DEFENDING THE TRADE DRESS CLAIM
An overview of the law of trade dress protection and what to
look for in defending against such actions
By Daniel C. DeCarlo
Mr. DeCarlo is a partner with the Los Angeles law firm of Lewis, D’Amato, Brisbois & Bisgaardis and a member of the Public Relations committee of the International Trademark Association ("INTA”). INTA is a not-for-profit association of trademark owners and advisors dedicated to promoting trademarks as essential to world commerce."
In 1992, The United State Supreme Court approved the practice of brand owners claiming a trademark interest in the way their products looked or were packaged. In Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992), the Supreme Court held that the distinctive appearance of a Mexican restaurant (described by the plaintiff as a “festive eating atmosphere having interior dining and patio areas decorated with artifacts, bright colors, painting and murals”) was entitled to protection as a trademark under Section 43(a) of the Lanham Act (15 U.S.C. Section 1125(a)). Section 43(a) reads in relevant part the following:
“(a)(1) 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-
(A) 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...
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.”
Generally speaking, the last three decades have brought increased activity in unfair competition lawsuits, especially those of the trade dress variety under Section 43(a) of the Lanham Act. (See Generally,J. Thomas McCarthy, McCarthy On Trademarks and Unfair Competition, §1:17) As is apparent above, the statute’s language is sweeping and Courts, until very recently, have consistently refused to narrow the fairly clear and broad nature of the statutory principal enunciated in this section of the Act.
While Section 43(a) has largely been used as the basis for claims of infringement of unregistered trademarks, passing off and false advertisement, the courts willingness to broadly interpret Section 43(a) has spawned an increasingly diverse and creative tapestry of trade dress claims. Deferring to this guiding principal, courts have held that the look of packaging, (Two Pesos, supra) the color of a product (Qualitex Co. v. Jacobson Products Co., 514 U.S. 159 (1995)) and even the design of a product itself (Ashley Furniture Industries, Inc. v. Sangiacomo N.A. Ltd., 187 F. 3d. 363 ( 4th Cir. 1999)) can serve the function of trademark. With generous rulings such as these, it is no mystery why trade dress claims have proliferated. However, while these types of claims have exploded in recent years (and while the Circuits have struggled to grapple with the unwieldy nature of trade dress law) the United States Supreme Court has taken notice and in two of its last three terms has issued significant decisions which can only assist in defending against trade dress claims. These two cases, which will be explained in more detail later on in this article are Wal-Mart Stores, Inc. v. Samara Brothers, Inc., 529 U.S. 205 (2000) and Traffix Devices, Inc. v. Marketing Displays, Inc. 121 S. Ct. 1255 (2001).
1. THE ELEMENTS GENERALLY OF TRADE DRESS
“Trade dress involves the total image of a product and may include features such as size, shape, color, or color combinations, texture, or graphics, or even particular sales techniques.” John H. Harlan Co. v. Clarke Checks, Inc.,711 F.2d. 966 (11th Cir. 1983). The judicially developed law of trade dress was derived from the foundation of word trademarks. Section 45 of the Lanham Act (15 U.S.C. 1127) defines a “trademark” as any “word, name, symbol, or device” used by a maker to “identify his goods and distinguish them from those manufactured by others.” Thus, if a word or symbol can serve the function of telling the consumer “who makes this”, why can’t the packaging of the product, or the look of the very product itself serve that function? In fact, a market economy is served by such a developed concept of trademarks.
Provided the exclusive appropriation of a certain style of packaging or look of a product does not collide with traditional notions of fair competition (to be discussed later) or Federal Patent Law, the interests of consumers are advanced by permitting the owner of valid trade dress to prevent copying which causes consumer confusion. After all, it is in society’s best interest to create a system where those delivering products and services are rewarded for making products which create repeat business and correspondingly, punish those who fail to meet consumer expectation. Trade dress, like traditional word trademarks, advances that policy. If the visitors to a fast food establishment come to associate the look of the restaurant with the quality food obtained within, then the proprietors of that establishment should be able to prevent the competition from confusing the public by emulating its distinctive decor.
2. THE FIRST HURDLE: OVERCOMING THE “KNOCK-OFF ARTIST” PERCEPTION.
Every lawyer bringing a trade dress claim invokes, at one time or another, the moniker of “Knock- Off Artist” against the defendant accused of copying. “Knock- Off” of course, has no legal significance and is simply a pejorative way of describing the act of copying. In cases where there is little doubt that copying has occurred, defense counsel’s first goal is to educate the Court on what little significance such a label holds.
