The opinion of the court was delivered by: ROSEMARY S. POOLER
Kompan A.S., Kompan, Inc. and Kompan/Big Toys Northeast (collectively Kompan)
, manufacture and distribute playground equipment. Defendants Park Structures, Inc., Kay and Alan Bayman and Baughman Bros., Inc. (collectively "PSI") compete with Kompan as manufacturers and/or distributors of playground equipment. PSI has created a product line, the "Karavan" line, that closely resembles Kompan's preexisting early childhood line. Kompan alleges that PSI's hen bouncer, bunny bouncer, and goose bouncer -- along with other products in the Karavan line -- have bounced over the elusive border that separates imitation as flattery from imitation as unfair competition. Kompan seeks a variety of injunctive, relief. Because Kompan has shown a likelihood of success on its trade dress infringement claim, Kompan is entitled to much, but not all, of the injunctive relief it seeks.
Kompan's annual world-wide revenues approximate $ 100 million. Olson Decl. I P 4. Last year Kompan, Inc., Kompan's United States subsidiary, earned approximately $ 4.8 million and spent approximately $ 350,000 on advertising. Id.; Olson Decl. II P 12.
In March 1995, Jeffrey L. Olson, the president and general manager of Kompan, Inc., first saw a catalog for PSI's Karavan line. Olson Decl. I P 23. Olson believed that virtually every item in several of Karavan's product groupings closely imitated the shape, color, and composition of playground equipment manufactured and sold by Kompan. Id. Olson also believed that PSI had further attempted to confuse consumers as to the source of its new product line by using the name "Karavan" which has sound and sight similarities to the Kompan name and by using a similar format for its catalog. Id. at PP 23-31. Kompan therefore commenced this action, which alleges violation of the Lanham Trademark Act, 15 U.S.C. § 1051 et seq. (the "Lanham Act" or the "Act") by false advertising and trade dress infringement, common law unfair competition and unjust enrichment, and violation of various New York statutes on April 10, 1995.
On that same date, Kompan's counsel sent a letter to Karavan demanding that Karavan cease all manufacturing, marketing, selling and distribution of 27 items that Kompan believed infringed its trade dress. Holman Aff. P 2 Ex. A. The April 10, 1995, letter demanded that Karavan provide assurance of its intention to cease its infringing activities by April 14, 1995. Id. At the request of PSI's counsel, Kompan extended this deadline to April 21, 1995. Id. PP 3-4, Ex. B & C. On April 18, 1995, PSI's counsel responded by denying infringement. Id. P 5, Ex. D. Within a week, Kompan filed a motion for a preliminary injunction. PSI has filed answers and counterclaims to both the complaint and a subsequent amended complaint and opposes Kompan's motion. I heard oral argument on June 5, 1995, and allowed additional submissions, the last of which were received on June 19, 1995.
Although Kompan seeks injunctive relief based on each of its claims against PSI, its proof and argument -- and PSI's response -- focus on the claim, made under section 43(a) of the Lanham Act, that PSI has infringed upon its trade dress. 11 U.S.C. § 1125(a)(1)(A). I find that Kompan has established both likelihood of success and irreparable harm on its trade dress infringement claim because it has shown that the Kompan early childhood product line -- with the exception of the Crazy Scrambler TM- has a distinctive trade dress and that PSI's imitative Karavan line creates a likelihood of confusion. I therefore address Kompan's remaining claims only briefly.
I. The Preliminary Injunction Standard
In order to obtain a preliminary injunction, the movant must show "(a) irreparable harm and (b) either (1) likelihood of success on the merits or (2) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly toward the party requesting the preliminary relief." Jackson Dairy v. H.P. Hood & Sons, 596 F.2d 70, 72 (2d Cir. 1979). This standard applies to actions alleging violation of the Lanham Act by false advertising or by trade dress infringement. See Castrol, Inc. v. Quaker State Corp., 977 F.2d 57, 62 (2d Cir. 1992) (false advertising); LeSportsac, Inc. v. K Mart Corp., 754 F.2d 71, 74 (2d Cir. 1985) (trade dress).
