Ferrari S.P.A. Esercizio Fabriche Automobili E Corse v. Carl Roberts, D/B/A Roberts Motor Company

U.S. Court of Appeals9/5/1991
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Full Opinion

944 F.2d 1235

60 USLW 2188, 20 U.S.P.Q.2d 1001

Ferrari S.P.A. ESERCIZIO Fabriche Automobili E Corse,
Plaintiff-Appellee,
v.
Carl ROBERTS, d/b/a Roberts Motor Company, Defendant-Appellant.

No. 90-5734.

United States Court of Appeals,
Sixth Circuit.

Argued March 25, 1991.
Decided Sept. 5, 1991.

Ed E. Williams, III, Robert D. Van de Vuurst, Baker, Worthington, Crossley, Stansberry & Woolf, Johnson City, Tenn., Albert Robin, Jonathan I. Blackman (argued), Lawrence B. Friedman (briefed), Cleary, Gottlieb, Steen & Hamilton, New York City, for plaintiff-appellee.

W.F. Shumate (argued and briefed). Bobby Bishop, Jr., Steven K. Bowling, Richard S. Wirtz, Knoxville, Tenn., for defendant-appellant.

Before KENNEDY and RYAN, Circuit Judges, and FEIKENS, Senior District Judge.*

RYAN, Circuit Judge.

1

This is a trademark infringement action brought pursuant to the Lanham Act, 15 U.S.C. § 1051, et seq. The principal issue is whether the district court correctly concluded that plaintiff Ferrari enjoyed unregistered trademark protection in the exterior shape and appearance of two of its automobiles and, if so, whether defendant Roberts' replicas of Ferrari's designs infringed that protection, in violation of section 43(a) of the Lanham Act. More narrowly focused, the issues are:

2

--Whether Ferrari's automobile designs have acquired secondary meaning;

3

--Whether there is a likelihood of confusion between Ferrari's cars and Roberts' replicas;

4

--Whether the appropriated features of Ferrari's designs are nonfunctional; and

5

--Whether the injunction granted by the district court is excessively broad.

6

We must also decide whether the district court, 739 F.Supp. 1138, properly rejected Roberts' request for a jury trial.

7

We hold that the district court properly decided all of the issues and, therefore, we shall affirm.

I.

The Facts

8

Ferrari is the world famous designer and manufacturer of racing automobiles and upscale sports cars. Between 1969 and 1973, Ferrari produced the 365 GTB/4 Daytona. Because Ferrari intentionally limits production of its cars in order to create an image of exclusivity, only 1400 Daytonas were built; of these, only 100 were originally built as Spyders, soft-top convertibles. Daytona Spyders currently sell for one to two million dollars. Although Ferrari no longer makes Daytona Spyders, they have continuously produced mechanical parts and body panels, and provided repair service for the cars.

9

Ferrari began producing a car called the Testarossa in 1984. To date, Ferrari has produced approximately 5000 Testarossas. Production of these cars is also intentionally limited to preserve exclusivity: the entire anticipated production is sold out for the next several years and the waiting period to purchase a Testarossa is approximately five years. A new Testarossa sells for approximately $230,000.

10

Roberts is engaged in a number of business ventures related to the automobile industry. One enterprise is the manufacture of fiberglass kits that replicate the exterior features of Ferrari's Daytona Spyder and Testarossa automobiles. Roberts' copies are called the Miami Spyder and the Miami Coupe, respectively. The kit is a one-piece body shell molded from reinforced fiberglass. It is usually bolted onto the undercarriage of another automobile such as a Chevrolet Corvette or a Pontiac Fiero, called the donor car. Roberts marketed the Miami Spyder primarily through advertising in kit-car magazines. Most of the replicas were sold as kits for about $8,500, although a fully accessorized "turnkey" version was available for about $50,000.

