Tools USA and Equip v. Champ Frame Straight ( 1996 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
TOOLS USA AND EQUIPMENT
COMPANY,
Plaintiff-Appellee,
v. No. 95-1698
CHAMP FRAME STRAIGHTENING
EQUIPMENT, INCORPORATED,
Defendant-Appellant.
Appeal from the United States District Court
for the Middle District of North Carolina, at Greensboro.
William L. Osteen, Sr., District Judge.
(CA-93-137-2)
Argued: May 9, 1996
Decided: July 2, 1996
Before WIDENER, NIEMEYER, and MOTZ, Circuit Judges.
_________________________________________________________________
Affirmed by published opinion. Judge Motz wrote the opinion, in
which Judge Widener and Judge Niemeyer joined.
_________________________________________________________________
COUNSEL
ARGUED: Thomas Matthew Clare, TEAGUE, CAMPBELL, DEN-
NIS & GORHAM, Raleigh, North Carolina, for Appellant. Jack Wil-
liam Floyd, FLOYD, ALLEN & JACOBS, L.L.P., Greensboro, North
Carolina, for Appellee. ON BRIEF: Karen K. Prather, TEAGUE,
CAMPBELL, DENNIS & GORHAM, Raleigh, North Carolina, for
Appellant. Robert V. Shaver, Jr., FLOYD, ALLEN & JACOBS,
L.L.P., Greensboro, North Carolina, for Appellee.
_________________________________________________________________
OPINION
DIANA GRIBBON MOTZ, Circuit Judge:
Tools USA and Equipment Company brought this action against
Champ Frame Straightening Equipment alleging trade dress infringe-
ment and unfair competition under § 43(a) of the Lanham Act, 15
U.S.C. § 1125(a) (1994), and deceptive or unfair trade practices under
state law. The jury returned a verdict in favor of Tools USA, finding
that Champ had infringed on Tools USA's trade dress. Asserting that
there was insufficient evidence to support the jury's verdict, Champ
appeals. Because Tools USA presented sufficient evidence that its
trade dress was non-functional and had acquired a secondary mean-
ing, and that Champ's infringement created a likelihood of confusion,
we affirm.
I.
Tools USA, a North Carolina corporation, engages in the mail
order sale of tools and equipment through catalogs distributed to auto
body shops nationwide. Champ Frame Straightening Equipment, a
California corporation, manufactures and sells frame straightening
equipment, and also engages in the mail order sale of tools and equip-
ment through catalogs distributed to auto body shops throughout the
country.
Tools USA began publishing its "Tools USA and Equipment" cata-
log in 1988. Until Champ introduced its "Auto Body Toolmart" cata-
log in 1991, Tools USA was the only company distributing a catalog
of tools and equipment directly to auto body shops. By 1994, Tools
USA was mailing over 80,000 copies of each issue of its catalog to
a group of customers that included almost every identifiable auto
body shop in the country. At that time, Champ was mailing over
67,000 copies of each issue of its catalog to many of the same busi-
nesses.
2
Tools USA's complaint alleged that its catalog has a distinctive
design and trade dress. Listing several similarities between the "Tools
USA and Equipment" catalog and Champ's "Auto Body Toolmart"
catalog, Tools USA charged that Champ had infringed on Tools
USA's trade dress. The jury agreed and assessed damages in the
amount of $38,387.19. The district court, having denied Champ's
motion for judgment as a matter of law at the conclusion of Tools
USA's case, also denied Champ's renewed motion following the jury
verdict. The parties had stipulated that Tools USA's claim for unfair
or deceptive trade practices in violation of N.C. Gen. Stat. § 75-1.1
would not be submitted to the jury but that if the jury awarded dam-
ages to Tools USA for trade dress infringement, those damages would
be trebled pursuant to N.C. Gen. Stat. § 75-16. Accordingly, the court
entered judgment in favor of Tools USA in the amount of
$115,161.57. The court also entered a permanent injunction, enjoining
Champ from publishing its catalog without making certain
modifications.1
II.
