Protecting Your 3D Brand: Dual Protection with Design Patent and Trade Dress Protection

Vol. 6 No. 4

By

Louise Arnott is a third-year law student at Chicago Kent College of Law.  She is a law clerk at Neal & McDevitt, LLC, and is particularly interested in trademark law and intellectual property litigation.  A special thank you to Jessica Bahr who assisted in editing the article.

Suppose you represent the fashion industry’s newest up and coming couture hair accessories designer. Your client’s oversized designs have been spotted on top of various A-list celebrities’ perfectly coiffed hair and are selling out in stores across the country. They are the hottest new commodity and are simply impossible to get ahold of but very easy to spot, given their bright colors and size. Your client is planning to release a new set of oversized hair bows, and their anticipation has caused quite the stir in the fashion community. But no sketches or information about the oversized hair bows have been released to the public. Your client has begun to notice poor quality, off-trend renditions of couture clothing and accessories showing up in discount stores. Terrified that her hair bows could end up on those shelves, or worse, that another couture designer will steal her design, your client has frantically sought your legal assistance to understand what, if any, are her options.

What Are Your Client’s Options to Protect Her Designs?

U.S. federal law provides various forms of intellectual property protection that could apply to the design of your client’s oversized hair bows, specifically trade dress and a design patent.1

Trade Dress

Trade dress protection “involves the total image of a product and may include features such as size, shape, color or color combinations, texture, graphics, or even particular sales techniques.”2 Trade dress protection is a trademark right, which covers anything that functions as a source identifier in commerce and is nonfunctional. A product is functional, and thus not eligible for trade dress protection, if “it is essential to the use or purpose of the article or if it affects the cost or quality of the article.”3 Specifically, trade dress protects the shape, color, or appearance of a product itself and/or how it is packaged. Once acquired, trade dress protection lasts as long as the owner of the trade dress uses the trade dress as a source identifier in commerce.

At first glance, trade dress protection may seem like the best option for your couture hair accessories designer client, as it offers the longest lasting protection. Unfortunately, it can be difficult to obtain a registration for trade dress with the United States Patent and Trademark Office (USPTO) until the design has been used continuously in commerce and has acquired secondary meaning.4

For many brand owners like your client, time and secrecy are of the essence, and are determining factors in whether knockoffs of your client’s prized oversized hair bows end up in the discount shop. In Wal-Mart Stores, Inc. v. Samara Bros., the U.S. Supreme Court differentiated between two types of trade dress: product packaging and product design.5 Specifically, the Court distinguished consumer perceptions of word marks and packaging on one hand, and product designs on the other. Product design covers the configuration of the product itself, whereas product packaging encompasses the box, bottle, or container for the product.6 The Court held that product design trade dress cannot, by definition, be inherently distinctive and is less likely to be recognized as the source identifier of goods. Therefore, the Court held that product design trade dress is only protectable upon a showing of secondary meaning.

Secondary meaning occurs when, “in the minds of the public, the primary significance of a product feature or term is to identify the source of the product rather than the product itself.”7 Secondary meaning may be established by direct evidence such as: (1) consumer testimony; (2) customer surveys; and (3) proof of actual confusion where consumers believe, for example, that a knockoff product is a particular brand based on that brand’s unique product design.8 In addition, secondary meaning can be established by circumstantial evidence demonstrating the nature and volume of public exposure of a product design such as: (1) the volume of sales of the design; (2) the length of time the design has been in use; (3) the advertising and other promotional efforts used, if there is prominent use of the design, and if consumers are invited to look for the designation when selecting goods; and (4) the physical manner of display of the design, if prominent.9 Ultimately, the owner of a product design must demonstrate that purchasers perceive the trade dress as a source identifier with which it is associated.

To acquire secondary meaning, a mark owner often must dedicate substantial time and finances to advertise its product. For example, it took Owens-Corning more than nine years and $42 million in marketing and advertising expenses to establish secondary meaning in the color pink as uniformly applied to its fibrous glass residential insulation.10 In contrast, for L.A. Gear to establish secondary meaning in its shoe trade dress design, it took only one year and nearly $5 million in advertising and marketing expenses.11 This rapid time frame resulted from L.A. Gear’s effective use of the mass exposure available with today’s communications media in combination with sales success. Furthermore, while actively promoting a product design, the brand owner must take caution to ensure the advertising does not stress any functional advantages in its design, as this may become a hurdle in establishing nonfunctionality.12 In addition, the advertising methods used to promote the product must focus on the product design to establish secondary meaning and not the associated product. Recently, the Southern District of New York in Urban Group Exercise Consultants, Ltd. v. Dick’s Sporting Goods, Inc., would not consider advertising, in determining whether secondary meaning was acquired, where the ad failed to highlight that the product is nonfunctional and distinctive.13

Despite the more stringent legal test implemented by the court in Wal-Mart, trade dress protection for your product design is a valuable investment of time and capital when protecting your brand.

What Are the Benefits of a Federal Trade Dress Registration?

