Rehearing Denied; Suggestion for Rehearing In Banc Declined November 29, 1994.
PLAGER, Circuit Judge.
Defendants May Department Stores Co. (May), Venture Stores, Inc. (Venture), The Benjamin Ansehl Co. (Ansehl), and Kessler Containers Ltd. (Kessler) appeal the judgment of the District Court for the Eastern District of Missouri, entered January 2, 1992 after a bench trial. Conopco, Inc. v. May Dep't Stores Co., 784 F.Supp. 648, 24 USPQ2d 1721 (E.D.Mo.1992). The District Court ruled that defendants willfully infringed a package of proprietary rights owned by plaintiff Conopco, Inc. d/b/a Chesebrough-Pond's U.S.A. Co. (Conopco) relating to a relaunch of Conopco's Vaseline Intensive Care Lotion (VICL) product. Those rights consist of (1) the rights conferred by U.S. Patent No. 4,939,179 (the '179 patent), (2) the rights to the VASELINE and INTENSIVE CARE trademarks, U.S. Trademark Registration Nos. 44,790, 140,345, and 864,662, and (3) the rights to the trade dress (container shape and labelling) of the relaunched VICL product pursuant to § 43(a) of the Lanham Act (codified as amended 15 U.S.C. § 1125(a) (1988)). The court awarded plaintiff an injunction, a recall order, enhanced damages of $2,679,201, and prejudgment interest. The court also found the case to be exceptional under 35 U.S.C. § 285 (1988) and 15 U.S.C. § 1117 (1988), and awarded attorney fees and costs. It also imposed joint and several liability on the defendants. The judgment became final on May 26, 1992 when the court denied in all material respects defendants' motions to alter or amend the judgment, or in the alternative, for a new trial. Conopco, Inc. v. May Dep't Stores Co., 797 F.Supp. 740 (E.D.Mo.1992).
Plaintiff cross-appeals the court's pre-trial decision dismissing certain state law claims it had asserted against defendants.
In 1986, Conopco decided to "relaunch" VICL, a product it had been marketing for over 20 years. Conopco wanted to enhance that product's therapeutic image and to further distance it from private label brands, which had been eroding its sales. Accordingly, it set about developing a new bottle shape and label for the product. It also set about developing a new formula for the lotion. Conopco's objective was to reduce the lotion's greasiness while maintaining its thickness and smooth skin feel.
In 1988, Conopco decided upon a revised bottle shape and label for the relaunched product. By 1989, it decided upon a lotion formula. Conopco discovered that the combination of two ingredients — isoparaffin and DEA-cetyl phosphate — resulted in a synergistic increase in the viscosity of the lotion. By adding these two ingredients to its lotion, Conopco found that it could decrease the amount of mineral oil used. Since mineral oil is heavy and greasy, Conopco was thus able to achieve a reduction in greasiness without a corresponding decrease in viscosity.
After filing a patent application on the new formula, Conopco initiated the relaunch. It began shipping the product to retailers and aggressively promoting it. By the fall of 1989, the product was on the shelves of virtually every major retailer and drug store in the United States. Between the fall of 1989 and March of 1990, Conopco spent over $37 million to advertise and promote the product.
In January 1989, Ansehl became aware of Conopco's plans to relaunch VICL. Accordingly, it developed a private label product to compete with the revised VICL product. Together with Kessler, it developed a container for the product. In conjunction with Venture, it developed the labelling that would be affixed to the container. Soon after Conopco initiated the VICL relaunch, Ansehl began marketing its product through several retailers, including Venture.
In March 1990, Conopco sent Venture a letter asserting that the Ansehl product infringed the proprietary rights Conopco had then accumulated in the revised VICL product (trademark and trade dress). In May 1990, May, Venture's parent, responded denying infringement of those rights.
