InstyBit, Inc. v. Poly-Tech Industries , 95 F.3d 663 ( 1996 )

____________
No. 95-2260
____________
Insty*Bit, Inc., *
*
Appellant, *
* Appeal from the United States
v. * District Court for the
* District of Minnesota
Poly-Tech Industries, Inc., *
*
Appellee. *
____________
Submitted: December 13, 1995
Filed: September 10, 1996
____________
Before McMILLIAN, JOHN R. GIBSON and BEAM, Circuit Judges.
____________
McMILLIAN, Circuit Judge.
Insty*Bit, Inc. (Insty*Bit) appeals from a final order entered in the
United States District Court for the District of Minnesota granting summary
judgment in favor of Poly-Tech Industries, Inc. (Poly-Tech) on Insty*Bit’s
claim of trade dress infringement in violation of § 43(a) of the Lanham
Act, 15 U.S.C. § 1125.1 Insty*Bit, Inc. v. Poly-Tech Indus., Inc., No. 3-
94-1427 (D. Minn. Apr. 26, 1995) (Memorandum and Order). For reversal,
Insty*Bit
1
Insty*Bit also raised the following state law claims pursuant
to 28 U.S.C. § 1367(a): (1) violation of Minn. Stat. § 325D.44 et
seq. (the Minnesota Deceptive Trade Practices Act); (2) common law
fraud; (3) negligent misrepresentation; (4) breach of fiduciary
duty; and (5) unjust enrichment. After granting summary judgment
in favor of Poly-Tech on the Lanham Act claim, the district court
declined to exercise supplemental jurisdiction over these state law
claims and dismissed them without prejudice. See slip op. at 15-
16.
argues the district court erred in holding that Insty*Bit had failed to
create a genuine issue of material fact with respect to its trade dress
infringement claim under 15 U.S.C. § 1125. For the reasons discussed
below, we reverse the judgment of the district court and remand the case
to the district court for further proceedings consistent with this opinion.
I. Background
Insty*Bit is a Minnesota corporation located in Minneapolis,
Minnesota. It designs, assembles, and sells quick-change drill chucks2 and
related accessories, including drill bits, countersinks, and drill guides.
Poly-Tech, also a Minnesota corporation located in Minneapolis,
operates primarily as a “job shop” for the manufacture of component parts
for other entities. Between 1988 and August 1994, Poly-Tech manufactured
component parts for Insty*Bit’s products to Insty*Bit’s specifications.
Insty*Bit would then assemble these components with other parts to produce
the quick-change drill chuck and related accessories.
In late 1989, Insty*Bit granted Poly-Tech permission to sell
Insty*Bit products, along with the products of other manufacturers, through
woodworking trade shows and magazine advertisements. Although Insty*Bit
contends that it gave Poly-Tech an exclusive limited sales territory in
three eastern states and specified the trade shows at which Poly-Tech could
sell Insty*Bit’s products, Poly-Tech maintains that Insty*Bit placed no
restrictions on its sales territory or methods. It is undisputed, however,
that Poly-Tech sold Insty*Bit products in various advertisements and
woodworking shows until August 1994. At the same time, Insty*Bit
2
A quick-change drill chuck allows the user to change bits and
drivers in a portable drill without a chuck key.
-2-
also engaged in “private labeling” with several national distributors of
woodworking products. Specifically, it allowed four distributors to sell
Insty*Bit’s products in connection with another company’s brand name.
According to Insty*Bit, it has eight national distributors of its products.
In addition to the four distributors which sell Insty*Bit’s products under
another brand name, two distributors sell unmarked products, and two others
sell them under Insty*Bit’s label.
In 1993, Poly-Tech developed its own quick-change drill chuck. Poly-
Tech filed a patent application for this quick-change chuck with the United
States Patent Office on December 23, 1993, and a patent (No. 5,398,946) was
subsequently issued on March 21, 1995. II Poly-Tech App. at 309. In
August 1994, Poly-Tech informed Insty*Bit that it was adding its own brand
of quick-release drills and accessories, under the name “Snappy,” to its
product line. Shortly thereafter, Insty*Bit ceased placing orders for
Insty*Bit component parts and instructed Poly-Tech not to sell Insty*Bit
products in the future.