Champ argues that the district judge erred in denying its motions
for judgment as a matter of law with respect to both liability and dam-
ages. A court may only grant a motion for judgment as a matter of
law (formerly j.n.o.v., see O'Neal v. Celanese Corp., 10 F.3d 249,
250 (4th Cir. 1993)) if, viewing the evidence in the light most favor-
able to the non-moving party and drawing every legitimate inference
in that party's favor, the court "determine[s] that the only conclusion
a reasonable trier of fact could draw from the evidence is in favor of
the moving party." Winant v. Bostic, 5 F.3d 767, 774 (4th Cir. 1993).
See also O'Neal, 10 F.3d at 250; Anheuser-Busch, Inc. v. L & L
Wings, Inc., 962 F.2d 316, 318 (4th Cir.), cert. denied, 506 U.S. 872
(1992). We review a grant or denial of a motion for judgment as a
matter of law de novo. Trandes Corp. v. Guy Atkinson Co., 996 F.2d
655, 661 (4th Cir.), cert. denied, 114 S. Ct. 443 (1993).
_________________________________________________________________
1 Although in its brief Champ includes the district court's asserted error
in issuing a permanent injunction as one of the"issues presented for
review," it provides no argument on the issue. At oral argument,
Champ's counsel acknowledged that Champ had complied with the
injunction and did not seek any relief with regard to it.
3
"``Trade dress' involves the total image of a product, and may
include features such as size, shape, color or color combinations, tex-
ture, graphics, or even particular sales techniques." Two Pesos, Inc.
v. Taco Cabana, Inc., 505 U.S. 763, 764 n.1 (1992) (quoting John C.
Harland Co. v. Clarke Checks, Inc., 711 F.2d 966, 980 (11th Cir.
1983)). See also Restatement (Third) of Unfair Competition § 16 cmt.
a (1995). Section 43(a) of the Lanham Act, 15 U.S.C.§ 1125(a),
creates a federal cause of action for trade dress infringement. See
Elmer v. ICC Fabricating, Inc., 67 F.3d 1571, 1578 (Fed. Cir. 1995);
John C. Harland Co., 711 F.2d at 980. See also Two Pesos, 505 U.S.
at 773.
A claim of trade dress infringement requires proof of three ele-
ments: (1) the trade dress is primarily non-functional;2 (2) the trade
dress is inherently distinctive or has acquired a secondary meaning;
and (3) the alleged infringement creates a likelihood of confusion. See
Two Pesos, 505 U.S. at 765-67. See also Elmer, 67 F.3d at 1578;
Computer Care v. Service Systems Enters., 982 F.2d 1063, 1067-68
(7th Cir. 1992); Woodsmith Publishing Co. v. Meredith Corp., 904
F.2d 1244, 1247 (8th Cir. 1990); Allied Marketing Group, Inc. v. CDL
Marketing, Inc., 878 F.2d 806, 813 (5th Cir. 1989); Hartford House,
Ltd. v. Hallmark Cards, Inc., 846 F.2d 1268, 1271 (10th Cir.), cert.
denied, 488 U.S. 908 (1988); American Home Products Corp. v. Barr
Labs, Inc., 834 F.2d 368, 370 (3rd Cir. 1987); Fuddruckers, Inc. v.
Doc's B.R. Others, Inc., 826 F.2d 837, 842 (9th Cir. 1987); Harlequin
Enters. v. Gulf & Western Corp., 503 F. Supp. 647, 649 (S.D.N.Y.
1980), aff'd, 644 F.2d 946 (2nd Cir. 1981).
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2 The circuits are divided as to which party bears the burden of proof
on the question of functionality. See generally Danielle Rubano, Note,
Trade Dress: Who Should Bear the Burden of Proving or Disproving
Functionality in a Section 43(a) Infringement Claim? , 6 Fordham Intell.
Prop., Media & Ent. L.J. 345 (1995) (collecting cases). We have yet to
address this issue, and need not do so here. In the instant case, the district
court instructed the jury that Champ had the burden of proving function-
ality. Champ has not appealed this instruction, and thus the issue is not
now before us.
4
III.
