OPINION AND ORDER
INTRODUCTION
This is an action for trade dress infringement and unfair competition. PAF S.r.l. (“PAF”), an Italian company, and Koch + Lowy (“K & L”), a New York corporation, plaintiffs herein, are respectively the manufacturer and exclusive United States distributor of the “DOVE” lamp. Defendant Hunter-Melnor, Inc., Kenroy International Division (“KI”), a Delaware corporation, imports the “SWAN” lamp from Taiwan and distributes it throughout the United States at wholesale in competition with plaintiffs’ Dove lamp. Defendants Lisa Lighting Co. 1 and Dac Wire Corp., both New York corporations, are retail outlets that sell the Swan lamp.
Plaintiffs allege that the Swan is a “knockoff” of the Dove lamp. They assert claims under the Lanham Act § 43(a), 15 U.S.C. § 1125(a) (1982), 2 for false designation of origin and under N.Y.Gen.Bus.Law § 368-d (McKinney 1984) for dilution of a trademark. Complaint W 22-23, 28, 29. In addition, plaintiffs plead a common law claim for unfair competition. Complaint ¶¶ 24-25.
Plaintiffs seek (1) permanent injunctive relief, (2) recall and destruction of the infringing lamps, (3) compensatory damages, (4) an accounting of defendants’ profits realized in connection with the sale of the Swan, with an award in such amount to plaintiffs, and (5) attorney’s fees.
The court has jurisdiction of this matter pursuant to 15 U.S.C. § 1121 (1982), 28 U.S.C. § 1338 (1982), and under the general doctrine of pendent jurisdiction. In accordance with Fed.R.Civ.P. 65(a)(2), the trial of the action on the merits was consolidated with the hearing of the application for a preliminary injunction. This action was tried to the court without a jury.
For the reasons set forth below, the court concludes that plaintiffs have sustained their burden of proof under the federal statute. The evidence leaves no doubt that the subject of this lawsuit, the Dove lamp, is in fact a highly distinctive design. Moreover, plaintiffs have established that (1) the Dove lamp has acquired secondary meaning in the marketplace, and (2) consumers are likely to be confused as to the source of the Swan lamp. Additionally, the court finds that KI violated section 43(a) of the Lanham Act by importing and selling lamps confusingly similar to plaintiffs’ Dove lamp and that it did so intentionally. Consequently, plaintiffs are entitled to permanent injunctive relief. 3
Further, under 15 U.S.C. § 1117(a) (Supp. IV 1986), plaintiffs are entitled to recover KI’s profits, costs of the action and reasonable attorney’s fees. Since plaintiffs did
As to defendant Dac Wire, since its participation in the infringement was de mini-mus (Dac sold only 13 lamps) and because it returned all unsold lamps to KI, Dac Wire, while enjoined from further infringement, will not be required to pay damages, profits, attorney’s fees or costs in this action.
BACKGROUND
The Dove, PX 194, 195, 4 is a halogen desk lamp manufactured in Italy by PAF. It is sold in five colors: black, white, red, blue, and yellow. The lamp has a cylindrical base which rotates on a circular platform. Such base is black on all models. On the underside of the base appear, so far as pertinent, the PAF studio logo, the name Dove, the names of the lamp’s designers, and “Made in Italy.” Two parallel curvilinear struts join the base to a long flat slightly curved arm which flares imperceptibly from top to bottom. The head of the lamp, in which is housed a high intensity bulb, has a graceful configuration: rectangular at the base, the head rises from the back to form a gently sloping mound which tapers off in the front. The head is hinged to the arm, allowing the user to adjust it up or down, and is counterbalanced by a concealed weight evenly distributed within the lower portion of the arm itself. At this point, the arm is hinged to the struts, again allowing one to adjust it up or down. From a practical standpoint, the design allows a full range of motion for desk or table lighting. Overall, the aesthetic effect of the lamp evokes the image of a bird descending or rising in flight. See Trial Transcript at 23, 243 [hereinafter “Tr. x ”]. For example, the struts, which serve the purpose of conducting electricity from the base to the head, resemble the manner in which a bird’s feet extend when it prepares to land. See Tr. 256. The Dove retails from $160 to $200. Tr. 337; see, e.g., PX 106, 116, 123-25.
Defendant KI imported Swan lamps, PX 196, 197, 5 from a Taiwanese Company, Lon Tai Shing, Ltd. (“LTS”). The Swan is virtually identical in appearance to the Dove, but is sold in only two colors: white and black. Also, the base of the Swan, unlike the Dove, matches the color of the lamp. Thus, a white Swan has a white base while a white Dove has a black base. The underside of the Swan base has no markings disclosing the make, model, manufacturer, or country of origin. The Swan lamp sells at retail for $120. Tr. 337. While ostensibly the differences between the two lamps are minor, the Swan is, in terms of quality, a poor imitation of the Dove. The record is replete with KI’s admissions that the Swan has “serious quality problems.” Tr. 386.
The genesis of the Dove lamp, and this litigation, was the decision by PAF in 1979 to expand its enterprise from the provincial manufacture and sale of traditional lamps in Italy to a modern design lamp that would sell throughout the world. Tr. 16. To that end, PAF and the Dove have been very successful. The Dove received universal acclaim, was awarded numerous honors, including an Oscar from the French Architects Association, and ultimately has become the second best selling desk lamp in the world. PAF increased in size from a company of fifteen employees in 1984 to over one hundred employees in 1988. This substantial growth has been a direct result of PAF’s development of the Dove. Tr. 63; see Plaintiff’s Exhibit 166 at 1 [hereinafter “PX n ”]; Tr. 21, 534; see also Declaration of Luigi Giroletti at 4.
