# Appendix Vol I — Poly-Tech Industries, Inc. v. InstyBit, Inc. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386013_0132%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix Vol I - **Published:** January 1, 1997 - **Citation:** 519 U.S. 1151 ## Text Supreme Court, U.S "a FiLeéeD o/ PG1153 san 17 997 ER a In The Supreme Court of the United States October Term, 1996 POLY-TECH INDUSTRIES, INC., Petitioner, INSTY*BIT, INC., Respondent. On Petition for a Writ of Certiorari to the United States Court of Appeals for the Eighth Circuit APPENDIX VOLUME I TO PETITION FOR WRIT OF CERTIORARI Edwin Edgar Voigt, II, Esquire Douglas J. Christensen, Esquire Paul Lloyd Sjoquist, Esquire Counsel of Record PALMATIER, SJOQUIST, HELGET & VOIGT, P.A. 6600 France Avenue, S. Suite 501 Minneapolis, MN 55435 (612) 922-6600 oe APPELLATE SERVICE: CURRY & TAYLOR (800) 222-8738 Appendix Table of Contents Page Appendix Volume I Opinion of the Eighth Circuit Court of Appeals in Case No. 95-2260 EE Acbbaabinden vi dkedbesconecens la Memorandum Opinion and Order of The United States District Court for the District of Minnesota, Third I oe i bncd sev mneeee 27a Order Denying Petition for Rehearing and Suggestion for Rehearing En Banc of the Eighth Circuit Court of Appeals in Case Ss EE didi Gull Sas ds sh Ade Aua pn eave 47a Affidavit of Robert J. De brey .......... 48a Excerpt of Article from Woodshop PUOUNE GING BI RINE 666 ve ve die tdwccccns 105a Excerpt of Article from 1995 PF Directory; "Update on Blackening I is vc dbunhindnes ok ok0e 106a Affidavit of Edward L. Quiring ....... 113a Declaration of Edward L. Quiring ..... 138a Volume II 9 Excerpts of United States Patent No. 5,398,946 to Quiring .............. 10 Excerpts of United States Patent No. 4,900,202 to James L. WEEE tivieiininaiel ai 11 Excerpts of United States Patent No. 5,013,194 to James L. WIDE attsnidiaciaice: re oe 12 Excerpts of United States Patent No. 4,692,073 to Martindell ........... 13 Excerpts of United States Patent No. 1,174,997 to Lackner .............. 14 Excerpts of United States Patent No. 2,255,333 to Scheiwer ............. 15 Excerpts of United States Patent No. 3,180,600 to Eee 16 Excerpts of United States Patent No. 4,765,657 to Cruse ................ 17 Excerpts of United States Patent No. 3,761,117 to Shendure .........._. 18 Excerpts of United States Patent No. 3,268,246 to Obeissart ............. 19 Excerpts of United States Patent No. 4,752,165 to Wanner .............. 20 Excerpts of United States Patent No. 5,062,749 to Sheets ................ 21 Excerpts of United States Patent No. 1,449,136 to Yates ................. 22 23 24 25 26 27 28 29 30 31 32 33 iii Excerpts of United States Patent No. 1,174,997 to Lackner ......... Excerpts of United States Patent No. 4,355,466 to Michael Quiring Excerpts of United States Patent No. 4,580,933 to Wilkins .......... Excerpts of United States Patent No. 5,071,295 to Greig ........... Excerpts of United States Patent No. 2,661,642 to Marcucci ........ Excerpts of United States Patent No. 3,794,438 to Knutsson ........ Excerpts of United States Patent No. 2,863,340 to Ingram .......... Excerpts of United States Patent No. 4,076,443 to Halpern ......... Excerpts of United States Patent No. 5,265,988 to Schmigalla ...... Excerpt of Photographs of Hose Couplers and Chucks attached to Affidavit of Edwin E. Voight II (Dated: February 16, 1995) ....... Excerpt of Poly-Tech 1992 Product Catalog attached to Affidavit of Edwin E. Voight II (Dated: March acs ced sae wkadeessedencn Exhibits Attached to Affidavit of Robert J. De brey See = BP GR EE nw ccc ssescvennes ‘Ii ii iv Pe ON is be cote suet 205a RY © I ois cocks k sc counsel, 206a NE OE seks oid evans cancucdcds 207a en re ee... ses 208a ge OF gi pC 209a WE Me OP ON oe cave cn scuavncacens 210a WE FN I oink is oo cdcbinn cc ndas 21la ION SE OE ions accu ncccuccvnas. 212a EE © EF UR UE nw vies ss hover inewocecac. 213a PE BF OO a ncikvsind ec ncvdvccucncda 214a ket 8 LR en ea m ee 215a | ee re 216a WOU OE I oe ee 217a SOE © i se vais unis. aces 218a ets, SHE cs PPT Oe ee 219a la United States Court of Appeals For the Eighth Circuit No. 95-2260 Insty*Bit, Inc., Appellant, Appeal from the United States District Court for v. the District of Minnesota Poly-Tech Industries, Inc., Appellee. Submitted: December 13, 1995 Filed: September 10, 1996 Before McMILLIAN, JOHN R. GIBSON and BEAM, Circuit Judges. McMILLIAN, Circuit Judge. 2a Insty*Bit, Inc. (Insty*Bit) appeals from a final order entered in the United States District Court for the District of Minnesota granting summary judgment in favor of Poly-Tech Industries, Inc. (Poly-Tech) on Insty*Bit's claim of trade dress infringement in violation of § 43(a) of the Lanham Act, 15 U.S.C. Secs. 1125. (1) Insty*Bit, Inc. y. Poly-Tech Indus.. Inc., No. 3-94-1427 (D. Minn. Apr. 26, 1995) (Memorandum and Order). For reversal, Insty*Bit argues the district court erred in holding that Insty*Bit had failed to create a genuine issue of material fact with respect to its trade dress infringement claim under 15 U.S.C. § 1125.' For the reasons discussed below, we reverse the judgment of the district court and remand the case to the district court for further proceedings consistent with this opinion. I. Background Insty*Bit is a Minnesota corporation located in Minneapolis, Minnesota. It designs, assembles, and ' Insty*Bit also raised the following state law claims pursuant to 28 U.S.C. § 1367(a): (1) violation of Minn. Stat. Secs. 325D.44 et Seq. (the Minnesota Deceptive Trade Practices Act); (2) common law fraud; (3) negligent misrepresentation; (4) breach of fiduciary duty; and (5) unjust enrichment. After granting Summary judgment in favor of Poly-Tech on the Lanham Act claim, the district court declined to exercise supplemental jurisdiction over these state law claims and dismissed them without prejudice. See slip op. at 15-16. 3a sells quick-change drili chucks’ and related accessories, including drill bits, countersinks, and drill guides. Poly-Tech, also a Minnesota corporation located in Minneapolis, operates primarily as a "job shop" for the manufacture of component parts for other entities. Between 1988 and August 1994, Poly-Tech manufactured component parts for Insty*Bit's products to Insty*Bit's specifications. Insty*Bit would then assemble these components with other parts to produce the quick-change drill chuck and related accessories. In late 1989, Insty*Bit granted Poly-Tech permission to sell Insty*Bit products, along with the products of other manufacturers, through woodworking trade shows and magazine advertisements. Although Insty*Bit contends that it gave Poly-Tech an exclusive limited sales territory in three eastern states and specified the trade shows at which Poly-Tech could sell Insty*Bit's products, Poly-Tech maintains that Insty*Bit placed no restrictions on its sales territory or methods. It is undisputed, however, that Poly-Tech sold Insty*Bit products in various advertisements and woodworking shows until August 1994. At the same time, Insty*Bit also engaged in "private labeling" with several national distributors of woodworking products. Specifically, it allowed four distributors to sell Insty*Bit's products in connection with another company's brand name. According to Insty*Bit, it has eight national _— — a A quick-change drill chuck allows the user to change bits and drivers in a portable drill without a chuck key. 2 4a distributors of its products. In addition to the four distributors which sell Insty*Bit's products under another brand name, two distributors sell unmarked products, and two others sell them under Insty*Bit's label. In 1993, Poly-Tech developed its own quick-change drill chuck. Poly-Tech filed a patent application for this quick-change chuck with the United States Patent Office on December 23, 1993, and a patent (No. 5,398,946) was Subsequently issued on March 21, 1995, II Poly-Tech App. at 309. In August 1994, Poly-Tech informed Insty*Bit that it was adding its own brand of quick-release drills and accessories, under the name "Snappy," to its product line. Shortly thereafter, Insty*Bit ceased placing orders for Insty*Bit component parts and instructed Poly-Tech not to sell Insty*Bit products in the future. On October 14, 1994, Insty*Bit instituted the present suit against Poly-Tech in the United States District Court for the District of Minnesota, alleging trade dress infringement under § 43(a) of the Lanham Act, 15 U.S.C. §§ 1125, violation of Minn. Stat. § 325D.44 et seq. (the Minnesota Deceptive Trade Practices Act); common law fraud; negligent misrepresentation, breach of fiduciary duty, and unjust enrichment. Insty*Bit sought damages, preliminary and perraanent injunctive relief, and attorney's fees. Poly-Tech then filed a counterclaim for sanctions pursuant to Fed. R. Civ. P. 11, Minn. R. Civ. P. 11, and Minn. Stat. §§ 549.21. Upon motion by Poly-Tech, the district court granted summary judgment in favor of Poly-Tech on Insty*Bit's Lanham 5a Act claim and dismissed Insty*Bit's state law claims without prejudice pursuant to 28 U.S.C. §§ 1367(c)(3). See slip op. at 2, 17.° Insty*Bit then filed this timely appeal. II. Discussion A. Standard of Review We review a grant of summary judgment de novo. The question before the district court, and this court on appeal, is whether the record, when viewed in the light most favorabie to the non-moving party, shows that there is no genuine issue as to any material fact and that the moving party is entitled to summary judgment as a matter of law. Fed. R. Civ. P. 56(c); see, e.g., Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986); Get Away Club, Inc. v. Coleman, 969 F.2d 664, 666 (8th Cir. 1992); St. Paul Fire & Marine Ins. Co. v. FDIC, 968 F.2d 695, 699 (8th Cir. 1992). Where the unresolved issues are primarily legal rather than factual, summary judgment is particularly appropriate. Crain v. Board of Police Comm'rs, 920 F.2d 1402, 1405-06 (8th Cir. 1990). B. Lanham Act Claim The district court also denied on mootness grounds Insty*Bit's motion for a preliminary injunction and its motion to dismiss Poly-Tech's counterclaim. See slip op. at 2, 17. 3 6a Section 43(a)* of the Lanham Act, 15 U.S.C. §§ 1125(a)(1), creates a federal cause of action for trade dress infringement. The trade dress of a product is the "total image of a product, the overall impression created, not the individual features." Aromatique, Inc. v. Gold Seal, Inc., 28 F.3d 863, 868 (8th Cir. 1994) (Aromatique); Woodsmith Publishing Co. v. Meredith Corp., 904 F.2d 1244, 1247 (8th Cir. 1990) * Section 43(a) of the Lanham Act, 15 U.S.C. §§ 1125(a)(1), provides in pertinent part: (1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which -- (A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval or his or her goods, services, or commercial activities by another person, or (B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities, Shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act. 7a (Woodsmith). A trade dress is entitled to protection under §§ 43(a) of the Lanham Acct if: (1) it is inherently distinctive or has acquired distinctiveness through secondary meaning; (2) it is primarily nonfunctional; and (3) its imitation would result in a likelihood of confusion in consumers’ minds as to the source of the product. See Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 769 (1992) (Two Pesos). With respect to the third prong of this analysis, we established in Co-Rect. Prods, Inc. __V- Marvy! Advertising Photography, Inc., 780 F.2d 1324, 1330 (8th Cir. 1985) (Co-Rect), that the following six factors are to be considered in determining whether a likelihood of confusion exists: (1) the strength of the owner's mark; (2) the similarity between the owner's mark and the alleged infringer's mark; (3) the degree to which the products compete with each other; (4) the alleged infringer's intent to "pass off" its goods as those of the owner; (5) incidents of actual confusion; and (6) the type of product, its costs, and conditions of purchase.” Insty*Bit alleged before the district court that S In Co-Rect we considered the likelihood of confusion issue with respect to trademark, rather than trade dress, infringement. In light of the Supreme Court's holding in Two Pesos, 505 U.S. at 774-76, that there is no textual basis for applying different analyses to the protection of trademarks and trade dress under section 43(a) of the Lanham Act, we conclude that the six Co-Rect factors also govern claims of trade dress infringement. Cf. Aromatique, 28 F.3d at 868 ("The difference between trade dress and trademark is no longer of importance in determining whether trade dress is protected by federal law"). ————————<< 8a Poly-Tech had copied the trade dress of Insty*Bit's products in manufacturing the Snappy line of quick-change drill chuck, countersink and drill guide.° The district court held that Insty*Bit had failed as a ° Specifically, Insty*Bit contended that Poly-Tech had infringed upon the following trade dress of Insty*Bit products: Quick-change chuck - "the combination of the color black; the shape of the shank; the size and dimensions of the sleeve; and the chamfered edge - raised knurled band - recessed smooth band raised knurled band appearance of the chuck sleeve"; Drill guide - the combination of the color black; the steel colored bit; the exposed spring; the shape and style of the set screw and opening; and the shape of the opening for receiving the shank in the collar; Countersink - the combination of the color black; the shape and style of the set screw and opening; the use of two flutes; the shape of the collar; the raised edge on the countersinking portion; the overall size and dimensions; and the shape of the opening for receiving the shank in the collar. Slip op. at 8-9. 