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Between patents and


trade marks
Darius C Gambino of DLA Piper analyses recent trends in trade dress
litigation, and suggests tips for an enforcement plan

O 1 MINUTE
ne of the benefits of patent litigation is the abil-
ity to obtain fairly sizable damages awards
under either a “reasonable royalty” or “lost prof-
its” theory. However, patent litigation is com-
plicated and costly, and injunctions are often
READ
difficult to obtain. Trade mark litigation typi- Trade dress litigation lies somewhere
cally provides a more straightforward path to an injunction, but between patent and trade mark litiga-
damages awards are much smaller. Trade dress litigation pro- tion, offering some of the benefits of
vides an avenue that lies somewhere between patent and trade each. Since a pair of Supreme Court
mark litigation, offering some of the benefits of each. For exam- cases decided in the early 2000s, many
ple, trade dress cases typically have a less complex trial schedule began to aggressively pursue enforce-
as compared to patent case (with no Markman hearing). Trade ment of trade dress rights, and court fil-
dress cases can also offer significant damages awards, the ability ings have risen sharply. Differences of
to obtain an early injunction, and a leaner trial budget. opinion remain across the Circuit Courts
of Appeal with regard to many trade
Trade dress has garnered a significant amount of attention in dress principles, especially with issues
the past 15 years due in large part to a pair of Supreme Court of functionality. But some core concepts
cases decided in the early 2000s – Wal-Mart v Samara Bros and have emerged, which provide a meas-
Traffix Devices v Marketing Displays. These two cases followed ure of predictability that was previously
closely on the heels the Supreme Court decision in Two Pesos v lacking in the trade dress field. In addi-
Taco Cabana, a case explicitly recognising that restaurant décor tion, recent damages awards in trade
could be protected as trade dress without a showing of second- dress cases have been sizable enough
ary meaning. This trifecta of cases brought attention to the con- to make trade dress litigation an attrac-
cept of trade dress, and reinvigorated filings with the US tive litigation alternative. These dam-
Trademark Office for this “fourth” type of intellectual property ages awards may be small compared to
(beyond patents, trade marks and copyrights). some patent litigation awards, but they
are sizable enough to make a trade
In Wal-Mart, the Supreme Court found that the “look and feel” dress trial worthwhile. Brand owners
of a line of children’s clothing could not be protected as trade concerned about incursions on the
dress without proof of secondary meaning. This ruling was in “look and feel” of their products should
direct opposition to Two Pesos, which held that a showing of consider adding a trade dress enforce-
secondary meaning was not required for the protection of ment plan to their overall strategy.