The district court submitted to the jury special interrogatories,
which required the jury to make separate findings as to each element
of trade dress infringement. The jury first found that the Tools USA
catalog's trade dress was non-functional. The jury then found that
although the trade dress was not inherently distinctive and had not
been intentionally copied, it had acquired a secondary meaning by the
time Champ introduced its Toolmart catalog. Finally, the jury found
that there was a likelihood of confusion created by the similarities in
the parties' catalogs. Champ now claims that the jury erred in its find-
ings as to each of the three elements necessary to establish a trade
dress claim. We address each element in turn.
A.
"[A] product feature is functional if it is essential to the use or pur-
pose of the article or it affects the cost or quality of the article."
Inwood Laboratories, Inc. v. Ives Laboratories, Inc. , 456 U.S. 844,
850 n.10 (1982). In other words, a feature is functional "if exclusive
use of the feature would put competitors at a significant non-
reputation-related disadvantage." Qualitex Co. v. Jacobson Products
Co., 115 S. Ct. 1300, 1304 (1995). See also , Clamp Mfg. Co. v. Enco
Mfg. Co., 870 F.2d 512, 516 (9th Cir.) ("Functional features of a
product are features which constitute the actual benefit that the cus-
tomer wishes to purchase, as distinguished from an assurance that a
particular entity made, sponsored, or endorsed a product") (internal
quotations and citations omitted), cert. denied , 493 U.S. 872 (1989).
The non-functionality requirement for trademark or trade dress pro-
tection "prevents trademark law, which seeks to promote competition
by protecting a firm's reputation, from instead inhibiting legitimate
competition by allowing a producer to control a useful product fea-
ture." Qualitex, 115 S. Ct. at 1304.
In support of its argument that the jury erred in finding that Tools
USA's trade dress was non-functional, Champ focuses on individual
aspects of the "Tools USA" catalog trade dress. Champ explains at
some length why it believes each feature is functional. This tactic
ignores the fact that the critical functionality inquiry is not whether
each individual component of the trade dress is functional, but rather
5
whether the trade dress as a whole is functional. See LeSportsac, Inc.
v. K Mart Corp., 754 F.2d 71, 76 (2nd Cir. 1985) ("by breaking
[plaintiff's] trade dress into its individual elements and then attacking
certain of those elements as functional, [defendant] misconceives the
scope of the appropriate inquiry"); Fuddruckers, 826 F.2d at 842
("We examine trade dress as a whole to determine its functionality;
functional elements that are separately unprotectable can be protected
together as part of a trade dress") (internal citation omitted); Hartford
House, 846 F.2d at 1272 ("a trade dress may be a composite of sev-
eral features in a certain arrangement or combination which produces
an overall distinctive appearance. In this context, the question is
whether the combination of features comprising the trade dress is
functional"); AmBrit, Inc. v. Kraft, Inc., 812 F.2d 1531, 1538 (11th
Cir.) ("That individual elements of packaging are functional does not,
however, render the package as a whole unprotect[a]ble"), cert.
denied, 481 U.S. 1041 (1983).
The trade dress of the Tools USA catalog consists of a number of
elements, combined in a particular fashion. Consequently, the fact
that, for example, newsprint provides the most economical type of
paper on which to print a catalog, and is thus functional, does not ren-
der the catalog's trade dress, as a whole, functional. Tools USA does
not seek to prevent its competitors from printing their catalogs on
newsprint; it seeks only to protect its "particular configuration of
design features." LeSportsac, 754 F.2d at 77. Tools USA's "particular
configuration of design features" includes, inter alia, (1) the use of a
"stars and stripes" logo designed around the catalog name, appearing
prominently at the top of the cover page and in smaller form on each
subsequent page; (2) an ordering information box featuring the logos
of accepted credit cards at the bottom of the cover page; (3) the
phrase "ATTENTION: BODY SHOP MANAGERS" in capital letters
at the bottom of the cover page; (4) the use of newsprint as printing
material; (5) the use of boxes around the photographs and descriptions
of items offered for sale; and (6) the use of a"banner" containing
ordering instructions across the bottom of each page. Champ cites no
evidence, and offers no argument beyond conclusory statements, sug-
gesting that this trade dress, as a whole, is functional.3
_________________________________________________________________
3 Champ asserts that, because Tools USA has made changes to its cata-
log over time, the catalog "does not have a consistent overall look." Brief
6
Tellingly, Champ also makes no argument as to why the use of the
"stars and stripes" logo, even examined by itself, should be consid-
ered functional. Indeed, Champ's president conceded at trial that its
use was not "fundamental to the design of the catalogue" and "was not
included in the original concept of our catalogue." He acknowledged,
"[i]t was a device that I added later, because I saw Tools USA was
using this device and I wanted to use it too."
