How green was my tractor accessory? John Deere defeats aesthetic functionality defense for color scheme

Deere & Co. v. FIMCO Inc., No. 15-CV-105 (W.D. Ky. Mar.
8, 2017)      
Deere sued FIMCO for infringing on Deere’s green and yellow
color scheme on agricultural equipment. 
Deere has three green and yellow registrations: (1) the ‘103
Registration is from 1988 and covers green and yellow “agricultural tractors,
lawn and garden tractors, trailers, wagons, and carts,” specifically those with
green bodies/frames and yellow wheels; (2) the ‘576 Registration is also from
1988 and covers green and yellow “wheeled agricultural, lawn and garden, and
material handling machines”; and (3) the ‘095 Registration is from 2010 and
covers “tractor-towed agricultural implements,” including, among others,
“fertilizer spreaders” and “nutrient applicators” with green bodies and yellow
wheels. Deere also alleged common law trademark protection of its green and
yellow color combination.
FIMCO makes lawn and garden sprayers, its main source of
business, along with a smaller line of agricultural equipment, including towed
agricultural sprayers and nutrient applicators, which FIMCO offers in multiple
colors, including green and yellow. Deere sought to enjoin FIMCO’s use of green
and yellow for sprayers and wheeled agricultural equipment, and its use of
yellow tanks or wheels in connection with wheeled agricultural equipment having
green vehicle bodies. 

screenshot from complaint
Here, the court rejected FIMCO’s functionality argument and
several others, but allowed some elements of FIMCO’s defenses to proceed.
First, the court declined to exclude testimony from Deere’s
expert, William Shanks, an investigator at Marksmen, “a private investigation
firm that focuses on intellectual property investigations.”  Shanks summarized his investigation as
Over several weeks in June 2016, I
spoke with a total of 20 salespeople at different dealership locations, and
with 18 of those 20 salespeople, I said something very close to the following:
“I always thought [or assumed] that yellow/green farm equipment was made by . .
. .” or “I always thought [or assumed] that the yellow/green coloring looked
like . . . .” I would not finish the sentence, but would pause, to see if the
sales personnel would finish the sentence. Each time I raised this unfinished
sentence (18 of 18 times) the salesperson responded to my partial sentence and
pause by stating promptly either “John Deere” or “Deere.”
He thus opined “that salespeople at dealerships that sell
FIMCO’s agricultural equipment perceive the green and yellow colors on
agricultural equipment as associated with Deere, or at a minimum, recognize or
believe that people generally associate such colors with Deere.” Shanks
presented himself in the role of “an employee of a film production company that
wanted to rent or purchase agricultural equipment for a movie” so that dealers
would “perceive[] [him] as someone not well- versed in that equipment, so the
salespeople would be more inclined to educate [him] about the equipment than to
assume [he] knew about it already.” He used “candid conversations” instead of
“an interrogation or formal survey” in an effort to “ensure that the
respondents felt comfortable enough with me to use their own words and give me
their truthful, candid opinions.” He “offered an open- ended statement so
people would feel free to fill in the gap however they wanted, instead of acting
on a prompt or specific question from me.”
The court found that FIMCO’s criticisms went  to weight, not admissibility.  Shanks’ “twenty years of experience as a
private investigator for an intellectual property investigation firm, which has
often involved developing personas, conducting investigations, eliciting candid
responses, and evaluating the results of such investigations, qualifies him to
testify as to his opinions in this case.” 
Would his testimony be “based on sufficient facts or data” and “the
product of reliable principles and methods,” as the FRE require?  FIMCO argued that dealers would give
different, less specific answers to a “random layman” than they would to a
“true purchaser or shopper” and that it was likely that respondents were making
“guesses . . . as to what they thought Shanks’ film producer character, as a
completely uninformed, uneducated consumer, would think Shanks meant to finish
the statement with. . . . Shanks’ [u]nfinished [s]tatements clearly lobbed for
the respondents an answer going to what company most prominently features green
and yellow on its agricultural equipment.”  But “errors in survey methodology are more
properly directed against the weight a jury should give the survey, rather than
overall admissibility,” and these problems were mere “technical inadequacies.”  