II. The Lanham Act Trade Dress Infringement Claim
"Trade dress" can refer either to a product's packaging or to its design. Wallace Int'l Silversmiths v. Godinger Silver Art Co., 916 F.2d 76, 79 (2d Cir. 1990), cert. denied 499 U.S. 976, 113 L. Ed. 2d 720, 111 S. Ct. 1622 (1991). The trade dress of a product is its total image and may include features such as size, shape, color or color combinations. Stormy Clime Ltd. v. Progroup, 809 F.2d 971, 974 (2d Cir. 1987) (citing John H. Harland Co. v. Clarke Checks, 711 F.2d 966, 980 (11th Cir. 1983)). In order to prevail on its trade dress infringement claim, Kompan must first show that its trade dress is protectable under the Lanham Act because it is inherently distinctive or, if its trade dress is not inherently distinctive, that it is protectable because it has acquired secondary meaning. Villeroy & Boch Keramische Werke K.G. v. THC Systems, 999 F.2d 619, 620 (2d Cir. 1993). Kompan must then show that there is a likelihood of confusion between its product and PSI's. Paddington Corp. v. Attiki Importers & Distributors, 996 F.2d 577, 582 (2d Cir. 1993). In a Lanham Act case, showing a likelihood of confusion also can establish irreparable harm. Hasbro, Inc. v. Lanard Toys, 858 F.2d 70, 73 (2d Cir. 1988). Kompan urges that it has shown a likelihood of success as to distinctiveness, secondary meaning, and likelihood of confusion. PSI, in addition to denying Kompan's claims, also affirmatively claims that Kompan's trade dress is functional and thus not protected by the Lanham Act. See Wallace, 916 F.2d at 79; Stormy Clime, 809 F.2d at 974. I consider each of these issues -- protectability, likelihood of confusion, and functionality -- in turn.
A. Protectability. Trade dress is protectable if it is "capable of identifying products or services as coming from a specific source" and thus inherently distinctive. Two Pesos, Inc. v. Taco Cabana, Inc., 120 L. Ed. 2d 615, 112 S. Ct. 2753, 2760 (1992). Because producers have an almost unlimited choice in design, trade dress choices will normally be inherently distinctive. Cf. Paddington, 996 F.2d at 583 (package design). However, if a particular industry customarily uses a certain trade dress - like the packaging of lemon-lime soda in green 12-ounce cans -- then the trade dress is generic rather than distinctive and is not entitled to protection. Id. Finally, descriptive trade dress such as the use of a shining car to illustrate a bottle of car wax is not distinctive, id. at 584, but may be protectable if the plaintiff shows that its trade dress has acquired secondary meaning, Two Pesos, 1125 Conn. at 2758.
Kompan claims as its trade dress its configurations of certain design elements such as stylized, soft-edged abstracted but recognizable shapes of animals, vehicles, houses and castles; superimposed flat panels; bright primary colors; patented self-locking shock resistant protective caps known as "DO-NUTS"; and durable springs coated with non-toxic blue paint. See Am. Compl. PP 17-18; Olson Decl. I P 16. Kompan seeks a determination that the trade dress of its entire early childhood product line is distinctive because the same distinct design elements and configurations of design elements transcend differences among individual products and define the product line. Olson Decl. IV P 3. PSI, on the other hand, argues that no particular design element or configuration of elements (except the blue spring which PSI did not copy) used by Kompan is distinctive either as to an individual product or as to the entire early childhood product line. PSI believes that each of the particular design elements Kompan cites is generic because many manufacturers of playground furniture use one or more of these elements. Bayman Decl. I PP 7-8; Def. Ex. A - G, I, K - M and DD.
