Color per se can never be protected, and color is protectible only "in connection with some definite arbitrary symbol or design."
6. "Trade dress" was defined by the Court of Appeals in Two Pesos in much the same fashion that this Court used in Spraying Sys., 762 F. Supp. at 782--as the Supreme Court in Two Pesos quoted the lower court's definition (60 U.S.L.W. at 4762 n.1), "essentially [the product's] total image and overall appearance." And quoting from and citing to other sources, Two Pesos, id. went on:
It "involves the total image of a product and may include features such as size, shape, color or color combinations, texture, graphics, or even particular sales techniques."
However, the rebuttable presumption that is accorded registered marks does not apply to trade dress, for which secondary meaning or distinctiveness must be established ( Spraying Sys., 762 F. Supp. at 782-83).
7. It is well settled that "product packaging which is commonplace and functional cannot be legally protectible" (1 J. Thomas McCarthy, Trademarks & Unfair Competition § 7:28, at 255 (2d ed. 1984); accord, Original Appalachian Artworks, Inc. v. Blue Box Factory (USA) Ltd., 577 F. Supp. 625, 631 (S.D. N.Y. 1983) (transparent plastic front window on the box containing Cabbage Patch doll unprotectible as "commonly used, functional device for displaying dolls")).
8. Even length of use and promotion of a mark or dress are not dispositive of secondary meaning, especially where the trade dress is a "simple geometric configuration" and there is nothing to suggest that consumers associate the configuration mark or dress with one source ( Eldon Indus., Inc. v. Rubbermaid, Inc., 735 F. Supp. 786, 817-18 (N.D. Ill. 1990)).
9. Secondary meaning cannot be established by advertising that merely pictures the product and does nothing to emphasize the mark or dress ( id. at 818 (another case dealing with a plaintiff that sought to obtain a monopoly over a product's configuration); Textron, Inc. v. United States Int'l Trade Comm'n, 753 F.2d 1019, 1027 (Fed. Cir. 1985) (no evidence that "promotions focused buyers' attentions on the shape of the machine or that the design of the column and ram was featured in any way")). "To establish secondary meaning, a manufacturer must show that, in the minds of the public, the primary significance of a product feature or term is to identify the source of the product rather than the product itself" ( Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 851, 102 S. Ct. 2182, 72 L. Ed. 2d 606 n.11 (1982) (emphasis added)).
10. "Where a configuration of a product is displayed with and identified by word marks, the burden to show that the configuration serves a trademark function is greater, since the usual way for consumers to identify and distinguish the source of products is by marks that can be verbalized" (3 Louis Altman, Callmann Unfair Competition, Trademarks and Monopolies § 18.12, at 136 n.2 (4th ed. 1983 rev'n)).
11. It is irrelevant that Ohio Art may have intended--through the promotion of Etch A Sketch--that the product configuration as well as the product name be a source identifier. For that purpose the "desires or intentions of the creator, or even the owner, are irrelevant. Instead, it is the attitude of the consumer that is important" ( Ellison Educ. Equip., Inc. v. Accu-Cut Sys., Inc., 769 F. Supp. 1090, 1096 (D. Neb. 1991), quoting Co-Rect Prods. v. Marvy! Advertising Photography, 780 F.2d 1324, 1332 (8th Cir. 1985)).
B. Likelihood of Confusion
12. Important factors in determining likelihood of confusion are the similarity of the marks, the similarity of the products, the area and manner of concurrent use, the degree of care likely to be exercised by consumers, the strength of the mark or dress, evidence of actual confusion and the intent of the alleged infringer ( Source Servs. Corp. v. Chicagoland JobSource, Inc., 643 F. Supp. 1523, 1527 (N.D. Ill. 1986), citing Helene Curtis Indus., Inc. v. Church & Dwight Co., 560 F.2d 1325, 1330 (7th Cir. 1977)).
13. "Side-by-side comparison is not the correct test" for determining the similarity of the marks ( Sterling Drug Inc. v. Lincoln Labs., Inc., 322 F.2d 968, 971 (7th Cir. 1963)). Instead the test is the degree of similarity "taken in a marketplace context" ( Source Servs., 643 F. Supp. at 1528). Sterling Drug, 322 F.2d at 971 (emphasis in original) put it in terms of "the purchasing public's state of mind when confronted by somewhat similar [marks] singly presented."
