Patent Baristas

I have blogged in the past about non-traditional trademarks. However the recent case of North Face and South Butt begs the discussion of trade dress and hence a comparison of the case in question with the precedents is unavoidable to glean whether South Butt does infringe North Face’s trade dress amongst other issues.

Almost everybody in this part of the world- irrespective of whether they are hiking enthusiasts/outdoor buffs or not, is familiar with North Face Apparels. In December 2009, North Face filed a complaint in the U.S. District Court for the Eastern District of Missouri for trademark infringement and dilution. South Butt is owned and operated by Missouri University student James Winkelmann who started this apparel line in 2007 to mock North Face.

Early on, upon being threatened by North Face with an infringement suit, Winkelmann offered to sell his enterprise for US $ 1 million. But with the impending lawsuit, the sales for South Butt soared and subsequently Winkelmann withdrew his offer.

This lawsuit in addition to addressing trademark infringement, dilution and unfair competition under the Trademark Act of 1946, 15 U.S.C. §§ 1051 (also known as the Lanham Act), also has an interesting aspect of trade dress infringement.

Often times, litigators are so focused upon the “popular” intellectual property like patents, trademarks, copyrights that lesser known, but equally important intellectual property like trade dress gets the step-daughterly treatment. One does not often come across trade dress cases. But two cases where the United States Supreme Court granted certiorari are the Two Pesos case and the Qualitex case.

Section 43(a) of the Lanham Act states inter alia the following:

“Any person who in connection with any goods or services uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which is likely to cause confusion, or to cause mistake, or to deceive as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or .in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is likely to be damaged by such an act.”

While the Lanham Act does not explicitly define trade dress, a perusal of the above definition makes it obvious that trade dress should be protected. (“in connection with goods or services”…”uses any…symbol or device”).

Drawing parallels between trademark and real property, where does the boundary of a trademark end? How does a second comer in the market get saddled with the label of an infringer? What does trade dress encompass? One looks to the precedents in order to shed some light on these and other related issues.

Two Pesos v. Taco Cabana

This was the first of the two precedents and the facts are as follows.

Respondents are the owners of a fast food chain in Texas and own six such restaurants in San Antonio.  In their words Taco Cabana has the following trade dress:

“a festive eating atmosphere having interior dining and patio areas decorated with artifacts, bright colors, paintings and murals. The patio includes interior and exterior areas with the interior patio capable of being sealed off from the outside patio by overhead garage doors. The stepped exterior of the building is a festive and vivid color scheme using top border paint and neon stripes. Bright awnings and umbrellas continue the theme.”

Two Pesos opened up their restaurant in Houston and adopted an ambiance similar to that of Taco Cabana’s but did not deign to open one in San Antonio. Taco Cabana expanded their market by opening up restaurants in cities where Two Pesos was open and sued Two Pesos for trade dress infringement in 1987 under § 43(a) of the Lanham Act.

Section 43(a) does not mention either trademarks or trade dress. Neither does it mention anything about secondary meaning. Therefore a trade dress need not have secondary meaning in order to be protected. Secondary meaning is only required for descriptive marks.

Trade dress then can be defined as the overall appearance or image of the business in question.

In Qualitex v Jacobson, (this was briefly discussed in my earlier blog post of non traditional trademarks) Qualitex sought protection over the green gold colour of their cleansing pads.

The Federal Court judgment held that no trademark protection can be conferred for mere color. The Federal Circuit at that point of time, was undecided over the issue of trademark protection for color.

There are a few other related cases which are summarized for the benefit of the readers.

• NutraSweet Co. v. Stadt Corp.: absolute prohibition against protection of color alone;
• In re Owens-Corning Fiberglas Corp.: allowed registration of color pink for fiberglass insulation; and
• Master Distributors, Inc. v. Pako Corp.: declined to establish per se prohibition against protecting color alone as a trademark.

The Supreme Court put to rest all debates on this issue by holding that color can be protected under the Lanham Act. Even though color by itself is not fanciful or arbitrary or suggestive, however, over time consumers can come to associate a product with the color on its label. (Think yellow “M” for McDonald, red and white label for Coca-Cola for example).

Coming back to the North Face-South Butt debate, it is obvious that South Butt was started as a joke, a parody if you will. The products of the two companies are the same (sports gear); the logo of South Butt is a mere rearrangement of that of North Face’s logo. South Butt may get off lightly on the offensiveness of the name (FCUK got off with no rap on their knuckles) but trade dress infringement definitely exists.

To small timers, the idea of pulling off a joke on major companies may seem like a lark. However, doing so results in a criminal wastage of time and resources which could be spent in developing newer technologies (in this case apparel!). More importantly, if not settled out of court, it is a burden on the justice system and speedy disposal and adjudication of more relevant and pertinent cases is prevented.

However, at this point of time there exists no major deterrent for such cases and one hopes future small time infringers will pay heed to precedents and perhaps abstain from petty infringements.

Today’s post is by Guest Barista Shalini Menezes of ::O.bi:t.er: D:ic.t:um.