Nor would his testimony be inadmissible hearsay: “evidence
of the state of mind of persons surveyed is not inadmissible as hearsay.” “Here,
Shanks phrased his questions to dealers as inquiring into what they always ‘thought [or assumed]’ about
the colors green and yellow on agricultural equipment” (emphasis added because
of factual mistake).  The Court was
satisfied that “experts in Shanks’ field would reasonably rely on this kind of
data in forming opinions.”
Comment: When I think about how hard real surveys struggle
to get attention paid to them, this result makes me sad.  Shanks explicitly induced salespeople to read
his mind and complete his sentence
with what they thought he thought.  The problem isn’t that Shanks is in the
courtroom instead of the salespeople—he can testify to their present mental
impressions—it’s that he isn’t testifying to the salespeople’s present mental
impressions of what they thought, but rather what they thought he, as a novice,
would be thinking.  After [gulp] years of
teaching, even I can anticipate a number of standard student responses, and
fill them in once a student starts down some particular path.  That doesn’t mean that the student is correct
or that I think the way the student thinks; it means I’ve seen the argument
before and I know what it sounds like. 
Nothing in his report is evidence of what dealers or ordinary customers
Deere also failed to exclude five FIMCO expert witnesses
qualified by their years of experience in the industry.  However, they lacked the expertise to testify
about likely confusion as an ultimate issue, rather than about their own
experience, because surveys are what proves likely
confusion.  [And Shanks apparently did a
“survey,” albeit one without controls, which alone would ordinarily have been
enough to exclude a real survey in the modern era.] As McCarthy says, “A survey
expert has conducted a scientific test and asked questions of potential buyers:
other experts have not,” and thus “expert who has not conducted such a survey
must articulate and describe some other reliable methodology that forms the
basis for the conclusion that confusion is or is not likely in this case.”
FIMCO’s witnesses didn’t offer reliable methodologies sufficient to offer the
blanket opinions that “[t]here is no actual or likely confusion by U.S.
However, FIMCO’s witnesses could testify about their own
experiences with their customers throughout their careers, as well as “subsidiary
factual questions, such as … the sophistication of buyers and the degree of
care buyers typically exercise when making a purchasing decision of these kinds
of goods or services.” For example, one witness testified, “reliably in the
Court’s view, that he based [his] opinion on ‘[t]he price difference. The
farmer is either looking for self-propelled that doesn’t compete because it’s a
300, $400,000 sprayer self-propelled sprayer versus a $50,000 or less sprayer.’”  Even though they did no separate research before
forming their opinions, that went only to weight.
On to substance: in terms of fame, Deere claimed fame since
1923, or at the latest 1950.  Deere’s
advertising expenditures were $34,000 in 1903 (roughly 1.1% of total company
expenditures), $1.59 million in 1948, $5.4 million in 1957 (roughly $46.3
million today), and $75.3 million in 2015. Since the 1920s, it has advertised
in color, clearly depicting its yellow and green color scheme, and often
referred to this color scheme as the “John Deere Colors.” Its US sales have
been extensive throughout its history, beginning in 1905, reaching $299.7
million in 1950 (roughly $3 billion today) and $29 billion today, and many of
those sales were of products using the color scheme.  Deere’s archivist cited a 1923 article
published in Implement & Tractor Trade Journal, discussing an upcoming
convention at which a “Model Store” would be featured for agricultural dealers
to see, which said that “[t]he glassed-in front is painted in the Deere colors,
green and yellow.”  A novel, originally
published in 1950 as Reluctant Farmer, also discusses a new wagon “painted the
bright John Deere green and yellow” and a “side-delivery rake” painted “the
usual bright John Deere green and yellow.” A article from 2011
called “Happy Birthday, John Deere!” begins with the following statement:
Unless, like my husband, you hail
from a place like Nebraska, where it is 
common knowledge that Farmall tractors are candy apple red, New
Hollands’ are royal blue and Allis Chalmers are orange, I suspect that John
Deere tractors, with their kelly green bodies and bright yellow hubcaps, are
the only ones that are instantly recognizable.
