Gibson Guitar Corp. v. Paul Reed Smith Guitars, LP

MOORE, Circuit Judge.

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A. Facts

Certain basic facts are not in dispute. Gibson and PRS both manufacture high-quality guitars. Gibson has been in the business of manufacturing musical instruments for over 100 years. PRS founder Paul Reed Smith ("Smith") began manufacturing custom guitars in the mid-1970s and opened a guitar factory in 1985.

Gibson introduced at least one guitar model under the Les Paul name in 1952. Since that time, Gibson has offered a number of guitar models under the Les Paul name. At least some of these models were solid-body, single-cutaway electric guitars of the type at issue in this litigation. For a number of years during the 1960s, Gibson did not manufacture guitars in the Les Paul series. At some time thereafter, Gibson resumed manufacturing solid-body, single-cutaway electric guitars under the Les Paul name. . . .

PRS is a relatively recent entrant to the solid-body, single-cutaway electric-guitar market. Although PRS had previously manufactured a number of other guitars, it did not offer a single-cutaway guitar in its normal line until January 2000 at the earliest. In February 2000, PRS displayed models of the PRS Singlecut, a solid-body, single-cutaway electric guitar, at a music industry trade show. On March 27, 2000, Gibson sent a letter demanding that PRS cease and desist from producing and selling the Singlecut. . . .

PRS moved for summary judgment . . . and Gibson moved for partial summary judgment on the trademark-infringement claim. On January 22, 2004, the district court granted Gibson’s motion for partial summary judgment on its trademark-infringement claim and denied PRS’s motion for summary judgment in its entirety.

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II. ANALYSIS

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D. Trademark Infringement Under the Lanham Act

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The district court concluded that, with the exception of actual confusion (factor four), all factors on which it made a finding favored Gibson for summary judgment purposes. Because there was no evidence of point-of-sale confusion, factor four would have favored PRS. However, the district court nonetheless concluded that “given the striking similarity of the PRS Singlecut to Gibson’s Les Paul and the instant market recognition of Gibson’s Les Paul . . . initial confusion would occur in the marketplace between parties’ products as to the ‘Singlecut’ guitar’s source. This factor favors Gibson.” Having made this substitution of “initial confusion” for actual confusion at the point of sale, the district court went on to determine that summary judgment in favor of Gibson was appropriate on Gibson’s claim that the PRS Singlecut infringed the LP Trademark. We disagree with the district court’s conclusion that “initial confusion” (or, as discussed below, any of its variants) can apply in this case. Moreover, as Gibson has conceded that no purchaser would be confused at the point of sale, we conclude that there is no theory of confusion upon which Gibson can prevail. In other words, Gibson’s concession that there is no point-of-sale confusion (which goes to the fourth Frish factor, actual confusion) is dispositive of Gibson’s claim. Accordingly, it is not necessary for us to discuss the remaining seven Frisch factors.

1. Gibson’s Theories of Purchaser Confusion

Gibson argues that despite the lack of actual confusion at the point of sale, the district court’s decision can be affirmed under a theory of either initial-interest confusion (the theory relied on by the district court), post-sale confusion, or some combination of the two. Initial-interest confusion takes place when a manufacturer improperly uses a trademark to create initial customer interest in a product, even if the customer realizes, prior to purchase, that the product was not actually manufactured by the trademark-holder. . . . Post-sale confusion occurs when use of a trademark leads individuals (other than the purchaser) mistakenly to believe that a product was manufactured by the trademark-holder. … We conclude that neither initial-interest confusion, nor post-sale confusion, nor any combination of two, is applicable in this case.

a. Initial-Interest Confusion

The one case where we arguably have applied initial-interest confusion involved facts strikingly different than those involved in the present dispute. In PACCAR, we were faced with a dispute between Telescan, a company operating used-truck-locator web sites, and PACCAR, a truck manufacturer which also operated its own used-truck-locator website. In PACCAR, Telescan was using trademarks owned by PACCAR as part of the domain name of some of its used-truck-locator web sites. Noting that “an infringing domain name has the potential to misdirect consumers as they search for web sites associated with the owner of a trademark,” we suggested that initial-interest confusion analysis might appropriately be applied. However, our decision that PACCAR had established a likelihood of success on the merits on the likelihood-of-confusion issue did not rest on initial-interest confusion. Instead, we focused primarily on three other Frisch factors that we judged to be particularly important in an Internet-domain-name case. . . . As always, our concern was with “whether the defendant’s use of the disputed mark is likely to cause confusion among consumers regarding the origin of the goods offered by the parties.” Other circuits applying the initial-interest confusion doctrine have generally focused on that same issue: whether the consumer might be misled about the source of the relevant product or service.

Gibson essentially argues that the shape of the PRS guitar leads consumers standing on the far side of the room in a guitar store to believe they see Gibson guitars and walk over to examine what they soon realize are PRS guitars. . . . We decline to adopt such a broad reading of the initial-interest-confusion doctrine. Many, if not most, consumer products will tend to appear like their competitors at a sufficient distance. Where product shapes themselves are trademarked, such a theory would prevent competitors from producing even dissimilar products which might appear, from the far end of an aisle in a warehouse store, somewhat similar to a trademarked shape. Accordingly, we hold that initial-interest confusion cannot substitute for point-of-sale confusion on the facts of this case.

