Sicilia Di R. Biebow & Co. v. Cox

• Citation: 732 F.2d 417
• Decision Date: 18 May 1984
• Docket Number: No. 82-1443,82-1443
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)
• Parties: SICILIA DI R. BIEBOW & CO., Plaintiff-Appellant, v. Ronald C. COX and Sales U.S.A., Inc., Defendants-Appellees.

Page 417

732 F.2d 417

SICILIA DI R. BIEBOW & CO., Plaintiff-Appellant, v. Ronald C. COX and Sales U.S.A., Inc., Defendants-Appellees.

No. 82-1443.

United States Court of Appeals, Fifth Circuit.

May 18, 1984.

Herndon & Foxman, Dallas, Tex., Stephen Schnitzer, Livingston, N.J., Morris M. Schnitzer, Newark, N.J., for plaintiff-appellant.

Hubbard, Thurman, Turner, Tucker & Glaser, L. Dan Tucker, Robert W. Turner, Dallas, Tex., for defendants-appellees.

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

Before REAVLEY, RANDALL and HIGGINBOTHAM, Circuit Judges.

REAVLEY, Circuit Judge:

In this trade dress infringement case, we must determine the extent to which section 43(a) of the Lanham Act, 15 U.S.C. Sec. 1125(a) (1982), ¹ incorporates the common law doctrine of functionality. See Inwood Laboratories v. Ives Laboratories, 456 U.S. 844, 857 n. 20, 102 S.Ct. 2182, 2190 n. 20, 72 L.Ed.2d 606 (1982). Stated simply, "functionality" privileges the copying of designs or features that are functional. The doctrine acts to separate those configurations that may be protected as property rights or trademarks and those designs that the law will not permit any person to appropriate or monopolize. Determining whether to apply the doctrine, therefore, implicates the competing interests of trademark law--the ability of parties freely to compete in the marketplace and protection of producers' attempts to establish a distinctive identity.

Other circuits have provided differing definitions of functionality that have resulted in nonuniform application of the doctrine. ² See Note, The Problem of Functional Features: Trade Dress Infringement Under Section 43(a) of the Lanham Act, 82 Colum.L.Rev. 77, 80-90 (1964) (Note). Although our cases have touched on the doctrine, we now confront for the first time in this circuit the meaning and application of functionality. See Supreme Assembly, Order of Rainbow for Girls v. J.H. Ray Jewelry Co., 676 F.2d 1079, 1083 n. 5 (5th Cir.1982).

I. This Litigation

Sicilia Di R. Biebow & Company (Sicilia) brought suit against Ronald C. Cox (Ron or Cox) and Sales, U.S.A., Inc. (Sales) for patent infringement, breach of contract, and unfair competition under Texas law, seeking damages and injunctive relief. The district court denied preliminary injunctive relief; Sicilia later dismissed its patent claim and amended its unfair competition claim to bring it under section 43(a) of the Lanham Act. After a bench trial on liability, the district court found for Cox and Sales on both claims. We reverse the district court's judgment dismissing Sicilia's trade dress infringement claim and affirm the dismissal of Sicilia's contract claim.

In 1967 Sicilia, a producer of lemon and lime juice, entered into a contract with Smoked Foods Products (Smoked Foods), extending to Smoked Foods the exclusive right to distribute Sicilia lemon juice in the United States. The contract was subject to annual renewal by Sicilia and provided that Smoked Foods was "not to sell, use, represent or be interested in any competing lemon juice products" while the contract was in effect. Moreover, a five-year covenant not to compete would be triggered if Smoked Foods terminated the contract without just cause. The parties amended the contract in 1975 to include lime juice and to require payment in Swiss francs rather than American dollars.

Rolf Biebow served as manager and general partner of Sicilia. Marcus Cox was the principal shareholder and de facto chairman of the board of Smoked Foods. Ron Cox, Marcus' son, held the nominal title of president, and owned approximately 20 percent of the stock. The primary role of the younger Cox, however, was as owner and manager of U.S. Marketing, Inc., which distributed Sicilia products in the southwest United States. Corporate formalities were observed between the entities, and Smoked Foods sold products to U.S. Marketing at a profit.

Smoked Foods and Sicilia maintained a harmonious relationship for ten years, but it began to deteriorate in 1977. The strength of the Swiss franc relative to the dollar made it more costly for Smoked Foods to purchase Sicilia product. The higher price resulted in a lower sales volume in the American market. During 1978 Marcus suggested that Sicilia either establish a bottling facility in the United States or allow Smoked Foods to bottle Sicilia juice under a royalty arrangement. Sicilia was not willing to make any changes.

