RBS News

Trademarks – Special Report

We interrupt our ongoing discussion of trademark basics with a special report.  On April 8, 2020, the Federal Circuit Court of Appeals, which has appellate jurisdiction over the Patent & Trademark Office – making their decisions the most important in both the Patent and Trademark universes, held for the very first time that color marks on product packaging can be inherently distinctive.  Let me just state it plainly, this is a landmark decision.  It dramatically lowers the bar for the acquisition of exclusive rights over colors.

            Perhaps even more important, it continues what this lawyer has been seeing for some time as the U.S. courts’ reactions to the level of copying in the US market coming out of our very favorite bad guy country, China.  Recent years have seen a dramatic uptick in the sale of products directly out of Chinese factories that have usurped an enormous volume of sales from US manufacturers who were often using the same factory to make their products.  Even a cursory review of Amazon sales will show Chinese factories as major sellers of all manner of consumer products.  In response, the federal courts, who are charged with governing virtually every aspect of US commerce in one way or another, are engaged in what we can only call a reinterpretation of many of the statutes that govern the protection of products in the US. 

We view this decision as a continuation of what Justice Thomas began in the copyright realm in Star Athletica, LLC v. Varsity Brands, Inc., 136 S. Ct. 1823 (2017).  You’ll have to wait until our Copyright discussion begins to get the full import of the Varsity Brands decision, but for now, let’s just say, it dramatically expanded the protection of the design of useful articles, i.e., consumer and industrial products, by the Copyright Act, which heretofore simply did not exist.  That movie you watched last night while social distancing to avoid the virus doesn’t receive much more in the way of copyright protection now than that coffee maker you bought at Walmart.  Leave it to Justice Sotomayor to capture the moment when she exclaimed during oral argument in the Varsity Brands case:

You’re killing knock-offs with copyright. You haven’t been able to do it with trademark law. You haven’t been able to do it with patent designs. We are now going to use copyright law to kill the knockoff industry. I don’t know that that’s bad. I’m just saying.

With this decision by the Federal Circuit, trademark law just received a boost in its ability to kill the knock-off industry.

Traditionally, color marks generally were regarded as merely descriptive – see discussion in Trademarks – Part 3.  Accordingly, they required proof of secondary meaning before they could be registered, that is to say, in order the register a color mark on the Principal Register of the PTO, the owner of the mark was required to prove that the public-at-large viewed the color mark on a product or its packaging as originating from a specific source– think pink insulation and Owens Corning.  

Trademarks are defined by the Lanham Act as a word, name, symbol, or device, or any combination thereof that is used to “identify and distinguish” one’s goods or services from those of other sources.  Notably, colors are not included in the definition of allowable trademarks.  But beginning in 1995, a single color or a color combination can be registered as part of a product, package, or service if they swerve a source identification function, and do not serve a merely decorative or utilitarian purpose.

In addition to pink insulation, there are numerous examples of color marks that have been registered: brown for parcel delivery trucks and uniforms (UPS); red knobs on cooking appliances (Wolf); orange for scissor handles (Fiskars); red soles for women’s high-heel dress shoes, where the rest of the shoe is not also red (Louboutin); light blue for jewelry boxes (Tiffany); and magenta for telecommunications services (T-Mobile).

Despite these few successes, secondary meaning is not an easy proof to make and can typically takes years of using a color or color combination before secondary meaning can be established. Just ask General Mills, which was recently denied trademark protection for the yellow color of its Cheerios cereal boxes. It has used that color on the box since 1945.  But, if the color or color combination is already widely used on a particular product, packaging, or service, establishing secondary meaning can be virtually impossible.  

One way to look at this issue is that it merely reinforces what we said in Trademarks – Part 1, “You want a mark that doesn’t tell you what the product or service is, and you want it to have no other meaning. None.”  While this was meant specifically to apply to word marks, the concept was make it unusual, make it distinct, and make it difficult for your competitors, as well as the knock-off industry, to use it without engaging in infringement, for which you have a remedy.