On October 14, 1994, Insty*Bit instituted the present suit against
Poly-Tech in the United States District Court for the District of
Minnesota, alleging trade dress infringement under§ 43(a) of the Lanham
Act, 15 U.S.C. § 1125, violation of Minn. Stat. § 325D.44 et seq. (the
Minnesota Deceptive Trade Practices Act); common law fraud; negligent
misrepresentation, breach of fiduciary duty, and unjust enrichment.
Insty*Bit sought damages, preliminary and permanent injunctive relief, and
attorney’s fees. Poly-Tech then filed a counterclaim for sanctions
pursuant to Fed. R. Civ. P. 11, Minn. R. Civ. P. 11, and Minn. Stat. §
549.21. Upon motion by Poly-Tech, the district court granted summary
judgment in favor of Poly-Tech on Insty*Bit’s Lanham Act claim and
dismissed Insty*Bit’s state law claims without
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prejudice pursuant to 28 U.S.C. § 1367(c)(3). See slip op. at 2, 17.3
Insty*Bit then filed this timely appeal.
II. Discussion
A. Standard of Review
We review a grant of summary judgment de novo. The question before
the district court, and this court on appeal, is whether the record, when
viewed in the light most favorable to the non-moving party, shows that
there is no genuine issue as to any material fact and that the moving party
is entitled to summary judgment as a matter of law. Fed. R. Civ. P. 56(c);
see, e.g., Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986); Get Away Club, Inc.
v. Coleman, 969 F.2d 664, 666 (8th Cir. 1992); St. Paul Fire & Marine Ins.
Co. v. FDIC, 968 F.2d 695, 699 (8th Cir. 1992). Where the unresolved
issues are primarily legal rather than factual, summary judgment is
particularly appropriate. Crain v. Board of Police Comm’rs, 920 F.2d 1402,
1405-06 (8th Cir. 1990).
B. Lanham Act Claim
Section 43(a)4 of the Lanham Act, 15 U.S.C. § 1125(a)(1),
3
The district court also denied on mootness grounds
Insty*Bit’s motion for a preliminary injunction and its motion to
dismiss Poly-Tech’s counterclaim. See slip op. at 2, 17.
4
Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a)(1),
provides in pertinent part:
(1) Any person who, on or in
connection with any goods or services,
or any container for goods, uses in
commerce any word, term, name, symbol,
or device, or any combination thereof,
or any false designation of origin,
false or misleading description of fact,
or false or misleading representation of
fact,
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creates a federal cause of action for trade dress infringement. The trade
dress of a product is the “total image of a product, the overall impression
created, not the individual features.” Aromatique, Inc. v. Gold Seal,
Inc., 28 F.3d 863, 868 (8th Cir. 1994) (Aromatique); Woodsmith Publishing
Co. v. Meredith Corp., 904 F.2d 1244, 1247 (8th Cir. 1990) (Woodsmith).
A trade dress is entitled to protection under § 43(a) of the Lanham Act if:
(1) it is inherently distinctive or has acquired distinctiveness through
secondary meaning; (2) it is primarily nonfunctional; and (3) its imitation
would result in a likelihood of confusion in consumers’ minds as to the
source of the product. See Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S.
763, 769 (1992) (Two Pesos). With respect to the third prong of this
analysis, we established in Co-Rect Prods, Inc. v. Marvy! Advertising
Photography, Inc., 780 F.2d 1324, 1330 (8th Cir. 1985) (Co-Rect), that the
following six factors are to be considered in determining whether a
likelihood of confusion exists: (1) the strength of the owner’s mark; (2)
the similarity between the owner’s mark and the alleged infringer’s mark;
(3) the degree to which the products compete with each other; (4) the
which --
(A) is likely to cause
confusion, or to cause
mistake, or to deceive as to
the affiliation, connection,
or association of such
person with another person,
or as to the origin,
sponsorship, or approval or
his or her goods, services,
or commercial activities by
another person, or
(B) in commercial
advertising or promotion,
misrepresents the nature,
characteristics, qualities,
or geographic origin of his
or her or another person’s
goods, services, or
commercial activities,
shall be liable in a civil action by any
person who believes that he or she is or
is likely to be damaged by such act.
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alleged infringer’s intent to “pass off” its goods as those of the owner;
(5) incidents of actual confusion; and (6) the type of product, its costs,
and conditions of purchase.5
Insty*Bit alleged before the district court that Poly-Tech had copied
the trade dress of Insty*Bit’s products in manufacturing the Snappy line
of quick-change drill chuck, countersink and drill guide.6 The district
5
In Co-Rect we considered the likelihood of confusion issue
with respect to trademark, rather than trade dress, infringement.