From the start, the company’s strategic goal was to develop a product that would help make PAF a recognizable name with consumers. Tr. 16-17. Giroletti, managing director of PAF, testified: “[Ojur effort was to have a completely different lamp.”
Id.
“We invested in research ... in machinery, in tooling ... our effort was to identify this lamp with our firm.” Tr. 22. To achieve this end, PAF hired two architects, Mario Barbaglia and Marco Co
The results of PAF’s efforts were impressive. The Dove lamp made its premiere in September 1985 at the Euroluce International Lighting Exhibition in Milan, Italy, where it became an instant success. Tr. 21. This success was important to PAF because the Euroluce Exhibition is regarded as the preeminent international lighting exhibition, Tr. 24-26, and the Dove won considerable acclaim there from designers, architects, museums and journalists. Tr. 21.
Following the Euroluce Exhibition, the Dove was featured prominently in a complimentary article written by Suzanne Slesin 6 for the New York Times, entitled “The Slender Minimalist Look Stars at the Milan Fair.” NY. Times, Sept. 26, 1985, at Cl, col. 5 (picture of the Dove lamp covers the width of the page). PX 82. In the article, the Dove is described as having an “attenuated birdlike shape,” and both Messrs. Bar-baglia and Colombo are mentioned as having designed the lamp for PAF. Id.
PAF enjoyed great success with its new product. The Dove received numerous international awards for its design, and laudatory letters from museums around the world requesting the lamp for exhibition were sent to PAF. Further, the lamp appeared on the cover of the International Design Yearbook for 1985-1986, edited by Phillipe Starke, a famous contemporary French designer. Tr. 46; PX 32; see also PX 82 (N.Y. Times, Sept. 26, 1985, at Cl, col. 5, acknowledging Phillipe Starke as one of France’s major talents in the field of design). In the United States, the editors of Modem Style chose to include the Dove as part of an eclectic catalog, a source book of interior design dating from the 1930’s to contemporary post-modern designs. PX. 17.
In addition to, and as a result of, the significant public attention given the Dove, PAF committed itself to a full scale marketing campaign, expending over ninety percent of its marketing budget to promote the Dove. Tr. 116. PAF’s marketing strategy was to target upscale, sophisticated consumers (those who typically would be interested in design), to emphasize the appearance of the product so that people would immediately recognize it, and to make the Dove lamp “the symbol of PAF.” Tr. 32, 34, 37-38.
The company implemented a three step program for advertising in the world market. First, PAF advertised in specialty magazines originating in Italy but sold internationally, including the United States. Giroletti explained the reason for this approach. Italy is renowned for the best in new design, both in furniture and clothing. Tr. 247, 315. Consumers interested in fine design initially consult Italian and European magazines. Tr. 293. “[If] customers in the United States wanted special Italian or European items, they [would] buy magazines ... made in Italy.” Tr. 34, 37, 95. Second, PAF built an advertising campaign in Europe, and third PAF then commenced an extensive campaign specifically directed at the United States market. Tr. 35.
KI, which as noted above is a division of defendant Hunter-Melnor, Inc., is an importer of lighting fixtures and accessories. Tr. 345-46. Roy Gomes, president of KI, testified that he originally became aware of the Dove lamp when he saw it advertised in The Sharper Image catalog sometime shortly before 1988. Tr. 406-07. On February 6,1988 LTS (the Taiwanese manufacturer) sent to the purchasing director of KI a letter enclosing a lighting catalog, which included a product called model LTS-614 (the Swan lamp). Tr. 347; PX 142. Mr. Gomes responded to this communication by facsimile, dated February 16, 1988:
We have received your Feb. 6, letter enclosing illustration of Model LTS-614. This seems to be similar to a European produced lamp. We wish to order immediately ... and we guarantee you volume sales ... Products such as [LTS-] 614 ... are in the luxury category, selling through lighting wholesalers, furniture stores and top quality department stores. They appeal to an elite, sophisticated market, willing to pay a high price— more for the design aspect of the lamp than for the functional aspect. This same customer will not buy a product that is commonly distributed everywhere for the obvious reason that it is no longer unique.... We strongly recommend you consider exclusive distribution through us.
PX 141.
In the same facsimile communication, Gomes acknowledged that the Dove was presently being sold in the United States. Id.; see also Tr. 356; Defendant’s Exhibit 1 at 36 [hereinafter “DX n ”] (Deposition of Roy Gomes, dated Oct. 17, 1988). Gomes also inquired as to whether a design patent had been issued for the Dove. Two weeks later Gomes ordered, sight unseen, 1000 units of model LTS-614, see PX 144, which he himself renamed the “SWAN.” Tr. 361; see also DX 1 at 50. Upon receiving the first shipment of Swan lamps, Gomes sent another facsimile dated March 15, 1988 to LTS, stating exultantly, “Our congratulations! We drink champagne to your excellent reproduction.” PX 144 (emphasis added).
Gomes became aware of the legal principle of trade dress protection in the spring of 1988 when his attorney sent him a copy of the decision in
Artemide SpA v. Grandlite Design and Manufacturing Co.,
KI commenced selling the Swan on July 7, 1988 at a trade show in Dallas, Texas. Tr. 395. Gomes testified that because no design patent had issued for the Dove, he thought he could sell the Swan freely, without fear of litigation. 7 Tr. 396. Plaintiffs maintain a year-round showroom at the Dallas tradeshow, and it was there, notably on KI’s first showing of its Swan lamp, that plaintiffs discovered the existence of defendants’ lamp. Tr. 225. The Dove was also on exhibit at the tradeshow, and as Gomes stated, several customers commented that the Swan looked just like the Dove. Tr. 407.
