Aesthetic Functionality and Trade Dress

In the United States, one can register the look of a product or product packaging if it is distinctive as a trademark. This is called trade dress, and famous examples of this include the shape of the Coca-Cola bottle and the signature baby blue color of Tiffany’s brand jewelry boxes (see related blog on trade dress in the adult entertainment industry). In a leading case regarding trade dress and the look and feel of Mexican restaurants, the U.S. Supreme Court has held that trade dress “involves the total image of a product and may include features such as size, shape, color or color combinations, texture, graphics,” among others. Two Pesos, Inc.  v. Taco Cabana, Inc., 505 U.S. 763 (1992).

One way registrability of trade dress is limited is through the concept of “functionality”. U.S. law will not grant trademark protection to the design of a product or product packaging if that design was primarily motivated with functional considerations. Because patent and copyright law already protect novel inventions and aesthetic creations, one is not permitted to gain additional protection through acquiring trademark protection. “Functionality” in this sense includes not only usefulness by the end user and product designs which decrease production costs, but also aesthetic functionality. 

Qualitex Dry Cleaning Pad

In a leading case involving the registration of and litigation based on color as trade dress, the U.S. Supreme Court supported the notion that the “ultimate test of aesthetic functionality…is whether the recognition of trademark rights would significantly hinder competition.” Qualitex Company v. Jacobson Products Company, Inc., 514 U.S. 159 (1995). The case involved a gold-greenish color, applied to dry cleaning pads and typically sold to professional laundry cleaners, and pictured in this blog post. The Court  distinguished practical functionality (use of color to distinguish different types of medication) from the functionality of satisfying the “noble instinct for giving the right touch of beauty to common and necessary things.” The Court then held that if either functionality was found, courts must then examine whether use of that trade dress would hinder competition. This is assessed by examining whether the trade dress would allow one competitor  “to interfere with legitimate (non-trademark related) competition through actual or potential exclusive use of an important product ingredient.”

The Qualitex case seems to provide a framework for the analysis of aesthetic functionality, however, a look at subsequent opinions issued by lower courts shows a different story. Since the 1992 Qualitex opinion, several Federal Circuit Courts (courts of second instance) have issued varying interpretations of aesthetic functionality. On one end of the spectrum, the Second Circuit has denied trade dress protection in a design where the primary purpose of the plaintiff’s design “was aesthetic rather than source-identifying”. Knitwaves, Inc. v. Lollytogs Ltd., 71 F.3d 996 (2d Cir. 1995). On the other end of the spectrum, the Fourth Circuit refused to accept the doctrine altogether: “[T]his court has no reason to think that the Fourth Circuit would be inclined to adopt such a policy.” Devan Designs, Inc. v. Palliser Furniture Corp., 27 U.S.P.Q.2d 1399 (4^th Cir. 1993).

While it is clear that aesthetic functionality is a bar to trade dress protection in the U.S., guidance provided by case law as to the determination of aesthetic functionality is ambiguous. In fact, a leading U.S. trade mark authority has even characterised aesthetic functionality as a “fading theory”. McCarthy on Trademarks and Unfair Competition, § 7:80.

– ck

Proper "Use" and Your Trademark Portfolio

I think it is good practice that, from time to time, brand owners audit their trademark portfolio to analyse their current practices, look at their future brand strategy, and compare those two in order to see where shortfalls exist and where current practices may need to be adjusted moving forward.

One part of a trademark audit should include a look into the use of the trademarks currently registered. Improper use of a trademark can lead to trademarks losing their distinctiveness, shrinking of the scope of protection, and loss of clarity in brand identity amongst consumers. Proper notice of trademark rights, such as properly adding the ® symbol to trademarks, can have a deterrent effect on likely infringers. In a similar vein, improper use of the ® symbol varies from country to country (no rules in Brazil; only with registered trademark marks in India, punishable by fines and even imprisonment), and thus having an accurate grasp of one’s trademark use and the relevant legal authority will help avoid unnecessary surprises.

