Schwinn Bicycle Co. v. Ross Bicycles, Inc.
| Decision Date | 25 January 1988 |
| Docket Number | No. 87 C 0914.,87 C 0914. |
| Citation | 678 F. Supp. 1336 |
| Parties | SCHWINN BICYCLE COMPANY, an Illinois corporation, Plaintiff, v. ROSS BICYCLES, INC., a New York corporation, Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
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Richard L. Reinish, Donald G. Mulack, Malcolm McCaleb, Jr., Michael J. Allen, Keck, Mahin & Cate, Chicago, Ill., for plaintiff.
Robert V. Jambor, Stephen J. Manich, Daniel C. McEachran, Kinzer, Plyer, Dorn, McEachran & Jambor, Chicago, Ill., Burton L. Lilling, Bruce E. Lilling, Lilling & Greenspan, White Plains, N.Y., Bernard J. Cantor, Cullen, Sloman, Cantor, Grauer, et al., Detroit, Mich., for defendant.
Plaintiff Schwinn Bicycle Company ("Schwinn") brought this action against defendant Ross Bicycles, Inc. ("Ross") under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), alleging unfair competition through Ross' appropriation of Schwinn's Air-Dyne exercise bicycle trade dress.1 Schwinn moved for a temporary restraining order and a preliminary injunction. This court referred the case to the assigned magistrate for a hearing and report on the motion for a preliminary injunction. Following a nine-day hearing, the magistrate issued a report recommending that the motion for a preliminary injunction be denied. Presently before the court are the parties' objections to the magistrate's report and recommendation pursuant to Fed.R.Civ.P. 72(b).
Ross objects narrowly to the admission into evidence of a survey submitted by Schwinn on the issues of secondary meaning and likelihood of confusion. Schwinn objects more generally that the magistrate erred in finding: (1) that there was negligible evidence of some likelihood of consumer confusion; and (2) that Ross will be able to show that the overall appearance of the Air-Dyne is functional. For the reasons stated below, this court overrules Ross' objections relating to the use of the survey at the hearing. However, the court disagrees with the magistrate's conclusions that Schwinn is not likely to establish some likelihood of consumer confusion at trial and that Ross is likely to prevail on the issue of functionality. The court therefore finds that Schwinn has satisfied the standards for preliminary injunctive relief.2
Schwinn is an old, well-established bicycle manufacturer whose name is commonly known and associated with bicycles. Since 1978, Schwinn has marketed an "air displacement"-type exercise bicycle known as the Air-Dyne. The appearance of the Air-Dyne, including its long arms which move back and forth, in combination within a large (27 inch) wheel and the possibility of simultaneous arm and leg movement, is unique. Until recently, although there were more than 100 exercise bicycles on the market, no other manufacturer sold an exercise bicycle that looks or performs like the Air-Dyne.
In 1986, Ross, also a well-established bicycle manufacturer, developed a competitive exercise bicycle which is similar to the Air-Dyne in a number of respects but which avoids the Air-Dyne patent.3 Both the Air-Dyne and the Ross prototype work by means of air displacement, with the principle of the resistance force being air moving in and being forced out by way of air veins mounted on spokes on the bicycle wheel. As the user pedals or moves the arms back and forth, the wheel is pushed around and air is pushed out, in much the same way as with an ordinary fan.
Ross displayed several early prototypes of its exercise bicycle at a series of trade shows in late 1986 and early 1987. Each prototype differed from its predecessor in certain respects, and each was progressively more differentiated from the Air-Dyne. Nevertheless, the final prototype, shown in February, 1987, is strikingly similar in appearance to the Air-Dyne. In addition to the fact that the Air-Dyne and the Ross bike are basically identical in shape, the arms of the two machines are shaped nearly the same, the wheel and enclosing cage are of the same size and configuration, and the rear and bases of the two bikes are nearly identical. While Ross uses the color cream where Schwinn has used chrome, and chrome where Schwinn uses white, the overall white and chrome effect of the two exercisers is also similar.
However, there are a number of differences between the two exercise bicycles. For example, the Ross prototype has no connecting mechanism between the pedals and the handlebars, but instead, has its gear connecting mechanism contained in a large pear-shaped enclosure on the large front wheel. In addition, the arms of the Ross exercise bicycle are longer than those on the Air-Dyne, the Ross bike has no footrests, it has straps on the foot pedals, it has a black locking device, the console or control is a different shape and has electronic controls, there are no black markings on the base, the seat is different, the small wheels in front of the machine are slightly larger and made of metal rather than plastic, the tubular steel arms are of different diameters, and there are design differences between the two chain covers and their connecting braces. Finally, the name "Ross" appears on the Ross bicycle in eleven separate places. Some of these marks, however, are in rather small letters at the bottom of decals containing the letter "R".4
Schwinn's claimed trade dress appears to relate primarily to the front portion of the bike (comprising the large bicycle wheel fan, surrounded by the wire fan guard or cage, with the long handle-arm levers that separately move back and forth). Schwinn's counsel conceded at the hearing that the rear frame of the Air-Dyne is not particularly distinctive, and indeed, the back end parts of the bike have been used for a number of years on other exercise bikes made by Schwinn, Ross, and several other competitors.