As noted above, Champ does maintain, however, that many of the
other features, individually, are functional. Even if this were the cor-
rect inquiry, which it is not, Champ's arguments are unpersuasive.
For example, Champ asserts that "the telephone number and facsimile
number on every page of the catalog are functional as they provide
easy access to information for the customer . . . ." Brief of Appellant
at 20. The problem is that while this information may be functional,
its placement in a "banner" format across the bottom of each page is
not. Because the functionality requirement is directed at the extent to
which protecting a particular feature would hinder competition, see
Qualitex, 115 S. Ct. at 1304, one test for functionality is the availabil-
ity to competitors of alternative options.4 A myriad of methods of
conveying ordering information to customers do not involve the use
_________________________________________________________________
of Appellant at 22. However, the changes appear to be slight, and the
jury would certainly have been justified in concluding that the changes
did not alter the overall trade dress of the catalog. Nor does Woodsmith,
904 F.2d at 1248, on which Champ principally relies for its functionality
argument, hold otherwise. The discussion of functionality in Woodsmith
is dicta. The district court in Woodsmith had held that there was a ques-
tion of fact as to functionality but granted the defendants summary judg-
ment because plaintiff had produced insufficient evidence of likelihood
of confusion; the Eighth Circuit simply affirmed that holding. Id. at
1250.
4 See, e.g., Hartford House, 846 F.2d at 1273 ("the availability of alter-
native appealing designs is a key factor in determining that a trade dress
is nonfunctional"). See also Restatement (Third) of Unfair Competition
§ 17 ("a design is ``functional'. . . if the design affords benefits in the
manufacturing, marketing, or use of the goods or services with which the
design is used, apart from any benefits attributable to the design's signifi-
cance as an indication of source, that are important to effective competi-
tion by others and that are not practically available through the use of
alternative designs") (emphasis added).
7
of a banner across the bottom of each page of a catalog. Thus, even
if the test for functionality permitted examination of each individual
component of a plaintiff's trade dress, the jury would have been justi-
fied in determining that the use of the ordering information banner at
the bottom of each page was non-functional.
For the same reasons, the jury would have been justified in con-
cluding that the particular size, shape, and location of the credit card
box on the front cover of Tools USA's catalog was non-functional,
despite the fact that the inclusion of credit card information is func-
tional. Indeed, Champ's president acknowledged as much at trial,
when he testified "You could put it [the credit card information] in
different places in the catalog."
Champ maintains that "the phrase ``Attention Body Shop Managers'
constitutes a functional feature because it is included in the catalog to
direct the catalog to the attention of the person most likely to purchase
products from it." Brief of Appellant at 20. This argument miscon-
ceives the functionality inquiry, which looks for features that are not
merely useful, but rather "essential to the use or purpose of the arti-
cle," Inwood Labs, 456 U.S. at 850 n.10, so that their exclusive use
by one party "would put competitors at a significant non-reputation-
related disadvantage." Qualitex, 115 S. Ct. at 1304. Champ has shown
nothing more than that the words "Attention Body Shop Managers"
might be useful. There are certainly other means to direct the catalog
to the attention of the shop manager, without using the exact wording,
the same typeface, and a location like that used in the Tools USA cat-
alog.