Plaintiffs, shortly thereafter, sent a letter dated August 4, 1988 to defendants demanding that they immediately terminate all sales and advertising of the imitator lamp and explaining the basis for plaintiffs’ claim of trade dress infringement. PX 166, 209. Defendants, however, failed to comply with plaintiffs’ demand. It is against this background that the present litigation was instituted.
Defendants contend that they may sell the “Chinese copy” with impunity. They maintain: first, that the design of the Dove is purely functional, hence unworthy of trade dress protection; second, that consumers do not associate the Dove with PAF, i.e., the Dove has not acquired secondary meaning; third, that KI does not purport to sell the original Dove and will distinguish its Swan by placing a KI logo on the base of its product; and finally, defendants insist that if they have infringed plaintiffs’ “trade dress” in copying the Dove, they have done so in good faith.
Plaintiffs argue that the Dove has received worldwide recognition, and sophisticated consumers recognize it as a distinctive Italian designer lamp. More, plaintiffs maintain that while very functional as an adjustable halogen desk lamp — of which there are literally hundreds — the design of the Dove simply does not dictate its function. Continuing, plaintiffs maintain There are many lamps that differ radically in design but perform essentially the same function, i.e., to provide high intensity, adjustable desk lighting. Finally, plaintiffs insist that a “KI” logo placed on the Swan will do little, if anything, to prevent consumers from confusing the two products.
I
Section 43(a) of the Lanham Act
8
establishes a federal law of unfair competition that protects against false designation of origin,
LeSportsac, Inc. v. K Mart Corp.,
To succeed under a § 43(a) claim, plaintiffs must prove (1) that the trade dress of their product has acquired secondary meaning among the relevant consumer group, and (2) that there exists a likelihood consumers will confuse the source or sponsorship of defendants’ product with their own.
Centaur Communications Ltd. v. A/S/M Communications, Inc.,
FUNCTIONALITY
Defendants’ initial contention is that the Dove lamp has a purely functional design, and as such, without the benefit of a design patent,
9
may be freely copied. The Supreme Court in
Inwood Laboratories, Inc. v. Ives Laboratories, Inc.,
The reason for this kind of analysis is clear:
[C]ourts must be sensitive to whether a grant of trade dress protection would close all avenues to a market that is otherwise open in the absence of a valid patent. This threat is particularly great when ... a first manufacturer seeks broad trade dress protection for a product on the ground that its arrangement of predominantly functional features is distinctive_ [The court must, however, balance] this purpose with the Lan-ham Act’s purpose of preventing confusion as to the source of products, [and the correct inquiry in a functionality defense is whether trade dress protection] ‘will hinder competition or impinge upon the rights of others to compete effectively in the sale of goods.’
Stormy Cline,
Applying the test of functionality, as articulated in the above-cited cases, the court concludes defendants have failed to meet their burden in proving functionality. As noted earlier, evidence of alternative constructions that perform the same function militate strongly against a finding of functionality.
Brandir Int’l,
At trial, defendants attempted to analytically disassemble the Dove into disparate functional components.
See
Tr. 161-86, 266-83. In doing so, however, defendants by contradistinction merely accentuated the testimony of plaintiff’s expert witness, Merle Edelman, who opined the Dove should be viewed, not with an eye toward its separate functional elements, but in its entirety, more for its purely aesthetic appeal. Tr. 249-53;
See Hartford House, Ltd. v. Hallmark Cards, Inc.,
The short of the matter is that the Dove is a highly distinctive, aesthetically appealing lamp, not a predominantly functional lamp.
Defendants point out that it is precisely this aesthetic appeal which is an essential feature of the lamp’s design, making it an “ ‘important ingredient in the commercial success of the product.’ ”
LeSportsac,
Moreover, there is no evidence that the Dove is less costly to manufacture than other similar halogen lamps. Indeed, on cross-examination, plaintiffs’ expert witness stated that the production methods used in the manufacture of the Dove made it more expensive to produce. Tr. 275-76. In a similar vein, Thomas Lowy, president of plaintiff K & L, testified that using a concealed counterweight in the arm made the production process for the Dove more difficult than that of other halogen lamps. Tr. 203.
Significantly too, defendants presented no evidence of their inability to compete effectively in the industry without copying plaintiffs’ trade dress. Defendants offered no evidence that KI considered alternative designs for its product, or that it made engineering studies or studies of manufacturing costs. Considering the number of halogen lamps plaintiffs presented as evidence of alternative designs that perform essentially the same function as the Dove, manifestly defendants are not precluded from competing in the sale of similar halogen desk lamps.
In sum, the court finds that defendants have failed to meet their burden in proving functionality. The design of the Dove lamp is simply not dictated by its function. SECONDARY MEANING
A trademark, or in this case trade dress, acquires secondary meaning when it can be demonstrated that consumers associate the product with a particular source.
Yarmouth-Dion, Inc. v. D’ion Furs, Inc.,
The focus, therefore, of secondary meaning is the relevant consumer group:
Although the mark owner strives to create a secondary meaning for its product, it is the consuming public which, in effect, determines whether that effort has succeeded.... [I]t is not always the general public’s understanding but — depending upon the product — often only a segment of consumers that need be examined.
Centaur,
Q. Is there a particular type of retail store that sells the Dove lamp?
A. Basically, the few fine department stores, the best lighting stores, and the best furniture stores.
Tr. 138; see also Tr. 232.
Again, defendant KI’s memorandum to LTS serves to buttress this conclusion: “Products such as the [Swan] ... are in the
“ ‘Proof of secondary meaning entails vigorous evidentiary requirements.’ ”
Thompson Medical Co. v. Pfizer Inc.,
Plaintiffs submit they need not prove secondary meaning because the trade dress of the Dove is so distinctive that in the realm of product design it must be considered arbitrary or fanciful,
10
or that the trade dress is more analogous to distinctive packaging, which under New York law is protected without proof of secondary meaning.
