LeSportsac, Inc. v. K Mart Corp.

• Decision Date: 24 January 1985
• Docket Number: D,Nos. 524,525,s. 524
• Citation: 225 USPQ 654,754 F.2d 71
• Parties: , 225 U.S.P.Q. 654 LESPORTSAC, INC., Plaintiff-Appellee, v. K MART CORPORATION, Defendant-Appellant. ockets 84-7632, 84-7790.
• Court: U.S. Court of Appeals — Second Circuit

Page 71

754 F.2d 71

78 A.L.R.Fed. 695, 225 U.S.P.Q. 654

LESPORTSAC, INC., Plaintiff-Appellee, v. K MART CORPORATION, Defendant-Appellant.

Nos. 524, 525, Dockets 84-7632, 84-7790.

United States Court of Appeals, Second Circuit.

Argued Dec. 10, 1984.

Decided Jan. 24, 1985.

Steven H. Bazerman, New York City (Kuhn, Muller & Bazerman, Julius Rabinowitz, New York City, of counsel), for plaintiff-appellee.

Marvin A. Tenenbaum, Chicago, Ill. (Alexander, Unikel, Bloom, Zalewa & Tenenbaum, Ltd., Richard E. Alexander, James D. Zalewa, Chicago, Ill., Martin W. Schiffmiller, Kirschstein, Kirschstein, Ottinger & Israel, P.C., New York City, of counsel), for defendant-appellant.

Before FEINBERG, Chief Judge, KAUFMAN and ROSENN, ^* Circuit Judges.

FEINBERG, Chief Judge:

K mart Corporation appeals from two orders of the United States District Court for the Eastern District of New York, Joseph M. McLaughlin, J., granting motions of plaintiff LeSportsac, Inc., for a preliminary injunction. The orders enjoin K mart from marketing certain bags, which the court found to contain a combination of mark and dress confusingly similar to that used by plaintiff. For reasons stated below, we affirm.

I.

LeSportsac commenced this action on June 22, 1984, alleging that K mart had violated various federal laws as well as New York State statutes and common law in selling certain bags under the trade name "di paris sac." On July 11, 1984, the district court, relying chiefly on the claim of unregistered trademark infringement under Sec. 43(a) of the Lanham Act, 15 U.S.C. Sec. 1125(a), granted LeSportsac's motion for a preliminary injunction after hearing testimony from four witnesses and receiving other evidence. ¹ By order dated July 13, 1984, the court enjoined K mart from selling four specific bags (the "lightweight bags") and directed LeSportsac to post an injunction bond of $250,000.

In August, K mart moved to modify the July 13 order to permit K mart to sell its bags with a square hangtag, approximately three and one-half inches on each side, stating prominently di paris sac

SOLD EXCLUSIVELY AT AND MADE EXCLUSIVELY FOR

K mart

LeSportsac cross-moved to broaden the injunction to include a fifth K mart bag, described by the parties and the district court as the "heavyweight knapsack." In a Memorandum and Order dated September 18, 1984, the district court denied K mart's motion to modify the injunction, granted LeSportsac's motion to broaden the injunction to include the heavyweight knapsack and increased the injunction bond to $400,000.

LeSportsac has been selling a distinctive, highly successful line of lightweight luggage and bags since 1976. In that period, LeSportsac has sold approximately 5,000,000 bags--for over $50,000,000--both in the United States and abroad. The bags, available in a variety of colors, are made of parachute nylon and trimmed in cotton carpet tape with matching cotton-webbing straps. The zippers used to open and close the bags are color coordinated with the bags themselves, and usually are pulled with hollow rectangular metal sliders. Many bags also have separate zippered compartments that employ the same hollow rectangular sliders.

The LeSportsac line also features the repetitive printing of the LeSportsac logo on the trim of each bag. The distinctive logo consists of a solidly colored circle, followed by the name "LeSportsac" in the same color as the bag, both enclosed within an elongated ellipse of the same color as the circle. The name, the circle and the ellipse are all set against an elliptical background that contrasts with the color of the bag.

K mart apparently purchased its allegedly infringing line of bags in the Far East in late 1983; the bags were first offered for sale early in 1984. The K mart bags are strikingly similar to those manufactured and sold by LeSportsac. Four of the five allegedly offending bags (the lightweight bags) are also made of parachute nylon and trimmed in cotton tape, have cotton handles in the same color as the trim and are equipped with color-coordinated zippers and hollow rectangular metal zipper pulls. K mart sells these bags under the name "di paris sac." The di paris sac logo is quite similar to that of LeSportsac in both design and color combinations. The name, which is in the same color as the bag, is followed by an Eiffel Tower design; both are enclosed within an elongated ellipse. The name, the Eiffel Tower design and the ellipse are all set against the elliptical background, which contrasts with the color of the bag. K mart apparently admits that these four bags were copied from LeSportsac bags.

The fifth bag--the heavyweight knapsack--is somewhat less similar to its LeSportsac counterpart than are the other four. It is made of heavier nylon and uses different webbing for its carrying straps. In addition, the "di paris sac" logo is slightly different from that on the other four K mart bags.