Proper use is also important with respect to use requirements in different jurisdictions. In the United States, the standard of “a bona fide use of the mark in the ordinary course of trade” is necessary before a trademark registration will issue. In the European Union, Community Trade Mark (CTM) applicants receive a trademark registration first, and only after five years could the proprietor be required to demonstrate “genuine use”, and with different standards than in the U.S.

It is important to have an accurate perception of the use of existing registered trademarks and potential marks for which registration may be sought at a later date. By conducting an audit of the portfolio, which includes an assessment of use, trademark usage guidelines can be created for all the relevant parties in a company which is related to use of the brand. This will help to ensure that marketing managers, social media teams, and business groups will all use the brand in a unified and clear manner, and thus protect and increase the value of the brand.

– ck

Interesting Trademark Law Fact 1: Abandonment

One way to lose a U.S. trademark registration is through “abandonment” of the mark. Among other ways, abandonment can be established by a showing of non-use of the mark in commerce. For example, if McDonald’s issued a press release stating that they were going to take Big Mac’s off their menu, and consequently stopped selling Big Mac’s, McDonald’s could likely lose their trademark in Big Mac’s for sandwiches in International Class 030.

However, courts have held that not all nonuse will lead to abandonment. An interesting series of cases occurred in the 1940’s where courts consistently held that suspension of a use of a trademark due to war would not lead to abandonment of a mark.

In Vaudable v. Montmarte, the famous Parisian restaurant Maxim’s was closed due to German occupation in WWII, and thus suspended it’s wine and catering services in New York, where it operated under the same name. Another New York restaurateur opened a replica of the Parisian Maxim’s in New York City, and the court fell deaf to the restaurateur’s claims that the real Maxim’s abandoned its trademark rights, finding no abandonment of the mark since Maxim’s business continued after the war in 1946. A similar finding on the abandonment-due-to-war issue. occurred in Chandon Champagne Corp. v. San Marino, involving the “Dom Perignon” mark. However, the ultimate result was against the owners of “Dom Perignon.”

Courts have refused to find abandonment in many situations where companies stopped using their trademarks due to outside circumstances: labor strikes, government seizures of foreign based companies, severely low levels of sales, and resource-intensive litigation causing a halt in business operations.

If you find your company needing to temporarily halt your trademark use due to severe outside circumstances, you may still preserve your trademark rights!

– ck

Trademark Registration: The “Use in Commerce” Requirement for Internet-Based Companies

For all marks sought to be federally registered in the United States, the requirement that the mark first be “used in commerce” must be satisfied, as registered trademarks must designate the origin and source of a product. At least one qualifying “specimen” of the mark being used in commerce must be submitted in each trademark application. Typically, submitting a picture of a mark attached to a good, a picture of a product with the mark in a trade catalog, or a picture of the mark on a trade show sign will suffice. This is requirement is relatively easy to satisfy in goods-based industries, and slightly more difficult for service-based industries which offer most or all of their services on the Internet.

While screenshots of a trademark applicant’s webpage can be a satisfactory specimen to satisfy the “use in commerce” requirement, a slightly different and more specific set of rules applies when the goods or services are offered exclusively on the internet.

Goods-Based Companies Existing Exclusively on the Internet

For a goods-based company on the internet, the USPTO follows case precedent on this issue, which consists of three factors to determine the eligibility of a screenshot as a specimen showing “use in commerce”:

1. The webpage must include a picture of the goods
2. The mark seeking registration must be shown sufficiently near the picture of the goods so that the website viewer is likely to associate the mark with those goods
3. The webpage contains the information needed by a website viewer to purchase and order the goods.

I would also stress that the mark should prominently displayed in the screen, as well as in all the pages of your website. If your mark is buried amongst a sea of text on your webpage and in your screenshot, it will not be seen as a sufficient use.

If your application for a trademark will submit a screenshot of your webpage as a specimen, and that screenshot satisfies the above three requirements, then it should satisfactorily demonstrate “use in commerce” to the USPTO Examining Attorney on your case.

Service-Based Companies Existing Exclusively on the Internet

Service-based companies possess a unique twist on the issue of proving “use in commerce” in a trademark application. This is because there is no part of the service upon which one could attach the mark. For specimens used to show “use in commerce” of service marks in general, it is only necessary to show the mark actually used in the advertising of the services, with an emphasis on an association between the mark and the services. A screenshot which shows only the mark, without a reference to the relevant services, would not demonstrate sufficient usage of the mark.

