Nora Beverages Inc. v. Perrier Group of Am.

• Decision Date: 01 August 2000
• Docket Number: PLAINTIFF-APPELLANT,DEFENDANTS-APPELLEES,Docket No. 00-7709
• Parties: (2nd Cir. 2001) NORA BEVERAGES, INC.,, v. THE PERRIER GROUP OF AMERICA, INC., POLAND SPRING CORPORATION, ZEPHYRHILLS CORPORATION, ARROWHEAD WATER CORPORATION, AND CALISTOGA MINERAL WATER COMPANY, INC.,
• Court: U.S. Court of Appeals — Second Circuit

Page 114

269 F.3d 114 (2nd Cir. 2001)

NORA BEVERAGES, INC., PLAINTIFF-APPELLANT, v. THE PERRIER GROUP OF AMERICA, INC., POLAND SPRING CORPORATION, ZEPHYRHILLS CORPORATION, ARROWHEAD WATER CORPORATION, AND CALISTOGA MINERAL WATER COMPANY, INC., DEFENDANTS-APPELLEES.

Docket No. 00-7709

August Term, 2000

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

Argued: March 29, 2001

Decided: August 23, 2001

Bottler of spring water brought action against competitors, alleging various claims including trade dress infringement and breach of contract. The United States District Court for the District of Connecticut, Ellen Bree Burns, Judge, granted summary judgment for competitors and bottler appealed. The Court of Appeals partially affirmed, partially reversed, partially vacated, and remanded. On remand, the district court granted summary judgment for appellee on the trade dress infringement claim and entered a verdict for appellee on the contract claim. Affirmed. [Copyrighted Material Omitted] Howard G. Slavit, Washington, DC (Slavit & Gill, P.C., of counsel), for Plaintiff-Appellant.

Jeffrey M. Garrod, Roseland, NJ (Linda B. Lewinter, Craig A. Ollenschleger and Orloff, Lowenbach, Stifelman & Siegel, P.A., of counsel), for Defendants-Appellees.

Before Oakes and Straub, Circuit Judges, and Rakoff, District Judge.^*

Oakes, Senior Circuit Judge

In this trade dress infringement case under § 43(a) of the Lanham Trademark Act ("Lanham Act"), 15 U.S.C. 1125(a) (2000), Nora Beverages, Inc. ("Nora") appeals from a summary judgment order granted by the United States District Court for the District of Connecticut, Ellen Bree Burns, Judge. Nora also appeals the verdict against it on its breach of contract claim. Because we agree with the district court that Nora failed to raise a genuine issue of material fact regarding likelihood of confusion and because we believe that the court's evidentiary rulings were not manifestly erroneous, we affirm.

BACKGROUND

This ten-year dispute involves the trade dress of 1.5-liter plastic bottles used for packaging spring water. Because this case comes before our Court for a second time, we assume familiarity with the facts set forth in our previous opinion, and we address only those facts that are necessary and unique to this appeal. See Nora Beverages, Inc. v. Perrier Group of Am., Inc. ("Nora Beverages I"), 164 F.3d 736 (2d Cir. 1998).

Before going into bankruptcy, Nora was a Canadian company engaged in the business of bottling spring water, which it marketed and sold under the brand name NAYA. Since beginning its operation in 1986, Nora bottled its water in 1.5-liter clear, ribbed plastic bottles made from polyethylene terephthalate ("PET"). PET is a clear, strong and environmentally-friendly resin that was developed in the early 1970s by Dupont and is now widely used among bottled drink manufacturers. The ribbed bottles are endowed with a "waist" that creates what Nora refers to as a "bottle upon bottle" effect.¹ A dark blue label with the block letters NAYA outlined in white is wrapped around the upper third of the bottle.

The Perrier Group of America, Inc. ("PGA") is also engaged in the business of bottling water. Through its subsidiaries Poland Spring, Zephyrhills, Arrowhead and Calistoga, PGA sells various regional brands of bottled water throughout the United States. Although these subsidiaries sold bottled water prior to Nora's entry into the market, they did not sell 1.5-liter convenience-size bottles until afterwards.

Wishing to enter the 1.5-liter bottle market, PGA negotiated with two bottle manufacturers to purchase PET bottles for its spring water. After PGA's chosen manufacturer was unable to perform the work, PGA entered into contract negotiations with Nora for the supply of plastic bottles. These negotiations fell through, and PGA ultimately purchased its bottles from another producer.

Nora filed a complaint against PGA on December 3, 1991, alleging, inter alia, trade dress infringement and breach of contract. On December 10, 1997, the district court granted summary judgment and dismissed Nora's trade dress and state law claims against PGA and other defendants.

On December 30, 1998, this Court partially vacated and remanded for further findings the district court's rulings on the trade dress claim and on one related state statutory claim. We remanded in order to allow the district court to conduct a full analysis of the Polaroid test used to determine likelihood of confusion. See Nora Beverages I, 164 F.3d at 745-46.

