AMBRIT, INC., f/k/a the Isaly Company, Inc., Plaintiff-Appellee, CrossAppellant, v.

KRAFT, INC., Defendant-Appellant, Cross-Appellee.

No. 85-3609.

United States Court of Appeals, Eleventh Circuit. Dec. 10, 1986.^{Footnote *}

Certiorari Denied May 4,1987.

See 107 S.Ct. 1983. 1531

Barry D. Rein, Robert M. Kunstadt, Michael C. Stuart, Pennie & Edmonds, New York City, Thomas H. Christopher, Kilpatrick & Cody, Atlanta, Ga., Jerry L. Newman, Rodney W. Morgan, Shear, Newman & Hahn, Tampa, Pla., for plaintiff-appellee, cross-appellant. Jerome Gilson, Gary M. Ropski, Susan Somers Neal, William Brinks Olds Hofer Gilson & Lione Ltd., Chicago, 111., Frank C. Jones, Charles M. Shaffer, Jr., King & Spalding, Atlanta, Ga., Donald W. Carlin, Seth A. Eisner, Dolores K. Hanna, Kraft, Inc., Glenview, 111., for defendant-appellant, cross-appellee.

Appeals from the United States District Court for the Middle District of Florida.

Before CLARK, Circuit Judge, HENDERSON,^{Footnote *} and WISDOM,** Senior Circuit Judges.

WISDOM, Senior Circuit Judge: This appeal presents a variety of questions involving trade dress and trademark rights. The parties are competitors in the ice cream novelty market. The principal

question in this controversy is whether the trade dress of Kraft's Polar B'ar infringes the trade dress of Isaly's Klondike bar. The district court answered "Yes" to this question. 619 F.Supp. 983. We affirm, holding that the district court's findings were not clearly erroneous and that the court's conclusions of law were correct.

FACTS The plaintiff in this action, the Isaly Company, Inc., ("Isaly"),¹ is a Delaware corporation with its principal place of business in Clearwater, Florida. The defendant, Kraft, Inc. ("Kraft"), is a Delaware corporation with its principal place of business in Glenview, Illinois. The parties are competitors in the stickless, five ounce, square, chocolate-covered ice cream bar market. Isaly sells its bar under the trademark "Klondike", and Kraft sells its bar under the trademark "Polar B'ar". The crux of the controversy concerns the packaging of those two products.

Isaly began in the last century as a family-owned dairy business operating in Eastern Ohio and Western Pennsylvania. In 1928 Isaly started making and selling five ounce, chocolate-covered, stickless ice cream bars under the name "Klondike". Isaly now sells three versions of the Klondike bar: plain, crispy, and chocolate/chocolate. The plain Klondike bar has been wrapped in pebbled foil featuring the colors silver, blue, and white since the 1940's. Since at least 1956 the wrapper has featured a 3 X 3 inch panel of silver, white, and blue, the words "Isaly's" and "Klondike", and the figure of a polar bear.

In 1978 Isaly revised the wrapper of the Klondike bar maintaining, however, the im pression the original wrapper conveyed.

The colors, images, and words on the wrap per remained the same, but "Klondike" was emphasized, "Isaly's" was reduced in size, and the stance of the polar bear was altered. Since 1978, the wrapper has re mained the same. The plain Klondike bar is wrapped in pebbled foil presenting a 3 X _____3 inch silver panel featuring a white polar

1. Since instituting this action in 1982, Isaly has changed its name to AmBrit, Inc. We shall bear on all fours before a sunburst design. Both the polar bear and the sunburst are outlined and highlighted with royal blue. Below the bear is the word "Klondike", written in large white letters outlined in royal blue. "Isaly's" appears in small blue letters to the right of the bear. The crispy and chocolate/chocolate wrappers are identical except that those wrappers use the colors yellow and brown respectively in place of the white color used on the plain wrapper.

Isaly began seiling the Klondike in a six-pack arrangement in 1963, and between 19G3 and 1978 some six-packs were offered in trays overwrapped in clear plastic. Since 1978, all six-packs have been sold in transparently overwrapped trays with a double layer of three bars, presenting the Klondike wrapper three times. The trays are silver and feature a large numeral "6" on the side. The end panels of the Klondike trays display a copy of the appropriate wrapper design depending on the version of the bar contained in the tray.

