Deere & Co. v. Farmhand, Inc.

• Decision Date: 30 June 1982
• Docket Number: Civ. No. 79-503-E.
• Citation: 560 F. Supp. 85
• Parties: DEERE & COMPANY, Plaintiff, v. FARMHAND, INC., Defendant.
• Court: U.S. District Court — Southern District of Iowa

560 F. Supp. 85

DEERE & COMPANY, Plaintiff, v. FARMHAND, INC., Defendant.

Civ. No. 79-503-E.

United States District Court, S.D. Iowa, C.D.

June 30, 1982.

COPYRIGHT MATERIAL OMITTED

L.R. Voigts, Des Moines, Iowa, Theodore R. Scott, Chicago, Ill., John M. Nolan, Moline, Ill., for plaintiff.

Alan G. Carlson, Minneapolis, Minn., for defendant.

FINDINGS OF FACT, CONCLUSIONS OF LAW AND JUDGMENT

O'BRIEN, District Judge.

This is an action under Section 43(a) of the Lanham Act, 15 U.S.C. 1125(a) and the common law of unfair competition. Deere & Company (hereinafter referred to as "Deere") sued Farmhand, Inc., on November 2, 1979 to enjoin it from selling two models in its series of "front-end loaders."¹ This action was tried to the Court and the parties have submitted post-trial briefs and proposed findings of fact and conclusions of law. Based on the briefs and argument of counsel and the entire record herein, the Court finds in favor of the defendant on the allegations of the Complaint and in favor of the plaintiff on the antitrust allegations of defendant's counterclaim.

The amended complaint in this matter alleges violations of 15 U.S.C. 1125(a) and the common law of unfair competition. Deere alleges that, through long use and extensive advertising, the color used on its farm machinery and equipment has become known in the industry as "John Deere green." Deere further alleges that the color John Deere green serves the purpose of identifying machinery of that color as the product of Deere & Company. Deere further alleges that its Models 148 and 158 front-end loaders embody distinctive exterior design features that give the loaders a unique configuration or appearance that serves the purpose of identifying loaders of that configuration as products of Deere & Company.

Deere alleges that Farmhand's use of the color John Deere green and embodiment of similar features in its Models F-248 and F-258 loaders, alone or in conjunction with its use of the name "John Deere" in its advertising, constitutes a false description or representation of origin within the meaning of 15 U.S.C. § 1125(a).² Deere requests an injunction prohibiting Farmhand from using the color John Deere green on its loaders. It further requests damages in the amount of Farmhand's profits from the sale of its loader Models F-248 and F-258.

Defendant has counterclaimed for declaratory and monetary relief. In Count I of its counterclaim, defendant requests declarations with respect to each element of plaintiff's prima facie case. In Count II of the counterclaim, defendant contends that plaintiff's maintenance of this allegedly baseless action is an attempt to monopolize the market for loaders specially designed for attachment on Deere tractors. Defendant contends that this is a violation of Section 2 of the Sherman Act, 15 U.S.C. 2 and a violation of Section 3 of the Clayton Act, 15 U.S.C. 14. Defendant requests an award of trebled attorneys' fees as damages for these violations. Count III requests a declaration that Section I of the Sherman Act and Section 3 of the Clayton Act would be violated if the Court gave protection to the color, John Deere green, under Section 43(a) of the Lanham Act.

FINDINGS OF FACT

The Parties and Their Products

Deere is a Delaware corporation having its principal offices and place of business in Moline, Illinois. Deere is currently the United States' leader in the sale of farm machinery and equipment. It is well known nationally for its high quality products. In the industry, it is known as a "full-line" farm machinery manufacturer. A full-line manufacturer makes and sells a complete line of farm equipment, including tractors, attachments and implements. Deere markets its product through an established and sophisticated nationwide dealership network. A John Deere dealer typically handles products of John Deere and other manufacturers.

Farmhand is a Delaware corporation having its principal offices and place of business in Hopkins, Minnesota. Farmhand is a "short-line" manufacturer. A short-line manufacturer is a smaller company that does not manufacture a tractor but manufactures attachments or implements for use in connection with the tractors of full-line companies. Farmhand is well known in its trade area and has a reputation of delivering a high-quality product.

Farmhand's primary product is front-end loaders. It has been making front-end loaders, in one form or another, since 1939. It markets the vast majority of its loaders in North Dakota, South Dakota, Nebraska, Kansas, Colorado, and Idaho. Approximately 98 percent of the Farmhand loaders in question here are sold through John Deere dealers.