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UNITED STATES TRADE DRESS

Clearline Technologies roof support block Mixed Chicks haircare products

restaurant décor trade dress. Collectively, Two Pesos and Wal- fringer’s profits to a plaintiff luxury watch manufacturer (Aude-
Mart drew a hard line distinction between product packaging mars Piguet v Swiss Watch Int’l d/b/a/ Swiss Legend). The award
trade dress (such as restaurant décor) and product design trade in that case was later trebled and increased to a total of about
dress (such as the design of children’s clothing), with the former $11.7 million.
being capable of protection without a showing of secondary
meaning, and the latter requiring specific proof of secondary More recently, a California jury granted Herman Miller $8.4
meaning. Traffix exposed and expanded upon one more im- million in damages for infringement and dilution of its Eames
portant element of a trade dress case – the concept of function- office chair trade dress by a competitor (Blumenthal Distributing
ality. The plaintiff in Traffix attempted to protect as trade dress dba Office Star v Herman Miller). A Pennsylvania jury also re-
the design of a road construction sign that was the subject of cently gave more than $5 million in damages to a plaintiff who
an expired utility patent. The Supreme Court made clear that claimed trade dress in the container and packaging for a fig
trade dress cannot protect any shape or packaging that provides spread (Dalmatia Import Group v FoodMatch). While these
functional benefits to the consumer, and that expired utility damages awards might seem like small potatoes compared to
patents are strong evidence of functionality. some patent litigation awards, they are sizable enough to make
a trade dress trial worth the effort.
With the above principles in mind, many began to aggressively
pursue enforcement of trade dress rights, and court filings have Take the Herman Miller case, for example. Herman Miller began
risen sharply since 2002. Case decisions rendered since that pursuing Office Star for infringement of the trade dress in two
time have provided a helpful framework for litigating trade dress chairs (The Eames and The Aeron) in December 2013
disputes. While significant differences of opinion remain across through a cease and desist letter. Well prior to sending the letter,
the Circuit Courts of Appeal with regard to many trade dress Herman Miller had secured US Trademark Registrations on
principles (most notably with respect to issues of functionality), the “Eames” and “Aeron” chairs. The application to register the
some core concepts have emerged. These core concepts pro- “Aeron” chair was filed in March 2000, right around the same
vide a measure of predictability that was previously lacking in time Wal-Mart was making headlines at the Supreme Court. In
the trade dress field. In addition, recent damages awards in trade response to the letter, Office Star filed a declaratory judgment
dress cases have been sizable enough to make trade dress litiga- action, looking for a finding that Herman Miller’s trade dress
tion a viable litigation alternative. was not infringed. Interestingly, Office Star did not initially chal-
lenge the validity of the “Eames” and “Aeron” chair registrations
(US TM Reg Nos. 3,105,591 and 2,754,826). In the litigation,
Recent trade dress awards Herman Miller asserted these registrations, along with com-
mon law trade dress rights in variations of the chairs designs. In
In 2011, a Texas jury awarded a plaintiff more than $5.8 million October 2016, after a nine-day trial and two days of delibera-
in damages for infringement of trade dress in rooftop support tions, the jury determined that certain versions of the “Eames”
blocks for power lines (Clearline Technologies v Cooper B-Line). chairs sold by Office Star were likely to cause confusion of con-
A California jury awarded a trade dress plaintiff more than $8 sumers, and awarded Herman Miller $3.3 million in actual
million in damages in 2012 for infringement of the bottle design damages, and another $5.1 million in treble damages for wilful
for hair care products (Mixed Chicks v Sally Beauty Supply). In infringement. Notably, the jury cleared Office Star of Herman
2014, after a four day bench trial, Judge Baer of the Southern Miller’s claims relating to the “Aeron” chairs.
District of New York awarded more than $3.2 million in an in-

Herman Miller’s “Eames” Office Chair US TM Reg No. 3,105,591 for the “Eames” chair US TM Reg No. 2,754,826 for the “Aeron” chair

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UNITED STATES TRADE DRESS

Dalmatia Fig Spread US TM Reg No. 3,667,716 for Dalmatia fig spread jar Foodmatch Divina Fig Spread