Deere also surveyed members of the general public, 153 out
of 156 of which identified a tractor bearing the yellow and green colors as
being a Deere brand. Deere also has registrations for its color scheme, but
those were not obtained until 1988 and 2010, long after the years in which
Deere alleges its mark became famous—and long after FIMCO began using the
colors.  The court found that the issue
of when Deere’s colors became famous was a genuine issue of material fact.  “[T]he mere fact that Deere’s use of yellow
and green were referenced in 1923 and 1950 is insufficient, at this stage, to
say that 1923 or 1950 are the years Deere’s mark became so ‘widely recognized’
so as to make it famous for dilution purposes. Indeed, our sister courts have
stated that ‘general media assertions and acclamations of fame are not strong
evidence’ of fame because fame for trademark dilution purposes ‘is not proven
through the words of trade publication articles declaring it so.’”
FIMCO alleges that, through its alleged predecessor in
interest, JDD, it used green and yellow on its agricultural equipment from
“either [19]32 or [19]38 forward.” The problem was that FIMCO couldn’t prove
that JDD was its predecessor in interest, since the only evidence was from the
current owner, Kevin Vaughn, who testified to his childhood memories from 1966
when, in his understanding, his father took over JDD’s assets out of
bankruptcy.  [One might think that this
is one reason we have laches, but the courts have been very hesitant to find
laches in trademark cases, though perhaps once the court gets around to likely
confusion Deere’s apparent inability to find real confused consumers over the
past half century might matter.]  This
evidence couldn’t be presented in admissible form, so FIMCO was left to its own
start date in 1966, when it started to use the green and yellow colors.
Functionality: basically, FIMCO couldn’t prove that, even
assuming that a desire to match equated to competitive necessity, the desire to
match couldn’t be satisfied with either
yellow or green, perhaps with black or gray; Deere limited its claims to the
yellow and green combo.  Deere & Co.
v. Farmhand, Inc., 560 F. Supp. 85 (S.D. Iowa 1982), aff’d, 721 F.2d 253 (8th
Cir. 1983), found aesthetic functionality in the color green in similar
circumstances, but (1) Deere clearly claimed only the combo this time, (2) the
case predated Qualitex and Traffix (which I think is a bad argument
because Breyer cited the case specifically in his discussion of aesthetic
functionality in Qualitex) and didn’t
apply the modern test.  “It may present a
different question if Deere sought to completely prohibit all use of the color
green or all use of the color yellow, as was the case in Farmhand.”   Trademark rights
in one color “may differ from trademark rights in a combination of
colors.”  [See also Louboutin.] 
Anyway, since Farmhand,
courts have rejected claims based on a mere desire to match, because that’s not
an aesthetic purpose “wholly independent of any source-identifying function.”  [I think that interpretation equivocates about
independence. The desire to match, given a previous purchase of durable equipment,
is independent of source-identifying function; it would apply no matter which
brand of tractor the buyer had.  The
matching color is related in a but-for sense to the choice of Deere, but I
don’t think that source-identifying function should be deemed a proximate cause
of the choice of matching equipment.] 
Testimony that half of customers wanted their equipment to match, and
half of those would change a purchase over that requirement, wasn’t convincing
to the court—which I find a bit perplexing, since functionality has never
required a showing that every single
thinks there’s no alternative; 25% is a pretty significant chunk
of a market.  But the broader point that
the color combo wasn’t shown to be necessary to match is still a good one.
FIMCO’s laches defense failed because it couldn’t prove
privity with JDD, which had received C&Ds in 1944 and 1963, as did its
implied license defense. However, there was a genuine dispute of material fact
as to acquiescence and estoppel. FIMCO put in a lot of evidence that its
products would have been visible to Deere representatives at farm shows for
years before 2011, when Deere allegedly discovered them.

The court also rejected FIMCO’s arguments about the scope of
Deere’s registrations as covering yellow tanks/other aspects of FIMCO’s
products; the question was not what the registrations covered but whether
confusion was likely.  There were also
some issues with incontestability—whether Deere made/sold all the items listed
in the registrations continuously. 
(Among other things, the ‘576 Registration includes “sprayers”; the
court wasn’t persuaded by FIMCO’s argument that Deere didn’t sell trailed
sprayers because it did sell self-propelled sprayers.)  Mostly there were genuine disputes of fact.

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