contributes to consumer appeal and salability of the product), aff'd, 794 F.2d 678 (8th Cir.1986); 1 J. McCarthy, McCarthy on Trademarks § 7.25[5] (3d ed. 1992) (“The ‘important ingredient in the commercial success of the product’ formulation is much too open-ended and vague to be a useful rule of law.”).
Moreover, the facts in Prufrock show that this language was not central to that court’s analysis. There, the district court found the defendant infringed upon the plaintiffs restaurants’ trade dress. The district court, however, had defined the protected dress to include the concept of “a full-service restaurant, serving down home country cooking, in a relaxed and informal atmosphere, with a full-service bar” and featuring an open kitchen. 781 F.2d at 131. This court reversed the finding of nonfunctionality, concluding that the district court erred by including Prufrock’s ‘core concept’ in its definition of Prufrock’s trade dress. Id. The district court had stated that “consumer demand for the concept of ‘down home country cooking’ includes the demand for the trade dress that creates the concept.” Id. at 134. Thus, this court denied protection for the various implements of the trade dress which created the desired atmosphere.
Aromatique, however, is not attempting to monopolize the concept of scented room fresheners or potpourri. In sharp contrast to Prufrock, this case involves the copying of packaging which, incidentally, is specifically designed to be cut open and thrown away when the product is used. Nothing in Pru-frock or Truck Equipment, upon which the court relied in Prufrock, requires protection for aesthetic functionality in mere packaging. Prufrock considered trade dress necessary to a “country cooking” restaurant part of its core concept, and Truck Equipment involved copying the design of the product, a semitrailer. See Prufrock, 781 F.2d at 131; Truck Equip., 536 F.2d at 1213. In fact, there is factual similarity between Aroma-tique’s packaging (which is more complex, expensive to produce, and difficult to pack) and the shape of the trailer in Truck Equipment. In Truck Equipment, testimony indicated that the trailer was designed to appear dissimilar from others, rather than to reflect *886any engineering considerations. 536 F.2d at 1218. An engineering memo stated that the entire rear of the skinside of the trailer was useless and would only gather road dirt and mud. Id.
The language in Prufrock, including portions quoted by the court today, see op. at 873, points to a distinction between the product itself and the packaging. Here, the packaging, intended to be discarded, exists simply to facilitate the sale of the product, enhancing identification and individuality. Other circuits, including the Ninth Circuit which authored Bliss, from which this court quoted in Truck Equipment and later Prufrock, have explicitly recognized a distinction between protection of a product and its packaging. See, e.g., Fabrica Inc. v. El Dorado Corp., 697 F.2d 890, 895 (9th Cir.1983) (accepting “important ingredient” analysis as to product features, but finding it inappropriate “to apply the test to cases involving trade dress and packaging”); Tas-T-Nut Co. v. Variety Nut & Date Co., 245 F.2d 3, 6 (6th Cir.1957) (“[T]he public policy which permits the imitation of an article of commerce is without relevance to the dress in which the article is marketed”); Restatement of Toiis § 742 cmt. a (1938) (providing protection for goods). By extending the broad aesthetic functionality doctrine to include coverage of Aromatique’s packaging, the court today leaves little to deter even the most blatant of copiers. “Full and fair competition requires that those who invest time, money and energy into the development of goodwill and a favorable reputation be allowed to reap the advantages of their investment.” Truck Equip., 536 F.2d at 1215. The court today destroys the ability of Aromatique to capitalize on its carefully tended image.
III.
The court today goes far beyond merely holding that Gold Seal’s challenged products do not infringe those of Aromatique. The court could have simply decided that whatever the extent of Aromatique’s property interest in its trade dress, Gold Seal’s products did not infringe on that interest. Instead, the court concludes that Aromatique’s federal registered marks should be cancelled.2
The court’s reasoning simply does not support such a sweeping remedy. According to the court today, Aromatique’s trade dress consists of:
A potpourri packaged in pillow-shaped double cellophane bags that are closed at the top by gathering excess cellophane and closing it with cord (red and/or green and gold for Christmas and gold and ecru for Spring) tied in a square-knot bow with an oval label (red and gold for Christmas and gold alone for Spring).
Op. at 870. The court concludes that those portions of Aromatique’s dress which Gold Seal appropriated were functional and not distinctive. In concluding that no infringement occurred, the court explicitly relies on the fact that Gold Seal used a label that differed significantly from Aromatique’s. Op. at 871. The court today never even suggests that the color, size, shape and appearance of Aromatique’s label is functional or not distinctive. Similarly, the court purports to decline reaching protectability of the ecru-colored cord on Aromatique’s Smell of Spring. Yet, the court holds that Aroma-tique “may not exclude others from using [its] marks,” including apparently the aesthetic details of its labeling and cord. Op. at 875.
Since collections of features incorporating otherwise unprotected elements may warrant protection, see Qualitex, 13 F.3d at 1303 and Computer Care, 982 F.2d at 1071, this court should not conclude that Aromatique’s dress deserves no protection without first considering the entirety of the dress, including the labeling and cord. Since the court does not consider Aromatique’s entire dress, it errs in holding that the law affords no protection to Aromatique.

. The district court also found that Bufford entered Aromatique's warehouse without authorization in July 1984 and was seen looking for information pertaining to fragrance oil. Bufford also attempted to determine the price Aroma-tique paid for its supplies, and was unhappy when he was not told.

. Gold Seal did not ask this court to cancel the state trademarks.