14. Labeling of the products, packaging and promotional materials with the competing logos is an important factor in determining whether the consumer is likely to be confused as to the source of the product ( Eldon Indus., 735 F. Supp. at 796 (logos prominently displayed in catalogs, on packages and on products); Washington Nat'l Ins. Co. v. Blue Cross & Blue Shield United, 727 F. Supp. 472, 475 (N.D. Ill. 1990) ("if the source . . . is identified, then confusion will be minimized--even if the marks are used in connection with the same type of product"); Keystone Camera Prods. Corp. v. Ansco Photo-Optical Prods. Corp., 667 F. Supp. 1221, 1232 (N.D. Ill. 1987) (no likelihood of confusion where defendant "presented its . . . name prominently on its [product], used different shades of color, different color combinations and different color placements . . . from those used by plaintiff")).
15. Because "'strong' marks are magnets, drawing consumers' attention away from the characteristics of a product or service and toward its producer or provider," while "'weak marks have no better than a blurred effect in that respect," the strength of the mark or dress must be considered in evaluating likelihood of confusion ( Source Servs., 643 F. Supp. at 1531). In that respect any third-party use of a mark or dress is reflective of the weakness of a mark or dress ( Washington Nat'l Ins., 727 F. Supp. at 476).
16. It is reasonable and proper to infer from the absence of any evidence of actual confusion that there is no likelihood of confusion ( S.C. Johnson & Son Inc. v. Lever Bros. Co., 1991 U.S. Dist. LEXIS 12529, 19 U.S.P.Q.2d 1027, 1036-37 (E.D. Wis. 1991) (citing a host of cases for the proposition that "where both parties have extensively marketed their products, the absence of actual confusion is highly persuasive evidence that confusion is not likely"); Washington Nat'l Ins., 727 F. Supp. at 477)).
17. This case involves an asserted mark covering the shape of a product itself--it is not a "container of goods" case such as In re Morton-Norwich Prods., Inc., 671 F.2d 1332, 1336 (C.C.P.A. 1982) ("it should be borne in mind that this is not a 'configuration of goods' case but a 'configuration of the container for the goods' case") (emphasis in original). It is particularly important in cases involving asserted trademarks in product designs to delineate between protectible and unprotectible elements, so as to avoid (1) conflict with the patent laws and (2) the impedance of competition ( Stormy Clime Ltd. v. ProGroup, Inc., 809 F.2d 971, 977-78 (2d Cir. 1986) ("Since trademark protection extends for an unlimited period, expansive trade dress protection for the design of products would prevent some functional products from enriching the public domain" (id. at 878)).
18. For this Court to recognize the overall product configuration of the Etch A Sketch toy as a trademark, the entire design must be arbitrary or nonfunctional ( Textron, 753 F.2d at 1025, emphasizing "entire" ("The reason for this rule is self-evident--the right to copy better working designs would, in due course, be stripped of all meaning if overall functional designs were accorded trademark protection because they included a few arbitrary and nonfunctional features")). Because at the very least the rectangular drawing screen of the Etch A Sketch toy is functional, it is highly questionable that the overall configuration was entitled to registration.
19. Schwinn, 870 F.2d at 1189 teaches that "[a] feature is functional if it is one that it [sic] costly to design around or do without, rather than one that is costly to have." And W.T. Rogers Co. v. Keene, 778 F.2d 334, 339 (7th Cir. 1985) tells us that "if the feature [in this instance the product shape itself] is not ornamental or fanciful or whimsical or arbitrary, but is somehow intrinsic to the entire product consisting of this manufacturer's brand and his rivals' brands, trademark production [sic] will be denied."
20. Where there are a limited number of alternative designs available to competitors, no one of those designs should be taken from the public domain through trademark protection ( Keene Corp. v. Paraflex Indus., Inc., 653 F.2d 822, 827 (3d Cir. 1981) ("the selection of a luminaire design does not have the unlimited boundaries as does the selection of a wine bottle or ashtray design, and the court's finding that competition will be stifled is again not clearly erroneous"); accord In re Bose Corp., 772 F.2d 866, 872 (Fed. Cir. 1985) ("If the feature asserted to give a product distinctiveness is the best, or at least one, of a few superior designs for its de facto purpose, it follows that competition is hindered"); Morton-Norwich, 671 F.2d at 1341 ("is it the best or one of a few superior designs available?")).