9a matter of law to create a genuine issue of material fact regarding the likelihood of consumer confusion as to the source of the Snappy brand products. Slip op. at 10-15. The district court opined that "fajithough the Insty*Bit products and the Snappy products compete in the same market, independent application of the six Co-Rect factors is unnecessary in this case." Id. at 10. The district court then conducted a visual inspection of the packaging of the Snappy and Insty*Bit products and determined that the "packaging designs are so graphically dissimilar that there is no reasonable likelihood that consumers would confuse a Snappy brand product with the Insty*Bit product." Id. at a.’ — dr — —————— —— 7 ‘The district court observed: Poly-Tech has left no doubt as to the source of the Snappy brand products. . . The words "Snappy™" appear in large letters prominently displayed on the front of the Snappy packages for each of the three products claimed to violate §§ 1125. Indeed, the brand name "Snappy" appears in bold letters nine times on the Snappy quick-release chuck package and in bold letters six times on each of the Snappy countersink and drill guide packages. "Snappy" is also permanently embossed on the face of each of the components themselves, and the embossed imprint is visible through clear plastic "bubble" packaging. Each Snappy package also contains the name "Poly-Tech Ind." along with its mailing address . . . The front face of each of the 10a In determining that there was no likelihood of confusion regarding the source of the products at issue, the district court declined to give weight to a survey offered by Insty*Bit of approximately one hundred potential quick-change drill customers. Id. at 13-15.° Snappy packages is solid purple with white lettering and yellow accent highlighting. | In contrast, the front . . .fand back] face[s] of the Insty*Bit product packages contai[n], in large, bold letters the word "INSTY-BIT." . . . The front of these packages is solid white, not purple. . . Based on the "total presentation" of the Snappy brand products to the consumer, there is no _ reasonable likelihood of confusion as to their source. Slip op. at 11-12. * The expert retained by Insty*Bit surveyed 102 consumers who had used a portable drill within the past three months. Fifty-four percent of the consumers were professional woodworkers, and forty- six percent were amateurs. The survey expert showed each participating consumer both unpackaged and packaged quick-change drill products manufactured by Snappy, Insty*Bit, and Vermont American (a competing manufacturer). The consumer was allowed to examine and hold the products but was not permitted to use them or to determine ho¥ je» functioned. The expert then asked the consumer .’ er any of the products were "so similar or such a satisfactory match" that he ee lla The survey expert had found that a statistically significant number of the respondents interviewed would purchase the Snappy brand products as a satisfactory match to Insty*Bit's. See Report of Jeffrey Stitt; Insty*Bit App. at 257. The district court, however, held that the fact that a_ statistically significant number of consumers would substitute the Snappy brand products for Insty*Bit's was "irrelevant" to the likelihood of confusion issue, because "the issue here is not whether consumers would substitute the defendant's product for the plaintiff's nor is it whether the products are similar; the issue is whether consumers would likely purchase the defendant's product mistakenly thinking it was manufactured by the plaintiff." Slip op. at 14-15. Similarly, the district court also rejected as non-probative the portion of the survey which tested consumer confusion with respect to unpackaged Snappy and _ Insty*Bit quick-change systems. Consumer reactions to the unpackaged product bore no relevance to the likelihood of confusion issue, the district court reasoned, because "to determine whether a substantial likelihood of confusion exists under §§ 1125, the product must be considered in its totality as it is presented to the average consumer -- which in this case is to say in . . .[packaged form]." Id. at 14. Based on its visual inspection of the packages, the district court found that the conspicuous placement of the "Snappy" letters on Poly-Tech's products made it highly unlikely that the average consumers would buy or she would buy one as a substitute for the other. See Jeffrey Stitt Aff. II 44 15, 20, 24; Insty*Bit App. at 394-96. 12a Snappy brand products mistakenly thinking that they were manufactured by Insty*Bit. See id. at 14-15. Therefore, finding no genuine issue of material fact regarding the third prong of the §§ 1125 analysis, the district court held that Poly-Tech was entitled to summary judgment on Insty*Bit's Lanham Act claim. Id. at 15. For reversal, Insty*Bit argues that the district court erred in granting summary judgment in favor of Poly-Tech on its Lanham Act claim in three respects. First, Insty*Bit maintains that the district court's failure to apply the six Co-Rect factors constitutes error as a matter of law. Noting our observation in Squirtco v. The Seven-Up Co., 628 F.2d 1086, 1091 (8th Cir. 1980), that resolution of the likelihood of confusion issue "does not hinge on a single factor but requires a consideration of numerous factors to determine whether under all the circumstances there is a likelihood of confusion," Insty*Bit contends the district court erred in relying exclusively on its own inspection of the Snappy and Insty*Bit packages, rather than applying the six Co-Rect factors for determining the existence of a likelihood of confusion under 15 U.S.C. §§ 1125. Second, Insty*Bit argues that the district court's exclusive reliance on the packaging of Insty*Bit and Poly-Tech's quick-change drill products was also misplaced because such packaging designs are relevant only to the issue of point-of-sale confusion. Arguing that the Lanham Act prohibits post-sale as well as point-of-sale confusion, e.g., Computer Care v. Service Sys. Enterprises, Inc., 982 F.2d 1063, 1070 (7th Cir. 13a 1992), Insty*Bit maintains that there is a genuine factual issue concerning the likelihood of post-sale confusion, because prospective purchasers are often first exposed to its products in the hands of another individual after the packaging has been discarded; such purchasers, Insty*Bit argues,"typically go the store looking for a product they have seen before and try to look past' the packaging to match the product with the one they are seeking." Brief for Appellant at 26-27. According to Insty*Bit, the strong similarity in the appearance of the unpackaged Insty*Bit and Pely-Tech product creates a genuine issue of material fact as to whether consumers would likely be confused as to the source of the Snappy brand products to preclude entry of summary judgment in favor of Poly-Tech. Finally, Insty*Bit challenges the district court's determination that the consumer survey had no probative value concerning the likelihood of confusion. Reiterating its argument that consumers are frequently exposed to quick-change products in unpackaged form, Insty*Bit contends that the survey expert's conclusion -- that a statistically significant number of respondents would buy the Snappy line of quick-change products as a Satisfactory match to Insty*Bit's -- demonstrates a genuine issue of material fact as to whether consumers would likely be confused as to the origins of the Snappy brand products. Poly-Tech responds, first, that although the district court did not recite each of the six Co-Rect factors in its memorandum and order, it considered all the factors in reaching its conclusion that "there is no confusion to the source of the Snappy brand products, . - .{and] [nJo evidence suggests that Snappy has l4da confused consumers into thinking its components were made by Insty*Bit." Slip op. at 11-12. Second, addressing Insty*Bit's argument that the district court improperly placed- exclusive reliance on its own inspection of the packaging of the respective products, Poly-Tech cites Woodsmith, 904 F.2d at 1250, for the proposition that a district court may visually review documentary evidence in determining whether there is a likelihood of confusion in a trade dress infringement action. Similarly, Poly-Tech argues that its prominent trade name labeling on both the Snappy packages and actual products precludes a finding that there is a genuine issue of material fact regarding the likelihood of confusion. Finally, Poiy-Tech contends that the district court did not err in disregarding the results of the consumer survey submitted by Insty*Bit. According to Poly-Tech, the survey was flawed because, among other reasons, (1) it did not adequately cCefine the sample of respondents; (2) it exposed respondents to the unpackaged products; and (3) it asked biased, irrelevant questions. Brief for Appellee at 30. Thus, Poly-Tech argues that the district court correctly found that the survey had no probative value with respect to the likelihood of consumer confusion. In sum, Poly-Tech argues that the district court did not err in entering summary judgment in its favor on Insty*Bit's trade dress infringement claim. We disagree. We hold that the district court erred as a matter of law in failing to apply the six Co-Rect factors to determine the likelihood of consumer confusion. Contrary to Poly-Tech's argument, it is not clear from the district court's memorandum and order that it CIA Ae Cine Pie ODN phase ER AL FE 15a analyzed all the Co-Rect factors in concluding that there was no genuine issue of material fact regarding the likelihood of confusion. We further hold that the district court erred in placing primary, if not exclusive, weight on its visual examination of the packaging of the Snappy and Insty*Bit products. Regarding this issue, Poly-Tech's reliance on Woodsmith is misplaced. In Woodsmith, we affirmed a district court's grant of summary judgment in favor of a defendant magazine publisher in a trade dress infringement action brought under section 43(a) of the Lanham Act. See 904 F.2d at 1250. The district court had found that no genuine issue of material fact existed regarding the likelihood of confusion. In upholding this determination, we examined the photographs and original facsimiles of the magazines and solicitation mailings published by each party. See id. at 1249-50. We declared that "[v]isual inspection is permissible as an aid to a district court's determination of likelihood of confusion, but should not constitute the sole basis for the conclusions made."Id. at 1250. Thus, visual inspection may not replace an application of the Co-Rect factors in determining whether a likelihood of confusion exists. Upon careful de novo review, we hold that Insty*Bit has presented sufficient evidence of the likelihood of confusion to withstand Poly-Tech's motion for summary judgment. As noted above, the following six factors must be considered in determining whether a likelihood of confusion exists: (1) the strength of the owner's mark; (2) the similarity between the owner's trade dress and the alleged infringer's trade dress; (3) the degree to which the l6a products compete with each other; (4) the alleged infringer's intent to "pass off" its goods as those of the trade dress owner; (5) incidents of actual confusion; and (6) the type of product, its costs and conditions of purchase. See Co-Rect, 780 F.2d at 1330. We consider each factor in turn, noting that although no one factor is determinative, each must be analyzed. See Duluth News-Tribune v. Mesabi Publishing Co., 84 F.3d 1093, 1096 (8th Cir. 1994) (Duluth) ("[t]hese factors do not operate in a mathematically precise formula; rather, we use them at the summary judgment stage as a guide to determine whether a reasonable jury could find a likelihood of confusion"). First, Insty*Bit has demonstrated the strength of its trade dress. Insty*Bit's quick-change drill products have received favorable reviews from several woodworking magazines and nationally televised home-improvement programs. See Insty*Bit App. at 112, 115-120. In addition, Insty*Bit's consumer survey showed that over thirty-eight percent of the respondents were familiar with Insty*Bit. See id. at 388. Second, Insty*Bit showed there are similarities in trade dress between the Insty*Bit and Snappy quick-change products. Poly-Tech contends that its Snappy brand shank does not resemble the shank of Insty*Bit's quick-change chuck, because the Snappy chuck does not have the same prominent enlarged collar portion as Insty*Bit's. In addition, although it concedes that its Snappy line of quick-change products are black (the same color as Insty*Bit's), Poly-Tech alleges that the similarity is due to functionality RMS ED CAAA AGA OP tO OA A nme 17a because Snappy brand products are treated with black oxide in order to prevent rusting, "as all the other competitive quick-release chucks also are." Brief for Appellee at 24. Insty*Bit, however, has presented evidence that the quick-change products of competing manufacturers have coatings other than black oxide which also provide a rust-inhibiting benefit. See Insty*Bit App. at 399-400. Moreover, Insty*Bit has demonstrated sufficient similarity in the shape and design of the Snappy and Insty*Bit quick-change drill products -- such as the combination of a raised knurled band, a recessed smooth band, and another raised knurled band on the quick-change chucks -- to create a genuine issue of material fact as to whether the second Co-Rect factor has been satisfied. As to the degree to which the products compete with each other, we note that both parties agree that their products are sold through similar distribution means. See Brief for Appellant at 24; Brief for Appellee at 25. The target purchasers are the same for both sets of products, and the products are comparably priced. See Insty*Bit App. at 65.1-66.1; 113. Thus, the competition between the Insty*Bit and Snappy products is not beyond genuine dispute. The fourth Co-Rect factor concerns the alleged infringer's intent to "pass off" its goods as those of the plaintiff. Co-Rect, 780 F.2d at 1330. Evidence submitted by Insty*Bit showed that when Poly-Tech began marketing its Snappy line of quick-change products, it solicited the same customers and distributors to whom it had previously sold Insty*Bit's products. See Insty*Bit App. at 87-90. 