See Perfect Fit Indust., Inc. v. Acme Quilting Co.,
Sales Success
The Dove is the second best selling lamp in the world and in the United States.
11
Tr. 21, 304-05, 534-35;
see also
PX 166 at 1. It has enjoyed tremendous worldwide sales for a new product. Thus, since September 1985 there have been over 200,000 units sold and sales in the United States have increased at a phenomenal annual rate of approximately fifty percent.
12
Tr. 55-59; PX 183. Significantly, the lamp accounts for sixty percent of PAF’s total sales, of
Plaintiffs’ witness Mitchell Steinberg, the owner of a retail lighting store, testified that he has been selling the Dove for the past four years, and that it is a very popular lamp. Tr. 304-05. Steinberg further stated that out of the hundreds of different lamp styles he carries in his store, the Dove is distinctive, and that it strikes an image in the minds of customers:
The Dove lamp stands out. It is very elegant. It has a certain something that most lamps are lacking_ Many customers come in and ask for the lamp simply as the Dove. Some come in and ask for the lamp as the PAF Dove. Some come in knowing the lamp they want to buy, they have seen it in a magazine ... and they describe it as a bird.... Then they will walk around the showroom floor. When they see it, they will point out [sic] to it, and they will say, ah, that’s the lamp I want.... A good number of customers will ask if the lamp is from Italy.
Tr. 305-06, 316.
Senior User’s Advertising Expenditures
To date, PAF has spent over two million dollars advertising the Dove in international design magazines and interior design trade magazines in the United States. Tr. 289; see, e.g., PX 9-87. In contrast, KI has spent no money advertising its Swan. Tr. 360.
Essentially, then, the Dove has been extensively advertised since 1985 in media intended to reach the United States market. Tr. 34-46, 64; PX 19-23, 26-27, 30-31, 34-40, 44-48. Plaintiffs introduced evidence that architects, designers, decorators and retailers would usually subscribe to such magazines. Tr. 95, 150, 218-21, 247, 302-OS, 308 (principal foreign magazines are Abitare, Casa Vogue, Interni, and Domus). The Dove was advertised in May, 1985 in Interior Design, which is the largest circulation trade magazine of interior design in the United States. Tr. 506, 519-21; PX 207. It was advertised in Designer Magazine, another trade magazine read by designers and architects in the United States. Tr. 521-22; PX 208. In many of these advertisements, the name PAF appears, usually in bold letters alongside a picture of the Dove.
In addition to advertising in the print media, PAF spent approximately $100,000 annually for exhibiting the Dove at trade shows in major cities throughout the United States. 13 Tr. 54. PAF also spent approximately another $100,000 annually to produce lighting catalogs which feature the Dove as the “symbol of PAF.” Tr. 32, 54, 116. PAF even made bags which included a picture of the lamp and the name PAF printed on the bags as promotional giveaways. Tr. 55.
Interestingly too, the Dove has received substantial free advertising in the United States from such widely recognized companies as The Sharper Image, Bloomingdales, Scandanavian Design Gallery and Pottery Barn. Tr. 48-52; PX 89, 123-28. For example, The Sharper Image catalog, which has an estimated monthly circulation of twenty million readers in the United States, advertised the Dove in September and November 1987 and in January 1988. PX 123-25. While not mentioning PAF by name in the advertisement, the advertising copy reads, “Italy puts sunshine in a dramatic halogen lamp.” Indeed, it was in such a catalog that Gomes testified he first saw the Dove lamp. Tr. 407.
The lamp is chic. Companies other than PAF use the Dove in the background of, or to complement, their own advertisements. It is used by set designers in film, television and magazines. Tr. 127, 302-03. For example, the lamp appears in an “ad slick” for a Macy’s two day furniture sale. PX 118 (sale of leather sofas and living
Unsolicited Media Coverage
Although the Dove is a relatively new product, no other halogen desk lamp, except for the Tizio, has generated so much excitement in the field of design in recent years. The lamp has garnered numerous awards and international recognition from designers, architects, and museums. 14 As noted supra p. 7, it was chosen by Phillipe Starke, an internationally recognized designer, to appear on the cover of the International Design Yearbook for 1985-1986. The Dove appeared prominently in an article in the New York Times covering the Euroluce lighting exhibition. All these commentators pointedly credit PAF and Messrs. Barbaglia and Colombo with the creation of the Dove lamp.
Intentional Copying
Without peradventure of doubt, defendants deliberately copied the Dove lamp; there is no evidence to the contrary. The Dove and Swan, even when viewed side by side, are virtually indistinguishable. KI’s contention that it did not copy the Dove but merely purchased the Swan from a Taiwanese manufacturer is utterly devoid of merit. True, defendants did not manufacture the product. Nevertheless, in selling the lamp they knowingly became part of the chain of distribution, and as such are liable for the results of any infringement.
See Bambu Sales, Inc. v. Sultana Cracker, Inc.,
Proof of intentional copying is persuasive, if not conclusive evidence of secondary meaning.
