Opinion
Cause No. IP97-1682-C-M/S
August 30, 2000
ORDER ON DEFENDANT'S SECOND MOTION FOR SUMMARY JUDGMENT
This case is now before the Court on defendant's, Hampshire Paper Corporation ("Hampshire"), second motion for summary judgment on the claims brought against it by the plaintiff, Syndicate Sales, Inc. ("Syndicate"), pursuant to the trademark dilution provision of the Lanham Act, 15 U.S.C. § 1125(c), and to Indiana common law prohibiting tortious interference with business relations. In a prior order dated December 1, 1998, this Court granted Hampshire's first motion for summary judgment on all counts included in Syndicate's complaint, including the counts addressed here. The Court of Appeals for the Seventh Circuit affirmed that order with respect to Syndicate's claim under the infringement provision of the Lanham Act, 15 U.S.C. § 1125(a), however, it reversed and remanded that order with respect to Syndicate's claims of trademark dilution and tortious interference. See Syndicate Sales, Inc. v. Hampshire Paper Corp., 192 F.3d 633, 641, 642 (7th Cir. 1999). After remand from the Seventh Circuit, Hampshire reasserted its motion for summary judgment on the trademark dilution and tortious interference claims. For the reasons discussed below, the Court GRANTS Hampshire's motion for summary judgment on both the trademark dilution and tortious interference claims.
I. FACTUAL AND PROCEDURAL BACKGROUND
Although the facts of this case have been reviewed in prior orders, the Court will reiterate them here for clarity, specifically noting facts in dispute. Syndicate and Hampshire compete in the plastic floral basket market. Def.'s Exh. 1, Stepanek Aff. ¶ 5; Def.'s Exh. 15, Demaree Dep. at 39-46. Although it is Hampshire's policy to only sell through wholesalers, Syndicate sells to wholesalers, retailers and manufacturers of floral arrangements. Def.'s Exh. 1, Stepanek Aff. ¶ 11; Def.'s Exh. 16, Busch Dep. at 114-18; Def.'s Exh. 15, Demaree Dep. at 55-57. Customers in the floral basket market want functional and appealing product configurations of a general size and shape that are durable. Def.'s Exh. 1, Stepanek Aff. ¶¶ 8-9; Def.'s Exh. 2, Arrington Aff. ¶¶ 4, 6, 12, 15; Def.'s Exh. 3, Barron Aff. ¶¶ 2, 4, 5, 6, 9; Def.'s Exh. 4, Hunsche Aff. ¶ 11; Def.'s Exh. 5, Botsis Aff. ¶¶ 9, 11; Def.'s Exh. 15, Demaree Dep. at 122-23; Def.'s Exh. 16, Busch Dep. at 136-37; 155-59. In addition, floral basket customers are familiar with and want common basket shapes: round, rectangular and fluted. Def.'s Exh. 1, Stepanek Aff. ¶¶ 8-10; Def.'s Exh. 2, Arrington Aff. ¶¶ 4, 6, 11, 12, 15; Def.'s Exh. 3, Barron Aff. ¶¶ 2, 4, 5, 6, 9, 12, 13; Def.'s Exh. 4, Hunsche Aff. ¶¶ 7, 11, 13; Def.'s Exh. 5, Botsis Aff. ¶¶ 6, 9, 11, 13, 16; Def.'s Exh. 15, Demaree Dep. at 41-42, 122-23; Def.'s Exh. 16, Busch Dep. at 51-54, 136-49; 155-59; Def.'s Exh. 25, Memorandum, From Lori Busch to TD, Del, Brad Henke, RE: Hamshire Samples, July 31, 1997, at 22-28.
All of the basket designs, whether by parties in this case or their competitors, typically have a round or teardrop-shaped handle with latticework of some sort between the two main ridges of the handle. Def.'s Exh. 1, Stepanek Aff. ¶ 9; Def.'s Exh. 15, Demaree Dep. at 41-42, 97-105; Def.'s Exh. 16, Busch Dep. at 141-49. The design of the latticework varies between basket manufacturers, however, any latticework is used to provide structural stability, to provide ornamentation and to provide a lower cost handle that uses less plastic. Def.'s Exh. 1, Stepanek Aff. ¶ 9 Def.'s Exh. 4, Hunsche Aff. ¶ 6; Def.'s Exh. 5, Botsis Aff. ¶ 6. Most of the baskets in the industry also come with a base, although some producers do not provide one. Def.'s Exh. 6, Snow Aff. ¶ 9a, Attachment C, Excerpts from Syndicate, Hampshire, Diamond-Line Containers, Inc., CFN Corp., Excelsior Plastics Industries and Franklin China Catalogs of Round Floral Baskets. Generally, the specific designs vary, but all try to use a minimum of plastic while achieving some sort of stability. Def.'s Exh. 1, Stepanek Aff. ¶ 9; Def.'s Exh. 5, Botsis Aff. ¶ 6. There is more similarity in the bases for rectangular and fluted baskets than in the round baskets. See Def.'s Exh. 6, Snow Aff. ¶ 9c, Attachment E, Excerpts from E.O. Brody Co., Diamond-Line Containers, Inc. and Syndicate Catalogs of Rectangular Floral Baskets. Typically, the rectangular baskets have a rectangular base with interior prongs; the fluted baskets have a solid base with an oval, fluted design that complements the fluted shape of the basket. See Def.'s Exh. 1, Stepanek Aff. ¶ 21; Def.'s Exh. 4, Hunsche Aff. ¶ 7; Def.'s Exh. 5, Botsis Aff. ¶ 6; Def.'s Exh. 6, Snow Aff. ¶ 9c, Attachment E, Excerpts from E.O. Brody Co., Diamond-Line Containers, Inc. and Syndicate Catalogs of Rectangular Floral Baskets; Def.'s Exh. 15, Demaree Dep. at 103-05; Def.'s Exh. 16, Busch Dep. at 159-66; Def.'s Exh. 25, Memorandum, From Lori Busch to TD, Del, Brad Henke, RE: Hampshire Samples, July 31, 1997, at 22-28. Syndicate admits that it is common in the floral industry for competitors to manufacture and sell products similar to products being sold by existing companies. Def.'s Exh. 2, Arrington Aff. ¶¶ 15, 16; Def.'s Exh. 3, Barron Aff. ¶¶ 2, 3; Def.'s Exh. 4, Hunsche Aff. ¶ 13; Def.'s Exh.5, Botsis Aff. ¶ 16; Def.'s Exh. 15, Demaree Dep. at 18-20, 27, 331-44, 346-50; Def.'s Exh 16, Busch Dep. at 51-54, 59-65, 82-86, 108; Def.'s Exh. 26, Answers to Def.'s Interrog., Interrog. 15, at 11. Syndicate has created products in that fashion itself. See Def.'s Exh. 15, Demaree Dep. at 331-44, 346-50; Def.'s Exh. 16, Busch Dep. at 108-12.
Syndicate has manufactured plastic floral baskets in various shapes since 1959; the first basket had a rectangular shape and was denoted the #91 basket. Def.'s Exh. 15, Demaree Dep. at 40-42. The company first marketed a round basket, the #92 basket, in approximately 1961. Id. at 41. A basket with a fluted shape and a fluted base followed and is marketed as the #95 basket. Id. at 324-25. Syndicate claims that its floral basket designs are trademarks within the meaning of the Lanham Act. Specifically, Syndicate points to several features of its baskets as distinctive: the teardrop shape of its handles, the latticework of its handles, the spoke arrangement on its round basket base and the overall "look and feel" of all of its baskets. Def.'s Exh. 15, Demaree Dep. at 311-26. A description of Syndicate's product line follows.
Syndicate's first product, the rectangular shaped basket #90, had a rectangular bucket with a narrow lip and a round handle with an intersecting arc design in the handle. Def.'s Exh. 7, Demaree Aff. ¶ 4. Originally, Syndicate's rectangular basket did not have a base. Id. It's next rectangular shaped basket, the #91, has a low base stand with "spars" radiating out from the corners. Id. ¶ 5. All of Syndicate's basket cartons are white with green lettering and are clearly marked with Syndicate's name, product number and a graphic of the design corresponding to the product number. Def.'s Exh. 15, Demaree Dep. at 147-49; Def.'s Exh. 16, Busch Dep. at 126-31.