18a We also observe that the inference of intent is strengthened when the parties have had a prior relationship, because "[s]uch a relationship provides evidence of the alleged infringer's intent to trade on the plaintiff's goodwill." Beer Nuts, Inc. v. Clover Club Foods Co., 805 F.2d 920, 927 (10th Cir. 1986). In the present case, Poly-Tech sold Insty*Bit's products through woodworking trade shows and magazine advertisements between 1989 and 1994. See Insty*Bit App. at 158; I Poly-Tech App. at 107. This fact creates a genuine issue of material fact regarding the fourth Co-Rect factor, particularly when it is combined with evidence in the record contradicting Poly-Tech's suggestion that it could not have changed certain features affecting the external appearance of its quick-change products to differentiate them more markedly from Insty*Bit's. With respect to the fifth Co-Rect factor -- incidents of actual confusion -- we find that the consumer survey presented by Insty*Bit is probative on this issue. In Woodsmith, 904 F.2d at 1249, we stated that surveys may provide useful evidence of the likelihood of confusion, although they are not required for such a determination. See id. Insty*Bit's survey was designed, conducted, and interpreted by an experienced market researcher. The expert's conclusion that "a statistically significant number of consumers would purchase Snappy as a satisfactory match for Insty*Bit" raises a genuine issue of material fact regarding the likelihood of confusion. Although the district court found the survey flawed because the expert did not ask consumers whether they would likely purchase Snappy's products mistakenly thinking Pil I AE LE mth a el IO 19a they were manufactured by Insty*Bit, such a question was not necessary to the methodological soundness of the survey. To the contrary, it is well-settled that a finding of trade dress infringement does not require consumers to buy the alleged infringer's products thinking that they were manufactured by the plaintiff; rather, all that is necessary is that they purchase the alleged infringer's products after associating the trade dress of those products with the trade dress of a single, albeit anonymous source. See, e.g., Tone Bros., Inc. vy. Sysco Corp., 28 F.3d 1192, 1204 (Fed Cir. 1994) (Tone Bros.) (plaintiff spice manufacturer in trade dress infringement action had raised genuine issue of material fact as to whether there was association in mind of consumer between container's shape and appearance and indication of the source for the spices inside the container, thereby precluding summary judgment in favor of defendant). In addition, we note that most of Poly-Tech's arguments concerning the flaws in the survey (e.g., the definition of the sample and the form of questions asked) do not render the issue of actual confusion beyond genuine dispute, rather, they go to the weight the trier of fact should place on the survey's results. Furthermore, the portion of the survey exposing consumers to the unpackaged Snappy and Insty*Bit quick-change systems is probative on the likelihood of confusion issue, because the Lanham Act protects post-sale as well as point-of-sale confusion. See Payless Shoe Source, Inc vy. Reebok Int'l Ltd., 998 F.2d 985, 989-90 (Fed. Cir. 1993) (Payless); Keds Corp. v. Renee Int'l Trading Corp., 888 F.2d 215, 222 (Ist Cir. 1989); Lois Sportswear, U.S.A., Inc. v. Levi Strauss & Co., 799 F.2d 867, 872 (2d Cir. 1986) (Lois Sportswear). 20a "Post-sale confusion" refers to the association consumers might make between the allegedly infringing item and the familiar product, thereby influencing their purchasing decisions. Lois Sportswear, 799 F.2d at 872-73. The Lanham Act's protection of post-sale confusion stems from the 1962 amendment to §§ 32 of the Act, 15 U.S.C. §§ 1114(1), which provides remedies for the infringement of registered trademark. Pub. L. No. 87-772, 76 Stat.769, 773 (1962). The 1962 amendment included confusion of nonpurchasers as well as direct purchasers by eliminating language in §§ 32 which had restricted the scope of trademark infringement to confusion of "purchasers as to the source of origin of such goods or services." 76 Stat. at 773. Thus, an action for trademark infringement may be based on confusion of consumers other than direct purchasers, including observers of an _ allegedly infringing product in use by a direct purchaser. See Payless, 998 F.2d at 989; Lois Sportswear, 799 F.2d at 872-73. Although §§ 32 of the Lanham Act protects registered trademarks, rather than trade dress, the Supreme Court's holding in Two Pesos, 505 U.S. at 774-76, that the same analyses apply to the protection of trademarks and trade dress under §§ 43(a) of the Act leads us to conclude that the likelihood of post-sale confusion may be considered in trade _ dress infringement actions. See Payless, 998 F.2d at 989-90 (holding that district court, in determining whether accused shoes infringed footwear manufacturer's trademarks and trade dress, had abused its discretion in failing to consider adequately the extent of post-sale confusion between the competing footwear). Post-sale confusion is at issue in the present case because Insty*Bit has demonstrated that consumers are often 21a first exposed to its products in use (that is, outside of the package) and then go to a distributor to find these tools by attempting to match the products on the shelves with the ones they are seeking. See Jeffrey Stitt Aff. 417; Insty*Bit App. at 394-95. We therefore find a genuine issue of material fact as to actual confusion. The final Co-Rect factor for assessing the likelihood of confusion is the type of product, its costs, and conditions of purchase. Co-Rect, 780 F.2d at 1330. Although Poly-Tech does not address this factor in its brief, Insty*Bit alleges that the quick-change drill products are inexpensive and are not the type of products over which consumers devote substantial time in making purchasing decision. Such factors, if found to be true by the trier of fact, would weigh in favor of a conclusion that a likelihood of confusion exists. In sum, our application of the Co-Rect factors to the present case leads us to conclude that the likelihood of consumer co.ifusion is not beyond genuine dispute. Poly-Tech also argues, however, that it is entitled to summary judgment because Insty*Bit failed to demonstrate a genuine issue of material fact with respect to the other two elements of a trade dress infringement claim under 15 U.S.C. §§ 1125. Specifically, Poly-Tech contends that Insty*Bit's trade dress is not entitled to protection under §§ 1125 because (1) it is not inherently distinctive and has not acquired distinctiveness through secondary meaning and (2) it is merely functional, rather than non-functional.’ As discussed below, we find that a 22a genuine issue of material fact exists as to each of these elements. In determining whether a trade dress or trademark is sufficiently distinctive to be entitled to protection under the Lanham Act, we have classified it as (1) arbitrary or fanciful," (2) suggestive,'’ (3) descriptive,’ or (4) generic.'’ Duluth, 84 F.3d at 1096; Stuart Hall Co. v. Ampad Corp., 51 F.3d 780, 785 (8th Cir. 1995)(Stuart Hall); Abercrombie & Fitch Co. vy. ° The district court did not address these issues in its Memorandum and Order granting summary judgment in favor of Poly-Tech. '° The Second Circuit explained in Abercrombie that the term "fanciful," as a classifying concept, is usually applied to marks invented solely for their use as trademarks or trade dress. See Abercrombie, 537 F.2d at 11 n.12. When a common mark is applied in an unfamiliar way as a trademark or trade dress, the use is called "arbitrary." Id. '' A suggestive mark is "one that requires some measure of imagination to reach a_ conclusion regarding the nature of the product." Duluth, 84 F.3d at 1096. A descriptive trademark or trade dress "immediately conveys the nature or function of a product." Id. '’ A generic trademark or trade dress "refer[s] to the genus of which the particular product is a species." Two Pesos, 505 U.S. at 768. UE as Wik ea Oe Geri ein 23a Hunting World, Inc., 537 F.2d 4, 9-11 (2d Cir. 1976) (Abercrombie). An arbitrary, fanciful, or suggestive mark is deemed inherently distinctive, and therefore entitled to protection, because its "intrinsic nature serves to identify a particular source of a product." Two Pesos, 505 U.S. at 768. By contrast, a descriptive mark merits protection only if it has become distinctive by acquiring a secondary meaning.’ Duluth, 84 F.3d at 1096. Finally, a generic term is not protected by the Lanham Act, because it is merely used by the general public to identify a category of goods. Id. Thus, a determination of inherent distinctiveness turns on "whether or not the trade dress is of such a design that a buyer will immediately rely on it to differentiate the product from those of competing manufacturers." Tone Bros., 28 F.3d at 1206. Viewing the evidence in a light most favorable to Insty*Bit, a genuine issue of material fact exists as to both inherent distinctiveness and secondary meaning. First, Insty*Bit has submitted the declarations of a retailer, two sales representatives, and a private label distributor that the design of Insty*Bit's products was unique when introduced. See Insty*Bit App. at 111, 241, 246, 248. Such evidence creates a genuine issue of material fact concerning the inherent distinctiveness of Insty*Bit's trade dress because a reasonable trier of fact could find that the '* A trademark or trade dress has acquired secondary meaning if it has “by long and exclusive use and advertising . . . become so associated in the public mind with such goods . . . that it serves to identify them and distinguish them from other goods." Stuart Hall, 51 F.3d at 789. 24a trade dress is arbitrary, fanciful, or suggestive. Similarly, whether the trade dress has acquired secondary meaning is not beyond genuine dispute, in light of evidence that (1) Insty*Bit's products have a six-year record of advertising and promotion in the marketplace and (2) consumers associate the appearance of Insty*Bit's products with a particular manufacturer. Id. at 111-12, 156, 241, 246. Finally, Poly-Tech contends that it is entitled to summary judgment because the design features of Insty*Bit's quick-change products are functional and therefore not entitled to trade dress protection. We have adopted the following test for functionality: If the particular feature is an important ingredient in the commercial success of the product, the interests in _ free competition permits [sic] its imitation in the absence of a patent or copyright. On the other hand, where the feature, or more aptly, design, is a mere arbitrary embellishment, a form of dress for the goods primarily adopted for purposes of identification and individuality, and hence, unrelated to basic consumer demand in connection with the product, imitation may be forbidden where the requisite showing of secondary meaning is made. Under such circumstances, since effective competition may be undertaken without imitation, the law grants protection. m4 a . aeeee wapitieadet , BBA Ara BE to i abla PANY ae 25a Stuart Hall, 51 F.3d at 790 (quoting Aromatique, 28 F.3d at 873). Thus, trade dress is nonfunctional "if it is an arbitrary embellishment primarily adopted for purposes of identification and __individuality." Aromatique, 28 F.3d at 873. In assessing functionality, the appropriate inquiry is whether the collection of design elements, taken as a whole, are functional, not whether individual elements of the trade dress could be categorized as such. See Hartford House, Ltd. vy. Hallmark Cards, Inc., 846 F.2d 1268, 1272 (10th Cir.) (Hartford House), cert. denied, 488 U.S. 908 (1988); Fuddruckers, Inc. v. Doc's _B.R. Others, Inc., 826 F.2d 837, 842 (9th Cir. 1987). In the present case, we find a genuine issue of material fact exists regarding the functionality issue. Although Poly-Tech argues that the exterior design of Insty*Bit's quick-change products -- including the color black and the appearance of the sleeve and shank -- are primarily functional because they remain necessary to the commercial success of these products, Insty*Bit has presented evidence that competing manufacturers have adopted different design features for their quick-change products. _See Insty*Bit App. at 23-24, 162-666; 244-45. Thus, a genuine issues of material fact exists as to whether or not the design of Insty*Bit's quick-change products is functional. Poly-Tech is not entitled to summary judgment on this issue. Ill. Conclusion Based