There is, in the vast majority of commercial endeavors, nothing insidious, illegal or anti-competitive in the act of copying. Indeed, copying in many instances is viewed as vital to a market economy and beneficial to consumers. Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989). “In general, unless an intellectual property right such as a patent or copyright protects an item, it will be subject to copying.” Traffix Devices, Inc. v. Marketing Displays, Inc., 121 S. Ct. 1255, 1260 (2001). A plaintiff who has no patent, copyright or valid trade dress rights in a particular product is engaged in an act to deprive consumers of a choice (undoubtedly at a less expensive price) by taking the position that only it can make a particular product. Such a stance is dangerous to a competitive economy and can be properly painted by defense counsel as an over-reaching anti-competitive act in itself.
3. ASCERTAIN IF THE TRADE DRESS IS REGISTERED
One of the first things defense counsel should determine is whether the subject trade dress is registered with the United States Patent and Trademark Office (“PTO”). Like word trademarks, trade dress can also be registered. While trademarks and trade dress need not be registered to be protectable, there are significant advantages to registration. In the case of litigation, and especially in light of the Supreme Court’s recent opinions on this topic, defending against registered trade dress is significantly more difficultthan defending against unregistered trade dress. Registration under Section 2 of the Lanham Act (15 U.S.C. Section 1052) permits the plaintiff to sue under Section 32 (15 U.S.C. Section 1114), while plaintiffs owning only non-registered trade dress (or trademarks) must rely upon Section 43(a). More importantly, the plaintiff who owns a registration in its trade dress need not prove the validity of such trade dress as registration provides prima facie validity. Generally speaking, registration for five years renders the trade dress incontestable, which makes it extremely difficult to ever invalidate the trade dress. If the trade dress is registered, counsel should obtain from the PTO the entire prosecution history related to the trade dress. The prosecution history will provide crucial information related to the procedural and substantive elements of the plaintiff’s trade dress. The prosecution history (also sometimes referred to as the “file history”) includes statements made by the plaintiff or its counsel in an effort to obtain registration. As such, these statements can often times prove helpful in defending against infringement claims.
The substantive elements required for obtaining a registration in trade dress are ostensibly the same as are required in a court action to prove a valid mark and will be discussed in this article in turn.
4. TRADE DRESS MUST BE NON-FUNCTIONAL
A recent amendment to Section 43(a), makes it the plaintiff’s burden to establish that its proposed trade dress is non-functional.(Section 43(a)(3)). Prior to this amendment the circuits were split on whether non-functionality was an element of trade dress the plaintiff was required to prove or whether functionality was an affirmative defense. Trade dress deemed functional is not protectable. This is because Federal Patent Law, not Trademark Law protects novel machines, processes and designs. Patent law offers a legal monopoly to inventors and even offers the power of the federal court system to shut down those who attempt to compete by using the patented device or design. Patent law seeks to strike a balance between the need to provide inventors with incentives to create new and useful articles while limiting the time period for which the inventor can bar others from competing.
Trademark law, in contrast, does not seek to place a time limit on trademark rights. Provided that an owner continues to use its mark in commerce, the rights vested in the trademark have the potential to live on forever. Thus, in order for trade dress to be viable, it can not run afoul of patent law, for it is patent law which governs useful articles and it is trademark law which governs symbols of good will. The so-called “functionality” restriction of trade dress law ensures that never ending de facto patent rights are not created under the auspice of trademark law.
The functionality doctrine essentially dictates that if a particular product design (or packaging) is superior in function than other available designs, then the alleged trade dress is de jure functional (functional as a matter of law) and not capable of trade dress protection. In Re Pingel, 46 U.S.P.Q. 2d. 1811, 1814 (TTAB 1998). The United States Supreme Court has articulated the concept this way:
“In general terms, a product feature is functional if it is essential to the use or purpose of the article or if it affects a cost or quality of the article.” Qualitex v. Jacobson, 115 S. Ct. 1300 (1995).
Bright line examples of designs which are functional and thus could not qualify for trade dress protection include a paperclip or rubber band. A manufacturer would not be permitted to appropriate these designs as trade dress because it would prevent meaningful competition in the product itself. The design is a product of its purpose, and hence the design is functional. In contrast, the inventor of the paperclip was rewarded for his or her initiative by being able to prevent others from making the paper clip for nearly two decades while the invention was covered by its patent. Once the patent expired however, anyone could make a paperclip. To effectively compete in the “making tools to keep papers together” market, competitors had to be able to make a design which emulated a paperclip. The design is essential to the purpose of the article, and forcing competitors to find another design would affect the cost and quality of the product. The paper clip is a superior way to keep papers together and thus cannot serve as trade dress. Trade dress law is designed to create a matrix wherein designs and packaging can earn good will based on the consumer’s understanding of who stands behind the product or service, not serve as a system to limit the availability of a useful design. That is the role of patent law, which places an absolute cut off point wherein such competitive restrictions end.
