Bern Unlimited, Inc. v. Burton Corp., No. 11–12278, 2015 WL
1442456 (D. Mass. Mar. 31, 2015)
Bern, which makes sports helmets, sued six competitors for trade dress infringement of its allegedly unique design, with a small visor and rounded shape. Defendants counterclaimed for false advertising of the Bern helmet as patented, when it knew the patent was invalid. The court here grants summary judgment to defendants based on lack of secondary meaning, and also summary judgment against defendants on the counterclaims.
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| Bern Baker helmet |
Bern alleged that the “rounded profile of the helmet, which
is designed to follow the shape of the wearer’s head,” and “the distinctive
visor” were the elements of its trade dress.
Bern allegedly launched this line with the goal of creating a
distinctive trade dress, and it was the first line with a rounded profile and
distinctive visor. “In January 2006,
Seth Wescott of the United States won a gold medal in snowboarding at the
Winter Olympics wearing a Bern Baker helmet. The day after Wescott’s
performance, the number of visitors to Bern’s website was approximately 9,800,
as compared to an average of 120 per day before.”
From 2006-2010, “Bern experienced compounded annual growth
of approximately 45 [percent] in total revenues from all products, and
approximately 46 [percent] compounded annual growth in revenues from brim-style
helmets.” Bern’s sales-unit volume grew at a rate of 38% annually for
brim-style helmets. Between its launch and March 2014, Bern sold over 700,000 brim-style
helmets in 47 countries, for total revenues of $22 million. It spent more than
$1 million on advertising, marketing, and promotion, including sponsoring at
least 50 pro athletes who chose the helmets because of their distinctive
style. Articles published in mainstream
and sports-specific outlets have “profiled Bern’s helmets” (no pun intended?). Publicity also came from celebrities
photographed using Bern helmets, use of the helmets in other companies’
promotional materials, and the helmets’ appearance in the film Premium Rush.
Bern submitted five customer declarations—three from
retailers and two from consumers—in support of its claim that customers have come to associate the
distinctive appearance of the brimmed helmets with Bern. It didn’t conduct a consumer survey. Bern also argued that evidence of copying by
the defendants showed secondary meaning; the defendants’ internal documents
generally indicated that they looked at Bern’s helmets (and others in the
market) when designing their own, and wanted to compete in the same market
niche as Bern.
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| Berton Mutiny helmet |
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| BRG Giro Surface helmet |
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| K2 Rant helmet |
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| Pro-tec Scandal helmet |
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| Salomon Patrol helmet |
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| Smith Gage helmet |
Defendants commissioned Dr. Itamar Simonson to conduct a secondary
meaning survey of prospective helmet purchasers in shopping malls. The survey, conducted in 2014, showed
participants either the Bern Baker helmet or the “control” Bern Brentwood
helmet. In the test cell, 152 respondents were shown the Bern Baker helment,
none of whom identified Bern as the source.
Defendants first moved to strike the five declarations as
untimely. The court agreed. Bern knew that defendants had asserted a
defense of lack of distinctiveness early on, and Bern always had the burden of
showing secondary meaning because its claims were based on product design:
The witnesses in question are not
percipient witnesses in the normal sense—there is no discrete event or activity
that they perceived—nor are they expert witnesses. In theory, at least, anyone
who ever saw or used a Bern helmet was a potential witness. But neither are
those witnesses insignificant. Bern has had the burden of proving secondary
meaning from the outset, and it has chosen not to rely on survey evidence. That
means that Bern elected to rely on the evidence of testifying witnesses. It
selected those five witnesses, and those witnesses alone, to give sworn
statements in an effort to defeat summary judgment.
Nor did Bern show that admitting their testimony would be
harmless. Bern submitted the declarations more than three months after the
close of discovery; Bern chose not to use a survey and should have known that
witnesses would be required; the weight of the evidence was limited, since the
three retailers’ views weren’t probative of secondary meaning; and “evidence of
two seemingly random (or, perhaps, not random) customers, without more, is very
weak direct evidence.” Defendants’
ability to respond was limited at best.
“Among other things, defendants have lost the opportunity to depose the
witnesses, and to explore exactly how it was Bern came to select them as
witnesses, and the factual basis of their statements.”
Bern moved to exclude the secondary meaning survey. Secondary meaning needs to be shown at the
time of infringement, and survey evidence is the best evidence of same. Bern
said the survey was irrelevant because it was taken in 2014. The court still admitted it: “Under Bern’s
theory, a company would have to undertake a preemptive survey prior to the time
they allegedly first infringe, or the survey evidence would not be admissible.
Such a requirement would be absurd, and would make it nearly impossible for defendants
ever to present the ‘preferred’ form of evidence.” So courts routinely admit evidence like this,
using the timing to determine its strength.
Onto the secondary meaning issue itself: “As a general
matter, trade-dress claims are difficult to establish.” Copying isn’t enough. Without secondary meaning, it doesn’t matter
that competitors’ designs “were clearly efforts to mimic or follow the style
set by the plaintiff.”