upon the foregoing, we hold that the district court erred in granting summary judgment in favor of Poly-Tech on the basis that Insty*Bit had failed to demonstrate a genuine issue of material fact 26a with respect to its trade dress infringement action. Accordingly, the judgment of the district court is reversed and the case is remanded for further proceedings consistent with this opinion. A true copy. Attest: CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT. Veeb gupueneidds 27a UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA THIRD DIVISION Insty*Bit, Inc., Plaintiff Civil No. 3-94-1427 VS. MEMORANDUM OPINION AND ORDER Poly-Tech Industries, Inc., Defendant. Alan M. Anderson and Renee L. Jackson, Larkin, Hoffman, Daly & Lindgren, Ltd., Minneapolis, Minnesota, for Plaintiff Paul L. Sjoquist, Edwin E. Voigt II and Douglas J. Christensen, Palmatier, Sjoquist & Helget, P.A., Minneapolis, Minnesota, for Defendant. Introduction Plaintiff Insty*Bit, Inc. ("Insty*Bit") commenced this action against Defendant Poly-Tech Industries, Inc. ("Poly-Tech") alleging trade dress infringement under the Lanham Act § 43(a), codified at 15 U.S.C. § 1125; violation of the Minnesota eee 28a Deceptive Trade Practices Act, Minnesota Statutes section 325D.44 4 et seq.; common law fraud; negligent misrepresentation; breach of fiduciary duty; and unjust enrichment. Insty*Bit's claims arise out of Poly-Tech's attempts to manufacture and market various power drill accessories. In its Complaint, Insty*Bit seeks damages, preliminary and permanent injunctive relief; and attorneys fees. Poly-Tech has asserted a counterclaim for sanctions, purportedly pursuant to Rule 11 of the Federal Rules of Civil Procedure, Rule 11 of the Minnesota Rules of Civil Procedure, and Minnesota Statutes section 549.21. Currently before the Court are (1) Insty*Bit's Motion to Dismiss Poly-Tech's Counterclaim (2) Poly-Tech's Motion for Summary Judgment for Non-Trade Dress infringement and (3) Insty*Bit's Motion for a Preliminary Injunction. For the reasons set forth below, the Court will grant Poly-Tech's Motion for Summary Judgment for Non- Trade Dress Infringement, deny Insty*Bit's Motion for a Preliminary Injunction as moot dismiss Insty*Bit's Complaint without prejudice pursuant to 28 U.S.C. § 1367(c)(3), and accordingly deny Insty*Bit's Motion to Dismiss Poly-Tech's Counterclaim as moot. Background A. Parties Insty*Bit is a Minnesota corporation with its principal place of business in Minneapolis, Minnesota. Insty*Bit is engaged in the business of designing, manufacturing, distributing, and marketing "quick-change" products for use with power drills. The 29a principal of Insty*Bit is James Wienhold ("Wienhold"). Between 1988 and August 1994, Wienhold conducted business as Wienhold Associates and used the registered name of "INSTY*BIT" to indicate its product line. In August 1994, Wienhold incorporated Insty*Bit and assigned the assets of Wienhold Associates to it. Poly-Tech is a Minnesota corporation with its principal place of business in Minneapolis, Minnesota. Poly-Tech is a "job shop" engaged in the manufacture of component parts for other business entities. Poly-Tech also currently manufactures and sells quick-change drilling products for use with power tools tm under the brand name "Snappy. B. Factual Background Poly-Tech began manufacturing component parts for Wienhold Associates during 1988. (Compl. { 9; Quiring Aff. { 6.) Among the items manufactured were component parts for: (1) a quick-release chuck, (2) a countersink, and (3) a drill guide. These three products are used as accessories for power drills. Poly-Tech was initially employed solely to manufacture the component Insty*Bit parts, which were then shipped back to Wienhold Associates for assembly and distribution. (Quiring Aff. 4 6.) In 1989, Poly-Tech began to purchase some of the assembled products back from Wienhold Associates for resale. (Id. { 7.) Poly-Tech subsequently began to distribute and promote these Insty*Bit products. Poly-Tech claims that it did not receive any direction, 30a instructions, or conditions from Wienhold with respect to its resale activity regarding the Insty*Bit products; (Id. § 7); and that it was entitled to sell these products to whomever, where ever, and through any method it selected (Quiring's Third Aff { 3). Poly-Tech claims that it accordingly promoted its tool line -- which included the Insty*Bit products as well as its own products and products purchased from various other manufacturers -- at national trade shows and through Poly-Tech sales representatives and distributors. (Quiring Third Aff. § 4.) Poly-Tech further claims it made a substantial investment in developing a "national distribution chain" to market products purchased from Wienhold Associates, (Quiring Aff. { 7.) Poly-Tech alleges that, beginning in 1991, Wienhold Associates representatives called Poly-Tech's dealers and hardware stores and told them they were required to purchase the Insty*Bit products directly from Wienhold Associates representatives, who were given exclusive distributorships within specified sales territories. (Quiring Aff 4 8.) As a result, Poly-Tech contends that between 1991 and 1993, Wienhold Associates exclusive sales representatives "effective! stole all of Poly-Tech's dealers and hardware stores throughout the country," with the exception of Ohio, New York and New Jersey. (Id). insty*Bit paints a very different picture of its business dealings with Poly-Tech. Insty*Bit claims that explicit conditions were placed on Poly-Tech's authority to sell and distribute the Insty*Bit quick-release chuck and its accessories. Wienhold maintains that Poly-Tech was Wt na nn RMSE At TR AM cs Sie che SCAM te po hm 3la granted the right to sell the Insty*Bit quick-release chuck system in a "limited" territory, consisting of Ohio, New York and New Jersey. (Wienhold Aff. { 7; Wienhold Second Aff 4 4.) Wienhold further claims that he decided which trade shows were to be attended by Poly-Tech and which were to be attended by other Insty*Bit sales representatives or distributors. (Wienhold Second Aff. { 4; Compl. 4 10.) He claims that he was "surprised" to discover that Poly-Tech sold Insty*Bit products "far beyond the manner and locations for which it had been authorized." (Wienhold Second Aff 4 8.) Beginning in approximately 1990, Insty* Bit apparently attempted to develop its own national distribution chain for its products. (Wienhold Aff. { 13; Wienhold Second Aff { 5.) Insty*Bit claims that in furtherance of this plan, its products were featured in national catalogs, at trade shows, at in-store demonstrations and in an expensive television "infomercial." (Wienhold Aff, { 13.) As a result of this advertising, Insty*Bit claims the unique features of its products have become well-recognized in the marketplace. (Compl. { 8.) In addition to selling quick-release products under its own name, Insty*Bit offers these products for sale through "private labeling." (Wienhold Second Aff 4 7.) According to Insty*Bit, it has eight national distributors of its products. (Wienhold Aff. { 10.) Four of these distributors sell the products under their own name or under no name, two sell unmarked products, and two sell them under the "Insty*Bit®" label. (Id.) According to Poly-Tech, approximately 60% of the Insty*Bit quick-release chucks sold have been sold 32a through private label offerings, and that only the remaining 40% identified Insty*Bit as the source for the quick-release chuck or accessories. (Kaul Aff. { 8.) In 1993, Poly-Tech developed its own quick-release chuck system. (Quiring Third Aff { 9.) A patent application for this quick-change chuck system was filed with the United States Patent Office on December 29, 1993, and a patent (No. 5,398,946) was subsequently issued on March 21, 1995. In the summer of 1994, Poly-Tech informed Wienhold that it was adding its own line of quick-release tools to Poly-Tech's product line. (Id. { 10; Compl. ¢ 14.) Shortly thereafter, Insty*Bit pulled its product line from Poly-Tech and ceased placing further orders for Insty*Bit component parts. (Quiring Third Aff. { 10.) Poly-Tech subsequently began marketing its own quick-release-chuck products under the brand name "Snappy™." (Compl. {¢ 17.) Insty*Bit argues that the Snappy quick-release chuck, countersink, and drill guide are "knock-offs" of the Insty*Bit quick-release chuck, countersink, and drill guide. (Id.) Insty*Bit claims that Poly-Tech has copied the unique, non-functional design characteristics of Insty*Bits products such that there is a likelihood of confusion among consumers in the market place, and that this copying infringes upon Insty*Bits protectable trade dress in violation of the Lanham Act, 15 U.S.C. § 1125. dd.{{ 21, 22.) In response, Poly-Tech maintains that it has identified and differentiated its products from Insty*Bits and those of other manufacturers and that it has "no interest" in deceiving Week cal alba ip tN ON, Sian Ne eS: 2 ‘ 4 t ‘ y ¢ ‘ : ; : : ; 3 5 : ; i } af 5 33a anyone as to the source of its products. (Quiring Third Aff. § 15.) This Court has original jurisdiction over Insty*Bits § 1125 Lanham Act claim pursuant to 28 U.S.C. §§ 1331 and 1338 and has supplemental jurisdiction over the remainder of Insty*Bit's claims pursuant to 28 U.S.C. § 1367. Discussion L. Standard of Review Rule 56 of the Federal Rules of Civil Procedure governs motions for summary judgment. Under that Rule: [summary] judgment shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any materia! fact and that the moving party is entitled to a judgment as a matter of law. Fed. R. Civ. P.56(c). Summary judgment is to be granted only where the evidence is such that no reasonable jury could return a verdict for the non-moving party. See Anderson v. Liberty Lobby Inc., 477 U.S. 242,250, 106 S. Ct. 2505,2511(1986). Initially, the movant bears the burden of bringing forward sufficient evidence to establish that there are no genuine issues of material fact and that the movant is entitled to judgment as a matter of law. Celotex. 34a Corp. v. Catrett, 477 U.S. 317, 322, 106 S. C.t 2548, 2552 (1986). In evaluating the movant's showing, the evidence offered by the non- moving party is to be believed and all justifiable inferences therefrom are to be drawn in a light most favorable to that party. Matsushita Elec. Indus. vy. Zenith Radio, 475 U.S. 574, 587, 106 S. Ct. 1348, 1357(1986); Kornblum vy. St. Louis County, No.93-4111, slip op. at 4 (8th Cir. Feb.15, 1995). where a moving party, with whatever it provides the court, makes and supports a motion for summary judgment in accordance with Rule 56, a party opposing the motion may not rest upon the allegations or denials of its pleadings; rather, the nonmovant must " set forth specific facts showing that there is a genuine issue for trial," Liberty Lobby, 477 U.S. at 256, 106 S. Ct. at 2514; Krenik v. County of Le Sueur, 47 F.3d 953, 957 (8th Cir. 1995). However, the nonmovant is not obligated to prove in its favor an issue of material fact, Unigroup_v. O'Rourke Storage & Transfer, 980 F.2d 1217, 1220 (8th Cir. 1992), and a summary judgment motion should be denied unless the court is convinced that there is no evidence to sustain recovery in any circumstances, Kornblum, No.93-4111, slip op. at 4. Ordinarily, the court's task on a motion for summary judgment is not to weigh facts or evaluate the credibility of affidavits and other evidence. The nonmovant cannot however, avoid summary judgment in favor of the movant merely by pointing to some alleged factual dispute between the parties. Instead, any fact alleged to be in dispute must be "outcome determinative under prevailing law," that is, it must be material to an essential element of the specific theory 35a of recovery at issue. See Get Away Club Inc. v. Coleman. 969 F.2d 664, 666 (8th Cir. 1992). Il. Analysis Insty*Bit alleges the Poly-Tech "Snappy" brand quick-release products infringe on its trade dress in violation of 11 U.S.C. § 1125.' In support of this claim, 15 U.S.C. § 1125 provides, in pertinent part: False designation of origin and false descriptions forbidden (a)(1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation or origin, false or misleading description of fact, or false or misleading representation of fact which-- (A) is likely to cause confusion or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or (B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's 36a Insty*Bit alleges its products contain the following protectable trade dress: Quick change chuck - "the combination of the color black; the shape of the shank; the size and dimensions of the sleeve; and the chamfered edge - raised knurled band - recessed smooth band raised knurled band appearance of the chuck sleeve"; Drill guide - "the combination of the color black; the steel colored bit; the exposed spring; the shape and style of the set screw and opening; and the shape of the opening for receiving the shank in the collar"; Countersink - "the combination of the color black; the shape and styie of the set screw and opening; the use of two flutes; the shape of the collar; the raised edge on the countersinking portion; the overail size and dimensions; and the shape of the opening for receiving the shank in the collar." (Wienhold Aff. ¢ 14.) shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act. 37a In order to establish a prima facie case of trade dress infringement under § 1125, Insty* Bit must demonstrate: (1) its trade dress is inherently distinctive or has acquired distinctiveness through secondary meaning; (2) its trade dress is primarily nonfunctional; and (3) imitation of its trade dress would result in likelihood of confusion as to the source of the products in consumers’ minds. Two Pesos. Inc. vy. Taco Cabana. Inc., U.S.