Dippin' Dots, Inc. v. Frosty Bites Distribution

Decision Date11 May 2004
Docket NumberNo. 03-14047.,03-14047.
Citation369 F.3d 1197
PartiesDIPPIN' DOTS, INC., Plaintiff-Appellant, v. FROSTY BITES DISTRIBUTION, LLC, Defendant-Appellee.
CourtU.S. Court of Appeals — Eleventh Circuit

Michael J. Bowers, Christopher S. Anulewicz, Meadows, Ichter & Trigg, PC, Atlanta, GA, D. Scott Hemingway, Dallas, TX, for Plaintiff-Appellant.

Keith E. Broyles, John P. Fry, Alston & Bird, Atlanta, GA, for Defendant-Appellee.

Appeal from the United States District Court for the Northern District of Georgia.

Before DUBINA and COX, Circuit Judges, and OWENS*, District Judge.

DUBINA, Circuit Judge:

Plaintiff-Appellant Dippin' Dots, Inc. ("DDI") brought suit against Defendant-Appellee Frosty Bites Distribution, LLC ("FBD") alleging trade dress infringement of DDI's product design and logo design, both in violation of the Lanham Act, 15 U.S.C. § 1125. The district court granted summary judgment in favor of FBD on both claims. For the reasons that follow, we affirm the judgment of the district court.

I. BACKGROUND
A. Facts

Plaintiff DDI markets and sells a brightly-colored flash-frozen ice cream product, called "dippin' dots," consisting of free flowing small spheres or beads1 of ice cream. Curtis Jones, DDI's founder, applied for and received Patent No. 5,126,156 ("Patent '156") for the method DDI uses to make dippin' dots. Patent '156 contains six steps: (1) preparing an alimentary ice cream composition for freezing, (2) dripping said composition into a freezing chamber, (3) freezing said composition into beads, (4) storing said beads at a temperature at least as low as -20° F so as to maintain said beads free flowing for an extended period of time, (5) bringing said beads to a temperature between substantially -10° F and -20° F prior to serving, and (6) serving said beads for consumption at a temperature between substantially -10° F and -20° F so that the beads are free flowing when served.2 DDI is the exclusive licensee of Patent '156.

DDI primarily sells its dippin' dots from colorful kiosks or stands at amusement parks, sporting venues, and shopping malls. To identify itself at these locations, DDI has a distinctive logo made up of an oval of blue, yellow, and pink spheres surrounding the product name, "dippin' dots," in blue letters. Below this oval of spheres is a tag line touting dippin' dots as the "Ice Cream of the Future."

Defendant FBD makes and sells a competing brightly-colored flash-frozen ice cream product, called "frosty bites," consisting of mostly small popcorn-shaped, along with some spherical-shaped, ice cream bites. FBD creates its product by streaming and dripping an ice cream solution into liquid nitrogen where it freezes and forms beads and clusters of frozen ice cream. The frozen product then passes through a "cluster buster," where the clusters are broken down into smaller pieces. The product then moves through a system of conveyor belts, further breaking the ice cream into small beads and popcorn-like clusters.

FBD principally sells its frosty bites from booths and kiosks. To identify itself, FBD has a distinctive logo consisting of an ice-like background upon which the words "Frosty Bites" are written in blue letters shadowed in pink. The "o" in the word "Frosty" is the torso of a cartoon caricature of a portly penguin holding a cup of yellow, green, blue, and red nuggets of ice cream. Below the words is a tag line touting frosty bites as "The Ultimate Ice Cream Sensation!".

In the Fall of 1999, several of DDI's retail dealers secretly started the FBD business while still under contract with DDI to sell dippin' dots at various locations.3 On March 16, 2000, eight of these dealers terminated their contracts with DDI. The following day, without changing locations, they began selling their frosty bites under the "Frosty Bites" logo.

B. Procedural History

DDI filed suit against FBD alleging infringement of DDI's trade dress (1) in the form of its unique, flash-frozen ice cream product, and (2) in the form of its unique logo design, both in violation of the Lanham Act, 15 U.S.C. § 1125.4 FBD moved for summary judgment.

The district court granted FBD's motion for summary judgment finding that (1) DDI's product design — small, predominantly separated colored beads or pieces of ice cream — is functional and therefore not subject to trade dress protection, and (2) DDI's and FBD's logos are so dissimilar that, as a matter of law, DDI cannot prove any likelihood of consumer confusion as to the source of the products. In re Dippin' Dots Patent Litig., 249 F.Supp.2d 1346, 1373-74 (N.D.Ga.2003). DDI timely filed this appeal.

