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Vol. 5 Issue No. 3

Trademarks & Brands


Product design can never be inherently distinctive

Wal-Mart ruling not the watershed case it is made out to be

In the Wal-Mart Stores Inc. v Samara Brothers Inc. case, the US Supreme Court held that a product design can never be inherently distinctive, and therefore protectible, in an action for infringement of unregistered trade dress. In order to qualify for protection of product design or trade dress, a plaintiff must show that its unregistered trade dress has “acquired” distinctiveness or “secondary meaning”. It also held that trade dress, a category that originally included only the packaging, or “dressing” of a product, has in recent years expanded in meaning to include the design of a product.

The suit

Samara Brothers Inc., designer and manufacturer of children’s clothing, who retails them from a chain of stores, accused several other major retailers, including Wal-Mart, of selling knockoffs of Samara’s outfits, and filed a suit for infringement of unregistered trade dress under Section 43 (a) of the Lanham Act, which provides protection in the “total image of a product and may include features such as size, shape, color or color combinations, texture, graphics or even particular sales techniques.” This was specified by the Supreme Court in the Two Pesos Inc. vs. Taco Cabana Inc. case, which accepted, in principle, that trade dress can be inherently distinctive.

Later, in the Qualitex Company vs. Jacobson Products Co. Inc. case, the court itself made an exception to that rule and held that only one category of trade dress, and that is colour, can never be inherently distinctive. It said that colour as a trademark can be protected only if it shows a secondary meaning.

In the Wal-Mart Stores case, it went a step further and clarified what a plaintiff has to prove in order to obtain Lanham Act protection, and held that product design, also like colour, cannot be inherently distinctive, since it almost “invariably serves purposes other than source identification.” Therefore, in order to qualify for protection of trade dress, a plaintiff must demonstrate that its trade dress has “acquired” distinctiveness or “secondary meaning.”

How a mark can be distinctive

The Supreme Court held that a mark can be distinctive in two ways:

(1)A mark is inherently distinctive if “its intrinsic nature serves to identify a particular source.” Word marks that are “arbitrary, fanciful or suggestive” are held to be inherently distinctive.

(2)A mark has “acquired” distinctiveness, even if it is not inherently distinctive, or has developed secondary meaning, when, “in the minds of the public, the primary significance of a (mark) is to identify the source of the product rather than the product itself.”

The Wal-Mart ruling

In the Wal-Mart vs. Samara lawsuit, the Supreme Court first took recourse to the Lanham Act. It observed that though Section 43 (a) tells the owner of a trade dress for what reasons it can take action against infringement, it tells very little about protection of unregistered trade dress. It also does not speak about distinctiveness very explicitly, but the court noted that despite that, all courts have “universally imposed” that condition, since without that, there would be no confusion regarding the origin, sponsorship or approval of the goods, as the section requires.

The court also referred to Section 2 of the Lanham Act, which lists the general guidelines by which a trademark would qualify for registration. Though the section provides for registration of only those marks that are either inherently distinctive or have acquired distinctiveness of a secondary meaning, the court observed that nothing in the section demands the conclusion that in every category, some marks are inherently distinctive.

The court held that consumers, by and large, do not equate product design with the source. They are aware that even the most unusual product design is not intended to identify the source, but to make the product itself more useful as well as appealing. However, as far as packaging is concerned, that can turn otherwise indifferent consumers’ minds towards source identification. That is why there should not be any clause of inherent distinctiveness in product design, as its non-source identifying quality will harm consumer interests. Product design serves utilitarian and aesthetic purposes, and consumers will be deprived of that if there is constant fear of legal action against new entrants, the court held.

What constitutes product design

The court realised that it cannot provide a foolproof manner in which to distinguish designs from packaging, and hence ruled that close cases must be classified as design. This goes against the owner of the trade dress, but serves the consumer protection rationale of the Lanham Act.

The Coca-Cola bottle example

The court observed: “(A) classic glass Coca-Cola bottle, for instance, may constitute packaging for those consumers who drink the Coke and then discard the bottle, but may constitute the product itself for those consumers who are bottle collectors, or part of the product itself for those consumers who buy Coke in the classic glass bottle, rather than a can, because they think it more stylish to drink from the former.” Even while citing this example, the court expressed doubts over whether a clear-cut test of product design can be formulated at all.

The interpretation

Regarding product-design and product-packaging trade dress, the Wal-Mart ruling said courts should classify ambiguous trade dress as product design, rather than product-packaging. At the same time, however, it said that in Two Pesos, the trade dress under consideration was the décor of a restaurant, which did not constitute product design. It could be either product packaging, which the consumer normally thinks indicates origin, or else some tertium quid that is akin to product packaging. The Coke bottle example also stresses the point that the design-packaging distinction depends totally on the context.