One point key to Herman Miller’s victory was the discovery of ation of trade secrets, trade mark infringement and trade mark
some important documents a few months prior to trial. These counterfeiting. Currently, the parties are briefing a motion for
documents indicated that Office Star had acknowledged the attorneys’ fees filed by the plaintiff in May 2017, seeking about
fame and non-functional aesthetics of the chair designs, and in- $1.7 million in fees. Like the result in Herman Miller, the Dal-
tentionally copied the designs despite repeated warnings from matia case shows that damages awards in trade dress cases often
their customers and manufacturers. Based on this discovery, justify the initial investment.
Herman Miller also asserted that Office Star had failed to timely
institute a litigation hold, resulting in the loss of many other doc- The next big award may be in a case involving competing spirits
uments. This spoliation argument resulted in an adverse infer- companies (Globefill v Elements Spirits). The plaintiff Globefill
ence instruction to the jury. After some post-trial motions, the was started by movie star (and Ghostbuster) Dan Aykroyd to
award in Herman Miller was ultimately lowered from $8.4 mil- produce and sell Crystal Head, a high-quality vodka packaged
lion to $6.3 million. The decrease centred around Herman in clear bottles shaped like a skull. The defendant, Elements
Miller’s damages calculation with respect to trade mark dilution, Spirits, produces “Kah” brand tequila and sells it in ‘sugar skull’
with the court finding that the $5.1 million in treble damages bottles. Globefill filed its trade dress case against Elements Spir-
should be reduced to simply $3 million. In any event, $6.3 mil- its in 2010, and lost a first jury trial in November 2013. After an
lion is a substantial sum to recover in a trade dress case, and it appeal to the Ninth Circuit, Globefill was granted a new trial.
would appear to justify Herman Miller’s investment of more On March 29 2017, a California jury returned a verdict for
than two years of litigation expenses. Globefill, finding Elements Spirits had willfully infringed the
skull-head trade dress. One point that particularly hurt Ele-
The Dalmatia case is also interesting, as it involved not only ments Spirits was testimony from a witness who recounted a
trade dress claims, but claims under the recently-enacted De- request by the company’s founder to make a plaster cast of the
fend Trade Secrets Act of 2016 (DTSA). In fact, this decision Crystal Head bottle as the starting point for the tequila bottle
was the first jury verdict under the DTSA. The $5 million award design. In April of this year, Globefill filed a motion for disgorge-
remains under some post-trial scrutiny due primarily to a dis- ment of Element Spirits’ profits (estimated at $13.4 million),
pute over the effective date of the DTSA. However, only about and requested payment of its attorneys’ fees (estimated at $4.3
$1 million of the $5 million awarded by the jury is attributed million). In a tentative ruling in June, US District Judge Con-
to the trade secret count; the remainder is assigned to trade suelo Marshall awarded Globefill only $870,000 in Elements
mark infringement and counterfeiting claims. So, even without Spirits’ profits, noting that the $13.4 million claimed by Globe-
the DTSA claims, the award should still be around $4 million. fill represented Elements Spirits’ total sales, and did not take
The plaintiff ’s claims in Dalmatia were focused on former busi- into account overhead and expenses. A few months later, the
ness partners that allegedly copied the unique packaging for a court entered a permanent injunction which barred any future
fig spread after a parting of ways. The plaintiff claimed to be the sales of Kah tequila by Elements Spirits; retailers were permitted
purveyor of the top-selling fig jam in the US, and asserted that to retain and dispose of any inventory purchased before March
the defendants conspired to create their own competitive fig 29 2017 (the date of the jury verdict). In September, Judge Mar-
jam using plaintiff ’s recipes and packaging after ending their shall issued her final ruling on damages, confirming the award
distribution relationship. Plaintiff had registered the shape of its of $870,000 in lost profits, but denying Globefill’s request for
fig jam container with the US Trademark Office in 2009, about attorneys’ fees. Part of the reason Elements Spirits’ profits were
seven years prior to the litigation. Following a four-week trial, so low is because they were selling through a third party, and al-
the jury ruled in favour of plaintiff on its claims of misappropri- legedly only receiving an 8% royalty on sales. The total sales of

Globefill’s “Crystal Head” Vodka Kah ‘Sugar Skull’ Tequila bottles

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UNITED STATES TRADE DRESS

Organic Spices’ “Spicely”


US TM Reg No. 3,361,597 for the Christian Louboutin ‘red sole’ shoe Morton & Bassett spice container brand container