Syndicate's round floral basket has a round bucket with a narrow lip. Def.'s Exh. 7, Demaree Aff. ¶ 6. The #92 round basket has a base with triangular supports and a teardrop shaped handle with an intersecting arc and crossbeam design. Id. Syndicate's round handle decoration has also been described as "a pair of intersecting ribbons that form pointed oval shapes." Def.'s Exh. 1, Stepanek Aff. Attachment F, Letter, John L. DuPre, Hamilton, Brook, Smith Reynolds, P.C. to Stephen B. Stepanek, Hampshire Paper Co., June 9, 1995, at 3. Syndicate's round baskets are packaged in cartons of 24. Def.'s Exh. 7, Demaree Aff. ¶ 7.
Syndicate's #95 oval-shaped, fluted basket was introduced in 1960.Id. ¶ 8. That basket has a frilly, teardrop-shaped handle; the handle design is comprised of intersecting arcs that form a scalloped or "frilled" outer edge. Id. See also Def.'s Exh. 6, Snow Aff. ¶ 8 Attachment B, Photographs of Diamond-Line, Hampshire and Syndicate Fluted Baskets. The flutes on Syndicate's #95 basket curve outward and form peaks on the outside of the basket; the flutes are similarly arranged on the basket's base. Def.'s Exh. 6, Snow Aff. ¶ 8 Attachment B, Photographs of Diamond-Line, Hampshire and Syndicate Fluted Baskets. There are eighteen flutes in that configuration. Id. For shipping, Syndicate packages eighteen fluted baskets in a carton. Def.'s Exh. 7, Demaree Aff. ¶ 9.
Syndicate publicizes its baskets in all fifty states through catalogs, fliers and advertisements in trade newspapers. Def.'s Exh. 15, Demaree Dep. at 58-59; Def.'s Exh. 16, Busch Dep. at 50; Def.'s Exh. 27, Various Syndicate Sales Advertising Materials. The catalogs, fliers and advertisements always include a photograph or line drawing depicting the "look" of the baskets. Def.'s Exh. 7, Demaree Aff. ¶ 13. In addition, Syndicate's baskets have been "featured regularly in at least ten national, regional, or wholesale trade shows per year." Id.
Some of Syndicate's customers have provided sworn statements that features of Syndicate's baskets are distinctive. Specifically, two retailers and one wholesaler in Georgia stated in their affidavits that the Syndicate #92 round basket is distinguished by its round bucket with a narrow lip, a base with triangular supports and a teardrop-shaped handle with an intersecting arc and an I-beam or a crossbeam design. Def.'s Exh. 12, Tydings Aff. ¶ 4; Def.'s Exh. 13, Hornbuckle Aff. ¶ 5; Def.'s Exh. 14, Roddenberry Aff. ¶ 4. Furthermore, each Syndicate customer specifically stated that he can recognize the "look" of the #92 basket and associates that basket with Syndicate. Def.'s Exh. 12, Tydings Aff. ¶ 4; Def.'s Exh. 12, Hornbuckle Aff. ¶ 5, 7; Def.'s Exh. 14, Roddenberry Aff. ¶ 4. In addition, one of the retailers also testified during his deposition that he associated the "look" of the fluted #95 basket with Syndicate. Pl.'s Exh. 9, Tydings Dep. at 12.
In contrast to Syndicate's long history of manufacturing plastic floral baskets, Hampshire entered the market in November 1995 with a round basket product. Def.'s Exh. 1, Stepanek Aff. ¶ 5. Hampshire chose to number its round-shaped floral basket #9200. Pl.'s Exh. 6, Stepanek Dep. at 127-28. Hampshire's fluted basket design followed in January 1997 and was designated the #9500 basket. Id. at 128. Finally, a rectangular product was introduced by the company in January 1999 and was designated the #9100. Def.'s Exh. 1, Stepanek Aff. ¶¶ 6-7; Pl.'s Exh. 6, Stepanek Dep. at 128-29. Hampshire claims that it used a similar numbering system to Syndicate's to indicate that its baskets should be used for similar purposes. Def.'s Exh. 1, Stepanek Aff. ¶ 24. Hampshire ships its floral baskets in brown boxes with Hampshire's name, address and model number displayed on the box as well as a picture of the product corresponding to the model number. Id. ¶¶ 13-15.
In addition to having a numbering system similar to Syndicate's, Hampshire's baskets have similar design features. Hampshire's round basket is approximately the same size as that of Syndicate and has a base with triangular supports and a teardrop-shaped handle with latticework. Def.'s Exh. 6, Snow Aff. ¶ 9a, Attachment C, Excerpt from Hampshire Catalog of Round Floral Basket. However, there are some differences between the Hampshire #9200 round and the Syndicate #92 round. See Def.'s Exh. 6, Snow Aff. ¶ 8, Attachment A, Photographs of Hampshire and Syndicate Round Floral Baskets. First, unlike in Syndicate's round basket base where the triangles point away from the center of the basket, the triangles in the base of Hampshire's round basket point toward the center of the basket. Id. ¶¶ 8 9a, Attachments A C, Photographs of Hamsphire's #9200 Round Floral Basket and Syndicate's #92 Round Floral Basket; Def.'s Exh. 10, Raiche Aff. ¶¶ 6 9, Attachments A, Photographs of Syndicate's #92 Round Floral Basket D, Photograph of Hampshire's #9200 Round Floral Basket. The lattice pattern in Hampshire's #9200 round basket handle is also different: where Syndicate's #92 handle pattern is comprised of ovals with struts between every second oval, Hampshire's #9200 handle pattern is comprised of semi-circles with a strut in the center of each semi-circle alternating with a triangle with a strut in the center of each triangle. See Def.'s Exh. 6, Snow Aff. ¶¶ 8 9a, Attachments A, Photograph of Syndicate's #92 and Hampshire's #9200 Round Floral Baskets; Def.'s Exh. 10, Raiche Aff. ¶¶ 6 9, Attachments A, Photograph of Syndicate's #92 Round Floral Basket D, Photograph of Hampshire's #9200 Round Floral Basket.
Hampshire's fluted basket, like that of Syndicate, is oval and has an identical number of flutes-eighteen. Def.'s Exh. 1, Stepanek Aff. ¶ 6, Attachment B, Photograph of Hampshire Fluted Basket; Def.'s Exh. 6, Snow Aff. ¶ 9, Attachment D, Photograph of Hampshire Fluted Floral Basket. In addition, the handle design of Hampshire's #9500 fluted basket contains semi-circles similar to that of Syndicate and has a scalloped outer edge. See Def.'s Exh. 1, Stepanek Aff. ¶ 6, Attachment B, Photograph of Hampshire Fluted Basket; Def.'s Exh. 6, Snow Aff. ¶ 9, Attachment D, Photograph of Hampshire Fluted Floral Basket. However, there are differences in the fluted baskets and their handles. See Def.'s Exh. 6, Snow Aff. ¶ 9, Attachment D, Photographs of Hampshire #9500 Fluted Basket and Syndicate #95 Fluted Basket. Specifically, unlike the flutes of Syndicate's #95 basket that point outward, the flutes of Hampshire's #9500 basket point inward. Def.'s Exh. 1, Stepanek Aff. ¶ 6, Attachment B, Photograph of Hampshire Fluted Basket;; Def.'s Exh. 6, Snow Aff. ¶ 9, Attachment D, Photograph of Hampshire Fluted Floral Basket. Hampshire designed the flutes this way because a customer survey indicated that its customers would prefer a fluted basket with a softer look; Hampshire thought reversing the flutes met this preference. Pl.'s Exh. 6, Stepanek Dep. at 140-41. Hampshire's base mimics the inward flutes of the basket. Def.'s Exh. 1, Stepanek Aff. ¶ 6, Attachment B, Photograph of Hampshire Fluted Basket; Def.'s Exh. 6, Snow Aff. ¶ 9, Attachment D, Photograph of Hampshire Fluted Floral Basket. Further, Hampshire's fluted basket handle does not incorporate intersecting semi-circles, rather there are curved struts within each semi-circle with another arc piece that attaches the top sides of each semi-circle to the next one.See Def.'s Exh. 6, Snow Aff. ¶ 9b, Attachment D, Photographs of Hampshire #9500 Fluted Basket and Syndicate #95 Fluted Basket.
