Clicks Billiards Inc., a Texas Corporation v. Sixshooters Inc., an Arizona Corporation Ronald R. Forbes, a Married Man Jane Doe Forbes, Wife
Docket: 99-17294
Court: Court of Appeals for the Ninth Circuit; June 1, 2001; Federal Appellate Court
In the case of Clicks Billiards Inc. v. Sixshooters Inc., the Ninth Circuit Court of Appeals addressed key issues regarding the protectability of trade dress in the context of pool halls. The court examined whether Clicks' claimed trade dress was nonfunctional, if it had acquired secondary meaning, and whether there was a likelihood of confusion between Clicks and its competitor, Sixshooters. The panel found that there were disputed material facts regarding these questions, leading to the reversal of the district court's summary judgment in favor of Sixshooters. The case was remanded for trial to further evaluate these issues. Background information indicated that Clicks had established multiple billiards locations in the Phoenix area prior to the opening of Sixshooters, which was opened by a former Clicks manager who may have used proprietary knowledge from his time at Clicks in the design of Sixshooters. Evidence suggested that Sixshooters may have engaged in detailed inspections of Clicks' facilities during its development, raising potential claims of unfair competition.
In April 1997, Clicks initiated a lawsuit against Sixshooters under the Lanham Act, alleging trade dress infringement. During summary judgment proceedings, Clicks claimed that various individual features of its billiard halls collectively constituted its trade dress. These features included:
1. Large floral print carpet.
2. Dark mahogany wood finishes.
3. Ceiling and wall coverings.
4. Custom lighting fixture designs.
5. Millwork details.
6. Layout of pool tables.
7. Electrical and air conditioning features related to decor.
8. Tile color and pattern.
9. Mahogany-stained bar components.
10. Acoustical wall treatments.
11. Light to medium oak cocktail tables.
12. Entry signage specifics.
13. Standardized entry area appearance.
14. Design and layout of drink rails and cue racks.
15. Neon beer signs.
16. Lighting design and placement.
17. Bar edge and motif designs.
18. Coordinated color schemes.
19. Ceiling fan design.
20. Bartender location relative to the entryway.
21. Cue rack design details.
22. Arrangement of promotional materials at the register.
23. Seating and furniture specifics.
24. Trash can design.
25. Bar-top video game appearance.
26. Draft-tap handles.
27. Internal bar layout.
28. Drop ceiling design.
Both parties engaged in extensive discovery, including depositions and site visits by the district court, which reviewed photographs and conducted visits to the establishments without the parties present. Clicks also provided a survey to support claims of secondary meaning and likelihood of confusion. Ultimately, the district court granted summary judgment to Sixshooters, concluding that Clicks failed to present adequate evidence on key trademark issues such as functionality, secondary meaning, and likelihood of confusion. The summary judgment is subject to de novo review, where evidence is evaluated favorably for Clicks to identify any genuine factual disputes and determine if the district court properly applied the law.
Trade dress encompasses the overall image and appearance of a product, including aspects like size, shape, color, texture, and graphics, and can be protectable under the law, particularly for restaurants. To establish a claim for trade dress infringement, a plaintiff must demonstrate three elements: 1) the trade dress is nonfunctional, 2) it identifies the source of the product as inherently distinctive or has acquired secondary meaning, and 3) there is a likelihood of consumer confusion due to the defendant's product or service. The court found that Clicks failed to provide sufficient evidence on any of these elements.
The first requirement, nonfunctionality, stipulates that a product feature is deemed functional if it is essential to the use or purpose of the product or affects its cost or quality. This criterion is a factual question. Although courts recognized trade dress protection under the Lanham Act prior to 1999, an amendment clarified that the burden of proof regarding nonfunctionality lies with the party asserting trade dress protection, particularly for unregistered trade dress.
In related case law, including Fuddruckers, the court clarified that while individual elements of trade dress may be functional, the overall combination of visual elements can still create a protectable distinctive impression. Thus, even if some elements are unprotectable, they may collectively constitute protectable trade dress.
Many elements of Clicks' claimed trade dress are deemed functional, such as lamps that illuminate pool tables and counters for drinks, meaning Clicks cannot monopolize these specific functional items or prevent Sixshooters from using them. However, Clicks can protect the unique combination and arrangement of design elements that set its pool halls apart. The court emphasizes that trade dress protection does not extend to necessary functional elements; for example, Fuddruckers cannot prevent other restaurants from using directors' chairs, white tile, or open bakeries but can protect against confusing uses of these elements as a whole.
