The emerging circuit split over secondary meaning in trade dress law.

JurisdictionUnited States
AuthorBerzins, Ingrida Karins
Date01 May 2004

INTRODUCTION

Big-city sidewalk vendors have long hawked "Rolex" watches and "Donna Karan" t-shirts. In an upscale twist on the theme, the Wall Street Journal recently reported that "purse parties," in which hostesses sell knockoff designer goods to their friends, are a hot new trend, albeit with the potential downside of jail time. (1) Such counterfeits have become a huge business and a major challenge for law enforcement. At a Garment District warehouse in December 2003, New York police netted $1 million worth of counterfeit handbags purporting to be made by Louis Vuitton Malletier, Burberry Ltd., Chanel, Inc., and other luxury manufacturers. (2) For Coach, Inc., a maker of handbags and one of the standbys of the sidewalk scene and purse parties, the story is all too familiar: the company's goods turn up regularly in such stings." (3)

To the extent that they care about legal niceties, copycat manufacturers may be relying on the Supreme Court's 2001 observation that "in many instances there is no prohibition against copying goods and products.... Allowing competitors to copy will have salutary effects in many instances." (4) Yet, the Court also carefully noted that copiers may not infringe recognized intellectual property rights. (5) Coach handbags, for example, are protected by federal statute and common law governing the use of trade dress, (6) a subset of trademark law that encompasses both product design and product packaging. The past several years have witnessed evolving legal standards for trade dress protection, offering the prospect of legal redress against the many-headed Hydra of the counterfeit industry.

The Supreme Court's 2000 decision in Wal-Mart Stores, Inc. v. Samara Brother (7) was widely expected to fundamentally limit the extent of legal protections for trade dress. For product design, one category of trade dress, the picture indeed looked ominous: the Supreme Court stated that distinctiveness, one of the elements necessary to protect a valid trademark, could no longer be found "inherent," or automatic, for product design simply by virtue of its uniqueness. (8) Instead, distinctiveness now requires proving that the trade dress has acquired secondary meaning, defined as a connection in consumers' minds between the product and its manufacturer. (9) To show secondary meaning, the trade dress owner must prove that the trade dress identifies the source of the product to consumers. (10)

Immediately after the case, commentators lamented the "death knell" sounded by the Court for product design trademark owners. (11) Observers feared that, without the possibility of claiming inherent distinctiveness, product design owners would have little legal protection for their marks because the new requirement of proving acquired distinctiveness was potentially onerous. (12) By narrowing the scope of trade dress protection in an effort to forestall anticompetitive strike suits, some argued, "Wal-Mart will likely benefit [the] consumer's interests since it promotes competition in the marketplace." (13) But for the counterfeit industry, Wal-Mart "could have the unfortunate effect of encouraging the practice of 'knock-offs,' especially in the fashion industry." (14)

While Wal-Mart deprived trade dress of automatic, or inherent, distinctiveness, TrafFix, decided by the Supreme Court a year later, increased the difficulty with which trade dress owners must demonstrate non-functionality. (15) Although these two cases seemed to indicate that the Supreme Court had significantly raised the bar for product design protection, the Wal-Mart decision has not entirely stemmed the flow of product design claims, nor has it precluded trade dress owners from protecting their products from infringement. In fact, as I will discuss, several trade dress owners have recently adapted to the new requirements set out by Wal-Mart and prevailed against infringers.

This Comment examines recent product design case law to evaluate the effect of Wal-Mart on how secondary meaning can be shown by trade dress owners, identifies which types of trade dress claims are most likely to satisfy the secondary meaning requirement, and describes the growing rift among the circuits in the application of factors that are used to evaluate secondary meaning. This Comment then argues that product design litigation since Wal-Mart reveals a growing gulf among the circuits' evidentiary requirements for proving secondary meaning. In time, it will be necessary for the Supreme Court to answer the question it posed, yet left unanswered, in Wal-Mart: "What must be shown to establish that a product's design is inherently distinctive for purposes of Lanham Act trade-dress protection?" (16)

Part I defines trade dress. Part II discusses the elements that must be shown to obtain Lanham Act protection for trade dress. Part III introduces Wal-Mart and the current state of the secondary meaning doctrine, and Part IV examines the effect of Wal-Mart on trade dress law. Part V discusses the factors that various circuits use to establish secondary meaning, and Part VI surveys recent trade dress litigation that illustrates the current state of the secondary meaning doctrine and indicates the direction in which trade dress litigation appears to be heading.