Consider adding a tagline to your mark, briefly explaining the services associated with the mark. For example, I am currently rebranding my law practice under the mark SOMA, with a tagline beneath stating “Trademark and Branding Law for the Internet Era”. If placed several mentions of the mark SOMA all over my webpage, and thus all over my screenshot specimen, it may not be obvious to a website visitor what it is that SOMA as a company provides. If this is unclear, than there is insufficient usage of the mark in commerce.

Examples of Specimens Failing to Demonstrate Sufficient “Use in Commerce” for Services

• A professional Christmas tree decorator/designer company submitting a specimen of a picture showing tags with their mark fixed to Christmas trees (mark makes no explicit reference to services)
• A custom parts manufacturer submitting a specimen of a picture showing labels fixed to packaging of custom manufactured parts (insufficient to show “custom manufacturing” as the service connected to the mark)
• An anti-drunk-driving organization submitting a specimen of a bumper sticker containing only the mark (the mark itself was insufficient to demonstrate what service was being provided)

Chippendales and Playboy – Trade Dress in Adult Entertainment

Chippendales sought to register the “cuff & collar” look of their male dancers with the United States Patent and Trademark Office, and ultimately failed. The USPTO denied Chippendales’ attempt to register this trade dress because the “Cuff & Collar” look was not inherently distinctive, a requirement for trademark registration in the United States. 

The term “trade dress” refers generally to a business’ overall look and feel, and can be a registered as a trademark if it is inherently distinctive and serves to identify the source/origin of a product. This is a separate concept from rights in a trademark or logo, which typically covers just a logo or company name.

A federal court has stated that trade dress may include “features such as size, shape, color or color combinations, texture, graphics, or even particular sales techniques.” For example, in the famous (at least for trademark nerds!) Taco Cabana v. Two Pesos case, two Mexican themed restaurants were in litigation over restaurant decor, where Taco Cabana described its decor as “a festive eating atmosphere having interior dining and patio areas decorated with artifacts, bright colors, paintings and murals. The patio includes interior and exterior areas with the interior patio capable of being sealed off from the outside patio by overhead garage doors. The stepped exterior of the building is a festive and vivid color scheme using top border paint and neon stripes. Bright awnings and umbrellas continue the theme.”

Chippendales, a company providing live, male exotic dancing services, sought trademark registration in look of their male dancers, who wear only a bowtie collar and cuffs in place of a shirt. The company has been in existence since 1978, and adopted the “Cuff & Collar” look in 1979. They claimed that this unique uniform served to uniquely identify Chippendales as the provider of the exotic dancing service. However, the Federal Circuit doubted the distinctiveness of the uniform, and upheld the denial of registration by the USPTO.

Marks sought to be registered must be inherently distinctive. If a mark is generic or merely descriptive, U.S. trademark law will not allow a single company to have a monopoly on a generic mark, as these marks must be reserved for the general public use to effectively communicate.

In the Chippendales case, the court paid particular attention to the existence of a “Sexy Bunny Costume” for sale at a costume store, as well as  Chippendales’ own expert witness referenced an article stating “The collar and cuffs, like the bunny suit which inspired them, has become a trademark recognized, wherever women take their entertainment seriously, as a symbol of professional and sexy fun.” How embarrassing for the legal team!

Because of this ruling, the public can continue to freely and safely use the cuff and collar look without starting a ticking time-bomb for trademark infringement.

$10,000 Shoes as a Product of Strategic Branding

The future has become now, as the Nike Mag was released this past Friday, September 8th. The Nike Mag is a self-lacing shoe which made its first appearance in the 1989 film Back to the Future 2, and is all the hype here in 2011. It’s also a great opportunity to see some of the many uses of trademarks in action.

Trademark as an Indicator of Source and Quality. People around the world would agree that Nike makes a quality shoe, and having Nike back this promotional shoe lends a great deal to the selling power of this promotion. A master of brand collaboration as seen in their “Dunk” collection, amongst others , Nike also knows how to market cool, certainly helpful to this promotion of the self-lacing shoe.