Hampshire and Syndicate agree that there are other plastic floral baskets on the market with similar basic shapes — round, rectangular and fluted. Def.'s Exh. 1, Stepanek Aff. ¶¶ 5-7; Def.'s Exh. 15, Demaree Dep. at 311-26. These baskets are made by other competitors including Diamond-Line Containers, Inc. ("Diamond-Line"), CFN Corp. ("CFN"), Excelsior Plastics Industries ("Excelsior") and Franklin China. See generally Def.'s Exh. 6, Snow Aff. ¶¶ 3, 4, 7, 8, 9a-f, Attachments. Not all of these competitors offer a floral basket of each shape. See Def.'s Exh. 6, Snow Aff. ¶ 9a.
Syndicate admits that in the early 1980s, a company run by Jerry Jones ("Jones") began producing and selling a round plastic floral basket that looks nearly identical to the Syndicate #92 round basket. Def.'s Exh. 8, Moore Aff. ¶ 4; Def.'s Exh. 9, Chastain Aff. ¶ 6; Def.'s Exh. 10, Raiche Aff. ¶¶ 8 10, Attachments C, Photograph of Jerry Jones Round Floral Basket E, Photograph of Hampshire, Syndicate, Jerry Jones My-Neil Round Floral Baskets; Def.'s Exh. 20, Hornbuckle Dep. at 12, 14, 16. Production of that basket continued, under various ownership, until 1996 when Jones sold the molds for the basket to Syndicate. Def.'s Exh. 15, Demaree Dep. at 141-46. Syndicate also admits that in 1992, a company known as My-Neil Import Co., Inc. ("My-Neil") introduced a round floral basket that was identical to the Syndicate #92 and My-Neil marketed the basket as the P92. Def.'s Exh. 9, Chastain Aff. ¶ 9; Def.'s Exh. 10, Raiche Aff. ¶ 7, Attachment B, Photograph of My-Neil P92 Round Floral Basket; Def.'s Exh. 11, Fisher Aff. ¶ 5. Apparently, My-Neil went out of business in 1995, however, its molds were purchased by Diamond-Line, which still markets the basket under the P92 label. Pl.'s Exh. 13, Botsis Dep. at 12, 23, 40, 49-51, 55.
The parties disagree about the similarity of these competitive baskets to those of Syndicate. Compare Hampshire Paper's Findings of Fact, No. 5with Syndicate Sales' Response to Hampshire Paper's Statement of Material Fact, No. 5. Syndicate argues that only the gross aspects of the competitor's designs are similar, for example a round bucket, a handle and a base (if it has a base at all). Def.'s Exh. 6, Snow Aff. ¶ 9a, Attachment C, Photographs of Diamond-Line, CFN, Excelsior and Franklin China Round Floral Baskets. A brief review of each company's product line is warranted.
Diamond-Line acquired the plastic floral basket line of the E.O. Brody Co. ("Brody"), which had been producing a round floral basket product since the 1960s. Def.'s Exh. 1, Stepanek Aff. ¶ 5; Def.'s Exh. 4, Hunsche Aff. ¶¶ 5 6; Def.'s Exh. 5, Botsis Aff. ¶ 4. For a number of years, Brody was Syndicate's main competitor. Def.'s Exh. 21, Hunsche Dep. at 11, 40-41, 45-46, 49-50. The Brody round basket design uses a round-shaped handle with spoked instead of curved latticework. Def.'s Exh. 6, Snow Aff. ¶ 9a, Attachment C, Excerpt from Brody Catalog of Round Floral Basket. Likewise, the base of the Brody round design uses spokes instead of triangles and resembles a wagon wheel.Id.
Diamond-Line purchased the Brody floral basket product line in 1984. Def.'s Exh. 5, Botsis Aff. ¶ 4. Diamond-Line designed its own round basket and entered the market before Hampshire. Def.'s Exh. 1, Stepanek Aff. ¶ 5. Diamond-Line's design is quite similar to the Brody design, however, it uses fewer spokes in the latticework handle. Def.'s Exh. 6, Snow Aff. ¶ 9a, Attachment C, Excerpts from Diamond-Line and Brody Catalogs of Round Floral Baskets.
Diamond-Line also produces a fluted basket using the same round, spoked handle from its round basket and flutes that point inward, similar to the Hampshire fluted basket. Id., Snow Aff. ¶ 9b, Attachment D, Excerpt from Diamond-Line Catalog of Fluted Floral Basket. Apparently, Diamond-Line had marketed its fluted basket prior to Hampshire's offering in January 1997. Def.'s Exh. 1, Stepanek Aff. ¶ 6; Def.'s Exh. 2, Arrington Aff. ¶ 11; Def.'s Exh. 5, Botsis Aff. ¶ 4, Def.'s Exh 15, Demaree Dep. at 311-26.
There are also Brody designed and Diamond-Line designed rectangular floral baskets in the market. Def.'s Exh. 6, Snow Aff. ¶ 9c, Attachment E, Excerpts from Brody and Diamond-Line Catalogs of Rectangular Floral Baskets. Both the Brody and Diamond-Line rectangular baskets use the same handle as its round-shaped counterpart — a round-shaped handle, with spoked latticework instead of curved latticework. Id. The bases are also different from that of Syndicate, however, it is unclear from the evidence exactly how they differ. Id.
The CFN round basket, marketed prior to Hampshire's entry in 1995, has a curved light bulb-shaped handle, similar to the teardrop shape of the Syndicate and Hampshire baskets. Def.'s Exh. 1, Stepanek Aff. ¶ 5; Def.'s Exh. 6, Snow Aff. ¶ 9a, Attachment C, Excerpt from CFN Catalog of Round Floral Basket. CFN's round basket has a base with spokes radiating from the center similar to that of the Brody designed and the Diamond-Line designed round baskets. Def.'s Exh. 6, Snow Aff. ¶ 9a, Attachment C, Excerpt from CFN Catalog of Round Floral Basket.
The Excelsior round floral basket has a round-shaped handle with diamond-shaped latticework. Id., Excerpt from Excelsior Catalog of Round Floral Basket. Excelsior's round floral basket has a solid base. Id. Excelsior was marketing its round floral basket when Hampshire entered the market in 1995. Def.'s Exh. 1, Stepanek Aff. ¶ 5.
Finally, Franklin China's round floral basket has a round handle with gentle S-shaped latticework, arranged as gentle spokes. Def.'s Exh. 6, Snow Aff. ¶ 9a, Attachment C, Excerpt from Franklin China Catalog of Round Floral Basket. Unlike any of the other round baskets, Franklin China's round basket does not come with a base. Id. Franklin China was marketing its round floral basket when Hampshire entered the market in 1995. Def.'s Exh. 1, Stepanek Aff. ¶ 5.
Syndicate never filed suit for trade dress infringement against any of its other competitors in the floral basket market. Def.'s Exh. 15, Demaree Dep. at 22, 111-13, 141-42, 311-26; Def.'s Exh. 26, Syndicate's Answers to Hampshire's Interrogatories, No. 15, at 11. It filed the present suit against Hampshire on October 14, 1997. See Compl., at 1. Syndicate's complaint alleged that Hampshire had violated the Lanham Act's infringement provision and the FTDA, an amendment to the Lanham Act. Am. Compl. ¶¶ 39, 47. Syndicate alleged that Hampshire had infringed the trade dress of its floral baskets and violated the Federal Trademark Dilution Act ("FTDA"). See 15 U.S.C. § 1125(a) (c). Syndicate also alleged that Hampshire's sale of similar floral baskets violated Indiana's common law prohibits unfair competition and its common law that prohibits tortious interference with business relations. Id. ¶¶ 50-55. Syndicate seeks a permanent injunction against Hampshire's sale of its plastic floral basket product line as well as compensatory and punitive damages. Id. at 8-9.