The evaluation of trade dress must focus on the overall visual impression rather than dissecting individual elements. Courts have cautioned against analyzing trademarks in isolation, as the collective image may convey distinctiveness. The district court's assertion that Clicks' overall image is both functional and purely aesthetic is rejected, as it contradicts the definition of functionality, which is inherently utilitarian. The circuit has not endorsed the aesthetic functionality doctrine, maintaining that aesthetic features cannot be functional. Therefore, the distinction between functional and ornamental designs is vital, as aesthetic functionality is seen as contradictory.
The analysis of trade dress functionality distinguishes it from source identification, emphasizing that a feature's functional status does not inherently affect its role as a source identifier. The functionality assessment should remain separate from the evaluation of whether consumers associate the trade dress with a specific source. Trade dress can be both aesthetically appealing and functional; however, it cannot be classified solely as functional while also being purely aesthetic.
Several factors are utilized to determine functionality, including the design's utilitarian advantage, availability of alternative designs, advertising that highlights utilitarian benefits, and the simplicity of the manufacturing process. These factors do not easily transfer from product features to service contexts, such as restaurants. The Fifth Circuit's Two Pesos case illustrates that traditional functionality concerns may be less relevant in the distinctive trade dress context, allowing for trade dress protection even when individual features are functional, provided that the overall integration of elements does not hinder competition.
In the case of Clicks, the critical question is whether its trade dress's integration allows for alternative designs in the pool hall industry without causing confusion. Clicks successfully demonstrated its design's non-functional and arbitrary nature, along with the availability of alternatives, thereby overcoming a summary judgment challenge. The district court acknowledged various arbitrary aspects of Clicks' trade dress, including the arrangement of pool tables, color schemes, lighting, signage, and other decor elements. Although some elements may be functional in isolation, the overall aesthetic and design must be assessed collectively to determine functionality.
Clicks' alleged trade dress is characterized as purely aesthetic, contributing to an upscale bar image through specific design choices, such as wood darkness, item placement, and color patterns. The district court determined these choices are decorative rather than source-identifying, indicating nonfunctionality. Clicks presented sufficient evidence to suggest its pool hall trade dress is nonfunctional.
The analysis of secondary meaning, defined as the public's association of trade dress with a specific source, indicates that even non-inherently distinctive marks can acquire distinctiveness through secondary meaning, as established in relevant case law. A product feature that serves solely decorative purposes lacks trade dress protection.
Clicks provided substantial evidence for secondary meaning, particularly through a survey indicating that patrons associate its visual appearance exclusively with Clicks rather than other establishments. Conducted by Dr. Sandra Cogan, an expert with extensive trademark survey experience, the survey revealed that 80% of respondents identified the look and feel of Clicks as unique to the brand. While surveys may face scrutiny, they are admissible if conducted according to established principles, and their technical reliability affects weight rather than admissibility.
The district court criticized a survey related to Clicks' trade dress, deeming it flawed and of little value. The court noted that respondents often provided vague descriptions of Clicks' image, mentioning unprotectable features like cleanliness and service. However, some responses indicated a distinct association between Clicks and specific elements that could contribute to protectable trade dress, such as the layout and decor of the establishment. While the court acknowledged that a reasonable juror might conclude the survey failed to demonstrate secondary meaning, it emphasized that such determinations require conflicting evidence and should not be made at the summary judgment stage. The court's role is limited to identifying whether a genuine issue for trial exists, rather than weighing evidence or assessing truth. The court accepted the survey into evidence but highlighted its deficiencies, outlining a two-step process for evaluating surveys: first determining admissibility based on proper foundation and relevance, and then addressing methodological issues related to weight. The court clarified that admitting the survey raises material fact questions concerning secondary meaning that cannot be resolved solely by the court.
Evidence presented by Clicks indicates that Sixshooters intentionally copied Clicks' trade dress, which is significant for establishing secondary meaning in trademark law. Deliberate copying can support an inference of secondary meaning, as recognized in various legal precedents. A former Sixshooters employee testified that Daryl Chester aimed to make Sixshooters resemble Clicks because its appearance was successful. Further, Clicks employees reported that the Forbes brothers, owners of Sixshooters, visited Clicks to take measurements and examine specific features such as foosball areas, lighting, and countertops, suggesting a thorough effort to replicate Clicks' design. The district court, however, dismissed this evidence as slight and contested, which is problematic because it should not weigh evidence or resolve disputed facts at the summary judgment stage. Clicks provided sufficient evidence, including a consumer survey and corroborating witness testimonies, to raise a triable issue regarding secondary meaning. The likelihood of confusion, a factual question, is crucial in trademark cases and is typically determined by a jury. Courts generally avoid summary judgment in such matters due to their inherently factual nature.