11

At the time of trial, Roberts had not yet completed a kit-car version of the Miami Coupe, the replica of Ferrari's Testarossa, although he already has two orders for them. He originally built the Miami Coupe for the producers of the television program "Miami Vice" to be used as a stunt car in place of the more expensive Ferrari Testarossa.

12

The district court found, and it is not disputed, that Ferrari's automobiles and Roberts' replicas are virtually identical in appearance.

13

Ferrari brought suit against Roberts in March 1988 alleging trademark infringement, in violation of section 43(a) of the Lanham Act, and obtained a preliminary injunction enjoining Roberts from manufacturing the replica cars. The injunction was later amended to permit Roberts to recommence production of the two models.

14

Five months later, Roberts filed a voluntary petition in bankruptcy. Despite the Chapter 11 proceedings, the bankruptcy court, in a carefully limited order, lifted the automatic stay and permitted Ferrari to continue to prosecute this action. Prior to trial, the district court denied Roberts' request for a jury, and the case was tried to the court resulting in a verdict for Ferrari and a permanent injunction enjoining Roberts from producing the Miami Spyder and the Miami Coupe.

II.

15

Section 43(a) of the Lanham Act creates a civil cause of action for trademark infringement. In relevant part, section 43(a) provides:

16

Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which--

17

(1) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person....

18

....

19

shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.

20

The protection against infringement provided by section 43(a) is not limited to "goods, services or commercial activities" protected by registered trademarks. It extends as well, in certain circumstances, to the unregistered "trade dress" of an article. "Trade dress" refers to "the image and overall appearance of a product." Allied Mktg. Group, Inc. v. CDL Mktg., Inc., 878 F.2d 806, 812 (5th Cir.1989). It embodies "that arrangement of identifying characteristics or decorations connected with a product, whether by packaging or otherwise, intended to make the source of the product distinguishable from another and to promote its sale." Mr. Gasket Co. v. Travis, 35 Ohio App.2d 65, 72 n. 13, 299 N.E.2d 906, 912 n. 13 (1973).

21

Ferrari's Lanham Act claim in this case is a "trade dress" claim. Ferrari charges, and the district court found, that the unique and distinctive exterior shape and design of the Daytona Spyder and the Testarossa are protected trade dress which Roberts has infringed by copying them and marketing his replicas.

22

Roberts asserts that there has been no infringement under section 43(a) for a number of reasons: (1) the design of Ferrari's vehicles are protected only under design patent law, see 35 U.S.C. § 171, and not the Lanham Act; (2) there is no actionable likelihood of confusion between Ferrari's vehicles and Roberts' replicas at the point of sale; and (3) the "aesthetic functionality doctrine" precludes recovery.

23

We shall take up each argument in turn.

III.

24

To prove a violation of section 43(a), Ferrari's burden is to show, by a preponderance of the evidence:

25

1) that the trade dress of Ferrari's vehicles has acquired a "secondary meaning,"

26

2) that there is a likelihood of confusion based on the similarity of the exterior shape and design of Ferrari's vehicles and Roberts' replicas, and

27

3) that the appropriated features of Ferrari's trade dress are primarily nonfunctional.

28

See Kwik-Site Corp. v. Clear View Mfg. Co., Inc., 758 F.2d 167, 178 (6th Cir.1985).

A.

Secondary Meaning

29

[4, 5] To acquire a secondary meaning in the minds of the buying public, an article of merchandise when shown to a prospective customer must prompt the affirmation, "That is the article I want because I know its source," and not the negative inquiry as to "Who makes that article?" In other words, the article must proclaim its identification with its source, and not simply stimulate inquiry about it.