21. Functionality does not depend on whether other possible designs are feasible. Rather the test is whether the particular features claimed as a trademark are necessary for "effective competition" ( Schwinn, 870 F.2d at 1191; accord, Keene Corp., 653 F.2d at 827 ("merely because there are other shapes and designs 'which defendant could use and still produce a workable' product, the design used is not thereby non-functional"); Tyco Indus. Inc. v. Lego Sys. Inc., 5 U.S.P.Q.2d 1023, 1039 (D. N.J. 1987), aff'd without published opinion, 853 F.2d 921 (3d Cir. 1988) ("Simply because other configurations are available or feasible does not render the design non-functional").
22. It is also some evidence of functionality that the claimed shape is depicted as the preferred embodiment of at least four utility patents. And it cannot be ignored that Ohio Art itself adopted the very same shape shown in the drawings of those patents for its own commercial embodiment. As stated in Cable Elec. Prods., Inc. v. Genmark, Inc., 770 F.2d 1015, 1031 (Fed. Cir. 1985):
A manufacturer may choose in its commercial embodiment of a patented device to less than faithfully replicate the exemplary depiction of a claimed embodiment shown in the figures of the patent. Hence, for purposes of evaluating the existence or impact of product copying, the relevance of patent figures depends on the extent to which their appearance is replicated in the actual marketplace product of the patentee.
23. It is not relevant, much less dispositive, that the particular shape of Etch A Sketch is not an element of the patent claims. Instead the issues are (a) whether that shape is one embodiment of the claimed invention (it is) and (b) whether the shape is ornamental (it is not). It remains true today, as nearly 70 years ago ( William H. Keller, Inc. v. Chicago Pneumatic Tool Co., 298 F. 52, 57 (7th Cir. 1923) (emphasis added)), that:
If the structure which the patentee makes pursuant to his patent is an embodiment of the elements of the claims or a claim therein, and contains no artistic or distinguishing marks, but is strictly a utilitarian article, where simplicity of structure and cheapened cost of production are inherent in the combination and constitute its virtue, then the mere fact that a Chinese copy is made does not impose on the maker the burden of establishing his good faith or the absence of unfair trade methods.
24. It is of course true that the Etch A Sketch product configuration was unique in 1960, when Ohio Art began marketing the toy. But that does not establish its nonfunctionality, particularly because that uniqueness resulted from the existence of a basic utility patent. No product design that "is essentially adapted to the function it performs" and is not "arbitrary or fanciful" achieves trademark status ( Textron, 753 F.2d at 1027). Here the shape of Etch A Sketch is closely adapted to the function performed by the patented apparatus.
25. Moreover, the fact that Ohio Art itself did not attribute any trademark significance to the shape of its product until 1987--a few years before the Clark patent expired--is added evidence that the shape is functional and does not have secondary meaning (see generally Singer Mfg. Co. v. June Mfg. Co., 163 U.S. 169, 41 L. Ed. 118, 16 S. Ct. 1002 (1895) (in part Singer, id. at 180-81 teaches that such a coincidence in time "tends to create a strong implication" of the patentee's intention to perpetuate the expiring patent monopoly); Textron, 753 F.2d at 1026).
26. Schwinn, 870 F.2d at 1191 reaffirms the holding in W.T. Rogers that a feature may also be functional (though it is not automatically so) due to its pleasing aspect to consumers. As W.T. Rogers, 778 F.2d at 347 put it:
Though a producer does not lose a design trademark just because the public finds it pleasing, there may come a point where the design feature is so important to the value of the product to consumers that continued trademark protection would deprive them of competitive alternatives; and at that point the protection ceases.
Absent the protection of a design or utility patent, therefore, Ohio Art cannot prevent "the loss of a competitive advantage stemming from the exclusive possession of a popular design" ( id. at 348).
27. From the evidence adduced at the Hearing, it appears that defendants are highly likely to demonstrate at trial that most if not all of the claimed features in Etch A Sketch are functional under the test in W.T. Rogers, id. at 347 (paraphrased to fit this case):
If many consumers consider the [rectangular screen and housing, with two knobs in lower corners] not the distinctive sign of a particular brand of [drawing toy] . . . but a design feature enhancing the attractiveness, value, and hence utility in the economic sense . . ., this is evidence bearing on the functionality of the feature.
It is likewise true that "trade dress protection does not extend to features already shared by different brands on the market" ( Schwinn, 870 F.2d at 1190). Because a number of other products utilize a square or rectangular drawing screen, a square or rectangular housing and round knobs in the bottom corners, those elements cannot be protected by Ohio Art under a theory of trade dress.