For purposes of this litigation, there are two types of front-end loaders, universal-fit loaders and custom-fit loaders. A universal-fit or "will-fit" loader is one that can be mounted on any manufacturer's tractor. A custom-fit loader is specifically designed for a particular manufacturer's tractor. Farmhand made nothing but universal-fit loaders from 1939 until 1977 or 1978, when it introduced its custom-fit loader, Models F-248 and F-258. The Farmhand universal-fit loaders are painted red. Farmhand Models F-248 and F-258 are painted the exact same shade of green as John Deere has used on all of its products since at least as early as 1955. Farmhand continues to sell at least eight models of the red universal-fit loaders.

In 1972, John Deere introduced its loader Models 148 and 158. These custom-fit loaders were specifically designed for use with John Deere "Generation II" tractors, which were also introduced that year.

John Deere has used the same shade of green as the predominant color upon its entire line of farm machinery and equipment since at least as early as 1955. Deere has sophisticated procedures, tests, and devices for assuring that the color it uses will not vary from factory to factory or from year to year. One such device is a "coloreye" which measures the weathering of paint finishes. Deere requires its paint suppliers to pass rigid paint performance tests and discontinues use of suppliers that do not meet its standards. Deere's advertising³ prominently and continuously features the shade of green known in the industry as "John Deere green."⁴

William MacGregor of Deere was the project engineer in charge of loaders at all times relevant to these proceedings. He was responsible for the overall design and development of Deere front-end loaders. In connection with this responsibility, Mr. MacGregor consulted with the Henry Dreyfuss Associates, a consulting firm retained by John Deere to assure that its tractors, implements and attachments maintain a continuity or uniformity of style.

The Appearance of the Deere Models 148 and 158 Loaders

Deere employees identified several features of its Model 148 and 158 loaders at trial that they believe give these loaders a unique overall configuration or appearance. These features are:

A. The shape of the loader mast.

B. The shape of the mounting frame.⁵

C. The location of the torque tube.⁶

D. The flat top of the bucket.

E. The location of the lift and bucket cylinders on the knee plate.

F. The routing of the hydraulic lines.

G. The shape and location of decals.

Additionally, Deere employees identified several aspects of the design suggested by Henry Dreyfuss Associates that contribute to the unique overall appearance of the loader. These features are:

A. The elimination of weld-on tabs to mount the cylinders.

B. The use of straight lines to compliment the contour of the Deere Generation II tractors.

C. The use of continuous welds.

D. The bent-over front lip on the top of the loader bucket.

E. Trim and radii details in crucial locations.

Although the foregoing elements of the overall appearance were identified by Deere employees, there was no similar testimony from consumers.

The shape of the loader mast is the result of engineering considerations. In the case of the Deere 148 and 158 loaders, the mast is triangular in shape. The Court is persuaded that the shape of the mast was dictated primarily by a need to distribute stress evenly over the loader frame. Other manufacturers have recognized this and, consequently, use triangular shape masts on their loaders. The Court recalls no evidence that even suggests that Deere incorporated a triangular shaped mast for reasons other than its utilitarian functionality.

The same is true for the mounting frame. The shape of the body of the tractor dictates the shape of the mounting frame to a large extent. The mounting frame distributes stress evenly over the frame of the tractor. Again, the Court recalls no evidence to suggest that the shape of the mounting frame was selected due to any consideration other than its utilitarian functionality.

The torque tube is a device that has been patented by Deere. Farmhand pays Deere a fee to be able to use the torque tube. The location and position of the torque tube was selected by both manufacturers to achieve the optimum utilitarian functionality.⁷

The flat top of the bucket is also functional in that it is parallel to the bottom or "cutting edge" of the bucket and thus, helps the operator to position the loader.

The other details that Deere engineers claim as a part of the unique overall configuration of the loader are all functional with the exception of the location and shape of the decals. The Court notes that there are only a few places on the loader that decals can be placed⁸—on the booms, the knee plates, the mast, the torque tube and the bucket. Deere places its decals on the knee plate and on the mast. Farmhand places decals on the mast, the boom, the knee plates and the torque tube. Both Deere and Farmhand prominently place their decals on their loaders.

The functions performed by the foregoing structural elements could have been performed by structural elements having a substantially different shape or positioned in other locations. This would have made the...