Home Builders Assoc. v. L & L Exhibtion ( 2000 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 99-3609
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Home Builders Association of Greater *
St. Louis, *
*
Plaintiff - Appellee, * Appeal from the United States
* District Court for the
v. * Eastern District of Missouri.
*
L & L Exhibition Management, Inc., *
*
Defendant - Appellant. *
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Submitted: May 11, 2000
Filed: September 12, 2000
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Before BOWMAN, FLOYD R. GIBSON,1 and LOKEN, Circuit Judges.
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LOKEN, Circuit Judge.
L&L Exhibition Management, Inc. (“L&L”), appeals the district court2 judgment
that L&L violated § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), by competing
1
Complications from an automobile accident have prevented Judge Gibson from
reviewing this opinion prior to its being filed. The opinion is consistent with Judge
Gibson's vote at conference.
2
The HONORABLE MARY ANN L. MEDLER, United States Magistrate Judge
for the Eastern District of Missouri, to whom the case was assigned with the consent
of the parties. See 28 U.S.C. § 636(c); Fed. R. Civ. P. 73(b).
unfairly with the Home Builders Association of Greater St. Louis (“HBA”) in
marketing and presenting home and garden shows in St. Louis. We affirm.
I. Background
HBA is a nonprofit organization representing the home-building industry in
metropolitan St. Louis. HBA members build homes; associate members supply goods
and services to home builders. HBA has sponsored home and garden shows in the
greater St. Louis area for more than forty years. Since 1981, HBA has held two shows
each year, one in the spring called “The St. Louis Builders Home and Garden Show,”
the other in the fall called “The St. Louis Builders Home and Remodeling Show.” The
HBA shows are held at the St. Louis Convention Center. The spring show, the largest
of its kind in the United States, uses up to 419,000 square feet for more than 500
exhibits. The 1998 spring show drew 60,000 visitors.
L&L is a recently-started Minnesota company that promotes home shows across
the country. In 1994, 1995, and 1996, L&L started its first four shows in Minnesota,
Colorado, and Indiana. In May 1997, after extensive market research, L&L sponsored
its first home show in St. Louis. As it has in other markets, L&L sought to piggyback
on the success of the well-established HBA shows. L&L called its show “The Home
Improvement & Building Show,” a name quite similar to the name of HBA’s spring
show. L&L marketed its new show as “The St. Louis Home Show,” or simply “The
Home Show,” names that HBA had used in the past and that St. Louis consumers had
come to associate with HBA shows. Like the HBA shows, L&L’s show was held at
the Convention Center, and its advertising suggested it would be a large show.
However, by HBA standards, the 1997 L&L show was small, using 80,000 square feet
for less than 100 exhibits.
Responding to complaints from visitors who attended L&L’s first show thinking
it was the more substantial HBA event, Convention Center officials told L&L that
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advertising for any future shows would have to identify L&L as the sponsor to prevent
public confusion. L&L promoted two more St. Louis shows in January and May 1998.
Advertising for these shows identified L&L as the event’s sponsor, but only in small
print in the written ads, and once very quickly at the end of the television and radio ads.
Some visitors to the January 1998 show testified that they attended under the mistaken
belief it was an HBA event.
HBA filed this complaint in September 1997, alleging unfair competition and
trade dress infringement in violation of § 43(a) of the Lanham Act, 15 U.S.C.
§ 1125(a), and Missouri common law. After a four-day trial, the district court found
that HBA’s home shows have acquired secondary meaning in the St. Louis market, that
L&L’s advertising and promotion of its competing shows have confused consumers and
building industry exhibitors, and that L&L intentionally created this confusion, as it has
done in entering other metropolitan markets, “to trade on the name and goodwill of the
pre-existing and well-established show.” Based upon these findings, the district court
concluded that L&L had violated § 43(a) by engaging in unfair competition. The court
entered an injunction ordering L&L (a) to market its St. Louis shows under their full
and official names; (b) to print each word of the full name in the same font style and
size in all print advertising ; (c) not to market any show as “The Home Show” or “The
St. Louis Home Show”; (d) to identify L&L as the show’s sponsor in all advertising;
and (e) to include the following disclaimer in all advertising: “This is not the St. Louis
Home and Garden Show or the St. Louis Builder’s Home & Remodeling Show
sponsored by the Home Builder’s Association of Greater St. Louis.” The court further
awarded HBA $25,000 in damages plus costs and a reasonable attorney’s fee. This
appeal followed.