30

West Point Mfg. Co. v. Detroit Stamping Co., 222 F.2d 581, 595 (6th Cir.) (citation omitted), cert. denied, 350 U.S. 840, 76 S.Ct. 80, 100 L.Ed. 749 (1955). Arguably, secondary meaning in this case can be presumed from Roberts' admissions that he intentionally copied Ferrari's designs. Roberts told Vivian Bumgardner, an investigator who recorded her conversations with Roberts, that "we put this whole body right on it and it looks just like a real car, I mean they can't tell by looking.... We build and sell the same car, reproduce it." The intent to copy was also shown by Roberts' use of the distinctive Ferrari prancing horse logo on the front parking lights of the Daytona Spyder and in advertising brochures. The original Miami Coupe brochure even copied the Ferrari name by referring to the Roberts' car as the "Miami Testarossa." The evidence of intentional copying shows the strong secondary meaning of the Ferrari designs because "[t]here is no logical reason for the precise copying save an attempt to realize upon a secondary meaning that is in existence." Audio Fidelity, Inc. v. High Fidelity Recordings, Inc., 283 F.2d 551, 558 (9th Cir.1960).

31

Ferrari, however, need not rely on a presumption of secondary meaning because the evidence at trial showed that the exterior design of Ferrari's vehicles enjoyed strong secondary meaning. Lawrence Crane, Art Director of Automobile magazine, testified that the shape of a Ferrari "says Ferrari to the general populous (sic)" and that "because it's so instantly recognizable ... we've used even just portions of Ferraris, the Testarossa, for instance, and people recognize it, and our sales are changed." William Moore, Editor of Kit Car Illustrated, and a witness for Roberts, conceded that car replica manufacturers frequently copy Ferraris because the "special image" associated with Ferrari creates a market for cars which look like Ferraris. The testimony of Crane and Moore was supported by survey data which indicated that of survey respondents shown photographs of Ferrari's cars without identifying badges, 73% properly identified a photograph of Daytona Spyder as manufactured by Ferrari and 82% identified the Testarossa as a Ferrari product. Such survey evidence, combined with intentional copying and the widespread publicity surrounding Ferraris, convinced the court in a separate action brought by Ferrari against Roberts' former partner to enjoin him from producing replicas of the Daytona Spyder identical to those produced by Roberts, that the Ferrari vehicle design has a secondary meaning:

32

In light of defendants' close intentional copying, their failure to introduce any evidence to show that such copying was for any purpose but to associate themselves with the reputation and marketability of the Ferrari DAYTONA SPYDER, the large amount of recognition of said design with Ferrari shown in continuous magazine articles and books about the DAYTONA SPYDER long after the cessation of its manufacture, the showings of the Ferrari DAYTONA SPYDER at vintage car shows, the highly publicized sales of said car by Ferrari customers, and the percentages of recognition in both the plaintiff's and the defendants' surveys, ... the court finds the evidence thorough and convincing that the Ferrari DAYTONA SPYDER design has achieved a strong secondary meaning.

33

Ferrari S.P.A. v. McBurnie, 11 U.S.P.Q.2d 1843, 1846-47 (S.D.Cal.1989).

34

Ferrari's vehicles would not acquire secondary meaning merely because they are unique designs or because they are aesthetically beautiful. The design must be one that is instantly identified in the mind of the informed viewer as a Ferrari design. The district court found, and we agree, that the unique exterior design and shape of the Ferrari vehicles are their "mark" or "trade dress" which distinguish the vehicles' exterior shapes not simply as distinctively attractive designs, but as Ferrari creations.

35

We also agree with the district court that Roberts' admission that he intentionally copied Ferrari's design, the survey evidence introduced by Ferrari, and the testimony of Crane and Moore amount to abundant evidence that the exterior design features of the Ferrari vehicles are "trade dress" which have acquired secondary meaning.

36

Roberts argues strongly that section 43(a) provides no trademark infringement protection for the exterior design of a product because "automobile designs are to be protected from copying only pursuant to the design patent statute," and Ferrari, during the period relevant to this case, had not protected the Daytona Spyder or the Testarossa with a design patent. We disagree.