I was not surprised to see that Judge O’Malley authored the opinion.  I found her to be incredibly knowledgeable on Intellectual Property issues when I appeared before her here in Cleveland, where she was a district judge for many years.  The TTAB had affirmed the Examiners determination that the color mark was not inherently distinctive.  Indeed, the TTAB said it was not capable of being inherently distinctive, which is probably a correct reading of prior cases.

Interestingly, the case may yet be overruled, either by the Federal Circuit in an en banc decision by the full court or by the Supreme Court.  The latter has made it clear in at least two decisions that no color mark can ever be inherently distinctive.  Judge O’Malley avoided the holdings in the Supreme Court cases by analyzing the case as a product packaging case, rather than a color case.  Many commentators will see this as error.  Only time will tell.  Will the PTO appeal?  Will the Court take certiorari?  Will the entire appellate court be moved to act?  We shall see.

One thing to keep in mind, the court was dealing with a multi-color design.  A single color will be much more problematic.  Indeed, you should assume that a single-color trademark cannot be inherently distinctive and thus will require secondary meaning before it can be registered.  The mark here was defined as “the colors red into yellow with a black banner located near the top as applied to packaging for the goods.”

Judge O’Malley said, “We find that the Board erred in two ways: (1) by concluding that a color-based trade dress mark can never be inherently distinctive without differentiating between product design and product packaging marks; and (2) by concluding (presumably in the alternative) that product packaging marks that employ color cannot be inherently distinctive in the absence of an association with a well-defined peripheral shape or border.” 

Judge O’Malley expressly found that color marks can be inherently distinctive when used on product packaging, depending upon the character of the color design.  The question devolves to whether consumers are likely to equate the color feature with the source.

In doing so, the Judge weaved together several Supreme Court decisions and determined that the Court had never actually ruled on the specific issue before the Court of Appeals.  In Qualitex Co. v. Jacobson Prod. Co., 514 U.S. 159 (1995), the Supreme Court held that a particular shade of a green-gold color on a dry-cleaning pad was protectable trade dress.  In Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S. 205 (2000), the Court held that color in a product design can never be inherently distinctive, and thus registration requires secondary meaning.  Judge O’Malley found this distinction to be enough to conclude that color in product packaging, i.e., trade dress, can be inherently distinctive.  Judge O’Malley pointed to the decision in Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992), concluding that the color mark at issue was akin to the mark there, a festive eating atmosphere in a restaurant, and therefore the Supreme Court’s holding that color can be distinctive in trade dress is applicable to this case.

With respect to the TTAB’s conclusion that color may only be inherently distinctive when used in conjunction with a peripheral shape or border. Judge O’Malley set forth the inherent distinctiveness test as “whether the trade dress ‘makes such an impression on consumers that they will assume’ the trade dress is associated with a particular source.”  The Judge said following factors are relevant:

(1) whether the trade dress is a “common” basic shape or design; (2) whether it is unique or unusual in the particular field; (3) whether it is a mere refinement of a commonly-adopted and well-known form of ornamentation for a particular class of goods viewed by the public as a dress or ornamentation for the goods; or, inapplicable here, (4) whether it is capable of creating a commercial impression distinct from the accompanying words.

Judge O’Malley characterized these tests as different ways to determine whether it is reasonable to assume that customers in the relevant market will perceive the trade dress as an indicator of origin.  She then made a very important distinction, the mark at issue is not just a color mark, but also a symbol: “Forney is not attempting to preempt the use of the colors red, yellow, and black, but instead seeks to protect only the particular combination of these colors, arranged in a particular design.”  The mark is shown here.

The visual depiction of the mark governs, rather than the verbal description, and thus the question the TTAB must answer is whether, as used on its product packaging, the combination of colors and the design those colors create are sufficiently indicative of the source of the goods contained in that packaging.   The question is one of overall impression.

The takeaway here is not particularly new, except as it applies to colors.  Creating a quality trademark is not easy.  Using colors as the main element makes it even harder.  The PTO is likely to review any mark that uses similar colors in an effort to show the design is not sufficiently unique to qualify as a distinctive trademark. 

The decision will likely receive a great deal of criticism and may yet be challenged by the PTO.  Nonetheless, the analysis seems correct, and it opens the door to creative design with the use of colors in trademarks.