As [plaintiff's] objective in the two sweater designs was primarily aesthetic, the designs were not primarily intended as source identification. Those sweater designs therefore fail to qualify for protection of trade dress inherent in product design.
Knitwaves, 71 F.3d 996, 1995 U.S. App. LEXIS 31942, *36, 1995 WL at *12 (emphasis added).
Knitwaves makes it clear that, in order to prevail on a claim for trade dress infringement, a plaintiff must do more than demonstrate that the appearance of its product serves some source identifying function. It must demonstrate that the primary purpose behind the design was to identify its product's source. In the case at hand, there is absolutely no evidence that Banff chose its design primarily to identify the source of its product. In fact, it is clear that Banff, like the plaintiff in Knitwaves, chose its design primarily for aesthetic reasons. As a result, the jury's verdict as to Banff's trade dress claim cannot stand.
F. False Designation of Origin
Express contends that the jury had no basis for concluding that it violated the Lanham Act by falsely designating the origin of its sweaters. Once again, this part of Express' motion for judgment as a matter of law is granted.
Section 43(a) of the Lanham Act makes it unlawful to sell a product in a manner that conveys a "false designation of origin." Stormy Clime Ltd. v. Progroup, Inc., 809 F.2d 971, 974 (2d Cir. 1987). Among other things, this section prohibits the practice of "reverse passing off," in which a company sells another's product as its own. See Waldman Publishing Corp. v. Landoll, Inc., 43 F.3d 775, 780 (2d Cir. 1994).
To prevail on a claim for "reverse passing off," a plaintiff must demonstrate: "(1) that the work at issue originated with the plaintiff; (2) that [the] origin of the work was falsely designated by the defendant; (3) that the false designation of origin was likely to cause consumer confusion; and (4) that the plaintiff was harmed by the defendant's false designation of origin." Lipton v. The Nature Co., 71 F.3d 464, 1995 U.S. App. LEXIS 33240, *24, 1995 WL 700377, *7 (2d Cir. 1995).
The question before the Court is whether, by proving that Express placed its "Compagnie Internationale Express" label on the sweaters it sold, Banff established that Express falsely designated the origin of the sweaters. A review of the controlling case law on this point reveals that Banff's proof was not legally sufficient to establish false designation of origin.
In Waldman, the Second Circuit held that the "reproduction of a work with a false representation as to its creator" supports a finding of false designation of origin. Waldman, 43 F.3d at 781. Waldman involved a publisher that had copied a line of children's books. The Court found that by publishing the copied books and designating its own authors as their creators, the defendant had falsely designated the origin of the works.
Prior to Waldman, however, the Second Circuit indicated that a defendant's use of a false copyright notice was not enough to constitute false designation of origin. See Kregos v. Associated Press, 937 F.2d 700, 710-11 (2d Cir. 1991). In Kregos, the Court rejected the claim that the defendants, Sports Features, Inc. and the Associated Press, violated § 43(a) by copying a sports form created by plaintiff and publishing it with Sports Features' copyright notice. The Court found that plaintiff's claim was merely a copyright claim in disguise, and declared that it would "reject [plaintiff's] attempt to convert all copyright claims into Lanham Act violations." Id. at 711.
Recently, in Lipton, the Second Circuit reaffirmed and clarified the scope of its holding in Kregos. Lipton involved defendants who copied a compilation of "terms of venery"
contained in a book written by plaintiff, and placed them on a variety of posters and other products. The Court explicitly rejected the argument that the defendants violated § 43(a) by placing false copyright notices on the infringing products. It held that, "as a matter of law, a false copyright notice alone cannot constitute a false designation of origin within the meaning of § 43(a) of the Lanham Act." Lipton, 1995 U.S. App. LEXIS 33240, *25, 1995 WL at *8.
The Second Circuit's decisions in Kregos and Lipton are not inconsistent with its holding in Waldman. In Waldman, the Court found a false designation of origin because the defendant made an affirmative misrepresentation regarding the creator, or originator of its books.
In Kregos and Lipton, the defendants falsely represented that they held copyrights to certain works; they did not make any false claims regarding who originated the works. In fact, in Kregos the Court explicitly noted that, "[plaintiff] could complain . . . if Sports Features unfairly competed with him by falsely claiming that its form was originated by some well-known baseball player." Kregos, 937 F.2d at 710.
The fact setting here is more analogous to Kregos and Lipton than it is to Waldman. By placing the "Compagnie Internationale Express" label in the sweaters it sold, Express did not represent that it had designed these sweaters. Rather, like the defendants in Kregos and Lipton, Express only represented that it had the right to sell the fisherman's sweaters. The evidence at trial indicated that retail clothing stores routinely place their labels on clothing sold in their stores. Tr. at 428. In light of Kregos and Lipton, the Court declines to find this widely accepted practice actionable under § 43(a) of the Lanham Act.
Accordingly, there was no "legally sufficient evidentiary basis" for the jury's verdict on the claim for false designation of origin.
Express' motion for judgment as a matter of law on Banff's claim for actual damages under the Copyright Act is denied. However, Express' motion for a new trial on this claim is granted. The jury's award of Express' profits under the Copyright Act will not be disturbed. Express' motion for judgment as a matter of law on Banff's trade dress claim is granted. Should this holding be reversed on appeal, Express is entitled to a new trial on this claim. Finally, Express' motion for judgment as a matter of law on Banff's claim for false designation of origin is granted.
However, in the event that this holding is reversed on appeal, the Court finds that no new trial is warranted.
Shira A. Scheindlin
Dated: New York, New York
December 29, 1995