Vision Sports, Inc. v. Melville Corp.

• Decision Date: 18 October 1989
• Docket Number: No. 89-55592,89-55592
• Citation: 888 F.2d 609
• Parties: , 12 U.S.P.Q.2d 1740 VISION SPORTS, INC., a California corporation; Vision Street Wear, Inc., Plaintiffs-Appellees, v. MELVILLE CORPORATION, a New York corporation doing business in California as Melville Shoe Corporation, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 609

888 F.2d 609

58 USLW 2316, 12 U.S.P.Q.2d 1740

VISION SPORTS, INC., a California corporation; Vision Street Wear, Inc., Plaintiffs-Appellees, v. MELVILLE CORPORATION, a New York corporation doing business in California as Melville Shoe Corporation Defendant-Appellant.

No. 89-55592.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Aug. 10, 1989.

Decided Oct. 18, 1989.

Robert Neuner, New York City, for defendant-appellant.

Darrell L. Olson, Newport Beach, Cal., for plaintiffs-appellees.

Appeal from the United States District Court for the Central District of California.

Before FLETCHER and NELSON, Circuit Judges, and CARROLL, ^* District Judge.

FLETCHER, Circuit Judge:

Defendant-appellant Melville Corporation ("Melville") appeals the district court's order issuing a preliminary injunction prohibiting Melville's sale of certain clothing items bearing its "STREET CLOSED" trademark in enlarged, color-contrasted, boldface lettering. We affirm.

I. FACTS AND PROCEEDINGS BELOW

Plaintiff-appellee Vision Sports, Inc. ("Vision") is the owner of the trademark "VISION STREET WEAR" and related logo design ("VSW logo"), which it uses in connection with various items of clothing and related products. ¹ VISION STREET WEAR clothing bearing the VSW logo accounted for sixty million dollars in sales last year. Appellant Melville operates 564 retail clothing stores located throughout the United States. Melville has sold clothing under the trademark "STREET CLOSED" since 1985. The "STREET CLOSED" mark was registered in 1986.

In the fall of 1988, representatives of Melville attempted to purchase VISION STREET WEAR clothing to sell in Melville stores. Vision chose not to sell its VISION STREET WEAR clothing to Melville, preferring to continue selling its clothing through department stores and specialty stores catering to skateboard enthusiasts.

Subsequently, Melville began producing its own version of clothing items similar to those sold by Vision. In February of 1989, Melville began using its STREET CLOSED mark in connection with this new line of clothing. Significantly, the STREET CLOSED mark was presented in a format similar to that used by Vision: the word "STREET" appears in large red block letters over the word "CLOSED" in white block letters against a black background. ²

On March 24, 1989, Vision filed a complaint against Melville for federal and state trademark infringement, false designation of origin under section 43(a) of the Lanham Act, trademark dilution, unfair competition, and copyright infringement. Four days later On April 4, 1989, the district court, at Vision's request, issued a temporary restraining order against Melville. After an April 14, 1989 hearing, the district court issued a preliminary injunction relating to the trademark claims but denied preliminary injunctive relief with respect to Vision's copyright claim. Melville filed a timely notice of appeal. We have jurisdiction over the appeal under 28 U.S.C. Sec. 1292(a)(1).

Melville filed an answer and counterclaimed for a declaratory judgment that it had not infringed or diluted Vision's trademark, competed unfairly with Vision, or infringed any Vision copyright.

II. ISSUANCE OF PRELIMINARY INJUNCTION AND STANDARD OF REVIEW

To qualify for a preliminary injunction, the moving party must show either (1) a combination of probable success on the merits and the possibility of irreparable harm, or (2) the existence of serious questions going to the merits and the balance of hardships tipping in its favor. Rodeo Collection, Ltd. v. West Seventh, 812 F.2d 1215, 1217 (9th Cir.1987); Sardi's Restaurant Corp. v. Sardie, 755 F.2d 719, 723 (9th Cir.1985). The district court concluded that Vision established probable success on the merits and the possibility of irreparable harm ³ and issued a preliminary injunction prohibiting Melville's use of a trademark logo format confusingly similar to the VSW logo format.

The district court's preliminary injunction order may be reversed only if the district court abused its discretion, based its decision on an erroneous legal standard, or based its decision on clearly erroneous findings of fact. First Brands Corp. v. Fred Meyer, Inc., 809 F.2d 1378, 1381 (9th Cir.1987).