20th Century II,
The record plainly establishes that defendants sought to gain an advantage at the expense of and via the reputation of an internationally recognized product. Gomes was fully aware, even before he placed his order with LTS, that the Dove was a European lamp. Moreover, the court finds incredible Gomes’ testimony that he had never seen the Dove lamp until presumably late 1987 when he saw it in a
Sharper Image
catalog. Tr. 407. Considering that Gomes is an intelligent and highly sophis
The most telling evidence, however, of intentional copying is the decision by Gomes to rename the birdlike imitator lamp the SWAN. Tr. 361, 366-67, 414; DX 1 at 50. Courts in this circuit have recognized that “ ‘the second comer has a duty to so name and dress his product as to avoid all likelihood of consumers confusing it with the product of the first comer.’ ”
Mobil Oil Corp. v. Pegasus Petroleum Corp.,
Finally, David Cohen, owner of defendant DAC Wire Corp., candidly conceded that he ordered the Swan because it was a copy of the Dove and he knew that the Dove had caught the public eye. Tr. 333, 335-36.
Plainly, then, defendants’ claim that KI sought to reproduce the Dove simply because it was a beautiful design, see Tr. 408, is unsubstantiated by the record.
Consumer Survey
Plaintiffs presented no evidence of a consumer survey that linked the Dove lamp to an Italian manufacturer. While consumer surveys have come to be regarded as the most common method of proving secondary meaning,
See Centaur,
Length and Exclusivity
Since 1985 PAF has been the exclusive manufacturer of the Dove lamp.
15
Defen
Unfortunately for defendants, the facts destroy their argument. From February 1, 1988 to July 1,1988 the Dove, in addition to the aforementioned advertising, appeared weekly in the New York Times, usually in the Thursday Home Section. Tr. 214, 306. It has been advertised in American magazines such as House Beautiful, PX 88, and Interior Design Magazine. PX 131. The Dove has also been advertised in national and local newspapers around the country, including: Newsday, PX 99; the Philadelphia Inquirer, PX 94; The Hartford Cour-ant, PX 119; The Sacramento Bee Final, PX 115; The Times-Picayune, PX 95; and Home Furnishing Daily (newspaper which has a full time staff covering the lighting industry did a story about the Dove mentioning both PAF and K & L) Tr. 524; PX 210.
Weekly advertising over a period of six months in the New York Times, coupled with contemporaneous advertising in other publications, added to the previous years of advertising and unsolicited media coverage, does much to establish a finding of secondary meaning in this case.
In trade dress cases, a product design may take longer than a wordmark to acquire secondary meaning,
Keystone Camera Prod. Corp. v. Ansco Photo-Optical Prod. Corp.,
However, the record establishes far more than secondary meaning in the making. In the instant case, a number of factors convince the court that the Dove has acquired secondary meaning in the relevant consumer market. First, the product has a special marketing niche; it is purposely not sold to all stores, but selectively to top-of-the-line furniture and department stores. Second, persons likely to purchase the Dove read or subscribe to Italian design magazines such as
Intemi, Casa Vogue,
or
Domus.
Third, considering the initial brouhaha over the Dove at the Euroluce Lighting Exhibition and the subsequent recognition of the lamp as an important contribution to modem design by eminent members of the profession, the court concludes that this lamp is well recognized, at the very least, as an Italian designer lamp. Finally, in a rela
LIKELIHOOD OF CONFUSION
To succeed under their Lanham Act claim, plaintiffs must demonstrate that “ ‘an appreciable number of ordinarily prudent purchasers are likely to be misled, or indeed simply confused as to the source of the goods in question.’ ”
Charles of the Ritz Group, Ltd. v. Quality King Distributors, Inc.,
Judge Friendly’s landmark decision in
Polaroid Corp. v. Polarad Electronics Corp.,
(1) The strength of the mark;
(2) The degree of similarity between the marks;
(3) The proximity of the products;
(4) The likelihood that the senior user will bridge the gap;
(5) The junior user’s good faith in adopting the mark;
(6) The quality of the junior user’s product;
(7) Evidence of actual confusion;
(8) The sophistication of the relevant consumer group.
See also Orient Express Trading Co. v. Federated Dept. Stores, Inc.,
In the present case some of the factors need little, if any, commentary. The strength of the mark, for example, speaks for itself, viz., the Dove has a highly distinctive design. The degree of similarity between the Dove and the Swan is self-evident; they are virtually identical. In the marketplace, the products are direct competitors and hence the proximity of the products is evident. Polaroid factors (5), (6), (7), and (8), however, merit further discussion.
Good Faith
As discussed
supra,
defendants intentionally copied plaintiffs’ trade dress in the Dove lamp. “Intentional copying gives rise to a presumption of likelihood of confusion.”
Mobil Oil Corp. v. Pegasus Petroleum Corp.,
The Quality of the Junior User’s Product
At trial, plaintiffs amply demonstrated that the Swan is inferior in quality to the Dove. KI’s memorandum to LTS serves to point up the Swan’s serious quality problems:
We have serious, and I mean serious quality problems with this item....
1. Paint peeling.
2. Plastic melting with ultimate transformer burnout.
3. Plastic case splitting at the seam where attached to upright steel rods.
We are literally being inundated with requests from customers for return of goods authorization.
PX 163; see also PX 153.
More, the Swan is wired to the secondary side of the transformer, whereas the Dove is wired to the primary side. This, in effect, means that when one switches off the Dove there is no current in the transformer, whereas in the Swan the transformer is always “on,” even when the light is turned “off.” Tr. 71-72, 385. According to KI’s own memorandum, “this method of construction is unacceptable from a safety point of view and longevity of the product itself.” PX 159.
Normally, a marked difference in quality will militate against finding a likelihood of confusion.
But see Hasbro, Inc. v. Lanard Toys, Ltd.,
In sum, the inferior quality of the Swan is a factor entitling plaintiffs to trade dress protection for the Dove. The lamps are virtually identical in appearance, and accordingly there is a significant risk that the public’s perception of the Dove as a high quality product will suffer from confusion between the lamps.
