## Facts

- Vacheron imported and distributed the Swiss-made Atmos clock, a high-priced, cordless, glass-cased mantel clock with a distinctive overall appearance and market prestige.
- Mastercrafters manufactured and sold the Model 308 electric mantel clock, priced roughly $30–$40, compared to the Atmos at about $175.
- The Model 308 was substantially similar in overall appearance to the Atmos, though it was cord-powered and bore Mastercrafters’ name and trademarks on the product and packaging.
- The Atmos was not protected by patent or copyright, and many individual design elements were common in the clock industry; the dispute centered on the overall configuration.
- After Model 308 entered the market, Vacheron warned Mastercrafters and distributors that Model 308 was a “counterfeit” of the Atmos appearance and pursued state-court actions against distributors.
- Mastercrafters alleged the distributor suits caused canceled orders and sued in federal court seeking declaratory and monetary relief.
- Vacheron counterclaimed (joined by intervenor Jaeger-Le Coultre, S.A.) for unfair competition and sought to enjoin manufacture and sale of Model 308.
- Trial evidence included retailer and customer statements suggesting Model 308 was perceived as “just like” an Atmos or a “lower-priced Atmos.”

## Issues

1. Whether copying an unpatented product’s distinctive overall appearance can constitute unfair competition when the copier uses its own brand name.
2. Whether likelihood of confusion may be based on confusion of observers after the sale (post-sale confusion), even if point-of-sale purchasers understand the difference.
3. What relief is appropriate if unfair competition is established (injunction and potential monetary remedies).

## Decision

- The Second Circuit reversed the judgment denying the counterclaim and held Mastercrafters liable for unfair competition.
- The court ruled that the Atmos’s overall appearance and configuration, as recognized in the market, could be protected against imitation notwithstanding the absence of patent or copyright.
- The court held that Mastercrafters’ use of its own name did not cure the confusion risk where observers might identify the clock by appearance and not notice labeling.
- The court accepted post-sale confusion as a basis for liability, emphasizing harm from observers attributing Atmos prestige and goodwill to the cheaper imitation.
- The court directed injunctive relief against continued manufacture and sale of Model 308 in the infringing form and remanded for further proceedings on accounting/damages.

## Legal Principles

- Unfair competition may be found when a competitor copies a distinctive, non-functional product configuration in a manner likely to cause confusion as to source or sponsorship, even absent patent or copyright.
- Likelihood of confusion may include post-sale confusion of non-purchasing observers, where the imitator’s product appearance causes mistaken identification with a prestigious original.
- Labeling the imitation with the copier’s own name is not dispositive when the similarity of appearance is likely to cause mistaken identification by observers who may not notice the mark.
- Intentional imitation to trade on another product’s reputation is strong evidence supporting an inference of likely confusion and resulting harm.
- Protection may extend to the overall combination and arrangement of otherwise common design elements when that configuration functions to identify a single source in the market.

## Conclusion

The court held that a lower-priced clock that deliberately copied the distinctive overall appearance of a prestige clock committed unfair competition because the imitation was likely to mislead observers after the sale, and it ordered injunctive relief with further proceedings on monetary remedies.


Mastercrafters Clock & Radio Co. v. Vacheron & Constantin-Le Coultre Watches, Inc., 221 F.2d 464 (2d Cir. 1955)