III. ELEMENTS OF TRADEMARK AND TRADE DRESS PROTECTION

The focus of Melville's appeal is the district court's conclusion that Vision demonstrated probable success on the merits. Melville contends that the district court fundamentally misunderstood the right asserted by Vision and consequently applied the wrong legal standard to this case. Specifically, Melville argues that this is not a trademark case, but a trade dress case under section 43(a) of the Lanham Act, 15 U.S.C. Sec. 1125(a). It contends that no trademark rights stem from the format through which Vision presents its VISION STREET WEAR mark. Rather, it insists that any rights possessed by Vision in its trademark format stem from the section 43(a) protection extended to trade dress and are subject to the limitations of trade dress doctrine: namely, that Vision must show its trade dress is nonfunctional, has acquired secondary meaning, and that Melville's use of a similar logo format creates a likelihood of confusion. First Brands, 809 F.2d at 1381. This, Melville claims, Vision cannot do. Evaluation of this argument requires a brief analysis of the distinction between trademark and trade dress claims.

A trademark is defined as "any word, name symbol, or device or any combination thereof adopted and used by a manufacturer or merchant to identify his goods and distinguish them from those manufactured or sold by others." 15 U.S.C. Sec. 1127. ⁴ Because of the very nature of trademark protection, its

emphasis and thrust ... is in the direction of deciding whether an alleged symbol in fact functions to identify and J. McCarthy, Trademarks and Unfair Competition Sec. 2:2, at 52 (2d ed. 1984); see also 15 U.S.C. Sec. 1114 (what constitutes trademark infringement).

distinguish the goods or services of one seller.... In trademark law, therefore, it is only the exclusive symbol characterized as a "trademark" which is juxtaposed against another's usage to determine whether or not the two used by two sellers is likely to confuse consumers.

In contrast, trade dress involves the total image of a product and "may include features such as size, shape, color, color combinations, texture, or graphics." Rachel v. Banana Republic, Inc., 831 F.2d 1503, 1506 (9th Cir.1987). A seller's adoption of a trade dress confusingly similar to a competitor's constitutes unfair competition that is actionable under section 43(a) of the Lanham Act. Blau Plumbing, Inc. v. S.O.S. Fix-It, Inc., 781 F.2d 604, 608 (7th Cir.1986). Trade dress protection is broader in scope than trademark protection, both because it protects aspects of packaging and product design that cannot be registered for trademark protection and because evaluation of trade dress infringement claims requires the court to focus on the plaintiff's entire selling image, rather than the narrower single facet of trademark. J. McCarthy Sec. 8:1, at 282-83. Thus, to the extent that Vision's cause of action focuses upon the look and styling of the clothing (including the fabric pattern), along with the color scheme and graphic display embodied in the VSW logo, it is a trade dress claim.

However, Vision claims that the VSW logo, when used as a hang-tag or in printed form on the clothing, also operates as a trademark. A background design, when used in connection with a word mark in such a way as to create in the minds of the consuming public a commercial impression, separate and apart from the word mark itself, may be protected as a separate mark. Id. Sec. 7:8, at 200. Similarly, although color, per se, is generally not capable of trademark protection, it may be an essential element of a protected arrangement of colors, symbols, or words. Id. at 214; see also In re Graham Magnetics, Inc., 226 U.S.P.Q. (BNA) 876 (Pat. & Trademark Off. Trademark Trial & App. Bd.1985) (light-colored rectangular panel on face of tape recording device may be registered in light of evidence of secondary meaning). Thus, if the VSW logo format has attained trademark significance independent of the words "VISION STREET WEAR," adoption of a confusingly similar format would constitute trademark infringement. Vision argues, and the district court found, that the logo format has attained trademark significance. ⁵

In short, we conclude that Melville's characterization of this case misapprehends significant aspects of Vision's claim. Vision asserts both trademark and trade dress interests in its logo. The district court addressed both the trademark and trade dress interests claimed by Vision and found a likelihood of success on the merits with respect to both claims. The district court did not apply an erroneous legal standard in this case.

IV. VISION'S TRADE DRESS CLAIM

"A plaintiff seeking to recover for trade dress infringement under section 43(a) must show that its trade dress is protectable and that defendant's use of the same or similar trade dress is likely to confuse consumers." Fuddruckers, Inc. v. Doc's B.R. Others, Inc., 826 F.2d 837, 841 (9th Cir.1987). A plaintiff's trade dress may be protected if it is nonfunctional and if it has acquired secondary meaning. Id. at 842.

A. Functionality

The focus of the district court's trade dress analysis was the VSW logo Citing this court's decision in First Brands, Melville contends that the district court erred in determining that the VSW logo is not functional because it failed to take into account the competitive need for the basic colors red, black, and white. Melville's reliance on this "color depletion" rationale is misplaced.

                which appears not only on Vision's clothing hangtags, but is featured prominently on Vision's clothing itself.  The district court found that the VSW logo is not functional.

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