Freixenet, S.A. v. Admiral Wine & Liquor Co.

• Decision Date: 28 March 1984
• Docket Number: Nos. 83-5227,83-5317,s. 83-5227
• Citation: 731 F.2d 148
• Parties: FREIXENET, S.A. and Freixenet USA, Inc., Appellants v. ADMIRAL WINE & LIQUOR CO. d/b/a Admiral-Cattani Wines, Trentacoste Bros. Inc. and Canals & Nubiola, S.A.
• Court: U.S. Court of Appeals — Third Circuit

Page 148

731 F.2d 148

222 U.S.P.Q. 770

FREIXENET, S.A. and Freixenet USA, Inc., Appellants v. ADMIRAL WINE & LIQUOR CO. d/b/a Admiral-Cattani Wines Trentacoste Bros. Inc. and Canals & Nubiola, S.A.

Nos. 83-5227, 83-5317.

United States Court of Appeals Third Circuit.

Argued Jan. 24, 1984.

Decided March 28, 1984.

Stevan J. Bosses (Argued), Edward E. Vassallo, Claire A. Koegler, Fitzpatrick, Cella, Harper & Scinto, New York City, for appellants.

Maxim H. Waldbaum (Argued), Ethan Horwitz, Adda C. Gogoris, Darby & Darby, P.C., New York City, Arthur D. Grossman, Fox & Fox, Newark, N.J., for appellee, Canals & Nubiola, S.A.

Before GIBBONS and BECKER, Circuit Judges and ATKINS, District Judge. ^*

OPINION OF THE COURT

GIBBONS, Circuit Judge:

Freixenet, S.A. and Freixenet U.S.A., Inc. (Freixenet) appeal from two orders of the District Court in Freixenet's suit against Canals & Nubiola, S.A. (C & N) and others. ¹ The first order denied a request for a preliminary injunction against C & N's alleged trade dress infringement. The second granted C & N's request for a partial summary judgment on Freixenet's rights to the use of the color black in its wine bottles. We affirm the order denying a preliminary injunction but dismiss the appeal from the order granting partial summary judgment.

I. The Facts and the Parties

Freixenet, S.A. manufactures a variety of Spanish wines. Freixenet U.S.A., Inc., a wholly-owned domestic subsidiary, imports those wines for distribution in the American market. Freixenet has been commercially active in this country since 1970. Its most popular wine to date has been a sparkling wine known as "Freixenet Cordon Negro." Since its introduction in 1977, more than 2.5 million bottles of "Freixenet Cordon Negro" have been sold.

One of the striking features of "Freixenet Cordon Negro" is the design of its trade dress. While the bottle is of the standard champagne shape, its color is a frosted or matte black. The foil covering the cork is black, as is the background color on the labels. There are two labels on the bottle. The top label is a chevron thinly bordered in gold, with the Freixenet seal in the middle and the Freixenet name on the sides. The main label is in an unbordered black. "Freixenet" and "Cordon Negro" are prominently displayed in buffed gold lettering, the former in an elaborate script. The label identifies the wine as "methode champenoise" and "fermented in this bottle." ² There is also a gold seal on the top of the bottle. Overall, "Freixenet" appears five times on the face of the bottle--once on top, twice on the top label, once on the main label, and once on the punt.

C & N is also a producer of Spanish wine. C & N has packaged Spanish sparkling wine in frosted black bottles since 1980. C & N's bottle appears to be virtually the same as Freixenet's but the labels differ in a number of respects. The top label (or "neck label") is not a chevron, but a band, which appears to wrap completely around the neck of the bottle. The label is bordered with a thick shiny gold line. Imprinted on the label is the French designation "Vin Brut." Halfway down the bottle a second label runs diagonally from left to right. Between thick gold borders it reads "Imported Sparkling Wine." The main label appears to be a third smaller than Freixenet's. The label has a circular gold seal with the C & N logo in the background, and thick gold borders. The lettering is white, and the wine is clearly identified as "Granvas." The background is black.

C & N argues that it sells its wine in a frosted black bottle because of "the feelings and impressions" of elegance and sophistication that black evokes in a purchaser of liquor." Freixenet charges that C & N uses the frosted black bottle to take advantage of Freixenet's success and to confuse customers into buying C & N wine.

II. Proceedings Below

Freixenet's motion for a preliminary injunction alleged that the C & N trade dress violated its rights under section 43(a) of the Lanham Act, 15 U.S.C. Sec. 1125(a), and under the New Jersey common law of unfair competition. ³ On February 18, 1983, the district court denied Freixenet's motion. The court held that Freixenet had not demonstrated a likelihood of success on the merits because the "labeling of the two bottles is so dissimilar as to distinguish the respective brands" in the minds of the consuming public. App. at 232a. The court also ruled that Freixenet could not establish secondary meaning in its trade dress because to do so would give it "exclusive rights to the marketing of Spanish sparkling wines in black bottles of standard shape." App. at 230a. ⁴

On April 18, 1983, the court granted the defendants' motion for a partial summary judgment that "as a matter of law, no party, including plaintiffs, may have a monopoly on a color including the color black ...." App. at 238a. Freixenet has appealed both orders.