Evidence of Actual Confusion
While the record contains no direct evidence of actual confusion by consumers, probably the best indirect proof of actual confusion adduced by plaintiffs was the testimony of David Cohen, owner of defendant DAC Lighting Corp. and an expert in the lighting field. At trial, Cohen conceded that he could not distinguish between the Dove and the Swan when both were presented to him. Tr. 331-32. Proof of likelihood of confusion relates not merely to confusion of the two products, but confusion as to source. While there is no evidence in the record that retailers themselves would be confused about the source of the lamps they sell,
see, e.g., Schwinn Bicycle,
Sophistication of the Relevant Consumer Group
The relevant consumer group, as we have seen, is relatively sophisticated. Con-cededly, the sophistication of consumers normally militates against finding a likelihood of confusion. Nonetheless, when the products have a virtually identical design, as here, “ ‘[t]he sophistication of the consumers cannot be relied upon to prevent confusion,’ ” and depending on the circumstances of the market and the product, may operate to increase confusion.
Banff, Ltd. v. Federated Dept. Stores, Inc.,
841 F.2d
Reverse Confusion
Confusion ordinarily means that consumers misperceive the source of the second comer’s goods. Here, consumers are likely to believe that the Swan lamps were actually original Dove lamps. The Lanham Act protects against this very kind of confusion. Thus, the Lanham Act’s reach, so far as this case is concerned, is to prevent KI from appropriating PAF’s reputation,
see
Tr. 83, 310, limiting its expansion, or causing PAF a loss of patronage. Tr. 226-232;
Banff, Ltd. v. Federated Dept. Stores,
Reverse confusion, on the other hand, is the misimpression that the second comer (KI) is the source of the original product. Such confusion would exist where consumers who first encounter the Swan, then later encounter the Dove and mistakenly believe PAF to be an unauthorized infringer. This can definitively injure PAF’s reputation and impair its good will. In
Banff,
the Second Circuit explicitly held reverse confusion actionable under § 43(a) of the Lanham Act.
Id.
at 490-91;
see also Yarmuth-Dion, Inc. v. D’ion Furs, Inc.,
II
On August 16, 1988 KI, after having sold most of its Swan lamps and being notified by PAF of a potential infringement suit, sent hang tags inscribed with the “KI” logo to its distributors and a letter with instructions that the KI hang tags were to be prominently displayed on the Swan lamps. See DX 11. This action by KI, however, does little to eliminate any likelihood of confusion. As the Second Circuit stressed in LeSportsac:
The proposed hangtag would be removable. Once the tag comes off, the bags are again virtually identical and likelihood of confusion remains. Moreover, as [plaintiffs] correctly point out, the equities are quite different than they would have been had [defendants] placed the proposed tags on the bags when they were first offered for sale.
The Swan is sold in a box that has KEN-ROY INTERNATIONAL printed in large letters on the outside of the box. Tr. 393. The record, though, indicates that retail lighting stores always display lamps for sale without the box. Tr. 140, 307, 336. Defendants, therefore, propose to modify the Swan and contend that by embossing, in raised black letters, a “KI” logo, see DX 6-A, onto the base of the lamp, defendants will avoid any likelihood of consumer confusion as to the source of its product. Hence, maintain defendants, even if the Swan is sold outside the box, the logo would be sufficient to identify KI as the source of the lamp.
In support of this proposition, defendants cite a number of cases holding that a newcomer can, in the absence of patent protection, copy another’s product so long as it obviously labels the product as its own.
Litton Systems, Inc. v. Whirlpool Corp.,
But under the facts of this case, defendants’ argument is at best specious, and defendants’ reliance on case law is misplaced. In none of the cases cited by defendants was the trade dress being considered highly distinctive or had acquired secondary meaning.
See, e.g., Schwinn Bicycle,
As observed in
Artemide SpA,
the court must look at both the type of product and the prominence of the label.
Additionally, the KI logo itself is inconspicuous. Defendants propose to emboss black lettering on a black base. However, even were the logo to contrast with the base, the consumers’ initial reaction, of course, would be to the lamp itself, not the logo. In such instances, consumers could unwittingly look at a Swan and conclude it is the original Dove, or at the very least, “that Italian lamp.” That is enough to warrant § 43(a) protection.
When it comes to trademark infringement, consumer perception is all important. Where the product in question is distinctive and has acquired secondary meaning, merely because the second comer places its logo on a confusingly similar product does not ameliorate the likelihood of confusion. “In order to be confused, a consumer need not believe that the owner of the mark actually produced the item and placed it on the market. The public’s belief that the mark’s owner sponsored or otherwise approved the use of the trademark satisfies the confusion requirement.”
Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinemas Ltd.,
Because none of the lamps sold by KI presently bear the logo, defendants’ proposal for a modification of the lamp shall be treated as an application for relief from this court’s order enjoining defendants from future sales of the Swan. To prevail on this motion, there is a heavy burden on defendants to come forward with evidence sufficient to demonstrate that the proposed modification would significantly reduce the likelihood of consumer confusion.
See Home Box Office, Inc. v. Showtime/The Movie Channel Inc.,
State Law Claims
Plaintiffs also seek relief under N.Y.Gen.Bus.Law § 368-d for dilution of a trademark and a common law claim of unfair competition. The New York statute is inapplicable in this case because the products involved are similar and competitive.
Aris-Isotoner Gloves, Inc. v. Fownes Bros. & Co.,
The court, having already decided the federal claim, need not reach the state claim. 19
Ill
Upon balancing the equities, the court readily reaches the conclusion that plaintiffs would suffer much more than defendants were an injunction not to issue. The Dove represents 60 percent of PAF’s business, and essentially, has come to be the symbol of PAF. Admittedly, the Swan comprises but merely 0.7 percent of KI’s total sales. Tr. 346.