On July 3, 1990, Conopco's patent on the new lotion formula, the '179 patent, issued. The sole independent claim in that patent is claim 1, which reads:
In August 1990, Conopco filed suit against the defendants in the District Court for the Eastern District of Missouri. Conopco's complaint contained six counts. Count one alleged infringement by defendants Ansehl, May, and Venture of the '179 patent; count two alleged infringement by Ansehl, May, and Venture of the VASELINE and INTENSIVE CARE trademarks; count three alleged trade dress infringement by all defendants; and counts four through six were state law counts.
In March 1991, in the decision that gave rise to Conopco's cross-appeal, the District Court dismissed without prejudice the state law counts (counts four through six) Conopco had asserted. The court found that complete diversity was lacking between plaintiff and defendants and that the only basis upon which it could conceivably exercise jurisdiction was pendent jurisdiction. However, it declined to exercise such jurisdiction on the ground that the state law issues would predominate over the federal issues.
On January 2, 1992, the court, in the decision that gave rise to defendants' appeals, entered after a bench trial judgment in favor of plaintiff. Conopco, Inc. v. May Dep't Stores Co., 784 F.Supp. 648, 24 USPQ2d 1721 (E.D.Mo.1992). The court found that defendants Ansehl, Venture, and May willfully infringed the '179 patent, both literally and under the doctrine of equivalents, and that all defendants had willfully infringed plaintiff's trademark and trade dress rights. The court found the case to be exceptional, and that enhanced damages were warranted. The court awarded plaintiff trebled damages of $2,397,579 for the patent infringement, and trebled damages of $281,622 for the trademark and trade dress infringement. The court also awarded costs, attorney fees, prejudgment interest, a recall order, and an injunction. It also imposed joint and several liability on the defendants. These appeals followed.
A. Patent Infringement Issues
We first address the literal infringement issue. Defendants argue that the court erred in its analysis of this issue because it adopted an unduly broad interpretation of the "about 40:1" limitation in the '179 claims. For example, the trial court considered a formulation with a ratio of 162.9:1 to be within the literal scope of the claim, in part on the theory that "about" allows a range to
Defendants are correct. There is simply no basis for interpreting the phrase "about 40:1" to encompass the 162.9:1 ratio. That would imply an expansion of the term "about" to encompass over a fourfold increase in the specified numerical ratio and thus would ignore the ordinary meaning of that term.
It also suggests that adherence to the 40:1 to 1:1 range was at least partly responsible for the favorable skin feel test results that had been obtained for the claimed lotion.
Thus, one of skill in the art, the vantage point from which the proper interpretation of a claim is ultimately determined
Conopco argues that an expansive interpretation of the term is not precluded by the prior art. That misses the point. The relevant inquiry, as noted, is whether one of skill in the art would have understood that the term was to be read expansively. The fact that an expansive definition is not precluded by the prior art is not dispositive of this inquiry.
Conopco argues that Kolene Corp. v. Motor City Metal Treating, Inc., 440 F.2d 77, 169 USPQ 77 (6th Cir.), cert. denied, 404 U.S. 886, 92 S.Ct. 203, 30 L.Ed.2d 169 (1971) compels a different result. The claim at
The District Court found that the 162.9:1 formulation infringed under the doctrine of equivalents because it met the function/way/result test set forth in Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 608, 70 S.Ct. 854, 856, 94 L.Ed. 1097 reh'g denied, 340 U.S. 845, 71 S.Ct. 12, 95 L.Ed. 620 (1950). Defendants argue that this finding is clearly erroneous. Defendants are correct.
The doctrine of equivalents cannot be used to erase "meaningful structural and functional limitations of the claim on which the public is entitled to rely in avoiding infringement." Pennwalt Corp. v. Durand-Wayland, Inc., 833 F.2d 931, 935, 4 USPQ2d 1737, 1739 (Fed.Cir.1987) (en banc), cert. denied, 485 U.S. 1009, 108 S.Ct. 1474, 99 L.Ed.2d 703 (1988) (quoting Perkin-Elmer Corp. v. Westinghouse Elec. Corp., 822 F.2d 1528, 1532, 3 USPQ2d 1321, 1324 (Fed.Cir.1987)); see also Graver Tank, 339 U.S. at 610, 70 S.Ct. at 857 (doctrine of equivalents inapplicable in the case of a substantial change between limitation recited in claim and corresponding element in accused product). That would be the effect of concluding that the 162.9:1 formulation infringes under the doctrine of equivalents. As noted, the "about 40:1" limitation is a meaningful limitation in the claim. A conclusion that the 162.9:1 formulation infringes under the doctrine of equivalents would eviscerate the plain meaning of that limitation.