On July 20, 1998, Hampshire filed a motion for summary judgment seeking dismissal of all Syndicate's claims against it. This Court granted Hampshire's motion by order dated December 1, 1998. Syndicate appealed and the Seventh Circuit affirmed the dismissal of Syndicate's trade dress infringement claim under the Lanham Act and the dismissal of Syndicate's state law unfair competition claim. Syndicate Sales, 192 F.3d at 638 n. 4. However, the Seventh Circuit remanded Syndicate's trade dress dilution claim on the basis that the FTDA would protect a mark that is famous only in a niche market, contrary to this Court's interpretation of the FTDA. Id. at 641. In addition, the Seventh Circuit remanded Syndicate's claim under Indiana common law for interference with business relations finding that a violation of the FTDA could form the basis of an illegal predicate act for purposes of liability under that law. Id. at 641-42. The Seventh Circuit found waived on appeal Hampshire's arguments that the FTDA does not protect trade dress as a matter of statutory interpretation or, in the alternative, that if the FTDA does protect trade dress, it violates the Patent Clause of the Constitution by granting a monopoly on a product configuration for an unlimited amount of time. Id. at 639-40. On remand, the Seventh Circuit instructed this Court to determine whether Syndicate's trade dress is distinctive and famous in the wholesale and retail floral products market by applying the FTDA statutory factors. Id. at 641.
Hampshire filed the present motion for summary judgment on November 23, 1999 asserting its statutory interpretation and constitutional arguments for the first time in this Court with that motion. The company also reasserted its arguments that the FTDA should not apply in this case, and consequently, Syndicate's claim under Indiana law that prohibits tortious interference with business relations should also fail.
II. SUMMARY JUDGMENT STANDARD
Summary judgment is granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). An issue is genuine only if the evidence is such that a reasonable jury could return a verdict for the opposing party.Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A disputed fact is material only if it might affect the outcome of the suit in light of the substantive law. See id. The moving party has the initial burden to show the absence of genuine issues of material fact. See Wollin v. Gondert, 192 F.3d 616, 620 (7th Cir. 1999); Schroeder v. Barth, 969 F.2d 421, 423 (7th Cir. 1992). This burden does not entail producing evidence to negate claims on which the opposing party has the burden of proof. See Green v. Whiteco Indus., Inc., 17 F.3d 199, 201 n. 3 (7th Cir. 1994). The party opposing a summary judgment motion bears an affirmative burden of presenting evidence that a disputed issue of material fact exists. See Wollin, 192 F.3d at 621; Gonzalez v. Ingersoll Milling Mach. Co., 133 F.3d 1025, 1031 (7th cir. 1998); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986); Scherer v. Rockwell Int'l Corp., 975 F.2d 356, 360 (7th Cir. 1992). The opposing party must "go beyond the pleadings" and set forth specific facts to show that a genuine issue exists. See Wollin, 192 F.3d at 621; Stop-N-Go of Madison, Inc. v. Uno-Ven Co., 184 F.3d 672, 677 (7th Cir. 1999); Hong v. Children's Mem. Hosp., 993 F.2d 1257, 1261 (7th Cir. 1993), cert. denied, 511 U.S. 1005 (1994). This burden cannot be met with conclusory statements or speculation, see Cliff v. Board of Sch. Comm'rs, 42 F.3d 403, 408 (7th Cir. 1994) (citing McDonnell v. Cournia, 990 F.2d 963, 969 (7th Cir. 1993)); accord Chapple v. National Starch Chem. Co., 178 F.3d 501, 504 (7th Cir. 1999); Weihaupt v. American Med. Ass'n, 874 F.2d 419, 428 (7th Cir. 1989), but only with appropriate citations to relevant admissible evidence. See Local Rule 56.1; Brasic v. Heinemann's Inc., Bakeries, 121 F.3d 281, 286 (7th Cir. 1997); Foreman v. Richmond Police Dept., 104 F.3d 950, 957 (7th Cir. 1997); Waldridge v. American Hoechst Corp., 24 F.3d 918, 923-24 (7th Cir. 1994). Evidence sufficient to support every essential element of the claims on which the opposing party bears the burden of proof must be cited. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
In considering a summary judgment motion, a court must draw all reasonable inferences "in the light most favorable" to the opposing party. Wollin, 192 F.3d at 621; Thomas Betts Corp. v. Panduit Corp., 138 F.3d 277, 291 (7th Cir. 1998); Spraying Sys. Co. v. Delavan, Inc., 975 F.2d 387, 392 (7th Cir. 1992). If a reasonable fact finder could find for the opposing party, then summary judgment is inappropriate.Stop-N-Go, 184 F.3d at 677; Shields Enters., Inc. v. First Chicago Corp., 975 F.2d 1290, 1294 (7th Cir. 1992). When the standard embraced in Rule 56(c) is met, summary judgment is mandatory. Celotex Corp., 477 U.S. at 322-23; Thomas Betts, 138 F.3d at 291; Shields Enters., 975 F.2d at 1294.
III. DISCUSSION A. TRADE DRESS DILUTION
Hampshire makes several arguments that its rectangular, round and fluted floral baskets do not dilute the trade dress of Syndicate's baskets. First, Hampshire asserts that product configurations or trade dress are not qualified marks under the FTDA (the Lanham Act § 43(c)) because the language of the FTDA is different from that of the trademark infringement provision (the Lanham Act § 43(a)) from which inclusion of trade dress protection has been derived. The purpose of the FTDA and the legislative history of the act support this conclusion, according to Hampshire. Further, Hampshire asserts that the Patent Act provides the exclusive statutory protection for product configurations; the FTDA cannot also protect "designs." Third, Hampshire argues that if the FTDA is interpreted to include product configurations, it is unconstitutional because the statute would controvert the "limited time" language of the Patent Clause of the U.S. Constitution. Finally, Hampshire asserts that Syndicate has not raised a genuine issue of material fact that its product configurations are famous marks within the meaning of the FTDA or that Hampshire's introduction of a competing, similar line of floral baskets caused dilution of Syndicate's marks. Although the Court finds some merit to Hampshire's arguments about statutory interpretation, the Court finds that the definition for mark contained in the Lanham Act § 45 is broad enough to include trade dress. Further, the Court is persuaded that Syndicate has failed to establish that a genuine issue of material fact exists on whether its basket configurations are famous marks, therefore, as the FTDA is applied in this case, there is no need to address the constitutional issue raised by Hampshire.
The FTDA amended Lanham Act §§ 43 and 45 and became effective in 1996. See Federal Trademark Dilution Act of 1995, Pub.L. No. 104-98, 109 Stat. 985 (codified at 15 U.S.C. § 1125 1127). The relevant sections state:
The owner of a famous mark shall be entitled, subject to the principles of equity and upon such terms as the court deems reasonable, to an injunction against another person's commercial use in commerce of a mark or trade name, if such use begins after the mark has become famous and causes dilution of the distinctive quality of the mark, and to obtain such other relief as is provided in this subsection. In determining whether a mark is distinctive and famous, a court may consider factors such as, but not limited to —
(A) the degree of inherent or acquired distinctiveness of the mark;
(B) the duration and extent of use of the mark in connection with the goods or services with which the mark is used;
(C) the duration and extent of advertising and publicity of the mark;
(D) the geographical extent of the trading area in which the mark is used;
(E) the channels of trade for the goods or services with which the mark is used;
(F) the degree of recognition of the mark in the trading areas and channels of trade used by the marks' owner and the person against whom the injunction is sought;
(G) the nature and extent of use of the same or similar marks by third parties; and
(H) whether the mark was registered. . . .
15 U.S.C. § 1125(c)(1). Furthermore, "`dilution' means the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of — (1) competition between the owner of the famous mark and other parties, or (2) likelihood of confusion, mistake, or deception." 15 U.S.C. § 1127. "Mark" is also a defined term: "any trademark, service mark, collective mark, or certification mark." Id. Syndicate claims that its product designs, or the "look and feel" of its plastic floral baskets, are its marks. That form of mark is called "trade dress." See Syndicate Sales, 192 F.3d at 636. Trade dress is the total image of a product and can include the size, shape, graphics, color or texture of a product. See id. With that framework, the Court will now address Hampshire's arguments.
1. Statutory Interpretation
Hampshire argues that the FTDA does not protect trade dress because unlike the Lanham Act § 43(a) that protects unregistered marks against the unauthorized use of "any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact . . .," 15 U.S.C. § 1125 (a)(1), the FTDA protects "famous mark[s]," which is a defined term that does not include "false designations of origin." In other words, Hampshire avers that the FTDA does not protect against dilution of trade dress because the statute does not either specifically state that trade dress is protected or provide the "false designation of origin" basis from which a court can infer that product configurations are protected. Hampshire offers no authority for its reliance on the "false designations of origin" language for inclusion of trade dress within the protection of the Lanham Act § 43(a).
