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|Trademarks Writing Sample|
UNFAIR COMPETITION WRITING ASSIGNMENT
CASE NOTE BRIEF
Wal-Mart v. Samara Brothers, Inc., 529 U.S. 205 (2000).
Exam No. 035
Professor Lee Goldman
June 22, 2001
TRADE DRESS INFRINGMENT – IN AN ACTION FOR INFRINGMENT OF AN UNREGISTERED TRADE DRESS UNDER §43(a) OF THE LANHAM ACT 15 U.S.C. §1125(a), IN ORDER FOR THE PLAINTIFF TO PROVE THAT THE TRADE DRESS WAS DISTINCTIVE, THE PLAINTIFF WAS REQUIRED TO PROVE THAT THE DESIGN OF THE PRODUCT HAD ACQUIRED A SECONDARY MEANING. Wal-Mart v. Samara Brothers, Inc., 529 U.S. 205 (2000).
The respondent, Samara Brothers, Inc. design and manufacture children’s clothing. Its primary product line is a spring/summer one-piece seersucker outfits decorated with appliqués of hearts, flowers and fruits. A number of chain stores, including JCPenny, sell this line of clothing under contract with Samara.
In 1995, Wal-Mart Stores, Inc., contracted with one of its suppliers, Judy-Philippine, Inc., to manufacture a line of children’s outfits for sale in the 1996 spring/summer season. Wal-Mart sent Judy-Philippine photographs of number of garments from Samara’s line, on which Judy-Philippine’s garments were to be based; Judy-Philippine duly copied, with only minor modifications, 16 of Samara’s garments, many of which contained copyrighted elements. In 1996, Wal-Mart sold the so-called knockoffs, generating more than $1.15 million in gross profits.
When Samara became aware of the knock-offs being sold at Wal-Mart, Samara launched an investigation, which disclosed that Wal-Mart and several other major retailers—Kmart, Caldor, Hills, and Goody’s, were selling the knockoffs of Samara’s outfits produced by Judy-Philippine.
After sending cease and desist orders, Samara brought this action in the United States District Court for the Southern District of New York against Wal-Mart, Judy-Philippine, Kmart, Caldor, Hills, and Goody’s for copyright infringement under federal law, consumer fraud, and unfair competition under New York law, and under the §43(a) of the Lanham Act, 15 U.S.C. §11245(a) for infringement of an unregistered trade dress. All of the defendants except Wal-Mart settled before trial. Samara brought suit against Wal-Mart in federal district court.
The jury in the District Court found in favor for Samara on all of its claims, Wal-Mart then renewed its motion for judgment as a matter of law, claiming, inter alia, that there was insufficient evidence to support a conclusion that Samara’s clothing designs could be legally protected as distinctive trade dress for purposes of §43(a). The District Court denied the motion and awarded damages, interest, costs, and fees totaling almost 1.6 million, together with injunctive relief. The Second Circuit affirmed the denial of the motion for judgment as a matter of law. The United States Supreme Court granted certiorari, which leads us to the instant case.
The Supreme Court’s ruling in this case is significant because the Supreme Court is the ultimate common law authority. The Court’s decision in the instant case will influence the decisions in all future trade dress cases. A possible effect of this decision may be to motivate Congress to legislate laws to fill in any gap areas in existing trademark statues. The Supreme Court’s decision in this case will also influence whether producers of goods take investment risks in producing or marketing goods for sale in the future and may encourage producers to create new design and packaging techniques that will protect the producers investment.
The controversy at issue in Wal-Mart v. Samara Brothers Inc., involved a determination by the United States Supreme Court, thereby holding that Samara’s trade dress lacked secondary meaning and therefore is not distinctive and not protected under §43(a) on the Lanham Act. Justice Scalia delivered the unanimous opinion, which reversed the Second Circuit, and the District Court,
The unanimous decision written by Justice Scalia’s can be divided into four sections. First, the Court provided an overview of Lanham Act’s registration of trademark requirements. Secondly, the court examined whether Samara’s trade dress was distinctive, as required under the Lanham Act. Thirdly, the Court examined the possibility that Samara’s trade dress had earned a secondary meaning, therefore becoming distinctive. Fourth, the Scalia’s opinion addresses the respondents, Samara’s, arguments.