Limitations of Wal-Mart

Though there are some who feel that Wal-Mart has been a landmark judgment of sorts which has changed the entire legalities of product design, the courts have not really gone beyond its basic ruling. Even after Wal-Mart, the lower courts have ruled that product design can still be generic. In the Abercrombie & Fitch Stores Inc. vs. American Eagle Outfitters Inc. case, the Sixth Circuit held that “only non-generic product configurations that have acquired distinctiveness through attachment of secondary meaning satisfy the distinctiveness requirement of the Lanham Act.” In Big Island, the United States District Court for Hawaii held that in the context of product design, genericness covers several areas. It held that a product design may be generic :

(i) If it is over-broad or too generalised;

(ii)If it is the basic or a basic form of a type of product;

(iii)Because it is so common that it is not identifiable with a particular source.

The method of assessing the utilitarian functionality of a product design also remains the same even after the Wal-Mart ruling. However, the considerations change if proof is required of acquired distinctiveness or secondary meaning. In the David White Instruments, LLC v. TLZ Inc. case, while the plaintiff sought protection of its trade dress, it also presented evidence of the high volume of sales and revenues and its long-standing reputation for manufacturing high-quality instruments, which was construed as secondary meaning by the court. The court, however, sounded a note of caution and observed that the plaintiff’s advertising, instead of its distinctive trade dress, primarily promoted its functional features.

The Wal-Mart ruling has also not adversely affected the availability of protection for product lines. In the New Colt Holding Corp. vs. RJG Holdings of Fla., Inc. case, the district court held that variations in alleged revolver trade dress and the clarity of plaintiff’s description concerning these variations did not harm its trade dress claims. In fact, it quoted the Second Circuit’s conslusion in Wal-Mart:

“We do not mean to suggest, however, that in order to gain protection each garment must contain identical specified design elements. We expect that in a product line there will be inevitable variation in the product.”

Again, in the Carroll Shelby Licensing Inc. vs. Super Performance Int’l Inc. case, the district court held that in a product design case, it is somehow presumed that design does not serve as a brand identifier. Just to disprove this assumption, the court asked plaintiff Shelby to prove that the source-identifying function of the design for Cobra automobiles was far more important than its aesthetic value. However, since Shelby was just the designer of the car which was marketed by Ford, it could not meet the requirement according to Wal-Mart, that “source” must refer to the entity which uses the design for commercial purposes. The court held that Shelby failed to prove that consumers associate the Cobra design with Shelby, and Shelby alone, as a source.

In the Leviton Mfg. Co. Inc. vs. Universal Sec. Instruments Inc. case, the district court in Maryland held that Wal-Mart has not affected the rules regarding the onus of proving acquired distinctiveness, or secondary meaning, of product designs. When plaintiff Leviton alleged infringement of the “well-known and functional” outward appearance of its ground fault circuit interrupter face plate, the court left it to Leviton to prove that its product had acquired secondary meaning. That is because the court found nothing inherently distinctive in the configuration or colour of Leviton’s product.

Packaging or design

Is it packaging or is it design: this is a question that has irked the courts since the Wal-Mart ruling. There have, of course, been a few cases simpler than the rest.

In the Eastern America Trio Products Inc. vs. Tang Electronic Corp. case, the court analysed the trade dress for the plaintiff’s telephone separately from the box in which the phone was packaged, and found that the packaging was inherently distinctive, but that no secondary meaning could be attributed to it.

In the Kaufman & Fisher Wish Co. vs. FAO Schwartz case, the plaintiff sought trade dress rights for both the packaging and design of its soft sculpture “wishing” doll, but failed to gather enough evidence to establish inherent or acquired distinctiveness of either its product or design. Trade dress rights were thus refused to the plaintiff. In another case related to dolls, the plaintiff sought trade dress protection for the copyrighted features of its real looking baby dolls. The nine Reva Schick doll sculpts consisted of a baby face, baby hands, arms and feet. However, going by Wal-Mart, the district court required secondary meaning, that is whether the “copyrighted sculpts have achieved a recognisable and distinctive place in the relevant marketplace, ie, have they taken on a secondary meaning.”

Furniture, for instance, is held to be within the product design category. In the Herman Miller vs. Palazetti Imps. & Exps. case, the court held that the plaintiff’s trade dress claims regarding its chair and ottoman are based on product design and cannot be confused with product packaging.

Quite a few other cases have distinguished rather easily between product design and packaging. In the EuroPro Corp. vs. TriStar Products case, plaintiff EuroPro’s alleged trade dress for “The Shark” vacuum, did not seek to protect its packaging, but only the design of the product. Citing Wal-Mart, the district court said it did not even need to discuss the “inherently distinctive” issue regarding the product.