Syndicate counters that the Supreme Court in Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768, 772 (1992), interpreted the term "mark" in Lanham Act § 45 to include product configurations. Therefore, any textual difference between the infringement provision of the Lanham Act and the FTDA is insignificant.
Neither the Seventh Circuit nor the Supreme Court have squarely addressed the issue of whether the FTDA protects trade dress. The First Circuit Court of Appeals has addressed the issue and found that the FTDA would protect trade dress. I.P. Lund Trading ApS, Kroin, Inc. v. Kohler Co., 163 F.3d 27, 45 (1st Cir. 1998). Cf. Nabisco, Inc. v. PF Brands, Inc., 191 F.3d 208, 217-18 (2d Cir. 1999) (applying the FTDA to the fish shape of crackers). In I.P. Lund the First Circuit stated that "the [FTDA] applies to a famous `mark' and does not restrict the definition of that term to names or traditional marks. In the absence of such a restriction, the [FTDA] applies to all types of marks recognized by the Lanham Act, including marks derived from product designs." I.P. Lund Trading ApS, Kroin, 163 F.3d at 45.
Hampshire's argument that the language of the infringement provision of the Lanham Act and the language of the FTDA are different has some merit. The definition of mark in the FTDA does not include the clause "false or misleading representation of fact" like § 43(a). Apparently, some courts have utilized that provision when deciding whether to include trade dress within the ambit of marks. See Chevron Chem. Co. v. Voluntary Purchasing Groups, Inc., 659 F.2d 695, 701-02 (5th Cir. 1981), cert. denied, 457 U.S. 1126 (1982); Sun-Fun Prods., Inc. v. Suntan Research Dev., 656 F.2d 186, 192 (5th Cir. 1981) (citing Boston Prof'l Hockey Ass'n, Inc. v. Dallas Cap Emblem Mfg., Co., 510 F.2d 1004, 1010 (5th Cir.), cert. denied, 423 U.S. 868 (1975)).
The Court notes that the list of covered items in Lanham Act § 43(a) is very similar to that in § 45. Compare 15 U.S.C. § 1125 (a) with 15 U.S.C. § 1127. The Seventh Circuit has looked at the definition of mark in Lanham Act § 45 to determine the scope of protection under Lanham Act § 43(a). See Kohler Co. v. Moen, Inc., 12 F.3d 632, 636 (7th Cir. 1993). The Seventh Circuit determined that the list in Lanham Act § 45 does not exclude trade dress, therefore, it is broad enough to cover such a mark. Id. at 636.
Even though the wording of Lanham Act §§ 43(a) and 43(c) differ, Lanham Act § 43(c) references mark, which is a defined term in Lanham Act § 45. See 15 U.S.C. § 1125(a), 1125(c), 1127. The definition of mark provided in Lanham Act § 45 is applicable for all sections of the Lanham Act. See 15 U.S.C. § 1127. That definition includes a "device" or a "symbol." 15 U.S.C. § 1127. The word device in particular conveys that a product configuration or design could be a trademark under this definition and thus fall within the reach of any section of the Lanham Act that uses those terms. This reading is supported by the Supreme Court's recent interpretation of the breadth of the definition for trademark in Lanham Act § 45:
The breadth of the definition of marks registrable [sic] under § 2, and of the confusion-producing elements recited as actionable by § 43(a), has been held to embrace not just word marks, such as "Nike," and symbol marks, such as Nike's "swoosh" symbol, but also "trade dress" — a category that originally included only the packaging, or "dressing," of a product, but in recent years has been expanded by many courts of appeals to encompass the design of a product. See, e.g., Ashley Furniture Indus., Inc. v. Sangiacomo N.A., Ltd., 187 F.3d 363 (4th Cir. 1999) (bedroom furniture); Knitwaves, Inc. v. Lollytogs, Ltd., 71 F.3d 996 (2d Cir. 1995) (sweaters); Stuart Hall Co., Inc. v. Ampad Corp., 51 F.3d 780 (8th Cir. 1995) (notebooks). These courts have assumed, often without discussion, that trade dress constitutes a "symbol" or "device" for purposes of the relevant sections, and we conclude likewise. "Since human beings might us as a `symbol' or `device' almost anything at all that is capable of carrying meaning, this language, read literally, is not restrictive."Wal-Mart Stores, Inc. v. Samara Bros., Inc., 120 S.Ct. 1339, 1342-43 (2000) (quoting Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 162 (1995)). Although the Supreme Court is specifically talking about Lanham Act § 43(a) in this passage, there would be no reason to interpret the same words, "symbol" and "device," from the definition for trademark any differently in another section of the same act. The Supreme Court appears to suggest that consistency between the provisions as applied to all marks is preferred. See Samara Bros., 120 S.Ct. at 1342-43; see also Two Pesos, 505 U.S. at 768 (using the registered trademark infringement provision, Lanham Act § 2, as a basis for interpreting the requirements of infringement for non-registered marks pursuant to Lanham Act § 43(a)). Moreover, the Seventh Circuit has specifically held that Lanham Act § 45 is broad enough to include product configurations. See Kohler, 12 F.3d at 636. Therefore, the definition of "mark" for purposes of the FTDA is broad enough to include trade dress and product configurations because it has been so construed as applied in other parts of the Lanham Act.
2. Requirements for Protection Under the FTDA
Although the Court has determined that the FTDA likely applies to trade dress and product configurations, the Court remains unconvinced that Syndicate has presented evidence of a material question of fact on whether its designs are famous marks. The Seventh Circuit has defined the elements of a trademark dilution claim: "(1) the mark is famous; (2) the alleged infringer adopted the mark after the mark became famous; (3) the infringer diluted the mark; and (4) the defendant's use is commercial and in commerce." Syndicate Sales, 192 F.3d at 639 (citing Ringling Bros.-Barnum Bailey Combined Shows, Inc. v. Utah Div. of Travel Dev., 170 F.3d 449, 452 (4th Cir.), cert. denied, 120 S.Ct. 286 (1999); I.P. Lund Trading ApS, Kroin, 163 F.3d at 45-50; Panavision Int'l v. Toeppen, 141 F.3d 1316, 1324 (9th Cir. 1998)). In the present case the parties' dispute centers around whether Syndicate's basket designs are indeed marks that have become famous in the relevant market of wholesalers and retailers in the floral products industry.
Hampshire makes several other arguments that Syndicate's products are not entitled to protection under the FTDA. Those arguments include that Syndicate's basket designs are functional, that Syndicate's basket designs have become generic or have been abandoned, that Hampshire has not caused dilution of Syndicate's marks, and that an FTDA claim cannot be asserted against Hampshire's round product because that product was in the market before the FTDA became effective and application of the statute to Hampshire's round basket would be impermissibly retroactive. The Court will not address these arguments because it has found Hampshire's argument on the famousness issue persuasive.
As discussed above, the FTDA lists some of the relevant factors for determining whether a particular trade dress is distinctive and famous. Those factors include: a) the degree of inherent or acquired distinctiveness of the mark; b) the duration and extent of use of the mark in connection with the goods or services with which the mark is used; c) the duration and extent of the trading area in which the mark is used; d) the geographical extent of the trading area in which the mark is used; e) the channels of trade for the goods or services with which the mark is used; f) the degree of recognition of the mark in the trading areas and channels of trade used by the marks' owner and the person against whom the injunction is sought; g) the nature and extent of use of the same or similar marks by third parties; and h) whether the mark was registered. 15 U.S.C. § 1125 (c)(1)(A)-(H). The statute itself points out that these factors are not exclusive. 15 U.S.C. § 1125(c)(1). In addition, other courts construing this section have stated that "courts should be discriminating and selective in categorizing a mark as famous." I.P. Lund, 163 F.3d at 46 (discussing a variety of sources that specifically discuss the high standard for fame required for protection against dilution of a mark). See also Times Mirror Magazines, Inc. v. Las Vegas Sporting News, L.L.C., 212 F.3d 157, 170-73 (3d Cir. 200) (Barry, J., dissenting); Avery Dennison Corp. v. Sumpton, 189 F.3d 868, 876 (9th Cir. 1999); Simon Property Group, L.P. v. mySimon, Inc., No. IP 99-1195-C-H/S, 2000 WL 1206575, *5 (S.D.Ind. 2000); but see Times Mirror Magazines, 212 F.3d at 166-67 (finding that there is no standard for fame separate from that of distinctiveness). The First Circuit has held that "the standard for fame and distinctiveness required to obtain anti-dilution protection is more rigorous than that required to seek infringement protection." I.P. Lund Trading ApS, Kroin, 163 F.3d at 47. Accord Avery Dennison, 189 F.3d at 876. The I.P. Lund court also implied that secondary meaning is only a threshold necessary for trademark status of a product configuration, not the touchstone for famousness under the FTDA. See I.P. Lund Trading ApS, Kroin, 163 F.3d at 47 (citing 3 McCarthy § 24:91; Gilson § 5.12[1][c][ii]).