II. Discussion
Section 43(a) is a remedial provision in the federal Trademark Act of 1946,
known as the Lanham Act. Section 43(a) is broadly worded, providing in relevant part:
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(1) Any person who . . . uses in commerce any word, term, name,
symbol, or device, or any combination thereof, or any . . . false or
misleading representation of fact, which
(A) is likely to cause confusion . . . as to the origin,
sponsorship, or approval of his or her . . . commercial
activities by another person, or
(B) in commercial advertising or promotion, misrepresents
the nature, characteristics, qualities, or geographic origin of
his or her or another person’s . . . commercial activities,
shall be liable [to] . . . any person . . . likely to be damaged by such act.
15 U.S.C. § 1125(a). The statute has been broadly construed by the federal courts as
“making certain types of unfair competition federal statutory torts.” Inwood Labs., Inc.
v. Ives Labs., Inc., 456 U.S. 844, 863 (1982) (quotation omitted); see Two Pesos, Inc.
v. Taco Cabana, Inc., 505 U.S. 763, 776-84 (1992) (Stevens, J., concurring). In
amending the Lanham Act, Congress has expressed its satisfaction with this judicial
approach to construing § 43(a). See SEN. REP. NO. 100-515, at 40-41 (1988), reprinted
in 1988 U.S.C.C.A.N. 5577, 5603-04.3
Though § 43(a) did not refer to trademarks, service marks, or trade dress until
a 1999 amendment, see footnote 4 infra, it is settled that the statute provides a remedy
to persons whose trade dress and unregistered marks are infringed or confusingly
3
HBA’s complaint asserted claims under § 43(a) and Missouri law. The district
court determined that Missouri unfair competition law follows Lanham Act principles;
L&L and HBA agree. However, as a body of federal unfair competition law develops
under § 43(a), conflicts between that law and the laws of individual States will be
inevitable in other cases. See, e.g., Genesee Brewing Co., Inc. v. Stroh Brewing Co.,
124 F.3d 137, 149 (2d Cir. 1997) (New York common law claim requires showing of
bad faith; § 43(a) claim does not ).
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imitated by others. See Two Pesos, 505 U.S. at 768, 773. Trademarks and service
marks are defined in the Lanham Act. For example, a service mark is “any word [or]
name . . . used by a person . . . to identify and distinguish [its] services . . . and to
indicate the source of the services.” 15 U.S.C. § 1127. Trade dress, on the other hand,
is a judicially created term. “The trade dress of a product is the total image of a
product, the overall impression created, not the individual features.” Woodsmith Pub.
Co. v. Meredith Corp., 904 F.2d 1244, 1247 (8th Cir. 1990). The two are equally
protected under § 43(a), see Two Pesos, 505 U.S. at 773, but the parameters of the
term trade dress, being entirely non-statutory, can be harder to discern.
L&L’s principal argument on appeal is that the trade dress of HBA’s home
shows is not entitled to protection from unfair competition under § 43(a) of the Lanham
Act because that trade dress is entirely “functional.” In our view, this argument
misdirects the relevant inquiry in two important respects. First, this is not truly a trade
dress case, and therefore second, the doctrine of functionality is not seriously at issue.
1. Trade Dress. HBA sent the parties down this wrong path when it alleged, in
Count II of its complaint, that L&L has infringed the trade dress of HBA’s St. Louis
home shows. As the above quote from Woodsmith suggests, trade dress refers to the
tangible features of a product or its packaging that create a distinctive image, like the
decor of the restaurants at issue in Two Pesos. No doubt a trade show sponsor could
identify its show to the public by repeatedly using tangible features that provide a
distinct image, such as the shape and style of exhibitor booths. But here, the only trade
dress to which HBA refers (other than the show names, which we will discuss in detail
in a moment) are the location of the shows and the times of year in which they are held.
These are not items of trade dress. Though an adroit imitator may of course use
similarity of time and location to increase public confusion as to source, the district
court properly rejected HBA’s attempt to achieve, through its trade dress allegations,
a monopolistic right to put on shows in the Convention Center at particular times of the
year. Thus, properly viewed, this is not a trade dress case.
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2. Functionality. It has long been a defense to a claim of trademark or trade
dress infringement that the mark or dress is a “functional” feature of the product.4 The
functionality doctrine serves as a buffer between patent law and trademark law by
preventing a competitor from monopolizing a useful product feature in the guise of
identifying itself as the source of the product. See generally W.T. Rogers Co. v.
Keene, 778 F.2d 334, 338-40 (7th Cir. 1985). As the Supreme Court explained in
Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 164 (1995):
The functionality doctrine 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 feature. It is the province of patent law, not trademark
law, to encourage invention by granting inventors a monopoly over new
product designs or functions for a limited time, after which competitors
are free to use the innovation.
“In general terms, a product feature is functional if it is essential to the use or
purpose of the article or if it affects the cost or quality of the article.” Inwood Labs.,
456 U.S. at 850 n.10. In other words, a feature is functional “if exclusive use of the
feature would put competitors at a significant non-reputation-related disadvantage.”