Conopco argues that Kolene again compels a different result. But that case involved a judgment of literal infringement, Kolene, 440 F.2d at 82, 169 USPQ at 81, and is of questionable relevance on the doctrine of equivalents issue presented here. Moreover, in that case the accused infringer specifically chose to operate at the 46 to 50% level to skirt the language of the claims while appropriating the benefits of the patented invention. That is not the situation here.
For all the foregoing reasons, we reverse the judgment of patent infringement, both literal and under the doctrine of equivalents, as it relates to the 162.9:1 formulation, but affirm that judgment as it relates to the 20:1 and 40:1 formulations. (See note 1, supra.)
Since the bulk of defendants' activity which formed the basis for the court's judgment on the patent infringement question involved the 169.2:1 formulation, we vacate the court's award of an injunction, recall order, damages, attorney fees, costs, and prejudgment interest as they relate to this issue. In addition, the finding of willfulness, the determination that enhanced damages are warranted, and the determination that the case is exceptional are vacated as they relate to the patent infringement question.
In view of our affirmance of the judgment of infringement in relation to the 20:1 and 40:1 formulations, the case is remanded to the District Court with instructions to reconsider what remedies might be appropriate, and for reconsideration of the willfulness, enhanced damages, exceptional case, and attorney fees issues as they relate to patent infringement. In resolving the willfulness, enhanced damages, exceptional case, and attorney fees issues, the court is cautioned not to place undue weight on defendants' activities prior to the issuance of the patent. Although these activities may have been undertaken with knowledge that a patent application covering the relaunched lotion formulation was pending (in view of the "patent pending" notice affixed to the relaunched product), that is insufficient to support a finding of willfulness. See State Indus., Inc. v. A.O. Smith Corp., 751 F.2d 1226,
B. Trade Dress and Trademark Infringement Issues
The trade dress and trademark infringement issues raise substantive legal issues over which this court does not have exclusive subject matter jurisdiction.
Conopco's trade dress infringement claim was brought pursuant to section 43(a) of the Lanham Act (codified as amended at 15 U.S.C. § 1125(a) (1988)). Conopco seeks injunctive and monetary relief. In the Eighth Circuit, the elements to be proved in a claim for trade dress infringement differ depending on whether injunctive or monetary relief is being sought. See Woodsmith Publishing Co. v. Meredith Corp., 904 F.2d 1244, 1247 n. 5, 15 USPQ2d 1053, 1055 n. 5 (8th Cir.1990); Co-Rect Products, Inc. v. Marvy! Advertising Photography, Inc., 780 F.2d 1324, 1329-30, 228 USPQ 429, 432 (8th Cir.1985). To establish entitlement to monetary relief, a plaintiff must show actual confusion, while to establish entitlement to injunctive relief, it is sufficient if the plaintiff establishes likelihood of confusion. Woodsmith, 904 F.2d at 1247 n. 5, 15 USPQ2d at 1055 n. 5. The difficulty of proving actual confusion understandably is greater than that of proving likelihood of confusion. See PPX Enters. v. Audiofidelity Enterprises, 818 F.2d 266, 271, 2 USPQ2d 1672, 1675 (2d Cir.1987); Schutt Mfg. Co. v. Riddell, Inc., 673 F.2d 202, 206, 216 USPQ 191, 194 (7th Cir.1982). We consider first Conopco's claim for monetary relief, then its claim for injunctive relief.
