The opinion of the court was delivered by: Paul E. Plunkett, United States District Judge
MEMORANDUM OPINION AND ORDER
This matter is before the Court on defendants' objections to Magistrate Judge Mason's Report and Recommendation ("R&R") recommending that plaintiff's motion for a preliminary injunction be granted. For the reasons set forth below, we accept the magistrate judge's R&R and grant plaintiff's motion for a preliminary injunction.
Plaintiff, Logan Graphic Products, Inc. ("Logan"), is a leader in the mat-cutting products industry. For the past twenty-eight years, it has been manufacturing and selling mat-cutting tools. It is currently the largest manufacturer of mat-cutting equipment in the United States. Logan manufactures a variety of products, including the #301 Compact (the "Compact") and the #401 Intermediate (the "Intermediate") mat-cutting systems, and straight-edge and bevel-edge cutting tools.
Defendants are Textus USA, Inc. (d/b/a Textus Industries, Inc. and Textus Art and Craft) and David Smith, CEO and owner of Textus USA, Inc. (collectively, "Textus"). Textus is a relative newcomer to the industry. It entered the mat-cutting tool industry about eighteen months ago with two mat-cutting systems, the HomePro and the StudioPro, which are designed to compete with Logan's Compact and Intermediate systems. Textus has displayed and marketed these products at several large art supply conventions in the past year, and does not deny that its products employ some of the same features found in Logan's products.
Logan asserts that Textus's mat-cutting products infringe its trade dress and has sued Textus for trade dress infringement in violation of section 43(a)(1) of the Lanham Act, 15 U.S.C. § 1125(a). Logan seeks to establish trade dress rights in the overall "look" of its Compact and Intermediate products, including: 1) the color scheme, shape, size and style of its mat-cutting boards and cutting tools; 2) the font, color and style of its measurement scale; 3) the sticker and screw location of the adjustable mat rail guides, as well as its color; and 4) the tension spring mat guide and the hinged mat guide used, respectively, on the Compact and Intermediate mat-cutting systems.
Textus argues that Logan's products are not entitled to trade dress protection because the allegedly unique and non-functional aspects of the products' trade dress are actually fully functional components that were the subjects of two Logan patents. The patents have expired and, according to Textus, Textus is free to incorporate in its own products many of the features used by Logan. Logan, argues Textus, cannot extend its expired patents by now claiming trade dress protection.
Logan has filed a motion for a preliminary injunction against Textus. The magistrate judge held a hearing on Logan's motion on November 12, 2002. He issued his R&R on December 23, 2002, recommending that Logan's motion be granted and the preliminary injunction be issued.
II. Magistrate Judge's Report and Recommendation
In his R&R, the magistrate judge noted the requirements for issuing a preliminary injunction. First, the Court must find: 1) some likelihood of success on the merits; 2) no adequate remedy at law; and 3) that the plaintiff will suffer irreparable harm if the injunction is not granted. Abbott Labs. v. Mead Johnson & Co., 971 F.2d 6, 11 (7th Cir. 1992). If these three conditions have been met, then the Court considers: 1) the harm to the defendant if the injunction is granted, weighed against the harm to the plaintiff if the injunction is denied; and 2) the public interest, i.e. the consequences to non-parties of granting or denying the injunction. Id. at 11-12.
The magistrate judge then undertook an examination of each of the preliminary injunction requirements. In order to demonstrate entitlement to trade dress protection, Logan must show: 1) that its "overall image" is inherently distinctive or has acquired distinctiveness through secondary meaning; and 2) that the similarity of the defendant's trade dress causes a likelihood of confusion on the source or affiliation of the product. Thomas & Betts Corp. v. Panduit Corp., 138 F.3d 277, 291 (7th Cir.) cert. denied, 525 U.S. 929 (1998). In addition, Logan must show that what it claims as trade dress is non-functional. See 15 U.S.C. § 1125(a)(3); TrafFix Devices, Inc. v. Marketing Displays Inc., 532 U.S. 23, 29 (2001). Logan need only show that it has a "better than negligible" chance of success on the merits of its claim. See Platinum Home Mortgage Corp. v. Platinum Fin. Group, Inc., 149 F.3d 722, 726 (7th Cir. 1998).
After receiving evidence and conducting a hearing, the magistrate judge made a variety of findings relating to the similarity of Logan's and Textus's products, the coverage of Logan's previous patents, comparisons of competitors' products, the likelihood of confusion regarding Logan's and Textus' products, and the parties' advertising efforts. The magistrate judge did not find that Logan's products were inherently distinctive, but he did find that Logan has a likelihood of success in proving that its mat-cutting systems have acquired a secondary meaning. In addition, the magistrate judge found that Logan had a better than negligible chance of demonstrating a likelihood of confusion about the products among consumers. Finally, the magistrate judge found that Logan met its burden of showing some likelihood of success in proving that the elements it seeks to protect are non-functional.
In his R&R, the magistrate judge then addressed the other factors to be considered when deciding whether to issue a preliminary injunction — inadequate remedy at law, irreparable harm to the plaintiff, the balancing of harms and the public interest. The magistrate judge ...