__ 112 S. Ct. 2753, 2758 (1992); Stuart Hall Co. v. Ampad Corp., No.94-2618, slip op. at 5 (8th Cir. April 7, 1995). In applying these factors, a court must consider the "total image" of the product as it is presented to "the consuming public," including features such as size, shape, color or color combinations, texture and graphics. L.A. Gear. Inc. v. Thom McAnn Shoe Co., 988 F.2d 1117, 1129 (Fed. Cir.), cert. denied 114 S. Ct. 291 (1993); see also Woodsmith Publishing Co. v. Meredith Corp., 904 F.2d 1244, 1247 (8th Cir. 1990) ("[t]he trade dress of a product is the total image of a product, the overall impression created, not the individual features"). In the present case, the Court concludes that Insty*Bit has failed, as a matter of law, to present facts sufficient to satisfy the third prong of § 1125 analysis. 38a Likelihood of Consumer Confusion The "dispositive issue in a trade dress case is the possibility of consumer confusion as to the source of the product." First Brands Corp. v. Fred Meyer Inc., 809 F.2d 1378, 1383 (9th Cir. 1987); See L.A. Gear. Inc. v. Thom McAnn Shoe Co., 988 F.2d 1117, 1131 (Fed. Cir. 1993) ("[i]f likelihood of confusion is avoided, copying of trade dress cannot be prevented under [§ 1125]"). "The test is whether there is a likelihood of confusion resulting from the total effect of the defendant's product and package on the eye and mind of the ordinary purchaser." First Brands, 809 F.2d at 1384 (emphasis added). The factors typically considered in this analysis are (1) the strength of the owner's mark; (2) the similarity between the owner's mark and the alleged infringer's mark; (3) the degree to which the products compete with each other; (4) the alleged infringer's intent to "pass off" its goods as those of the trademark owner; (5) incidents of actual confusion; (6) the type of product, its costs, and conditions of purchase. Co-Rect Prods. v. Marvy! Advertising Photography Inc., 780 F.2d 1324, 1330 (8th Cir. 1985); see Conopco Inc. v. May Department Stores Co., 46 F.3d 1556, 1565 (Fed. Cir. 1994), cert. denied SCt 1995 WL 94103 (April 17, 1995) (applying six Co-Rect factors to § 1125 claim). Although the Insty*Bit products and the Snappy products compete in the same market, independent application of the six Co-Rect factors is unnecessary in this case. The focus of the likelihood-of-confusion analysis -- and thus the Co-Rect factors -- is whether, "based on the entire product image" the consumer will 39a be confused as to the source of the products. LA. Gear 988 F.2d at 1133. In this case, Poly-Tech has left no doubt as to the source of the Snappy brand products. The Snappy and Insty*Bit product packaging designs are so graphically dissimilar that there is no reasonable likelihood that consumers would confuse a Snappy brand product with the Insty*Bit product. The words "Snappy'™" appear in large letters prominently displayed on the front of the Snappy packages for each of the three products claimed to violate § 1125. Indeed, the brand name "Snappy" appears in bold letters nine times on the Snappy quick-release chuck package and in bold letters six times on each of the Snappy countersink and drill guide packages. "Snappy" is also permanently embossed on the face of each of the components themselves, and the embossed imprint is visible through clear plastic "bubble" packaging. Each Snappy package also contains the name "Poly-Tech Ind." along with its mailing address and phone number printed on the bottom. The front face of each of the Snappy packages is solid purple with white lettering and yellow accent highlighting. In contrast, the front face of the Insty*Bit product packages contains, in large, bold letters, the word "INSTY-BIT®". The back face of the Insty*Bit product packages also contains the word "INSTY-BIT®" in bold. These products have the word "INSTY-BIT" embossed on the components, which are visible through clear plastic packaging. Each Insty*Bit package also contains the name "©Wienhold Associates" set off from text on the bottom of the package. The front of these packages is solid white, not purple. 40a Insty*Bit has also provided its products to other manufacturers for resale. In some of these cases, Insty*Bit has not marked its product with the "INSTY-BIT®" label. No evidence before the Court suggests the packaging of these private labels is similar to the packaging of the Snappy brand; to the contrary, the private label packages submitted to the Court show that the packaging of the Snappy brand is unique. (See Def's Mot. for Summ. J., Ex. 1.) Moreover, while consumers may become confused as to whether the Insty*Bit private label components were made by Insty*Bit or someone else, there is no confusion as to the source of the Snappy brand products. Their source is clearly, conspicuously, and repeatedly identified in the Snappy trade dress. - Based on the "total presentation" of the Snappy brand products to the consumer, there is no reasonable likelihood of confusion as to their source. No evidence suggests that Snappy has confused consumers into thinking its components were made by Insty*Bit. Instead, its products are unmistakably identified as "Snappy" brand. Summary judgment is appropriate in this circumstance. See L.A. Gear, 988 F.2d at 1125, 1133-1134 (holding that district court "clearly erred" in finding § 1125 trade dress violation, "despite the substantial similarity of overall design" and despite the defendant's intentional copying, because trademarks were conspicuously labeled on the products); Conopco, 46 F.3d at 1570. (holding that district court committed "clear error" in finding a likelihood of confusion under § 1125 because a "prominent placement" of defendant's logo appeared on the front face of defendant's products) (applying Eighth Circuit law); Litton Sys. Inc. v. Whirlpool Corp., 728 F.2d 1423, 1446-47 & 4la n.1. (Fed. Cir. 1984) (holding that Minnesota district court committed "clear error" in finding likelihood of confusion under § 1125 when defendant's name was affixed to its product). In the face of Poly-Tech's overwhelming evidence that consumers would not likely be confused as to the source of its products, Insty* Bit offers the results of a survey of 102 potential quick-release system customers. The "expert" conducting that survey concluded that "at least eight out of ten respondents perceive that Snappy's products are manufactured by the same company as "Insty*Bit’."" (Stitt Aff., Ex. B at IB-3193.) Ostensibly, this might be construed to create an issue of material fact regarding whether consumers might be confused about the source of the Snappy brand products. Despite this appearance, however, a careful review of this survey demonstrates that it has no probative value with respect to the likelihood of consumer confusion in this case. The data ; Litton explained that: The district court failed to recognize that the most common and effective means of apprising intending purchasers of the source of goods is a prominent disclosure on the container, package, wrapper, or label of the manufacturer's or trader's name. . . and that when that is done, there is no basis for a charge of unfair competition. Id. at 1446 (quotations omitted). 42a supporting this conclusion was complied by showing subjects unpackaged quick-change chucks, unpackaged countersinks and unpackaged drill guides, and asking them "In your opinion, which of the test products look like they are manufactured by the same company as the prototype [Insty*Bit product]?" (Id. at 113-3249, No.11; 113-3251, No.32; IB-3252 No.42.) However, to determine whether a substantial likelihood of confusion exists under § 1125 the product must be considered in its totality as it is presented to the average consumer -- which in this case is to say in a package containing the identifying source "Snappy" in bold letters between nine and six times and the words "Poly-Tech Ind." printed on the bottom. The Insty*Bit survey also tested the packaged products, and concluded that a statistically significant number of the respondents interviewed would purchase the Snappy brand products as a satisfactory match to Insty*Bit's.°(id. at IB-3197.) This is irrelevant to the , The survey participants were asked the following questions after having been shown quick-change chuck, drill guides and countersinks in their packages: (1) I'd like you to rate the degree of similarity between the following product and the prototype [Insty*Bit product], based on overall product appearance as packaged, using a ten point scale where 1 is totally dissimilar and 10 is totally similar. (2) Let's suppose that someone from work or a family member gave you this tool, the prototype 43a Third prong of the § 1125 analysis. Marketing a competitive substitute is not a violation § 1125. Indeed, it is encouraged.‘ The issue here is not whether [Insty*Bit product], and asked you to go to a hardware store or other parts supplier to get another one. Are there any here that you would consider so similar or such a satisfactory match that you would buy it? (Stitt Aff. Ex. B at IB 3252-54.) During argument, Insty*Bit asserted that survey participants were shown the packaged products, asked if they looked like they were manufactured by the same company, and responded that the packaged products appeared to be manufactured by the same company. This may have been probative to the issue of consumer confusion. However, participants were not asked that question. (See__id. at IB-3249-54.) . L.A. Gear determined that the defendant intentionally copied the plaintiffs trade dress and that the first and second prongs of the § 1125 analysis had been satisfied. The court nevertheless reversed the trial court's finding of trade dress infringement and explained that "the public has the right to copy the design of goods that are unprotected by patent or copyright, absent consumer confusion or deception." L.A. Gear, 988 F.2d at 1131 (emphasis added). The Supreme Court has also emphasized this principle, explaining that: [T]he plaintiff has the right not to lose 44a consumers would substitute a defendant's product for the plaintiffs nor is it whether the products are similar; the issue is whether consumers would likely purchase the defendants product mistakenly thinking it was manufactured by the plaintiff. See L.A. Gear 988 F.2d at 1134. Insty*Bit has failed to create a genuine issue of material fact with respect to its § 1125 Lanham Act claim Poly-Tech is accordingly entitled to a summary judgment finding of non-trade dress infringement. Supplemental Jurisdiction Insty*Bits § 1125 claim is the only federal claim asserted in its Complaint. 28 U.S.C. § 1367(c) provides that "the district court may decline to exercise supplemental! jurisdiction over a claim...if...the district court has dismissed all claims over which it has original jurisdiction." The Supreme Court has explained that "[Supplemental] jurisdiction is a doctrine of discretion, not of plaintiff's right... [I]f the his customers through false representation that those are his wares which in fact are not, but he may not monopolize any design or pattern, however trifling. The defendant, on the other hand, may copy plaintiffs goods slavishly down to the minutest detail: but he may not represent himself as the plaintiff in their sale. Bonito Boats. Inc. vy. Thunder Craft Boats. Inc. 489 U.S. 141, 157, 109 S. Ct. 971, 981 (1989) (quoting Crescent Tool Co. vy. Kilborn & Bishop Co.. 247 F. 299, 301 (2nd Cir. 1917)). 45a federal claims are dismissed before trial... the normal practice is to dismiss pendant claims without prejudice." United Mine Workers v. Gibbs. 333 U.S. 715, 726, 36S. Ct. 1130, 1139 (1966); see also Stokes v. Lokken, 644 F.2d 779, 735 (8th Cir. 1981) (“when federal claims are dismissed before trial, the normal practice is to dismiss pendent claims without prejudice, thus leaving plaintiffs free to pursue their state-law claims in state courts if they wish"). This case is not scheduled for trial until April 1996. Accordingly, the Court will dismiss the remainder of Insty*Bits Complaint without prejudice. Conclusion Based on the foregoing, and upon all the files, records and proceedings herein, IT IS ORDERED that: (1) Defendant's Motion for Summary Judgment for Non-Trade Dress Infringement (Doc. No.35) is GRANTED and Count I of Plaintiffs Compiaint (Doc. No.1) is DISMISSED WITH PREJUDICE; (2) Plaintiffs Motion for Preliminary Injunction (Doc. No.28) is DENIED AS MOOT; and (3) Plaintiffs Motion to Dismiss Defendant's Counterclaims (Doc. No.7) is DENIED AS MOOT. 46a IT IS FURTHER ORDERED that the remainder of this action is DISMISSED WITHOUT PREJUDICE pursuant to 28 U.S.C. § 1367(c). LET JUDGMENT BE ENTERED ACCORDINGLY Dated: April 26, 1995 RICHARD H. KYLE United States District Judge os 47a United States Court of Appeals For the Eighth Circuit No. 95-2260MNST Insty*Bit, Inc., Appellant, Order Denying Petition for Rehearing and Suggestion v. for Rehearing En Banc Poly-Tech Industries, Inc., Appellee. The suggestion for rehearing en banc is denied. The petition for rehearing by the panel is also denied. October 21, 1996 Order Entered at the Direction of the Court: /s/ Clerk, U.S. Court of Appeals, Eighth Circuit 48a UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA THIRD DIVISION Insty*Bit, Inc., Plaintiff Civil No. 3-94-1427 vs. | Judge Richard H. Kyle AFFIDAVIT OF ROBERT J. DE BREY Poly-Tech Industries, Inc., Defendant. STATE OF MINNESOTA SS COUNTY OF HENNEPIN I, Robert J De brey, being duly sworn upon oath, depose and state that: - I am a mechanical engineer, a graduate of the University of Notre Dame in mechanical engineering, and hold a masters degree from the Institute of Design at Illinois Institute of Technology. I have received additional education in marketing and psychology from Northwestern and _ Loyola Universities. a I am presently employed with De brey Design, located at 6014 Blue Circle Drive, 49a Minneapolis, Minnesota 55343, telephone 612-935-2292. Over the past 30 years I have worked in a consulting capacity, concentrating in product design and development, corporate identity, and marketiaiz communications. I have conducted over 200 programs for a wide range of clients, encompassing a comprehensive approach to address all elements of a clients needs including technical, ergonomic, human factors, and aesthetic and economic designs for manufacture and sale of products. 