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1987 Court Decision Trade or Business

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1987 Court Decision Trade or Business Powered By Docstoc
					TRADE DRESS
CAN COLOR QUALIFY FOR
TRADEMARK PROTECTION?
      YES!!!!!!!!!!!!

 THINK OF THE MANY PRODUCTS YOU
 ASSOCIATE WITH A CERTAIN COLOR.
   FOR EXAMPLE, PINK ARTIFICIAL
   SWEETENER IS AUTOMATICALLY
  ASSOCIATED WITH SWEET „N‟ LOW.
      QUALITEX COMPANY V.
  JACOBSON PRODUCTS COMPANY
FACTS
•Since 1950 Qualitex sold pads to dry cleaners

•These pads were a distinctive shade

•In 1989 Jacobson began to market the same color pads

•In 1991, Qualitex registered the special green-gold
color on press pads with the Patent and Trademark
office as a trademark

•Qualitex sued Jacobson for unfair competition and
trademark infringement
PROCEDURAL HISTORY
•The District Court found for Qualitex on both counts
•The Ninth Circuit set-aside the Trademark judgment
•The court found that the Lanham Act did not offer protection to color alone
•The Circuit Courts were split on the issue of whether or not color could be
registered

QUALITEX AT THE SUPREME COURT
•§ 1127 of the Lanham Act allows for color to be the subject of a trademark
•Color alone can indicate the source of a product
•Color can identify and distinguish goods
•Color cannot be the subject of trademark protection if it is functional
         o Allowing this would inhibit competition
•Allowing colors to be used as trademarks will not lead to the court having to
make value judgments about differences in shades of a color
•Colors are usually not so limited that there will be a shortage that would
inhibit competition
   FUNCTIONALITY


 IF CERTAIN ASPECT OF A PRODUCT IS
FUNCTIONAL, IF IT IS NECESSARY FOR
COMPETITORS TO MARKET COMPETING
  PRODUCTS, THE ASPECT CANNOT BE
           COPYRIGHTED.
 DETERMINING FUNCTIONALITY
   IN RE: MORTON-NORWICH PRODUCTS,
                 INC.


   THE TRADEMARK AND THE PRODUCT MUST BE
                 SEPARATE



This helps to     This             Sometimes, the
ensure that       distinction is   entire product can be
there is a        sometimes        the subject of
supply of forms   hard to          trademark protection,
for products      make             but only when the
                                   form is nonfunctional
DETERMINING FUNCTIONALITY
IN RE: MORTON-NORWICH PRODUCTS,
              INC.


          FUNCTIONAL DEFINED



  The normal or        A legal conclusion
  characteristic
  action of anything
 DETERMINING FUNCTIONALITY
   IN RE: MORTON-NORWICH PRODUCTS,
                 INC.


           FUNCTION MEANS UTILITY



If an aspect of      Utility is a question of   If there are other
the product has      degree – trademark         alternatives
utility, it cannot   protection may             available, it is more
be the subject       depend on how              likely that trademark
of trademark         functional the aspect      protection will be
protection           of the product is          available
DETERMINING FUNCTIONALITY
  IN RE: MORTON-NORWICH PRODUCTS,
                INC.
              •Because of this, competitors need to use it
              to compete and trademark protection is not
              available
DE FACTO
              •The subject of the trademark makes the
UTILITY       product superior
              •This would not bar trademark protection
              for an entire package, when only parts of
              the package are necessary for competition

  Functionality is a question of fact that requires a
  balancing of the needs of one company to identify
  its products and the needs of competitors in
  creating similar products
       WALLACE INTERNATIONAL
SILVERSMITHS v. GODINGER SILVER ART
FACTS:
•Wallace International Silversmiths is as manufacturer of
a line of silverware called Grande Baroque.

•This line consisted of fine sterling utensils with an
ornate, massive, and flowery design on them. The line
sold for thousands or dollars per place setting.

•Godinger Silver art is also manufacturer of silverware.
His line included some of the design elements of Wallace’s
silverware, but which only sold for $20 a place of setting.

•Wallace sued Godinger base on Section 43 (a) of the
Lanham Act and claimed the ornamental design as a
trademark.
   AESTHETIC FUNCTIONALITY
          DOCTRINE


     The design is essential for the use or
           description of the item

•The Court stated that even if Wallace‟s design had developed
secondary meaning it still could not be protected by a trademark.

•The “GRAND BAROQUE” design was part of the functionality of
the silverware and was therefore not protected by the Lanham Act
   ROMM ART CREATIONS v. SIMCHA
         INTERNATIONAL
FACTS
• Room Art is a distributor of the art of Itzchak Tarkay
  and also had the exclusive rights to distribute her
  posters and artwork.

