USCA1 Opinion

United States Court of Appeals

United States Court of Appeals
For the First Circuit
For the First Circuit
____________________

No. 95-1975

TEC ENGINEERING CORP.,

Plaintiff, Appellee,

v.

BUDGET MOLDERS SUPPLY, INC. AND

PLASTIC PROCESS EQUIPMENT, INC.,

Defendants, Appellants.

____________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Nathaniel M. Gorton, U.S. District Judge]

___________________

____________________

Before

Cyr, Boudin and Stahl,

Circuit Judges.
______________

____________________

Louis M. Ciavarra
__________________

with whom

Barry A. Bachrach and

___________________

Bowditc
_______

Dewey were on brief for appellants.

_____
James C. Donnelly, Jr. with
________________________

whom

Charles B. Straus, III

________________________

Mirick, O'Connell, Demallie & Lougee were on brief for appellee.

____________________________________

____________________

April 30, 1996

____________________

STAHL, Circuit Judge.

STAHL, Circuit Judge.

Budget Molders Supply, Inc.,

_____________

and Plastic Process Equipment, Inc.,

appeal

from

preliminary

manufacturing, marketing or

conveyors

alleged

manufactured

("TEC").

of fact

and sold

Because

and

to

(collectively "Budget")

order

enjoining

distributing certain

be confusingly

by

them

similar

appellee,

from

industrial

to conveyors

TEC Engineering

Corp.

the district court failed to make findings

conclusions of

law sufficient

decision as required by Fed. R. Civ. P.

to support

its

52(a), we modify the

injunction and remand for further proceedings.

I.
I.
__

Background1
Background
__________

TEC manufactures

a series

of conveyors

under the

model

name "Ultraline,"

which it

markets primarily

plastics processing industry.

The

used

plastic products from molding

to transport lightweight

machines in

packaging.

which

they are

TEC sells

conveyors are

to the

formed

to other

machines

for

the Ultraline conveyors under the

TEC

name through independent sales representatives.

TEC authorizes an independent distributor,

Supply,

Inc.

generally

("IMS"),

to

advertise,

In addition,

Injection Molders

promote

and

sell

____________________

1.

Our recitation of the

court's

failure

injunction.
statement
facts.

To

to

make

provide

from what

any

findings

context, we

we perceive

The statement is

district court.

facts is hampered by the

in

draw

issuing
the

as essentially

not intended to

district
the

following
undisputed

be binding on the

-22

Ultraline conveyors under the IMS tradename through IMS's own

product

catalogues.

international

sales of

In

1994,

Ultraline

combined

domestic

conveyors exceeded

and

2,000

units, generating revenues of approximately $3 million.

Budget

has competed

manufacturers in the plastics

with TEC

and

other conveyor

processing industry market for

over five

years.

Budget markets its

through direct-catalogue sales.

decided

to

conveyors.

modify

the

About January 1995,

design

of

Consequently, Budget

redesigned conveyor

closely resembled

under the

conveyors exclusively

its

soon

primary

began

"Supraline"

TEC's Ultraline

conveyor.

Budget

line

of

to market

model name

Budget

that

labels

each Supraline conveyor with the name "Budget Molders Supply,

Inc."

in several

these

Budget labels

photograph of

different places

cannot be

a Supraline

on the

seen in

machine.

While

every advertisement

conveyor included in

each Supraline advertisement prominently features

the record,

the Budget

name (although not necessarily on the pictured conveyor), and

several include the statement "Made in the USA by Budget."

It

appears

largely

undisputed

conveyors, when

placed side by side,

in

Many of

appearance.

are

that

extent

by the two

machines,

however,

addition,

the

conveyors

sold by companies other than TEC or Budget.

record

some

includes several

-33

two

are strikingly similar

the similarities shared

to

the

functional.

In

advertisements

for

These

conveyors,

at

least

as

they

are

presented

in

the

advertisements, also appear somewhat similar to the Ultraline

and

Supraline

companies

conveyors.

other than

"line"

in the

model

Budget

notes

that,

Moreover,

TEC or

names of

in

plastics processing industry

several

Budget incorporate

the suffix

their respective

conveyors.

addition

"Supraline," other model names

apparently

to

"Ultraline"

and

for conveyors marketed to the

include "A-line,"

"Flex-line,"

"Slim-line," "Omni-line," and "Direct-line."

On

July

12, 1995,

TEC

brought

this action

for

trademark infringement under section 43(a) of the Lanham Act,

15

U.S.C.

1125(a).

