In this case, we decide under what circumstances a products design is distinctive, and therefore protectible, in

Question:

In this case, we decide under what circumstances a product’s design is distinctive, and therefore protectible, in an action for infringement of unregistered trade dress under §43(a) of the Trademark Act of 1946 (Lanham Act), [citation]. 

Respondent Samara Brothers, Inc., designs and manufactures children’s clothing. Its primary product is a line of spring/summer one-piece seersucker outfits decorated with appliques of hearts, flowers, fruits, and the like. A number of chain stores, including JCPenney, sell this line of clothing under contract with Samara.

   Petitioner Wal-Mart Stores, Inc., is one of the nation’s best known retailers, selling among other things children’s clothing. In 1995, Wal-Mart contracted with one of its suppliers, Judy-Philippine, Inc., to manufacture a line of children’s outfits for sale in the 1996 spring/ summer season. Wal-Mart sent Judy-Philippine photographs of a number of garments from Samara’s line, on which Judy-Philippine’s garments were to be based; Judy-Philippine duly copied, with only minor modifications, 16 of Samara’s garments, many of which contained copyrighted elements. In 1996, Wal-Mart briskly sold the so-called knockoffs, generating more than $1.15 million in gross profits.

   In June 1996, a buyer for JCPenney called a representative at Samara to complain that she had seen Samara garments on sale at Wal-Mart for a lower price than JCPenney was allowed to charge under its contract with Samara. The Samara representative told the buyer that Samara did not supply its clothing to Wal-Mart. Their suspicions aroused, however, Samara officials launched an investigation, which disclosed that Wal-Mart and several other major retailers—Kmart, Caldor, Hills, and Goody’s— were selling the knockoffs of Samara’s outfits produced by Judy-Philippine.

   After sending cease-and-desist letters, Samara brought this action in the United States District Court for the Southern District of New York against Wal-Mart, JudyPhilippine, Kmart, Caldor, Hills, and Goody’s for copyright 832 Part 9 Regulation of Business infringement under federal law, consumer fraud and unfair competition under New York law, and—most relevant for our purposes—infringement of unregistered trade dress under §43(a) of the Lanham Act, [citation]. All of the defendants except Wal-Mart settled before trial.

   After a weeklong trial, the jury found in favor of Samara on all of its claims. Wal-Mart then renewed a motion for judgment as a matter of law, claiming * * * that there was insufficient evidence to support a conclusion that Samara’s clothing designs could be legally protected as distinctive trade dress for purposes of §43(a). The District Court denied the motion, [citation], and awarded Samara damages, interest, costs, and fees totaling almost $1.6 million, together with injunctive relief, [citation]. The Second Circuit affirmed the denial of the motion for judgment as a matter of law, [citation], and we granted certiorari, [citation].

II 

   The Lanham Act provides for the registration of trademarks, which it defines in §45 to include ‘‘any word, name, symbol, or device, or any combination thereof [used or intended to be used] to identify and distinguish [a producer’s] goods * * * from those manufactured or sold by others and to indicate the source of the goods * * *’’ [Citation.] Registration of a mark under the Act, [citation], enables the owner to sue an infringer under [citation]; it also entitles the owner to a presumption that its mark is valid, [citation], and ordinarily renders the registered mark incontestable after five years of continuous use, [citation]. In addition to protecting registered marks, the Lanham Act, in §43(a), gives a producer a cause of action for the use by any person of ‘‘any word, term, name, symbol, or device, or any combination thereof * * * which * * * is likely to cause confusion * * * as to the origin, sponsorship, or approval of his or her goods. * * *’’ [Citation.] It is the latter provision that is at issue in this case.

   The breadth of the definition of marks registrable under [the Act], and of the confusion-producing elements recited as actionable by §43(a), has been held to embrace not just word marks, such as ‘‘Nike,’’ and symbol marks, such as Nike’s ‘‘swoosh’’ symbol, but also ‘‘trade dress’’—a category that originally included only the packaging, or ‘‘dressing,’’ of a product, but in recent years has been expanded by many courts of appeals to encompass the design of a product. [Citations.] These courts have assumed, often without discussion, that trade dress constitutes a ‘‘symbol’’ or ‘‘device’’ for purposes of the relevant sections, and we conclude likewise. ***

   The text of §43(a) provides little guidance as to the circumstances under which unregistered trade dress may be protected. It does require that a producer show that the allegedly infringing feature is not ‘‘functional,’’ [citation], and is likely to cause confusion with the product for which protection is sought, [citation]. Nothing in §43(a) explicitly requires a producer to show that its trade dress is distinctive, but courts have universally imposed that requirement, since without distinctiveness the trade dress would not ‘‘cause confusion * * * as to the origin, sponsorship, or approval of [the] goods,’’ as the section requires. Distinctiveness is, moreover, an explicit prerequisite for registration of trade dress * * *, and ‘‘the general principles qualifying a mark for registration under * * * the Lanham Act are for the most part applicable in determining whether an unregistered mark is entitled to protection under §43(a).’’ [Citation.]

