IP Law Daily, TRADEMARK—D. Minn.: Costco supplier did not infringe National Presto space heater trade dress, (Aug 22, 2022)

By Brian Craig, J.D.

The evidence at trial showed that the asserted trade dress was weak and no consumers have actually been confused.

Following a bench trial between competing manufacturers of parabolic space heaters, the federal district court in St. Paul, Minnesota has concluded that plaintiff National Presto Industries, Inc. (Presto) failed to prove trade dress infringement against defendant U.S. Merchants Financial Group, Inc. The court concluded that no likelihood of confusion exists where the trade dress in the Bundt cake grill design for the space heaters is weak and no consumers have actually been confused. The court also ruled against plaintiff Presto on its claims for tortious interference with prospective business relations and related Minnesota state law claims, but a jury trial on copyright infringement of user manuals remains (National Presto Industries, Inc. v. U.S. Merchants Financial Group, Inc., August 18, 2022, Nelson, S.).

Presto was a maker of parabolic heaters and the exclusive supplier of those heaters to Costco for over 30 years under the HeatDish mark. In early 2017, Costco approached U.S. Merchants Financial Group, Inc. (U.S. Merchants) about providing a replacement for the HeatDish. The replacement was eventually developed and sold as The Heat Machine. Presto alleged that Merchants deliberately copied protected elements of Presto’s design, including trade dress and marks, and also copied the user manual almost verbatim. Presto filed claims against U.S. Merchants for trade dress infringement, copyright infringement, and related state law claims under Minnesota law. In November 2021, the court concluded that a bench trial was needed for the trade dress infringement, tortious interference with prospective business relations, and related state tort claims and that a jury would decide the copyright infringement claim. After a six-day bench trial held in April 2022 on trade dress infringement, tortious interference with prospective business relations, and related state tort claims, the court issued its findings of fact and conclusions of law.

Trade dress. The court concluded that Presto failed to show prove the essential elements of trade dress infringement with its Bundt cake grille design. To succeed on a claim for unregistered trade dress infringement under the Lanham Act, a plaintiff must demonstrate, by a preponderance of the evidence, that the claimed trade dress is distinctive or has secondary meaning and is nonfunctional, and that its imitation would likely cause confusion for consumers as to the source of the product.

Here, the court found that Presto failed to establish distinctiveness with its Bundt cake grille design and did not provide sufficient evidence to support secondary meaning. Presto repeatedly change its design throughout the years and did not show continuous use. U.S. Merchants presented evidence of a similar grille in the market in December of 2021. Furthermore, Presto did not establish that HeatDish’s overall trade dress is nonfunctional where experts testified that each component was functional.

The court also determined that Presto did not establish any likelihood that a consumer will confuse the trade dress of The Heat Machine with the trade dress of the HeatDish. The evidence established that Presto’s trade dress is weak. Presto failed to present favorable reviews, consumer surveys, design awards, and other evidence that typically demonstrates the strength of a product’s trade dress. In addition, Presto could not show that its sales were linked to the trade dress. U.S. Merchants did not intend to confuse consumers and prominently displayed its own trademark. The court found no evidence to support actual consumer confusion. Because Presto failed to show the elements of distinctiveness and likelihood of confusion, the court ruled in favor of defendant U.S. Merchants on the trade dress claim.

Tortious interference. The court also ruled against Presto for the tortious interference with prospective business relations claim. Presto did not have a reasonable expectation of prospective business relations with Costco. Presto did not show that Minnesota state law for tortious interference with prospective business relations, unfair competition, deceptive trade practices, and unlawful trade practices.

Remaining state law claims. Finally, the court ruled against Presto its remaining claims under Minnesota state law for unfair competition, deceptive trade practices, and unlawful trade practices. Because the court found no likelihood of confusion with the trade dress claim, the court ruled against Presto on the claims for common law unfair competition, along with its unlawful and deceptive trade practices claims.

Copyright infringement. The court previously ruled that a jury trial is necessary on the copyright infringement claim on whether U.S. Merchants copied language in user manuals for the heaters. The court scheduled a status conference for the remaining copyright infringement claim.

The Case is No. 18-cv-03321.

Attorneys: Andrea L. Arndt (Dickinson Wright PLLC) for National Presto Industries, Inc. Christopher K. Larus (Robins Kaplan LLP) for U.S. Merchants Financial Group, Inc. d/b/a Greenmade.

Companies: National Presto Industries, Inc.; U.S. Merchants Financial Group, Inc.; Costco Wholesale Corporation

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