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Totes Isotoner Corp. v. R.G. Barry Corp.

United States District Court, Sixth Circuit

June 7, 2013

totes ISOTONER CORPORATION, Plaintiff,
v.
R.G. BARRY CORPORATION, Defendant.

OPINION AND ORDER

GREGORY L. FROST, District Judge.

Currently pending before the Court are the Verified Complaint of Plaintiff totes Isotoner Corporation (ECF No. 1) and Plaintiff's motion for temporary restraining order ("TRO") and preliminary injunction (ECF No. 3). On March 27, 2013, this case came on for an informal preliminary telephone conference pursuant to S.D. Ohio Civ. R. 65.1(a). By agreement of the parties, the Court consolidated Plaintiff's motion for TRO and preliminary injunction into one hearing and considered the motion as one for a preliminary injunction. (ECF No. 11 at PAGEID# 113.)

Pursuant to this Court's briefing schedule, Defendant R.G. Barry Corporation filed a response to Plaintiff's motion for preliminary injunction (ECF No. 23) and Plaintiff filed a reply in support of its motion (ECF No. 25). The Court held a hearing on Plaintiff's motion on May 2, 2013, at which the parties presented evidence and argument.

Upon consideration of the parties' briefing, arguments, and evidence, the Court DENIES Plaintiff's motion for preliminary injunction.

I. Background

Plaintiff totes Isotoner Corporation ("Isotoner") is a company known for manufacturing quality gloves and slippers. Founded as a glove manufacturer in 1910, Isotoner has been selling slippers for more than 40 years.[1] Isotoner's slippers are sold worldwide.

Defendant R.G. Barry Corporation ("R.G. Barry") is a slipper company that manufactured the world's first foam-soled, soft, washable slipper in 1947. R.G. Barry markets its slippers under well-known brand names, including Dearfoams®, Foot Petals®, and Baggallini®. R.G. Barry promotes and sells a wide range of slipper products under its various brand names through numerous marketing channels, including national retail chains, mass merchants, warehouse clubs, department stores, catalogs, specialty retailers, and online retailers.

For several years, both R.G. Barry and Isotoner sold slippers to the J.C. Penney retail chain. In August 2012, J.C. Penney informed Isotoner that it would cease buying Isotoner slippers in the "Basics" slipper product segment as part of the retailer's decision to reduce the number of vendors from which it bought product. The "Basics" product segment (also called "Replenishable" in the slipper industry) consists of slipper styles that are sold year-round, as distinguished from the "Fashion" product segment that is primarily sold between October and January each year. According to Isotoner, most major national retail chains and department stores typically split their slipper purchases roughly evenly between the Basics and Fashion segments. (Verified Compl. & 9, ECF No. 1.) The change in J.C. Penney's purchasing strategy for Basics slippers became effective with the Spring 2013 line of merchandise that is presently in J.C. Penney stores.

J.C. Penney asked R.G. Barry to replace Isotoner as the retailer's supplier of slippers in the Basics product segment. Specifically, J.C. Penney asked R.G. Barry to replace slippers previously supplied by Isotoner with slippers sold under the Dearfoams brand name. R.G. Barry agreed and began to work with J.C. Penney to develop a full line of Dearfoams slippers for introduction into J.C. Penney stores in early 2013. The additional offering would complement the existing Dearfoams product line that was already sold in J.C. Penney stores.

The Dearfoams product line introduced at J.C. Penney in 2013 consists of fourteen slipper designs. This case involves four of these designs-the satin ballerina slipper, the terry ballerina-style slipper, the terry embroidered clog slipper, and the microterry clog slipper. R.G. Barry acknowledges that it worked with J.C. Penney to create four "Dearfoams replenishment styles" to replace the four styles previous sold by Isotoner in J.C. Penney stores. (Nancy Coons Decl. & 11, Def.'s Exh. 1.) R.G. Barry also contends, however, that it created the new offerings using elements of prior slipper designs created by Dearfoams. ( Id. ) In support of this contention, R.G. Barry has placed in the record copies of catalogs showing various styles of Dearfoams slippers offered as far back as the 1980s.

Isotoner argues, however, that the new Dearfoams styles introduced this year at J.C. Penney are copies of Isotoner's best-selling products from its Basics segment. Isotoner alleges that in fiscal years 2002 to 2013, its total sales of slippers in the Basics category to J.C. Penney exceeded $45 million, with the four slipper styles at issue in this case accounting for $22 million of those sales. (Verified Compl. & 12, ECF No. 1.) Isotoner continues to sell these styles to other national chains and department stores. During the same time period (fiscal years 2002 to 2013), Isotoner estimates total sales of these four styles to exceed $100 million, which is more than 56 percent of Isotoner slipper sales in the United States in the Basics segment and more than 15 percent of Isotoner's total sales in all slipper categories. ( Id. at & 14.)

In this lawsuit, Isotoner claims that R.G. Barry has infringed Isotoner's protected trade dress with regard to the satin ballerina slipper, the terry ballerina-style slipper, the terry embroidered clog, and the microterry clog. Placing the companies' respective products side-byside, Isotoner contends that R.G. Barry's products at issue sold under the Dearfoams brand are remarkably similar to the corresponding Isotoner products they replaced at J.C. Penney. Below is a sampling of the side-by-side photographs of the products at issue.

(Verified Compl. && 55-58, ECF No. 1 at PAGEID# 21-42.)

