Opinion
Civil Action No. 3:01-CV-2190-D
December 10, 2001
MEMORANDUM OPINION
Plaintiff Urgent Gear, Inc. ("Urgent Gear") applies for a preliminary injunction against defendants Savoia, Terry Zimmer ("Zimmer"), and Dallas Boots/Shoes ("Dallas Boots") seeking to enjoin alleged violations of Urgent Gear's trade dress rights. For the reasons that follow, the court grants Urgent Gear's application and enters a preliminary injunction by separate order filed today.
Urgent Gear's preliminary injunction application is before the court under the procedure permitted by Fed.R.Civ.P. 43(e) and is being decided on the papers without an evidentiary hearing. See, e.g., Jones v. Bush, 122 F. Supp.2d 713, 715 (N.D. Tex.) (Fitzwater, J.), aff'd, 244 F.3d 134 (5th Cir. 2000) (per curiam) (table), cert. denied, 531 U.S. 1062 (2001). The court's November 5, 2001 order directed defendants to file their opposition materials within 15 days of the date Urgent Gear filed its materials. Urgent Gear did so on November 15, 2001, making defendants' response due November 30, 2001. They have not responded, and the application is now ripe for decision.
As permitted by Rule 52(a), the court sets out in this memorandum opinion its findings of fact and conclusions of law.
In a proposed form of preliminary injunction, Urgent Gear requests injunctive relief that exceeds what its application supports or that is unnecessary in view of other provisions of the preliminary injunction that the court has entered. To the extent Urgent Gear seeks relief that the court has not included in the injunction, its application is denied without prejudice.
I
Urgent Gear markets a line of affordable and fashionable clothing products. Since 1995 it has generated revenues in excess of $40 million on sales of approximately three million units. Urgent Gear alleges that it adopted, and has used since at least 1995, a distinctive trade dress in connection with its clothing line. Through magazine publications, radio, billboards, the Internet, and fashion shows, Urgent Gear has spent over $2 million advertising and promoting its clothing since 1995.Urgent Gear alleges that in the past several months, Savoia has offered to Urgent Gear consumers a selection of look-alike products under the Savoia brand. An Urgent Gear sales representative purchased some of Savoia's products on September 20, 2001 from Dallas Boots. Urgent Gear asserts that Savoia is infringing its trade dress by marketing knock-off clothing products that contain the following distinctive features of Urgent Gear's trade dress:
(1) packaging artwork featuring a sun in the center of a circle, surrounded by animals, with a crown above;
(2) a crest, containing the brand name and size of the garment, in the upper right-hand corner of the packaging;
(3) a warning spread across the lower portion of the packaging;
(4) the slogan "Invest in An American Tradition" on the packaging;
(5) yellow lettering on a dark background with red highlight lines on a rectangular-shaped wrap located on the lower portion of the garment;
(6) a flag logo (on the garment, hand tag, and packaging) with a red border on either side, consisting of four rectangles, two of which are dark and two of which are light in color;
(7) the word "Sportswear" written in yellow lettering on a dark background on the hand tag; and
(8) a button-down shirt with the distinctive flag logo on the pocket.See P. Br. at 3-4; P. App. 6.
See also P. App. 9 for an example of a comparison of an Urgent Gear product to a similar Savoia product featuring all these alleged infringements.
Savoia began selling its look-alike products to Urgent Gear's customers at about 75% of Urgent Gear's usual prices, and it has since reduced its prices further. Urgent Gear alleges that defendants' actions constitute trade dress infringement under the Lanham Act, 15 U.S.C. § 1125(a). It applies for a preliminary injunction enjoining Savoia, Zimmer, and Dallas Boots from selling, marketing, or distributing clothing products that infringe Urgent Gear's trade dress rights. Defendants have not responded to Urgent Gear's application.
See supra note 1.