a. Monetary Relief — Actual Confusion
In the Eighth Circuit, the question of actual confusion vel non is one of fact subject to the clearly erroneous standard of review. Prufrock Ltd., Inc. v. Lasater, 781 F.2d 129, 132-33, 228 USPQ 435, 437 (8th Cir.1986) (discussing standard of review for trade dress infringement claim). The trial court based its finding of actual confusion on two factors. The first is the testimony of a consumer, Mrs. Sickles. The second is a presumption of actual confusion arising from the "overwhelming evidence that defendants intended to deceive and confuse the public in connection with the Venture skin care lotion product." (CL80)
In her testimony, Mrs. Sickles stated that she purchased a private label brand of VICL — the Target brand
Thus, Mrs. Sickles' experience appears to have been atypical and an isolated incident. Isolated instances of actual confusion do not justify an award of monetary relief when there is a reasonable explanation in the record which serves to discount their importance. See Harad v. Sears, Roebuck & Co., 204 F.2d 14, 19, 97 USPQ 93, 97 (7th Cir.), cert. denied, 346 U.S. 914, 74 S.Ct. 274, 98 L.Ed. 410 (1953); see also Woodsmith Publishing Co., 904 F.2d at 1249, 15 USPQ2d at 1057; Amstar Corp. v. Domino's Pizza, Inc., 615 F.2d 252, 263, 205 USPQ 969, 978-79 (5th Cir.), cert. denied, 449 U.S. 899, 101 S.Ct. 268, 66 L.Ed.2d 129 (1980). Accordingly, that testimony is legally insufficient to sustain the court's award of monetary relief.
Actual confusion is normally proven "through the use of direct evidence, i.e., testimony from members of the buying public, as well as through circumstantial evidence, e.g., consumer surveys or consumer reaction tests." PPX Enters. v. Audiofidelity Enterprises, 818 F.2d 266, 271, 2 USPQ2d 1672, 1675 (2d Cir.1987). A presumption of actual confusion arising from an intent to deceive is neither. Thus, the question is whether such a judicially-created presumption constitutes a sufficient basis to sustain the trial court's award of monetary relief.
In the absence of any Eighth Circuit authority supporting such a presumption, the trial court based the existence of the presumption on three Second Circuit cases, a Ninth Circuit case, and an excerpt from a treatise: My-T Fine Corp. v. Samuels, 69 F.2d 76 (2d Cir.1934); Getty Petroleum Corp. v. Island Transp. Corp., 878 F.2d 650, 11 USPQ2d 1334 (2d Cir.1989); PPX Enterprises v. Audiofidelity Enterprises, 818 F.2d 266, 2 USPQ2d 1672 (2d Cir.1987); U-Haul Intern., Inc. v. Jartran, Inc., 601 F.Supp. 1140, 225 USPQ 306 (D.Ariz.1984), aff'd-in-part, rev'd-in-part, and mod.-in-part, 793 F.2d 1034, 230 USPQ 343 (9th Cir.1986); and 2 J. Thomas McCarthy, Trademarks and Unfair Competition § 30:25, at 500 (1984). However, a careful evaluation of this material shows that it does not support the court's conclusion.
My-T Fine involved a trademark infringement case
Getty involved a case in which non-Getty gasoline was being sold to consumers under the Getty trademark. In determining whether an award of punitive damages for trademark infringement was sustainable, the court acknowledged the differing elements to be proved depending upon whether monetary or injunctive relief was being sought. 878 F.2d at 656, 11 USPQ2d at 1338. Citing PPX, infra, it ultimately concluded that the award was sustainable under the limited circumstances of that case, despite plaintiff's failure to provide consumer witnesses or surveys in relation to the issue of actual confusion. As the court put it: "Consumer witnesses or surveys are not a sine qua non of proof of actual confusion in a case where the product falsely presented cannot be meaningfully inspected by the consumer." Id. at 656, 11 USPQ2d at 1339. Since the court's holding was expressly limited to the special circumstances
PPX involved a case for false advertising brought under section 43(a) of the Lanham Act. The defendant was marketing records, the jackets of which falsely represented Jimi Hendrix's involvement in the songs recorded thereon. The question was whether the trial court's award of monetary relief was sustainable despite plaintiff's failure to proffer consumer testimony or surveys showing actual confusion. In concluding that the award of monetary relief was sustainable, the court drew a distinction between a claim for false advertising and other claims cognizable under section 43(a) of the Lanham Act, such as a claim for `palming off' — false designation of origin, the claim at issue in this case. Id. 818 F.2d at 272, 2 USPQ2d at 1676. In a case involving false advertising, said the court, the traditional difference between a claim for injunctive relief and one for monetary relief has less relevance. Id. at 272, 2 USPQ2d at 1677. However, the court did not disturb the significance of this difference in a case involving a claim for false designation of origin. Thus, PPX, as well, is inapposite.