  1. TRADE DRESS IN THE CONTEXT OF TRADEMARK LAW

    According to a widely cited definition, trade dress "involves 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." (17) Trade dress is a subset of trademark law and is also protected, whether registered or unregistered, by the Lanham Act. (18) Typically, trade dress litigation is brought under section 43 (a) of the Act, which addresses unregistered marks. (19) The Lanham Act grants trade dress owners "the exclusive right to use the trade dress and the right to prevent confusion of the consuming public in the marketplace." (20) Despite the application of these statutory provisions, Congress has not succeeded in passing a federal trademark bill for trade dress. (21) Instead, trade dress law has common law origins and continues to be primarily judge-made in the federal courts. (22) As this Comment will argue, the common law evolution of trade dress law has led to significant variance in how courts define and protect trade dress, and occasionally, the Supreme Court has stepped in to referee.

    Trade dress may be divided into two general categories: product packaging and product design. As the Restatement (Third) of Unfair Competition (23) made clear, trade dress traditionally covered the packaging or labeling of a product, but now can encompass the "overall appearance or image of goods and services." (24) The extension of trade dress protection to product design is a fairly recent development, (25) and the courts are still in the process of working out just what kind of protection is available to trade dress owners. The secondary meaning discussion in this Comment illustrates one aspect of trade dress law that has been in flux.

  2. PROTECTING TRADE DRESS UNDER THE LANHAM ACT

    To recover for trade dress infringement or unfair competition under section 43(a) of the Lanham Act, a plaintiff must prove three elements by a preponderance of the evidence. (26) First, the plaintiff must show that the two marks are so similar that there is a likelihood of confusion, which occurs when there is "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." (27)

    The second element the trade dress owner must prove is that "the appropriated features" (28) of the trade dress are primarily nonfunctional (29)--a burden that is particularly hard to overcome in product design cases, where the physical function of the object and its appearance are by definition intertwined. The Supreme Court, relying on the Restatement (Third) of Unfair Competition, has stated that a design is "functional" if its "'aesthetic value' lies in its ability to 'confer a significant benefit that cannot practically be duplicated by the use of alternative designs.'" (30)

    The third, and most contentious, element a trade dress owner must establish is that the mark is distinctive. (31) This requirement can be met in one of two ways. First, the mark may be "inherently distinctive" because it is a particularly unique, and therefore strong, trademark. Under the most widely used taxonomy, trademarks may be grouped "in an ascending order which roughly reflects their eligibility to trademark status and the degree of protection accorded[.] [T]hese classes are (1) generic, (2) descriptive, (3) suggestive, and (4) arbitrary or fanciful." (32) Some examples of marks falling under these categories include: "shredded wheat," a generic mark for shredded wheat cereal; (33) "Fish-Fri," a descriptive mark for fish batter mix; (34) "Coppertone," a suggestive mark for sunscreen; (35) and "Kodak," an arbitrary mark for film and camera products. (36) Only suggestive, arbitrary, and fanciful marks, "because their intrinsic nature serves to identify a particular source of a product, are deemed inherently distinctive and are entitled to protection." (37) At the other end of the scale, generic marks may not be protected at all. (38)

    Between these two extremes are marks that, though not inherently distinctive, can acquire distinctiveness over time, thereby obtaining trademark protection. For example, descriptive marks are not considered to be inherently distinctive, but as the Supreme Court stated in Two Pesos, Inc. v. Taco Cabana, Inc., (39) "descriptive marks may acquire the distinctiveness which will allow them to be protected under the [Lanham] Act." (40) Thus, while inherent distinctiveness is automatically assumed based on the substance of the mark alone, acquired distinctiveness, also called secondary meaning, (41) must be...

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