In short, plaintiffs have established that prospective purchasers are likely to be confused as to the source of the Swan, and as a result, are entitled to permanent injunc-tive relief. Accordingly, Kenroy International and all other divisions of Hunter-
The court, having decided that plaintiffs are entitled to permanent injunctive relief, now considers plaintiffs’ other requests in their prayer for relief. Plaintiffs request a recall of all lamps sold by KI. A recall would be problematic. Among other difficulties, more than six months have passed since the last sale of a Swan by KI. Not only would it be virtually impossible to attempt to collect all the scattered lamps, but there is no assurance that all customers of KI would comply with the request. Therefore, the request for a recall is denied.
Plaintiffs further seek under section 35, 15 U.S.C. § 1117(a), compensatory damages, an accounting of defendants’ profits, attorney’s fees and costs in this action.
20
Although likelihood of confusion is all that is required for injunctive relief, proof of actual confusion is necessary to recover damages under § 43(a) of the Lanham Act.
PPX Enter., Inc. v. Audio Fidelity Enter., Inc.,
An accounting of defendants’ profits and an award of attorney’s fees are appropriate where there is a finding of deliberate and willful infringement.
Getty Petroleum Corp. v. Bartco Petroleum Corp.,
Moreover, in the instant case an accounting is unnecessary. Of the 4500 lamps that KI ordered from LTS, it sold 1500. Tr. 397, 399; DX 1 at 137. The other 3000 lamps have not yet entered the United States and perhaps may not have even been manufactured. DX 1 at 139-41. Of the 1500 lamps sold, fourteen have been returned. Id. at 137-38. KI used a scaled pricing system in its sale of the Swans. For one lamp the price was $72; for lots of twelve the price was $65; and for lots of twenty-four the price was $60. Tr. 398-99; PX 165. The lamps cost KI $32.50 f.o.b. Taiwan. Gomes testified that the average price per lamp was $62, that his landed cost was actually closer to $40, Tr. 399, and estimated “pretty much to formula” that after agents’ commissions KI’s gross profit on the unit price would be around $24. DX 1 at 55-57.
The court, exercising its broad powers of discretion in this area, calculates KI’s profits as follows: Assuming as Gomes stated, all the Swans were sold for an average price of $62 and KI’s landed cost was $40 per lamp, KI’s profit would be $22 per unit. Multiplying 1500 units by $22 profit per unit yields a total of $33,000, and minus $308 for the fourteen returns, equals $32,-692.
As for attorney’s fees, the parties may stipulate as to reasonable attorney’s fees. In the event the parties cannot reach an agreement, plaintiffs will submit within twenty days from the date hereof an affidavit including a contemporaneous time sheet documenting the number of billable hours for this case and a reasonable request for payment thereof.
Lewis v. Coughlin,
CONCLUSION
The Dove lamp is a highly distinctive, aesthetically appealing and award winning lamp. Its design features are not predominantly functional. Plaintiffs have provided sufficient evidence to demonstrate the Dove has acquired secondary meaning among the relevant consumer group, which consists of designers, decorators, architects, and sophisticated upscale consumers.
Plaintiffs adduced adequate evidence that consumers are likely to be confused as to the source of the Swan. Therefore, permanent injunctive relief is granted to plaintiffs. Plaintiffs are also entitled to an award of KI’s profits amounting to $32,-692., reasonable attorney’s fees, and the costs of this action.
The foregoing constitutes the court's findings of fact and conclusions of law as required by Fed.R.Civ.P. 52(a).
Submit judgment.
Notes
.At trial, the action against Lisa Lighting, which never filed an answer in this matter, was dismissed without prejudice. Trial Transcript at 14, 565 [hereinafter "Tr. x "]; see Fed.R.Civ.P. 41(a).
. Plaintiffs also assert a common law trademark infringement claim which is essentially no different from the federal claim.
. At the conclusion of the trial, the court granted plaintiffs a permanent injunction, with a full opinion and order to follow. Tr. 563-64.
. A picture of the Dove lamp appears infra as Appendix A.
. A picture of the Swan lamp appears infra as Appendix B.
. Suzanne Slesin is the journalist who coined the widely used expression "high-tech." Tr. 124.
. See discussion on issue of design patents infra notes 9, 15, 19, 21.
. Section 43(a), 15 U.S.C. § 1125(a), provides:
Any person who shall affix, apply or annex, or use in connection with any goods or services, or any container or containers for goods, a false designation of origin, or any false description or representation, including words or other symbols tending falsely to describe or represent the same, and shall cause such goods or services to enter into commerce, and any person who shall with knowledge of the falsity of such designation of origin or description or representation cause or procure the same to be transported or used in commerce or deliver the same to any carrier to be transported or used, shall be liable to a civil action by any person doing business in the locality falsely indicated as that of origin or in the region in which said locality is situated, or by any person who believes that he is or is likely to be damaged by the use of any such false description or representation.
The purpose of this section is to "prevent consumer confusion regarding a product's source, and to enable those that fashion a product to differentiate it from others on the market.”
Centaur Communications Ltd. v. A/S/M Communications, Inc.,
. Lack of a design patent does not preclude plaintiffs from asserting a § 43(a) claim.
See
discussion on issue of design patent
infra
notes 15, 19, 21. Moreover, the holder of a legal trademark, in this case unregistered trade dress, “is under no obligation to give advance notice of its rights to an infringer before seeking damages or injunctive relief for infringement."
See Bambu Sales, Inc. v. Sultana Crackers, Inc.,
. In
trademark
cases, verbal marks are entitled to varying degrees of protection, depending on whether they are classified as (1) generic, (2) descriptive, (3) suggestive, or (4) arbitrary or fanciful.
