Computer Care and Service Systems Enterprises, Inc. are both engaged in the auto service “reminder letter” business. These businesses use a computer program to generate letters on behalf of auto dealerships and repair shops reminding car owners when their cars are in need of some service, such as an oil change or a tune up. Computer Care brought this suit against Service Systems alleging that Service Systems had violated section 43(a) of the Lanham Act 1 by infringing the trade dress of Computer Care’s reminder letters, sales brochure and monthly reports. The suit also charged Service Systems with making representations in its sales calls that were false as to Service Systems, although true as to Computer Care. In addition, Computer Care claimed that Service Systems had misappropriated certain trade secrets, in violation of state law. The district court granted Computer Care’s motion for a preliminary injunction on the trade dress and trade secret claims. The court did not, *1066 however, enjoin Service Systems from continuing to make the false representations alleged by Computer Care. Service Systems appeals from the district court’s grant of preliminary relief, and Computer Care cross appeals from the court’s decision not to grant relief on the false advertising claim. We affirm in part, reverse in part and remand for further proceedings.
I.
Computer Care was founded by Robert Kaufman, who still runs the company, in 1977. The company now has approximately 2,000 customers nationwide. Most of Computer Care’s customers are car dealerships, although the company also services oil change shops and repair shops. Each month Computer Care sends computer-generated letters on behalf of these customers to car owners whose cars are due for service reminding them that work is due. Computer Care also provides its customers (the dealers) with computer-generated reports that show the dealer the amount of business the reminder letters are generating. Once a month the Computer Care representative delivers three basic reports to the dealer: a “Profit Builder Response Analysis,” which shows the revenue generated by Computer Care’s system; the “Work Due Schedule,” which shows the dealer which customers received reminder letters and which services were indicated as being due; and the “Transaction Analysis,” which tallies servicing done during the last month by type of service, showing the number of times each service was performed that month. Computer Care also uses a four-page brochure entitled “Win or Lose!” to sell its business to potential customers.
Computer Care entered the Chicago market in June of 1989, when it hired Timothy Riordan and Patrick O’Rourke to act as sales representatives in the area. Riordan, a personal friend of Kaufman, had worked for Computer Care off and on for approximately ten years in other areas of the country. O'Rourke was a friend of Riordan with whom Kaufman was unfamiliar. At the time Riordan became a Chicago sales representative for Computer Care, he was also working for Larry Aronson and William Feldgreber, who later became the president and vice president of Service Systems, selling advertising space in a magazine they published.
At some point, Riordan told Aronson about Computer Care’s business. Aronson became interested in starting a similar business. Riordan provided Aronson and Feldgreber with copies of Computer Care’s sample reminder letter, its sales brochures, its computer-generated monthly reports, its sales presentation book and other materials that Computer Care sales representatives make available to customers. Riordan also played an audiotape of a Computer Care sales presentation for Aronson, and delivered a presentation to Aronson and Feldgreber. Finally, Riordan supplied Aronson and Feldgreber with a list of customers whom he and O’Rourke had contacted on behalf of Computer Care, to ensure that Service Systems would not call on them.
On December 8, 1989, Riordan and O’Rourke signed up Service Systems’ first customers. (Although Riordan and O’Rourke were invited to join the new business, they ultimately declined to do so, and ceased working for Service Systems.) By May of 1990, Service Systems was using a four-page sales brochure called “Maintain or Fail.” In June of 1990, Service Systems sent out its first reminder letters to car owners. Shortly thereafter, Service Systems sent its first monthly reports to its customers. Like Computer Care, Service Systems used three reports: a “Service System Monthly Report,” which shows the revenue generated by Service System’s service; a “Service Schedule,” which lists the customers who were sent reminder letters and what services those customers are due; and a “Repair Order Analysis,” which shows the services that were done during the previous month and how many times each was performed.
In October of 1990, Computer Care filed this lawsuit against Service Systems. Computer Care alleges that Service Systems has violated section 43(a) of the Lanham Act by (1) infringing Computer Care’s *1067 trade dress in its sales brochure, reminder letters and monthly reports; and (2) making advertising claims that are false as to Service Systems but true as to Computer Care, thereby “deceiv[ing] customers into believing that their service is Computer Care and not Service Systems.” Plaintiff’s Post-trial Brief at 8 (Dec. 24, 1990). Computer Care also claims that Service Systems misappropriated certain trade secrets belonging to Computer Care. Computer Care sought broad injunctive relief against Service Systems and the other defendants.
