Duraco Products, Inc. v. Joy Plastic Enterprises, Ltd.

• Citation: 40 F.3d 1431,32 USPQ2d 1724
• Decision Date: 16 December 1994
• Docket Number: No. 93-3323,93-3323
• Parties: , 32 U.S.P.Q.2d 1724 DURACO PRODUCTS, INC., Appellant, v. JOY PLASTIC ENTERPRISES, LTD., d/b/a Backyard Products; Travis Products, Inc.
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Page 1431

40 F.3d 1431

63 USLW 2332, 32 U.S.P.Q.2d 1724

DURACO PRODUCTS, INC., Appellant, v. JOY PLASTIC ENTERPRISES, LTD., d/b/a Backyard Products;

Travis Products, Inc.

No. 93-3323.

United States Court of Appeals, Third Circuit.

Argued Feb. 17, 1994.

Decided Nov. 15, 1994.

As Amended Dec. 16, 1994.

James R. Kyper (argued), Mark R. Leslie, Kirkpatrick & Lockhart, Pittsburgh, PA, for appellant.

Craig A. Markham (argued), Harry D. Martin, Elderkin, Martin, Kelly, Messina & Zamboldi, Erie, PA, for Travis Products, Inc., appellee.

John B. Fessler (argued), Marsh, Spaeder, Baur, Spaeder & Schaaf, W. Patrick Delaney, MacDonald, Illig, Jones & Britton, Erie, PA, for Joy Plastic Enterprises, Ltd., d/b/a Backyard Products, appellee.

Before: BECKER, HUTCHINSON, and COWEN, Circuit Judges.

OPINION OF THE COURT

BECKER, Circuit Judge.

This is a trade dress infringement action brought under section 43(a) of the Lanham Act, 15 U.S.C.A. Sec. 1125(a) (West Supp.1994). Plaintiff Duraco Products, Inc. ("Duraco") appeals from an order of the district court denying its motion for a preliminary injunction against defendants Joy Plastic Enterprises, Ltd. ("Joy"), d/b/a Backyard Products, and Travis Products, Inc. ("Travis"). Duraco, a manufacturer of plastic planters for use in gardens, claims that Joy has infringed the trade dress of Duraco's most popular product by marketing a planter with a similar shape and texture, and that Travis is liable for manufacturing the molds for Joy's planter. Because Duraco's claim is predicated upon infringement of the trade dress of the product itself, the appeal requires us to confront a difficult area of trade dress law--that dealing with the circumstances under which product configurations, in contrast to product packaging, can, in Lanham Act parlance, constitute inherently distinctive trade dress thus serving as a designator of origin that will protect the plaintiff's product design features against copying.

We conclude that traditional trade dress doctrine does not "fit" a product configuration case because unlike product packaging, a product configuration differs fundamentally from a product's trademark, insofar as it is not a symbol according to which one can relate the signifier (the trademark, or perhaps the packaging) to the signified (the product). In other words, the very basis for the trademark taxonomy--the descriptive relationship between the mark and the product, along with the degree to which the mark describes the product--is unsuited for application to the product itself.

However, we also think that there is a proper set of circumstances for treating a product configuration as inherently distinctive. These circumstances are characterized by a high probability that a product configuration serves a virtually exclusively identifying function for consumers--where the concerns over "theft" of an identifying feature or combination or arrangement of features and the cost to an enterprise of gaining and proving secondary meaning outweigh concerns over inhibiting competition, and where consumers are especially likely to perceive a connection between the product's configuration and its source. We conclude that, to be inherently distinctive, a product feature or a combination or arrangement of features, i.e., a product configuration, for which Lanham Act protection is sought must be (i) unusual and memorable; (ii) conceptually separable from the product; and (iii) likely to serve primarily as a designator of origin of the product.

The district court applied a different standard, and in the ordinary course we might remand for reconsideration under the proper test. However, our examination of the record persuades us that, under the standard we adopt, no factfinder could reasonably conclude that Duraco has demonstrated a likelihood of success on the merits by meeting the threshold distinctiveness requirement of section 43(a) either through a showing of inherent distinctiveness or, failing that, by establishing secondary meaning. We will therefore affirm the district court's order. However, the district court will have to conduct a final hearing at which it will apply the newly announced standard. In view of our disposition, we need not reach the other grounds that the district court gave for its denial of a preliminary injunction, i.e., functionality of the trade dress and failure to show a likelihood of confusion.

