The opinion of the court was delivered by: SPRIZZO
The instant action comes before the Court on remand and vacatur of a preliminary injunction for the Court to consider whether the design of Landscape Forms, Inc.'s ("Landscape") Petoskey furniture is functional and therefore not protectable trade dress. For the reasons that follow, Landscape's furniture design is not functional, and the Court's earlier preliminary injunction is reinstated.
The background relevant to the instant action, set forth briefly herein, is set forth in greater detail in an earlier opinion of the Court of Appeals. See Landscape Forms, Inc. v. Columbia Cascade Co., 70 F.3d 251 (2d Cir. 1995).
On November 9, 1994, Landscape filed suit alleging that Columbia's Colonnade line infringed the trade dress of its Petoskey Collection, in violation of § 43(a) of the Lanham Act and New York state unfair competition and dilution law. On December 30, 1994, Landscape moved for a preliminary injunction. The Court held a hearing on January 17 to 19, 1995, and at the close of testimony, issued a temporary restraining order prohibiting Columbia from selling or advertising its Colonnade furniture.
On February 14, 1995, the Court heard summations and issued an opinion from the bench finding that Landscape had demonstrated at least substantial questions going to the merits of its Lanham Act claim, i.e. that the trade dress of the Petoskey furniture was distinctive; that there was a likelihood of confusion between the Colonnade and Petoskey lines, see Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492, 495 (2d Cir.), cert.. denied, 368 U.S. 820, 7 L. Ed. 2d 25, 82 S. Ct. 36 (1961); and that the balance of hardships tipped decidedly in favor of Landscape. Landscape Forms, 70 F.3d at 252-53. On March 3, 1995, the Court issued a preliminary injunction prohibiting Columbia from selling and advertising its Colonnade furniture in the United States.
Columbia appealed, and on November 13, 1995, the Second Circuit vacated the preliminary injunction and remanded for the Court to consider the affirmative defense of functionality. See Landscape Forms, 70 F.3d at 253-55. Specifically, the Second Circuit instructed the Court to consider whether the Petoskey design "'confers a significant [competitive] benefit' to Landmark [sic] 'that cannot practically be duplicated by the use of alternative [furniture] designs, . . . thus making the design functional and not protectable trade dress." Id. at 254 (quotations and citations omitted).
On January 2 to 4, 1996, pursuant to the remand, the Court held a hearing to weigh the evidence and make additional factual findings. At the hearing, Landscape called four witnesses: Arno Yurk, an industrial designer for Landscape; William Main, Landscape's President; S. Kenneth Kirn, Columbia's President; and Leonard Hopper, the chief landscape architect for the New York City Housing Authority. See Hearing Transcript Dated January 2 to 4, 1996, ("Tr.") at 65-66, 140, 172-73, 212. Columbia called one witness, Joseph Fasanella, the vice president of Mid-Atlantic Products, a manufacturers' representative. Tr. at 44. The Court also reviewed post-hearing briefs, together with exhibits and excerpts of deposition testimony.
At the hearing, Landscape elicited testimony that over a five year period, the Petoskey Collection accounted for approximately $ 9,500,000 in sales. Tr. at 142. Of this number, Landscape retained approximately $ 4,750,000 in net profits, after the deduction of installation, procurement, and reselling costs. Tr. at 142-43. In 1989, the Petoskey's first year, sales generated approximately $ 300,000. Tr. at 144. In its best year, Landscape retained $ 1,299,000. Id. The site furnishings market, as a whole, was estimated to be worth $ 120,000,000. Tr. at 141.
These "or equal" furnishings must be "substantially the same and function the same" as any materials specified, Tr. at 216, but need not be exactly the same. Tr. at 231 Rather, the words "or equal" mean something that will achieve an aesthetic and functional purpose similar to the other, but in its own fashion. Tr. at 232. Hopper further testified that the "or equal" terminology promotes competition since it "welcome[s] contractors to look for other products" that would meet the Housing Authority's requirements. Tr. at 230-31.
Hopper explained that the context in which furniture is placed is important since it determines the alternatives from which a selection is made, Tr. at 226-28, and that look, materials, durability, and aesthetics are all significant factors in making that determination. Tr. at 228-29, 242. Hopper further testified that he considered the Trystan bench, Tr. at 235-36, 250, the DuMor bench, Tr. at 250, the Ultrum bench, Tr. at 237-38, 250-52, and the Wabash bench, Tr. at 250, as "or equal[s]" to the Petoskey. Hopper also indicated that a number of benches could be considered "or equal[s]" ...