Until 1978, Isaly sold the Klondike bar in a tri-state area composed of Western Pennsylvania, Eastern Ohio, and Northern West Virginia. Isaly advertised in newspapers and in point-of-sales materials in stores, both of which featured the polar bear emblem found on the bar's wrapper. Isaly also advertised on television in a commercial featuring a polar bear and prospector in a supermarket.

In 1978, Isaly began to investigate the possibility of expanding the market for the Klondike bar. Isaly decided to introduce the bar into supermarkets and convenience stores in various expansion markets. To augment the expansion it achieved on its own, Isaly approached Kraft, an international manufacturer and distributor of food products, concerning a distribution arrangement between the two parties. Although Kraft's dairy group produces its own ice cream products, which are principally distributed under the brand names "Sealtest" and "Breyers", since 1970 that refer to the company as "Isaiy" throughout this opinion.

group has also distributed ice cream products made by other companies. The parties agreed that Kraft would distribute the Klondike bar in Florida and that Isaly would be responsible for most of the advertising in that market.

The introduction of the Klondike bar into the Florida market in early 1979 was highly successful and Kraft was well satisfied. Kraft had previously been unsuccessful with its ice cream novelty line and viewed the Klondike bar as a way to change that pattern. In October 1979, Kraft informed Isaly that it was interested in purchasing Isaly or having Isaly package its bars for Kraft under the Sealtest name. Isaly rejected these proposals, suggesting instead that Kraft expand its distribution of the Klondike bar. Kraft stated, however, that it was reluctant to expand distribution without a proprietary interest in the product.

In late 1979, Kraft began to develop its own five ounce chocolate-covered ice cream bar. Kraft attempted to duplicate the exact size and taste of the Klondike bar. Kraft chose the name "Polar B'ar" after finding that name on a list of unused trademarks. A predecessor of Kraft, Southern Dairies, Inc., had sold an ice cream bar under that trademark from 1929 to 1932, and periodically renewed the trademark registration. Through merger, Kraft acquired it.

Kraft employed two firms to design the packaging for the Polar B'ar product, making clear to these firms that the functional features of the Polar B'ar package were to resemble as closely as possible the Klondike bar package. The bars were to be wrapped in foil and sold in six-pack trays overwrapped in transparent plastic. Kraft supplied these design firms with samples of the Klondike packaging to aid them in their efforts.

The designers presented Kraft with a number of different wrapper designs but ultimately chose the one Isaly now challenges. That wrapper presents a 3x3 pebbled silver foil panel with a white polar bear standing on all fours contained within a colored triangle in the bottom right corner. "Polar B'ar" is written in large colored block letters diagonally across the center of the bar. "Sealtest" is written in script in a red box in the upper left corner, and the phrase "made with real milk chocolate" appears in a red circle in the bottom left corner of the panel.

In 1980 Kraft sold Polar B'ars in two forms: plain and "crunchy". The colors of the triangle and block letters on the wrappers varied with each version. Plain wrappers used royal blue and "crunchy" wrappers used red. Later, Kraft introduced four new versions of the bar: chocolate, mint, heavenly hash, and peanut butter, using the colors brown, green, light blue, and golden brown respectively.

As planned, Kraft sold Polar B'ars in a six-pack tray overwrapped in clear plastic.

The tray employs a silver background and displays a large numeral "6" between the brand name and the product description.

The end panels of Kraft's tray feature a large white polar bear and the words "Polar B'ar" in large block letters against a background colored to correspond with the version of the bar contained in the tray.

Kraft promoted the bar with television and newspaper advertising. Its television commercial featured the figure of a bear.

Then came a bear's roar when the camera shifted to the polar bar wrapper.

Kraft was the exclusive distributor of the Klondike bar in Florida from 1979 to 1982. In February 1982 Kraft notified Isaly in writing of its intention to terminate its distribution of Klondike as of April 1982.