Trademark as an Indicator of Sponsorship. Back to the Future 2  grossed $332 million in the box office, and another $72 million in rentals in the United States alone. The reach of this movie was widespread, and it is an iconic film series of the late 80’s and early 90’s conjuring fond memories in the minds of consumers who were children and young adults during that time. By associated the Back to the Future mark with the Nike Mag, scores of potential purchasers have been included in the reach of Nike Mag; consumers who may otherwise have no interest in purchasing a hip Nike limited release shoe.

Trademark as an Indicator of Positive Public Image. The Michael J. Fox Foundation for Parkinson’s Research is a key player in the release of the Nike Mag, with proceeds of Nike Mag sales contributed to the foundation. Michael J. Fox himself endorses the shoe on behalf of the foundation in a video, making a pitch for the foundation’s mission to cure Parkinson’s disease.

Trademark as an Indicator of Distribution. All 1500 pairs of Nike Mag are being exclusively sold on Ebay, with 100 pairs going up for auction every day for 15 days. Ebay is a strategic medium for distributing these shoes, with its auction-style purchasing serving to maximize profits for this limited release shoe in a relatively short amount of time.

The cumulative effect of the collaboration of 4 commercially significant identities is worth mentioning. As many of my peers expressed, I can’t say I’m overjoyed over the design of the shoe. However, I think there’s something to be said about the power of brand identity in driving consumer behaviour when people are paying $10,000.00 for a shoe that, isn’t necessarily the most aesthetic product out there.

Businesses can achieve the type of hype and consumer awareness exemplified here by the Nike Mag release through using their trademarks in multiple capacities, but only after consumers have a clear message of what the trademark and brand communicate.  Creating a solid company identity over time through strategic registration and enforcement of trademarks lets a company clearly communicate to the consumers it wishes to reach. If another business is using your mark, you may want to think twice about what the association between that other business and your mark will communicate to the market. Having your brand associated with too many ideas or third-party brands dilutes your trademark’s value and strength. It pays to be wary of the use of your mark.

It’s great to see the self-lacing shoes become a reality, but what I think we all really want is the hover board…

Brand Equity 101

If Apple wanted to sell just its branding (INCLUDES the Apple, Ipod, Iphone, Ipad trademarks, and the designs of Apple products. DOES NOT INCLUDE Apple’s computers, technology, vehicles, buildings), they would pull in a cozy $153 billion. Check out this list of the 29 highest valued brands in the world.

In the marketing world, “brand equity” stands for the value that marketing, public relations, and other publicity efforts adds to a product or service. Amongst business circles, this simply means more assets and an addition to a company’s overall portfolio.

Using a purely monetary example, let’s take a Sterling silver ring which costs $25 USD to make, considering the material, craftsmanship, and time. Now, this ring is quite a beautiful ring, a ring that resembles two interlaced silver bands. But you don’t know this silversmith, or his work, and at the time you make the order you don’t know how the ring will turn out. If you reluctantly agreed to make a purchase order for $25, then you have paid for the silver, the silversmith’s skill, and the silversmith’s time.

Now, let’s say this silversmith is hired by a certain well known jewelry company, and he makes the same exact ring using the same materials and craftsmanship. However, now the ring is sold for $325, and consumers are willing to pay for it. What happened? Brand equity happened.

There are many parts of brand equity, and it can inculcate many perceptions in the minds of consumers. While difficult to quantify, it is also difficult to argue that brand equity is fictitious when love-struck men are lining up to pay hundreds of dollars for silver jewelry, just because it says “Tiffany” on it. Perception of quality and brand awareness, association, and loyalty are all tied to how much money consumers are willing to pay for a brand, and thus, an indicator of brand value.

A failure to properly guard your intellectual property can lead a court to find that your rights are weak or nonexistent, and allow others to benefit from your efforts in building your brand. Registering trademarks, company names, package design, and unique store layouts are examples of methods you can use to protect your brand equity from other companies who will try to pass off their goods as yours.