After an evidentiary hearing at which Service Systems presented no live testimony, the district court found that Computer Care had demonstrated a “substantial probability” of prevailing on the merits of its trade dress infringement and trade secret misappropriation claims.
Computer Care v. Service Sys. Enter., Inc.,
With respect to the false advertising claim, the court rejected Computer Care’s contention that Service Systems’ false statements “deceive customers” in the manner alleged by Computer Care. The court concluded, however, that “whether or not” such activity is actionable under the Lanham Act, it is “unfair competition that ... violates Illinois law.” Id. at 1334. Nevertheless, the court failed to grant an injunction prohibiting Service Systems from continuing to make false advertising claims.
We review a district court’s decision granting or denying a preliminary injunction under the deferential “abuse of discretion” standard.
Abbott Labs. v. Mead Johnson & Co.,
II.
“ ‘Trade dress’ refers to the total image of a product, including features such as ‘size, shape, color or color combinations, texture, graphics, or even particular sales techniques.’ ”
Roulo v. Russ Berrie & Co.,
Service Systems argues that Computer Care failed to establish a likelihood of success on the merits of its trade dress claim because (1) Computer Care’s reminder letter, brochure and monthly reports are not inherently distinctive and (2) Service Systems’ versions of those documents do not pose a likelihood of confusion on the part of consumers. Service Systems also contends that Computer Care’s monthly reports are not entitled to trade dress protection because they are functional.
A. Distinctiveness
Computer Care’s “Win or Lose!” sales brochure (reproduced in an appendix to this opinion) uses a four-page layout. The first page of the brochure consists of the words “Win or Lose” occupying the upper left quadrant, a drawing of a boxer in the upper right, and two columns of information on the bottom half. The column on the left lists three examples of how a dealer or repair shop will “lose” by not having Computer Care’s service. Each of these examples is listed separately under the words “You Lose.” The right-hand column contains three corresponding “You Win” entries, which inform the dealer of the benefits of having Computer Care’s service. On the second page, under the heading “Round 1,” the brochure describes the customer database that is created for each Computer Care customer. Under the heading “Round 2,” the brochure describes Computer Care’s reminder letters. This description is accompanied by an illustration of a reminder letter and envelope. On the third page, under the heading “Round 3,” the brochure describes the three monthly reports, each of which is pictured. Finally, the back page of the brochure quotes various testimonials by Computer Care customers, along with Computer Care’s address and phone number and space for salesmen to enter estimates of the cost of Computer Care’s service.
Computer Care’s reminder letters (reproduced in appendix) are printed on white paper with a blue right-angled design. Any “specials” the dealer may be offering that month are printed in the horizontal portion of the blue design. In the upper right corner Computer Care prints the manufacturer’s logo, in the same blue as the right-angled design. The name and address of the dealer appear in the upper left corner. The dealer’s telephone number appears twice in the letter — once in the body of the text and once at the end. The letters are addressed to “Mr.” or “Ms.” plus the car owner’s last name. The letters are signed with the first names of dealer employees. The letters are mailed in a “window” envelope that features a slightly modified version of the blue right-angled design on the letters.
Computer Care’s monthly reports (reproduced at appendix) each consists of columns of information accompanied by a summary description of the report at the top of the page. The “Profit Builder Response Analysis” consists of six vertical columns, headed as follows: (1) customers [sic] name; (2) model car; (3) letter mailed; 4 (4) services listed on letter as due; (5) services completed by the dealer; and (6) amount billed. The report also gives the total amount of money spent by customers responding to the service letters the previous month, the average repair order amount for customers responding, and the average repair order amount for other customers. The “Work Due Schedule” also contains six columns of information. These columns are headed: (1) customer, (2) phone, (3) car, (4) year, (5) service now *1069 due, and (6) mileage of last service. Finally, the “Transaction Analysis” lists various types of car service on the left side and on the right the number of times each service was rendered during the previous month,
A plaintiff’s trade dress is inherently distinctive, and therefore protectable without proof of secondary meaning,
Two Pesos, Inc. v. Taco Cabana, Inc.,
— U.S. —, —,
Computer Care’s trade dress, as embodied in its sales brochure, reminder letters and monthly reports, is neither generic nor descriptive. Of course, some of its elements, such as the use of a window envelope to send out reminder letters, are arguably generic,
see Roulo,
More important, the overall combination of these elements, which Service Systems copied wholesale, is largely arbitrary, and therefore inherently distinctive.
5
Where the plaintiff’s overall trade dress is distinctive, the fact that it uses descriptive (or generic) elements does not render it nonprotectable.