In light of the Supreme Court’s holding in Two Pesos, 505 U.S. at
774-76, that there is no textual basis for applying different
analyses to the protection of trademarks and trade dress under
section 43(a) of the Lanham Act, we conclude that the six Co-Rect
factors also govern claims of trade dress infringement. Cf.
Aromatique, 28 F.3d at 868 (“The difference between trade dress and
trademark is no longer of importance in determining whether trade
dress is protected by federal law”).
6
Specifically, Insty*Bit contended that Poly-Tech had
infringed upon the following trade dress of Insty*Bit products:
Quick-change chuck - the combination of
the color black; the shape of the shank;
the size and dimensions of the sleeve;
and the chamfered edge-raised knurled
band-recessed smooth band-raised knurled
band appearance of the chuck sleeve;
Drill guide - the combination of the
color black; the steel colored bit; the
exposed spring; the shape and style of
the set screw and opening; and the shape
of the opening for receiving the shank
in the collar;
Countersink - the combination of the
color black; the shape and style of the
set screw and opening; the use of two
flutes; the shape of the collar; the
raised edge on the countersinking
portion; the overall size and
dimensions; and the shape of the opening
for receiving the shank in the collar.
Slip op. at 8-9.
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court held that Insty*Bit had failed as a matter of law to create a genuine
issue of material fact regarding
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the likelihood of consumer confusion as to the source of the Snappy brand
products. Slip op. at 10-15. The district court opined that “[a]lthough
the Insty*Bit products and the Snappy products compete in the same market,
independent application of the six Co-Rect factors is unnecessary in this
case.” Id. at 10. The district court then conducted a visual inspection
of the packaging of the Snappy and Insty*Bit products and determined that
the “packaging designs are so graphically dissimilar that there is no
reasonable likelihood that consumers would confuse a Snappy brand product
with the Insty*Bit product.” Id. at 11.7
7
The district court observed:
Poly-Tech has left no doubt as to the
source of the Snappy brand products. .
. . The words “SnappyTM” appear in large
letters prominently displayed on the
front of the Snappy packages for each of
the three products claimed to violate §
1125. Indeed, the brand name “Snappy”
appears in bold letters nine times on
the Snappy quick-release chuck package
and in bold letters six times on each of
the Snappy countersink and drill guide
packages. “Snappy” is also permanently
embossed on the face of each of the
components themselves, and the embossed
imprint is visible through clear plastic
“bubble” packaging. Each Snappy package
also contains the name “Poly-Tech Ind.”
along with its mailing address . . . The
front face of each of the Snappy
packages is solid purple with white
lettering and yellow accent
highlighting.
In contrast, the front . . .[and
back] face[s] of the Insty*Bit product
packages contai[n], in large, bold
letters the word “INSTY-BIT.” . . . The
front of these packages is solid white,
not purple. . . . Based on the “total
presentation” of the Snappy brand
products to the consumer, there is no
reasonable likelihood of confusion as to
their source.
-8-
Slip op. at 11-12.
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In determining that there was no likelihood of confusion regarding
the source of the products at issue, the district court declined to give
weight to a survey offered by Insty*Bit of approximately one hundred
potential quick-change drill customers. Id. at 13-15.8 The survey expert
had found that a statistically significant number of the respondents
interviewed would purchase the Snappy brand products as a satisfactory
match to Insty*Bit’s. See Report of Jeffrey Stitt; Insty*Bit App. at 257.