In May 1982 Isaly initiated this suit. Isaly asserted that Kraft's packaging: (1) constituted a false designation of origin under § 43(a) of the Lanham Act,² (2) infringed

Isaly's federal trademarks covering its label and package designs,^{Footnote 3} (3) constituted common law unfair competition, (4) diluted Isaly's trade dress in violation of Florida statutory law, ^{Footnote 4} and (5) constituted unfair

competition under Florida law. ^{Footnote 5}

amended its complaint seeking to have Kraft's Polar B'ar trademark cancelled.

Kraft denied all of Isaly's claims and asserted the defense of laches. After a long trial, the district court ruled in favor of * the trademark and false designation of origin claims. ^{Footnote 6}

The court rejected Kraft's laches defense and Isaly's request to cancel Kraft's trademark. The court then entered an injunctive order and scheduled a hearing on the damages issue. ^{Footnote 7}

Both parties appealed.

DISCUSSION I. Trade

Dress Infringement Kraft's first contention on appeal is that the district court erred in finding Kraft guilty of trade dress infringement. Kraft does not contend that the district court applied the wrong test in making this finding, but rather argues that the district court misapplied the proper test.

Section 43(a) of the Lanham Act states in relevant part: Any person who shall ... use in connection with any goods or services, or any container or containers for goods ... any false description or representation, including words or other symbols tending falsely to describe or represent the same ... shall be liable to a civil action by ... any person who believes he is or is likely to be damaged by the use of any such false description or representation. ^{Footnote 8}

Isaly later This Court has held that Section 43(a) creates a federal cause of action for trade dress infringement. ^{Footnote 9}

As we stated in John Harland Co. v. Clarke Checks, Inc., ^{Footnote 10} " 'Trade Dress' involves the total image of a product and may include features such as ¦ Isaly on size, shape, color or color combinations, texture, graphics, or even particular sales n techniques." The trade dress at issue in this controversy is the wrapper and packaging of Isaly's Klondike bar.

As the district court below held, to prevail on a trade dress infringement claim under § 43(a), the plaintiff must prove three elements: 1) its trade dress is inherently distinctive or has acquired secondary meaning, 2) its trade dress is primarily nonfunctional, and 3) the defendant's trade dress is confusingly similar. ^{Footnote 12}

The district court found that Isaly had established all three elements and therefore ruled in favor of Isaly on the trade dress infringement claim. Kraft contends that the district court erred in its conclusion with respect to each element. Because each element involves a finding of fact, we cannot overturn the decision of the district court absent clear error on at least one element. We now review the district court's findings.

A. Inherent Distinctiveness or Secondary Meaning At the outset, the plaintiff must establish that its trade dress is inherently distinctive or has acquired secondary meaning. ^{Footnote 13}

Manifestly, if the plaintiffs trade dress is not sufficiently distinctive to allow consumers to identify the product from the trade dress, then the dress does not inherently serve as an indication of origin and the plaintiff can claim no right to the exclusive use of that trade dress. Even if a competitor appropriated the identical trade dress, the plaintiff would not be injured because the plaintiff's trade dress does not serve to distinguish its goods from those of its competitor's. Alternatively, a finding of secu ondary meaning suffices to establish protectability because such a finding means that notwithstanding the indistinctiveness of the trade dress, the consuming public has come to associate that trade dress with the product's producer. The district court found that at the time Polar B'ar was introduced in 1980, the trade dress of Isaly's Klondike was inherently distinctive and had acquired secondary meaning. Kraft challenges both of these findings. Because we hold that the district court's finding with respect to inherent distinctiveness is not clearly erroneous, we need not address the secondary meaning issue. In assessing the inherent distinctiveness of the Klondike trade dress, the district court considered the factors enunciated by this Court in Brooks Shoe Manufacturing Co. v. Suave Shoe Corporation, ^{Footnote 15} we stated that a court should examine the trade dress and consider, among other factors: whether it [is] a "common" basic shape or design, whether it [is] unique or un usual in a particular field, [and] whether it [is] a mere refinement of a commonlyadopted and well-known form of orna mentation for a particular class of goods viewed by the public as a dress or orna mentation for the goods____ ^{Footnote 16}