Taco Cabana,
B. Likelihood of Confusion
Service Systems’ sales brochure, reminder letters and monthly reports are slavish imitations of Computer Care’s documents. Indeed, the district court stated that “any suggestion ... that Service Systems had developed its materials independently, rather than by copying them from Computer Care virtually lock, stock and barrel, is rejected as incredible.”
Computer Care,
The district court’s conclusion that Service Systems’ sales brochure, reminder letters and monthly reports are likely to confuse consumers is a finding of fact that we will affirm unless clearly erroneous.
Forum Corp. v. Forum, Ltd.,
Nor does the fact that Computer Care’s customers are “sophisticated” car dealers mean that, as a matter of law, there is no likelihood of confusion. “Human memories, even of discriminating purchasers, ... are not infallible.” 2 J. Thomas McCarthy, Trademarks and Unfair Competition § 23:29, at 136 (2d ed.1984). Indeed, we can readily imagine a scenario in which confusion is quite likely. Suppose that a New York car dealer who subscribes to Computer Care’s service tells a Chicago car dealer about it. 6 The New York dealer shows him the brochure, the monthly reports and perhaps a copy of a reminder letter, and tells the Chicago dealer what a great service this is. Some weeks later, a Service Systems salesperson shows up at the Chicago dealership and gives the dealer a sales presentation, showing him the brochure, the monthly reports and the reminder letters. The Chicago dealer doesn’t remember the name of the service recommended by the New York dealer, but the documents look very familiar, so he thinks this is the one and he subscribes.
Finally, as the above hypothetical suggests, it is not necessarily true that consumers first encounter Computer Care’s and Service Systems’ documents during a sales pitch in which the name of the vendor is repeatedly disclosed. Despite Service Systems’ representations to the contrary, the district court did not make such a finding. Further, even if this assertion were accurate, it would not necessarily eliminate the likelihood of confusion. For example, a dealer might be given a sales pitch by Computer Care, and be impressed by Computer Care’s record of service, but not certain at that point that he needs such a program. Several weeks or even months later, he might get a call from a Service Systems salesperson, who shows him brochures and other documents that look very similar to those he was shown by the Corn *1071 puter Care representative. Particularly if the sales pitch includes the misrepresentations alleged by Computer Care and found by the district court (see infra), the dealer might now subscribe to the service thinking that it is the same one he had heard about before.
Finally, it seems quite likely that the similarity of the parties’ trade dress could lead dealers to believe that the two companies are associated in some way. That kind of confusion could damage Computer Care if dealers are dissatisfied with Service Systems’ product, as Computer Care alleges that some are. We do not find the district court’s conclusion that Service Systems' documents are “confusingly similar” to Computer Care’s to be clearly erroneous.
C. “Functionality’’ of Monthly Reports
A trade dress feature is “functional,” and therefore not protectable, if it is “one which competitors would have to spend money not to copy but to design around____ It is something costly to do without (like the hood [of a car]), rather than costly to have (like the statue of Mercury [on the hood of a Rolls Royce]).”
Schwinn Bicycle,
It is clear that certain elements of Computer Care’s computer-generated monthly reports are “functional” under these definitions. For example, Computer Care cannot claim an exclusive right to display information in columns or to include the make and year of a car in its reports. But Computer Care makes no such claim. Rather, Computer Care seeks to protect the overall format of each of its monthly reports, which Service Systems copied in their entirety. In such a case, it is error to “focus[] on the individual elements rather than the overall trade dress.”
Vaughan Mfg.,
[B]y breaking LeSportsac's trade dress into its individual elements and then attacking certain of those elements as functional, K Mart misconceives the scope of the appropriate inquiry. LeSportsac does not claim a trademark in all lightweight nylon bags using hollow zipper pulls or carpet tape trim. It claims as its mark the particular combination and arrangement of design elements that identify its bags and distinguish them from other bags.
III.
The district court found “a high likelihood that the methodology employed by Computer Care in its service program ... involves trade secrets that are unique to Computer Care.”
1. the use of twelve different car repair services to “trigger” reminder letters, rather than the one or two basic services used by the competition;
2. offering dealers the option of “adjustable service cycles” rather than the manufacturer’s recommended service cycle;
3. tracking car owners by a method other than license plate number or Vehicle Identification Number (VIN); 7
4. sending car owners a second reminder letter if they do not respond to the first one; and
5. automatically putting the names of car owners who do not respond after two reminder letters in “inactive status.”
