Vuitton et fils S.A. v. J. Young Enterprises, Inc.

• Decision Date: 04 May 1981
• Docket Number: No. 80-5468,80-5468
• Citation: 644 F.2d 769
• Parties: , 212 U.S.P.Q. 85 VUITTON ET FILS S.A., Appellant, v. J. YOUNG ENTERPRISES, INC. et al., Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 769

644 F.2d 769

210 U.S.P.Q. 351, 212 U.S.P.Q. 85

VUITTON ET FILS S.A., Appellant, v. J. YOUNG ENTERPRISES, INC. et al., Appellees.

No. 80-5468.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Dec. 4, 1980.

Decided May 4, 1981.

J. Joseph Bainton, Reboul, MacMurray, Hewitt, Maynard & Kristol, New York City, for appellant.

David A. Golant, Romney, Schaap, Golant, Disner & Ashen, Beverly Hills, Cal., on brief; David S. Romney, Beverly Hills, Cal., argued, for appellees.

Appeal from the United States District Court for the Central District of California.

Before GIBSON, ^* Senior Circuit Judge, SNEED and TANG, Circuit Judges.

FLOYD R. GIBSON, Senior Circuit Judge.

The appellant, Vuitton et Fils, S.A. (appellant or Vuitton), in its complaint sought equitable and monetary relief for trademark infringement, false designation and description of origin, trademark dilution, and unfair competition. The district court granted summary judgment to defendants J. Young Enterprises, Inc., et al. (Young). The principal issue on appeal, aside from the propriety of summary judgment, is whether the fabric design which decorates luggage and related items of Vuitton is entitled to protection as a trademark or whether the design is "functional" and thus not entitled to protection. Vuitton raises several other issues regarding its claim for recovery of profits and attorneys' fees and urges that the district court committed plain error by granting summary judgment to defendants despite the existence of genuine issues of material fact. In addition, Vuitton has filed before this court a motion for an order to show cause why Young should not be cited for civil and criminal contempt for violation of an injunction originally issued by the district court while the case at bar was before it and reinstated by this court while the instant appeal was pending. Appellees aver that the design at issue is not properly protectable by trademark, not only because it is "functional," but also because it is a simulation of the fleur-de-lis, a symbol which appellees identify as an insignia of France.

Inasmuch as we conclude that the factual question of functionality was not adequately disposed of in the summary judgment rendered below, we reverse and remand for a trial on that issue. We also remand the motion to show cause, on the ground that the district court is in a better position than is this court to dispose of it.

I.

Vuitton, a French company, is owned and controlled by members of the Vuitton family. It is engaged in the sale and distribution of expensive luggage, handbags, and related items.

The instant action concerns the design which covers the canvas with which the goods are constructed. Most Vuitton merchandise is covered with dark brown, vinyl-impregnated canvas, bearing an arrangement of the initials "LV" superimposed one upon the other and surrounded by three floral symbols. The design is in a contrasting mustard color. Vuitton claims that the design used in its manufacture is widely recognized as the Vuitton trademark.

Young developed a line of merchandise marketed as "The Lorenzo Young Collection," decorated with a design remarkably similar to that used on Vuitton's merchandise. The Lorenzo Young collection was promoted by means of advertisements which compared that line to Vuitton's. The competing items appear to be identical in size, shape, and configuration, and almost identical in design and coloring, so that Young's merchandise can easily and readily be taken for that of Vuitton.

In January 1978, Vuitton's attorney wrote to Young and claimed that the design on Young's goods constituted an infringement of Vuitton's trademark. Vuitton's attorney demanded that Young discontinue production and distribution of the goods. Young urged that his use of similar product designs was sanctioned by law in that Vuitton's designs were not properly protectable by trademark. This suit followed.

II.

The complaint, filed December 19, 1978, sought equitable and monetary relief for trademark infringement, 15 U.S.C. § 1114, false designation of origin and false description of goods, 15 U.S.C. § 1125, trademark dilution, California Business and Professional Code § 14330, and unfair competition.

Prior to filing the complaint, counsel for Vuitton contacted appellee Young and informed him of Vuitton's intention to seek a temporary restraining order. At that time, counsel for Young agreed to the entry of a preliminary injunction which "essentially restrained and enjoined Young from imitating, copying or making unauthorized use of Vuitton's registered trademark." Vuitton et Fils, S.A. v. J. Young Enterprises, Inc., 609 F.2d 1335, 1336 (9th Cir. 1979). Two weeks later, the district court, on its own motion, construed the stipulation as a stipulation disposing of the entire case and entered it as a final judgment of the matter. Vuitton appealed the judgment, and this court reversed and directed the district court to reinstate Vuitton's complaint subject to the terms of the stipulation. Id. at 1338.