3 I established De brey Design in 1965 and I have provided services in the capacities as a consultant since that time. Prior to initiation of De brey Design, I was employed with the General Electric Co., Naval Research Laboratory, Jensen Design Consultants. and IIT Research Institute. 4. . I have attached to this affidavit a resume which more fully describes my qualifications and professional experience. 3. In the past, I have provided expert opinions in a variety of intellectual property lawsuits related to patent infringement, trademark infringement, and trade dress cases as evidenced by the attached Summary of Case Experience. 6. I have consulted on and participated in the following design projects for clients which are in the general category: of the design and development of tools. Wood Plane A cast aluminum plane for finishing. wood, utilizing a Sanding Machine Apple Peeler Ball Point Pen Automotive Ice Scraper Light Pen 50a unique disposable blade design. Redesign of conveyorized, production wood sanding machine, including ergonomics, technical, and aesthetic. Product concept, development, and production design for consumer tool to peel, slide, and core apples, mainly for home canning. Also, design of the product package. Several bali point pens with innovative point projection and point protection concepts. An ergonomically designed tool for removing ice from car windshields. Selected for the design collection of the Museum of Modern Art, N.Y. Engineering, ergonomic, and aesthetic design concepts for hand-held ‘light pen for use with desktop computers. 5la Corn cutter A hand-held device for remolding the kernels of corn from a cob for the canning process. Canning Tongs Ergonomic design of specialized tongs for the aesthetic placement of food in canning jars. Canning Tongs Ergonomic design of specialized tongs for the aesthetic placement of food in canning jars. Aircraft Helmet Ergonomic and aesthetic design for pilot's helmet for F-16 fighter aircraft, utilizing advanced electronic communications. Saber Saw | Ergonomic and aesthetic design concepts for hand-held electric saber saw. 7. I have prepared a report (Exhibit 6) which sets forth my analysis and conclusions with respect to the trade dress issues raised within this proceeding. All matters stated in the report are true to my knowledge and belief and as to those matters stated on belief. I believe them to be true. It is my opinion that no protectible trade dress is present in this case with respect to Plaintiff's quick change chuck, countersink, or drill guide. 52a FURTHER YOUR AFFIANT SAYS NOTHING except that all matters stated herein are true to your affiant's knowledge and belief, and as to those matters stated on belief, I believe them to be true. ROBERT J. DE BREY Dated __ Subscribed and sworn to before me this 16 day of February, 1995 53a Resume Robert J. De brey 612-935-2292 EMPLOYMENT Mr. De brey has worked in a consulting capacity for the past thirty years concentrating in product design and development, corporate identity, and marketing communications. He has conducted over two hundred programs for a wide range of clients. A comprehensive approach is utilized which addresses all elements of the client's needs, i.e.; technical, human factors, aesthetic and economic. Prior to establishing De brey Design in 1965, he was associated with the following companies: The General Electric Company, Naval Research Laboratory; Latham, Tyler,. and Jensen, Design Consultants and IIT Research Institute EDUCATION Mr. De brey is a Mechanical Engineering graduate of the University of Notre Dame, and holds a Masters Degree from the Institute of Design at Illinois Institute of Technology. Additional programs in marketing and psychology were completed at Northwestern aad Loyola Universities. 54a PROFESSIONAL RECOGNITION Thirty-five issued patents Minnesota Design Award for product and graphic design Listed in Who's Who in Technology Today Selected five times for the Annual Design Review Wescon Design Award for product and graphic design Art Directors Award for computer package design Industrial Design Magazine, Cover Museum of Modern Art, New York, Design Collection Industrial Design Excellence Award, Product Design IDEA Award for package design IDEA Special Mention Award 38th Annual Design Review, Gold Award AREAS OF EXPERTISE Industrial Design Ergonomic Design Graphic Design Model Making Marketing Materials and Manufacturing Processes Mechanical Engineering Scurcing Components and Services F -aluation and Selection of Vendors Contract Administration Expert Witness In Product Liability Cases Panel of Commercial Arbitrators, AAA ADDITIONAL SKILL Knowledge in a wide range of manufacturing machines, materials, and processes Proficient with mechanical devices, tools, and assemblies Photography and Video Familiar with cultures of the following countries: Canada, UK, Germany, France, Hungary, former Yugoslavia, Spain, Portugal, Italy — 56a TRIAL VISUALS De brey Design GRAPHIC EXHIBITS Graphs and flowcharts Visualization of Process Diagrammatic portrayal of events Structures, machines, components Photographs, slide sequences, film As the verbal testimony of your case is delivered, a multitude of different images may appear in the minds of the court and jury. The alternative is a persuasive visual presentation, carefully designed to locus those minds to a common understanding of circumstances. Eliminate erroneous ideas; point out unseen relationships and reduce the case to important decision factors. A legal position will dominate when its merits become obvious. 3-DIMINESIONAL MODELS Detailed evidentiary exhibits Precision product models, cutaways Configureational mock-ups Architectural scale models. A picture may be worth 1000 words but "a model is worth 1000 pictures". Modeling is a universal language and thus, a highly effective medium through which to communicate the overall concept, operating details, special relationships, and appearance of a product or process. Visualization for the court may concentrate on he tah a 57a hazardous conditions, design deficiencies, or the actual results. "Before and after" conditions can be sequentially analyzed and alternate design approaches presented. A three dimensional statement focuses attention, helps to clarify circumstances and bring about a meeting of minds. COST EFFECTIVENESS Models and exhibits justify their place in the financial plan of every complex case. A case can be strengthened when everyone's thinking follows a common reference; trial time is substantially reduced, or possibly eliminated through pre-trial settlements. Larger awards can sometimes be traced to the jury's and court's increased perception, understanding, and sensitivity resulting from the use of visuals designed to meet communication objectives. Appeal cases can also benefit through rapid, clarified presentation. QUALIFICATIONS Our firm is fully equipped with design and shop facilities and employs a wide range of mediums to accomplish the attorney's objectives. Graphic design, engineering, and model making talent are blended from planning to completion to insure that the results are accurate, effective, and confidential. We would be happy to discuss the communication needs of your next case. De brey Design ey a a 58a De brey Design Case Experience of Robert J. De brey CASE DESCRIPTION SERVICES Cardiac Patent Trial Visuals Pacemakers vs. Infringement Expert, Design Coratomic Cardiac Patent Trial Visuals Pacemakers vs. Infringement Medtronic St. Jude Medical Patent Trial Visuals vs. Possis Corp. Infringement Technical Expert Chief Industries Patent Trial Visuals vs. Squareliner Infringement Technical Expert Chicago Cutlery Patent Expert Witness vs. Bordien Infringement Design Corp., Tommer Cutlery Peterson vs. Personal Injury Expert Witness Komatsu of Human Factors Japan Abdo vs. Sperry Personal Injury Expert Witness New Holland Human Factors Parkos vs. Personal Injury Technical Expert Metropolitan Wire Corp. Plaintiff vs. Kai Cutlery, Tokyo Personal Injury Technical Expert Human Factors Gravity Guidance inc. vs. Inversion Health Systems Plaintiff vs. Raygo, Inc. Metronic vs. Pacesetter, Inc. Otto Bock vs. Daw Industries Northland group vs. Christian Bros. Horton Clutch vs. Tlomatic 59a Patent Infringement Personal Injury Patent Infringement Patent Infringement Patent, Trademark Trade Dress Technical Expert Trial Visuals Trial Visuals Trial Visuals Expert Witness Expert Witness Design Insty*Bit, Inc. VS. Poly Tech Industries, Inc. REPORT OF ROBERT J. DE BREY FOR DEFENDANT 6la TABLE OF CONTENTS SECTION PAGE ) 1. Introduction 1 | be Conclusions and Opinions 2 . De Scope of Analysis 6 | 4. Summary of Findings 7 | Be Detailed Analysis 15 6. Exhibits 26 { ‘ 4 4 een 62a SECTION 1. INTRODUCTION Insty-Bit a Minnesota corporation located in Minneapolis, is an assembler of parts related to specialized tool accessories for the professional and consumer hardware trade. Poly-Tech is also a Minnesota corporation located in the Twin Cities and performs general job-shop machine work. Poly-Tech has been producing the parts for Insty-Bit's tool accessory line since approximately 1988, and has in the past operated a business marketing and selling products purchased from Insty-Bit. More recently Poly-Tech has begun production of its own line of quick release tools. Insty-Bit has objected to Poly Tech's production and trade in the same market and has charged, among other things, infringement of its trade dress and violation of the Minnesota Deceptive Trade Practices Act. Poly-Tech's attorneys, Palmatier, Sjoquist, and Helget, have retained the writer for Expert testimony on the design features of the tools in question and how they might be viewed in the marketplace as related to factors of trade dress. Process To accomplish this assignment a meeting was held at the office of Palmatier, Sjoquist, and Helget on February 10, 1995 at which time a detailed explanation of the case was given. Samples of the various tools were provided including relevant items of both brands. GS a 00S tt ORI LL AANA ABE Sechie leee S k needed 63a The complaint document and response to interrogatories were then studied in detail. A detailed analysis of the samples was made in an attempt to determine the basic character and existence of asserted design features as they might contribute to the development of "trade dress" in the marketplace. Observational trips were also made to a number of retail outlets which handle the types of tools under study. A variety of tool accessories were selected for — their comparative and illustrative value and purchased for consideration. They are included in this report in photographic form in Section 6. Exhibits. SECTION 2. CONCLUSIONS AND OPINIONS The questions to be answered include whether or not there exists a non-functional trade dress, whether the asserted trade dress functions to denote a source of origin, and whether there exists a likelihood of confusion in the marketplace between the two competing product lines. Point of Sale The writer's conclusion is that there is virtually no chance for confusion at point of sale, even in the rare event that the two products appeared side by side in the merchandising display. The two packaging designs are so graphically dissimilar as to allow no possibility that one product might be mistaken for the other. (See exhibits #10, 11,12). Furthermore, it is understood that these items are never sold in bulk form and we also know that the packages are not easily opened with bare hands even if 64a one were inclined to do so. Thus one can assume that in all cases the graphic power of the package is the primary reference to verify identity. From a merchandising point of view, the front face of the Insty-Bit product line packaging is more effective in communicating the brand name and product identity than the front face of the Snappy brand. Insty-Bit's name is printed larger, is in more readable type and is not encumbered by other competing words. The Insty-Bit product, in all cases, stands in front of a clean white background where it is more clearly observed in a contrast condition. The names of both brands are quite conspicuous and provide unmistakable identification of the source. (See exhibits #10,11,12). Where the customer closely examines the front and back of the respective packaging, the Snappy brand does a better job of conveying the source of the product. The identifying name "Snappy" appears ten times on the chuck packaging and is also printed on the actual product which is visible through the clear plastic. The corporate name, address, and phone number is also on the back side of