37

Courts have consistently rejected Roberts' argument that the availability of design patent protection precludes applicability of the Lanham Act for products whose trade dress have acquired strong secondary meaning. Actionable harm results from either infringing a design patent or copying a product with secondary meaning. Mastercrafters Clock & Radio Co. v. Vacheron & Constantin-Le Coultre Watches, Inc., 221 F.2d 464, 466 (2d Cir.), cert. denied, 350 U.S. 832, 76 S.Ct. 67, 100 L.Ed. 743 (1955). See also Audio Fidelity, 283 F.2d at 555. As the court explained in Rolls-Royce Motors, Ltd. v. A & A Fiberglass, Inc., 428 F.Supp. 689, 692-93 (N.D.Ga.1977):

38

There is no doubt that the plaintiffs' Classic Grill and Flying Lady are attractive objects. As such, they may be deserving of copyright or design patent protection. Their entitlement to trademark recognition, however, depends not on their eye appeal but on their characteristic of identifying the manufacturer of Rolls-Royce motor cars.

39

Likewise, the distinctive appearance of a Ferrari's exterior shape, as evidenced at trial by surveys and the testimony of car magazine editors and others, entitles Ferrari to Lanham Act protection. This trademark protection does not unduly extend the seventeen-year monopoly guaranteed by the patent laws because the two sources of protection are totally separate:

40

[T]rademark rights, or rights under the law of unfair competition, which happen to continue beyond the expiration of a design patent, do not "extend" the patent monopoly. They exist independently of it, under different law and for different reasons. The termination of either has no legal effect on the continuance of the other.

41

Application of Mogen David Wine Corp., 328 F.2d 925, 930, 51 CCPA 1260 (1964). Patent and trademark law are completely distinct fields:

42

The protection accorded by the law of trademark and unfair competition is greater than that accorded by the law of patents because each is directed at a different purpose. The latter protects inventive activity which, after a term of years, is dedicated to the public domain. The former protects commercial activity which, in our society, is essentially private.

43

Truck Equip. Serv. Co. v. Fruehauf Corp., 536 F.2d 1210, 1215 (8th Cir.), cert. denied, 429 U.S. 861, 97 S.Ct. 164, 50 L.Ed.2d 139 (1976).

44

The dissent disagrees that patent and trademark law are distinct fields of law. The dissent, citing Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 109 S.Ct. 971, 103 L.Ed.2d 118 (1989); Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234, 84 S.Ct. 779, 11 L.Ed.2d 669 (1964); and Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 84 S.Ct. 784, 11 L.Ed.2d 661 (1964), argues that Ferrari's designs are not protected because unpatented goods may be freely copied. In the cases cited in the dissenting opinion, the Supreme Court examined state unfair competition laws to determine whether federal patent law preempted their application. In all three cases, the Court held that a state, through its unfair competition laws, could not extend patent protection to otherwise unprotected designs because such protection conflicted with the federal policy of substantially free trade in unpatented design and utilitarian concepts. See Bonito Boats, 489 U.S. at 152-54, 109 S.Ct. at 978-79.

45

These cases, however, do not affect the applicability of the Lanham Act in this case. First, the Court in Compco expressly noted that a defendant can copy at will if the design is "not entitled to a design patent or other federal statutory protection...." Compco, 376 U.S. at 238, 84 S.Ct. at 782 (emphasis added). Thus, Roberts cannot copy at will because "other federal statutory protection," the Lanham Act, applies. Second, these cases involved only the preemption of state unfair competition law by federal patent law, not the scope of federal trademark or unfair competition law. Because trademark law and patent law address different concerns, and because of the narrow focus of the Supreme Court's inquiry in Compco and Sears, courts have explicitly held that these decisions do not preclude Lanham Act protection of designs. Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Ltd., 604 F.2d 200, 204 (2d Cir.1979); Rolls-Royce Motors, 428 F.Supp. 689.