Isotoner alleges that the R.G. Barry products mimic Isotoner's distinctive trade dress in the slipper styles shown above, in violation of Section 43(a) of Lanham Act, 15 U.S.C. § 1125(a). In the motion before the Court, Isotoner asks for a preliminary injunction ordering R.G. Barry to-

1. Refrain from advertising, marketing, promoting, selling, shipping or distributing any merchandise using the infringing trade dress or any other trade dress that is confusingly similar to it, or otherwise engaging in acts or conduct that would cause confusion as to the source, sponsorship, or affiliation of the slippers' trade dress;
2. Refrain from making any commercial use of the infringing trade dress or any other trade dress that is confusingly similar to it;
3. Deliver to the Court for destruction all packaging, point of sale materials and advertising in its possession or under its control that utilizes the infringing trade dress and to recall all inventories of slippers incorporating any of the infringing trade dress from retailers or third parties and deliver to the Court for destruction all such product; and
4. Immediately send out a notice of recall and take appropriate action to have R.G. Barry's employees and/or agents physically retrieve all such product from each store and warehouse of their customers that uses the infringing trade dress.

Having read the briefing and heard the parties' evidence and argument at the preliminary injunction hearing, the Court now proceeds to the merits of Isotoner's motion.

II. Discussion

When ruling on a motion for preliminary injunction, the court must consider and balance four familiar factors: (1) whether the movant has a strong likelihood of success on the merits; (2) whether the movant would suffer irreparable injury without the injunction; (3) whether issuance of the injunction would cause substantial harm to others; and (4) whether the public interest would be served by issuance of the injunction. Blue Cross & Blue Shield Mut. of Ohio v. Columbia/HCA Healthcare Corp., 110 F.3d 318, 322 (6th Cir.1997); see also United States v. Edward Rose & Sons, 384 F.3d 258, 261 (6th Cir. 2004). These factors are not prerequisites but, rather, factors that the court must balance in a weighing of the equities involved. Id. The moving party must demonstrate a right to injunctive relief by clear and convincing evidence. Patio Enclosures, Inc. v. Herbst, 39 F.Appx. 964, 969 (6th Cir. 2002); Am. Sys. Consulting, Inc. v. Devier, No. 2:07-cv-818, 2007 U.S. Dist. LEXIS 66339, at *5-6 (S.D. Ohio Sept. 7, 2007).

In this case, Isotoner seeks a preliminary injunction aimed at enjoining alleged trade dress infringement by R.G. Barry. Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), protects the unregistered "trade dress" of a product. As the United States Supreme Court explained: "The design or packaging of a product may acquire a distinctiveness which serves to identify the product with its manufacturer or source; and a design or package which acquires this secondary meaning, assuming other requisites are met, is a trade dress which may not be used in a manner likely to cause confusion as to the origin, sponsorship, or approval of the goods." Traffix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23, 28 (2001). A party seeking to recover for alleged trade dress infringement must show that (1) the trade dress in question is distinctive in the marketplace, (2) the trade dress is primarily nonfunctional, and (3) the trade dress of the competing product is confusingly similar. Abercrombie & Fitch Stores, Inc. v. Am. Eagle Outfitters, Inc., 280 F.3d 619, 629 (6th Cir. 2002); see also Wal-Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205, 210 (2000).

As the Sixth Circuit noted in Abercrombie & Fitch, the concept of "trade dress" has taken on an "expansive meaning, " including the design and appearance of a product as well as its container "and all elements making up the total visual image by which the product is presented to customers.'" Abercrombie & Fitch, 280 F.3d at 630 (quoting Jeffrey Milstein, Inc. v. Greger, Lawlor, Roth, Inc., 58 F.3d 27, 31 (2d Cir. 1995)). "In short: any thing' that dresses a good can constitute trade dress." Id. The protectability of that trade dress, however, is another matter. Id. "Trade dress protection must subsist with the recognition that in many instances there is no prohibition against copying goods and products. In general, unless an intellectual property right such as patent or copyright protects an item, it will be subject to copying." Traffix Devices, 532 U.S. at 29. In a case like this one, where the trade dress at issue consists of a product's design, a product's design is distinctive (and therefore protectable) only upon a showing of secondary meaning, which occurs when a design can be said to identify the source of the product rather than the product itself. See Samara Bros., 529 U.S. at 211-16.

With these principles as the backdrop, the Court proceeds to analyze Isotoner's trade dress claims in this case and whether Isotoner's requested injunctive relief is appropriate.

A. Likelihood of Success on the Merits: Secondary Meaning

Because this is a case focused on product design, Isotoner can prevail only if it can establish that the designs in question have "secondary meaning." Id. That is, Isotoner must show that the public has come to associate the alleged trade dress with Isotoner as the specific source of the product. See Kendall-Jackson Winery v. E. & J. Gallo Winery, 150 F.3d 1042, 1047 (9th Cir. 1998). In deciding whether a product has secondary meaning, a court looks to seven factors related to the alleged trade dress: (1) direct consumer testimony, (2) consumer surveys, (3) exclusivity, length, and manner of use, (4) the amount and manner of advertising, (5) the amount of sales and number of customers, (6) established place in the market, and (7) proof of intentional copying. Abercrombie, 280 F.3d at 639 n.14. In this case, Isotoner emphasizes the second, third, fifth, sixth, and seventh factors.

1. Intentional Copying

The Court first addresses the "intentional copying" factor, as Isotoner places the most importance on it. Isotoner argues that its trade dress is entitled to a presumption of secondary meaning because R.G. Barry has intentionally copied the Isotoner slipper designs at issue in this case. At the preliminary injunction hearing in this case, Isotoner went so far as to say that the proof of ...


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