Trademarks and Your Business

Trademarks are a very important, and often overlooked, part of a company which does business across state lines or over a large geographic area. The more successful a company gets, the more likely someone will attempt to copy that success, and frequently, this involves a new company imitating the identity of the successful company.

U.S. federal law defines “trademark” as any word, phrase, symbol, or device, or a combination of these, used by someone to “identify and distinguish his or her goods…from those manufactured or sold by others and to indicate the source of the goods.” This article will unpack this definition.

First, you should know the different types of protections that copyrights, trademarks, trade secrets, and patents provide.

A trademark signifies your company’s identity, whether the mark is a word or a logo or a slogan. It works much like your personal name; when someone mentions your name to your social circles, others will match you and your reputation to your name. A trademark operates the same way for a business. When you see the Yahoo! mark, or when you see the Google mark, what do you think/feel about those companies? Do you think/feel different when you see the Ferrari or Toyota mark? That’s the effectiveness of a strong trademark which has had millions of dollars invested into it. It’s identity, and it should be protected much like defamation laws protect your personal name.

When your trademark is successfully registered with the U.S. Patent and Trademark Office (USPTO), the federal government essentially guarantees you, the trademark owner, several rights. If someone else tries to imitate your trademark, you can use federal courts to stop the unauthorized use and sue them for profits gained from imitating your trademark. You can see the value in this if you can imagine how much money you could make if you could start a shoe company tomorrow and slap a Nike Swoosh on every pair.

In cyberspace, trademark owners have rights against those who register domain names similar to  a registered trademark, and then uses that registration to drive traffic away and profit from a trademark owner’s webpage. For example, if someone registered <cloroxx.com> and sold their own brand of bleach, or if someone registered <nykee.com> and sold footwear on the site.

When you register a trademark, you own it. Like other types of property, you can lease it to others to use, and for a price. This is licensing. When your trademark is very strong, others will want to use it to harness the selling power of it. This is very similar, and sometimes a part of, franchising: the trademark owner has a tried and true mark which sells products because of its good reputation, and the trademark owner can license that mark to others who want to use the mark to their advantage.

I hope this helps young entrepreneurs with conceptualizing what a trademark is and how registering a trademark can be a benefit. As always, The Law Office of Cliff Kuehn can always be contacted for further questions at ck@cliffkuehn.com.

–  ck

Even Motorcycle Gangs Get Trademarks

Mongols Trademark Registration Certificate

After about two years of prosecution, a federal judge ruled that the motorcycle gang “Mongols” get to keep their trademark registration. The Mongols Nation Motorcycle Club, Inc., the gang’s legal name, began using their named trademark in 1969 soon after the group of Latino Vietnam veterans formed the gang after being denied entry into the Hell’s Angel motorcycle club. The design mark shown to the right was registered in 2006. When federal prosecutors filed an indictment against the Mongols in 2008 for charges ranging from racketeering to money laundering, one of the things they sought was forfeiture of the gang’s trademark, meaning ownership would pass to the U.S. government. I personally have not heard of the government pursuing a route like this before; essentially an attempt to usurp a defendant’s identity!

One of the rights that comes with owning a trademark is the ability to stop and/or sue for damages for unauthorized use of the mark. I am curious as to how the feds would have used this right. It would be very interesting to see FBI pulling over Mongol members on the highway and ordering them to remove patches or face trademark infringement claims!

-ck

What is Trademark-Able?

Just about everything, so long as you use it commercially to identify the source of your products, and so long as it is not “confusingly similar” to a competitor’s mark.

Company Name and Slogan – “Nike” and “Just Do It”

Domain Names – godaddy.com

Colors – Tiffany’s blue, T-Mobile pink

Sounds – MGM Studio’s lion roar

Smells – Only if the smell isn’t “functional” (ie – fragrances don’t count). A trademark is registered for a plumeria scent for a company that sells plumeria scented yarn.

Product Packaging – The Coca-Cola Bottle

Restaurant Decor – Think classic Taco Bell, KFC, McDonald’s storefronts.

The key is to remember that sometimes it is not so much what is being sought for a trademark registration, but how you use it.

– ck