Hampshire makes several arguments that Syndicate has not evidenced that its basket designs are famous marks. First, Hampshire asserts that Syndicate's baskets are not trademarks because they are not inherently distinctive or have secondary meaning. Second, even if the designs could be considered marks, they are not famous in the wholesale and retail floral product industry. As discussed above, the FTDA provides several non-exclusive factors for determining whether a mark is distinctive and famous. The Court will address Hampshire's arguments about the distinctiveness and famousness of Syndicate's trade dress within the rubric of the statutory factors for finding that a mark is distinctive and famous under the FTDA.
a.) the degree of inherent or acquired distinctiveness of the mark
— Few cases have specifically addressed the issue of distinctiveness of a mark within the context of the FTDA. However, generally, those courts apply the principles of distinctiveness that have been developed under the trademark infringement provision of the Lanham Act, § 43(a). See, e.g., Times Mirror Magazines, 212 F.3d at 165-66; Nabisco, 191 F.3d at 215-16; I.P. Lund Trading ApS, Kroin, 163 F.3d at 39-43. Under those principles, since 1993 the Seventh Circuit has implied that a product configuration can never be inherently distinctive. Kohler Co. v. Moen, Inc., 12 F.3d 632, 641 n. 11 (7th Cir. 1993). Recently, the Supreme Court in Wal-Mart Stores, Inc. v. Samara Brothers, Inc., held that "a product design cannot be protected under § 43(a) without a showing of secondary meaning." 120 S.Ct. 1339, 1345 (2000). The Supreme Court stated that "design, like color, is not inherently distinctive." Id. at 1444. This is true, the Court reasoned, because "consumer predisposition to equate [a] feature with [a] source does not exist." Id. Moreover, "[c]onsumers should not be deprived of the benefits of competition with regard to the utilitarian and esthetic purposes that product design ordinarily serves by a rule of law that facilitates plausible threats of suit against new entrants based upon alleged inherent distinctiveness." Id. Finally, a producer with a truly inherently source-identifying design has other protections available, including patent and copyright; the availability of which "greatly reduces any harm to the producer that might ensue from [the Court's] conclusion that a product design cannot be protected under § 43(a) without a showing of secondary meaning." Id. at 1445.
There is no reason to conclude that this Court should apply the test for distinctiveness of a product design under the FTDA, Lanham Act § 43(c), any differently than it would under Lanham Act § 43(a). Therefore, Syndicate must show that there is a material issue of fact on whether its designs for the round, rectangular and fluted baskets have secondary meaning.
The test for secondary meaning is whether in the mind of consumers the primary significance of the product configuration is to identify the source of the product rather than the product itself. See Thomas Betts Corp. v. Panduit Corp., 65 F.3d 654, 661 (7th Cir. 1995) (hereinafter T B I); see also Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 163 (1995); Inwood Labs., Inc. v. Ives Labs, Inc., 456 U.S. 844, 851 n. 11 (1982). Factors to consider when evaluating whether a product configuration has secondary meaning include customer testimony, consumer surveys, length and manner of use, amount and manner of advertising, sales volume, position in the market and proof of intentional copying. See Thomas Betts Corp. v. Panduit Corp., 138 F.3d 277, 291 (7th Cir.) (hereinafter T B II), cert. denied, 525 U.S. 929 (1998).
The Court notes that some of these factors are similar to the statutory factors listed in the FTDA. However, this does not change the analysis, it only gives it additional context.
Syndicate avers that its product configurations have secondary meaning because: (1) it has sworn affidavits and deposition testimony from one wholesaler and two retailers that they associate its product designs with Syndicate, not with the baskets themselves; (2) it has used the same basket designs in the market for floral products for nearly forty years; (3) it has promoted those designs through catalogs, fliers and other print media using pictures of the product in each advertising piece; (4) it is dominate in the market for large plastic floral baskets and its basket designs have been described as the "originals" by Hampshire itself; and (5) it has evidence that Hampshire intentionally copied its designs. Although Syndicate has shown that its round basket could possibly have obtained some degree of secondary meaning, it has not shown that its fluted or rectangular baskets enjoy the same distinctiveness. The Court will address the evidence regarding the round floral basket first, then address the fluted and rectangular baskets.
One wholesaler and two retailers in Georgia testified by affidavit that they associate the look of the #92 round floral basket with Syndicate. Def.'s Exh. 12, Tydings Aff. ¶ 4; Def.'s Exh. 13, Hornbuckle Aff. ¶ 4; Def.'s Exh. 14, Roddenberry Aff. ¶ 4. Specifically, the wholesaler affirmed that he associated "a round bucket with a narrow lip, a base with triangular supports, and a teardrop[-]shaped handle with and intersecting arc and I-beam design in the handle . . . with baskets coming from Syndicate Sales." Def.'s Exh. 13, Hornbuckle Aff. ¶ 4. The wholesaler's deposition testimony reflects that Syndicate's round product is associated with quality and shape. Pl.'s Exh. 10, Hornbuckle Dep. at 35. The two retailers similarly testified either by affidavit or at deposition. Def.'s Exh. 12, Tydings Aff. ¶ 4; Pl.'s Exh. 9, Tydings Dep. at 19; Def.'s Exh. 14, Roddenberry Aff. ¶ 4. A reasonable inference from this testimony is that Syndicate's round basket design is recognized by this wholesaler and the two retailers as a quality product from Syndicate. However, it is notable that the wholesaler also testified during his deposition that he had difficulty remembering which round basket design was a Syndicate #92 and which was a Jerry Jones designed basket. Id. at 28. Moreover, Hampshire presented evidence that other wholesalers in the market do not associate the #92 round floral basket design with Syndicate. Def.'s Exh. 3, Barron Aff. ¶¶ 1, 2, 4-6, 9 (discussing his experience as a wholesaler in ten states); Def.'s Exh. 5, Botsis Aff. ¶ 11. This testimony reflects that although Syndicate's round basket design is recognized among some customers, whether Syndicate's design is associated only with Syndicate is questionable.
In addition, although neither sample size is large, the evidence of conflicting testimony confirms the importance of customer survey data to evidence secondary meaning. Syndicate offers no customer survey data to supplement the affidavit testimony and depositions of its three customers. Although Syndicate was the first company to manufacture such a product, enjoying an apparent monopoly in the industry for a few years until Brody entered the market in the early 1960s, there were several additional copycat products in the industry starting in the early 1980s. Def.s' Exh. 4, Hunsche Aff. ¶¶ 5 6; Def.'s Exh. 5, Botsis Aff. ¶ 4; Def.'s Exh. 8, Moor Aff. ¶ 4; Def.'s Exh. 9, Chastain Aff. ¶ 6. Those copycat products used a round bucket, a latticework handle and a latticework base. See Def.'s Exh. 6, Snow Aff. ¶¶ 3, 4, 7, 8, 9a, Attachment C, Excerpts from Diamond-Line, CFN Corp., Excelsior, Franklin China and Brody Catalogs of Round Floral Baskets. At least one of those copycats was identical to Syndicate's product and sold for at least three years, and may currently be on the market under a new label; another was virtually identical and competed with Syndicate for over a decade.See Def.'s Exh. 8, Moore Aff. ¶ 4; Def.'s Exh. 9, Chastain Aff. ¶¶ 6 9; Def.'s Exh. 10, Raiche Aff. ¶¶ 7, 8 10, Attachments B, Photograph of My-Neil P92 Round Floral Basket, C, Photograph of Jerry Jones Round Floral Basket E, Photograph of Hampshire, Syndicate, Jerry Jones My-Neil Round Floral Baskets; Def.'s Exh. 11, Fisher Aff. ¶ 5; Pl.'s Exh. 13, Botsis Dep. at 12, 23, 40, 49-51, 55; Def.'s Exh. 20, Hornbuckle Dep. at 12, 14, 16. Although Syndicate apparently dominated the industry, the fact that it was not the exclusive manufacturer of its particular round design for the entire period weighs against a finding that its design acquired secondary meaning during the later part of its almost forty years in the market.