Champ offers similar arguments as to the functionality of other
individual features of the Tools USA catalog, but all of these argu-
ments are equally meritless in light of the relevant inquiry. The Tools
USA catalog's trade dress combines functional and non-functional
features. Looking, as we must, at the overall trade dress rather than
at individual features, we cannot say that a reasonable jury could only
have concluded that the trade dress was functional. See Computer
Care, 982 F.2d at 1071 (noting that, although certain elements of a
company's monthly reports were functional, the "district court did not
err in concluding that the ``combination and arrangement' of features
in [the] reports is not functional").
8
B.
Champ asserts that Tools USA failed to prove that its trade dress
had acquired a secondary meaning.
If a particular product's trade dress has acquired a secondary
meaning, then the consuming public associates that product
with a certain producer, and, most importantly, is likely to
make that same association when the trade dress is used on
another producer's product. The public need not be able to
identify the name of the manufacturer that produces the
product; it is enough if the public perceives that the product
emanates from a single source.
M. Kramer Mfg. v. Andrews, 783 F.2d 421, 449 (4th Cir. 1986). In
determining whether a product's trade dress has acquired secondary
meaning, a court considers four factors: "(1) long use; (2) advertising;
(3) sales volume; and (4) identity of service or origin in the minds of
the purchasing public." Pizzeria Uno Corp. v. Temple, 747 F.2d 1522,
1528 n.3 (4th Cir. 1984), cited in Nabisco Brands, Inc. v. Conusa
Corp., 722 F. Supp. 1287, 1290 n.3 (M.D.N.C.), aff'd, 892 F.2d 74
(4th Cir. 1989).
The evidence as to the first three factors, while perhaps not over-
whelming, supports the jury's finding that Tools USA's trade dress
had acquired a secondary meaning. As to the first factor, it is undis-
puted that Tools USA's catalog had been in existence for approxi-
mately three years before Champ began publishing its catalog. As to
the second, although there does not appear to be any evidence that
Tools USA conducted any advertising campaign separate from its cat-
alog, advertisement of one's products constitutes the very purpose of
a catalog. Tools USA's catalog was mailed directly to over 80,000
potential customers in 1994. With respect to sales volume, the third
factor, Champ notes that Tools USA's sales have increased every year
since 1989, with gross sales of approximately $3.5 million in 1993.
Only the fourth factor seems to be seriously disputed in this case.
Evidence offered as to actual customer confusion, although also pro-
bative of likelihood of confusion, certainly tends to show that the rele-
vant purchasing public associated Tools USA's trade dress with Tools
9
USA. For example, customer Larry Overby testified that he had dis-
cussed a particular piece of equipment on the telephone with Tools
USA's president, Clyde White. He subsequently received Champ's
"Auto Body Toolmart" catalog, and became confused when the cata-
log featured the equipment at a different price than had been quoted
to him. Believing the Champ "Toolmart" catalog to be a Tools USA
catalog, he took it with him to the Tools USA warehouse to resolve
the discrepancy. He showed the catalog to White, who informed him
that it was not Tools USA's catalog. Customer Sid Lowe testified as
to a comparable experience. Similarly, customer Richard Draughn
testified that he received the Toolmart catalog and, thinking it was a
Tools USA catalog, threw away the previous issue of the Tools USA
catalog, as was his practice whenever a new issue came out. Even
Champ's president, Michael Doughty, acknowledged at trial that
"there is no doubt" that there was confusion in the marketplace and
that "this confusion [wa]s created by" the two catalogs.
In light of this and other evidence as to customer confusion, a rea-
sonable jury could have found that Tools USA's trade dress had
acquired a secondary meaning.
C.
Champ maintains that Tools USA failed to present sufficient evi-
dence to show that the similarities between the two catalogs created
a likelihood of confusion. Champ asserts that "a visual inspection of
plaintiff's and defendant's catalogs reveal[s] that there is no likeli-
hood of confusion since the catalogs are distinct in appearance." Brief
of Appellant at 28. A visual inspection of the catalogs is certainly a
way to evaluate "the similarity of the trade dresses," which is one of
the factors to be considered "[i]n assessing the likelihood of market-
place confusion." See Badger Meter, Inc. v. Grinnell Corp., 13 F.3d
1145, 1152 (7th Cir. 1994) (internal quotation and citation omitted).