U-Haul is a Ninth Circuit case also involving a claim for false advertising. The court applied the rule that "[p]ublication of deliberately false comparative claims gives rise to a presumption of actual deception and reliance." 601 F.Supp. at 1149, 225 USPQ at 311, aff'd, 793 F.2d at 1041, 230 USPQ at 348. The court did not purport to apply this rule to a case involving a claim of palming off or false designation of origin. Thus, it provides no support for the trial court's conclusion.
Finally, the McCarthy treatise notes that there are courts that require some proof of actual confusion for a recovery of damages, and some that, "in some situations will make a monetary award where defendant is a willful infringer or an outright pirate or counterfeiter." 2 J. Thomas McCarthy, supra, § 30:25, at 499-500. The treatise hardly supports or establishes the conclusion that the Eighth Circuit is one of the jurisdictions that recognizes the presumption, or that it should be applied in these circumstances.
This is a case in which a retailer markets a national brand product and at the same time markets its own private label product in direct competition. The retailer packages its product in a manner to make it clear to the consumer that the product is similar to the national brand, and is intended for the same purposes. At the same time, the retailer clearly marks its product with its private logo, and expressly invites the consumer to compare its product with that of the national brand, by name.
With the rise of regional and national discount retailers with established names and logos, retailers who market both national brands and their own private label brands in direct competition, this form of competition has become commonplace and well-known in the marketplace. When such packaging is clearly labelled and differentiated — as was the case here, see the discussion in the next section — we are unwilling to attribute to the Eighth Circuit, absent clear precedent so requiring, a rule that would make such competition presumptively unlawful.
The District Court erred in concluding that under Eighth Circuit law actual confusion could be presumed from defendants' intent to copy the overall package design. Consequently, there is a complete absence of proof of actual confusion, the required element in plaintiff's claim for monetary relief. The court's award of monetary relief is thus not sustainable, and is reversed.
b. Injunctive Relief — Likelihood of confusion
In the Eighth Circuit, a finding of likelihood of confusion involves consideration of at least the following six factors: (1) strength of the plaintiff's mark; (2) similarity of the plaintiff's and defendant's marks; (3) similarity of the products; (4) the competitive proximity of the products; (5) the defendant's intent; and (6) instances of actual confusion. See SquirtCo v. Seven-Up Co., 628 F.2d 1086, 1091, 207 USPQ 897, 900 (8th Cir.1980) as applied in Calvin Klein Cosmetics Corp. v. Parfums de Coeur, Ltd., 824 F.2d 665, 668, 3 USPQ2d 1498, 1500 (8th Cir.1987). Likelihood of confusion is, as actual confusion,
The trial court concluded that likelihood of confusion had been established on the basis of the following findings: that plaintiff's marks are strong (CL71), the trade dress of the two products is "extremely similar" (CL73), the two products are "directly competitive" (CL76), the defendants "acted with deliberate intent to imitate and infringe the revised VICL trade dress" (CL77), a presumption of likelihood of confusion arising from defendants' intent to deceive and copy (CL95), and the presence of actual confusion (CL94). As noted, supra, the court's finding of actual confusion was erroneous because of a complete failure of proof. Thus, our task is to determine whether the other findings are sufficient to support the court's finding of likelihood of confusion.
