Adidas-Salomon Ag v. Target Corp., No. Civ.01-1582-ST.

• Decision Date: 30 October 2002
• Docket Number: No. Civ.01-1582-ST.
• Citation: 228 F.Supp.2d 1192
• Parties: ADIDAS-SALOMON AG and adidas America, Inc., Plaintiffs, v. TARGET CORP.; E.S. Originals, Inc.; and B.U.M. International, Inc., Defendants.
• Court: U.S. District Court — District of Oregon

Page 1192

228 F.Supp.2d 1192

ADIDAS-SALOMON AG and adidas America, Inc., Plaintiffs, v. TARGET CORP.; E.S. Originals, Inc.; and B.U.M. International, Inc., Defendants.

No. Civ.01-1582-ST.

United States District Court, D. Oregon.

October 30, 2002.

William H. Brewster, R. Charles Henn, Jr., Jerre B. Swann, Kilpatrick Stockton, LLP, Atlanta, GA, Stephen M. Feldman, Thomas R. Johnson, Anne L. Nichol, Perkins Coie, LLP, Portland, OR, for plaintiffs.

Vincent Henry Chieffo, Frank E. Merideth, Jr., Greenberg Traurig, LLP, Santa Monica, CA, Kenneth R. Davis, II, Milo Petranovich, Lane, Powell, Spears, Lubersky, LLP, Portland, OR, James R. Steffen, Faegre & Benson, LLP, Minneapolis, MN, for Target Corporation.

Kenneth R. Davis, II, Milo Petranovich, Lane, Powell, Spears, Lubersky, LLP, Portland, OR, Lisa A. Pieroni, Martin W. Schiffmiller, Kirschstein, Ottinger, Israel, Schiffmiller, New York City, for E.S. Originals, Incorporated.

OPINION AND ORDER

REDDEN, District Judge.

This is an action by adidas-Salomon AG and adidas America, Inc., alleging that defendants have offered for sale and sold shoes with features that bear confusingly similar imitations of adidas' trademark diagonal three stripes and the trade dress of adidas' Original Superstar shoe. Plaintiffs assert claims for violation of federal copyright law and the Lanham Act, 15 U.S.C. §§ 1051-1127, and state laws governing trademark dilution, injury to business reputation, unfair competition, and deceptive trade practices. The defendants filed a motion to dismiss, which the court converted to a motion for summary judgment. On July 31, 2002, Magistrate Judge Stewart filed Findings and Recommendations that the defendants' motion be denied.

The matter is now before me pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure. Section (b)(1)(A) authorizes a magistrate to hear and determine any pretrial matter pending before the court except certain specified "dispositive" motions. United States v. Raddatz, 447 U.S. 667, 673, 100 S.Ct. 2406, 65 L.Ed.2d 424 (1980). Review by the district court of the magistrate's determination of dispositive motions excepted under § 636(b)(1)(A) is de novo. Fed.R.Civ.P. 72(b); Bhan v. NME Hospitals, Inc., 929 F.2d 1404, 1414 (9th Cir. 1991).

Defendants have filed timely objections to Magistrate Judge Stewart's Findings and Recommendation. I have given the Findings and Recommendation de novo review.

Defendants' first objection to the Findings and Recommendation is that Judge Stewart's Findings and Recommendation permits adidas to bring an anti-competitive strike suit in the guise of product design trade dress claims. This, say the defendants, flies in the face of the encouragement of copying product designs not protected by copyright or patent law.

A product's "trade dress" is its total image and overall appearance; it includes "features such as size, shape, color, color combinations, texture, or graphics." Vision Sports, Inc. v. Melville Corp., 888 F.2d 609, 613 (9th Cir.1989)(internal quotations and citation omitted). To sustain a claim for trade dress infringement, the plaintiff must prove that its claimed dress is nonfunctional, serves a source-identifying role either because it is inherently distinctive or has acquired secondary meaning, and that the defendant's product creates a likelihood of consumer confusion. Clicks Billiards, Inc. v. Sixshooters, Inc., 251 F.3d 1252, 1257 (9th Cir.2001).

adidas asserts that the trade dress of its original Superstar shoe is based on four elements: the trademarked three stripes on the side of the shoe, a flat sole, a rubber toe with a shell design ("shell toe,") and a "heel patch" including a trefoil design.

Defendants' first objection is based on the functionality doctrine. Under the functionality doctrine, the law distinguishes between trademark and trade dress features "which constitute the actual benefit that the consumer wishes to purchase, which do not engender trademark protection," and "an assurance that a particular entity made, sponsored, or endorsed a product, which, if incorporated into the product's design by virtue of arbitrary embellishment, does have trademark significance." Tie Tech, Inc. v. Kinedyne Corp., 296 F.3d 778, 785 (9th Cir.2002)(internal citations and quotations omitted). Under the functionality doctrine, competitors can replicate important non-reputation-related product features. Qualitex Co. v. Jacobson Prods. Co., Inc., 514 U.S. 159, 169, 115 S.Ct. 1300, 131 L.Ed.2d 248 (1995). However, the copying of "arbitrary embellishments" that have acquired distinctiveness or secondary meaning is prohibited. Tie Tech, 296 F.3d at 785.