In accordance with this court's directive, the district court scheduled the final pretrial conference. Prior to the hearing, on April 9, 1980, Young filed a motion for summary judgment. On May 5, 1980, the motion was heard and granted. At that time, the court declared Vuitton's registered trademark invalid and dissolved the aforementioned injunction. On June 10, 1980, the court entered its judgment and, in addition to the above, awarded the defendants attorneys' fees for the period after March 31, 1980, the date on which Young proffered an offer of settlement to Vuitton which was subsequently rejected. In addition, the judgment held that even if Vuitton's mark was found to be valid, Vuitton would not be entitled to monetary recovery.

Vuitton moved for a stay of the court's order pending appeal and for restoration of the injunction. The court set the matter for June 30, 1980, and established a briefing schedule. Vuitton immediately filed in this court for summary reversal or in the alternative for a stay of the district court's order and restoration of the preliminary injunction. By order filed July 3, 1980, this court denied the motion for summary reversal but reinstated the preliminary injunction.

III.

The physical details and designs of a product may be protected under the Lanham Act if these features are "non-functional" and they have acquired a secondary meeting. But, where the features are "functional," i. e., they connote other than a trademark purpose, they generally are not protectable. E. g., Pagliero v. Wallace China Co., 198 F.2d 339, 343 (9th Cir. 1952); Truck Equipment Serv. Co. v. Fruehauf Corp., 536 F.2d 1210, 1217 (8th Cir.), cert. denied, 429 U.S. 861, 97 S.Ct. 164, 50 L.Ed.2d 139 (1976); Ives Laboratories, Inc. v. Darby Drug Co., Inc., 601 F.2d 631, 642-43 (2d Cir. 1979).

Explication of the term "functional," as it is used in trademark law, is found in the following passage from Pagliero v. Wallace China Co., supra, 198 F.2d at 343:

"Functional" ... might be said to connote other than a trade-mark purpose. If the particular feature is an important ingredient in the commercial success of the product, the interest in free competition permits its imitation in the absence of a patent or copyright. On the other hand, where the feature or, more aptly, design, is a mere arbitrary embellishment, a form of dress for the goods primarily adopted for purposes of identification and individuality and, hence, unrelated to basic consumer demands in connection with the product, imitation may be forbidden where the requisite showing of secondary meaning is made. Under such circumstances, since effective competition may be undertaken without imitation, the law grants protection. (Citations omitted.)

Young and Vuitton have predictably focused on different aspects of this passage. Young argues that, since the design of Vuitton's products "is an important ingredient in the commercial success of the product," it may be freely imitated. Vuitton argues that its design "is a mere arbitrary embellishment, a form of dress for the goods primarily adopted for the purposes of identification and individuality" and thus imitation may be forbidden.

The district court found: "The repeated pattern fabric design used on plaintiff's goods constitutes the primary decoration of those goods and is a factor in their consumer appeal and saleability and as such is a functional element of the goods. Pagliero v. Wallace China Co., Ltd., supra." We disagree with the district court insofar as it found that any feature of a product which contributes to the consumer appeal and saleability of the product is, as a matter of law, a functional element of that product. Neither Pagliero nor the cases since decided in accordance with it impel such a conclusion.

IV.

The designs at issue in Pagliero, floral patterns used to decorate hotel china, were neither trademarked, copyrighted, nor patented. The court's discussion regarding the designs, therefore, dealt solely with the claim of unfair competition; the act of trademark infringement alleged was in the usurpation of the names which had been adopted to designate these designs.

We may assume that the four floral pattern designs at issue in Pagliero were originally intended primarily to beautify the china and not to identify the manufacturer. In fact, plaintiff, Wallace China Company, alleged that its designs had come to identify their source only after Wallace's extensive advertising of the designs and names popularized them by use in literature distributed by Wallace and its dealers. Pagliero, supra, 198 F.2d at 340. "Through the years both the designs and their names are alleged to have become associated in the minds of the trade and the consumer as indicating a Wallace product; ...." Id. (Emphasis added.) Wallace China Company hoped to convince the court that the designs used on its china had gradually...