A few other cases have held that trade dress that is arguably somewhat close to the design/packaging line, can be said to be inherently distinctive. In the Sally Beauty Co. Inc. vs. Beauty Co. Inc. case, where the trade dress at issue was a cosmetic bottle, the district court treated the bottle as product packaging and not product design, after comparing the bottle to brand name salon products.

In the TeleRep Caribe Inc. vs. Zambrano case, the plaintiff sought trade dress in a customised pre-paid calling card featuring a specific artwork. The district court granted preliminary injunction, and though it did not spell out very clearly whether the calling card constituted packaging or design, it also definitely did not apply the clause of secondary meaning as in Wal-Mart.

Purpose of a product, vis-a-vis Wal-Mart’s Coke

While deciding whether a claimed trade dress is design or packaging, some courts have preferred to go by the purpose a particular product serves.

In the Adidas-Salomon AG v. Target Corp. case, the district court went as far as saying that the Wal-Mart analysis yields “no clear answer” on whether Adidas’ original “Super Star” shoe trade dress was product packaging and not product design. It went on to explain that as with the hypothetical Coke drinkers and bottle collectors of Wal-Mart, a consumer might choose to buy the original Adidas shoes for various reasons, right from utility to simply style. Going by the Wal-Mart ruling that ambiguous trade dress should be classified as product design, it held that “Super Star” was a product design that was incapable of being inherently distinctive.

A men’s low-cut Wallabee-style shoe with a seven-sided buckle and a strap was treated as a product design in the Jack Schwartz Shoes Inc. vs. Skechers USA Inc. case, without even considering that it may be product packaging.

In Continental Laboratory Products Inc. vs. Medax International Inc., plaintiff asserted trade dress in its container for holding disposable pipette tips used for medical tests, and claimed it was product packaging, whereas the defendant insisted that it was a design. The court ruled that since the container is physically and functionally inseparable from the product, it would be a product design, and “therefore protectable, only upon a showing of secondary meaning.”

In Harvard Apparatus Inc. vs. Cohen, the district court refused to determine whether the plaintiff’s bioscience pumps were packaging or design, inasmuch as there was sufficient evidence of secondary meaning. However, the court stated that it had previously distinguished packaging from design by noting that “an item is the product if it is the essential commodity being purchased and consumed rather than the dress which presents the product.”

The court once again turned to Wal-Mart’s Coca-Cola bottle example to determine whether the plaintiff’s claim for protection of his novelty bumper sticker was valid or not, because the issue inevitably became one of whether it was design or packaging (McKernan vs. Burek). It concluded that since the essential commodity being purchased was a joke on a bumper site, “the proper classification of what McKernan seems to protect is product design.”

In Fedders Corp. vs. Elite Classics, the functionality of the trade dress did not determine its classification as design or packaging. The issue before the court was whether the plaintiff Fedder’s trade dress for its chassis line of room air conditioning units was product design or packaging. It held that it was product design, as the “undulating curve on the left or right side of the faceplate” definitely served a purpose other than just identify the maker. Since functional components are not entitled to trade dress protection, that cannot be the distinguishing factor between packaging and design, the court observed.

Tertium quid of product packaging

The more unusual or difficult cases have mostly been declared product designs instead of packaging, but that is also in keeping with Wal-Mart’s ruling that close cases should be so. In some cases, however, courts have banked on Wal-Mart’s tertium quid classification in avoiding a finding of product design.

In the Best Cellars Inc. vs. Wine Made Simple Inc. case, for example, the plaintiff claimed protection for the total effect of the interior design of its wine store. The court held that the interior décor category fits “awkwardly” in to the classifications of trade dress law that constitute either product packaging or a tertium quid akin to product packaging, as in Wal-Mart. Though many would argue that since the product packaging was “awkward”, the court should have classified the trade dress as design, the tertium quid category provided the much-needed cover for its decision.

There have been other cases where the tertium quid cover has come in handy. After the Two Pesos case, the lower courts recognised that a plaintiff is entitled to claim that restaurant décor is packaging or tertium quid. In the Yankee Candle Company Inc. vs. Bridgewater Candle Company case, the plaintiff sought separate trade dress protection for its candle labels as well as candle display and sales configuration. The First Circuit observed that it did not see the combination trade dress as inherently distinctive, which the Supreme Court later described as a “tertium quid akin to product packaging”.

Beyond and after Wal-Mart

A few years after the Wal-Mart ruling, litigants have altered and enhanced its scope to suit various needs, on a case-to-case basis, regarding protection of trade dress. Though Wal-Mart ruled that product design cannot be inherently distinctive, there is no one distinguishing factor between packaging and design. The “Coke bottle test” and the tertium quid classification provide some relief. To give credit to Wal-Mart, however, the most unusual or difficult cases continue to be classified as product design, just as it intended.