46

Thus, Lanham Act protection is available to designs which also might have been covered by design patents as long as the designs have acquired secondary meaning. Dallas Cowboys Cheerleaders, 604 F.2d at 204-05; Truck Equip. Serv., 536 F.2d 1210; Mogen David, 328 F.2d 925; Rolls-Royce, 428 F.Supp. 689. Ferrari's designs have clearly acquired secondary meaning and thus were entitled to protection.

B.

Likelihood of Confusion

1.

District Court's Findings

47

This court has held that in determining likelihood of confusion in a Lanham Act case, the court should consider the following factors: strength of the plaintiff's mark; relatedness of the goods; similarity of the marks; evidence of actual confusion; marketing channels used; likely degree of purchaser care; defendant's intent in selecting the mark; and likelihood of expansion of the product lines. Frisch's Restaurants, Inc. v. Elby's Big Boy, 670 F.2d 642, 648 (6th Cir.), cert. denied, 459 U.S. 916, 103 S.Ct. 231, 74 L.Ed.2d 182 (1982). A party claiming infringement need not show all, or even most, of these factors in order to prevail. Wynn Oil Co. v. Thomas, 839 F.2d 1183, 1186 (6th Cir.1988). A district court's findings regarding each factor are reviewed for clear error, but the further determination of likelihood of confusion based on those factors is a legal conclusion reviewed de novo. Frisch's Restaurants, 670 F.2d at 651.

48

The district court found, based upon an evaluation of the eight Frisch factors, that the similarity of the exterior design of the Ferrari vehicles and the Roberts replicas was likely to confuse the public. The court noted that while no evidence was offered on two of the factors, evidence of actual confusion and likelihood of expansion of the product lines, two others, marketing channels and purchaser care, favored Roberts and the remaining factors "radically favor[ed] Ferrari." Summarized, the district court's findings on the Frisch "likelihood of confusion" factors are as follows:

49
         Factors                                    Favor
1.    Strength of the mark                         Ferrari
2.    Relatedness of the goods                     Ferrari
3.    Similarity of the marks                      Ferrari
4.    Evidence of actual confusion               No evidence
5.    Marketing channels used                      Roberts
6.    Likely degree of purchaser care              Roberts
7.    Roberts' intent in selecting "mark"          Ferrari
8.    Likelihood of expansion of product lines.  No evidence
50

Recalling that the claimed mark involved here is the trade dress--the exterior shape and design of the Ferrari vehicles--it is clear that Ferrari's mark is very strong. The strength of the mark is its distinctiveness and Ferrari's designs are unquestionably distinctive. The survey evidence we have discussed, as well as the testimony that the shape of the plaintiff's vehicles "says Ferrari," is evidence of that distinctiveness. Indeed, Roberts' purposeful effort to copy the Ferrari designs is strong circumstantial evidence of the distinctiveness of the originals.

51

There is no dispute about the relatedness of the goods factor. The products produced by both parties are sports cars.

52

Likewise, the similarity of the marks--the exterior designs of the vehicles--is indisputable. Ferrari offered survey evidence which showed that 68% of the respondents could not distinguish a photograph of the McBurnie replica, upon which Roberts' Miami Spyder is based, from a photograph of the genuine Ferrari Daytona Spyder. In these photographs, the cars were shown without identifying insignia. Drawings for Roberts' cars show identifying insignia, an "R" on the parking lens and vent window, but the cars produced at the time of trial did not include the "R". Because the survey respondents saw photographs of the McBurnie cars, and because all of the identifying insignia were removed, the survey has limited value in showing the likelihood of confusion between the Roberts and Ferrari vehicles if displayed with identifying emblems. The survey, however, does show that the trade dress of the two car designs, the shapes and exteriors, were quite similar. An examination of the photographs of the cars which are in evidence confirms the striking similarity of the dress of the originals and the replicas. They are virtually indistinguishable.