We conclude that they are not. Even accepting these other findings as true, they are at best merely inferentially or presumptively relevant to the likelihood of confusion issue. A factor more probative of that issue, which the court in its opinion failed to address, is the significance of the black and white diagonally-striped Venture logo prominently situated on the front of the original and relaunched Venture products. Photographs comparing the original and relaunched Conopco products with the corresponding Venture products, reproduced below, show the prominent placement of that logo on the front of the Venture products:
The fact that Venture (and other retailers) compete in the manner described, which is all that the evidence establishes, is simply insufficient to amount to proof that there is in the minds of consumers a likelihood of confusion about whose product is whose. The same point has been made in a number of recent cases: L.A. Gear, Inc. v. Thom McAn Shoe Co., 988 F.2d 1117, 25 USPQ2d 1913 (Fed. Cir.), cert. denied, ___ U.S. ___, 114 S.Ct. 291, 126 L.Ed.2d 240 (1993); Bristol-Myers Squibb Co. v. McNeil-P.P.C., Inc., 973 F.2d 1033, 24 USPQ2d 1161 (2d Cir.1992); Oreck Corp. v. U.S. Floor Systems, Inc., 803 F.2d 166, 231 USPQ 634 (5th Cir.1986), cert. denied, 481 U.S. 1069, 107 S.Ct. 2462, 95 L.Ed.2d 871 (1987); Litton Systems, Inc. v. Whirlpool, Corp., 728 F.2d 1423, 221 USPQ 97 (Fed.Cir.1984); Amstar Corp. v. Domino's Pizza, Inc., 615 F.2d 252, 205 USPQ 969 (5th Cir.), cert. denied, 449 U.S. 899, 101 S.Ct. 268, 66 L.Ed.2d 129 (1980); and Warner Lambert Co. v. McCrory's Corp., 718 F.Supp. 389, 12 USPQ2d 1884 (D.N.J.1989). See also Life Indus. Corp. v. Star Brite Distrib. Inc., 31 F.3d 42, 46-48, 31 USPQ2d 1536, 1540 (2d Cir.1994).
In L.A. Gear, this court, applying regional circuit law, reversed the judgment of the trial court that the overall appearances of several models of defendant's athletic shoes, admitted copies of plaintiffs' athletic shoe, were confusingly similar to the overall appearance of plaintiffs' shoe in contravention of section 43(a) of the Lanham Act. Although the rule, that intentional copying of trade dress creates a presumption of confusing similarity, was applicable, 988 F.2d at 1132, 25 USPQ2d at 1924, we found erroneous the district court's conclusion that the prominent placement of well-known trademarks on plaintiffs' and defendant's shoes did not dispel or overcome the presumption:
Id. at 1134, 25 USPQ2d at 1926.
Similarly, in Bristol-Myers, the appellate court reversed the judgment of the district court that the trade dress used in connection
Id. at 1046-47, 24 USPQ2d at 1170-71.
In Oreck, the court said that the inability to point to a single instance of actual confusion, despite concurrent use of the marks in question for seventeen months, is "highly significant." 803 F.2d at 173, 231 USPQ at 639.