II
To obtain a preliminary injunction, Urgent Gear must establish (1) a substantial likelihood that it will prevail on the merits, (2) a substantial threat that it will suffer irreparable injury if the injunction is not granted, (3) that the threatened injury to it outweighs the threatened harm the injunction may do to defendants, and (4) that granting the preliminary injunction will not disserve the public interest. See Jones v. Bush, 122 F. Supp.2d 713, 718 (N.D. Tex.) (Fitzwater, J.) (citing Ruscitto v. Merrill Lynch, Pierce, Fenner Smith, Inc., 777 F. Supp. 1349, 1353 (N.D. Tex.) (Fitzwater, J.), aff'd, 948 F.2d 1286 (5th Cir. 1991) (per curiam) (table)), a ff'd, 244 F.3d 134 (5th Cir. 2000) (per curiam) (table), cert. denied, 531 U.S. 1062 (2001). "A preliminary injunction `is an extraordinary and drastic remedy, not to be granted routinely, but only when the movant, by a clear showing, carries the burden of persuasion.'" Id. (quoting White v. Carlucci, 862 F.2d 1209, 1211 (5th Cir. 1989); Holland Am. Ins. Co. v. Succession of Roy, 777 F.2d 992, 997 (5th Cir. 1985)).III
To determine whether Urgent Gear is likely to prevail on the merits of its Lanham Act claim, the court must determine whether the product trade dress qualifies for protection. If protected, the court must decide whether the trade dress is being infringed, that is, whether defendants are using the same or similar trade dress that is likely to confuse consumers. See Blue Bell Bio-Med. v. Cin-Bad, Inc., 864 F.2d 1253, 1256 (5th Cir. 1989); Sno-Wizard Mfg., Inc. v. Eisemann Prods. Co., 791 F.2d 423, 425 (5th Cir. 1986).
A
The court first determines whether Urgent Gear's trade dress qualifies for protection. This inquiry encompasses the issues of functionality, distinctiveness, and secondary meaning. Blue Bell, 864 F.2d at 1256. If the trade dress is non-functional, it qualifies for protection if it is either inherently distinctive or has acquired distinctiveness through secondary meaning. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 769 (1992).
"[A] product feature is functional if it is essential to the [product's] use . . . or if it affects the cost or quality of the article." Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 850 n. 10 (1982); see also Pebble Beach Co. v. Tour 181 Ltd., 155 F.3d 526, 538 (5th Cir. 1998). Specific functional features in a product design do not necessarily make the combination of those features functional and therefore unprotectable. See Sunbeam Prods., 123 F.3d at 256. Most of the features of Urgent Gear's trade dress involve artwork, designs, and slogans, usually on the packaging of the clothing products. As such, these features are not essential to the actual use of the clothing. Moreover, there is no evidence that these features affect the quality or cost of the specific products. The trade dress that Urgent Gear claims is thus non-functional.
Trade dress is inherently distinctive when it identifies the particular source of the product or distinguishes it from other products. Pebble Beach, 155 F.3d at 540. Each feature does not itself have to be unique; "it is the combination of elements and the total impression that the dress gives to the observer that should be the focus of a court's analysis of distinctiveness." Paddington Corp. v. Attiki lmps. Distribs., Inc., 996 F.2d 577, 584 (2d Cir. 1993); see also Taco Cabana Int'l, Inc. v. Two Pesos, Inc., 932 F.2d 1113, 1120 (5th Cir. 1991) (holding that while competitor may use individual elements of trade dress, "the law protects the distinctive totality."), aff'd, 505 U.S. 763 (1992); Falcon Rice Mill Inc. v. Cmty Rice Mill, Inc., 725 F.2d 336, 337 n. 1 (5th Cir. 1984).
