Merchant & Evans, Inc. v. Roosevelt Bldg. Products Co., Inc.

Decision Date05 June 1992
Docket NumberNo. 91-1773,91-1773
Citation963 F.2d 628
CourtU.S. Court of Appeals — Third Circuit

Robert W. Hayes, (argued), Cozen & O'Connor, Philadelphia, Pa., for appellant.

Arthur H. Seidel, (argued), Nancy Rubner-Frandsen, Seidel, Gonda, Lavorgna & Monaco, Steven R. Waxman, Fox, Rothschild, O'Brien & Frankel, Philadelphia, Pa., for appellee.

Before: SLOVITER, Chief Judge, SCIRICA and NYGAARD, Circuit Judges.


SCIRICA, Circuit Judge.

In this trademark infringement action, Roosevelt Building Products appeals from the district court's entry of a preliminary injunction in favor of Merchant & Evans, Inc. Because we believe Merchant has not made the requisite showing of a reasonable likelihood of success on the merits, we will vacate and remand.


Merchant and Roosevelt both manufacture and sell aluminum roofing panels. Merchant brought this action as a result of Roosevelt's copying of Merchant's long-length, concealed fastener metal roofing system (also known as a "standing seam" metal roofing system), which is marketed under the registered trademark "Zip-Rib."

The standing seam metal roof was introduced in the 1960's. It consisted of flat panels having raised edges, which were affixed to the building without penetrating the exposed panel surfaces. The standing seam roof was more durable and more watertight than its predecessors.

On April 4, 1967, Kaiser Aluminum Company obtained a patent for a new "structural" standing seam roofing product, which, unlike previous standing seam roofs, could be applied directly over steel and did not require plywood solid decking. The panels had two and one-half inch standing seams which could be joined together without penetrating the panels or utilizing exposed fasteners; the edges of the seams were crimped together by a special automatic "zippering" tool, which itself was patented. These improvements were significant in that they increased watertightness by obviating the need for holes in the panels. By eliminating exposed fasteners, the invention also increased durability by allowing the panels to move across, as well as up and down, the roof.

The statement of claim that accompanied Kaiser's patent application described the innovation as follows:

Each flange 15 has at its upper end a cylindrical tubular bead 17. Each flange 16, in the assembled ceiling structure, has a tubular socket sleeve 18 of cylindrical or equivalent nestable configuration slightly larger in diameter than the bead 17, and with its inner surface being in close-coupled contact with the outer surface of bead 17. The coupling is sufficiently close to be substantially watertight.

This design, as used in Merchant's roofing system, has come to be known as the "bulb & hook" configuration. The name derives from the appearance of the seam's profile after it has been "zippered" together.

Kaiser marketed its new roofing system under the name "Zip-Rib," and obtained a trademark upon that name. It manufactured and marketed the product through its wholly owned subsidiary, Zip-Rib, Inc.

In 1981, Merchant & Evans Company purchased Zip-Rib, Inc. It operated Zip-Rib, Inc. as a separate company until 1987, when Merchant & Evans Company and Zip-Rib, Inc. went into bankruptcy. At that time, James Buck, a former owner of Merchant & Evans Company, formed Merchant & Evans, Inc., and purchased Zip-Rib, Inc. Merchant has manufactured and marketed the Zip-Rib roofing system since 1987.

Roosevelt was founded in 1984 by Roosevelt Morin; at that time, it was known as Cold Form Industries. In 1987, that company began manufacturing metal wall and roof panels. In June 1990, Cold Form Industries changed its name to Roosevelt Building Products, 1 and adopted a logo containing the word "Roosevelt" above the "tail" of a stylized letter "Z," with "Building Products" below the tail of the "Z."

In 1987, Morin hired Kenneth Parish to be Roosevelt's Vice President of Engineering. Parish and Morin had previously worked together over a twenty-five year period at Morin's former company, but when Morin sold his ownership interest in that company, Parish went to work for Zip-Rib, Inc. Buck fired Parish on the day Merchant purchased Zip-Rib, and Morin hired Parish to work at Roosevelt.