In Litton, this court reversed a finding of likelihood of confusion on the ground that the prominence of the parties' names affixed to the two products in question — Whirlpool and Litton microwave ovens — overcame any presumption or inference of likelihood of confusion arising from the similarity of the two products:
In Amstar, the appellate court reversed the trial court's judgment that defendants, through their use of trade dress in which the phrase "Domino's Pizza" was prominently featured, had infringed under section 43(a) of the Lanham Act plaintiff's rights in its trade dress, in which the mark "Domino" was prominently featured. Although the governing standard of review in relation to the likelihood of confusion issue was the `clearly erroneous' standard, id. 615 F.2d at 258, 205 USPQ at 974, the court nonetheless concluded
In Warner Lambert, the trial court denied a motion for a preliminary injunction seeking to enjoin defendant's use of a trade dress in connection with a private label mouthwash which allegedly was confusingly similar to plaintiff's trade dress in contravention of section 43(a) of the Lanham Act. In determining that the plaintiff had made an insufficient showing of likelihood of confusion, the court took cognizance of the extensive experience relevant consumers had had with private label brands:
Finally, in Life Industries, the Second Circuit overturned the trial court's finding that there was a likelihood of confusion between the trade dress of the parties' boat caulking products in part because of the absence of evidence of actual confusion. As the court put it: "Life has failed to present any evidence of actual confusion. Although such evidence is difficult to obtain and is not a prerequisite to finding likelihood of confusion, its absence nevertheless weighs against that finding." 31 F.3d at 47, 31 USPQ2d at 1540 (citing McGregor-Doniger Inc. v. Drizzle Inc., 599 F.2d 1126, 1136, 202 USPQ 81, 91 (2d Cir.1979)).
As the above discussion shows, the marketing device employed by defendants in this case is neither new nor subtle. The cases have approved the general practice in a variety of settings, at least to the extent of not finding a violation of the Lanham Act absent a showing by the plaintiff that real consumers have real confusion or likelihood of it with regard to the origin of the products involved. We are thus left with a "definite and firm conviction" that the District Court erred in concluding that likelihood of confusion had been established. United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948); see also Colorado v. New Mexico, 467 U.S. 310, 316, 104 S.Ct. 2433, 2437-38, 81 L.Ed.2d 247 (1984). The court thus clearly erred in awarding injunctive relief, and the judgment of the court in that regard is reversed. We reverse the court's judgment of trade dress infringement, and its award of costs, attorney fees, and prejudgment interest as they relate to this issue. We further reverse the court's finding of willfulness, the determination that the case is exceptional, and the determination that enhanced damages are warranted as they relate to trade dress infringement. The injunction and recall order are vacated as they relate to this issue.
The dissent's point — that we have impermissibly reweighed the evidence and intruded on the fact finding role of the trial court — is incorrect. With the exception of the court's finding in relation to actual confusion, our quarrel is not with any of the court's underlying findings of fact. Our point is that — in view of the prominent placement of the Venture logo on the front of the Venture product, the extensive exposure consumers have had to that logo, and the extended time period over which consumers have been able to distinguish the Venture and Conopco brands without any apparent confusion — the
Conopco's trademark infringement claim was brought pursuant to § 32 of the Lanham Act (codified as amended at 15 U.S.C. § 1114(1)(a) (1988)). As with trade dress infringement, actual or likelihood of confusion (depending upon whether monetary or injunctive relief is being sought) is an element of trademark infringement. See SquirtCo, 628 F.2d at 1091, 207 USPQ at 900. A factor relevant to actual and likelihood of confusion is the manner in which the mark is used by the accused infringer. See Calvin Klein, 824 F.2d at 668, 3 USPQ2d at 1500. If the use of the mark is truthful and unlikely to confuse consumers as to the source of the product, then the use is permissible. Id. In light of the prominent placement of the Venture logo on the face of the Venture product, and the context in which the marks appear, i.e., a `Compare' statement, defendants' use of the Conopco marks draws a clear distinction between their product and Conopco's. The record is simply devoid of evidence to support findings of actual and likelihood of confusion here as well. Accordingly, the court erred in finding trademark infringement.
We reverse the court's judgment of trademark infringement. We also reverse the court's award of an injunction, a recall order, and damages as they relate to this issue. We also reverse the court's finding of willfulness, the determination that enhanced damages are warranted, the determination that the case is exceptional, and the court's award of attorney fees, costs, and prejudgment interest as they relate to this issue.
C. The Cross-Appeal
Conopco asserts that the court erred in dismissing its state law claims, and in declining to exercise pendent jurisdiction over Conopco's state law claims. The determination of whether to exercise pendent jurisdiction is a matter within the district court's discretion.