As instructed, the district court on remand applied the Polaroid factors. The court found that there were no genuine issues of material fact and that no reasonable juror could find that there was a likelihood of confusion between Nora's bottle and the PGA brand bottles. Accordingly, on October 14, 1999, the district court granted PGA summary judgment on the trade dress infringement claim. On May 12, 2000, the court entered a judgment on jury verdict in favor of PGA on the contract claim.

On appeal, Nora argues (1) that the district court improperly dismissed its claim for trade dress infringement (a) by reconsidering the issue of distinctiveness and finding Nora's bottle to be generic, (b) by applying the wrong legal standard for "likelihood of confusion," and (c) by considering issues of arguable fact in applying the Polaroid factors; and (2) that the jury verdict in PGA's favor was predicated on erroneous evidentiary rulings.

DISCUSSION

We review de novo grants of summary judgment. See Nora Beverages I, 164 F.3d at 742. Summary judgment is appropriate when there are no genuine issues of material fact and when, viewing the evidence in a light most favorable to the non-moving party, no reasonable trier of fact could disagree as to the outcome of the case. See Nabisco, Inc. v. Warner-Lambert Co., 220 F.3d 43, 45 (2d Cir. 2000); Nora Beverages I, 164 F.3d at 742.

I. The Trade Dress Infringement Claim

Section 43(a) of the Lanham Act protects trade dress.² A product's trade dress encompasses the overall design and appearance that make the product identifiable to consumers. See Nora Beverages I, 164 F.3d at 743 (quoting Fun-Damental Too, Ltd. v. Gemmy Indus. Corp., 111 F.3d 993, 999 (2d Cir. 1997)). A product's trade dress is protected under the Lanham Act if it is not functional and if it is either inherently distinctive or has acquired secondary meaning in the marketplace. See Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 769 (1992).

Owning a protectable trade dress is not sufficient for a finding of trade dress infringement; in order to prevail on an infringement claim, a plaintiff must also prove that the allegedly infringing product is likely to confuse consumers as to its source or sponsorship. See id.; Nabisco, 220 F.3d at 45; Nora Beverages I, 164 F.3d at 743.

In this Circuit, likelihood of confusion is determined by the multi-factor test set out in Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492, 495 (2d Cir. 1961). The now-familiar list of Polaroid factors includes:

the strength of [the prior owner's] mark, the degree of similarity between the two marks, the proximity of the products, the likelihood that the prior owner will bridge the gap [between the two products], actual confusion, and the reciprocal of defendant's good faith in adopting its own mark, the quality of defendant's product, and the sophistication of the buyers.

Id.

The Polaroid analysis is not a mechanical measurement. See Bristol-Myers Squibb Co. v. McNeil-P.P.C., Inc., 973 F.2d 1033, 1042 (2d Cir. 1992). When conducting a Polaroid analysis, "a court should focus on the ultimate question of whether consumers are likely to be confused." Paddington Corp. v. Attiki Imps. & Distrib., Inc., 996 F.2d 577, 584 (2d Cir. 1993). In making this determination, a court looks to the totality of the product. See Bristol-Myers Squibb, 973 F.2d at 1042. Although no one factor is necessarily dispositive, any one factor may prove to be so. See Nabisco, 220 F.3d at 46 (finding dispositive on review of summary judgment the "similarity of marks" factor in Polaroid analysis).

It is important to keep in mind that "the Lanham Act must be construed in the light of a strong federal policy in favor of vigorously competitive markets[.]" Landscape Forms, Inc. v. Columbia Cascade Co. ("Landscape Forms II"), 113 F.3d 373, 379 (2d Cir. 1997). "When evaluating [trade dress] claims, courts must not lose sight of the underlying purpose of the Lanham Act, which is protecting consumers and manufacturers from deceptive representations of affiliation and origin." Id. at 375. As the Supreme Court recently noted, "[t]rade dress protection must subsist with the recognition that in many instances there is no prohibition against copying goods and products. In general, unless an intellectual property right such as a patent or copyright protects an item, it will be subject to copying." Traffix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23, 121 S.Ct. 1255, 1260 (2001).

A. Inherent Distinctiveness

In Nora Beverages I, we concluded that the district court improperly found on summary judgment that Nora's bottle was generic and not inherently distinctive. See 164 F.3d at 745. We based our conclusion in part on the fact that in making its determination, the court relied on stricken testimony that Evian had sold its spring water in the United States in 1.5-liter clear, ribbed PET bottles since 1986. See id.

On remand, the district court reconsidered the issue of distinctiveness and found that Nora's bottle was generic as early as 1989 because it was used, with minor variations, throughout the entire market of similar products.³ The court based its finding on newly-admissible testimony regarding Evian's sales and on evidence that prior to 1989, North Country, another competitor in the bottled spring water market, was selling its spring water in bottles that Nora had manufactured and sold to North...