See also, Woodsmith, 904 F.2d at 1249 ("Visual inspection is permis-
sible as an aid to a district court's determination of likelihood of con-
fusion, but should not constitute the sole basis for the conclusions
made"). In this case, although the two catalogs do differ in some
respects, visual inspection of them does not lead to the inescapable
conclusion that there is no likelihood of confusion.
10
Moreover, evidence of actual customer confusion"is patently the
best evidence of likelihood of confusion." Allied Marketing Group,
Inc. v. CDL Marketing, Inc., 878 F.2d 806, 813 (5th Cir. 1989) (quot-
ing Chevron Chem. Co. v. Voluntary Purchasing Groups, 659 F.2d
695, 704 (5th Cir. 1981), cert. denied, 457 U.S. 1126 (1982)). Actual
confusion can be demonstrated by survey evidence, but contrary to
Champ's suggestion, survey evidence is not necessarily the best evi-
dence of actual confusion and "surveys are not required to prove like-
lihood of confusion." Woodsmith, 904 F.2d at 1249.
Although Tools USA presented no survey evidence of consumer
confusion, it did provide abundant evidence of incidents of actual
confusion. In addition to the testimony of individual customers dis-
cussed above, Tools USA introduced the testimony of several of its
employees regarding actual customer confusion. For example, Jea-
nette Smith, who handles customer complaints at Tools USA, testified
that over about an eighteen month period, she received approximately
seventy-five calls from customers complaining about late or incom-
plete shipments, which turned out to have been ordered not from
Tools USA but from Champ (Auto Body Toolmart).
Similarly, Tools USA salesman Steve Kalill testified that he had
received approximately 150 to 200 calls from confused customers
over a two and a half to three year period. He described one specific
occasion in which a customer calling about a late shipment was so
convinced that he was talking to the right company that he faxed
Kalill a copy of his credit card authorization. Upon receiving the fax,
Kalill noted that it was a credit card authorization contract from Auto
Body Toolmart.
Another salesman, Lee Acres, testified that in the nine months prior
to the trial, he received approximately three telephone calls a day
from customers confused between Tools USA and Auto Body Tool-
mart. He gave an example of a telephone call he received from an
auto body shop in Connecticut. The customer called to inquire why
he had not received an item he had ordered. Acres informed the cus-
tomer that he did not see the order on the computer, but that he would
be glad to send the customer the item. The customer responded, "You
have already put it on my credit card." Acres suggested that the cus-
tomer examine his credit card statement, and the customer stated that
11
the charge was listed under "Toolmart." When Acres told him, "we're
not Toolmart," the customer's reaction was incredulous, "I always
order from you . . . How could I have not ordered from you?"
Based on the evidence in the record as to actual customer confu-
sion and similarity of the trade dress of the two catalogs, the jury's
finding of likelihood of confusion was amply supported. We note that
much less pervasive evidence of actual confusion than this has been
held sufficient to allow a reasonable jury to infer that there was a like-
lihood of confusion. Harland, 711 F.2d at 978-79. (Plaintiff presented
evidence as to only two instances of actual confusion. The court
found that "the jury reasonably could have inferred" likelihood of
confusion, "although the evidence . . . was not sufficient to compel"
such a finding. (emphasis added)).
Furthermore, there was also support in the record as to the other
factors that may be considered in making this determination. The dis-
trict court instructed the jury that it could consider seven factors in
assessing likelihood of confusion, although all seven were not neces-
sary to support such a finding. Those factors adapted from Pizzeria
Uno, 747 F.2d at 1527, are:
(1) the strength or distinctiveness of the plaintiff's trade
dress;
(2) the similarity between the trade dress of the parties'
product[s];
(3) the similarity of [the] goods which the trade dress
identified;
(4) the similarity of [the] retail facilities and trade chan-
nels used to market the two lines of products;
(5) the similarity in advertising used by the sellers of each
line of product;
(6) the defendant's intent; and
(7) customer reaction indicating actual confusion.
