In a unanimous decision, the United States Supreme Court recently ruled that product designs are not inherently distinctive and thus are not entitled to trademark protection unless the design has acquired secondary meaning – that is, that the public perceives the design to identify the source of the product. This decision is important to all companies who depend on product design.
The Fight Over Children’s Clothing
The facts of the case, Wal-Mart Stores, Inc. v. Samara Brothers, Inc., 120 S.Ct. 1339 (2000), are not complex. Samara Brothers designs and manufactures children’s clothing, including seersucker outfits decorated with hearts, flowers and fruits. Wal-Mart, apparently not wanting to purchase Samara Brothers’ clothes directly, but attracted to its designs, sent photographs of Samara Brothers’ clothes to one of its own clothing suppliers. The supplier dutifully manufactured clothes bearing designs that were nearly identical to Samara Brothers’ designs, which Wal-Mart promptly sold for a tidy profit.
Samara Brothers sued for, inter alia, copyright infringement and trademark infringement, and prevailed on all of its claims at the trial court level. As to the trademark infringement award, Wal-Mart argued that Samara Brothers’ designs could not be legally protectible trade dress, since a consumer could not associate the designs of the clothes with the manufacturer of the clothes. After losing at the appellate court level, Wal-Mart appealed to the Supreme Court. The Supreme Court, reversing the appellate court, held that Wal-Mart did not commit trademark infringement because Samara Brothers’ clothing designs, as a matter of law, were not protectible.
Secondary Meaning is Required for
Product Designs
Before trademark rights will attach to trade dress, the trade dress must be distinctive. Otherwise, similar trade dress could not cause the public to be confused as to the producer of the trade dress. A mark is “inherently” distinctive if its intrinsic nature serves to identify a particular source. The Supreme Court held that, as a matter of federal trademark law, product designs can never be inherently distinctive because consumers do not equate the design of a product with the source of the product. Instead, according to the Court, people believe product designs are intended to make products more useful or more appealing.
The decision weakens the usefulness of trademarks in protecting product design. Under this decision, before trademark protection can attach to a product design, the design must acquire a “secondary meaning,” which means that the public must perceive the design to identify the source of the product.
The Difference Between Design and Packaging
The Court distinguished its ruling in Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 112 S.Ct 2753 (1992), which stands for the proposition that trade dress, in general, can be inherently distinctive, and thus protected by trademark law without proof of secondary meaning. The Court reasoned that the trade dress in Two Pesos, which was restaurant decor, was product packaging, not product design.
Thus, the Court has created a distinction between the design of a product and the package the product is contained in. The Court acknowledged that it may be difficult to distinguish product design from product packaging, using, as an example, a Coca-Cola bottle (which could be product design or product packaging). In light of this ambiguity, the Supreme Court instructed courts that are struggling with the issue of whether something is product design or product packaging to err on the side of classifying trade dress as product design, and therefore require proof of secondary meaning before protecting it by trademark law.
The Repercussions of the Decision
This decision weakens the rights of designers of all types of products, such as clothing, dishes and bedding. If a designer now wishes to use trademark law to prevent someone from imitating its products, it will have to establish a secondary meaning. This can be done by a variety of means, such as extensive advertising or continuous use for a lengthy period of time.
In light of this decision, designers should apply for trademark registrations on all of their important designs once they believe those designs have acquired a secondary meaning, because trade dress which is also a registered trademark is presumptively entitled to trademark protection. However, such registrations could be difficult to obtain, since the United States Patent and Trademark Office might grant registrations only to the most distinctive product designs.
Designers should also consider applying for copyright registrations and design patents for their important designs, since claims for copyright and patent infringement remain viable. This may provide little solace to designers since, in many respects, the Lanham Act’s protections are broader than those under the copyright and patent laws.
Conclusion
In the wake of the Wal-Mart decision, designers wishing to prevent knockoffs of their designs must work diligently to establish a secondary meaning in the minds of consumers, and should consider filing for trademark registrations as soon as possible. In addition, they should evaluate whether their designs can by copyrighted or patented.
Mark A. Finkelstein is an attorney at Latham & Watkins. As a member of Latham’s litigation department in Orange County, Mr. Finkelstein has represented clients in a wide range of business litigation while specializing in the area of intellectual property.
Latham & Watkins is an international law firm with close to 1,000 attorneys and offices in Chicago, Los Angeles, New Jersey, New York, Orange County, San Diego, San Francisco, Silicon Valley, Washington, DC, Hong Kong, London, Moscow, Singapore and Tokyo. Mr. Finkelstein can be reached at Latham & Watkins, 650 Town Center Drive, 20th Floor, Costa Mesa, California 92626, (714) 540-1235 or Mark.finkelstein@lw.com. Latham & Watkins paid for this space and is solely responsible for its contents.