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With respect to Gibson’s trademark-infringement claim, we REVERSE the district court’s decision granting summary judgment in favor of Gibson, REVERSE the district court’s decision denying summary judgment in favor of PRS, and VACATE the permanent injunction issued by the district court. We DENY all other claims and motions AS MOOT, and REMAND the case to the district court with instructions that summary judgment be entered in favor of PRS on Gibson’s trademark-infringement claim.

KENNEDY, Circuit Judge, concurring in part and dissenting in part.

I agree that the district court erred in granting summary judgment in favor of Gibson and I also agree that Gibson cannot maintain its trademark infringement claim either on a theory of likelihood of confusion at the point-of-sale (for it has disclaimed that a consumer could be confused at the point-of-sale) or on a theory of post-sale confusion. However, because I believe that a product shape trademark holder should be able to present evidence to maintain a trademark infringement claim on the theory of initial-interest confusion, I dissent with respect to this issue.

First, this court has recognized initial-interest confusion as an infringement under the Lanham Act. . . . Second, a product shape can serve as a trademark, i.e. it can identify the source of the product. . . . Since a product shape can serve as a trademark, and since initial interest confusion is a recognized theory of relief generally for trademark infringements, I believe that a product shape trademark holder whose product shape does in fact identify the product’s source should not be precluded from presenting evidence that a competitor’s product shape causes consumers to be attracted to it because of its similarity to a trademark holder’s mark.

The majority’s reason for rejecting the application of initial interest confusion to product shapes is based upon the concern that since many product shapes within the same category will appear similar when viewed from a sufficient distance, if the initial-interest confusion doctrine were applied to product shapes, a product shape trademark holder could prevent competitors from producing even dissimilar products that appeared from a sufficient distance to be somewhat similar to a trademarked shape. This concern, however, is misplaced. Evidence that a competitor’s product shape is similar to a trademark holder’s product shape when viewed from afar is irrelevant unless the product shape trademark holder maintains that its product shape identifies its source when viewed from afar. For if a product shape trademark holder does not assert that its product shape identifies its source when viewed from a certain distance, then any alleged confusion between the trademark holder’s product shape and a competitor’s product shape would not support the trademark holder’s claim for infringement. If a product shape trademark holder does assert that its product shape serves to identify the product’s source when viewed from a distance where many competitor products appear substantially the same, then this will be evidence that the trademark holder’s product shape does not identify its source. If most product shapes in the same product category have similar shapes, a product shape trademark holder will have a difficult time establishing that its trademark identifies the source of its product when viewed from afar, for the further one is away from a product, the more similar products in the same category will look to each other and, thus, the less likely a product shape will identify the source of the product (i.e. serve as a trademark) from that vantage point. In other words, a product shape trademark holder will not be able to present probative evidence of initial interest confusion unless it first shows that its product shape identifies its source when viewed from the vantage point where the confusion is alleged to have occurred.

Thus, this preliminary question (whether a product shape identifies its source when viewed from the point where the confusion is alleged to have occurred), when in dispute, as it is here, must be addressed before determining if there is an issue of fact as to whether a competitor’s product shape causes initial interest confusion due to its similarity to a trademark holder’s product shape. For if the product shape does not identify its source, then, logically, there can be no confusion as to the source of the product due to the product’s shape, since, in such a case, a consumer would not associate the product’s shape with its source.

It is true, of course, that a product shape trademark holder could argue that a competitor’s product causes confusion as to its source when viewed from varying perspectives. Assuming the defendant argues that the trademark holder’s product shape does not identify its source when viewed from any of those perspectives, the court will need to address this argument. In this case, the only relevant allegation of initial-interest confusion is from Gibson’s expert, who claimed that upon entering Gruhn’s Guitar store in Nashville, he looked at what he thought was a wall of Gibson Les Paul guitars to discover, upon closer inspection, that the guitars were actually PRS Singlecuts. Since PRS argues that Gibson’s guitar shape does not identify its source, Gibson must establish that its shape does identify its source from the perspective where the alleged confusion occurred. Ultimately, Gibson may not be able to succeed in establishing this point, but PRS has not met its burden to be entitled to summary judgment.

Here, PRS argues that, as there are only a few general shapes in which guitars are made, and since there are numerous single-cutaway style guitars in the market, a consumer would not, and, indeed, could not, identify the source of a guitar on the basis of its shape. Although PRS would likely prevail on this issue, I cannot say, in light of the record as developed, that it has met its burden establishing that there is no genuine issue of material fact as to whether the shape of Gibson’s guitar identifies its source.

Since the district court incorrectly analyzed the issue of whether Gibson’s trademark served to identify its source from the distance where the confusion was alleged to have occurred, I would remand for consideration of this issue. If it were found that the shape of Gibson’s guitar does serve to identify its source from the distance where the confusion is alleged to have occurred, then I believe that Gibson should be entitled, just as any other trademark holder would be, to present evidence that a competitor’s use of a similar mark causes confusion as to the source of the competitor’s product. Thus, I respectfully dissent.