Likelihood of confusion arises when consumers might mistakenly believe that products or services bearing similar marks originate from the same source. Key factors in determining this likelihood include actual confusion evidence, the defendant's intent in using the mark, the similarity of the marks and goods, the marketing channels, and the strength of the mark. Clicks provided substantial evidence of actual confusion, which is a strong indicator of likely future confusion. A survey indicated that 72% of respondents thought Sixshooters was owned or operated by Clicks, with an additional 13% believing there was some connection between the two. Among those expressing confusion, 28% had visited Sixshooters. Testimonies from patrons also revealed instances of actual confusion, with individuals recalling that they believed Sixshooters was the same as Clicks or operated under a different name. Clicks' evidence was deemed sufficient to challenge a summary judgment regarding confusion, as a jury could assess the credibility of this evidence, but a court must favor the non-moving party, Clicks, in summary judgment considerations.
Evidence indicated an intent to copy, which is a significant factor in assessing the likelihood of confusion in trade dress cases. The district court did not adequately weigh Clicks' evidence that employees of Sixshooters engaged in detailed inspections of Clicks, including measuring interior features. Under the summary judgment standard, all reasonable inferences must be drawn in favor of Clicks, suggesting that an inference of copying should be made. The district court acknowledged conflicting evidence about Sixshooters' intent to harm Clicks' reputation, leaving factual determination for trial rather than resolution at summary judgment.
Other factors related to likelihood of confusion, such as mark similarity and goods, were less impactful due to the strong evidence of intent to copy. Testimony from patrons indicated perceived similarities between Clicks and Sixshooters, which both operate as billiards halls, though Clicks did not present substantial evidence regarding marketing channels and conceded the weakness of its mark.
Regarding Clicks' claim that the district court's unaccompanied visit to the establishments violated its due process rights, it was clarified that a judge's examination of the actual trade dress is permissible and beneficial for understanding the case. Such inspections, unlike the presentation of evidence in court, do not require the presence of counsel, and judges are allowed to view evidence that cannot be physically brought into the courtroom.
The court's handling of evidence during a site visit raised significant concerns regarding due process and the integrity of the record. Unlike typical scenarios where both parties are aware of the evidence reviewed by the judge, the parties in this case were not informed about the timing of the judge's inspection, leaving them unaware of what was considered. This lack of transparency meant the judge could have been exposed to factual evidence outside the official record, which is improper unless the facts are undisputed or commonly known. The case was complicated further by allegations of spoliation regarding the evidence, as Clicks accused Sixshooters of altering its interior during litigation. The district court's reliance on its observations from the site visit without allowing parties to accompany the judge resulted in an incomplete record for appeal. The court found conflicting evidence regarding Clicks' consent to the visit but opted not to address potential due process violations. Ultimately, the ruling emphasized the reluctance of trial courts to grant summary judgments in trademark cases due to the factual nature of the issues. Clicks presented enough evidence to challenge the summary judgment, indicating genuine disputes over material facts, but the court did not conclude whether Clicks had proven nonfunctionality, secondary meaning, or likelihood of confusion. The case was reversed and remanded for further proceedings.
Fuddruckers addresses trade dress protection and functionality in relation to Taco Cabana's and Clicks Billiards' claims. The Supreme Court's decision in Cooper Industries pertains specifically to punitive damages, while in Two Pesos, functionality was assumed not to be a factor. The Fifth Circuit upheld a jury instruction emphasizing that functional features can be copied for competition, but trade dress may still be protectable if its overall combination is arbitrary, even if individual elements serve functional purposes. The court noted that if Taco Cabana's trade dress is essential for others to compete, it would be deemed functional and unprotectable. However, the correct standard for functionality is that protection is denied if it significantly limits competitive alternatives in the market. De jure functionality applies if a design is the best or among the few superior options available.
Testimony regarding consumer perception of Clicks Billiards indicated some belief in similarity with other establishments, but not necessarily confusion regarding the source of the trade dress. While the lack of actual confusion does not preclude a trademark infringement claim, perceived similarities may suggest a likelihood of confusion. The document also notes that the court and counsel had an untranscribed conference call regarding the case, and there is a dispute on appeal about whether Clicks consented to the court's visit.