I turn first to PSI's argument that Kompan has no distinctive trade dress because many of the specific elements in Kompan's claimed trade dress are commonly used in the industry and therefore generic. PSI points out that it is common practice in the industry to fabricate playground equipment from flat panels in stylized shapes of animals or objects attractive to children, and that soft corners and protective white and colored caps for protruding components are common safety features. Bayman Decl. I PP 7-12, 14-18, Def. Ex. A-G, I, K-M. PSI's argument misses the mark in two respects. First, some of Kompan's design elements are truly unique. Although rounded corners and stylized shapes may be common in the industry as PSI urges, Kompan's use of curved shapes goes beyond the functional necessity to protect children from sharp edges to a design choice that is made even when an angle or straight line would not be dangerous. Second, even if each of the design elements in a product's trade dress would not be inherently distinctive, the court must look at the combination of elements and the total impression it gives the observer in order to determine whether the trade dress is distinctive. Paddington, 996 F.2d at 584. A comparison of the products in other manufacturer's lines to Kompan's shows that, as to most of those products, no other manufacturer combines even the generic design elements in ways similar to Kompan. Compare Olson Decl. IV, Ex. W with, Ex. Y -- RR. The only exception is Kompan's Crazy Scrambler TM. The Crazy Scrambler TM has a generic trade dress used by several manufacturers to convey the idea of a motorcycle; this generic trade dress does not give as much emphasis to the characteristic Kompan design elements as does the remainder of the early childhood line. See Def. Ex. N. Kompan has therefore established a likelihood of success on its claim that all of its products except the Crazy Scrambler TM have a distinctive trade dress that is protectable.
Kompan has also established a likelihood that it will be able to demonstrate that its distinctive trade dress exists throughout its early childhood line. Courts in this Circuit -- or applying this circuit's law -- have found an entire product line's trade dress to be distinctive. See, e.g., Imagineering, Inc. v. Van Klassens, Inc., 53 F.3d 1260 at 1264 (Fed. Cir. 1995) (applying Second Circuit law); Life Indus. Corp. v. Star Brite Distrib., 31 F.3d 42, 46 (2d Cir. 1994); Saban Entertainment v. 222 World Corp., 865 F. Supp. 1055, (S.D.N.Y. 1994). Product line trade dress has been found both when the trade dress is virtually identical across the product line, see Life Indus., 31 F.3d at 42, 46, and when certain strong features marking the trade dress are found throughout the product line, see Imagineering, 53 F.3d at 1264, and Saban, 865 F. Supp. at 1049-50, 1055. Careful review of Kompan's catalog and the catalogs of its competitors demonstrates that Kompan has a distinctive trade dress containing design elements and combinations of elements which recur throughout its product line and are unique in the outdoor playground business. See Olson Decl. IV Ex. W and Z-RR. Kompan emphasizes soft curved shapes, including curved openings, repetitive s-curves or reverse s-curves, and its signature hen-head and stylized beak shapes. When function would allow a choice between a curved shape and an angular or straight line, Kompan always chooses the curved line. Even protective slats on various pieces of equipment incorporate curves. Although other manufacturers sometimes use curved lines, they neither use them as consistently as Kompan nor emphasize curves as design elements in the way that Kompan does. In addition, Kompan uses color in a way not replicated by the other manufacturers. Other manufacturers also use the primary colors, red, blue and yellow, emphasized in Kompan's designs, but none do so as predominantly or in the same combinations of shades and hues. A potential consumer familiar with Kompan's use of color might well recognize a Kompan product by its color combinations alone. Finally, Kompan uses its plastic DO-NUTS as design elements in a way that is not replicated by any of the other manufacturers. The white and bright-colored DO-NUTS stand out in a distinctive way on Kompan's large and small products alike. Kompan has established a likelihood of success on its claim that its product line trade dress is distinctive and thus protectable.
As noted previously, however, this distinctive trade dress does not extend to Kompan's Crazy Scrambler TM (M130) which appears to have a generic trade dress.