Unlike the "V" or "7" in Brooks, the Klondike trade dress is not a basic shape or common design. Rather, as the district court found, the Klondike wrapper with its square size, bright coloring, pebbled texture, polar bear and sunburst images, and distinctive style of printing is "a complex composite of size, color, texture and graphics ___ [creating] a distinctive visual impression". ^{Footnote 17}

The court, hewing close to the language in Chevron Chemical Co. v. Voluntary Purchasing Groups, ls Inc., noted that the wrapper includes features that are "arbitrary and serve no function either to describe the product or assist in its effective packaging", ^{Footnote 19} and found the wrapper trade dress inherently distinctive.

Kraft challenges this finding on two grounds. It first argues that the silver foil, the color royal blue, and the arctic sun where

and polar bear images all connote cold and are therefore not inherently distinctive when used in connection with ice cream novelties. Kraft also argues that third parties have used these same elements in connection with their packaging of ice cream products and frozen desserts. Kraft asserts that when viewed in context of the Brooks factors, these third party uses indicate that the Klondike trade dress is not unique and is a mere refinement of a commonly-adopted form of ornamentation for ice cream products. The district court rejected both of these arguments. The ruling was not clearly erroneous. Trademarks and trade dress may be classified as generic, descriptive, suggestive, or arbitrary. ^{Footnote 20}

Once conceived as distinct categories, these rubrics are now commonly viewed as "central tones in a spectrum". ^{Footnote 21}

Within this spectrum, the distinctiveness of a product's trade dress increases as it moves toward the suggestive or arbitraryend of the spectrum. The overall appearance of the Klondike trade dress and of its constituent elements is arbitrary or suggestive. ^{Footnote 22}

The trade dress does not describe the ice cream product, rather it suggests to the consumer the coldness of the product. Such trade dress is inherently distinctive under Section 43(a). ^{Footnote 23}

Isolated or piecemeal third party uses of various elements of the Klondike trade dress do not detract from the distinctiveness of the overall impression conveyed by the combination of those elements on the Klondike wrapper. Indeed, third party use of one or more suggestive or arbitrary elements of a plaintiff's trade dress renders that trade dress indistinct only if the third party use is so extensive and so similar to the plaintiff's that it impairs the ability of consumers to use the trade dress of the products to identify their source. ^{Footnote 24}

Extensive and similar use is not present in the instant case. Indeed, the record reveals no prior use of any combination of the Klondike trade dress elements that is at all similar to the unique impression conveyed by Isaly's trade dress.

The district court did not commit clear error in ruling that the Klondike trade dress was inherently distinctive and therefore protectable without a showing of secondary meaning. ^{Footnote 25}

B.

Functionality

Trade dress is protectible under section 43(a) only if it is primarily nonfunctional. ^{Footnote 26}

The district court found the Klondike tray with its plastic overwrap functional. Kraft was therefore free to imitate those features of the Klondike packaging with complete impunity. A contrary result would hinder Kraft in its attempt to compete effectively with Isaly.

That individual elements of packaging are functional does not, however, render the package as a whole unprotectible. ^{Footnote 27}

The district court found that "the Klondike foil wrapper, with its graphics, is primarily nonfunctional". ^{Footnote 28}

Kraft does not seriously dispute this finding, and indeed any such challenge would be misplaced. The actual wrapper may be functional, but its appearance is not. That the wrapper is primarily nonfunctional does not mean that Kraft may not use a foil wrapper in connection with the packaging of its five-ounce ice cream novelties. Rather, Kraft is precluded only from using a foil wrapper with an overall appearance that is confusingly similar to the wrapper used in Isaly.

C.

Likelihood of Confusion "[T]he touchstone test for a violation of § 43(a) is the "likelihood of confusion" resulting from the defendant's adoption of a trade dress similar to the plaintiffs." ^{Footnote 29}

In determining whether a likelihood of confusion exists, the fact finder evaluates a number of elements including: the strength of the trade dress, the similarity of design, the similarity of the product, the similarity of retail outlets and purchasers, the similarity of advertising media used, the defendant's intent, and actual confusion. ^{Footnote 30}

The issue of likelihood of confusion is not determined by merely analyzing whether a majority of the subsidiary factors indicates that such a likelihood exists. Rather, a court must evaluate the weight to be accorded the individual factors and then make its ultimate decision. ^{Footnote 31}

The appropriate weight to be given to each of these factors varies with the circumstances of the case.