Qualitex, 514 U.S. at 165. “The fact that the feature at issue serves some function is
not enough; to be functional in the trade dress sense, the feature must be necessary to
afford a competitor the means to compete effectively.” Thomas & Betts Corp. v.
Panduit Corp., 138 F.3d 277, 297 (7th Cir. 1998) (quotation omitted).5
4
In 1999, Congress amended § 43(a) to expressly provide that a person suing for
trade dress infringement “has the burden of proving that the matter sought to be
protected is not functional.” See Pub. Law 106-43 § 5, 113 Stat. 220, codified at 15
U.S.C. § 1125(a)(3).
5
The district court defined a “functional” design as one that “performs some
function other than identifying the source of the goods,” and a nonfunctional trade dress
as “an arbitrary embellishment primarily adopted for purposes of identification and
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Viewed with these principles in mind, it becomes apparent that the doctrine of
functionality is not truly at issue here. The names of HBA’s home shows are not
“functional,” in the narrow trademark sense of that word, because the name of a trade
show does not impact patent law concerns, and HBA’s exclusive use of its show names
does not prevent the sponsors of competing home shows from competing effectively
using other, equally descriptive names. The location and times of the year for HBA
shows relate to the shows’ function, in the broad sense of the word, but as we have
explained, these are not trade dress features, and § 43(a) does not provide HBA the
exclusive right to hold home shows in the Convention Center in the spring and the fall.
If this is not a § 43(a) case about trade dress and functionality, then how should
it be analyzed? To answer this question, we look more closely at the key identifying
feature of an HBA trade show, its name. The names HBA gives its shows are, without
question, unregistered service marks -- in the words of 15 U.S.C. § 1127, they are
names used by HBA to identify and distinguish its home show services. Section 43(a)
protects unregistered marks from infringement and unfair competition. We must
classify the strength or weakness of a mark to determine the extent to which it is
entitled to Lanham Act protection. A “generic” mark is the common name of a product
or service -- “the genus of which the particular product is a species.” Park ‘N Fly, Inc.
v. Dollar Park & Fly, Inc., 469 U.S. 189, 194 (1985). It may not be registered nor used
individuality and hence unrelated to basic consumer demands in connection with the
product.” This is too restrictive a view of trademark protection. Before a trademark
or trade dress will be denied Lanham Act protection under the functionality doctrine,
Qualitex requires a court to find that exclusive use of that feature would put
competitors at a significant non-reputation-related disadvantage. While there is
language supporting the district court’s formulation in Aromatique, Inc. v. Gold Seal,
Inc., 28 F.3d 863, 873 (8th Cir. 1994), and in Prufrock Ltd. v. Lasater, 781 F.2d 129,
133 (8th Cir. 1986), that language must be read in light of the Supreme Court’s later
discussion in Qualitex and the result it reached in Two Pesos.
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exclusively by one competitor, even if it has acquired secondary meaning.6 On the
other hand, a “descriptive” mark -- one that “describes the qualities or characteristics
of a good or service” -- may be registered if it has acquired secondary meaning. Id. at
194. The other trademark classifications are arbitrary or fanciful and suggestive.
These are “strong” marks, because their primary purpose is to identify the source of the
product or service, rather than to describe the product or service. Strong marks are
presumptively registrable and entitled to full trademark protection. See Duluth News-
Tribune v. Mesabi Publ’g. Co., 84 F.3d 1093, 1097 (8th Cir. 1996).
Some trade show names used by HBA in the past, such as “The Home Show”
or “The St. Louis Home Show,” might well be generic when applied to this type of
show. See Genesee Brewing, 124 F.3d at 147 (a mark is generic when applied to
services “that require the use of the mark in order to convey their nature to the
consumer”). But the names HBA now uses, “The St. Louis Builders Home and Garden
Show,” and “The St. Louis Builders Home and Remodeling Show,” are descriptive.
They describe the characteristics of the shows, but they also identify the sponsor or
source in a way that leaves competitors free to adopt other names that are equally
descriptive but not inherently confusing.