B. Likelihood of Confusion
Having found that Kompan has established a likelihood of success on its claim that its trademark is distinctive and therefore protectable, I turn now to the issue of likelihood of confusion. Likelihood of confusion refers to the likelihood that an appreciable number of consumers will be misled or confused as to the source of the goods in question. Mushroom Makers v. R.G. Barry Corp., 580 F.2d 44, 47 (2d Cir. 1978), cert. denied 439 U.S. 1116, 59 L. Ed. 2d 75, 99 S. Ct. 1022 (1979). This confusion may, but need not, occur at the time of purchase; post-sale confusion as to source is also actionable. Lois Sportswear, U.S.A. v. Levi Strauss & Co., 799 F.2d 867, 872 (2d Cir. 1986). In addition, the owner of distinctive trade dress merits protection against the possibility that a consumer will believe imitative goods are sponsored by or associated with the originator. Id.
In evaluating likelihood of confusion in the trade dress area, courts in this circuit weigh eight factors first described by Judge Friendly in Polaroid Corp. v. Polarad Elec. Corp., 287 F.2d 492, 495 (2d Cir.), cert. denied 368 U.S. 820, 7 L. Ed. 2d 25, 82 S. Ct. 36 (1961). Paddington, 996 F.2d at 584. These factors are: strength of the trade dress, degree of similarity between the trade dress of the senior and junior users, proximity of the products, likelihood that the prior owner will bridge the gap, actual confusion, the defendant's good or bad faith, the quality of the defendant's product, and the sophistication of the buyers. Polaroid, 287 F.2d at 495. The court should examine each Polaroid factor to determine how it bears on the ultimate question of likelihood of confusion, Lois Sportswear, 799 F.2d at 872, and also weigh any additional appropriate factors that are appropriate, Polaroid, 287 F.2d at 495. The evaluation is not mechanical, i.e. the party with the greater number of factors weighing in its favor does not necessarily prevail. Paddington, 996 F.2d at 584 (citing Physicians Formula Cosmetics v. West Cabot Cosmetics, 857 F.2d 80, 85 (2d Cir. 1988)).
1. Strength of Kompan's Mark
A trade dress's strength is its "distinctiveness..., or more precisely, its tendency to identify the goods sold under the [trade dress] as emanating from a particular, although possibly anonymous, source." McGregor-Doniger Inc. v. Drizzle Inc., 599 F.2d 1126, 1131 (2d Cir. 1979). Trade dress that "seems to the consumer uniquely intended to indicate a product's source [is] strong whether or not the consumer is familiar with the [trade dress] or knows the source." Paddington, 996 F.2d at 585. Inherent distinctiveness may suffice to establish the strength of a mark. Id. The court may weigh secondary meaning in determining strength but may not find a mark to be weak solely based on lack of secondary meaning. Id. Because Kompan's trade dress is very distinctive and there are no countervailing factors, I find that Kompan's trade dress is also strong.
2. Similarity Between Kompan's and Karavan's Trade Dress
a. Karavan's train (Locomotive (Model 1100-1), Passenger Car (Model 1100-2), and Flat Car (Model 1100-3))
bears an extraordinary similarity to Kompan's train (Steam Engine (M525), Railway Carriage (M526) and Goods "Waggon" (M527)). The general configurations of the trains are virtually identical. In addition, each is primarily red with a black curved roof, each has similarly (and unusually) shaped doors and windows incorporating the Kompan curves, and each uses the white plastic "DO-NUTS." PSI's attempt to focus attention on minor differences in color and on the different configuration of the cowcatcher and smoke stack does not detract from the overall impression of similarity.
b. Karavan's car (Model 1200-1) is quite different from Kompan's Mini Car (Model M531). The general configuration of Karavan's car is not like Kompan's, and the use of color differs significantly. However, Karavan's car does use certain elements characteristic of the Kompan trade dress, e.g. the prominent use of the white protective coverings as design elements and non-functional repetitive curved shapes. Standing alone, the similarities between the Kompan car and the Karavan car would not lead to confusion. However, in the context of an entire product line consisting of very similar products, these similarities may be sufficient to produce confusion.
c. Karavan's camper (Model 1200-2) has a moderately strong similarity to Kompan's camper (M532). The exterior shapes of both look like they were stamped from the same mold. Both also have similar although not identical doorways and a similar cut out hole toward the rear and top of the camper. Finally, both have non-functional curvilinear design elements and use the white protective coverings as design elements. The campers are, however, made in ...