53

Finally, Roberts conceded that his intent in replicating the exterior design of Ferrari's vehicles was to market a product that looked as much as possible like a Ferrari original, although Roberts made no claim to his customers that his replicas were Ferraris. " '[The] intent of [a party] in adopting [another's mark] is a critical factor, since if the mark was adopted with the intent of deriving benefit from the reputation of [the plaintiff,] that fact alone may be sufficient to justify the inference that there is confusing similarity.' " Frisch's Restaurants, 670 F.2d at 648 (emphasis in original) (quoting Amstar Corp. v. Domino's Pizza, Inc., 615 F.2d 252, 263 (5th Cir.), cert. denied, 449 U.S. 899, 101 S.Ct. 268, 66 L.Ed.2d 129 (1980)); see also Mastercrafters, 221 F.2d at 467. This is especially true in cases, such as this one, where the defendant sold a comparatively cheap imitation of an expensive, exclusive item. As the court in Rolex Watch explained:

54

By selling the bogus watches, only one inference may be drawn: the Defendants intended to derive benefit from the Plaintiff's reputation. This inference is no less reasonable when weighed against the Defendants' assertion that in selling these watches, they did not fail to inform the recipients that they were counterfeits.

55

Rolex Watch, U.S.A., Inc. v. Canner, 645 F.Supp. 484, 492 (S.D.Fla.1986). Intentional copying, however, is not actionable under the Lanham Act "absent evidence that the copying was done with the intent to derive a benefit from the reputation of another." Zin-Plas Corp. v. Plumbing Quality AGF Co., 622 F.Supp. 415, 420 (W.D.Mich.1985). "Where the copying by one party of another's product is not done to deceive purchasers and thus derive a benefit from another's name and reputation, but rather to avail oneself of a design which is attractive and desirable, a case of unfair competition is not made out." West Point Mfg., 222 F.2d at 586. In this case, where Ferrari's design enjoyed strong secondary meaning and Roberts admitted that he designed his cars to look like Ferrari's, the intent to copy was clear.

56

We conclude that aside from the presumption of likelihood of confusion that follows from intentional copying, Ferrari produced strong evidence that the public is likely to be confused by the similarity of the exterior design of Ferrari's vehicles and Roberts' replicas.

2.

Roberts' Objections

57

Roberts disagrees with the legal significance of the district court's findings of likelihood of confusion. He argues that for purposes of the Lanham Act, the requisite likelihood of confusion must be confusion at the point of sale--purchaser confusion--and not the confusion of nonpurchasing, casual observers. The evidence is clear that Roberts assured purchasers of his replicas that they were not purchasing Ferraris and that his customers were not confused about what they were buying.

58

Roberts also argues that actionable confusion may not be inferred from intentional copying when the intentional copying involves the design of a product as opposed to the copying of a trademark, trade name or trade dress. Implicit, of course, is Roberts' related argument that the exterior shape and design of the Ferrari cars is not, and cannot be, a trademark or trade dress. We disagree with these contentions.

59

a.

Confusion as to Source

60

Roberts is correct that, for the most part, similarity of products alone is not actionable; there must also be confusion as to the origin of the product. West Point Mfg., 222 F.2d at 589; see also Fisher Stoves, Inc. v. All Nighter Stove Works, Inc., 626 F.2d 193, 195 (1st Cir.1980). Similarity of products, however, does become actionable when the similarity leads to confusion as to source and the public cares who the source of the product is.

61

[O]ne who claims that another is guilty of unfair competition in copying his product, must show that the consuming public is primarily concerned in the producer, rather than in the product itself; ... the only obligation of the copier is to identify its product lest the public be mistaken into believing that it was made by the prior patentee.