II. STANDARDS OF REVIEW

This court reviews a grant of summary judgment de novo, applying the same legal standards that governed the district court. Levinson v. Reliance Standard Life Ins. Co., 245 F.3d 1321, 1325 (11th Cir.2001). Summary judgment is appropriate when "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). "[W]e review the facts and all reasonable inferences in the light most favorable to the non-moving party." Pennington v. City of Huntsville, 261 F.3d 1262, 1265 (11th Cir.2001).

III. ISSUES

1. Whether DDI's product design is functional and therefore not subject to trade dress protection.

2. Whether a reasonable likelihood of confusion exists between DDI's logo and FBD's logo.

IV. ANALYSIS

Section 43(a) of the Lanham Act states that

(1) Any person who, on or in connection with any goods or services, ... uses in commerce any word, term, name, symbol, or device, ... or any false designation of origin, ... which

(A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, ... of such person with another person, ...

shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.

15 U.S.C. § 1125(a)(1).

A. Trade dress infringement of DDI's product design

Section 43(a) creates a federal cause of action for trade dress infringement. AmBrit, Inc. v. Kraft, Inc., 812 F.2d 1531, 1535 (11th Cir.1986). "The term `trade dress' refers to the appearance of a product when that appearance is used to identify the producer." Publications Int'l, Ltd. v. Landoll, Inc., 164 F.3d 337, 338 (7th Cir.1998). "`Trade [d]ress' involves the total image of a product and may include features such as size, shape, color ..., texture, graphics, or even particular sales techniques." AmBrit, 812 F.2d at 1535 (internal quotation omitted). In order to prevail on this claim for trade dress infringement under § 43(a), DDI must prove that (1) the product design of the two products is confusingly similar; (2) the features of the product design are primarily non-functional; and (3) the product design is inherently distinctive or has acquired secondary meaning. Epic Metals Corp. v. Souliere, 99 F.3d 1034, 1038 (11th Cir.1996); see also 15 U.S.C. § 1125(a)(3) ("[T]he person who asserts trade dress protection has the burden of proving that the matter sought to be protected is not functional."); TrafFix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23, 29, 121 S.Ct. 1255, 1259, 149 L.Ed.2d 164 (2001) (stating that "trade dress protection may not be claimed for product features that are functional"). "[A]s all three elements are necessary for a finding of trade dress infringement, any one could be characterized as threshold." Epic Metals, 99 F.3d at 1039. Because we conclude that DDI has not met its burden of establishing the non-functionality of its product design,5 we decline to address the other two elements of the claim.

"The functionality doctrine prevents trademark law, which seeks to promote competition by protecting a firm's reputation, from instead inhibiting legitimate competition by allowing a producer to control a useful product feature." Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 164, 115 S.Ct. 1300,1304, 131 L.Ed.2d 248 (1995); see also In re Morton-Norwich Prods., Inc., 671 F.2d 1332, 1336 (C.C.P.A.1982) ("This requirement of `nonfunctionality'... has as its genesis the judicial theory that there exists a fundamental right to compete through imitation of a competitor's product, which right can only be temporarily denied by the patent or copyright laws."). "Functional features are by definition those likely to be shared by different producers of the same product and therefore are unlikely to identify a particular producer." Landoll, 164 F.3d at 340. "[T]hese features cannot be appropriated; otherwise, competitors would be prevented from duplicating the new product even to the extent permitted by the branches of the law of intellectual property that protect innovation rather than designations of source." Id.

"The line between functionality and non-functionality is not ... brightly drawn." Epic Metals, 99 F.3d at 1039 (internal quotations omitted). Nonetheless, two tests exist for determining functionality. See id. Under the first test, commonly referred to as the traditional test, "`a product feature is functional ... if it is essential to the use or purpose of the article or if it affects the cost or quality of the article.'" TrafFix, 532 U.S. at 32, 121 S.Ct. at 1261 (quoting Qualitex, 514 U.S. at 165, 115 S.Ct. at 1304). Under the second test, which is commonly called the competitive necessity test and generally applied in cases of aesthetic functionality, "a functional feature is one the `exclusive use of [which] would put competitors at a significant non-reputation-related disadvantage.'" Id. (quoting Qualitex, 514 U.S. at 165, 115 S.Ct. at 1304). Where the design is functional under the traditional test, "there is no need to proceed further to consider if there is a competitive necessity for the feature." Id. at 33, 121 S.Ct. at 1262.

The features of product design that we must analyze in this case are the size, color, and shape of dippin'...

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