The decisive consideration in a functionality analysis is whether the overall design is so superior in function or economy of manufacture that recognition of that design as a trademark would hinder competition. Goodyear Tire and Rubber Co., v. Interco Tire Corp., 49 U.S.P.Q. 2d. 1705, 1715 (TTAB 1998). A significant test for measuring this concept is found in asking the question, “are there alternative designs” for the product. In the case of a paperclip, the answer is simple. However, the issue is rarely that simple. Consider a recent case where the design of a green house was at issue. The hopeful trade dress owner argued that there were many ways to make a green house and that competitors did not need to use his design, which was a variation of the traditional Gothic arch shaped greenhouse, to effectively compete. It is beyond dispute that arched green houses are functionally superior to non-arched greenhouses, yet there are different variations of the arched greenhouse. Highlighting how difficult it is to know how such cases will turn out, the Trademark Trial and Appeals Board (the entity which passes judgment on what can qualify as a trademark for registration purposes) rejected the application supporting its position with the following explanation:
“Applicant’s argument is unpersuasive. In the first place, we find that other Gothic arch-type greenhouse configurations of record in this case are not “alternative designs” within (the meaning of the law). Rather, they are merely variations of a single basic design, i.e. the gothic arch-type greenhouse.” Green house Systems v. Carson, 37 U.S.P.Q. 2d. 1748, 1754 (TTAB 1995).
Some other examples of cases where designs were held functional and therefore not entitled to trade dress protection include:
1. The shape of LEGO building blocks. While perhaps distinctive, the court determined there were very few alternative designs for children’s building blocks. Tyco Industries, 5 U.S.P.Q. 2d. 1023 (D.N.J. 1987) aff’d 853 F.2d 921 (3rd. Cir 1988).
2. The pentagonal shape of a loud speaker because the pentagonal shape is a superior design for the shape of a design matrix and thus contributes to functionality of the sound system itself. In fact, the Court noted, the manufacturer touted the functional benefits of the shape. It would thus be contrary to law to permit the manufacturer, who admitted in its own advertising the superior functionality of the design, to prohibit others from making the design when there was no patent protection covering the design. In Re Bose Corp., 772 F.2d 866 (Fed Cir. 1985).
A. EXAMINE ANY RELEVANT UTILITY PATENTS FOR CLUES OF FUNCTIONALITY
One of the best sources to consult in attempting to ascertain if trade dress is primarily functional are utility patents which disclose similar designs. Utility patents are directed to functional considerations and hence elements claimed in utility patents are uniquely suited to serve as support for a functionality defense.
In March of 2001, The Supreme Court squarely addressed the issue of what effect an expired utility patent plays in the context of a trade dress claim when the claimed trade dress is the subject matter of the expired utility patent. Traffix Devices, Inc. v. Marketing Displays, Inc., 121 S. Ct. 1255 (2001). In Traffix, the Court was presented with a scenario wherein the inventor of a particular type of road sign with a spring mechanism at its base to combat the effects of high wind (the sign would sway back and forth on its springs but not fall over), sued a competitor for trade dress infringement alleging that the competitors incorporated the same spring design. The spring design was the subject of a recently expired utility patent which the competitor reverse engineered. The plaintiff was understandably upset that the monopoly it enjoyed for so many years was now being threatened by the onset of competition. In fact, there was no dispute that the defendant slavishly copied the design. Despite the cries of unfair competition and “Knock -Off Artist” by the plaintiff, the Supreme Court had little difficulty holding that the spring mechanism was available for all to copy because the design was functional and thus not capable of trade dress protection.
The Court examined the utility patent and found that the element plaintiff was trying to claim as trade dress was described in the utility patent as a functional design. The Court issued a strong mandate that the presence of relevant utility patents be closely examined in trade dress cases:
“A prior patent, we conclude, has vital significance in resolving the trade dress claim. A utility patent is strong evidence that the features therein claimed are functional. If trade dress protection is sought for those features the strong evidence of functionality based on the previous patent adds great weight to the statutory presumption that features are deemed functional until proved otherwise by the party seeking trade dress protection. Where the expired patent claimed the features in question, one who seeks to establish trade dress protection must carry the heavy burden of showing that the feature is not functional. For instance by showing that it is merely an ornamental, incidental, or arbitrary aspect of the device.” Traffix supra at 1260.
