The Eastern District of Missouri granted a preliminary injunction enjoining the defendant from selling a dog toy in the shape of a beer bottle due to a likelihood-of-confusion with the plaintiff's distinctive trade dress. The court rejected plaintiff's dilution claims under federal and state law for failure to prove actual dilution. Relying heavily on plaintiff's survey evidence showing a likelihood-of-confusion rate of 30.3%, the court rejected the defendant's arguments that the dog toy was a parody.
Defendant VIP Products, LLC ("VIP") manufactures and sells high-quality dog toys. VIP designed a "Buttwiper" dog toy as a knock-off of plaintiff Anheuser-Busch, Inc.'s ("Anheuser-Busch") "Budweiser" beer bottle and label. In addition to copying the design elements of the distinctive "Budweiser" label, VIP's "Buttwiper" toy uses the word "Buttwiper" in place of "Budweiser," and depicts a dog scooting its bottom across the ground. The "Buttwiper" dog toy is packaged with "Cataroma," another beer-bottle-shaped squeeze toy and is available for purchase for $19.95 from VIP's website and at specialty pet stores. In addition to beer, Anheuser-Busch uses its "Budweiser" mark and label design on a variety of other products, including pet products such as food/water bowls, frisbees, balls, leashes, collars, and pet mats. Anheuser-Busch sought a preliminary injunction for trademark and trade dress infringement and dilution under the Lanham Act and Missouri state law.
The court considered Anheuser-Busch's claims for trademark and trade dress infringement together, but focused on the trade dress claim. Regarding the first two prongs of the test for trade dress infringement under Section 43(a) of the Lanham Act, the parties stipulated that the "Budweiser" label was distinctive and the court found it nonfunctional. VIP conceded that the only relevant likelihood-of-confusion factors were: (1) the degree of care reasonably expected of potential customers; and (2) evidence of actual confusion.
In support of its claims, Anheuser-Busch submitted a likelihood-of-confusion survey demonstrating a 30.3% net confusion rate. In accepting the survey, the court emphasized that one out of three people interviewed mistakenly believed that VIP's "Buttwiper" is manufactured and marketed by, or with the approval of, Anheuser-Busch or that there was some affiliation between "Buttwiper" and Anheuser-Busch.
In addressing the degree of care exercised by consumers, VIP argued that because its dog toys were more expensive than the typical dog toy, the survey results were invalid. The court disagreed, noting that some of Anheuser-Busch's dog-related items cost the same as VIP's dog toy and that a $10 dog toy is not a high-end product.
As for the second relevant factor, actual confusion, VIP challenged Anheuser-Busch's survey on several grounds. First, VIP attacked survey responses where the respondent said, "Budweiser, I guess," when asked what company or brand put out or approved the making of "Buttwiper," arguing that the "I guess" answers conflicted with the survey expert's contention that he instructed the respondents not to guess. The court accepted the expert's testimony that "I guess" responses were not uncommon in situations where people try "to articulate their thoughts in this particular fashion." Second, VIP contended that the survey was deficient because it did not take into account the "high-end" price of the "Buttwiper" toy. The court rejected this argument, noting that $10 per dog toy is not such a significant cost as to discredit an otherwise sound survey. Finally, the court rejected VIP's argument that the survey improperly excluded persons aged 18 to 21. The court found credible the survey expert's testimony that exclusion of this age group was inconsequential because it accounted for only 6% of the population and because VIP presented no evidence to the contrary and no survey evidence of its own.
In addition to the survey evidence, the court noted an additional instance of actual confusion, accepting Anheuser-Busch's evidence that searches for "Budweiser Beer" on Sears & Roebuck's website displayed hits for VIP's "Buttwiper" product.
In defense of the infringement claims, VIP argued that its "Buttwiper" product was a parody, citing Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC' 507 F.3d 252 (4th Cir. 2007), and Tommy Hilfiger Licensing, Inc. v. Nature Labs, LLC, 221 F. Supp. 2d 410 (S.D.N.Y. 2002), two cases in which makers of parody dog items successfully avoided a finding of likelihood-of-confusion. The court distinguished Louis Vuitton, noting the absence of evidence in that case that the plaintiff sold dog toys or dog-related products. The court also emphasized the importance of Anheuser-Busch's survey, finding this to be an additional factor distinguishing Louis Vuitton. In addition, unlike in Louis Vuitton where the plaintiff's bags were considerably more expensive than the defendant's chew toys, here, Anheuser-Busch offered products under the "Budweiser" label that were the same price as VIP's "Buttwiper" toy. The court distinguished Tommy Hilfiger on similar grounds, noting that the products did not compete, and that the plaintiff in Tommy Hilfiger did not submit any survey evidence. Instead, the court cited two cases from the Eighth Circuit, Anheuser-Busch, Inc. v. Balducci Publications, 28 F.3d 769 (8th Cir. 1994), and Mutual of Omaha Insurance Co. v. Novak, 836 F.2d 397 (8th Cir. 1987), emphasizing that in both of these cases, the defendant's parody argument did not defeat the plaintiff's survey evidence.
The court granted a preliminary injunction on Anheuser-Busch's claims for trademark/trade dress infringement and unfair competition, finding that the showing of a likelihood-of-confusion supported a strong presumption of irreparable harm and that the remaining preliminary injunction factors (i.e., balance of harm and the public interest) favored Anheuser-Busch.
The court refused, however, to grant Anheuser-Busch a preliminary injunction on its dilution claims under either the Lanham Act or Missouri state law. In rejecting the claim of dilution by blurring, the court emphasized that Anheuser-Busch's survey failed to prove that consumers would change their impression of "Budweiser" because of an association with "Buttwiper." Likewise, the court rejected the claim of dilution by tarnishment because Anheuser-Busch provided no evidence that "Buttwiper" had harmed the reputation of "Budweiser." In both instances, the court rejected the claims after very limited discussion, apparently convinced that because Anheuser-Busch provided no evidence of actual dilution, its claims for blurring and tarnishment failed under federal law. It appears that the court improperly applied the now-defunct requirement from Mosely v. V. Secret Catalogue, Inc., 537 U.S. 418 (2003), that a plaintiff demonstrate actual dilution, rather than a likelihood of dilution.
This decision demonstrates the persuasive value of survey evidence, particularly when courts may be less familiar with trademark law. Anheuser-Busch's survey evidence showing a 30.3% confusion rate carried the day throughout the court's opinion. Indeed, one of the factors the court emphasized in distinguishing two factually similar parody cases decided in favor of the defendants (i.e., Louis Vuitton and Tommy Hilfiger) was the failure of the plaintiffs in those cases to submit survey evidence.