In its complaint,

TEC alleges, inter

_____

alia,
____

that the trade dress

of its Ultraline

conveyors is a

well-established mark in the industry and that, by developing

and

marketing

its Supraline

exploit the goodwill

July 21, 1995,

request for

conveyors, Budget

associated with that

the district

court held a

trade dress.

hearing on

preliminary injunctive relief.

an Ultraline and a Supraline conveyor

intended to

On

TEC's

At the hearing,

were made available to

the district court for review.

At the

that "it

that,

close of

believed the products are

therefore, it

injunctive relief."

a ruling

the hearing, the

was

court indicated

confusingly similar" and

"inclined to

enter

some sort

of

Nonetheless, the court declined to enter

at that time and

urged the parties to

resolve the

-44

matter

themselves.

Eventually,

on August

1,

1995,

the

districtcourt enteredan orderenjoiningBudget from,inter alia,

_____ ____

manufacturing,

distributing,

promoting,

advertising, and/or selling:

1)
and

the horizontal,
variable

inclined

inclined
Budget

Supraline Conveyors; and

2)

any other conveyor which is

likely

to

mistake

cause confusion

in

the

minds of

or
the

public or to deceive purchasers

into

the

belief

that

the

defendant's

goods

are

the

plaintiff's

goods

or

are

affiliated with or sponsored by

the plaintiff.2

Budget now appeals from this order.

II.
II.
___

Discussion
Discussion
__________

In

district

court

established

success

ruling on

on

must

a preliminary

ask

that

(1) it

the

merits,

whether

has

(2)

injunction motion,

the

moving

party

substantial likelihood

there

exists,

absent

has

of

the

injunction, a

significant risk of irreparable

harm, (3) the

balance of hardships tilts in its favor, and (4) granting the

injunction will

See, e.g.,
___ ____

not negatively

Hypertherm, Inc.
________________

affect the

public interest.

v. Precision Prods., Inc., 832

_______________________

F.2d 697, 699 n.2 (1st Cir. 1987).

Though the district court

____________________

2.

The order

distributing .
which

also

enjoins Budget

. . any advertising

depict the

Supraline

"from

producing

and/or

or promotional materials

Conveyor or

any other

product

which is confusingly similar to the Ultraline Conveyor."

-55

enjoys

considerable

decision

to grant or

supported

law.

discretion in

deny a preliminary

by adequate

See Fed.
___

R.

applying this

findings of

Civ. P.

injunction must be

fact and

52(a);

test, its

conclusions of

Knapp Shoes, Inc.

__________________

v.

Sylvania Shoe Mfg. Corp., 15 F.3d 1222, 1228 (1st Cir. 1994).
________________________

The

assure

the

are intended

to

consideration to all essential relevant factors

and provides

for

court

52(a)

appropriate

adequate basis

district

Rule

gives

an

that

requirements of

meaningful appellate

review of

its

decision.

See
___

generally 9A
_________

Charles A. Wright

Miller, Federal Practice and Procedure

______________________________

ed. 1994).

of the

in subsequent proceedings.

of a

they do not bind the

court

See Aoude v. Mobil Oil Corp., 862

___ _____
_______________

F.2d 890, 895 (1st Cir. 1988).

findings

the context

the district court's findings

need not be overly detailed, and

Moreover, the absence of Rule

and conclusions

will

not be

fatal

in all

We may overlook the defect, if our own review of the

record substantially

the

2751, at 478-80 (2d

proceeding; in

preliminary injunction motion,

cases.

R.

The rule, however, is not intended to change the

preliminary nature

52(a)

& Arthur

basis

of

the

eliminates all

district

court's

reasonable doubt

decision.

See
___

as to

New
___

Hampshire Motor Transp. Assoc. v. Flynn, 751 F.2d 43, 47 (1st

______________________________
_____

Cir. 1984)

(citing Pullman-Standard v. Swint,

________________
_____

456 U.S. 273,

292 (1982)); Conservation Law Found., Inc. v. Busey, Nos. 92_____________________________

_____

-66

1335, 1464, 95-1019, 1020, 1047, 1048, slip op. at 48-49 (1st

Cir. April

Rule

52(a) is

evidence

of

2, 1996)

(failure to adhere

harmless

error where

to requirements

of

undisputed documentary

combined with district court's extensive discussion

other

findings

and

conclusions

adequately

clarifies

otherwise unexplained finding of irreparable harm).

In this

findings of

request

fact

for a

case, the district court

or conclusions

preliminary

of law

injunction.

made no explicit

in granting

In its

TEC's

three-page

written order, the court merely recited the traditional four-

prong preliminary injunction

test and summarily

TEC had met its burden in establishing it.

stated that

The transcript of

the relatively brief hearing on TEC's motion, provides little

further

total

insight into

extent

of the

the district

court's

oral

court's reasoning.

findings following

The

the

hearing is limited to its statement that "it believed the two

products were confusingly similar."

case, such

In the context of

this

minimal findings do not provide an adequate basis

for appellate review.