The district court evaluated these factors, weighed them carefully, and found that Kraft's trade dress creates a likelihood of confusion. Kraft rejects this finding arguing that the district court misapplied the above test. A finding of likelihood of confusion is a finding of fact and is reviewed by this court under the clearly erroneous standard. ^{Footnote 32}

Although that standard is not applicable "when a district court labors under a misapprehension concerning the governing legal norms", ^{Footnote 33} we find that in evaluating a likelihood of confusion the district court properly applied the appropri-

ate legal test. ^{Footnote 34}

Our review is thereby confined to an inquiry as to whether the court's finding is clearly erroneous. A survey of the likelihood of confusion factors in this case convinces us that the district court's finding is not clearly erroneous.

1. Strength of the Trade Dress The strength of the Klondike trade dress determines the scope of protection it will receive: strong trade dress receives strong protection, and weak trade dress receives weak protection. The strength of a particular trade dress is determined by a number of factors that establish its standing in the marketplace. ^{Footnote 35}

Relying on its finding that the trade dress was inherently distinctive and had acquired secondary meaning, the district court concluded that the Klondike trade dress was strong. A more thorough analysis, however, is needed to determine the scope of protection appropriate for the Klondike trade dress. A finding of inherent distinctiveness indicates that the Klondike trade dress will be protected, but the appropriate degree of protection is determined by examining a number of factors that establish the standing of the trade dress in the marketplace: most notably, the type of trade dress and the extent of the third party uses. ^{Footnote 36}

In analyzing the scope of protection a particular trade dress warrants, a court must first consider the type of trade dress involved. As noted above, trade dress may be classified as generic, descriptive, suggestive, or arbitrary, and the scope of protection increases as the trade dress moves toward the arbitrary end of the spectrum. Isaly's trade dress is composed of a number of elements suggesting the coldness of the Klondike bar. The Klondike trade dress is therefore mainly suggestive. Although there is no clear pattern in this circuit as to what type of protection suggestive trade dress warrants under § 43(a) ^{Footnote 37} , we hold that the mainly suggestive Klondike trade dress merits at least moderate protection.

The second scope-of-protection factor is the extent of third party use. As noted in the discussion of inherent distinctiveness, a number of third parties have used various elements of the Klondike trade dress. The record indicates that, in connection with the sale of frozen desserts, at least eight third parties have used a polar bear image, and that numerous third parties have used silver foil, an arctic sun image, or the royal blue color. Although not as extensive as the third party uses that have led to weak protection in other cases, ^{Footnote 38} these uses do require the court to extend less protection to the Klondike wrapper than it would in their absence. Use of isolated elements of the Klondike trade dress that do not convey the same total image does not, however, lead to the Klondike wrapper being stripped of protection. ^{Footnote 39}

Our review of the evidence leads us to conclude that were we to make the determination as to the strength of Isaly's trade dress de novo, we would accord that trade dress moderate, as opposed to either strong or weak, protection.

10

The Klondike trade dress is suggestive, and third parties have used most of the elements of that trade dress. We need not decide, however, whether the district court's finding that the Klondike trade dress warranted strong protection is clearly erroneous. Given that the amalgam of the other likelihood of confusion factors points so strongly in favor of a finding of likelihood of confusion, it does not matter whether the Klondike trade dress is accorded strong or moderate protection, for in either case, the finding of likelihood of confusion is not clearly erroneous.

2. Similarity of Design The similarity of design test has been described as " 'really nothing more than a subjective eyeball test.' ... The similarity of design is determined by considering the overall impression created by the mark as a whole rather than simply comparing individual features of the marks." ^{Footnote 41}

Following this approach, the district court stated, "Upon visual inspection, the wrapped bars convey the same overall appearance." ^{Footnote 42}

Kraft strenuously objects to this finding.