the Poly-Tech packaging. The Insty-Bit package in contrast repeats "Insty-Bit" a total of four times on the package and has a further identifier Copyright Weinhold Associates, 1993, Minneapolis, MN 55426 The particular style of the packaging is such that the product is covered over with a layer of clear plastic. To produce the plastic "bubble" which nests the product, the sheet material is stretch formed over curved surfaces under vacuum, which virtually guarantees _ 65a that its clarity will be partially distorted in an optical sense. For example, it is impossible to determine by external observation alone that the sleeve on the Sears Roebuck Quick Change Chuck is actually molded in plastic rather than machined from steel. (See exhibit #16). Thus, from a practical standpoint, the customer is pretty much limited to external packaging information to identify the product, its purpose, the material of construction, distinctive design features, and its maker. Under normal circumstances the buyer of this product is going to interpret the information on the packaging and accept it at face value Private Label Products The most likely source of confusion in the marketplace is the existing practice of Insty-Bit providing its same products, private labeled, to other OEM's without identifying the true source. As stated above, the customer is likely to accept that the product is manufactured by the company named on the package. When the product is removed from the package the only identification is the brand name stamped on the product. Apparently the actual product sold in the private labeling may either be marked with "Insty-Bit", the name of the private labeler, or with no identifier. The Porter Cable Quick Change Chuck looks physically identical to the Insty-Bit Quick Change Chuck (note name similarities also) therefore, one is bound to wonder "who makes what?" The Porter Cable packaging employs the same colors and graphic lined background as Insty-Bit packaging. (See exhibit #39). This marketing strategy would seem to be counter productive to Insty-Bit's efforts to establish any recognition of their products in the marketplace. : i 66a The private labeling destroys a consumer's ability to identify a single source of origin for the products. The Product in Hand Once the package is opened and the product separated from the identifying printed information one is left with product information, ie word marks, trademarks, patent numbers, model numbers, operative sizes, and last but not least, specific product features and the overall configuration of the product itself. Insty-Bit has claimed a list of approximately thirty-six (36) "non-functional" design features for their product line from which its trade dress is constructed. These were analyzed in detail and evaluated using the criteria normally associated with trade dress development and protection. In all but a few isolated instances the claimed design features were judged functional because they benefited the consumer and, or the manufacturer, were essential to the purpose, and enhanced the quality. Are the product designs as a whole functional? Tool products in general and drilling tools and accessories in particular are designed with efficiency in mind. This means doing more with less, at the lowest cost, and maximizing performance. Such a process leaves little room for the arbitrary and fanciful, or the option of specifying a component or feature primarily to denote a source of origin. The tool accessory market is highly competitive and forces the optimization of function. The Plaintiff manufactures his Quick Chuck under two U.S. utility patents which show its functional design 67a character. The whole purpose of this tool is to render repetitive operations with the portable electric drill more efficient. It is purchased for its time saving and convenience attributes. The countersink tools are also aimed at efficiency by combining drilling and countersinking into one operation. The size combination of the drill and countersink is pre-selected for each screw size and retained in the tool. Countersinking depth is controlled automatically for some operations. The Insty-Bit Quick Change Drill Guides are designed to quickly, conveniently, and accurately perform the important operation of centering the drilled hole in the countersunk hole of the hardware to be mounted. There appears to be no other purpose for these tools There are no non-essential elements in these designs. It is obvious then that all of the above products were created as purely functional devices. Thus, combined with the described appraisal of the functionality of the individual design features, the designs, in the writers judgment, are functional as a whole. In the writers opinion, it would be detrimental to competition to give trade dress protection to all of the charted design features individually or in combination, except the two noted. In only one case was a design feature (the exposed spring on drill guides) rationalized as possibly being used to denote a source of origin. As one might expect with technical type tool products, none of the 36 claimed design features were classified as arbitrary or fanciful. The Feel of the Products 68a The Plaintiff has claimed "the feel" of the products as well as the design features. Upon comparing the operation of Insty-Bit Quick Change Chuck and the Snappy Quick Chuck, it became immediately apparent that there is a major ergonomic difference between the two. Poly Tech produces their "Snappy" product with a different and patentable design feature which allows the user to insert a tool into the chuck single-handedly by simply pushing the bit straight in until it bottoms out and locks. Upon doing so, the Snappy chuck produces strong tactile feedback and makes a loud click simultaneously upon locking. It is one smooth, non-stop action. The sleeve never needs to be touched or moved to insert a tool bit. The Insty-Bit chuck is a two-handed operation of sliding the sleeve axially to release the lock, inserting the bit, and then releasing the sleeve. It is a start and stop operation and definitely has a different "feel" to its operation than the Snappy chuck. The Snappy Quick Chuck is a major ergonomic design advancement adding greatly to the convenience of use as well as the feel of its operation. Degree of Care Likely to be Exercised by the Customer Because the main benefits of the subject products are increased efficiency and quality of performance for repetitive tasks, the typical purchaser is likely to be more sophisticated than the average do-it-yourselfer and more like a professional user. This, plus the fact that the tools are not inexpensive, suggests that the customer will carefully evaluate his selection before 69a purchasing the tools. Thus, there should be even less likelihood of confusion at point of sale. General Conclusions As a result of the above analysis, evaluations, design comparisons, and survey of similar tools found in today's market, it is the writers opinion that the design features claimed by Insty-Bit do not meet the requirements for protection as trade dress. There is no likelihood of confusion between the Insty-Bit and Snappy Brands at point of sale. However, there is a likelihood of confusion by users of the Insty-Bit product and its private labeled products since the true identity is not revealed. SECTION 3. SCOPE OF ANALYSIS This study is primarily. directed to the products and product features identified by the Plaintiff in their ANSWERS TO DEFENDANT'S FIRST SET OF INTERROGATORIES (NOS. 1-13) dated January 16, 1995. Products Insty-Bit Poly-Tech Quick Change Chuck Make it Snappy Quick Chuck Quick Change Pilot Countersink Make it Snappy Drill Guide 70a Quick Change Drill Guide Make it Snappy Countersink (See exhibits #10,11, 12). Packaging The packaging for each of the above products was also reviewed in a comparative manner. The countersinks and drill guides of each brand are packaged and sold in sets of five different sizes. (See exhibits #10,11,12). Criteria The criteria by which the designs were evaluated for trade dress representation are: Whether or not Insty-Bit's asserted individual design elements and the design as a whole are functional eThe impact on competition if the asserted designs were protected as trade dress The availabily of alternative designs Whether or not the asserted design element function to denote the source of origin ¢Whether or not the design element is arbitrary or fanciful Pes REO a ir it Retan Tla SECTION 4. SUMMARY of FINDINGS Definitions: (as used in the charts on the following pages) ° Functionality: A functional feature which competition would have to spend money not to copy but to design around. Additionally, the following categories on the charts are indications of functionality: Benefit to User Essential to Purpose Benefit to Manufacturer Quality Enhanced * Benefit to User or Manufacturer: ie; increase in efficiency, safety, speed of operation, or durability; facilitation or accommodation of performance, lower cost, reduction in liability, etc. * Essential to Purpose? Is the design essential to the utility of the item?. . Enhancement of Quality? Does the design element improve quality? * Protection Hurts Competition? Would protection of the feature impede effective competition? ° Alternative Designs Available? Are there more than a limited number of alternative designs available which could be used without penalty? * Functions as a Source of Origin? 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DETAILED ANALYSIS INSTY*BIT CHUCK DESIGN ANALYSIS Black Oxide Finish The black oxide finish serves two important functions. First, the oxidation of the steel's surface provides protection from rust. While it will not prevent corrosion, it does inhibit it, such that it is much more desirable than untreated steel. Rust on the internal and external surfaces of a steel tool with moving parts operating within certain dimensional tolerances can seriously compromise its performance. The oxidized black surface is used extensively in the tool industry because it allows the steel to be given a finish without changing the dimensions of the part. Any other type of plated corrosion protection must be done at the expense of strict dimensional control, since coatings and dated metals are dimensionally added to the surface of the base metal. Furthermore, it is quite common for other plated metals to flake off under extreme conditions. When this happens and bare steel is exposed, the surface is very likely to rust Metal platings such as chrome, nickel, and zinc can vary widely in quality. Paint coatings are not commonly used on the working ends of tools or surfaces of parts with critical fits like these in question. The dimensional changes that metal parts incur from coating processes, the lack of precise control of coating thickness, and the coating's lack of 9la long term durability make them a poor choice for corrosion protection on moving, interactive parts. The second benefit provided by a black oxide finish is that the black oxide provides the function of communicating to the customer that the tool has been made using quality manufacturing processes. The many benefits of black oxide are well known in the industry and therefore the use of black oxide on tools can be associated with a manufacturer who is following industry standards. Because black oxide is a finish used on many precision tools, it suggests a high level of quality. The use of black oxide is not mandatory in the production of tools, but it has proven to significantly improve a tool's quality. It's designation as a protected design element would substantially hurt competition in this market. Its use would not be indicative of a particular manufacturer because so many manufacturers of similar products use black oxide. Its use is not arbitrary or fanciful, but functional. (See exhibits #26, 27, 28, 29, 33, 34, 35, 36). Notably, all quick change drill chucks that the writer is aware of are finished in black. Shape and Appearance of Sleeve The shape of the sleeve is derived strictly from the function it performs. Nothing has been added to the sleeve to make its design unique or decorative. The cylindrical shape has been used in order to provide easy grip without limitation to its rotational orientation Its appearance is a function of its black oxide finish, its 92a diameter, and its length. Restriction of this configuration would hurt competition because this is the most cost effective and straightforward design to meet performance requirements. This shape and appearance are widely used in the industry, and wouid not suggest a particular manufacturer (See exhibits #17, 19, 20, 23 24, 25). Two raised, knurled bands The two raised bands of knurling on the sleeve are provided strictly to increase grip by the user. Knurling is a process that has been used for many years and is a well-known, recognizable feature easily understood by consumers. It is cold formed on the surface under pressure and is therefore a cost-effective way of achieving a grip surface without metal removal. Knurling can only be effectively applied to the highest of adjacent surfaces on any one part. Its use as a protected element would put competition at a disadvantage because it is widely used as an economical way to increase the performance of any round tool gripped by the hand. Two bands of knurling, as opposed to one band, allows a center, non-knurled band ideal for indicia such as identifying the origin and patent numbers. The two bands at each end of the sleeve provide a better gripping arrangement than a single band at one end of the sleeve. Two bands are common in many different types of couplers and connectors. (See exhibits # 17, 19, 23, 24, 25, 29). 