Inadequacy of Remedy at Law
28. As Roland Machinery, 749 F.2d at 386 points out:
The absence of an adequate remedy at law is a precondition to any form of equitable relief.
Actions claiming the violation of intellectual property rights frequently satisfy that standard, for quantifying the damages caused by the unlawfully competitive activity--though such damages are very real--may pose a real problem. Although Hyatt Corp. v. Hyatt Legal Services, 736 F.2d 1153, 1158 (7th Cir. 1984) spoke in the context of irreparability of injury from the dilution of a trademark, its statement applies with equal force to the inadequacy of a remedy at law here--what follows omits a citation and a quotation, the latter taken from this Court's opinion in Instrumentalist Co. v. Marine Corps League, 509 F. Supp. 323, 332 (N.D. Ill. 1981):
We note that it is the very nature of dilution to gnaw away insidiously at the value of a mark. . . . Such an injury would be remarkably difficult to convert into damages. "There is no effective way to measure the loss of sales or potential growth--to ascertain the people who don't knock on the door or to identify the specific persons who do not [return] because of the existence of the infringer."
Irreparability of Harm
29. While irreparable harm is generally presumed in the usual trademark infringement case, that presumption is overcome where the plaintiff delays in seeking injunctive relief ( Stokely-Van Camp Inc. v. Coca-Cola Co., 2 U.S.P.Q.2d 1225, 1227 (N.D. Ill. 1987) ("extraordinary remedy" of preliminary injunction denied where plaintiff chose to wait three months before filing suit while defendant was spending substantial amounts to market its product)). It can be inferred from the plaintiff's delay that there is no threat of irreparable harm ( Borden, Inc. v. Kraft, Inc., 224 U.S.P.Q. 811, 822 (N.D. Ill. 1984), quoting Amstar Corp. v. Domino's Pizza, Inc., 615 F.2d 252, 265 (5th Cir. 1980) ("A trademark owner that strongly believed its customers were being deceived would hardly have remained idle for such an extended period of time") and rejecting "extraordinary remedy of preliminary injunctive relief" where plaintiff delayed bringing suit for almost six months). As already stated, the fact that Ohio Art was engaged in other litigation is irrelevant to the issue of irreparable harm. Nor are trademark cases cited by Ohio Art, dealing with the issue of laches, persuasive on the issue of irreparable harm.
Balancing of Relative Harms
30. Injunctive relief is not available "where a party is simply trying to obtain a commercial advantage. . ." ( Borden, 224 U.S.P.Q. at 823). Such relief is particularly inappropriate here, where the advantage that Ohio Art is seeking to obtain is for the direct benefit of its later-marketed product, Travel Etch A Sketch--which is the head-to-head competitor of Doodle It and is trying to cut into Doodle It's already-established market entry and business momentum. But even apart from that, the harm to Galoob and its codefendants if preliminary injunctive relief were to be wrongfully granted far outweighs the harm that Ohio Art would sustain if such relief were wrongfully denied. And that would remain true even if (contrary to what Conclusion 29 reflects) it were possible to identify some degree of irreparable harm to Ohio Art. Finally, the sliding scale approach described in Roland Machinery, 749 F.2d at 387-88 strongly favors defendants and disfavors Ohio Art, because both of the weights placed in the scales--the likelihood of success on the merits and the balance of relative harms--tip so heavily toward defendants (rather than requiring a comparative evaluation of counterweights).
31. It would not serve the public interest to grant an injunction where there is "minimal likelihood of . . . confusion" ( Eldon Indus., 735 F. Supp. at 798). Indeed, the public's interest in obtaining the "lowest priced goods" and in "avoiding monopolies and in encouraging, not stifling, competition" is best served in this case by the denial of an injunction ( Calvin Klein Cosmetics Corp. v. Lenox Labs., Inc., 815 F.2d 500, 505 (8th Cir. 1987)).
* * *
Ohio Art must establish each of five conditions to obtain preliminary injunctive relief. It has succeeded in showing only one of those: the inadequacy of its remedy at law if it were otherwise entitled to relief. In every other respect it has failed. In this contest in which even one strike (either swinging or called) is "out," Ohio Art has thus sustained not one but four strikes. Its motion for a preliminary injunction is denied.
Milton I. Shadur
Senior United States District Judge
Date: July 20, 1992