The district court, however, held that the fact that a statistically
significant number of consumers would substitute the Snappy brand products
for Insty*Bit’s was “irrelevant” to the likelihood of confusion issue,
because “the issue here is not whether consumers would substitute the
defendant’s product for the plaintiff’s nor is it whether the products are
similar; the issue is whether consumers would likely purchase the
defendant’s product mistakenly thinking it was manufactured by the
plaintiff.” Slip op. at 14-15. Similarly, the district court also
rejected as non-probative the portion of the survey which tested consumer
confusion with respect to unpackaged Snappy and Insty*Bit quick-change
systems. Consumer reactions to the unpackaged product bore no relevance
to the likelihood of confusion issue, the district court reasoned, because
“to determine whether a substantial likelihood of confusion exists under
§ 1125, the product must be considered in its totality as it is presented
to the average consumer -- which in this case is to say in . . . [packaged
form].” Id. at 14. Based on its visual inspection of
8
The expert retained by Insty*Bit surveyed 102 consumers who
had used a portable drill within the past three months. Fifty-four
percent of the consumers were professional woodworkers, and forty-
six percent were amateurs. The survey expert showed each
participating consumer both unpackaged and packaged quick-change
drill products manufactured by Snappy, Insty*Bit, and Vermont
American (a competing manufacturer). The consumer was allowed to
examine and hold the products but was not permitted to use them or
to determine how they functioned. The expert then asked the
consumer whether any of the products were “so similar or such a
satisfactory match” that he or she would buy one as a substitute
for the other. See Jeffrey Stitt Aff. II ¶¶ 15, 20, 24; Insty*Bit
App. at 394-96.
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the packages, the district court found that the conspicuous placement of
the “Snappy” letters on Poly-Tech’s products made it highly unlikely that
the average consumers would buy Snappy brand products mistakenly thinking
that they were manufactured by Insty*Bit. See id. at 14-15. Therefore,
finding no genuine issue of material fact regarding the third prong of the
§ 1125 analysis, the district court held that Poly-Tech was entitled to
summary judgment on Insty*Bit’s Lanham Act claim. Id. at 15.
For reversal, Insty*Bit argues that the district court erred in
granting summary judgment in favor of Poly-Tech on its Lanham Act claim in
three respects. First, Insty*Bit maintains that the district court’s
failure to apply the six Co-Rect factors constitutes error as a matter of
law. Noting our observation in Squirtco v. The Seven-Up Co., 628 F.2d
1086, 1091 (8th Cir. 1980), that resolution of the likelihood of confusion
issue “does not hinge on a single factor but requires a consideration of
numerous factors to determine whether under all the circumstances there is
a likelihood of confusion,” Insty*Bit contends the district court erred in
relying exclusively on its own inspection of the Snappy and Insty*Bit
packages, rather than applying the six Co-Rect factors for determining the
existence of a likelihood of confusion under 15 U.S.C. § 1125.
Second, Insty*Bit argues that the district court’s exclusive reliance
on the packaging of Insty*Bit and Poly-Tech’s quick-change drill products
was also misplaced because such packaging designs are relevant only to the
issue of point-of-sale confusion. Arguing that the Lanham Act prohibits
post-sale as well as point-of-sale confusion, e.g., Computer Care v.
Service Sys. Enterprises, Inc., 982 F.2d 1063, 1070 (7th Cir. 1992),
Insty*Bit maintains that there is a genuine factual issue concerning the
likelihood of post-sale confusion, because prospective purchasers are often
first exposed to its products in the hands of another individual after the
packaging has been discarded; such purchasers, Insty*Bit argues,
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“typically go the store looking for a product they have seen before and try
to look ‘past’ the packaging to match the product with the one they are
seeking.” Brief for Appellant at 26-27. According to Insty*Bit, the
strong similarity in the appearance of the unpackaged Insty*Bit and Poly-
Tech product creates a genuine issue of material fact as to whether
consumers would likely be confused as to the source of the Snappy brand
products to preclude entry of summary judgment in favor of Poly-Tech.
Finally, Insty*Bit challenges the district court’s determination that
the consumer survey had no probative value concerning the likelihood of
confusion. Reiterating its argument that consumers are frequently exposed
to quick-change products in unpackaged form, Insty*Bit contends that the
survey expert’s conclusion -- that a statistically significant number of
respondents would buy the Snappy line of quick-change products as a
satisfactory match to Insty*Bit’s -- demonstrates a genuine issue of
material fact as to whether consumers would likely be confused as to the
origins of the Snappy brand products.
Poly-Tech responds, first, that although the district court did not
recite each of the six Co-Rect factors in its memorandum and order, it
considered all the factors in reaching its conclusion that “there is no
confusion to the source of the Snappy brand products, . . .[and] [n]o
evidence suggests that Snappy has confused consumers into thinking its
components were made by Insty*Bit.” Slip op. at 11-12. Second, addressing
Insty*Bit’s argument that the district court improperly placed exclusive
reliance on its own inspection of the packaging of the respective products,
Poly-Tech cites Woodsmith, 904 F.2d at 1250, for the proposition that a
district court may visually review documentary evidence in determining
whether there is a likelihood of confusion in a trade dress infringement
action. Similarly, Poly-Tech argues that its prominent trade name labeling
on both the Snappy packages
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and actual products precludes a finding that there is a genuine issue of
material fact regarding the likelihood of confusion.