Because of the importance that functionality and utility patents play in the trade dress analysis, defense counsel should search the PTO’s record for relevant patents, including all patents in the name of the plaintiff (both active and expired) as well as patents with similar subject matter. These patents should be carefully examined for clues on functionality.
B. EXAMINE THE PLAINTIFF’S ADVERTISING TO ASCERTAIN IF THE PLAINTIFF HAS EVER TOUTED THE ALLEGED DISTINCTIVE FEATURES OF ITS TRADE DRESS AS FUNCTIONAL.
The elements of protectable trade dress are not something innate to most without legal training. Accordingly, it is doubtful that the average business person would understand the implications from a trade dress point of view when advertising its products. It is therefore quite common for advertisers to tout the functional advantages of their products. This often times includes claims of superior functionality of a specific feature which the owner later attempts to claim as part of his or her trade dress.
Although there is no discussion of this area of inquiry in the Traffix case, it is conceivable that during the term of the patent, the owner of the wind resistant signs touted the superior functionality of his or her signs to that of the competition. For example, the statement “our patented spring base allows our signs to stay standing in gusts up to 70 miles per hour” would be significant evidence of a superior functioning product feature and make it difficult, if not impossible, for the owner to later claim that the feature is not primarily functional. Because of the importance of this evidence, a thorough review of all the plaintiff’s advertising should be made to discover any claims of functionality.
5. TRADE DRESS MUST BE DISTINCTIVE; EITHER INHERENTLY SO, OR THROUGH ACQUIRED DISTINCTIVENESS.
As noted above, the purpose of trademarks is to distinguish products from those of the competition, such that consumers can readily identify a product which has delivered value in the past. In order to meet this basic function, trade dress must be distinctive, either inherently, or through acquired distinctiveness which is sometimes referred to as secondary meaning. The mere fact that a product’s packaging or design is not functional, does not automatically equate with trade dress protection. A product’s design or packaging must still serve primarily to identify the source of a product before trade dress protection can be bestowed.
A. INHERENT DISTINCTIVENESS.
Because trade dress is a sub set of word trademarks, there is an instinct to look to the law of word marks even when the law does not easily translate. Word marks have always been classified by way of strength. The stronger the mark, the more apt it is to distinguish its product. The strongest marks are “arbitrary”, “fanciful” or “coined” marks. These are marks that have seemingly no logical affiliation with the products or services they designate. There is thus an incongruity with the mark and product. For example, XEROX, a made up name, is strong because it has no natural affiliation with any goods. APPLE has no logical nexus with computers and thus the mark is entitled to great protection. The fact that the relevant consuming public associates APPLE with computers is a testament to the power of the APPLE brand to distinguish its product. Arbitrary, coined and fanciful terms such as these are considered inherently distinctive and entitled to trade mark protection immediately upon use in commerce with goods or services.
In contrast to strong inherently distinctive marks are weak marks which are descriptive of the goods or services they represent and thus are afforded less protection (generic terms, such as APPLE for apples are never allowed to earn trademark protection). Examples of weak marks might include LUBE PROS for a quick oil change business or THE LOBSTER POT for a lobster restaurant. Such merely descriptive marks are not entitled to trademark protection until the proprietor of the marks establishes to the Court’s satisfaction (or the PTO if registration is sought) that the marks have established secondary meaning. Secondary meaning is proven by establishing that consumers have come to associate the mark with the plaintiff as its exclusive source. This is accomplished by evidence of the extent of usage, the amount of sales, the amount and type of advertising and in some instances consumer surveys.
1. The Wal-Mart decision and the effect on inherent distinctiveness.
A plaintiff has an incentive to assert that its mark is inherently distinctive because such a finding avoids the sometimes difficult task of proving acquired distinctiveness. As noted above, with word marks the test is manageable, however with trade dress the test becomes difficult to conceptualize and thus difficult to put into practice. For example, how does a court determine whether the design of a particular chair is inherently distinctive? The question is a difficult one because of the awkwardness of trying to adopt a test designed for word marks. The Circuits struggled with this concept, developing inconsistent tests which created more questions than answers. Consider the 2nd Circuit’s often cited test:
1. Is the design or shape a common or basic shape or design;
2. Is it unique or unusual in a particular field; and
3. Is the design a mere refinement of a commonly-adopted and well-known form of ornamentation for a particular class of goods which consumers view as mere ornamentation? Seabrook Foods, Inc. v. Bar-Well Foods, Inc., 568 F. 2d. 1342, 1344 (2d. Cir. 1977).