III. Preliminary Injunction

Our review of the denial of a preliminary injunction is narrow. We cannot reverse unless the trial court has committed an obvious error in applying the law or a serious mistake in considering the proof. SK & F Co. v. Premo Pharmaceutical Laboratories, 625 F.2d 1055, 1066 (3d Cir.1980); A.O. Smith Corp. v. FTC, 530 F.2d 515, 525 (3d Cir.1976). To obtain a preliminary injunction, a party must demonstrate a reasonable likelihood of eventual success on the merits as well as a probability of irreparable injury if relief is not granted. The trial court must also consider the likely consequences of the decision on other parties and the overall public interest. See generally Kershner v. Mazurkiewicz, 670 F.2d 440, 443 (3d Cir.1982); Eli Lilly & Co. v. Premo Pharmaceutical Laboratories, Inc., 630 F.2d 120, 136 (3d Cir.), cert. denied, 449 U.S. 1014, 101 S.Ct. 573, 66 L.Ed.2d 473 (1980); Constructors Ass'n of Western Pa. v. Kreps, 573 F.2d 811, 815 (3d Cir.1978).

A. Likelihood of Success on Merits

Freixenet alleges that C & N's conduct violates both the New Jersey common law of unfair competition and Sec. 43(a) of the Lanham Act, 15 U.S.C. Sec. 1125(a). ⁵ A finding that C & N infringed a protected trade dress requires a demonstration that Cordon Negro's trade dress was non-functional, that it had acquired secondary meaning, and that it was likely to be confused with C & N's product by members of the consuming public. The district court ruled that a frosted black champagne bottle was not a functional feature, and since C & N prevailed on other grounds it has not appealed. See Keene Corp. v. Paraflex Industries, Inc., 653 F.2d 822, 824 (3d Cir.1981); Ives Labs, Inc. v. Darby Drug Co., 601 F.2d 631, 642 (2d Cir.1979), rev'd, 456 U.S. 844, 102 S.Ct. 2182, 72 L.Ed.2d 606 (1982); Mogen David Wine Corp., 328 F.2d 925 (C.C.P.A.1964); Le Sportsac, Inc. v. Dockside Research, Inc., 478 F.Supp. 602 (S.D.N.Y.1979).

The dispositive issue is the possibility of consumer confusion as to source. Regardless of how much secondary meaning it possesses, a product's trade dress will not be protected from an imitator that is sufficiently different in its features to avoid such confusion. See, e.g., Le Sportsac, Inc. v. Dockside Research, Inc., 478 F.Supp. 602 (S.D.N.Y.1979). In the instant case the district court found that the labels of plaintiffs' and defendants' sparkling wine bottles were so dissimilar that consumers were not likely to confuse the two. Freixenet argues that the district court "never properly addressed the issue ...." (Appellants' br. at 32). The court's opinion denying the preliminary injunction discloses otherwise:

Plaintiffs have ... failed to adequately demonstrate that wine customers will confusedly buy defendants' product in lieu of its own. Plaintiffs bluntly submit that "likelihood of confusion is independently established by a simple visual comparison of the Canals & Nubiola frosted black bottle with the FREIXENET frosted black bottle ...." I find that a simple visual comparison "establishes quite the opposite: the labeling of the two bottles is so dissimilar as to distinguish the respective brands.

In addition, plaintiffs' contention that some wine buyers fail to even glance at labels, but merely ask liquor store owners to find them the "wine in the black frosted bottle" is insufficiently substantiated (especially in view of defendants' conflicting affidavits) to support a finding of irreparable harm in the absence of a preliminary injunction.

App. at 231a. Thus the court clearly held that the labels of the two bottles were so dissimilar as to rule out any possibility of confusion. Our own analysis of the evidence in this record leads us to conclude that the court's finding is not clearly erroneous.

Freixenet also argues that the district court applied the wrong legal standard. It contends that six separate criteria should have been considered, including intent of the defendant, similarity of the products, retail outlets and purchasers, and evidence of actual confusion (Appellants' br. at 34-35). All these elements are helpful in arriving at a finding as to the likelihood of confusion. ⁶ Nevertheless, it should not be necessary to consider all six when some are dispositive. See, e.g., Le Sportsac, Inc. v. Dockside Research, supra, 478 F.Supp. at 609. In the instant case the district court found (for the limited purposes of a preliminary injunction motion) that the differences in the labels were too great to support a finding of likelihood of confusion. It also considered Freixenet's evidence of actual confusion and found it insufficiently credible to overcome C & N's conflicting affidavits. ⁷ The district court's finding that the appellants' evidence did not demonstrate probability of consumer confusion is not clearly erroneous and its conclusion that there was consequently no likelihood of success on the merits is supported on this record. This is a conclusion sufficient to sustain the court's denial of a preliminary injunction. We express no opinion as to...