Finally, Poly-Tech contends that the district court did not err in
disregarding the results of the consumer survey submitted by Insty*Bit.
According to Poly-Tech, the survey was flawed because, among other reasons,
(1) it did not adequately define the sample of respondents; (2) it exposed
respondents to the unpackaged products; and (3) it asked biased, irrelevant
questions. Brief for Appellee at 30. Thus, Poly-Tech argues that the
district court correctly found that the survey had no probative value with
respect to the likelihood of consumer confusion. In sum, Poly-Tech argues
that the district court did not err in entering summary judgment in its
favor on Insty*Bit’s trade dress infringement claim. We disagree.
We hold that the district court erred as a matter of law in failing
to apply the six Co-Rect factors to determine the likelihood of consumer
confusion. Contrary to Poly-Tech’s argument, it is not clear from the
district court’s memorandum and order that it analyzed all the Co-Rect
factors in concluding that there was no genuine issue of material fact
regarding the likelihood of confusion.
We further hold that the district court erred in placing primary, if
not exclusive, weight on its visual examination of the packaging of the
Snappy and Insty*Bit products. Regarding this issue, Poly-Tech’s reliance
on Woodsmith is misplaced. In Woodsmith, we affirmed a district court’s
grant of summary judgment in favor of a defendant magazine publisher in a
trade dress infringement action brought under section 43(a) of the Lanham
Act. See 904 F.2d at 1250. The district court had found that no genuine
issue of material fact existed regarding the likelihood of confusion. In
upholding this determination, we examined the photographs and original
facsimiles of the magazines and solicitation mailings published by each
party. See id. at 1249-50.
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We declared that “[v]isual inspection is permissible as an aid to a
district court’s determination of likelihood of confusion, but should not
constitute the sole basis for the conclusions made.” Id. at 1250. Thus,
visual inspection may not replace an application of the Co-Rect factors in
determining whether a likelihood of confusion exists.
Upon careful de novo review, we hold that Insty*Bit has presented
sufficient evidence of the likelihood of confusion to withstand Poly-Tech’s
motion for summary judgment. As noted above, the following six factors
must be considered in determining whether a likelihood of confusion exists:
(1) the strength of the owner’s mark; (2) the similarity between the
owner’s trade dress and the alleged infringer’s trade dress; (3) the degree
to which the products compete with each other; (4) the alleged infringer’s
intent to “pass off” its goods as those of the trade dress owner; (5)
incidents of actual confusion; and (6) the type of product, its costs and
conditions of purchase. See Co-Rect, 780 F.2d at 1330. We consider each
factor in turn, noting that although no one factor is determinative, each
must be analyzed. See Duluth News-Tribune v. Mesabi Publishing Co., 84
F.3d 1093, 1096 (8th Cir. 1994) (Duluth) (“[t]hese factors do not operate
in a mathematically precise formula; rather, we use them at the summary
judgment stage as a guide to determine whether a reasonable jury could find
a likelihood of confusion”).
First, Insty*Bit has demonstrated the strength of its trade dress.
Insty*Bit’s quick-change drill products have received favorable reviews
from several woodworking magazines and nationally televised home-
improvement programs. See Insty*Bit App. at 112, 115-120. In addition,
Insty*Bit’s consumer survey showed that over thirty-eight percent of the
respondents were familiar with Insty*Bit. See id. at 388.
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Second, Insty*Bit showed there are similarities in trade dress
between the Insty*Bit and Snappy quick-change products. Poly-Tech contends
that its Snappy brand shank does not resemble the shank of Insty*Bit’s
quick-change chuck, because the Snappy chuck does not have the same
prominent enlarged collar portion as Insty*Bit’s. In addition, although
it concedes that its Snappy line of quick-change products are black (the
same color as Insty*Bit’s), Poly-Tech alleges that the similarity is due
to functionality because Snappy brand products are treated with black oxide
in order to prevent rusting, “as all the other competitive quick-release
chucks also are.” Brief for Appellee at 24. Insty*Bit, however, has
presented evidence that the quick-change products of competing
manufacturers have coatings other than black oxide which also provide a
rust-inhibiting benefit. See Insty*Bit App. at 399-400. Moreover,
Insty*Bit has demonstrated sufficient similarity in the shape and design
of the Snappy and Insty*Bit quick-change drill products -- such as the
combination of a raised knurled band, a recessed smooth band, and another
raised knurled band on the quick-change chucks -- to create a genuine issue
of material fact as to whether the second Co-Rect factor has been
satisfied.