Bern lacked direct evidence of secondary meaning, since it
had no survey evidence or admissible
evidence from individual consumers. Even
if the court considered the excluded evidence, retailers’ views on
distinctiveness weren’t probative of secondary meaning, and two consumers
didn’t show that a significant portion of the consuming public connected the
design exclusively with Bern. “The size of the helmet market is unclear from
the record, but surely two individuals represent only a tiny fraction of that
market, and there is nothing in the record to suggest that those two are in
some way representative of the market as a whole.”
Bern also offered statements by two pro athletes who both
declared: “I have chosen to wear Bern’s helmets because of their distinctive
style, which is created by the profile of the helmet and the narrow visor or
brim.” The declarations indicated a belief that the helmets had a distinctive
style, but said nothing about connecting that style to the source of the
product, which wasn’t enough under Wal-Mart. Plus, these declarations were dated 2012, and
Bern needed to prove secondary meaning before defendants’ sales of similar
products began—in 2007. And again,
statements from two pro athletes didn’t show secondary meaning in a significant
portion of the consuming public. (Though
some defendants didn’t start selling similar products until later, Bern lost
its exclusive hold on the market in 2007, and anyway Bern didn’t show secondary
meaning in any potentially relevant year.)
By contrast, Simonson’s 2014 survey, though not decisive, was probative
of lack of secondary meaning.
As for circumstantial evidence, this could include [1] the
length and manner of the use of the trade dress, [2] the nature and extent of
advertising and promotion of the trade dress, [3] the efforts made to promote a
conscious connection by the public between the trade dress and the product’s
source, [4] the product’s ‘established place in the market’ and [5] proof of
intentional copying.
Length and manner of exclusive use: Bern’s sales began in
December 2005, and by January 2007, defendants K2 and Burton were selling
similar helmets. This was barely more
than a year, and didn’t favor Bern.
Advertising, marketing, and product success: Bern’s claimed
$1 million on promotion described spending 2005-2012, but it spent $10,397 in
2005, $24,532 in 2006,and $96,369 in
2007—only 12% percent of that amount, about $131,000, had been spent before to
the introduction of the first allegedly infringing products, and that doesn’t
even show how much of Bern’s spending promoted the helmets embodying the
claimed trade dress, or how much occurred after competition began in January
2007.
Bern argued that its ads focused on the distinctive profile
of its helmets. Dates were missing from
many submitted ads, though the ads did include pictures of the helmet. Still,
relevant advertising “specifically directs a consumer’s attention to a particular
aspect of the product.... Merely ‘featuring’ the relevant aspect of the product
in advertising is no more probative of secondary meaning than are strong
sales.” The ads didn’t call attention to the short brim or the rounded shape. Bern’s evidence that it sponsored pro athletes
also didn’t indicate that this happened before 2007.
As for market success, sales alone aren’t as probative of
secondary meaning in a product design case, since market success may be
attributable to the desirable product configuration rather than
distinctiveness. Less than 82,000 brim-style helmets, grossing less than $1.4
million, had been sold by the end of 2007. “[A]bsent evidence connecting it to
the desirability of the alleged Bern trade dress, that evidence is not particularly
probative of secondary meaning. Also, due to the short time of exclusivity,
those numbers do not prove that the design achieved secondary meaning by the
time of the first alleged infringement.”
The evidence of unsolicited publicity was also mostly after
January 2007, and only one article was from before that; this article merely
mentioned the brim “in passing.” The
majority of articles Bern submitted focused on functional aspects or other
features, and didn’t mention the allegedly distinctive features. Comments from on-line reviewers and retailers
concerning Bern’s unique style and efforts of competitors to copy it were all
dated 2012 or later.
Evidence of intentional copying: Intent plays a “particularly minor role” in
product design cases, because copying may well be carried out to exploit a
particularly desirable feature. Any
negative inference is even weaker when the copier takes conspicuous steps, such
as in packaging or word marks, to distinguish its products. The relevant intent
is intent to pass off, not intent to copy.
The evidence of intentional copying here showed “nothing more than
typical—and legitimate—marketplace behavior. It is perfectly appropriate for
companies to respond to competitive forces in the marketplace, including any sudden
shifts in fashion triggered by a competitor’s introduction of a successful new
product.” The court pointed out that “Bern itself analyzed a variety of sources
when designing the Baker helmet, including other helmets in the market.”
There was no evidence of intentional copying, as opposed to
consideration of Bern’s helmets as part of defendants’ design efforts. On this record, defendants always included
their own marks or names on their helmets. Thus, the copying evidence was not
probative of secondary meaning.
Weighing the factors, Bern failed to show sufficient
evidence to allow a jury to conclude it had secondary meaning in 2007. The
court therefore didn’t have to address functionality, likely confusion, or any
issue on Bern’s federal dilution (!) claim.