• Simcha distributed limited editions of the art of Patricia
  Govezensky whose line simulated the Tarkay style.

• Room Art sued Simcha under Section 43 (a) of the
  Lanham Act for infrigment of trade dress
                   •Tarkay had priority on that style
                   of art
                   •Tarkay‟s style had developed a
                   secondary meaning
TARKAY’s ART       •Govezensky works created a
(Court Decision)   likelihood of confusion among
                   consumers as to whose work was
                   whose
                   •The test for similarity between
                   pieces of art is whether the works
 TRADE DRESS       create the same overall
                   impression when viewed
  PROTECCION
                   separately
   APPLIES TO
 WORKS OF ART      •The court found a “striking”
                   similarity between the works, and
                   therefore found it likely that
                   consumers would be confused
   VORNADO AIR v. DURACRAFT
            CORP
FACTS

•Plaintiffs’ (Vornado) manufactured from their
patent -a household fan comprised of several
elements, including a spiral grill design, which
plaintiff claimed, improved the fan’s airflow.

•Defendant (Duracraft) produced a fan with
similar grill.

•Plaintiff sued for trade dress infringement,
pursuant to 43 (a) of Lanham Act.
                Where a product configuration is a
                significant incentive component of an
 PATENT         invention covered by utility patent, so
 POLICY &       without it the invention cannot fairly be
                said to be the same invention, patent
 TRADE          policy dictates that it enter into the
 DRESS          public domain when the utility patents
                of the fan expire.

                    Not every nonfunction configuration
                    is eligible protection. Court held
NONFUNCTION         that the plaintiff could not prevent
                    defendant‟s use of a similar grill. To
CONFIGURATION       hold otherwise would effectively
                    stop the defendant from practicing
                    the full invention embodied in the
                    patented fan once the patent
                    expired, contrary to the purposes of
                    the patent law
    TRAFFIX DEVICES v.
   MARKETING DISPLAYS
               FACTS



The manufacturer (MDI) of “Windbuster
outdoor sign stands brought trademark
and trade dress infringment action
against competitor (Traffix) that used
“Windbuster” mark for its traffic sign.
          Can be protected under federal law
          in an infringement action if the
TRADE     matter sought to be protected in not
DRESS     functional. Because plaintiff‟s dual-
          spring design is a functional feature
          for which there is no trade dress
          protection, plaintiff‟s claim is barred

          The existence of expired utility
          patents claiming dual-spring design
EXPIRED   mechanism for keeping outdoor
UTILITY   signs upright in adverse wind
          conditions created strong
PATENTS   evidentiary inference by showing
          that the design was merely
          ornamental, incidental, or arbitrary
          precluded trade dress protection for
          the design
    TWO PESOS v. TACO CABANA

FACTS
•Taco Cabana operates a chain of Mexican fast-
food restaurants in San Antonio Texas since 1978.
It is recognized that the interior decoration of the
restaurants represents the Mexican culture
•Two Pesos Inc. started doing business in
Houston and expanded around Texas except San
Antonio and took similar atmosphere that Taco
Cabana
•In 1987 Taco Cabana sued Two Pesos, Inc based
on trade dress infringement section 43 (a)
Lanham Act
                          Inherently Distinctive
TRADE DRESS
PROTECTION                Secondary Meaning



    Trade that is inherently distinctive
    (shows the source of the goods or
    services) can be protectable
    without showing secondary
    meaning
 SAMARA BROS v. WAL-MART STORES
FACTS
•Samara Brothers, Inc designs and manufactures
a line of children’s clothing.
•Wal-Mart Stores, Inc a chain of retail stores sold
in sale a special line of children’s clothes base on
Samara’s designs without her consent. In fact,
Wal-Mart contracted with Judy-Philipine (JPI) the
manufacture of that clothes and gave her the
samples.
•JPI copied the design with some small
modifications and put the Wal-Mart’s house label,
“small stepts”.
                •The allegedly feature is not
                “functional”
                •Likely to cause confusion
                •Distinctiveness     Inherently
UNREGISTERED
TRADE DRESS                   Secondary Meaning

(PROTECTION)
                       It presents 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.”
 DESIGN IS NOT INHERENTLY DISTINCTIVE.
  THEREBY REQUIRE PROOF SECONDARY
                MEANING
IDEAL TOY CORPORATION, Plaintiff, v.
    CHINESE ARTS & CRAFTS INC
FACTS:
•Ideal has an exclusive arrangement with
the inventor(a teacher in Hungary, Erno
Rubik) to sell the puzzle in the United States.
•Ideal has applied to register as its
trademark the name Rubik’s Cube.
•Ideal spent more than $1 million on
advertising in one year and has sold well
over $5 million cubes in a relatively short
period of time.
•The defendant is marketing cubes, which
have an appearance strikingly similar to
plaintiff’s.
                                        Is there a great variety of options
                                        available to the “second-comer”?
NON-FUNCTIONAL
                                        Colors: If second-comer has many
  (ARBITRARY)                           options regarding colors, shades of
                                        colors, and color combinations,
  TRADE DRESS                           plaintiff‟s distinct color combination
                                        must be considered non-functional.