As to the degree to which the products compete with each other, we
note that both parties agree that their products are sold through similar
distribution means. See Brief for Appellant at 24; Brief for Appellee at
25. The target purchasers are the same for both sets of products, and the
products are comparably priced. See Insty*Bit App. at 65.1-66.1; 113.
Thus, the competition between the Insty*Bit and Snappy products is not
beyond genuine dispute.
The fourth Co-Rect factor concerns the alleged infringer’s intent to
“pass off” its goods as those of the plaintiff. Co-Rect, 780 F.2d at 1330.
Evidence submitted by Insty*Bit showed that when Poly-Tech began marketing
its Snappy line of quick-change products, it solicited the same customers
and distributors to whom it had previously sold Insty*Bit’s products. See
Insty*Bit App. at 87-90.
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We also observe that the inference of intent is strengthened when the
parties have had a prior relationship, because “[s]uch a relationship
provides evidence of the alleged infringer’s intent to trade on the
plaintiff’s goodwill.” Beer Nuts, Inc. v. Clover Club Foods Co., 805 F.2d
920, 927 (10th Cir. 1986). In the present case, Poly-Tech sold Insty*Bit’s
products through woodworking trade shows and magazine advertisements
between 1989 and 1994. See Insty*Bit App. at 158; I Poly-Tech App. at 107.
This fact creates a genuine issue of material fact regarding the fourth Co-
Rect factor, particularly when it is combined with evidence in the record
contradicting Poly-Tech's suggestion that it could not have changed certain
features affecting the external appearance of its quick-change products to
differentiate them more markedly from Insty*Bit’s.
With respect to the fifth Co-Rect factor -- incidents of actual
confusion -- we find that the consumer survey presented by Insty*Bit is
probative on this issue. In Woodsmith, 904 F.2d at 1249, we stated that
surveys may provide useful evidence of the likelihood of confusion,
although they are not required for such a determination. See id.
Insty*Bit’s survey was designed, conducted, and interpreted by an
experienced market researcher. The expert’s conclusion that “a
statistically significant number of consumers would purchase Snappy as a
satisfactory match for Insty*Bit” raises a genuine issue of material fact
regarding the likelihood of confusion. Although the district court found
the survey flawed because the expert did not ask consumers whether they
would likely purchase Snappy’s products mistakenly thinking they were
manufactured by Insty*Bit, such a question was not necessary to the
methodological soundness of the survey. To the contrary, it is well-
settled that a finding of trade dress infringement does not require
consumers to buy the alleged infringer’s products thinking that they were
manufactured by the plaintiff; rather, all that is necessary is that they
purchase the alleged infringer’s products after associating the trade dress
of those products with the trade
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dress of a single, albeit anonymous source. See, e.g., Tone Bros., Inc.
v. Sysco Corp., 28 F.3d 1192, 1204 (Fed Cir. 1994) (Tone Bros.) (plaintiff
spice manufacturer in trade dress infringement action had raised genuine
issue of material fact as to whether there was association in mind of
consumer between container’s shape and appearance and indication of the
source for the spices inside the container, thereby precluding summary
judgment in favor of defendant). In addition, we note that most of Poly-
Tech’s arguments concerning the flaws in the survey (e.g., the definition
of the sample and the form of questions asked) do not render the issue of
actual confusion beyond genuine dispute, rather, they go to the weight the
trier of fact should place on the survey’s results.
Furthermore, the portion of the survey exposing consumers to
the unpackaged Snappy and Insty*Bit quick-change systems is
probative on the likelihood of confusion issue, because the Lanham
Act protects post-sale as well as point-of-sale confusion. See
Payless Shoesource, Inc v. Reebok Int’l Ltd., 998 F.2d 985, 989-90
(Fed. Cir. 1993) (Payless); Keds Corp. v. Renee Int’l Trading
Corp., 888 F.2d 215, 222 (1st Cir. 1989); Lois Sportswear, U.S.A.,
Inc. v. Levi Strauss & Co., 799 F.2d 867, 872 (2d Cir. 1986) (Lois
Sportswear). “Post-sale confusion” refers to the association
consumers might make between the allegedly infringing item and the
familiar product, thereby influencing their purchasing decisions.