The Lanham Act is a federal statute promulgated to protect purchases made by the public, by providing assurance that when they purchase a product bearing a particular trademark, that they are getting the product they are seeking. The Lanham Act also protects a holder of a trademark from misappropriation of his trademark thereby protecting the holder’s time and money investment.
The Lanham Act, 15 U.S.C.S §1125(a) gives a producer a cause of action for the use by any person of any word, term name or symbol or device, or any combination thereof which is likely to cause confusion as to the origin, sponsorship, or approval of his or her good.
Scalia’s majority opinion recognized that the Lanham Act provides for registration of Trademarks, which it defines in §45 to include “any word, name, symbol or device, or any combination thereof…to identify and distinguish a producer’s goods…from those manufactured or sold by others and to indicate the source of the good….” Registration under §2 of the Act 15 U.S.C. §1052 enables the owner to sue an infringer under §32 15 U.S.C. §1114; it also entitles the owner to a presumption that the mark is valid. The Lanham Act §43(a) gives a producer a cause of action for the use by any person of “any word, term, name, symbol, or device, or any combination thereof…which…is likely to cause confusion…as to the origin, sponsorship, or approval of his or her goods…” It is this latter provision which is at issue in this case.
The breadth of the definition of marks registrable under §2, and of the confusion-producing elements recited as actionable by §43(a) has been held to embrace not just word marks and symbols but also trade dress; a category which originally included only the packaging, or dressing of a product, but in recent years has been expanded by many courts of appeals to encompass the design of a product.
Justice Scalia’s opinion noted that the text of §43(a) provides little guidance as to the circumstances under which unregistered trade dress may be protected. However, it was noted that §43(a) does require that a producer (Samara in this case) to show that the allegedly infringing feature is not “functional,” see §43(a)(3), and is likely to cause confusion with the product that Samara is seeking to protection. In guiding the courts opinion, Scalia’s recognized that nothing in §43(a) explicitly requires a producer to show that its trade dress is distinctive, but courts have universally imposed that requirement, since without distinctiveness the trade dress would cause confusion…as to origin, sponsorship, or approval of the goods as the section requires. Justice Scalia pointed out that distinctiveness is…an explicit prerequisite for registration of trade dress under §2 and “the general principles qualifying a mark for registration under §2 of the Lanham Act are for the most part applicable in determining whether an unregistered mark is entitled to protection under §43(a).
Justice Scalia’s opinion examined two ways in which a mark can achieve distinctiveness. In evaluating distinctiveness of a mark under §2, Justice Scalia recognized that a mark could be distinctive in one of two ways. First, a mark is inherently distinctive if “[Its] intrinsic nature serves to identify a particular source.” Second, a mark has acquired distinctiveness, even if it is not inherently distinctive, if it has developed secondary meaning, which occurs when, “in the minds of the public, the primary significance of a mark is to identify the source of the product rather than the product itself.”
Justice Scalia pointed out that secondary meaning has a solid foundation in §2 of the Lanham Act. Section 2 of this Act provides that “nothing in this chapter shall prevent the registration of a mark used by the applicant which has become distinctive of the applicant’s goods in commerce” – that is, which is not inherently distinctive but has become so only through secondary meaning.
