Esercizio v. Roberts

• Decision Date: 05 September 1991
• Docket Number: No. 90-5734,90-5734
• Citation: 20 USPQ2d 1001,944 F.2d 1235
• Parties: , 20 U.S.P.Q.2d 1001 Ferrari S.P.A. ESERCIZIO Fabriche Automobili E Corse, Plaintiff-Appellee, v. Carl ROBERTS, d/b/a Roberts Motor Company, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 1235

944 F.2d 1235

60 USLW 2188, 20 U.S.P.Q.2d 1001

Ferrari S.P.A. ESERCIZIO Fabriche Automobili E Corse, Plaintiff-Appellee, v. Carl ROBERTS, d/b/a Roberts Motor Company, Defendant-Appellant.

No. 90-5734.

United States Court of Appeals, Sixth Circuit.

Argued March 25, 1991.

Decided Sept. 5, 1991.

Ed E. Williams, III, Robert D. Van de Vuurst, Baker, Worthington, Crossley, Stansberry & Woolf, Johnson City, Tenn., Albert Robin, Jonathan I. Blackman (argued), Lawrence B. Friedman (briefed), Cleary, Gottlieb, Steen & Hamilton, New York City, for plaintiff-appellee.

W.F. Shumate (argued and briefed). Bobby Bishop, Jr., Steven K. Bowling, Richard S. Wirtz, Knoxville, Tenn., for defendant-appellant.

Before KENNEDY and RYAN, Circuit Judges, and FEIKENS, Senior District Judge. ^*

RYAN, Circuit Judge.

This is a trademark infringement action brought pursuant to the Lanham Act, 15 U.S.C. § 1051, et seq. The principal issue is whether the district court correctly concluded that plaintiff Ferrari enjoyed unregistered trademark protection in the exterior shape and appearance of two of its automobiles and, if so, whether defendant Roberts' replicas of Ferrari's designs infringed that protection, in violation of section 43(a) of the Lanham Act. More narrowly focused, the issues are:

--Whether Ferrari's automobile designs have acquired secondary meaning;

--Whether there is a likelihood of confusion between Ferrari's cars and Roberts' replicas;

--Whether the appropriated features of Ferrari's designs are nonfunctional; and

--Whether the injunction granted by the district court is excessively broad.

We must also decide whether the district court, 739 F.Supp. 1138, properly rejected Roberts' request for a jury trial.

We hold that the district court properly decided all of the issues and, therefore, we shall affirm.

I. The Facts

Ferrari is the world famous designer and manufacturer of racing automobiles and upscale sports cars. Between 1969 and 1973, Ferrari produced the 365 GTB/4 Daytona. Because Ferrari intentionally limits production of its cars in order to create an image of exclusivity, only 1400 Daytonas were built; of these, only 100 were originally built as Spyders, soft-top convertibles. Daytona Spyders currently sell for one to two million dollars. Although Ferrari no longer makes Daytona Spyders, they have continuously produced mechanical parts and body panels, and provided repair service for the cars.

Ferrari began producing a car called the Testarossa in 1984. To date, Ferrari has produced approximately 5000 Testarossas. Production of these cars is also intentionally limited to preserve exclusivity: the entire anticipated production is sold out for the next several years and the waiting period to purchase a Testarossa is approximately five years. A new Testarossa sells for approximately $230,000.

Roberts is engaged in a number of business ventures related to the automobile industry. One enterprise is the manufacture of fiberglass kits that replicate the exterior features of Ferrari's Daytona Spyder and Testarossa automobiles. Roberts' copies are called the Miami Spyder and the Miami Coupe, respectively. The kit is a one-piece body shell molded from reinforced fiberglass. It is usually bolted onto the undercarriage of another automobile such as a Chevrolet Corvette or a Pontiac Fiero, called the donor car. Roberts marketed the Miami Spyder primarily through advertising in kit-car magazines. Most of the replicas were sold as kits for about $8,500, although a fully accessorized "turnkey" version was available for about $50,000.

At the time of trial, Roberts had not yet completed a kit-car version of the Miami Coupe, the replica of Ferrari's Testarossa, although he already has two orders for them. He originally built the Miami Coupe for the producers of the television program "Miami Vice" to be used as a stunt car in place of the more expensive Ferrari Testarossa.

The district court found, and it is not disputed, that Ferrari's automobiles and Roberts' replicas are virtually identical in appearance.

Ferrari brought suit against Roberts in March 1988 alleging trademark infringement, in violation of section 43(a) of the Lanham Act, and obtained a preliminary injunction enjoining Roberts from manufacturing the replica cars. The injunction was later amended to permit Roberts to recommence production of the two models.