Lois Sportswear, 799 F.2d at 872-73. The Lanham Act’s protection
of post-sale confusion stems from the 1962 amendment to § 32 of the
Act, 15 U.S.C. § 1114(1), which provides remedies for the
infringement of registered trademark. Pub. L. No. 87-772, 76 Stat.
769, 773 (1962). The 1962 amendment included confusion of
nonpurchasers as well as direct purchasers by eliminating language
in § 32 which had restricted the scope of trademark infringement to
confusion of “purchasers as to the source of origin of such goods
or services.” 76 Stat. at 773. Thus, an action for trademark
infringement may be based on confusion of consumers other than
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direct purchasers, including observers of an allegedly infringing
product in use by a direct purchaser. See Payless, 998 F.2d at
989; Lois Sportswear, 799 F.2d at 872-73. Although § 32 of the
Lanham Act protects registered trademarks, rather than trade dress,
the Supreme Court’s holding in Two Pesos, 505 U.S. at 774-76, that
the same analyses apply to the protection of trademarks and trade
dress under § 43(a) of the Act leads us to conclude that the
likelihood of post-sale confusion may be considered in trade dress
infringement actions. See Payless, 998 F.2d at 989-90 (holding
that district court, in determining whether accused shoes infringed
footwear manufacturer’s trademarks and trade dress, had abused its
discretion in failing to consider adequately the extent of post-
sale confusion between the competing footwear). Post-sale
confusion is at issue in the present case because Insty*Bit has
demonstrated that consumers are often first exposed to its products
in use (that is, outside of the package) and then go to a
distributor to find these tools by attempting to match the products
on the shelves with the ones they are seeking. See Jeffrey Stitt
Aff. ¶17; Insty*Bit App. at 394-95. We therefore find a genuine
issue of material fact as to actual confusion.
The final Co-Rect factor for assessing the likelihood of
confusion is the type of product, its costs, and conditions of
purchase. Co-Rect, 780 F.2d at 1330. Although Poly-Tech does not
address this factor in its brief, Insty*Bit alleges that the quick-
change drill products are inexpensive and are not the type of
products over which consumers devote substantial time in making
purchasing decision. Such factors, if found to be true by the
trier of fact, would weigh in favor of a conclusion that a
likelihood of confusion exists.
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In sum, our application of the Co-Rect factors to the present
case leads us to conclude that the likelihood of consumer confusion
is not beyond genuine dispute.
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Poly-Tech also argues, however, that it is entitled to summary
judgment because Insty*Bit failed to demonstrate a genuine issue of
material fact with respect to the other two elements of a trade
dress infringement claim under 15 U.S.C. § 1125. Specifically,
Poly-Tech contends that Insty*Bit’s trade dress is not entitled to
protection under § 1125 because (1) it is not inherently
distinctive and has not acquired distinctiveness through secondary
meaning and (2) it is merely functional, rather than non-
functional.9 As discussed below, we find that a genuine issue of
material fact exists as to each of these elements.
In determining whether a trade dress or trademark is
sufficiently distinctive to be entitled to protection under the
Lanham Act, we have classified it as (1) arbitrary or fanciful,10
(2) suggestive,11 (3) descriptive,12 or (4) generic.13 Duluth, 84
F.3d at 1096; Stuart Hall Co. v. Ampad Corp., 51 F.3d 780, 785 (8th
Cir. 1995)(Stuart Hall); Abercrombie & Fitch Co. v. Hunting World,
9
The district court did not address these issues in its
Memorandum and Order granting summary judgment in favor of Poly-
Tech.
10
The Second Circuit explained in Abercrombie that the term
“fanciful,” as a classifying concept, is usually applied to marks
invented solely for their use as trademarks or trade dress. See
Abercrombie, 537 F.2d at 11 n.12. When a common mark is applied
in an unfamiliar way as a trademark or trade dress, the use is
called “arbitrary.” Id.
11
A suggestive mark is “one that requires some measure of
imagination to reach a conclusion regarding the nature of the
product.” Duluth, 84 F.3d at 1096.