93a Series of 2 raised sleeve elements. knurling with sinooth recess, appearance and sequence The raised bands of knurling with a smooth center area is a design which provides two main functional benefits. First the profile created by the two raised areas and the center recess provide for better location and grip by the fingers. The center recess helps the user to quickly locate the best grip area. By locating the center of the fingertip in the recess, it allows the two bands of knurling to come into full contact with the finger. The ridge created by the second, or rear band of knurling provides a sidewall which can be pushed against to move the sleeve and release the bit. A secondary functional benefit provided by this design is that it allows a smooth surface which can easily be Stamped with the manufacture's name and/or patent number. Having the manufacturer's name stamped on the part where it is not likely to be scraped away also helps the consumer in the event they are trying to identify the part after it has been separated from the packaging. (See exhibits #17, 19, 24, 25). Diameter of body and sleeve The diameter of the main body of the chuck and the Sleeve that fits over it are determined by the diameter of the bit being held by the chuck and the mechanisms needed to retain it. Insty*Bit's chuck mechanism is protected by two U.S. utility patents. (See appendix). Any additional diameter would require additional material and/or tooling and would therefore increase i OL TTT TTT TTT TTT Tr en ee er errr rece rr nn ncn nnn n nnn n ener nn nnn nnn n een e en elt 94a costs. Furthermore, any increase in diameter would be undesirable because the chuck would interfere with other parts in a close working environment. The smaller the better. Chamfer on sleeve The chamfer on the sleeve is a functional shape used to provide a smooth edge on the top corner of the chuck. A smooth edge rather than a sharp corner is more desirable for any part coming into contact or being held by the hand. A rounded edge would also serve this purpose, but a chamfer is easier and cheaper to make. Furthermore, a chamfer also provides a narrower profile to decrease the likelihood of coming into contact with parts in tight working environments (See exhibits #19, 23, 24, 25, 33). INSTY-BIT ROUND BODY COUNTERSINK DESIGN ANALYSIS Black Oxide Finish See black oxide section in chuck design analysis. Shape of recessed opening for set screw The shape of the recessed opening for the set screw is derived from the combination of two functional shapes. The first shape is created by a recessed band around the middle part of the collar. The second shape comes from countersinking the set screw The countersink for 95a the set screw is necessary in order to finish the edge of the hole free of burrs for the set screw. There is no practical alternative for finishing the edge of the screw hole to a burr- free condition and providing an enhanced entry point for screw assembly. Protecting this shape would be detrimental to competition. (See exhibits #33, 38). Shape of the collar: raised edge - recess - raised edge The recessed perimeter band performs the function of generating a gripping edge so that the bit can be more easily removed from the chuck with a oulling action. This recessed band is necessary because the main body of the countersink is relatively small in diameter and short in length. Operation of the spring loaded chuck by itself to release the bit can, in many cases require the use of two hands. The additional task of removing the bit when the chuck's spring action is being held back makes it much more desirable to make the bit easier to grab by incorporating functional design elements such as a recessed band. A recessed band is the best way to provide grip around the circumference to aid in a pulling motion. This design also allows a recessed, protected area ideal for marking the bit with the manufacturer's name. Allen style set screw The Allen style set screw is widely used in the industry because of its low cost and performance benefits. When the an Allen set screw is used, a stronger force can be applied to tighten it. This is due to a more positive lock with the head due to its faceted shape and the depth of 96a the recess allowing the wrench to travel further into the head, as compared with a slotted screw. Because a more positive engagement of the screw is provided by its design, slippage and thus wear of the drive surfaces is reduced. The top surface of an Allen style set screw is not as sharp as the slotted variety, therefore the user is less likely to get cut by it. The Allen wrench is not likely to slip out of the hex screw and contribute to hand injuries like a blade drive with a Slotted screw might. These reasons, along with the lower cost of the Allen head vs. the slotted head screw make the Allen head the preferred choice for many applications. Its use as a protected trade dress element of design would compromise the functionality and competitiveness of tool design. Collar, round shape The round collar on the shank of the countersink is used as a depth gauge to keep the countersunk hole to precise dimensions. After the hole is drilled, a plug is inserted. In order for the standard plug to fit the hole, the hole's depth must be precisely controlled. The use of a round shape on the collar is derived from the machining operation. It is the most straightforward design and is therefore the cheapest to manufacture. Some additional advantages of a round shaped collar are a smooth perimeter edge vs. the hex shaped design. A smooth edge is less likely to scratch the work surface. (See exhibits #33, 36, 38). 97a Two fluted cutting edges The two flutes on the tool are used to cut and remove material in order to form the countersink hole. They are absolutely essential to the function of the tool. A different number of flutes may be used, but two flutes affords a high degree of performance with respect to forming the hole. The hole can be formed quicker by using two flutes instead of one. The two flutes also provide a smoother cutting action. Because the removal of material is performed by two edges instead of one, the bit will retain a sharp edge longer. The two fluted design is more cost effective and provides more structural integrity than those designs with more than two flutes and provides more cutting performance than designs than with just one flute. (See exhibit #32). Round hole on receiver for shank The round hole in countersink bit accepts the hex Shaped shank. The countersink is assembled this way to permit the joining of metals of dissimilar hardness. The bit is hardened so that it remains sharper longer. The shank should not be hardened because this would make it brittle and susceptible to breaking. In order to join the two parts using economical production methods, a hole must be made in the receiver to accept the shank and a set screw used to lock the shank in place by running it into the shank. Because the shank is hex shaped, the hole must either align with the flats of the hex or accommodate the DDE LT 98a perimeter of the hex shank. A round hole to accommodate the round turned portion of the hex shank is clearly the only economical way to meet the design requirements. To machine a hex shaped hole in the receiver to accommodate the hex shank would be very expensive. Silver steel drill bit The bright color of the drill bit is derived from the high speed tool steel from which it was manufactured. Additional treatment of drill bit is not necessary to achieve satisfactory performance. Furthermore, the vast majority of drill bits sold have the same color. Any additional coatings or treatments to the drill bit would increase costs. The silver steel color is often seen along side of black oxide because the two finishes are used extensively on a wide variety of parts (See exhibits #29, 34; 35 36). Length and diameter of countersink The length and diameter of the countersink itself is directly related to the function the countersink performs A different length and a different diameter would make a different size hole and thus would not meet screw head specifications. The correct length and diameter of hole allows the screw and plug used in the countersink hole to properly fit the work piece after final assembly. (See exhibits #36, 38). Raised edge on relief barrel 99a The raised edge on the relief barrel is a functional design consideration. It prevents the barrel from binding during cutting operations by forming a slightly larger diameter hole. The extra clearance allows the relieved barrel to rotate freely and run cooler. (See exhibit 38). INSTY-BIT HEX BODY COUNTERSINK DESIGN ANALYSIS All design elements for the hex body countersink are identical to the round body countersink, except for the hex collar and the shape of the recessed opening for set screw, which are analyzed below. See Insty-Bit Round Body Design Analysis section. The design differences of the Insty-Bit hex shaped receiver and the Snappy round shaped receiver are compared side by side on the next page. Hex Shaped Collar The hex shaped collar has been designed for the function of accepting a screw driving attachment. This allows the countersinking tool to be quickly changed to drive screws after the hole has been drilled. Shape of recessed opening for set screw The shape of the opening for the set screw is generated by a conical shaped cutting tool penetrating first the hex flat and then the cylindrical portion in the recessed band, For removing burrs, sharp edges, and guiding the screw into the thread, there is no practical 100a alternative. Protection of such a feature directly related to economical, standard processing techniques would hurt competition. INSTY-BIT DRILL GUIDE DESIGN ANALYSIS Black Oxide Finish See black oxide section in chuck design analysis. Steel color of bit and steel color of spring The steel color of the bit and steel color of the spring are the colors of the materials used to make these parts. Further treatment of the metal is not required and would add expense to the parts. (See exhibits #29, 34, 35 36). The oval recess for the top screw is created by a countersinking tool working against a round surface. The countersink for the top screw is necessary in order to finish the edge of the hole for the top screw. An unfinished edge or sharp edge would create a hazard when the part was turning because it could easily catch on materials or possibly cut the hand of tile user. (See exhibits #33, 38). Allen set screw 10la See Allen set screw section in round countersink design analysis. Exposed spring The exposed spring is a low cost functional design allowing openings around the drill bit for easy removal of shavings. Other designs without an exposed spring are available, but these designs are more expensive to produce. Shape of nose bushing The shape of the nose bushing is purely functional to locate the drill bit in the center of the tapered recess of the hardware being installed and to attach the spring onto the back side of the bushing. Shape of the drill guide collar The round shape of the drill guide collar is the most efficient and straightforward design. for this part. Any other shape would be more expensive to produce and would add unnecessary complexity. The round Shape also provides a smooth surface for stamping of the manufacture's name. Overall length 102a The overall length of the drill guide is a function of the length of its components. All components and their corresponding lengths have been chosen for their optimum performance characteristics Any additional length would incur increased costs without corresponding performance benefits. Any reduction in length would reduce the performance of the tool. Compressive force of spring The compressive force of the spring has been chosen on the basis of its ability to meet stiffness requirements for adequate control of the nose bushing tip as the locating and hole drilling operations take place. Any more or less compressive force could reduce the effectiveness and smoothness of the locating and drilling operations. Spring shape. size, diameter. and number of turns The spring shape, size, diameter, and number of turns characteristics were chosen to meet the performance requirements for locating and drilling operations and to match up with the diameter of the nose bushing tip. Different size, shape, and diameter springs would not perform as well, may not fit the nose bushings correctly and may increase the cost of the drill guide. The number of turns in a spring is one of the factors in the cost of a spring. An increase in the number of turns past what is necessary to provide good lateral stiffness would likely increase the cost of the spring. Hex shape into round opening 103a See section in design analysis of round countersink. shape and size of brass thrust washer The shape and size of the brass thrust washer is determined by the shape and size of the spring connected to it on one end and the shape and size of the drill guide collar it must fit into on the other end. This brass part performs a critical function by allowing the body of the guide to turn freely and the spring and nose bushing to remain Stationary. Any other size and shape of the brass thrust washer would alter its performance or increase its cost. 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The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386013_0132%3A2. Public record. Not legal advice.