In 1978 Ron Cox began preparations to enter the citrus juice business in competition with Sicilia products. He formed Sales, U.S.A., through which he began selling "Pompeii" lemon and lime juice in July 1979, after the contractual relationship between Marcus and Biebow had ended. Ron Cox marketed Pompeii juice, contained in bottles similar to Sicilia's, to the same brokers he had earlier supplied with Sicilia citrus juice.

Sicilia contends that Sales' Pompeii bottle infringes the Sicilia bottle design in violation of section 43(a) of the Lanham Act. Sicilia claims that (1) its trade dress is sufficiently distinctive so that a showing of secondary meaning is not required; (2) assuming that secondary meaning is required, the trade dress has acquired secondary meaning; (3) the bottle design is not primarily functional; and (4) the Pompeii trade dress creates the likelihood of confusion in consumers, and thus infringes the Sicilia trade dress.

The Pompeii bottle resembles the Sicilia bottle. We quote from the district court's comparison of the two designs:

Both Sicilia bottles and Pompeii bottles stand upright on a pedestal-type base and contain four ounces of juice. Sicilia bottles and Pompeii bottles are the same height and the same basic shape. However, Pompeii bottles are slightly more bulbous than Sicilia bottles. Sicilia copied the shape of its bottle from that used by Biebow's father in his German business since 1956.

Sicilia lemon juice bottles and Pompeii lemon juice bottles are both yellow. Sicilia lemon juice bottles have green caps; Pompeii lemon juice bottles have yellow caps. Both Sicilia lime juice bottles and Pompeii lime juice bottles are green with yellow caps.... Both Sicilia caps and Pompeii caps have thirty-six serrations.

Both Sicilia bottles and Pompeii bottles are marked with leaf-shaped tags.

....

The word "Sicilia" appears in capital letters on all bottles of Sicilia products; Pompeii bottles do not display the word "Pompeii"; however, Pompeii bottles display a design resembling a cut lemon or lime with juice flowing from it on the lower one-third of the bottle. The Pompeii design resembles a logo which Smoked Foods had used in advertising Sicilia.

The district court dismissed Sicilia's trade dress infringement claim. The court found that the Sicilia bottle design was nondistinctive and primarily functional, that Sicilia's trade dress had not acquired secondary meaning, and that no likelihood of confusion had been established.

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

II. Trademark or Trade Dress Protection

The district court indicated that, under any definition of functionality, Sicilia's bottle design was primarily functional and was therefore not entitled to protection. The court's finding of functionality also implicated the finding that the Sicilia bottle design was not distinctive. If a particular configuration or design is found to be inherently or sufficiently distinctive, ³ it cannot also be functional in the legal sense, although it may serve a useful purpose. To find legal functionality is to find that plaintiff's trade dress does not serve as a trademark and does not qualify as a protected property interest. Only when plaintiff's product dress or design rises to the level of trademark protectability--either by a showing that it is sufficiently distinctive or has acquired secondary meaning ⁴--does the question of likelihood of confusion become relevant. If confusion between the products is likely, because of similarity of dress, then the second comer falsely represents that the product he is selling was produced or sold by the first comer.

Despite the variety of perspectives and terms of art that courts use in analyzing trademark and trade dress cases, the inquiry should be reduced to two basic questions. The first, whether a mark or dress qualifies for protection, encompasses the issues of distinctiveness, secondary meaning, and functionality. The second, whether the protected mark or dress has been infringed, is answered by applying the "digits-of-confusion" test to decide whether a likelihood of confusion exists. The question of remedy arises only after a court finds infringement of a protected property interest by another product's dress or mark that will likely confuse the consuming public as to source.

Courts have differed in applying functionality to deny protection to designs or configurations that serve some functional purpose. Some courts, for example allow the copying of features or designs that are somewhat utilitarian, even though they may be distinctive or identifying. In other words, only if the design or configuration has identification of source as its sole purpose will it be entitled to trademark protection. E.g., Vibrant Sales, Inc. v. New Body Boutique, Inc., 652 F.2d 299, 304 (2d Cir.1981), cert. denied, 455 U.S. 909, 102 S.Ct. 1257, 71 L.Ed.2d 448 (1982); SK & F, Co. v. Premo Pharmaceutical Laboratories, Inc., 625 F.2d 1055, 1063 (3d Cir.1980). Other courts have realized, however, that many designs and features have both functional and identifying aspects. "Some designs adopted for the purpose of identification are not wholly useless but perform a utilitarian function." Truck Equipment Service Co. v. Freuhauf Corp., 536 F.2d 1210, 1218 (8th Cir.), cert. denied, 429 U.S. 861, 97 S.Ct. 164, 50 L.Ed.2d 139 (1976) (TESCO). Thus, protection may be accorded a distinctive or identifying design, even though that design is also...