Mem. Op. and Order at 3 (Apr. 23, 1991) (modifying decretal provisions of order published at
The Illinois Trade Secrets Act defines a trade secret as follows:
“Trade secret” means information, including but not limited to, technical or non-technical data, a formula, pattern, compilation, program, device, method, technique, drawing, process, financial data, or list of actual or potential customers or suppliers, that:
(1) is sufficiently secret to derive economic value, actual or potential, from not being generally known to other persons who can obtain economic value from its disclosure or use; and
(2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy or confidentiality.
Ill.Rev.Stat. ch. 140, ¶ 352(d)(1). As the Illinois courts have noted, “the focus of ... the Act is on the secrecy of the information sought to be protected.”
Service Centers of Chicago, Inc. v. Minogue,
A. Multiple Triggers
The district court found that Computer Care’s use of twelve different ear repair services to trigger its system was a protectable trade secret, and therefore enjoined Service Systems “from triggering a system off any repair service except oil change.” Mem. Op. at 4. This ruling constituted an abuse of the court’s discretion. Even if Computer Care could have a trade secret in its particular twelve triggers, the only evidence that Service Systems in fact uses those precise triggers was Kaufman’s statement that the trade secrets to which he testified were items “that have been incorporated to my knowledge in Service
*1073
Systems’ system.” Tr. at 350-51 (Dec. 17, 1990). We doubt that such general and unsupported testimony is sufficient to justify the district court’s exercise of the “far-reaching power” to grant a preliminary injunction.
Schwinn Bicycle,
Moreover, the district court’s injunction does not merely protect Computer Care’s twelve triggers, but grants Computer Care a trade secret in the mere
idea
of using more than one trigger. We do not think that the use of multiple triggers is sufficiently “secret” to be protected. Kaufman testified that he had decided to use multiple triggers because “[w]hen I did analysis of different service systems that were available I found” that most of them used just one or two triggers. Tr. at 351-52. But Computer Care failed to present any evidence that information about these different systems was not generally available in the industry.
See Service Centers,
B. Adjustable Service Cycles
The term “adjustable service cycles” refers to the fact that Computer Care will adjust its reminder letter program to send out letters at the intervals requested by a particular dealer, rather than those recommended by the car manufacturer. The district court found that this feature “is available to dealers who specifically ask for it but is not offered generally; it is therefore secret.”
Computer Care,
C. Tracking Customers by Method Other Than VIN or License Plate
The district court found Computer Care’s use of a method other than VIN or license plate number to track car owners in its database is a trade secret, and therefore enjoined Service Systems from using any
*1074
tracking method other than VIN or license plate number. Kaufman testified that although the automobile industry generally uses either VIN or license plate number to track customers, he decided on a system that was “not dependent upon license plates or VIN numbers” because he found that some repair shops did not record either the car’s VIN or license plate number. Tr. at 353. Again, Computer Care offered no evidence that it is not generally known in the industry that some repair shops do not record VIN or license plate numbers, or that a different method of tracking would not be an obvious solution to that problem for anyone going into the reminder letter business. That Computer Care may have been the first in the car industry to adopt a different method of tracking does not establish that the practice is secret.
Service Centers,
D.Second Reminder Letter
Computer Care failed to establish that the idea of sending a second reminder letter to a customer who does not respond the first time is a trade secret, rather than simple common sense. Other than Kaufman’s general statement that all of Computer Care’s alleged trade secrets were items that were unique to that system, Computer Care presented no evidence that the use of follow-up letters is not common in either direct mail generally or the reminder letter business specifically. This is not really surprising, given that the use of follow-up letters is an obvious sales method, as anyone who has ever allowed a magazine subscription to run out can attest. The district court erred in affording Computer Care trade secret protection for this feature of its system.
E. Automatically Removing Nonresponding Individuals from Database
Computer Care failed to show that deleting nonresponding individuals from a database is not an obvious feature of a direct mailing system. The idea of saving money by not continuing to send letters to customers who have failed to respond in the past is hardly novel. There is no evidence that Computer Care’s use of such a feature is unique either in the direct mail business or in the car service industry. Nor is there any evidence in the record concerning “the amount of time, money or effort involved” in developing this idea.
