Fotomat Corp. v. Cochran

• Decision Date: 12 April 1977
• Docket Number: No. 75-196-C5.,75-196-C5.
• Parties: FOTOMAT CORPORATION, Plaintiff, v. Steven COCHRAN, d/b/a Quick Stop Photo, Defendant.
• Court: U.S. District Court — District of Kansas

437 F. Supp. 1231

FOTOMAT CORPORATION, Plaintiff, v. Steven COCHRAN, d/b/a Quick Stop Photo, Defendant.

No. 75-196-C5.

United States District Court, D. Kansas.

April 12, 1977.

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Welton B. Whann, San Diego, Cal., Michael A. Kaplan, La Jolla, Cal., John E. Wilkinson, Topeka, Kan., for plaintiff.

David R. Gilman, Overland Park, Kan., for defendant.

DECISION OF THE COURT

ROGERS, District Judge.

This is an action for trademark infringement and unfair competition arising from defendant's use of a building design in the provision of drive-in photographic development services which allegedly infringes plaintiff's trademarked building design.

Defendant counterclaimed, arguing that plaintiff's federal registered trademark should be cancelled as unprotectable on non-functionality groups. At the end of the defendant's evidence, we ruled against the counterclaim as a matter of law, concluding that defendant had not met its burden of proof in challenging a presumptively valid federal trademark registration. We felt the evidence clearly showed that plaintiff's trademark was distinctive and arbitrary. The shape of plaintiff's building design with specific emphasis as to the shape of the roof, was not dictated by the function it was to serve. Nor would enjoining others from using the building design inhibit competition in any way, for defendant's own expert testified that many other designs would provide all the "functional" benefits which defendant claimed inhered in this particular design. While this particular design did shelter the plaintiff's personnel and stock from the elements, it did so no better than a myriad of other building designs. Therefore, while the design had some small element of functionality, it was not "in essence" functional. An analogy can be drawn from this wording in Best Lock Corporation v. Schlage Lock Company, 413 F.2d 1195, 1199, 56 CCPA 1472 (1969):

. . . some articles, made in a purely arbitrary configuration, (e. g., the wine bottle considered in Mogen David) Application of Mogen David Wine Corporation, 328 F.2d 925, 51 CCPA 1260 (1964) may perform a function, holding wine, which could equally well be served by containers of many other shapes, and in such circumstances the incidental function should not by itself preclude trademark registrability if the other conditions precedent are present.

See also Time Mechanisms, Inc. v. Qonaar Corp., 422 F.Supp. 905, 913-914 (D.N.J. 1976).

We realize that Judge Gerry has reached a contrary conclusion in Fotomat Corporation v. Photo Drive-Thru, Inc., 425 F.Supp. 693 (D.N.J.1977). Judge Gerry concluded that the Fotomat building was functional and stated that he had received no evidence that (1) linked confusion to any "similarity in the aspects of the building designs which are distinctive for federal trademark purposes" or (2) confusion was design-related, rather than "caused by generalized similarities in the settings and products." We note (1) Judge Gerry was ruling only on a motion for a preliminary injunction; (2) plaintiff represents, and it appears from the opinion, that Judge Gerry received no specific evidence as to functionality; (3) we received evidence which did clearly link customer confusion to the shape of the roofs; and (4) we received evidence clearly indicating that the shape of the Fotomat roof is only incidentally functional, and is primarily distinctive and arbitrary. Had Judge Gerry been given the benefit of the evidence which we were presented, he might well have reached a contrary conclusion. In support of our conclusion, see Fotomat Corporation v. Houck, 166 U.S.P.Q. 271 (1970).

Thus, it is our conclusion that while the Fotomat building configuration does serve incidentally functional purposes, it is in essence arbitrary and distinctive and may constitute a valid service mark. We will discuss the issue of functionality no further in this opinion; we presume the validity of plaintiff's service mark.

Trial to the Court was held January 24 to 27, 1977. At the close of the evidence, the Court allowed both sides to file final briefs. These have recently been received. We state for the record that this case was well prepared and well tried. Counsel for both sides are to be commended.

Upon reflection, we have concluded that two evidentiary rulings made during the trial should be reversed. First, we have concluded that the testimony of Melville Owen should be disregarded as invading the province of the Court. Second, we have concluded that all passages from the book used by plaintiff to cross-examine defendant's witness Balderson should be disregarded for lack of a proper foundation. We have completely disregarded both of these sources of evidence.

