One More Tool in the Brand Protection Toolbox
Trade dress is perhaps a lesser-known sibling of the intellectual property rights (IPR) family, but, as markets become more saturated and product differentiation becomes increasingly important, the protection offered by trade dress is beginning to step into the spotlight. Sarah Morgan reports.
While the concept of trade dress—the commercial image (look and feel) of a product or service that identifies the source of that product or service and distinguishes it from those of others—seems simple enough, conditions for registrability and the protection afforded by trade dress have evolved over the years, with different jurisdictions developing their laws down different paths. Depending on the jurisdiction, trademark, design right, copyright, and/or patent law may afford protection to trade dress.
In the first place, why should brand owners and practitioners consider trade dress as a tool in their brand protection toolbox?
Doug Rettew, partner at Finnegan (US), said: “Trade dress rights are a powerful way to protect a company’s brand assets beyond traditional word marks and logos—and to stop others from using confusingly similar versions of them.”
Otávio Padilha, IP attorney at Soerensen Garcia Advogados Associados (Brazil), added: “Trade dress is an extension of a brand’s personality. It also helps customers to immediately identify the origin of the product or service.”
In agreement, Lisa Neilson, senior associate at FB Rice (Australia), said that, as brand owners invest significant sums in the packaging and presentation of products and services, it has become imperative to protect this investment by securing trademark registration for key trade dress elements.
“Not only have trade dress marks become a valuable asset in a company’s suite of IP rights, but they have also become a crucial enforcement tool to protect against the increasing rise of copycat products,” she said.
“Copycat products often take ‘inspiration’ from established and market-leading brands, adopting similar get-up elements to look as close as possible to the original brand. Trade dress registrations not only afford protection against copycats, but also provide a deterrent by simply having an application or registration on the register.”
Unpredictable Outcomes
While securing a trade dress registration can act as a good deterrent and valuable protection, applying for protection can be a difficult process.
In Australia, applications for trade dress marks are subject to the same registrability tests as traditional marks. But nontraditional marks, including aspects of packaging, shape, and color—all common components of trade dress marks—have proven more difficult to register, according to Ms. Neilson.
“Trade dress rights are a powerful way to protect a company’s brand assets beyond traditional word marks and logos—and to stop others from using confusingly similar versions of them.”
Doug Rettew, partner, Finnegan (US)
To secure registration, brand owners must convince the registrar that the elements being claimed function as a trademark and are not seen as merely functional or decorative. The trade dress must be adapted to distinguish or have the capacity to distinguish a trader’s goods and services from those of another. Alternatively, it must have acquired distinctiveness as an indicator of source as a result of extensive use and reputation.
“For this reason, it is sometimes important to ‘educate’ consumers that the trade dress elements are trademark use/indicators of source,” said Ms. Neilson.
She added that companies that are successful at trade dress protection typically have “rigorous strategies in place,” watching for potential conflicting uses or applications for similar trade dress elements and acting quickly, by way of letters of objection, opposition, or court proceedings.
For trade dress to be protectable in the United States, it must be both distinctive and nonfunctional. While the Lanham Act (also known as the Trademark Act of 1946) protects trade dress if it serves the same source-identifying function as a trademark, it will not be protected if the trade dress is functional. However, as a definition of functionality has not been set out, protection is uncertain, with the U.S. Circuit Courts split on the nonfunctional condition.
Carrie Johnson, partner at Eastman & Smith Ltd. (US) and vice chair of INTA’s Non-Traditional Marks Committee, said: “Recent decisions from the U.S. Court of Appeals for the Second and Third Circuits are good examples of unpredictable outcomes in litigation—essentially barring trade dress protection for any product feature that is ‘useful.’ There continues to be uncertainty for brand owners of trade dress that can be argued to have any potential ‘useful’ aspect to it.”
“The owner should evaluate with its counsel the evidence/specimen it has to take the matter to court in order to reduce the risks of having to obtain an expert opinion.”
Otávio Padilha, IP attorney, Soerensen Garcia Advogados Associados (Brazil)
In October 2020, in Ezaki Glico Kabushiki Kaisha v. Lotte International America Corp, the Third Circuit granted summary judgment after finding Ezaki Glico’s POCKY trade dress configuration (a chocolate-dipped stick) functional and therefore not protectable. After an unsuccessful attempt for the case to be reheard en banc, Ezaki Glico appealed the decision to the U.S. Supreme Court.
INTA filed an amicus brief before the U.S. Supreme Court on July 29, 2021, arguing the importance of reinforcing the established national functionality standards to provide more certainty to brand owners and meaningful protection for nonfunctional trade dress rights. Late last year, the U.S. Supreme Court denied certiorari in the matter.
Subsequently, INTA filed a similar amicus brief in Sulzer Mixpac AG v. A&N Trading Co. on October 18, 2021. At issue is the U.S. Court of Appeals for the Second Circuit’s finding that any utility of a product necessarily affects the product’s cost or quality, rendering the product functional and ineligible for trade dress protection.