II.

A party seeking a preliminary injunction in this circuit must establish both possible irreparable injury and either (1) a likelihood of success on the merits or (2) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in the movant's favor. See, e.g., Arthur Guinness & Sons, PLC v. Sterling Publishing Co., 732 F.2d 1095, 1099 (2d Cir.1984); Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Ltd., 604 F.2d 200, 206-07 (2d Cir.1979). The standard of review on appeal to this court is whether issuance of the preliminary injunction, in light of the applicable legal standards, constituted an abuse of discretion. Doran v. Salem Inn, Inc., 422 U.S. 922, 931-32, 95 S.Ct. 2561, 2567-68, 45 L.Ed.2d 648 (1975). The term "abuse of discretion" is capable of widely varying interpretations, ranging, as Judge Friendly has recently pointed out, "from ones that would require the appellate court to come close to finding that the trial court had taken leave of its senses to others which differ from the definition of error by only the slightest nuance, with numerous variations between the extremes." See Friendly, Indiscretion About Discretion, 31 Emory L.J. 747, 763 (1982); see also Rosenberg, Judicial Discretion of the Trial Court, Viewed from Above, 22 Syracuse L.Rev. 635, 639 (1971). In the remainder of this opinion, we will indicate the type of scrutiny we are applying to the various aspects of the decision of the district court. Cf. Coca-Cola Co. v. Tropicana Products, Inc., 690 F.2d 312, 315-16 (2d Cir.1982).

Section 43(a) of the Lanham Act, 15 U.S.C. Sec. 1125(a), ² establishes a federal law of unfair competition by providing a statutory remedy to a party injured by a competitor's "false designation of origin" of its product, whether or not the aggrieved party has a federally registered trademark. See, e.g., Ives Laboratories, Inc. v. Darby Drug Co., 601 F.2d 631, 641 (2d Cir.1979). The "trade dress" of a product, which "involves the total image of a product and may include features such as size, shape, color or color combinations, texture, [or] graphics," John H. Harland Co. v. Clarke Checks, Inc., 711 F.2d 966, 980 (11th Cir.1983), may become an unregistered trademark eligible for protection under Sec. 43(a) if it is nonfunctional and has acquired a secondary meaning in the marketplace by which it is identified with its producer or source. See, e.g., Ives Laboratories, supra, 601 F.2d at 642-43.

Most trade dress infringement actions involve the packaging or labeling of goods. See 1 J.T. McCarthy, Trademarks and Unfair Competition Sec. 8:1 (2d ed. 1984). Recently, however, we have recognized that the design of a product itself may function as its packaging, serving to distinguish it from other products, and hence be protectable trade dress under Sec. 43(a). See, e.g., Warner Bros., Inc. v. Gay Toys, Inc., 658 F.2d 76 (2d Cir.1981) (distinctive color and symbols on toy car); Harlequin Enterprises Ltd. v. Gulf & Western Corp., 644 F.2d 946 (2d Cir.1981) (distinctive paperback book covers). To maintain an action for trade dress infringement, having established an unregistered trademark in that dress, "a plaintiff must allege that a competitor's product design or packaging is likely to confuse consumers as to the product source--such a design or packaging falsely designates its origin." 20th Century Wear, Inc. v. Sanmark-Stardust Inc., 747 F.2d 81, 93 (2d Cir.1984).

A. Functionality

"Functional symbols (those that are essential to a product's use as opposed to those which merely identify it) are not protected under Sec. 43(a)." Warner Bros., Inc. v. Gay Toys, Inc. (Warner II), 724 F.2d 327, 330 (2d Cir.1983). K mart claims that LeSportsac failed to establish that its design features are nonfunctional.

At the outset, we note that it is not clear either in this circuit or elsewhere whether a plaintiff has the burden of proving nonfunctionality in order to obtain Sec. 43(a) relief or whether a defendant must prove functionality as a defense. Compare Vibrant Sales, Inc. v. New Body Boutique, Inc., 652 F.2d 299, 303-04 (2d Cir.1981) (apparently suggesting, in dicta, that burden is on plaintiff), cert. denied, 455 U.S. 909, 102 S.Ct. 1257, 71 L.Ed.2d 448 (1982), with Warner II, supra, 724 F.2d at 330-32 (discussing "functionality defense"), and Ives Laboratories, supra, 601 F.2d at 643 (affirming denial of preliminary injunction; "case for functionality ... depends on the evidence proffered by defendants ..."). See also Clarke Checks, supra, 711 F.2d at 982 n. 26 (declining to resolve question of where burden should be placed); Fisher Stoves, Inc. v. All Nighter Stove Works, Inc., 626 F.2d 193, 195-96 (1st Cir.1980) (expressing doubt about where burden should be placed).

We believe that Warner II correctly characterized the question of functionality as a defense, and that the burden therefore falls on the defendant to prove functionality. See also Inwood Laboratories, Inc. v. Ives...