                                        Start Position (here, start and
                                        finish position with each of the
INJUNCTION:                             sides containing one solid color):
                                        Defendant had many choices of
• Likelihood of Confusion               color combinations,schemes: polka
• Balancing Test                        dots, fruit patterns, etc.
    -Second-comer won‟t suffer          Packaging: Here the clear,
     hardship (with injunction)         cylindrical container is one of many
   -Plaintiff will suffer irreparable   ways to package the product.
    harm that can not be                There were other packaging
   repaired with monetary               options that were far more
   damages.(without injunction)         economical, available to the
                                        defendants
Plaintiff’s Product:
•Each Rubik’s Cube is a solid cube approximately 2 x 2 x 2.
• Each of the six sides of Rubik’s Cube consists of nine smaller cubes,
stacked three cubes high and three cubes across.
• Each of the three levels on a side can be rotated on an axis.
•Brightly colored adhesive squares of six different colors are applied to
the outer faces of each of the 27 smaller cubes.
Procedural Posture:
Plaintiff filed a motion for a preliminary injunction in an action alleging
common law and statutory trademark infringement and unfair competition
under the Lanham Act, (a), and the N.Y. Gen. Bus. Law §§ 133, 368-d.
Court Holds:
•There are a great number of color, start positions and packaging options
available to the defendant so as not to directly imitate the trade dress of the
plaintiff.
• The number of imitators and the accuracy of the copying of plaintiff’s trade
dress is persuasive evidence that the trade dress has acquired secondary
meaning.
•A preliminary injunction is warranted because of the irreparable damage to
Ideal’s goodwill and ability to control the nature and quality of goods being
sold that would result if the injunction were denied.
 NORA BEVERAGES, INC v. THE PERRIER
 GROUP OF AMERICA, INC.,
FACTS:
• Nora marketed spring water under the brand name
NAYA, using clear, ribbed plastic bottles made from
polyethylene terephthalate ("PET") on which it affixed a
dark blue label.
•PET is a clear, strong and environmentally-friendly resin
that was developed in the early 1970s by Dupont and is
now widely used among bottled drink manufacturers.
• The ribbed bottles are endowed with a "waist" that
creates what Nora refers to as a "bottle upon bottle"
effect.
•Perrier, through its subsidiary Poland Spring, then began
to market spring water in 1.5 liter plastic bottles carrying
their own prominent brand name labels.
                                     Courts look to the
       POLAROID                      “totality” of the product:
    OF TRADE DRESS                   •Strength of mark
    INFRINGEMENT                     •Degree of Similarity
                                     •Proximity of the Products

STRENGTH OF MARK                     •Likelihood that owner will
                                     bridge the gap
•   Labels can be integral, if not
    dispositive, factors in          •Actual Confusion
    determining overall similarity   •Defendant’s good –faith
    of trade dress
                                     in adopting its own mark
•   Courts will determine if marks
    are so dissimilar that no
                                     •Quality of Defendant’s
    question of fact is presented    product
    (thus a summary judgment will    •Sophistication of the
    be granted)
                                     buyers
PROCEDURAL POSTURE:
•This ten-year dispute involves the trade dress of 1.5-liter plastic bottles used for
packaging spring water.
•Plaintiff spring water bottler sued competitors, alleging various claims including
trade dress infringement, under § 43(a) of the Lanham Trademark Act
•The district court granted summary judgment and dismissed Nora's trade dress
and state law claims against PGA and other defendants.
•Nora appealed arguing, that the district court improperly dismissed its claim for
trade dress infringement (a) by reconsidering the issue of distinctiveness and
finding Nora's bottle to be generic, (b) by applying the wrong legal standard for
"likelihood of confusion," and (c) by considering issues of arguable fact in applying
the Polaroid factors; and
•The court of appeals affirmed, as a reasonable trier of fact could not find for the
bottler on the likelihood of confusion issue.
Court Holds:
•The presence of the prominent and distinctive labels on the competitors' bottles
alone: 1) negated any intent to deceive, 2) negated any possibility of a likelihood of
confusion, and 3) provided sufficient basis for affirming the district court's grant of
summary judgment.
•The bottler offered only minimal evidence of actual confusion, which did not
include consumer surveys.
•Copying the bottler's bottle alone was insufficient to establish bad faith on the
competitors' part

				
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Description: 1987 Court Decision Trade or Business document sample