12
A descriptive trademark or trade dress “immediately conveys
the nature or function of a product.” Id.
13
A generic trademark or trade dress “refer[s] to the genus of
which the particular product is a species.” Two Pesos, 505 U.S. at
768.
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Inc., 537 F.2d 4, 9-11 (2d Cir. 1976) (Abercrombie). An arbitrary,
fanciful, or suggestive mark is deemed inherently distinctive, and
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therefore entitled to protection, because its “intrinsic nature
serves to identify a particular source of a product.” Two Pesos,
505 U.S. at 768. By contrast, a descriptive mark merits protection
only if it has become distinctive by acquiring a secondary
meaning.14 Duluth, 84 F.3d at 1096. Finally, a generic term is not
protected by the Lanham Act, because it is merely used by the
general public to identify a category of goods. Id. Thus, a
determination of inherent distinctiveness turns on “whether or not
the trade dress is of such a design that a buyer will immediately
rely on it to differentiate the product from those of competing
manufacturers.” Tone Bros., 28 F.3d at 1206.
Viewing the evidence in a light most favorable to Insty*Bit,
a genuine issue of material fact exists as to both inherent
distinctiveness and secondary meaning. First, Insty*Bit has
submitted the declarations of a retailer, two sales
representatives, and a private label distributor that the design of
Insty*Bit’s products was unique when introduced. See Insty*Bit
App. at 111, 241, 246, 248. Such evidence creates a genuine issue
of material fact concerning the inherent distinctiveness of
Insty*Bit’s trade dress because a reasonable trier of fact could
find that the trade dress is arbitrary, fanciful, or suggestive.
Similarly, whether the trade dress has acquired secondary meaning
is not beyond genuine dispute, in light of evidence that (1)
Insty*Bit’s products have a six-year record of advertising and
promotion in the marketplace and (2) consumers associate the
appearance of Insty*Bit’s products with a particular manufacturer.
Id. at 111-12, 156, 241, 246.
14
A trademark or trade dress has acquired secondary meaning if
it has “by long and exclusive use and advertising . . . become so
associated in the public mind with such goods . . . that it serves
to identify them and distinguish them from other goods.” Stuart
Hall, 51 F.3d at 789.
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Finally, Poly-Tech contends that it is entitled to summary
judgment because the design features of Insty*Bit’s quick-change
products are functional and therefore not entitled to trade dress
protection. We have adopted the following test for functionality:
If the particular feature is an
important ingredient in the commercial
success of the product, the interests in
free competition permits [sic] 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 demand 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.
Stuart Hall, 51 F.3d at 790 (quoting Aromatique, 28 F.3d at 873).
Thus, trade dress is nonfunctional “if it is an arbitrary
embellishment primarily adopted for purposes of identification and
individuality.” Aromatique, 28 F.3d at 873. In assessing
functionality, the appropriate inquiry is whether the collection of
design elements, taken as a whole, are functional, not whether
individual elements of the trade dress could be categorized as
such. See Hartford House, Ltd. v. Hallmark Cards, Inc., 846 F.2d
1268, 1272 (10th Cir.) (Hartford House), cert. denied, 488 U.S. 908
(1988); Fuddruckers, Inc. v. Doc’s B.R. Others, Inc., 826 F.2d 837,
842 (9th Cir. 1987). In the present case, we find a genuine issue
of material fact exists regarding the functionality issue.
Although Poly-Tech argues that the exterior design of Insty*Bit’s
quick-change products -- including the color black and the
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appearance of the sleeve and shank -- are primarily functional
because they remain necessary to the commercial success of these
products, Insty*Bit has presented evidence that competing
manufacturers have adopted different design features for their
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quick-change products. See Insty*Bit App. at 23-24, 162-666; 244-
45. Thus, a genuine issues of material fact exists as to whether
or not the design of Insty*Bit’s quick-change products is
functional. Poly-Tech is not entitled to summary judgment on this
issue.
III. Conclusion
Based upon the foregoing, we hold that the district court
erred in granting summary judgment in favor of Poly-Tech on the
basis that Insty*Bit had failed to demonstrate a genuine issue of
material fact with respect to its trade dress infringement action.
Accordingly, the judgment of the district court is reversed and the
case is remanded for further proceedings consistent with this
opinion.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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