Urgent Gear's trade dress is inherently distinctive. The strength of a claim for trade dress protection "increases as one moves away from generic and descriptive marks toward arbitrary marks. . . . While most elements of design — that is, colors, shapes, placement of marks on the package, etc. — can independently be called `arbitrary,' no seller can foreclose others absolutely from using any particular color or other feature." Falcon Rice Mill, 725 F.2d at 346. Urgent Gear's trade dress claims reflect arbitrary and very specific design features that go beyond the use of a particular color, shape, or the like. The packaging artwork featuring a sun in the center of a circle, surrounded by animals and with a crown overhead, distinguishes the packaged product from others. Because such artwork has been associated with Urgent Gear clothing since at least 1995, it identifies the particular source of the product. The entire packaging design, which includes the sun and other arbitrary features arranged in a specific way, is unique. The record evidence indicates that the slogan "Invest In An American Tradition" is not common text on clothing products but is instead a specific feature of the Urgent Gear package. The slogan is also arbitrary and therefore distinctive, especially when placed in a particular place on the packaging with a particular color scheme of yellow lettering, dark background, and red highlights. Similarly, the crest and the flag logo, which appear on both the product and packaging, reflect specific, rather than generic, designs associated with, and therefore distinguishing, the Urgent Gear brand. Collectively, these arbitrary designs on both the packaging and the clothing products identify the source of the product as Urgent Gear and distinguish the product from other clothing products. The trade dress is inherently distinctive and therefore protectable.
Because the court holds that Urgent Gear's claimed trade dress is inherently distinctive, it need not address Urgent Gear's alternative argument that its trade dress has acquired distinctiveness through secondary meaning.
B
The court next determines whether Urgent Gear's trade dress rights are being infringed — that is, whether Savoia's clothing products are likely to be confused with Urgent Gear's. In Sunbeam Products the Fifth Circuit held the following factors relevant to this inquiry: (1) similarity of the two products; (2) identity of retail outlets and purchasers; (3) identity of advertising media; (4) strength of the mark or trade dress; (5) intent of the alleged infringing parties; (6) similarity of design; (7) actual confusion; and (8) degree of care employed by consumers. Sunbeam Prods., 123 F.3d at 257. Proof of actual confusion is not required, however, and no single factor is dispositive. Id.1
The products in this case are highly similar. Although there are, upon inspection, specific differences between the artwork and designs on Savoia's packaging and Urgent Gear's, the overall designs are almost identical. See, e.g., P. App. 9. The products themselves are also quite similar.Except for the fact that the flag logo on the Savoia shirt pocket has two yellow and two blue rectangles whereas the one on the Urgent Gear shirt pocket has two white and two blue rectangles, the garments are almost identical. The colors are the same, the collar style is the same, the buttons are the same, and each left breast pocket has the same design flag logo in the same place. See id. This factor strongly favors a likelihood of confusion.
2
Urgent Gear has offered evidence that Savoia is marketing its products to the same retail outlets and purchasers as does Urgent Gear. For example, an Urgent Gear sales representative received telephone calls from customers indicating that Zimmer offered them Savoia's lower-priced alternatives to Urgent Gear's products while representing that the products were identical. P. App. 7. Additionally, several Texas retail outlets informed Urgent Gear that they had purchased Savoia products because of their lower price instead of making their usual Urgent Gear purchases. Id. at 19-20. The identity of retail outlets and purchasers factor also strongly favors a likelihood of confusion.
3
Urgent Gear alleges that both it and Savoia promote their products through similar advertising media, including catalogs and flyers. Id. at 5. It offers as supporting evidence a promotional piece described as either being a Savoia flyer or emanating from a Savoia catalog. See id. at 11. This evidence, because its source is unclear and because there are no additional examples of the media used by Savoia in marketing its products, is insufficient for the court to determine whether the identity of advertising media factor weighs in favor of a likelihood of confusion.