   In evaluating the distinctiveness of a mark * * *, courts have held that a mark can be distinctive in one of two ways. First, a mark is inherently distinctive if ‘‘[its] intrinsic nature serves to identify a particular source.’’ [Citation.] In the context of word marks, courts have applied the now-classic test originally formulated by Judge Friendly, in which word marks that are ‘‘arbitrary’’ (‘‘Camel’’ cigarettes), ‘‘fanciful’’ (‘‘Kodak’’ film), or ‘‘suggestive’’ (‘‘Tide’’ laundry detergent) are held to be inherently distinctive. [Citation.] Second, a mark has acquired distinctiveness, even if it is not inherently distinctive, if it has developed secondary meaning, which occurs 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.’’ [Citation.]

   The judicial differentiation between marks that are inherently distinctive and those that have developed secondary meaning has solid foundation in the statute itself. [The Act] requires that registration be granted to any trademark ‘‘by which the goods of the applicant may be distinguished from the goods of others’’—subject to various limited exceptions. [Citation.] It also provides, again with limited exceptions, that ‘‘nothing in this chapter shall prevent the registration of a mark used by the applicant which has become distinctive of the applicant’s goods in commerce’’—that is, which is not inherently distinctive but has become so only through secondary meaning. [Citation.] Nothing in [the Act], however, demands the conclusion that every category of mark necessarily includes some marks ‘‘by which the goods of the applicant may be distinguished from the goods of others’’ without secondary meaning—that in every category some marks are inherently distinctive.

   Indeed, with respect to at least one category of mark—colors—we have held that no mark can ever be inherently distinctive. * * * We held that a color could be protected as a trademark, but only upon a showing of secondary meaning. * * * 

   It seems to us that design, like color, is not inherently distinctive. The attribution of inherent distinctiveness to certain categories of word marks and product packaging derives from the fact that the very purpose of attaching a particular word to a product, or encasing it in a distinctive packaging, is most often to identify the source of the product. Although the words and packaging can serve subsidiary functions—a suggestive word mark (such as ‘‘Tide’’ for laundry detergent), for instance, may invoke positive connotations in the consumer’s mind, and a garish form of packaging (such as Tide’s squat, brightly decorated plastic bottles for its liquid laundry detergent) may attract an otherwise indifferent consumer’s attention on a crowded store shelf—their predominant function remains source identification. Consumers are therefore predisposed to regard those symbols as indication of the producer, which is why such symbols ‘‘almost automatically tell a customer that they refer to a brand,’’ [citation], and ‘‘immediately * * * signal a brand or a product ‘source,’’’ [citation]. And where it is not reasonable to assume consumer predisposition to take an affixed word or packaging as indication of source—where, for example, the affixed word is descriptive of the product (‘‘Tasty’’ bread) or of a geographic origin (‘‘Georgia’’ peaches)— inherent distinctiveness will not be found. That is why the statute generally excludes, from those word marks that can be registered as inherently distinctive, words that are ‘‘merely descriptive’’ of the goods, [citation], or ‘‘primarily geographically descriptive of them,’’ [citation]. In the case of product design, as in the case of color, 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.

***

   * * * To the extent there are close cases, we believe that courts should err on the side of caution and classify ambiguous trade dress as product design, thereby requiring secondary meaning. The very closeness will suggest the existence of relatively small utility in adopting an inherent-distinctiveness principle, and relatively great consumer benefit in requiring a demonstration of secondary meaning.* * *

   We hold that, in an action for infringement of unregistered trade dress under §43(a) of the Lanham Act, a product’s design is distinctive, and therefore protectible, only upon a showing of secondary meaning. The judgment of the Second Circuit is reversed, and the case is remanded for further proceedings consistent with this opinion.

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Smith and Roberson Business Law

ISBN: 978-0538473637

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Authors: Richard A. Mann, Barry S. Roberts

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