See Girls Club of America,
. The best selling lamp is the Tizio lamp,
see
Tr. 304-05, which at this writing is the subject of another trade dress infringement action. In
Artemide SpA v. Grandlite Design and Manufacturing Co.,
.Actual sales figures for the Dove are confidential, subject to a protective order. See Order dated October 28, 1988.
. Such cities include New York, Chicago, San Francisco, Los Angeles, Dallas, and Fort Lauder-dale. Tr. 139.
. Designers include Achille Castiglioni, judge of the sixth Arango International Design exhibition. The Arango Foundation, a non-profit organization founded to promote good industrial design in the United States, commissioned Mr. Castiglioni to judge an exhibition of what it considered to be the very best in lighting design. The Dove won special recognition. Tr. 122-23; PX 6. Mr. Giroletti, managing director of PAF, referred to Mr. Castiglioni as "the father of lamps,” Tr. 29, and Mr. Lowy called him the greatest lighting designer of the twentieth century. Tr. 122-23.
Architects include the French Architect’s association, Le Bureau du Syndicat National des Architectes D’Interieur, which in 1987 awarded PAF an Oscar for the Dove lamp. The award was given during an international lighting exhibition in Paris. The Dove was selected over literally thousands of lamps shown at the exhibition. Tr. 28-29; PX 5.
Museums include the following: Museo Ta-mayo in Mexico City, Mexico, see PX 3; Museum für Kunst und Gewerbe in Hamburg, West Germany, see PX 8 (museum book showing great designs throughout the ages and where they are located in the museum includes a picture of the Dove lamp); Die Neue Sammlung Staatliches Museum für angewandte Kunst in Munich, West Germany, see PX 4; Cooper-Hewitt Museum in New York City. Tr. 87.
. In 1988, there was an instance of copying when another Italian company attempted to market a product identical to the Dove lamp. This dispute was settled between the parties. Under Italian law,
preuso
affords protection to newly designed products that have been on the market for over one year. Tr. 106-07. This may have been a reason why PAF never deemed it necessary to file for a design patent in the United States. Unfortunately, United States law concerning design patents is different. Under 35 U.S.C. § 102(b) (1982), a person is entitled to a design patent
unless
his product has been on sale or in public use for more than one year prior to his application for a patent. Because plaintiffs have been selling the Dove for more than one year in the United States, plaintiffs are presently ineligible for patent protection in this
. On that date, PAF joined forces with its now sister corporation, Koch + Lowy. Both PAF and K & L were acquired by the Chartwell Group in January 1988. Tr. 14, 93.
. The
Polaroid
analysis originally applied only where the products in question were different. Polaroid now extends to competing products.
Physicians Formula Cosmetics, Inc. v. West Cabot Cosmetics, Inc.,
. UL listing is an assurance by the Underwriters Laboratory that a product meets certain quality and safety standards. UL listing is difficult to obtain, and the Underwriters Laboratory performs a monthly quality control check on products that receive its rating. Tr. 65-67.
. Defendants have made much of PAF’s failure to acquire a design patent for the Dove. As pointed out
supra
note 15, plaintiffs are presently ineligible for design patent protection in this country. In light of the recent Supreme Court decision in
Bonito Boats, Inc. v. Thunder Craft Boats,
— U.S. -,
In this case, however, preemption is not an issue. Although some courts have refused to extend trade dress protection in cases of product simulation,
see Sublime Prod., Inc. v. Gerber Prod., Inc.,
Were Gemveto’s claim predicated solely upon [defendant’s] having copied plaintiffs jewelry designs, the claim perhaps would be preempted by the federal law. However, it is not merely product simulation, but predatory practices that ture the basis of injunctive relief. ...
Id.; see also Ippolito v. Ono-Lennon,
For a related discussion on the issue of design patents see supra notes 9, 15, and infra note 21.
. Section 35 of the Lanham Act, 15 U.S.C. § 1117(a), applies to section 43(a) actions, 15 U.S.C. § 1125(a).
NuPulse, Inc. v. Schlueter Co.,
. KI contends that as evidence of its good faith it did a patent search on the Dove which uncovered no evidence of a design patent. Thus, Gomes testified: “I thought that [sic] the fact that no patent existed ... put me in a position where I could sell this [Swan] based on the patent laws without any fear of litigation." Tr. 396. However, as evidenced by his August 9, 1988 memorandum to LTS, see PX 155, and contrary to his August 16, 1988 letter to KI distributors, see DX 11 (which the court regards as a self-serving declaration having little probative value), Gomes was unaware of this fact at the time he started selling the Swan (KI sold its first Swan at the Dallas Trade Show on July 7, 1988, see Tr. 395). Also, Gomes was placing additional orders with LTS, see PX 152, after he had been made aware of the legal theory of trade dress protection and had voiced concerns that he might be sued by the owners of the Dove. See DX 1 at 76-79, 103.
. Additionally, KI sirgues that because its initial shipping order to LTS was subject to an irrevocable letter of credit, the company had to sell the Swans or face a loss. Tr. 401-03. Contrary to KI’s position, this concern over profit is indicative more of bad than of good faith. Gomes made no attempt to either cancel the letter of credit or transfer the money to other already existing accounts. Tr. 403. He testified, "Why would I? I was anxious to receive these [Swans].” Id. Furthermore, KI continued to sell its remaining stock of Swan lamps after having received a cease and desist letter from plaintiffs’ attorneys. Tr. 416-19. Finally, judging from PX 153 and DX 1 at 84-86, (implying that KI was shipping lamps from Italy to be used as samples for the products that LTS would then make) and from the court’s opportunity to observe the witnesses at trial, the court concludes Gomes’ assertion of good faith in this matter lacks credibility.