Moreover, our

own review of the

relatively sparse

record does not allow us to affirm the district court's order

in the absence of Rule 52(a) findings.

believe

that the

evidence

side.

pertinent issues

in the record does

Indeed,

in a case

Suffice it to say, we

are close

not compel a

such as this

-77

and that

the

ruling for either

one, where a

proper

evaluation

balancing

district

fact or

of

of

the

plaintiff's

number

court, the

of the district court's ruling.

engage in

the case to the

careful

factors

any subsidiary

law renders it

for this court to do anything

unable to

requires

of nondispositive

absence of

conclusions of

claim

by

the

findings of

virtually impossible

but speculate as to the

basis

Accordingly, because

we are

meaningful appellate review,

district court for further findings

we remand

of fact

and conclusions of law.

See Allied Mktg. Group, Inc. v. CDL

___ _________________________
___

Mktg., Inc., 878 F.2d 806, 813-14 (5th Cir. 1989) (remand for
___________

findings in trade dress infringement action); Inverness Corp.

_______________

v. Whitehall Labs., 819 F.2d 48, 50-51 (2d Cir. 1987) (same);
_______________

cf.
___

Knapp Shoes,
___________

15 F.3d at

1228-29 (decision

to dissolve

preliminary injunction in unfair competition case vacated for

lack of detailed findings).

On

remand, the

district court

will have to apply

the four-part preliminary injunction test

and

basis for its

set forth the

this case,

TEC alleges that Budget

the trade dress

section

ruling on each

of its

43(a) of the

In

has impermissibly copied

Ultraline conveyor

Lanham Act, 15

prong.

U.S.C.

in violation

of

1125(a).

To

establish

such a

violation,

TEC must

design is inherently distinctive

meaning, and (2) that there

purchasers

prove

(1) that

its

or has acquired a secondary

is a likelihood that prospective

of conveyors will be confused as to the source of

the Budget conveyor.

See
___

Two Pesos, Inc.

_______________

-88

v. Taco Cabana,
_____________

Inc., 505 U.S. 763, 769 (1992); Mana Prods., Inc. v. Columbia
____
_________________
________

Cosmetics Mfg., Inc.,

_____________________

65 F.3d

1063,

1068 (2d

Cir. 1995);

Duraco Prods., Inc. v. Joy Plastics Enters., Ltd.,

____________________
___________________________

1431, 1439 (3d

exists will

design.

See
___

40 F.3d

Cir. 1994).

Whether a violation

ultimately

also depend on

the functionality of

the copied

Two Pesos,
_________

TEC's likelihood

505 U.S.

at 769.3

of success, the district

In

addressing

court should make

subsidiary findings of fact and conclusions of law sufficient

to

explain its

evaluation of

the evidence with

respect to

each of these three factors.

Furthermore, we think

court

should also

give specific

that on remand

consideration

the district

to Budget's

claim that,

second

even if the injunction was

paragraph is

disapproved in

711

F.2d

Similar language

has been

John H. Harland Co. v. Clarke Checks, Inc.,

____________________
____________________

966, 984-85

McCarthy,

(1995).

overbroad.

rightly entered, the

(11th

Cir.

1983).

See
___

Trademarks and Unfair Competition

____________________________________

also 1
____

J.

8.01[1][c]

There is no compelling reason for us to resolve

the

____________________

3.

We find it unnecessary to decide at this juncture whether

functionality
affirmative

is an element
defense

to be

Fisher Stoves, Inc. v.

____________________
F.2d

193,

196

defendant bears

(1st

of the plaintiff's
raised

by the

claim or an

defendant.

See
___

All Nighter Stove Works, Inc., 626

_______________________________
Cir.

burden to

1980)

(assuming

arguendo
________

prove functionality); see

___

that
also 3
____

Louis Altman, Callman on Unfair Competition Trademarks and

_______________________________________________

Monopolies
__________

19.33

(4th

ed. 1994)

(discussing

split

in

circuits on whether functionality is an affirmative defense).

In either event,
court

should

we think it
consider

is a factor that

in

ruling

on

the

the district
preliminary

injunction.

-99

issue

at this time, and we express

this overbreadth claim.

III.
III.

no view on the merits of

____

Conclusion
Conclusion
__________

For the

the

district

conclusions of

court

for

further

law consistent

moment,

we leave

modify

the order

months

from the

further

foregoing reasons,

issuance

findings

with this

the preliminary

such that

we remand the

So ordered.
So ordered.
___________

fact

and

For

the

opinion.

injunction in

place, but

the injunction will

expire two

of this

court's mandate,

action by the district court.

F.2d at 814.

of

case to

absent

See Allied Mktg., 878

___ ____________

-1010