Syndicate argues that T B II stands for the proposition that long term use negates the requirement that a plaintiff produce consumer testimony that its design has secondary meaning and that a plaintiff demonstrate that customers care that the product comes from a particular source. See Syndicate Sales' Corrected Resp. to Hampshire Paper's Second Mot. for Summ. J., at 14 (citing T B II, 138 F.3d at 293-94) ("Syndicate Sales' Resp."). However, the T B II court made clear that it was distinguishing the case before it from prior precedent because, unlike the plaintiffs in prior cases, the plaintiff in T B II had previously enjoyed patent protection on the product at issue. Therefore, evidence of whether a customer cared about that particular product feature coming from a particular source would not be helpful in determining secondary meaning, other evidence was required to distinguish between meaning developed as a result of patent protection and meaning developed through use of a feature as a trademark. T B II, 138 F.3d at 294.
In Syndicate's case, there is no design patent, therefore whether customers care about the source of the product is probative of secondary meaning.
Other factors for finding secondary meaning weigh in favor of Syndicate. Syndicate has promoted it round floral basket design for a long period of time. The promotional materials submitted to the Court reflect that the wording of the fliers emphasize the functionality of the baskets rather than the distinctive design qualities of the baskets. This is not fatal to Syndicate's cause, however, because it has pictured the round basket design, including its more distinctive features, in all of its advertisements, which has been enough in at least one other case to evidence secondary meaning. See T B II, 138 F.3d at 292 (stating that "there is no hard-and-fast rule establishing that the shape of a product must be specifically pointed out in advertising in order for that advertising to be considered as evidence of secondary meaning").
Also weighing toward an inference of secondary meaning, particularly with the round basket, is Syndicate's evidence reflecting how closely Hampshire followed Syndicate's design. Although Hampshire asserts that it utilized the handle and base designs that it did for structural reasons, Def.'s Exh. 1, Stepanek Aff. ¶¶ 10, 19, 21, Syndicate points to testimony that implies Hampshire's purpose was to mimic closely Syndicate's round basket design. The mold-maker that Hampshire approached to manufacture its round floral basket molds testified during his deposition that he was initially asked to make a mold that would duplicate the Syndicate round floral basket handle and base. Pl.'s Exh. 12, Miles Dep. at 31-35; 44-45, 48. Eventually, the base spokes and the handle design were changed so they would look different from those of Syndicate. Id. at 45, 50. Reading these facts in the light most favorable to Syndicate, arguably Hampshire wanted to copy Syndicate's design closely, if not exactly, in order to ease its entry into the market.
In the balance, Syndicate has provided some evidence that its round basket is associated with "Syndicate" rather than the product itself. However, its presentation of a small number of affiants in a small geographic area coupled with its lack of customer survey data reflecting that its round basket has acquired secondary meaning belies the strength of that product design as a mark.
Although the evidence Syndicate presented from its wholesaler and two retailers supported its assertion of distinctiveness of its round basket design, there was little or no similar support in the affidavits or depositions for the fluted or rectangular baskets. The wholesaler and one retailer stated in their affidavits that they associated Syndicate's fluted basket "look" with Syndicate itself rather than the product. Def.'s Exh. 12, Tydings Aff. ¶ 4; Def.'s Exh. 13, Hornbuckle Aff. ¶ 7. Only the retailer so testified during his deposition. Pl.'s Exh 9, Tydings Dep. at 12. The wholesaler merely identified Syndicate's fluted basket and described what distinguished its "look" when asked. Pl.'s Exh. 10, Hornbuckle Dep. at 11. Even coupled with Syndicate's evidence of its time in the market and advertising of its products, the Court cannot find that Syndicate has created an issue of material fact on whether its fluted basket has secondary meaning on this testimony alone. One customer's testimony under oath on the subject, in a market that spans the entire United States does not establish a question on secondary meaning absent customer survey data. Moreover, even if it does create an issue of material fact on the whether the Syndicate's #95 fluted basket has secondary meaning, it cannot support Syndicate's assertion that its fluted basket design is famous within the meaning of the FTDA. In a national market, with national competition, one retailer's testimony that he associates the design with Syndicate does not evidence the prominence necessary for a finding of fame even with Syndicate's lengthy history in the market.
Finally, with respect to Syndicate's rectangular floral basket, none of Syndicate's witnesses affirmed or testified that they associated the rectangular basket design with Syndicate. Again, even coupled with the length of time Syndicate has been in the market and its continuous advertisement of this product, the lack of direct customer testimony and customer survey data weighs against finding a material issue of fact on whether the rectangular basket design has attained secondary meaning. Even if the other circumstantial factors were enough to create an issue of material fact on the distinctiveness issue, the lack of any customer testimony or data belies Syndicate's assertion that its rectangular basket has the renown necessary for a finding of fame. See I.P. Lund Trading ApS, Kroin, 163 F.3d at 46-47 (describing the heightened fame standard established by the FTDA). Therefore, as for Syndicate's rectangular basket design, it has failed to raise a genuine issue of material fact on whether that design has secondary meaning or is famous.
Having determined that Syndicate has presented evidence that raises an inference that its round basket design has acquired secondary meaning and therefore is distinctive, at least in a small region of the United States, the Court will assess the remaining FTDA statutory factors in detail for that basket design.
b.) the duration and extent of use of the mark in connection with the goods or services with which the mark is used — Syndicate has not changed its round floral basket design for nearly forty years. As discussed in the previous section, Syndicate enjoyed a dominate position in the market with that design for at least twenty years, even though it had a competitor since the early 1960s. See Note 1, infra, at 8 (discussing the entry of Jerry Jones' basket design in the early 1980s);see also Def.'s Exh 1, Stepanek Aff. ¶ 5; Def.'s Exh. 4, Hunsche Aff. ¶¶ 5 6; Def.'s Exh. 21, Hunsche Dep. at 11, 40-41, 45-46, 49-50; Def.'s Exh. 5, Botsis Aff. ¶ 4; Def.'s Exh. 6, Snow Aff. ¶ 9a, Attachment C, Excerpt from Brody Catalog of Round Floral Basket (all discussing the Brody round floral basket design that has been sold since the early 1960s). In addition, Syndicate has never changed its marketing scheme for the product line. Def.'s Exh. 7, Demaree Aff. ¶ 13. However, Syndicate has allowed two very similar products to coexist in the market for a number of years. Syndicate argues that the small market share of those competitors should make their presence insignificant in the balance. Yet, the presence of competitors using the same "mark" dilutes Syndicate's claim that its design is associated with it rather than with the product itself. Notwithstanding that finding, this factor weighs in favor of finding Syndicate's round floral basket design famous primarily because of the length of time Syndicate has used the design in the market.
c.) the duration and extent of the trading area in which the mark is used — Syndicate claims that it has advertised its product in the wholesale and retail floral products market for nearly forty years. Def.'s Exh. 7, Demaree Aff. ¶ 13; Def.'s Exh. 15, Demaree Dep. at 58-59; Def.'s Exh. 16, Busch Dep. at 50; Def.'s Exh. 27, Various Syndicate Sales Advertising Materials. Although Syndicate has not specifically focused its advertising on the design features that make the #92 round basket unique from others, each advertisement depicts the round floral basket in its entirety, including the teardrop-shape and latticework of its handle. This factor also weighs in favor of finding Syndicate's round floral basket "famous."