Kraft asserts that in making its finding of similarity of design the court disregarded the word marks "Sealtest", "Polar B'ar", "Isaly's", and "Klondike". Kraft also argues that a comparison of the packages reveals many differences including a different overall impression.

Kraft is correct in asserting that the presence of dissimilar word marks lessens the possibility of a finding of similarity of design. ^{Footnote 43}

Use of distinguishing word marks does not, however, preclude a finding of similarity of design. ^{Footnote 44}

The similarity of design test is an inquiry into the overall similarity of the defendant's trade dress with that of the plaintiff. Therefore, the dissimilar word marks may not be considered separately; rather, they must be considered in the context of the trade dress as a whole.

Even a cursory reading of the district court's order makes clear that in analyzing the overall appearance of the trade dress of

the products the district court did not disregard the dissimilar word marks. Indeed, the court even mentioned that each wrapper displayed "the product name printed in large block letters, accompanied by the company name (Sealtest or Isaly's) in much smaller script lettering". ^{Footnote 45}

Kraft next argues that the design and color of the trade dress of each product are simply not similar. Kraft points again to the dissimilar word marks and also to the differences between the modern design of the Polar B'ar trade dress and the old-fashioned tone of the Klondike trade dress. In assessing Kraft's contention, it is important to remember that, regardless of the ready accessibility of the exhibits to the reviewing court and the ability of this Court to see as well as the district court, the district court's finding that the designs are similar is still reversible only for clear error. ^{Footnote 46}

Viewing the trade dress as a whole, the overall impression conveyed by each is similar. An inspection of the wrappers of the plain Klondike and the plain Polar B'ar ^{Footnote 47} reveals that each is the same size, each has a textured silver foil background, each is printed primarily with blue and white inks, each includes the product name in large block letters and the company name in smaller script, and each features a polar bear. ^{Footnote 48}

Although a close examination of the two wrappers reveals significant differences, a court may not view trade dress in a vacuum. Rather, a court must consider how the trade dress would function in the actual market place. Ice cream novelties are impulse items stored in frosty freezer cases and sold in busy grocery stores to hurried shoppers. When viewed in this context, the general similarity of the design of the trade dress of the two products is an even stronger indication of the existence of likelihood of confusion.

3.

Similarity of the Products That the products involved are similar is evidence tending to prove the existence of a likelihood of confusion. ^{Footnote 49}

The district court found and we agree that the products in the instant case are identical. Both are competitively priced, five ounce, stickless, chocolate-covered ice cream bars.

4.

Similarity of Retail Outlets and Pur chasers Likelihood of confusion is more probable if the products are sold through the same channels to the same purchasers. ^{Footnote 50}

The district court found that the products are both sold through the same channels, pri-

marily supermarkets and convenience stores, to the same purchasers. Kraft has not challenged this finding.

5.

Similarity of Advertising Media If the plaintiff and defendant both use the same advertising media, a finding of likelihood of confusion is more probable. ^{Footnote 51}

The district court found that both parties use the same advertising media, primarily television and radio, and that the advertisements were themselves similar. This finding is clearly correct.

6.

Defendant's Intent Kraft's intent in adopting the Polar B'ar trade dress is a critical factor because a finding that Kraft adopted the trade dress with the intent of deriving benefit from the reputation of Isaly's Klondike may alone be enough to justify the inference that there is confusing similarity. ^{Footnote 52}

In assessing the intent factor, the district court found that "Kraft intended to emulate if not infringe". ^{Footnote 53}

Kraft and Isaly have both argued as to the meaning of that phrase and as to whether the evidence supports the position of the other party. After reviewing that phrase and the context in which it is found, we are convinced that the district court's finding was based on solid evidence that Kraft intended to benefit from the goodwill of Isaly. We turn now to examine the evidence supporting that finding.

In early 1979, Kraft began distributing the Klondike bar for Isaly in Florida. The introduction of the Klondike bar in Florida was surprisingly successful. Kraft had been searching for an appropriate ice cream novelty product, and after witnessing the success of the Klondike bar, Kraft approached Isaly with an offer to either buy Isaly or have Isaly pack Klondike bars for Kraft under the Sealtest label. Isaly rejected this offer, proposing instead that Kraft expand its distribution of the Klondike bar. Kraft rejected that offer.