We cannot say the court abused its discretion. As the Supreme Court has stated, "if it appears that the state issues substantially predominate, whether in terms of proof, or the scope of the issues raised, or of the comprehensiveness of the remedy sought, the state claims may be dismissed without prejudice and left for resolution to state tribunals." Id. at 726-27, 86 S.Ct. at 1139. The District Court is affirmed on this issue.
We have considered the remaining arguments raised by the parties and find them either unpersuasive or not dispositive.
For all the foregoing reasons, we
Each party to bear its own costs.
MAYER, Circuit Judge, concurring in part and dissenting in part.
I would affirm to the extent the district court held defendants liable for infringement of Conopco's trade dress and trademark rights. I see no clear error in that court's finding that there is a likelihood of confusion between defendants' packaging and the trade dress of the relaunched VICL product. I also see no error in the finding that defendants' use of Conopco's registered trademarks was likely to cause confusion among the relevant class of consumers.
This court's contrary conclusion on likelihood of confusion is reached by impermissibly reweighing the evidence that was before the trial court. This is not only beyond its competence but intrudes on the fact finding role of the district court and encourages litigants to ignore the outcome of the trial and retry the case on appeal. Sometimes, like here, it works.
The trial court properly applied the factors set out in Squirtco v. Seven-Up Co., 628 F.2d 1086, 1091, 207 USPQ 897, 900 (8th Cir.1980), to determine whether a likelihood of consumer confusion exists.
The district court explained that defendants' employee, Bowers, testified it was "a major directive [of the company] to obtain the new VICL product" and that he was instructed "to make the revised skin care packaging as close as possible to the VICL packaging." Conopco, 784 F.Supp. at 659 (district court's findings of fact (FF) 54-55). The court further found as evidence of defendants' intentional conduct that, without adequate explanation, they failed to place the well known "Venture" name on the front of the package but instead placed only the VASELINE and INTENSIVE CARE marks on the front of the package, including their trademark registration symbols. Id. at 660-61, 666 (FF 64-68, 134-137).
Defendants did argue that placing a disclaimer on the package alleviated potential confusion. But, supported by the testimony of an expert on consumer psychology, the district court specifically found that consumers rarely, if ever, pay attention to disclaimers. This is especially true if it is obscurely placed, as was defendants', in small print on the bottom rear label of the package. Conopco, at 667 (FF 140). The court further found based on this evidence that the disclaimer could actually foster confusion because the consumer would likely focus on the most well-known words in it, VASELINE and INTENSIVE CARE, and miscomprehend the disclaimer entirely. Id. at 667 (FF
In addition, the court found that not only were the trade marks VASELINE and INTENSIVE CARE "strong marks" but survey evidence established that a very high percentage (83%) of respondents throughout the country correctly recognized the VICL bottle even with all textual material removed except for the ingredient list. Conopco, at 665 (FF 114). That the court's detailed comparison of the products and finding that they were "substantially identical" is not clearly erroneous is self-evident from the packages themselves, many examples of which were available at trial. Id. at 665 (FF 116).
These extensive findings are supported by the evidence in the record including expert testimony that the trial court found credible and persuasive and the testimony of defendants' own employees. The court's detailed comparison of the products properly included an analysis of the features asserted by defendants as reducing confusion. The court's findings on the Squirtco factors — the strength of plaintiff's trademarks and trade dress; the similarity of the products sold in direct competition; the extreme similarity between plaintiff's trade dress and defendants' packaging; and defendants' intent to mimic the VICL trade dress — all amply support its conclusions. Defendants have not established that any of these findings taken alone is clearly erroneous or that, as a whole, they are so defective as to cast doubt on the district court's conclusion about a likelihood of confusion. That the court failed to discuss every possible piece of evidence in its opinion does not render its decision defective or permit the inference that it ignored relevant evidence. See Medtronic, Inc. v. Daig Corp., 789 F.2d 903, 906, 229 USPQ 664, 667 (Fed. Cir.1986) ("We presume that a fact finder reviews all the evidence presented unless he explicitly expresses otherwise.").
Col. 6, 11. 26 — 28.