In order to prevail on its motion for a preliminary injunction, Schwinn must show (1) that it has no adequate remedy at law; (2) that it will suffer "irreparable harm" if the injunction is not granted, which must be weighed against the prospective harm to Ross; (3) that there is some likelihood that it will succeed on the merits (something better than a negligible chance, with the likelihood of success to be weighed in the balance of harms to each party); and (4) that the public interest will not be disserved. Roland Machinery Co. v. Dresser Industries, Inc., 749 F.2d 380, 386-88 (7th Cir.1984); see also Ball Memorial Hospital, Inc. v. Mutual Hospital Insurance Co., 784 F.2d 1325 (7th Cir.1986); Lawson Products, Inc. v. Avnet, Inc., 782 F.2d 1429 (7th Cir.1986).5
In this case, as in the usual trade dress case, lack of an adequate remedy at law and irreparable harm are presumed. See A.J. Canfield Co. v. Vess Beverages, Inc., 612 F.Supp. 1081, 1088-89 (N.D.Ill. 1985), aff'd, 796 F.2d 903 (7th Cir.1986). In addition, no objection has been raised to the magistrate's finding that the public interest will not be disserved by the issuance of a preliminary injunction. Thus, the only requirement for injunctive relief in dispute here is the likelihood that Schwinn will ultimately prevail on the merits of the case.
A trade dress that is confusingly similar to the trade dress adopted by a competitor constitutes unfair competition under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). Blau Plumbing, Inc. v. S.O.S. Fix-It, Inc., 781 F.2d 604, 608 (7th Cir.1986); Blue Coral, Inc. v. Turtle Wax, Inc., 664 F.Supp. 1153, 1159 (N.D.Ill.1987). "A product's trade dress is the overall image used to present it to purchasers; it could thus include ... the product's size, shape, color, graphics, packaging, and label." Vaughan Mfg. Co. v. Brikam International, Inc., 814 F.2d 346, 348 n. 2 (7th Cir.1987).
In order for a manufacturer to prevail on a claim for trade dress infringement, it must first establish that its trade dress is protectible as a trademark — i.e., either that it is "inherently distinctive" or that it has acquired "secondary meaning" to consumers. Blue Coral, supra at 1159. In addition, the manufacturer must show some "likelihood of confusion" on the part of consumers as to the source of the product. Id.; see also Horn Abbot Ltd. v. Sarsaparilla Ltd., 601 F.Supp. 360, 365 (N.D.Ill.1984). Even if both of these requirements are satisfied, however, a plaintiff cannot prevail if the alleged appropriated trade dress is found to be "functional." Stormy Clime Ltd. v. Progroup, Inc., 809 F.2d 971 (2d Cir.1987).6 Each of these elements — secondary meaning, likelihood of confusion, and functionality — must be separately considered.
The magistrate in this case correctly found that the overall configuration of the Schwinn Air-Dyne has acquired secondary meaning. "Secondary meaning" in the context of Section 43(a) of the Lanham Act denotes an association in the mind of the consumer between the trade dress of the product and a particular producer. Vaughan Mfg. Co. v. Brikam International, Inc., 814 F.2d 346, 348 (7th Cir.1987); see also A.J. Canfield Co. v. Vess Beverages, Inc., 796 F.2d 903, 907 (7th Cir.1986). Secondary meaning need not be shown where the trade dress, by itself, is a distinctive, identifying mark; however, it must be shown where the trade dress is not inherently distinctive but is claimed to have become identified with a particular producer over time. Vaughan, supra at 348; see also Blau Plumbing, Inc. v. S.O.S. Fix-It, Inc., 781 F.2d 604, 608 (7th Cir.1986). A product's trade dress has acquired secondary meaning "when the purchasing public associates that dress with a single producer or source rather than just with the product itself." LeSportsac, Inc. v. K-Mart Corp., 754 F.2d 71, 78 (2d Cir.1985).
At the hearing before the magistrate, Schwinn introduced into evidence the results of a market survey conducted by an independent consultant. Twenty-six professional buyers of exercise equipment at...
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