In the 2000 term, the Supreme Court made a significant advance in clarifying the place of inherent distinctiveness with regard to trade dress and putting to rest once and for all the Seabrook test for product configuration trade dress. In Wal-Mart Stores, Inc. v. Samara Brother, Inc., 529 U.S. 205 (2000), the Court in essence, acknowledged the futility of trying to interpret product configuration trade dress in an inherent distinctiveness hierarchy and held that all product configurations were by there very nature not inherently distinctive.
“In the case of product design...we think consumer predisposition to equate the feature with the source does not exist. Consumers are aware of the reality that, almost invariably, even the most unusual of product designs–such as a cocktail shaker shaped like a penguin–is intended not to identify the source, but to render the product itself more useful or more appealing.” Wal-Mart at 213.
The court went on to explain why, in the world of configuration trade dress, consumers were not served by adherence to an inherent distinctiveness concept:
“The fact that product design almost invariably serves purposes other than source identification not only renders inherent distinctiveness problematic; it also render application of an inherent-distinctiveness principle more harmful to other consumer interests. Consumers should not be deprived of benefits of competition with regard to the utilitarian and esthetic purposes that product design ordinarily serves by a rule of law that facilitates plausible threats of suit against new entrants based upon alleged inherent distinctiveness, and where product design is concerned we have little confidence that a reasonably clear test can be devised.” Id.
Accordingly, after Samara, all those seeking to protect configuration trade dress, either through the registration process or the courts, must establish secondary meaning in the trade dress. Note however, Samara drew a distinction between product packaging and product configuration. Product packaging can still be considered inherently distinctive. The Court also indicated however, that in cases where it was difficult to ascertain whether trade dress was of the configuration type or the packaging type, the Court should err on the side of forcing the plaintiff to prove secondary meaning. Id. At 215.
B. SECONDARY MEANING/ACQUIRED DISTINCTIVENESS
The requirement of proof of secondary meaning by a plaintiff (either because the proffered trade dress is configuration trade dress, or because the product packaging trade dress is deemed not inherently distinctive) is a fertile area of inquiry and defense.
Secondary meaning can be established in several ways and defense counsel should perform complete discovery on this issue. Many plaintiffs will try to meet their burden by simply placing into the record the amount of sales of products made with the trade dress. Perhaps counsel will also seek to illustrate the amount of money spent on advertising in which the trade dress appears. This type of evidence, however, is seldom, and should not be sufficient to meet plaintiff’s burden. The test is not how much money has been spent, but rather has the consumer come to associate the trade dress with the plaintiff. Special attention should be paid to the type of advertising used by the plaintiff. Did the plaintiff try to call the consumer’s attention to the trade dress as source identifying?
One example of an effective use of advertising to build consumer awareness with trade dress is how the Owens Corning company promoted its pink insulation. Its marketing and promotion focused on the pink nature of the insulation. The Pink Panther was used in print and television advertisements to focus attention on the pink color. Additionally, slogans such as “keep your house in the pink” and “look for the pink” were used. The color pink, the Trademark Trial and Appeals Board found, had no function for insulation (the color in no way affected the insulation’s cost, quality or purpose) and the company’s advertising enhanced the distinctive nature of the trade dress at issue (the color pink). The color pink, the Board thus found, served the classic function of trademarks, to distinguish Owens Corning’s insulation from the competition. In Re Owens Corning, 774 F. 2d. 116 (Fed. Cir. 1985). Is it any wonder then that competitors wanted to make their insulation pink. The public had made an association between pink insulation and quality and that link proved to be of great value to Owens Corning.
Another way to establish secondary meaning, or to defeat secondary meaning, is to commission a survey. If defense counsel is confident that no secondary meaning can be established, counsel should consider hiring a survey expert to conduct an appropriate survey. These types of surveys are expensive, often time running in excess of $50,000 and therefore only cases where significant damage claims are possible, should such a survey be considered.
We have not addressed in this article the evaluation of an infringement claim beyond defending against plaintiff’s claimed entitlement to trade dress protection. If the plaintiff is successful in establishing that it owns trade dress protection, it must still prove likelihood of confusion or dilution and its entitlement to injunctive or monetary relief. Those elements of defending the claim are beyond the scope of this article.
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