d.) the geographical extent of the trading area in which the mark is used — Syndicate sells its baskets in all fifty states. Def.'s Exh. 7, Demaree Aff. ¶ 14. In addition, it has advertised the basket and shown the basket at trade shows across the United States for a number of years. Id. ¶ 13. Although not without competition during that time frame, Syndicate promoted and sold its baskets throughout the United States. This factor seems to be most relevant when measured with the remaining factors in determining fame. Therefore, further discussion of this factor will occur in the appropriate section below.
e.) the channels of trade for the goods or services with which the mark is used — Syndicate's round floral basket is used in the wholesale and retail market for floral products. This is the market in which the fame of Syndicate's round floral basket must be measured. See Syndicate Sales, 192 F.3d at 640-41 (describing the niche market of wholesale and retail floral products as the relevant market). This factor also seems to be most relevant when measured with the remaining factors in determining fame. Therefore, further discussion of this factor will occur in the appropriate section below.
f.) the degree of recognition of the mark in the trading areas and channels of trade used by the mark's owner and the person against whom the injunction is sought — As discussed above, Syndicate and Hampshire compete in the wholesale and retail floral products market in the United States. Def.'s Exh. 1, Stepanek Aff. ¶ 5; Def.'s Exh. 15, Demaree Dep. at 39-46. Syndicate offers testimony from one wholesaler, who is located in Georgia and sells in Georgia and central Florida, and two retailers, both of whom are located in Georgia, that they associate the #92 round floral basket with Syndicate. See Def.s' Exh. 12, Tydings Aff.¶ 4; Def.'s Exh. 13, Hornbuckle Aff. ¶ 5, 7; Def.'s Exh. 14, Roddenberry Aff. ¶ 4. However, Syndicate offers no testimony from a broader geographical sample of customers that its baskets are similarly recognized in the entire United States. One wholesaler who sells in ten states affirmed that he had never had a retailer specifically ask for a particular brand of floral basket. Def.'s Exh. 3, Barron Aff. ¶¶ 1, 6. In other words, there is no evidence that Syndicate's baskets have renown in the whole market in which its sells the baskets or within the whole market where Syndicate and Hampshire compete. Syndicate has only provided evidence of recognition in a small segment of its entire market, Georgia and central Florida. There is no consumer surveys of any kind, much less one that links the #92 round floral basket design to Syndicate, that extends the reach of this data to the larger market. This fact weighs heavily against a finding of famousness because it does not comport with the requirement that a mark be truly prominent and renowned to fall within the category of marks protected by the FTDA. See I.P. Lund Trading ApS, Kroin, 163 F.3d at 46-47 (discussing the heightened fame standard established by the FTDA). Accord Avery Dennison, 189 F.3d at 876.
g.) the nature and extent of use of the same or similar marks by third parties — Although Syndicate carefully points out the differences between its baskets and those of third parties, the fact remains that at least two manufacturers produced baskets that were either identical or nearly identical to Syndicate's round floral basket between at least the early 1980s and 1996. See n. 1, infra, at 8. Apparently those baskets enjoyed limited market share, however, it is not apparent from the evidence before the Court whether the limited market share was a result of limited distribution. As a result, the precise extent of use of the same or similar basket design by third parties is unknown.
However, it is clear that some aspects of Syndicate's baskets are found in all competitive third party baskets, including a latticework handle, a round-shaped bucket, and in most cases an open-work base. Def.'s Exh. 1, Stepanek Aff. ¶¶ 5-7; Def.'s Exh. 15, Demaree Dep. at 311-26. The specific lattice design of the handles and their overall shape (round versus teardrop) vary, as well as the specific open-work of the bases, but the silhouettes of the baskets do not vary much at all. Moreover, competitive baskets are sold to the same wholesalers and retailers to which Syndicate sells. See Pl.'s Exh. 10, Hornbuckle Dep. at 14-22 (discussing purchasing various baskets from various manufacturers); Def.'s Exh. 3, Barron Aff. ¶¶ 1, 2 (discussing purchasing various baskets from various manufacturers).
Although the complete nature and extent of the use of competitive basket designs is not specifically known, it is clear that some basket designs that incorporate the major overall elements of Syndicate's round floral basket have been sold nationally since at least the early 1960s. Moreover, one of Syndicate's own witnesses, the wholesaler, could not distinguish between Syndicate's trade dress and that of Jerry Jones. Pl.'s Exh. 10, Hornbuckle Dep. at 28. The telling part of this testimony is that the difference between Syndicate's design and that of Jerry Jones is in the latticework detail of the Jerry Jones' designed handle. Syndicate's wholesaler could not remember which supplier's basket had the curly-cue handle. Id. If the wholesaler truly associated Syndicate's round basket design with Syndicate, he surely would remember the distinguishing feature on Jerry Jones' round basket design without prompting. The evidence presented with respect to this factor weighs against a finding of famousness because other manufacturers with similar basket designs have been competing with Syndicate without reprisal for a number of years and Syndicate's own witnesses could not associate Syndicate's trade dress only with Syndicate.
h.) the registration of the mark — Syndicate has not presented evidence that its mark was registered. This factor weighs against finding famousness, although it alone is not dispositive. See I.P. Lund Trading ApS, Kroin, 163 F.3d at 47 (discussing non-registration as a factor relevant to a determination of fame, but not finding it dispositive).
In the balance, Syndicate has provided some evidence that its round floral basket design is distinctive, however, has insufficient evidence to show that it has become famous in the market for wholesale and retail floral products. Syndicate's offer of evidence that three consumers, in a small geography, associate the #92 round floral basket with Syndicate, coupled with the fact that similar if not identical product designs have been available to consumers in the market for a number of years defeats Syndicate's claim that its round floral basket has become renowned among wholesalers and retailers in the floral products market throughout the United States. Further, its own witness could not distinguish Syndicate's round floral basket design from that of Jerry Jones, a nearly exact replica of Syndicate's design. This fact belies Syndicate's claim that customers in the relevant market clearly associate Syndicate's round floral basket design with Syndicate.
Syndicate has failed to show that there is a genuine issue of material fact on whether its round, fluted and rectangular floral baskets are famous and therefore entitled to protection under the FTDA. Without evidence on that element, its claim against Hampshire fails.
3. Conflict with Patent Law Constitutionality
The Court has found that Syndicate is not entitled to protection under the FTDA because it has presented no issue of material fact that its product designs are famous marks. In the words of the First Circuit, the facts presented in this case do not present a conflict between the Patent Clause and the FTDA, therefore, the constitutional issue raised by Hampshire is better left for another case that presents the issue with clarity. See I.P. Lund Trading ApS, Kroin, 163 F.3d at 51.
B. TORTIOUS INTERFERENCE
As discussed by the Seventh Circuit in its prior order in this case,
"[t]he elements of an action for tortious interference with a contract are (1) existence of a valid and enforceable contract; (2) defendant's knowledge of the existence of the contract; (3) defendant's intentional inducement of breach of the contract; (4) the absence of justification; and (5) damages resulting from defendant's wrongful inducement of the breach.
In addition it has been recognized that an action may lie under Indiana law for tortious interference with a business relationship even though there was no valid contract. In such cases, however, it appears to be critical that the defendant acted illegally in achieving his end."Syndicate Sales, 192 F.3d at 641 (quoting Biggs v. Marsh, 446 N.E.2d 977, 983 (Ind.Ct.App. 1983)). Moreover, non-criminal illegal predicate acts, such as a violation of the FTDA, are sufficient to support a tortious interference claim. Id. (citing United States v. FKW, Inc., 997 F. Supp. 1143, 1153 (S.D.Ind. 1998); Moffett v. Gene B. Glick Co., 604 F. Supp. 229, 239 (N.D.Ind. 1984), overruled on other grounds,Reeder-Baker v. Lincoln Nat'l Corp., 644 F. Supp. 983 (1986)).
As discussed above, Syndicate has failed to evidence that its floral basket designs are famous in the wholesale and retail floral products market such that it is entitled to protection under the FTDA. As a result, there is no underlying predicate act that would support a claim of tortious interference with business relations.
IV. CONCLUSION
For the reasons discussed above, Hampshire's motion for summary judgment on Syndicate's claims against it pursuant to the FTDA and Indiana common law prohibiting tortious interference with business relations is GRANTED.
IT IS SO ORDERED.