the third party were over $10 million, and Globefill asserted In Millennium Labs v Ameritox (April 2016), the Ninth Circuit
that the third party was a front for Elements Spirits’ to avoid li- endorsed the doctrine for the first time in over 10 years in a case
ability; based on the evidence of record, Judge Marshall did not involving the format of medical reports. A few months later, in
agree. As to attorneys’ fees, Judge Marshall found the case not Sweet Street Desserts v Chudleigh’s (July 2016), the Third Circuit
to be exceptional under the Octane Fitness ‘totality of the circum- affirmed a lower court finding that the registered and incon-
stances’ standard. Specifically, the court noted the limited evi- testable shape of an apple turnover dessert was aesthetically
dence of actual confusion and the sophistication of purchasers functional. In April of this year, a district court in California
as reasons why the case was not exceptional. court seized upon the Ninth Circuit’s endorsement, and ap-
plied the aesthetic functionality doctrine in a case relating to
The Globefill case is far from over, and the parties will continue spice containers (Morton & Bassett v Organic Spices). Ultimately,
to jockey over damages for months to come. Attorneys for the court there found the trade dress at issue not aesthetically
Globefill have publicly stated that they will appeal Judge Mar- functional.
shall’s damages ruling to the Ninth Circuit. If Globefill can con-
vince the Ninth Circuit that its damages are greater than The trade dress asserted by the plaintiff in Morton & Bassett was
Elements Spirits’ alleged actual profits, the current figure of not registered with the US Trademark Office, but generally
$870,000 may wind up in the $1-3 million range when all is comprised see-through spice containers with specific lettering.
said and done. Based on the conduct described in the case (El- The defendant’s spice containers were also see-through and in-
ements Spirits’ founder allegedly lied under oath and concealed cluded a similar lettering pattern. At summary judgment, the
evidence), it also seems possible that the Ninth Circuit will re- defendant asserted that a see-through container was functional
verse the denial of attorneys’ fees. We will have to wait and see, both in a utilitarian sense, and in an aesthetic sense. The court
but Globefill’s total recovery in this case may ultimately exceed found insufficient evidence to grant summary judgment on ei-
$5 million. ther ground. On the aesthetic functionality point, the court
found that the defendant had not put forth sufficient evidence
to show that it needed to use a see-thorough container in order
Concerns over trade dress damages to compete. This case is set for a trial in September 2017. While
the court did not find sufficient undisputed facts to decide the
While such developments on the damages front are positive functionality issues on summary judgment, these issues will
for trade dress plaintiffs, there are some recent negatives. One surely be raised again at trial, and the result may revitalise the
concerns the doctrine of aesthetic functionality, which gained doctrine of aesthetic functionality within the Ninth Circuit, and
some notoriety with the Christian Louboutin v YSL “red sole” elsewhere.
shoe case in 2012. As the Supreme Court set out in Traffix, trade
dress cannot protect any configuration or packaging that would
provide a functional or utilitarian advantage. The doctrine of Trade dress enforcement plans
“aesthetic” functionality holds, however, that a configuration,
colour or shape may be functional even if it has no practical Trade dress litigation is an evolving area of law that contains
function, so long as competitors “need to use it” to compete. many of the positives of both patent and trade mark litigation,
YSL’s argument in Louboutin was just that: that it needed to use with few of the negatives. A simplified trial schedule (with no
a contrasting red sole on its shoes to compete in the fashion in- Markman hearing), significant damages awards, the ability fairly
dustry. Ultimately, the court found otherwise, and upheld easily obtain an injunction, and a leaner trial budget all make
Louboutin’s trade dress registration (US TM Reg No. trade dress litigation an interesting option. Brand owners con-
3,361,597). cerned about incursions on the “look and feel” of their products
should consider adding a trade dress enforcement plan to their
The aesthetic functionality doctrine has been criticised by overall strategy.
many scholars (most notably Professor Thomas McCarthy, the
author of the seminal treatise on trade marks). The criticism The strategy begins with early identification of unique and aes-
stems from the fact that the term “aesthetic functionality” is itself thetic designs and colour schemes, and continues on with reg-
an oxymoron, as aesthetics are defined by art and beauty, not istration of such designs with the US Trademark Office. As the
function. At the time Louboutin was decided, the aesthetic func- Herman Miller and Dalmatia cases demonstrate, going into
tionality doctrine was all but dead in many Circuits, but two re- court with a well-established trade dress registration signifi-
cent decisions suggest it may be poised for a comeback. cantly increases your chances of success at trial. Thus, it is im-

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UNITED STATES TRADE DRESS

portant to think about registering trade dress not just when lit-
igation is imminent, but well before such a time. Many federal
district courts will rely heavily on the opinion of the USPTO
when it comes to issues of intellectual property validity, so hav-
ing a US Trademark Registration covering your trade dress can
be vital to prevailing in Federal Court.

Beyond simply registering trade dress with the US Trademark


Office, one should also consider alternative but equivalent
forms of protection for product shapes, colours and packaging.
Design patents and copyrights provide related and coextensive
forms of protection, and both may be obtained without any
showing of secondary meaning (although novelty and original-
ity are required). The 15-year exclusivity period provided by a
design patent may be used to create evidence of secondary
meaning. For example, the design patent may be enforced
against infringers in the first five years after a product’s intro-
duction, to establish the five years of ‘continuous and exclusive
use’ that the US Trademark Office typically accepts as proof of
secondary meaning. A copyright registration may similarly pro-
vide proof of non-functionality, as the Copyright Office will
not register functional works. Such evidence may prove valu-
able in the event that the US Trademark Office raises function-
ality concerns in a trade dress application.

Trade dress is an important intellectual property right in today’s


world. In every situation where you would think about regis-
tering and enforcing patents and trade marks, think also about
trade dress. If you carefully orchestrate your strategy, you will
likely be able to enforce trade dress with less effort, and at a
lower overall cost, with the same results.

© Darius C Gambino. He is a partner in the


Philadelphia Office of DLA Piper (US) and the
author of Trade Dress: Evolution, Strategy &
Darius C Practice from LexisNexis
Gambino

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