Mr. Rettew added: “Complicating things further, trade dress comprised of a product configuration or design can only be protected upon a showing of acquired distinctiveness. In making that determination, there are hard cases at the margin where it is difficult to draw the line between product-design and product-packaging trade dress—for example, the unique shape of a soft drink bottle.
“Some consumers will view the bottle as the product itself, while others view it simply as packaging for the true product—liquid contents. In those instances, the U.S. Supreme Court has directed the lower courts to err on the side of caution and classify ambiguous trade dress as product design, which requires secondary meaning for protection.”
Words of Caution
In the jurisdictions where trade dress is an option, brand owners must tread carefully through the process, from application to registration to enforcement.
“U.S. applicants should expect a bit of an uphill battle registering trade dress,” said Ms. Johnson, noting that there is a good chance the United States Patent and Trademark Office will require evidence of distinctiveness/nonfunctionality when registering trade dress.
Before applying to register trade dress, she suggested that brand owners consider the entire landscape, including the length of time the trade dress has been in use, and sales and advertising figures for the associated products and services.
“Trade dress registrations not only afford protection against copycats, but also provide a deterrent by simply having an application or registration on the register.”
Lisa Neilson, senior associate, FB Rice (Australia)
“Even if there has been a history of extensive advertising, it is important to evaluate how the trade dress has been featured in advertisements,” said Ms. Johnson. “Advertising materials should refer to trade dress as a source indicator—commonly referred to as ‘look for’ advertising. Creating this type of advertising campaign can feel awkward for brand owners and marketers, but it pays dividends in establishing and maintaining trade dress rights.”
At the opposite end of the spectrum, she said, a history of advertising which touts the functional or useful qualities of trade dress can make it very difficult to establish nonfunctionality.
Agreeing, Ms. Neilson said that in some cases evidence of use of a trade dress mark has been found insufficient due to the prominence of the word mark element.
“The evidence is not sufficient to show that the trade dress on its own, without the key word/logo mark, functions as a trademark,” she said. “Brand owners can avoid this by proactively educating consumers about the trade dress—for example, in advertising or promotion, by identifying the trade dress features as a trademark rather than a decorative or functional element.” Further, Mr. Padilha suggested: “It is not expected that the owner will seek registration of all features of the trade dress. But, if there is a very important visual aspect that may be unduly taken advantage of by competitors, seeking the registration of it may increase your chances of success if enforcement becomes necessary.”
After gaining protection, owners should shift their focus toward maintenance and enforcement of their trade dress rights.
According to Mr. Padilha, before seeking to enforce trade dress rights, the owner should evaluate with counsel the evidence/specimen it has to take to court to reduce the risks of having to obtain an expert opinion, “which will always make the lawsuit longer and more expensive in Brazil.”
Noted Mr. Rettew: “In order to maintain trade dress rights and keep them strong, it’s important for owners to enforce them against copycats and infringers. This applies not just to the physical world but also to the metaverse with the rise of non-fungible tokens (NFTs).”
He cited the example of Hermès (France), which earlier this year filed a lawsuit against an NFT creator for infringement of its trade dress in the “Birkin Bag” and the BIRKIN word mark.
“There is a good chance the United States Patent and Trademark Office will require evidence of distinctiveness/non-functionality when registering trade dress.”
Carrie Johnson, partner, Eastman & Smith Ltd. (US)
“Trademark owners can protect their trade dress in the metaverse by obtaining registrations for virtual goods and/or services they may offer (or intend to offer) in the metaverse. Trademark owners should also monitor the metaverse, as they would a physical marketplace, for any copycats and infringements,” added Mr. Rettew.
On enforcement, Ms. Neilson added that it is crucial for brand owners to maintain trademark watches for each of their marks and object to copying and imitation by competitors.
She added: “Enforcement issues can also arise if the trade dress mark covers too many elements; this can detract from the key elements the owner wishes to protect by registration, and infringement may only be found if all elements are used by a third party.”
Acquiring trade dress protection may not be a straightforward process and retaining this protection may require time and resources, but the importance of registration cannot be understated.
The Australian case of Kraft Foods Group Brands LLC v. Bega Cheese Limited (2020) clearly illustrates the importance of registration, rather than reliance on unregistered common law rights.
Kraft argued that when it sold its peanut butter business to Bega Cheese, the transaction did not include the rights to the unregistered trade dress.
However, Ms. Neilson pointed out, the court found that an unregistered trademark cannot be assigned separate from the business which holds the related goodwill and therefore the unregistered trade dress transferred from Kraft to Bega with the goodwill of the business.
She added: “The decision reinforced the value of registering distinctive trade dress which would avoid the automatic, but perhaps unwanted, transfer of trademarks which are embodied in trade dress to a new business owner. For registered trademarks, including trade dress marks, the registered owner will be able to make a choice about which marks it wishes to assign.”
Essentially, while organizations may encounter hurdles when attempting to register trade dress and when enforcing their rights, a clear strategy will help to unlock the plentiful benefits of an additional form of brand protection.
Video courtesy of Envato Elements / sovv
Sunday, May 1, 2022
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