As a result of the distribution relationship, Kraft learned of Isaly's expansion plans for the Klondike bar and of information vital to the successful sale of an ice cream novelty like the Klondike bar. In late 1979, Kraft began developing its own five ounce, stickless, chocolate-covered ice cream bar. Kraft attempted to develop a bar that was, in almost all respects, identical with the highly successful Klondike bar.

Kraft chose to name its new product "Polar B'ar", a name that conveys a double meaning: "polar bear" and "cold bar". At the time it chose the name, Kraft was aware that the Klondike wrapper featured a polar bear. Moreover, prior to the time Kraft selected the name for its product, Isaly had undertaken some promotional and other efforts to develop an association between the polar bear symbol and the Klondike bar. ^{Footnote 54}

Kraft retained two design firms to design the packaging for the Polar B'ar. It is undisputed that Kraft requested these firms to copy the functional features of the Klondike packaging, such as the six-pack tray, the dead fold foil wrapper, and the clear plastic overwrap. To help achieve this goal, Kraft supplied the design firms with samples of the Klondike packaging and wrapper. It is also clear that, given the name Kraft had chosen for its product, the use of a polar bear image on the Polar B'ar wrapper was a foregone conclusion. The design firms offered Kraft a number of wrapper prototypes employing a variety of graphic designs. Kraft chose the design that Isaly is now challenging. The record reveals that Kraft knew of the distinct possibility that the wrapper design it chose infringed the Klondike trade dress. But Kraft never sought an opinion from legal counsel on that issue. ^{Footnote 55}

Isaly argues that the unmistakable import of this evidence is that Kraft chose deliberately to come as close to the total image of the Klondike bar as possible. According to Isaly, even though Kraft may have intended to stay within legal bounds, it copied the Klondike bar and functional packaging features exactly and attempted to copy the Klondike trade dress to a sufficient degree that when combined with the other packaging features, Kraft would benefit from the reputation of Isaly's Klondike. Isaly correctly points out that even an intent to come as close as the law will allow is an intent to derive benefit from the other party's reputation and is therefore probative on the likelihood of confusion issue. ^{Footnote 56}

Indeed, Isaly argues that Kraft even chose its name with the intent of deriving benefit from Isaly's reputation.

Kraft argues, however, that it had no such intent to derive benefit from the reputation of Isaly. Rather, Kraft argues that it copied only those features that it had the right to copy, those that were in the public domain. ^{Footnote 57}

Kraft asserts that it copied those features not to benefit from Isaly's reputation, but to let the consumers know that they would be getting the same type of product as that offered by Isaly. Kraft points to the word mark "Polar B'ar", which it asserts is clearly not confusing with the "Klondike" word mark, and to the "Sealtest" logo, and argues that if it had been attempting to poach the goodwill of Isaly, it would not have used these distinctive and different marks. ^{Footnote 58}

There is no question that Kraft's argument finds support in the evidence'as does Isaly's'but even were we to accept Kraft's position, the district court's finding of intent on the part of Kraft to benefit from Isaly's goodwill would be proper. There is nothing unusual about a finding of intent based on circumstantial evidence. ^{Footnote 59}

Although Kraft was free to copy the Klondike product and the functional packaging features of that product, the finder of fact may infer from evidence of such actions an intent to derive benefit from Isaly's goodwill. ^{Footnote 60}

Such a finding is especially fitting when, as here, a review of Kraft's nonfunctional trade dress and that of the plaintiff reveals substantial similarities. Therefore, irrespective of which version of the facts is to be believed, the record supports the district court's finding that Kraft intended to benefit from the goodwill Isaly has built for itself. ^{Footnote 61}

7. Actual Confusion Actual consumer confusion is the best evidence of likelihood of confusion. ^{Footnote 62}

There is no absolute scale as to how many instances of actual confusion establish the existence of that factor. Rather, the court must evaluate the evidence of actual confusion in the light of the totality of the circumstances involved. ^{Footnote 63}