Service Centers,
F. The “Profit Builder System ”
Computer Care argues that, whether or not the individual features of its system are protectable trade secrets, the Profit Builder System comprised of these components is a protected trade secret that Service Systems misappropriated in its entirety. Computer Care relies on
SmokEnders, Inc. v. Smoke No More, Inc.,
The SmokEnders principle is sound, but we do not believe it applies here. The program at issue in SmokEnders is a highly structured regimen “comprised of specific assignments and detail concepts” that “requires that each person attending the program perform each act at a particular time.” Id. at 312. Further, the court found that “the length and complexity of *1075 the program make it too much for an attendee to remember or to memorize enough of the program to appropriate it.” Id. By-contrast, Computer Care’s system does not take its individual features and transform them into something that is itself secret— that is, not generally known or easily duplicated by the industry. All of the individual features discussed above are either sufficiently obvious that anyone entering the reminder letter business would be likely to incorporate them into his system, or easily duplicated by anyone with legitimate, publicly available knowledge of Computer Care’s business. Moreover, unlike the SmokEnders system, Computer Care’s system is readily replicable by anyone who has been exposed to its various components; one need not also have knowledge of a special formula or technique for combining those components. Computer Care has therefore failed to establish that it has a protectable trade secret in its Profit Builder System as a whole.
IV.
Computer Care alleged, and the district court found, that Service Systems had promoted its business by making representations that are false as to Service Systems, though true as to Computer Care, in order to “deceive potential customers into believing that Service Systems has a record of experience, customer satisfaction, and successful performance substantiated by objective evidence.”
1. Service Systems has “hundreds of auto dealers” and “dealers all over the country” using its services. Service Systems had been making this false statement since July or August of 1990. In actuality, of course, Service Systems is a start-up company operating only in the Chicago area that had only one hundred customers as of December 1990;
2. Service Systems has been in business “more than a dozen years.”
3.Service Systems has “done work for Chrysler.” Service Systems has never had any relationship with Chrysler Corporation, although. Computer Care has.
■ 4. Chrysler Corporation did a test using Service Systems’ program that substantiated the effectiveness of that program. In fact, Chrysler did such a test with Computer Care, not Service Systems.
Id.
The district court rejected Computer Care’s claim that Service Systems’ false advertising “deceive[s] customers into believing that their service is Computer Care and not Service Systems,” stating that “this action is not a ‘palming off’ case in that sense.”
Id.
at 1334. The court concluded, however, that “whether or not” Service Systems’ activities were actionable under the Lanham Act, they constituted “unfair competition that ... violates Illinois law.”
Id.
Nevertheless, the district court did not grant Computer Care injunctive relief on this claim. Computer Care cross-appeals from this decision. Although the district court did not explicitly deny Computer Care’s request that it enjoin the false advertising, the court’s failure to grant such relief when it was sought by Computer Care has the substantive effect of a denial, and therefore is reviewable by this court.
Carson v. American Brands, Inc.,
The court’s discussion of Computer Care’s false advertising claim presents two possibly significant problems. First, the court seems to suggest that “palming off” is necessary to state a false advertising claim under section 43(a) of the Lanham Act. That is clearly not the law in this circuit.
See Abbott Labs.,
V.
For the foregoing reasons, the decision of the district court is Affirmed in part, Reversed in part and Remanded for further proceedings consistent with this opinion.
*1077 APPENDIX
[[Image here]]
*1078 [[Image here]]
*1079 [[Image here]]
*1080 [[Image here]]
*1081 [[Image here]]
*1082 [[Image here]]
*1083 [[Image here]]
*1084 Computer Care’s Monthly Reports (as Reproduced in “Win or Lose!” Brochure)
[[Image here]]
*1085 Service Systems’ Monthly Reports (as Reproduced in “Maintain or Fail!” Brochure)
[[Image here]]
Notes
. 15 U.S.C. § 1125(a) (1988).
. In addition to demonstrating a likelihood of success on the merits, a party seeking a preliminary injunction must also show that "it has ‘no adequate remedy at law' and will suffer 'irreparable harm’ if preliminary relief is denied.”
Abbott Labs. v. Mead Johnson & Co.,
. Although the district court originally found that six of the features of Computer Care’s system were protectable trade secrets, on reconsideration the court changed its ruling as to one of these elements.
. This column simply lists the date each reminder letter was mailed. Although it appears in the illustration of this report in the "Win or Lose!” brochure, it is not actually included in the current version of the report itself.
. We also note that, even if the trade dress were merely suggestive, Computer Care would be entitled to protection from wholesale copying of that trade dress by a direct competitor.
Taco Cabana,
. We will assume, for purposes of this inquiry, that car dealers who compete in the same area would not share information about a service designed to increase their own competitive advantage, although we suspect that there are other ways in which a dealer might hear about Computer Care outside a Computer Care sales presentation.
. The record does not show what method Computer Care actually uses to track car owners.
. Of course, the way in which Computer Care adjusts its service cycles — that is, the software it uses to perform that task — is protectable, but that is distinct from the mere idea of adjusting service cycles to customers’ needs.