FINDINGS OF FACT

The Plaintiff

1. Plaintiff Fotomat Corporation is a Delaware corporation with its principal offices in La Jolla, California, and Stamford, Connecticut. Fotomat has engaged in the retail drive-in photographic service and supply store business since 1967, when it purchased the rights to its service mark from its predecessor corporation which had begun operations in 1966.

2. Since opening its business, Fotomat has used continuously a building design which includes a small building with a rectangular base. The building is a free-standing kiosk which is normally situated in the parking lot of a shopping center. The base of the building is aluminum with doors and windows suitable for drive-up service. The most distinguishing feature of the design is the large, steeply-pitched roof which overhangs the base of the building. The roof can be variously described as an A-frame, a hip roof, or a gable roof. The Fotomat building is blue with a yellow, three-tiered roof. Fotomat constructs its own buildings and erects them with concrete planters at each end. Fotomat departs from its standard blue and yellow building only when local building regulations or shopping center leases require changes. The most frequent change required is that Fotomat place a brown thatched roof over its normal yellow, three-tiered roof. In practice, the "standard" Fotomat buildings are not identical, but are extremely similar. See Appendix # 1. The standard Fotomat building is pictured in the left hand column; defendant's allegedly infringing stores are represented in the other two columns

3. A slight change in the design of the Fotomat store occurred around 1972 when the word "FOTOMAT" was moved from the ends to the sides of the kiosks, and the size of the letters was increased from about 7 inches to about 11 inches.

4. On April 13, 1971, plaintiff's service mark, consisting of a black and white sketch of its building design, was registered on the Principal Register of the United

States Patent and Trademark Office. See Appendix # 2

5. On September 5, 1972, plaintiff's building design with color and the word "Fotomat" was registered on the Principal Register of the United States Patent and Trademark Office. See Appendix # 3

6. On October 22, 1968, Fotomat registered, with the State of Kansas Service Mark Registration, its building design without color and its building design with color and the word "Fotomat".

7. By October 31, 1976, there were over 2600 Fotomat stores embodying the Fotomat building design in operation in 37 of the United States and Canada. In the last five years, Fotomat has done approximately $450 million worth of retail business.

8. On October 25, 1968, Fotomat expanded into Kansas by opening and operating a store embodying the service mark building design in Kansas City, Kansas.

9. Phil Chamberlain is the area manager for Fotomat, headquartered in Kansas City, Missouri. His area of responsibility includes metropolitan Kansas City and the surrounding areas, including Topeka. There are 53 stores in Chamberlain's area. All 53 utilize the standard shape of the Fotomat building design. Six of the buildings have a changed roof composition or color because of housing and building regulations or because of lease restrictions. The remaining 47 buildings are the standard blue-and-yellow color and standard design.

10. In September, 1974, Fotomat opened four stores in Topeka, Kansas. In May, 1976, Fotomat opened two more stores in Topeka. All six of these stores utilize the standard blue-and-yellow Fotomat building.

11. Plaintiff has established a reputation in Lawrence, Kansas, even though it has no shops presently open there. Fotomat is reasonably likely to expand its business into Lawrence in the future. Fotomat has investigated sites and attempted to arrange leases in Lawrence, Kansas. Mr. Chamberlain has examined several places in Lawrence as possible sites for future Fotomat stores. However, plaintiff has not attempted to negotiate any leases since the summer of 1976.

12. In the past six years, Fotomat has spent approximately $18 million for advertising. All television advertising includes the prominent display of the standard blue-and-yellow Fotomat building. All printed advertising in magazines and newspapers features the Fotomat building design. Until a few years ago, all Fotomat radio advertising described the Fotomat building design, referring the potential customer to the "little blue building with the big yellow roof." Fotomat also displays its building design on processing bags, film boxes, flash cube boxes, merchandising bags, processing envelopes, delivery trucks, letterheads, business cards, checks, invoices, purchase orders, coupons, fliers, and the like. See Appendix # 4 for example of Fotomat film envelope.

13. Significant amounts of Fotomat's advertising have been done through Kansas City media that reach Lawrence and Topeka. In the last four years, Fotomat has spent approximately $100,000 on television advertising in the Kansas City television stations. Lawrence is within the ADI area of dominant influence of the Kansas City television stations. These stations all reach Topeka,...