Thus, trade dress protection extends only to design features that are non-functional. Clicks Billiards, 251 F.3d at 1258. A product feature is functional if the feature is essential to the use or purpose of the article or if it affects the cost or quality of the article. Qualitex, 514 U.S. at 165, 115 S.Ct. 1300; TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, 121 S.Ct. 1255, 1259, 149 L.Ed.2d 164 (2001). In determining whether trade dress is nonfunctional, the whole collection of features must be taken together. See International Jensen, Inc. v. Metrosound U.S.A., Inc., 4 F.3d 819, 822-23 (9th Cir. 1993). The fact that individual elements of the trade dress may be functional does not necessarily mean that the trade dress as a whole is functional; rather, functional elements that are separately unprotectable can be protected together as part of a trade dress. Clicks Billiards, 251 F.3d at 1259. Trade dress is "the composite tapestry of visual effects." Id.

Judge Stewart concluded that when all of the elements of the Original Superstar shoe's trade dress were taken together, they were nonfunctional and therefore protectable. Defendants have conceded that two elements of the Original Superstar's trade dress, the three-stripe mark and the heel patch, are nonfunctional. However, they assert that the flat sole and the rubber shell toe are widely used in the shoe industry and therefore are functional elements which render the Original Superstar's trade dress also functional.

adidas has proffered evidence that the flat sole of the Original Superstar was considered optimal for a performance basketball shoe in 1969, when adidas introduced the Original Superstar, but that it is considered optimal no longer. adidas has also introduced evidence that the rubber toe of the Original Superstar shoe adds neither durability nor performance to the shoes, but is purely ornamental and actually increases the production cost, Judge Stewart concluded from this evidence that adidas had established the nonfunctionality of the Original Superstar trade dress. I agree with that conclusion. Defendants' first objection is rejected.

Defendants' second objection is that adidas failed to show that its claimed Original Superstar trade dress has acquired distinctiveness or secondary meaning. They also argue that Judge Stewart erroneously inferred that the B.U.M. shoe had been copied from the Original Superstar shoe, and that such copying conferred secondary meaning on the Original Superstar shoe. They also contend that the evidence proffered by adidas on the existence of acquired distinctiveness of the Original Superstar trade dress was merely circumstantial and therefore not probative. This objection is also without merit.

In evaluating the sufficiency of evidence of secondary meaning, the court looks to a number of factors, including 1) whether actual purchasers of the product bearing the claimed trade dress associate the trademark with the producer, 2) the degree and manner of advertising under the claimed trade dress, 3) the length and manner of use of the claimed trade dress, and 4) whether use has been exclusive. See Committee for Idaho's High Desert, Inc. v. Yost, 92 F.3d 814, 822 (9th Cir. 1996); Japan Telecom, Inc. v. Japan Telecom America, Inc., 287 F.3d 866, 873 (9th Cir.2002). Secondary meaning requires a showing that there is a "mental recognition in buyers' and potential buyers' minds that products connected with the mark are associated with the same source." Japan Telecom, 287 F.3d at 873 (internal quotations and citations omitted).

adidas has submitted evidence showing that since 1986, when the rap group "Run DMC" performed the song "My adidas" while wearing the Original Superstar shoes, several rap and hip-hop musical artists have written and performed songs whose lyrics refer to the adidas "shell toe." adidas has also proffered evidence showing unsolicited media references identifying the Original Superstar's trade dress, particularly the shell toe, with adidas.

In determining whether a plaintiff's advertising is enough to establish secondary meaning, the court looks at the advertising's "amount, nature and geographical scope" with an "eye toward how likely the advertising is to expose a large number of the relevant consuming public to the use of the symbol...." Japan Telecom, 287 F.3d at 875. adidas' evidence shows extensive and diverse advertising of both the three-stripe mark and the Original Superstar shoe itself. This includes print advertising and placement of the Original Superstar shoe on famous athletes. In addition, adidas has shown that the Original Superstar shoe has been marketed continuously since 1969. The evidence is sufficient to create a triable issue of fact on secondary meaning.

Defendants claim that adidas has not proffered sufficient evidence to constitute a triable issue of fact on whether the "retro look" of the B.U.M. shoe is likely to cause consumer confusion with the adidas Original Superstar. The likelihood of confusion is "the central element of trademark infringement." GoTo.com. Inc. v. Walt Disney Co., 202 F.3d 1199, 1205 (9th Cir.2000). Likelihood of confusion involves consideration of the "total effect of the defendant's product and package on the eye and...