I. FACTS AND PROCEDURAL HISTORY

A. The Relevant Facts

Duraco's most profitable products, its "Grecian Classics" plastic planters, account for one tenth of its nearly $35 million in annual sales. These planters, shaped like a Grecian urn, are made in two sizes, with diameters of twelve and eighteen inches and heights of ten and fifteen inches, respectively. Their plastic construction makes them inexpensive and durable. But the key to their considerable success, according to Duraco, is that a careful combination of ornamental features creates in them the illusion of marble, cement, or stone construction.

The stimulus for the Duraco urn's design was a suggestion by Robert Armstrong, a Senior Buyer at K-Mart, Duraco's largest retailer customer. Armstrong had run across urn-shaped planters similar in appearance to the eventual design of the Grecian Classics at a trade show in the Federal Republic of Germany sometime in 1984. Realizing that like products were not then available in the United States, Armstrong met with Duraco officials to describe his fortuitous discovery and to encourage Duraco to manufacture such an item. Duraco, in turn, set about to satisfy Armstrong's interest. It surveyed Grecian urns at statuary stores and explored its own archives. As it happened, in the late 1970s Duraco had tried to market the "Cotswold Planter," an English-made Grecian plastic planter. Poor sales, perhaps attributable to its relatively high retail price tag--$14.99 compared to under $5.00 for the Grecian Classics--caused Duraco to drop the product two years later. The Cotswold may have survived in United States commerce for some time thereafter, but was no longer available at the time of the Armstrong-Duraco conference.

The Grecian Classics are much like, but not clones of, the Cotswold. Both planters have an hourglass-like design and fluting, though the Cotswold has a higher base (hence a higher center of gravity), softer lines, and a less realistic texture. Despite the differences, Armstrong would have been pleased with a replica of the Cotswold urn.

Once Duraco showed Armstrong its prototype, K-Mart committed itself to purchase 100,000 Grecian Classics planters from Duraco. With no competing plastic urn in the United States sporting a similar, detailed design, sales of the eighteen-inch Grecian Classics planter reached 460,000 the first year, making it Duraco's leading seller. This overwhelming success persuaded Duraco to manufacture a twelve-inch cousin; sales continued to soar.

Today, Duraco markets the bulk of its planter wares directly to large retailers, primarily large discount department stores; some distributors are directly supplied. Advertising is typically done cooperatively with the retailers: the parties share costs, and Duraco allows the retailer to use two percent of sales receipts for advertising, redeemable in cash or credit. The media generally relied upon for consumer advertising are Sunday newspaper fliers, magazines, circulars, and newspaper ads. In those types of advertising, the planters are generally depicted in juxtaposition with other outdoor garden products, such as plant food and watering cans. Duraco also solicits retailers with brochures and trade advertisements.

In its marketing endeavors, Duraco encourages, but does not contractually require, its retailer customers to place either the Duraco tradename or its registered trademark "Garden Scene" logo in their advertisements. Although a retailer's failure to display Duraco's logo results, at worst, in an admonition, half of the planter advertisements contain the logo. Nevertheless, brand-name awareness in the outdoor garden products area is slight--less than 0.5 percent of consumers in Duraco's survey recognized the Duraco name. This is probably so because planters are inexpensive and are typically bought as an impulse item.

A number of enterprises compete with Duraco in the plastic planter market, amongst them the defendant Joy. Joy, also known by its "Backyard Products" logo, calls its planters "Ultimate Urns." Defendant Travis manufactures the molds for the plastic planters; Joy markets them. The interest of Joy's President Thomas Gay in producing a planter configured like a classic Grecian urn had been piqued by a color brochure depicting the Cotswold urn. In 1987 and 1988, he approached buyers at K-Mart and another retailing chain, both of which already stocked Duraco's Grecian Classics, to elicit information regarding the potential for a competitor to Duraco in the plastic urn market. Having received favorable feedback, Gay undertook the development of the Backyard Products urn.

During the development phase Gay had access to various urns in the market, including the Grecian Classics. His considered observation and analysis of all those urns' features convinced him to design one with a deeper bowl--to hold more soil and water for enhanced root development--and with a lower center of gravity--because some other urns, such as the Duraco urns, were too top-heavy and subject to tipping over. After completing his design, Gay engaged defendant Travis to create the plastic injection mold for the Ultimate Urns. Joy's Ultimate Urns are strikingly similar in appearance to Duraco's Grecian Classics. Both planters have a similar two-part construction consisting of a top "bowl" section that connects at a joint with the "base" or "pedestal" of the planter. Like Duraco, Joy offers a twelve-inch, reduced-scale version of its eighteen-inch model.

According to Richard Husby, Duraco's Vice...