12
While none of the other factors weighs as heavily in Tools USA's
favor as do actual customer confusion and similarity of trade dress,
there was evidence in the record as to each of the seven factors that
supports the jury's finding of likelihood of confusion. For example,
the Tools USA catalog's trade dress is relatively strong by virtue of
the fact that for three years it was the only catalog of its type directed
towards its particular market niche. As is evident from a visual com-
parison of the two catalogs, although they are certainly not identical,
their trade dress is similar in many respects. The trade dress of each
catalog identifies an identical product, namely, a catalog of tools and
equipment (the goods sold in each catalog are also very similar). The
parties utilize the same retail facilities, trade channels, and advertis-
ing, namely, direct mailing of catalogs to auto body shops.
As to Champ's intent, although the jury found that Champ did not
intentionally copy Tools USA's trade dress, uncontroverted evidence
indicated that Champ intentionally copied certain elements of Tools
USA's trade dress. For example, Champ's president testified that
some parts of the Toolmart catalog, such as the placement of the
credit card box and the use of an American flag to designate
American-made products, were used because they appeared in Tools
USA's catalog, and he "wanted to do the same thing." Additionally,
while working on the design for the Toolmart catalog, Champ's
graphic designer was provided with a copy of a Tools USA catalog.
Lastly, as discussed above, ample evidence of customer reactions
indicated actual confusion.
******
By special interrogatories, the jury found that the Tools USA cata-
log's trade dress was non-functional, that it had acquired secondary
meaning, and that there was a likelihood of confusion between the
Tools USA and Toolmart catalogs. Viewing the evidence in the light
most favorable to Tools USA, and drawing every reasonable infer-
ence in its favor, we must conclude that a reasonable jury could have
so found. Thus, the district court did not err in denying Champ's
motions for judgment as to liability.
IV.
Finally, Champ argues that the jury's finding that Tools USA suf-
fered $38,387.19 in damages "bears no rational relationship to the
13
supporting evidence." Brief of Appellant at 36. This argument is
meritless.
The Lanham Act entitles a prevailing plaintiff, subject to equitable
principles, to damages including: 1) defendant's profits, 2) plaintiff's
damages, and 3) the costs of the action. 15 U.S.C.§ 1117(a). Tools
USA sought attorneys fees and disgorgement of Champ's profits, but
the district court found equity did not warrant recovery of these items;
Tools USA does not appeal that ruling. The court refused to upset the
jury's verdict as to Tools USA's actual damages; Champ claims this
ruling was error.
With regard to its actual damages, Tools USA's president, Clyde
White, testified that in order to protect its interests in the market from
the effects of Champ's (unfair) competition, Tools USA distributed
two more issues of its catalog than it ordinarily would have. He sub-
mitted two exhibits -- each reflecting the printing, mailing, and post-
age costs attendant to the design and distribution of the additional
issues. Each exhibit includes a calculation of the value of White's
time in designing the issue. The damages sought for one issue were
$49,478.69, including $7,425.00 for White's design services; the
damages attributable to the other extra issue were $45,812.19, again
including $7,425.00 for White's design services. Champ did not assert
that Tools USA did not send out the extra mailings; rather it main-
tained that the extra mailings were prompted by Tools USA's grow-
ing business, as opposed to Champ's unfair competition.
The jury obviously carefully considered the testimony and found
some truth in both positions. Its award, $38,387.19, 5 is equal to the
amount of the costs attributable to one of the catalogs -- the less
costly one, $45,812.19 -- less the amount attributable to White's
time, $7,425.00. There is certainly evidence to support this award.
Indeed, contrary to Champ's suggestion that the jury' award was arbi-
trary, it is clear that the jury thoughtfully considered the arguments
_________________________________________________________________
5 As noted within, the parties stipulated that the award would be trebled
pursuant to the state law claims. Thus, the district court trebled the
$38,387.19 and entered judgment against Champ in the amount of
$115,161.57. Champ does not maintain that the court erred in trebling the
damages.
14
and evidence on both sides in making its determination of the proper
measure of damages.
V.
The judgment of the district court is in all respects
AFFIRMED.
15