4
Urgent Gear's trade dress is arbitrary, not generic, and comprises many unique features, such as packaging artwork, a slogan on packaging lettering, and the flag logo. See supra § III(A). Because of the uniqueness of its features, the trade dress is strong and recognizable. Urgent Gear has also achieved a degree of success for its products in the marketplace, with retail sales exceeding $40 million since 1995. See P. App. 5. It has also spent over $2 million on advertising and promoting its products over the same period. Id. at 4. These expenditures contribute to the strength of Urgent Gear's trade dress, because retail success and advertising tend to go hand-in-hand with product recognition and distinctiveness. The strength of the trade dress factor therefore favors a likelihood of confusion.5
Although proof of wrongful intent is not required, the "intent of defendants in adopting [their mark] is a critical factor, since if the mark was adopted with the intent of deriving benefit from the reputation of [the plaintiff] that fact alone may be sufficient to justify the inference that there is confusing similarity." Amstar Corp. v. Domino's Pizza, Inc., 615 F.2d 252, 263 (5th Cir. 1980). Urgent Gear argues that "[t]here can be no question but that defendants selected their trade dress with knowledge of the [Urgent Gear] line." P. Br. at 13. It adduces no specific evidence of defendants' intent when developing the Savoia line to copy the Urgent Gear line. Urgent Gear does, however, offer evidence that Savoia marketed its line with specific references to its being "identical" to Urgent Gear's. P. App. 7. This proof, combined with the striking similarity of the products, is sufficient to persuade the court of defendants' intent to copy Urgent Gear's products. The intent of defendant factor therefore weighs in favor of finding a likelihood of confusion.
6
The similarity of design factor also weighs in favor of a likelihood of confusion, as explained above in the discussion of similarity of products. Most of the designs on Savoia's product are similar if not virtually identical to Urgent Gear's designs.7
Urgent Gear argues that consumers purchasing relatively inexpensive clothing are unlikely to exercise a high degree of care in their purchases. Generally, the risk of confusion is increased when the products at issue are relatively inexpensive, because the buyer may take less care in shopping and selecting the product. Sun-Fun Prods., Inc. v. Suntan Research Dev. Inc., 656 F.2d 186, 191-92 (5th Cir. Unit B Sept. 1981). This factor favors a likelihood of confusion.
Because each of the relevant factors, except for actual confusion and identity of advertising media, weighs significantly in favor of a likelihood of confusion, the court holds that Urgent Gear's customers are likely to confuse Savoia's line with Urgent Gear's products. Because Urgent Gear's trade dress qualifies for protection and is being infringed, there is a likelihood of success on the merits of Urgent Gear's Lanham Act claim.
IV
The court next considers whether there is a substantial threat that Urgent Gear will suffer irreparable injury if the injunction is not granted.
Because the court has held that there is a likelihood of confusion in this case, see supra § III(B), and since such confusion is likely to be especially damaging during the current holiday season, it also holds that there is a substantial threat that Urgent Gear will suffer irreparable injury. See Ramada Franchise Sys., Inc. v. Jacobcart, Inc., 2001 WL 540213, at *3 (N.D. Tex. May 17, 2001) (Fitzwater, J.) ("In a trademark infringement case, `a substantial likelihood of confusion constitutes irreparable injury.'" (quoting KFC Corp. v. Goldey, 714 F. Supp. 264, 267 (W.D. Ky. 1989)); see also Joy Mfg. Co. v. CGM Valve Gauge Co., 730 F. Supp. 1387, 1394 (S.D. Tex. 1989) ("When a likelihood of confusion exists, the plaintiff's lack of control over the quality of the defendant's goods constitutes immediate and irreparable harm, regardless of the actual quality of the defendant's goods.").
V
The court next considers whether the potential injury to Urgent Gear outweighs any damage to defendants caused by preliminary injunctive relief.
Urgent Gear argues that because of the considerable amounts of money it has spent marketing and promoting its clothing line, and because of the potential for a loss of significant profits during the holiday season if Savoia's infringement of its trade dress is allowed to continue, the irreparable injury it will suffer without preliminary injunctive relief will be substantial. Because defendants have not responded to this application, there is no contrary evidence. In fact, given Savoia's intentional infringement, the only hardship defendants may suffer is the inability to sell infringing products. The court therefore holds that the potential injury of no relief to Urgent Gear outweighs any potential damage of such relief to defendants.
VI
There is no evidence here that the entry of a preliminary injunction will disserve the public interest. See Ramada, 2001 WL 540213, at *3 (holding that "[t]he entry of a preliminary injunction will not disserve the public interest, which promotes the protection of valuable trademarks and service marks in a capital-based economy that rewards success through competition.").
* * *
Urgent Gear's application for a preliminary injunction is granted by separate order filed today.