The attribution of inherent distinctiveness to certain categories of word marks and product packages derives from the fact that the very purpose of attaching a particular word to a product, or encasing it in a distinctive packaging, is most often to identify the source of the product. Although the words and packaging can serve subsidiary functions – a suggestive word mark (such as “Tide” for laundry detergent), may invoke positive connotations in a consumers mind, and a garish form of packaging (such as Tide’s squat, brightly decorated plastic bottles for its liquid detergent) may attract an otherwise indifferent consumer’s attention on a crowed store shelf -- their predominant function remains source identification. Consumers are therefore predisposed to regard those symbols as indication of the producer, which is why such symbols “almost automatically tell a customers that they refer to a brand, and “immediately…signal a brand or a product source.” And where it is not reasonable to assume consumer predisposition to take an affixed word or packaging as indication of the source—where, for example the affixed word is descriptive of the product (“Tasty” bread) or of geographic origin (“Georgia” peaches) – inherent distinctiveness will not be found.
In the case of product design, as in the case of color, Scalia stated that consumer predisposition to equate the feature with the source does not exist. Consumers are aware of the reality that, almost invariably, even the most unusual of product designs – such as a cocktail shaker shaped like a penguin -- is intended not to identify the source but to render the product itself more useful or more appealing.
Respondent and the United States as amicus curiae urged the Supreme Court to adopt for product design relevant portions of the test formulated by the Court of Customs and Patent Appeals for product packaging in Seabrook Foods, Inc. v. Bar-Well Foods, Ltd., 568 F.2d 1342 (1977). That opinion in determining the inherent distinctiveness of a product’s packaging, considered, among other things, “whether it was a ‘common’ basic shape or design, whether it was unique or unusual in a particular field, [and] whether it was 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 of the goods.”
Respondent also contended that this Court’s decision in Two Pesos forecloses a conclusion that product-design trade dress can never be inherently distinctive. Courts said that in that case the trade dress of a chain of Mexican restaurants, which the plaintiff described as “a festive eating atmosphere having interior dining and patio areas decorated with artifacts, bright colors and murals,” could be protected under §43(a) without a showing of secondary meaning. Justice Scalia said that Two Pesos unquestionably establishes that trade dress can be inherently distinctive, but it does not establish that product-design trade dress can be. Justice Scalia continued by stating that Two Pesos is inapposite to this Court’s holding because the trade dress at issue, the décor of a restaurant, seems to us not to constitute product design. It was either product packaging – which, as this Court has discussed, normally is taken by the customer to indicate origin – or else some tritium quid that is akin to product packaging and has no bearing on the present case.
Respondent replied that this manner of distinguishing Two Pesos will force courts to draw difficult lines between product-design and product trade dress. Justice Scalia agreed that there would be some hard cases at the margin. But, Scalia believes that the frequency and difficulty of having to decide when a product design and product packaging will be much less than the frequency and the difficulty of having to decide when a product design is inherently distinctive. To the extent there are close cases, Scalia believe that courts should err on the side of caution and classify ambiguous trade dress as product design, thereby requiring secondary meaning. The very closeness will suggest the existence of relatively small utility in adopting an inherently-distinctiveness principle, and relatively great consumer benefit in requiring a demonstration of secondary meaning.
The Wal-Mart decision is largely a review of established law and the Court establishes a fine line distinction between trade dress, which can be inherently distinctive, product-design which requires secondary meaning in order to become distinctive. The Court held that, in an action for infringement or unregistered trade dress under §43(a) of the Lanham Act, a product’s design is distinctive, and therefore protectible, only upon a showing of secondary meaning. The judgment of the Second Circuit is reversed, and the case is remanded for further proceedings consistent with this opinion.
Justice Scalia unanimous opinion used proper reasoning and properly applied the applicable rule of law but one of the likely effects of this decision is to encourage registration of marks under the Lanham Act. One of the negative effects of this decision is that producers of goods may fear bringing a product to market because the court will not provide recourse against competitors that are not honest or that don’t deal fairly. One of the main purposes for a Lanham Act is to prevent consumer confusion & protect a trademark owner’s investment from diversion of sales, and to preserve fair competition. However, Justice Scalia’s decision makes it more difficult for a producer of goods to distinguish his goods from a competitor’s knockoffs. Producers of goods may be discouraged in bringing a product to market for the fear that there investment in advertising and quality may serve to benefit a cheaper, inferior knockoff.
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