Viewed in this light, we have no difficulty concluding that the district court
properly granted HBA relief under § 43(a). The names of the HBA shows are
unregistered descriptive marks. Unless those marks are functional, HBA is entitled to
§ 43(a) relief upon proof of secondary meaning and a likelihood of confusion or actual
confusion. See Co-Rect Prods., Inc. v. Marvy! Adver. Photography, Inc., 780 F.2d
6
Secondary meaning is acquired when, in the minds of the public, the primary
significance of a mark “is to identify the source of the product [or service] rather than
the product itself.” Inwood Labs., 456 U.S. at 851 n.11. In a different § 43(a) context,
the Supreme Court recently noted the “relatively great consumer benefit in requiring
a demonstration of secondary meaning.” Wal-Mart Stores, Inc. v. Samara Bros., Inc.,
120 S. Ct. 1339, 1346 (2000).
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1324, 1330 (8th Cir. 1985). As we have explained, the marks are not “functional,” just
as they are not “generic.”7
Moreover, even if we agreed with L&L that HBA is seeking to protect functional
aspects of its trade dress, we reject L&L’s contention that a functional trade dress, or
a generic trademark, is entitled to no protection from unfair competition under § 43(a)
even if it has acquired secondary meaning. A generic trademark or functional trade
dress is not protected from copying. But if it has acquired secondary meaning, § 43(a)
relief may be appropriate to require the copier to take reasonable measures to eliminate
public confusion as to the source of its competing product or service. See Genesee
Brewing, 124 F.3d at 149-50 (generic trademark); WSM, Inc. v. Hilton, 724 F.2d 1320,
1331 n.5 (8th Cir. 1984) (same; dictum); American Greetings Corp. v. Dan-Dee
Imports, Inc., 807 F.2d 1136, 1141 (3d Cir.1986) (functional trade dress). This
principle is consistent with the common law doctrine of passing off, which § 43(a) was
intended to codify. See RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 16 cmt. d
(1995), adopted from RESTATEMENT OF TORTS § 741(b)(ii) (1938); J.C. Penney Co.
v. H.D. Lee Mercantile Co., 120 F.2d 949, 955-56 (8th Cir. 1941). Compare Kellogg
Co. v. National Biscuit Co., 305 U.S. 111, 122 (1938) (no unfair competition in
copying plaintiff’s distinctive shredded wheat biscuits because there was “no evidence
of passing off . . . and [defendant] has taken every reasonable precaution to prevent
confusion or the practice of deception in the sale of its product”).
In this case, the district court found that HBA’s home shows have acquired
secondary meaning, that L&L “intentionally attempted to trade on HBA’s good will
and reputation,” that L&L’s actions have caused actual confusion among consumers,
and that L&L’s corrective actions in 1998 were inadequate to end the confusion. L&L
mounts no serious challenge to these findings. L&L asserts the only evidence of public
7
The trademark doctrines of functionality and genericness serve essentially the
same purpose. See W.T. Rogers Co., 778 F.2d at 338-39.
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confusion arose because L&L advertised “The Home Show” and “The St. Louis Home
Show,” names in which HBA has acquired no secondary meaning. This argument is
wide of the mark. L&L violated § 43(a) by advertising its shows in a way that was
likely to cause confusion as to origin. HBA proved it has acquired secondary meaning
in the descriptive service marks that identify its shows. HBA need not prove secondary
meaning in the words L&L used to create the public confusion.
Having carefully reviewed the evidentiary record, we find ample evidence to
support these critical district court findings and conclude they are not clearly erroneous.
See Conagra, Inc. v. George A. Hormel & Co., 990 F.2d 368, 370-71 (8th Cir. 1993),
and Prufrock, 781 F.2d at 132-33 (standard of review). Therefore, HBA is entitled to
§ 43(a) relief.
Turning to the scope of that relief, L&L argues that injunctive relief is
inappropriate because HBA presented no evidence of actual confusion at L&L’s third
show in May 1998. But numerous witnesses testified they were confused as to the true
sponsorship of L&L’s first two shows. The district court did not abuse its discretion
by entering a limited injunction carefully framed to eliminate the likelihood of confusion
at L&L shows in the near future. L&L does not otherwise challenge the scope of the
district court’s injunction, and it is therefore affirmed. We note that, because of the
inherent weakness of HBA’s descriptive marks, it is only entitled to injunctive relief
that will eliminate public confusion over the sponsorship of L&L’s shows. There is
always a risk that an injunction of this type will stifle healthy competition if construed
too restrictively or left in place longer than necessary. We are confident the district
court will guard against that risk should either party hereafter petition the court to
vacate or modify its injunction.
L&L also does not challenge the district court’s damage award, and that award
is affirmed. L&L does challenge the district court’s decision to award attorney’s fees
to HBA. That issue is not ripe for appellate review because a fee award is separate
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from the judgment on the merits, and the amount of the award has not yet been
determined. See Budinich v. Becton Dickinson & Co., 486 U.S. 196, 200-01 (1988);
In re Modern Textile, Inc., 900 F.2d 1184, 1192 (8th Cir. 1990).
The judgment of the district court is affirmed. L&L’s motion to strike HBA’s
letter submission of April 22, 2000, is granted because that letter contained argument.
See F.R.A.P. 28(j).
A true copy.
Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.
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