Roosevelt entered the standing seam roofing market in 1988. At that time, Roosevelt manufactured and marketed a non-structural standing seam roofing panel. Prior to Roosevelt's entry into the structural standing seam roofing market, Morin and Parish debated what type of seam to use. Morin favored a trapezoidal seam (the only type of structural standing seam other than Zip-Rib's cylindrical seam currently on the market), whereas Parish had designed his own configuration. Morin asked Parish what was the best-engineered product then on the market, and Parish named Zip-Rib. In August 1990, Morin decided to use Zip-Rib's cylindrical configuration for Roosevelt's structural standing seam roofing panels. Roosevelt admits that it had the Zip-Rib standing seam roofing panel "reverse engineered," that it intentionally copied that product, and that the Roosevelt product and Zip-Rib are virtually identical. 2

In December 1990, Parish designed and prepared a brochure that was used in connection with the marketing of Roosevelt's roofing system. The brochure employed a drawing similar to that on Merchant's Design Guide, Edition 3. It also employed a side-view diagram. The roofing system depicted in the brochure is not Merchant's roofing system (which was not yet in production when the brochure was put together), but appears similar to a Zip-Rib roof.

In this trademark infringement action, Merchant alleges: (1) false designation of origin in violation of § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (1988); (2) trademark infringement in violation of § 32(1) of the Lanham Act, 15 U.S.C. § 1114(1) (1988); (3) improper use of trade secrets; and (4) non-privileged imitation in violation of New Jersey law. Merchant sought a preliminary injunction restraining Roosevelt from using the "bulb & hook" cylindrical standing seam in its metal roofing products; from using depictions of Merchant's products in its advertising; and from using its corporate logo, which allegedly infringed Merchant's "Zip-Rib" logo.

The district court held that: (1) Merchant was likely to succeed on the merits of its claims; (2) Merchant would suffer irreparable harm in the absence of a preliminary injunction; (3) the harm to Merchant outweighed any harm to Roosevelt; and (4) the public interest would be served by entry of a preliminary injunction. Accordingly, the district court granted Merchant's motion for preliminary injunction.


The district court had jurisdiction under 28 U.S.C. § 1331. We have jurisdiction under 28 U.S.C. § 1292(a)(1).

In ruling on a motion for a preliminary injunction, the district court must consider: (1) the likelihood that the plaintiff will prevail on the merits at final hearing; (2) the extent to which the plaintiff is being irreparably harmed by the conduct complained of; (3) the extent to which the defendant will suffer irreparable harm if the preliminary injunction is issued; and (4) the public interest. Opticians Ass'n v. Independent Opticians, 920 F.2d 187, 191-92 (3d Cir.1990). The injunction should issue only if the plaintiff produces evidence sufficient to convince the district court that all four factors favor preliminary relief. Id. at 192.

The decision whether to enter a preliminary injunction is committed to the sound discretion of the trial court, and will be reversed "only if the court abused its discretion, committed an obvious error in applying the law, or made a serious mistake in considering the proof." Loretangeli v. Critelli, 853 F.2d 186, 193 (3d Cir.1988). However, "[a]lthough terms of an injunction are normally reviewed for abuse of discretion, any determination that is a prerequisite to the issuance of an injunction ... is reviewed according to the standard applicable to that particular determination." John F. Harkins Co. v. Waldinger Corp., 796 F.2d 657, 658 (3d Cir.1986), cert. denied sub nom. TWC Holdings, Inc. v. Waldinger Corp., 479 U.S. 1059, 107 S.Ct. 939, 93 L.Ed.2d 989 (1987).

A. § 43(a) Claim

The district court held that the "bulb and hook" profile of the Zip-Rib roofing seam was "trade dress" protectible under § 43(a) of the Lanham Act. Although " 'trade dress' has traditionally referred to the packaging or labeling of a product," Stormy Clime Ltd. v. Progroup, Inc., 809 F.2d 971, 974 (2d Cir.1987), " 'trade dress' in its more modern sense [may] refer to the appearance of the [product] itself." American Greetings Corp. v. Dan-Dee Imports, Inc., 807 F.2d 1136, 1140 (3d Cir.1986) (quoting Ideal Toy Corp. v. Plawner Toy Mfg. Co., 685 F.2d 78, 80 n. 2 (3d Cir.1982)). In order to qualify for trade dress protection, the plaintiff must show:

(1) that the imitated feature is non-functional, (2) that the imitated feature has acquired a "secondary meaning," and (3) that consumers are likely to confuse the source of the plaintiff's product with that of the defendant's product.

American Home Prods. Corp. v. Bar Lab., Inc., 834 F.2d 368, 370 (3d Cir.1987) (citing American Greetings Corp., 807 F.2d at 1141).

In this case, the crucial issue is functionality. The district court's findings of secondary meaning and likelihood of confusion appear to be logical results of the seventeen-year monopoly Zip-Rib enjoyed under its utility patent. 3 Although courts are split as to who bears the burden of proof on the issue of functionality, this court places the burden on the plaintiff to prove non-functionality. American Greetings Corp., 807 F.2d at 1141. "Proof...

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