Five months later, Roberts filed a voluntary petition in bankruptcy. Despite the Chapter 11 proceedings, the bankruptcy court, in a carefully limited order, lifted the automatic stay and permitted Ferrari to continue to prosecute this action. Prior to trial, the district court denied Roberts' request for a jury, and the case was tried to the court resulting in a verdict for Ferrari and a permanent injunction enjoining Roberts from producing the Miami Spyder and the Miami Coupe.

II.

Section 43(a) of the Lanham Act creates a civil cause of action for trademark infringement. In relevant part, section 43(a) provides:

Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which--

(1) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person....

....

shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.

The protection against infringement provided by section 43(a) is not limited to "goods, services or commercial activities" protected by registered trademarks. It extends as well, in certain circumstances, to the unregistered "trade dress" of an article. "Trade dress" refers to "the image and overall appearance of a product." Allied Mktg. Group, Inc. v. CDL Mktg., Inc., 878 F.2d 806, 812 (5th Cir.1989). It embodies "that arrangement of identifying characteristics or decorations connected with a product, whether by packaging or otherwise, intended to make the source of the product distinguishable from another and to promote its sale." Mr. Gasket Co. v. Travis, 35 Ohio App.2d 65, 72 n. 13, 299 N.E.2d 906, 912 n. 13 (1973).

Ferrari's Lanham Act claim in this case is a "trade dress" claim. Ferrari charges, and the district court found, that the unique and distinctive exterior shape and design of the Daytona Spyder and the Testarossa are protected trade dress which Roberts has infringed by copying them and marketing his replicas.

Roberts asserts that there has been no infringement under section 43(a) for a number of reasons: (1) the design of Ferrari's vehicles are protected only under design patent law, see 35 U.S.C. § 171, and not the Lanham Act; (2) there is no actionable likelihood of confusion between Ferrari's vehicles and Roberts' replicas at the point of sale; and (3) the "aesthetic functionality doctrine" precludes recovery.

We shall take up each argument in turn.

III.

To prove a violation of section 43(a), Ferrari's burden is to show, by a preponderance of the evidence:

1) that the trade dress of Ferrari's vehicles has acquired a "secondary meaning,"

2) that there is a likelihood of confusion based on the similarity of the exterior shape and design of Ferrari's vehicles and Roberts' replicas, and

3) that the appropriated features of Ferrari's trade dress are primarily nonfunctional.

See Kwik-Site Corp. v. Clear View Mfg. Co., Inc., 758 F.2d 167, 178 (6th Cir.1985).

A. Secondary Meaning

[4, 5] To acquire a secondary meaning in the minds of the buying public, an article of merchandise when shown to a prospective customer must prompt the affirmation, "That is the article I want because I know its source," and not the negative inquiry as to "Who makes that article?" In other words, the article must proclaim its identification with its source, and not simply stimulate inquiry about it.

West Point Mfg. Co. v. Detroit Stamping Co., 222 F.2d 581, 595 (6th Cir.) (citation omitted), cert. denied, 350 U.S. 840, 76 S.Ct. 80, 100 L.Ed. 749 (1955). Arguably, secondary meaning in this case can be presumed from Roberts' admissions that he intentionally copied Ferrari's designs. Roberts told Vivian Bumgardner, an investigator who recorded her conversations with Roberts, that "we put this whole body right on it and it looks just like a real car, I mean they can't tell by looking.... We build and sell the same car, reproduce it." The intent to copy was also shown by Roberts' use of the distinctive Ferrari prancing horse logo on the front parking lights of the Daytona Spyder and in advertising brochures. The original Miami Coupe brochure even copied the Ferrari name by referring to the Roberts' car as the "Miami Testarossa." The evidence of intentional copying shows the strong secondary meaning of the Ferrari designs because "[t]here is no logical reason for the precise copying save an attempt to realize upon a secondary meaning that is in existence." Audio Fidelity, Inc. v. High Fidelity Recordings, Inc., 283 F.2d 551, 558 (9th Cir.1960).

Ferrari, however, need not rely on a presumption of secondary meaning because the evidence at trial showed that the exterior design of Ferrari's vehicles enjoyed strong secondary meaning. Lawrence Crane, Art Director of Automobile magazine, testified that the shape of a Ferrari "says Ferrari to the general populous (sic)" and that "because it's so instantly recognizable ... we've used even just portions of Ferraris, the Testarossa, for instance, and people recognize it, and our sales are changed." William Moore, Editor of Kit Car Illustrated, and a witness for Roberts conceded that car replica manufacturers frequently copy Ferraris...