Though the Massachusetts anti-dilution statute was less stringent than
the federal statute, it still required distinctiveness, so that claim failed
too.
As for the counterclaims, Jonathan Baker designed the Baker
helmet, and Bern began publicly soliciting sales for the Baker helmet in Sept.
2005, with first sales in December of that year. A design patent for the Baker
helmet issued on July 8, 2008, from an application that was filed on January
19, 2007. Because of the then-applicable on-sale bar, the court said with some
understatement, “the patent was not likely to withstand a legal
challenge.” Bern was aware of this
problem, according to internal correspondence, including an email from a sales
rep/investor who asked whether there was “any way to ‘modify’ our shipping
records for the Baker to earn the patent?” Jonathan Baker assigned the patent
to Bern in April 2014, purporting to be retroactive to 2007 (Bern contended
there was a previous assignment ,but anyway Baker had always understood that IP
rights in his design belonged to Bern). Bern then filed a statutory disclaimer
of the patent, which was accepted in May.
Bern referred to the patent in marketing materials and on
its website and at trade shows many times.
Catalogs included logos that stated “the original” above text that
stated “visor shell patent # US D572,865S,” and one also included an actual
excerpt from the patent. There were other claims, such as that Bern’s “patented
hard visor shell shape has been imitated but never replicated. Almost every
brand in the market now has a brim, but your customer wants the original.”
Trade-show banners also included “the original” with the patent number below
it. Bern’s strategy, as indicated by
internal documents, included allegations that competitors have “knocked off”
Bern and that retailers should avoid stocking knock-off brands.
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| Bern catalog using image from design patent |
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| Bern catalog using logo with design patent number |
So, though the design was patented, Bern learned that the
patent was “probably” invalid. First, were the relevant claims made in
advertising or promotion? The documents
on marketing strategy were mostly internal, and there was no evidence that the
ones that weren’t were targeted beyond certain individuals.
Were the actual ads literally false? They didn’t state
outright that Bern owned the patent, but cited the patent number and used phrases
such as “our patented hard visor shell shape,” “our patented visor shape,” “our
patented integrated cap style visor and hard shell visor,” “the original visor
patent,” or “the original visor shell patent.” One ad showed the actual patent,
but indicated that the inventor was Jonathan Baker. There was an issue of actual, technical
ownership, but Bern was undisputedly authorized to make products under the
patent. “The word ‘our,’ in reference to property, can refer to ownership (for
example, a homeowner referring to the property as ‘our house’) or a legal right
to use it (for example, a renter referring to an apartment as ‘our apartment’).” Thus, the statements weren’t literally false.
However, if there was intentional deception, defendants
still wouldn’t need evidence of actual consumer deception. Defendants argued that the deception was
intentional because Bern knew its patent was invalid by February 2011 but
continued touting it, e.g., the sales rep/investor’s statement that “I have had
an uneasy feeling since Dennis explained to me that we did not file a patent in
time for the Visor shape that we invented. Not sure how this happened but it is
probably Bern’s biggest mistake to date.” This evidence was enough to create a genuine
dispute of material fact on intentional deception leading to a presumption of
consumer deception.
The court commented that a patent is presumed valid, and the
design patent here was never formally challenged. “Nonetheless, it seems clear that a claim of
intentional deception could be made out based on the unenforceability of the
patent, under the unusual factual circumstances presented here.”
But what of materiality? That was independent of
intent. (Though prominence in
advertising might suggest that Bern believed that consumers would care.) Defendants argued that the statement related
to an “inherent quality or characteristic” of the product, making it material. “Inherent” here means part of the “essential”
character of a product. Defendants had
no survey or other direct evidence of material, but Bern’s Rule 30(b)(6)
deposition witness stated that “[t]he intention was to help educate retailers
about our patent and to try to get them to place their buy for visor lids with
us and not our competitors.” That was
sufficient to “create the inference that Bern at least hoped and indeed
intended that its advertising of the patent would affect purchasing decisions,”
creating a genuine fact issue on materiality.
Then, injury. In
literal falsity cases, “only a slight likelihood of injury need be shown to
warrant injunctive relief.” But misleadingness requires more. Defendants had no evidence of actual or
likely injury: no evidence of lost sales or consumer confusion, or harm to
goodwill or reputation. A presumption of
harm from direct competition wasn’t enough; that made sense in a two-competitor
market, but not here. Even though defendants
alleged that they comprised all the other major helmet manufacturers; defendants
didn’t provide evidence that this was so and Bern disputed the issue. Nor was
Bern’s fraudulent conduct enough to bypass the rule of actual harm. Such a presumption “should be reserved for
extraordinary cases,” and there wasn’t enough evidence that this was such a
case.
With “no evidence of literal falsity, minimal evidence of
deception, minimal evidence of materiality, and no evidence of causation and
injury,” summary judgment for Bern was appropriate. This disposed of coordinate state-law claims
as well.
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