62

West Point Mfg., 222 F.2d at 589. Thus, in West Point Mfg., there was no unfair competition where the plaintiff had not shown that the public cared who produced the clamp; no secondary meaning had attached to the plaintiff's clamp. West Point, however, does not hold that similarity of appearance may never state a claim. In fact, the West Point court explicitly recognized that a different case would exist where there is strong secondary meaning:

63

Appellee cites Wesson v. Galef, [286 F. 621 (D.C.N.Y.1922) ] as sustaining its contention that the exact copying of the features of appellee's clamp resulted in unfair competition. That case is distinguishable. There, the ensemble of plaintiff's revolver, a Smith & Wesson, had come to mean the product of the manufacture of plaintiff, an old and well-known firm. In fact, few products in the past have been better known than the Smith & Wesson, along with the Colt revolver. The mere mention of their names in former times has inflamed the imagination of youths dreaming of deeds of derring-do; and these guns have been known to generations of soldiers, sportsmen, and police officers, as well as to their quarry. The Smith & Wesson revolver had many peculiar features which had made it known to the public as the product of the manufacturer of those guns. The barrel, for instance, was squared at the frame end, which was unnecessary. This was copied, as well as its peculiar profile. A stop on the left to hold the chamber when it was swung out of position was exactly imitated in shape. Other well-known characteristics of the gun were also copied. In view of these circumstances, the court found that the purpose of the imitation was to sell the copy as a Smith & Wesson revolver. In the instant case, there is no evidence to support any such findings.

64

Id. at 597. In contrast to West Point, Roberts copied the nonfunctional features of an item having great secondary meaning.

65

Because consumers care that they are purchasing a Ferrari as opposed to a car that looks like a Ferrari, and because Roberts' replicas look like Ferraris, Ferrari presented an actionable claim as to confusion of source.

66

b.

Confusion at Point of Sale

67

Roberts argues that his replicas do not violate the Lanham Act because he informed his purchasers that his significantly cheaper cars and kits were not genuine Ferraris and thus there was no confusion at the point of sale. The Lanham Act, however, was intended to do more than protect consumers at the point of sale. When the Lanham Act was enacted in 1946, its protection was limited to the use of marks "likely to cause confusion or mistake or to deceive purchasers as to the source of origin of such goods or services." In 1967, Congress deleted this language and broadened the Act's protection to include the use of marks "likely to cause confusion or mistake or to deceive." Thus, Congress intended "to regulate commerce within [its control] by making actionable the deceptive and misleading use of marks in such commerce; [and] ... to protect persons engaged in such commerce against unfair competition...." 15 U.S.C. § 1127. Although, as the dissent points out, Congress rejected an anti-dilution provision when recently amending the Lanham Act, it made no effort to amend or delete this language clearly protecting the confusion of goods in commerce. The court in Rolex Watch explicitly recognized this concern with regulating commerce:

68

The real question before this Court is whether the alleged infringer has placed a product in commerce that is "likely to cause confusion, or to cause mistake, or to deceive." ... The fact that an immediate buyer of a $25 counterfeit watch does not entertain any notions that it is the real thing has no place in this analysis. Once a product is injected into commerce, there is no bar to confusion, mistake, or deception occurring at some future point in time.

69

Rolex Watch, 645 F.Supp. at 492-93 (emphasis in original). The Rolex Watch court noted that this interpretation was necessary to protect against the cheapening and dilution of the genuine product, and to protect the manufacturer's reputation. Id. at 495; see also Mastercrafters, 221 F.2d at 466. As the court explained:

70

Individuals examining the counterfeits, believing them to be genuine Rolex watches, might find themselves unimpressed with the quality of the item and consequently be inhibited from purchasing the real time piece. Others who see the watches bearing the Rolex trademarks on so many wrists might find themselves discouraged from acquiring a genuine because the items have become too common place and no longer possess the prestige once associated with them.

71

Rolex Watch, 645 F.Supp. at 495; see also Mastercrafters,

Ferrari S.P.A. Esercizio Fabriche Automobili E Corse v. Carl Roberts, D/B/A Roberts Motor Company | Law Study Group