Trade dress protection is derived from the common law protection of trademarks. Common law protection, based on use in commerce, does not require registration with the USPTO.14 Despite the availability of common law protection, federal registration is an important step in the protection process for one’s brand. On the most basic level, federal registrants have the benefit of a prima facie presumption of trade dress validity, although that presumption can be rebutted.15 Once trade dress registration is granted, protection can last as long as: (1) the design is used in commerce, (2) the design identifies the source of goods to consumers, and (3) the registration is renewed every 10 years.16 Additionally, after the registration has passed its fifth anniversary, the owner can obtain incontestable status of the registration, meaning that the presumption of validity has become conclusive and cannot be rebutted except under limited circumstances.17 Moreover, the mere act of applying for a federal trade dress registration may have evidentiary significance in determining secondary meaning.18 Industries that commonly seek trade dress protection are restaurants, footwear, and even golf courses.19

Trade dress protects against competitors and knockoff producers from fabricating designs that may be confusingly similar to your product design in hopes of confusing consumers into thinking their product is produced by you. Although trade dress offers potentially infinite continued protection, so long as the registration is renewed and the product is used in commerce, trade dress that is not inherently distinctive requires a showing of secondary meaning. Further, trade dress does not protect against competitors producing exact copies so long as they are not confusingly similar. In addition, some courts have held that trade dress law protects only the goodwill associated with a seller and not the goodwill associated with a product.20 Therefore, a person copying a designer brand may defend a copy by stating that he or she was merely copying the style and not the actual designer source.

That being said, trade dress protection for couture hair accessories, such as the oversized bows produced by our fashion designer client, has recently gained the attention of the district courts. Fashion design company Moza Inc. filed suit against defendant S&S Hat Company with regard to the “Original Inaugural Hat” designed by plaintiff Wook Song and worn by Aretha Franklin at President Obama’s inauguration.21 Evidencing actual confusion, the plaintiff testified that previously placed orders for 2,779 inauguration hats were cancelled by customers as a result of the defendant’s knockoff duplicate. As a result, the court found that S&S Hat had infringed the plaintiff’s trade dress rights in its common law mark. Therefore, although a knockoff competitor may produce an exact copy of our client’s oversized hair bows, where there is a likelihood of confusion, the courts are likely to find in our client’s favor for trade dress infringement.22

Brand owners, therefore, need to consider other forms of intellectual property protection to implement while their product design is establishing itself in the marketplace and to fully protect against exact replicas of their product being introduced into the marketplace.

Design Patent

Design patent protection is taking on an increased role in the product design world, as a result of the more stringent trade dress requirements in recent years.23 Design patents can provide valuable protection for a product design while a company is working to establish marketplace awareness, or secondary meaning.

A design patent grants the owner the right to prevent others from making, using, or selling a product that, under the ordinary observer test, is substantially similar to the patented product.24 Unlike trade dress protection, design patent protection does not rely upon a prerequisite of acquired distinctiveness and use in commerce.25 Similar to trade dress protection, however, a design patent protects nonfunctional, ornamental features of an article of manufacture such as the shape, surface ornamentation, color, or a combination thereof.26 Specifically, a design patent must have a unique or distinctive shape or appearance not dictated by the function that it performs at the time the design was created, and the design must be original and must not simulate a well-known or naturally occurring object or person.27 For example, the makers of Crocs sandals were able to prevent the importation of competing foam clog sandals that too closely resembled its design patent.28 Design patents typically take nine to 12 months to register and are presumed valid immediately after issuance of the patent for a period of 14 years, as opposed to trademarks, which only become incontestable after five years of continuous use in commerce.29

Securing a design patent is an effective way to prevent outsiders from appropriating a client’s product design before the product even hits the market. Meanwhile, it affords product owners adequate time to dedicate reasonable and appropriate funds to advertising and marketing their designs in order to establish secondary meaning to secure trade dress protection. When considering whether to register a design patent, it is critical to not release the product design until registration is obtained. The patent system awards rights to the “first to file”; therefore, a product that is released prior to registration could face the risk of a competitor discovering the design and beating the original designer to the USPTO.30

In addition, if a design patent owner later applies for trade dress registration, the design patent may in fact help to prove nonfunctionality. Due to the presumption of nonfunctionality adhering to a design patent, some courts have suggested that a design patent covering a configuration is dispositive evidence of nonfunctionality in a trade dress case.31 Despite the general consensus, the Court of Appeals for the Federal Circuit in In re R.M. Smith, Inc., has suggested in some cases that a design patent does not necessarily render the product design nonfunctional for trade dress purposes.32

Risks of Securing Design and Utility Patents

If you are not a patent practitioner, you may think a utility patent is also a necessary form of protection for your client’s design. However, this would only be appropriate in certain, limited circumstances where the product has a novel and nonobvious functional element that also needs protection apart from the subject matter covered by the trade dress or design patent. Design patents are different from utility patents. In general terms, a utility patent protects the way an article is used and works, whereas a design patent protects the way an article looks.33 Although inventors may secure both design and utility patents for a product, trade dress protection cannot be granted to a product design that is functional. Companies should take precautions, as registration of a utility patent is strong evidence that the features therein claimed are functional.34

In fact, courts have suggested that the presence of a utility patent, even expired, may be dispositive of a product owner’s claims of nonfunctionality when asserting trade dress protection for the same design elements. In TrafFix Devices, Inc. v. Marketing Displays, Inc., the Supreme Court found a utility patent to be strong evidence that the features claimed in the trade dress protection for the same design elements were functional and therefore not protectable under trademark law.35 Similarly, the Trademark Trial and Appeal Board (TTAB) has held that the “probative nature of utility patents to the functionality inquiry is not limited to patents secured by the trade dress claimant.”36 Therefore, the TTAB has allowed litigants to submit third-party owned patent registrations to show that the features of a trade dress applicant’s design configuration have functional advantages.37 In order to overcome this heavy burden, an applicant seeking trade dress protection after an expired utility patent must show that the feature is not functional and is “merely an ornamental, incidental, or arbitrary aspect of the device.”38

Litigation

When considering your client’s options, it is also important to take into consideration the cost of litigation and available recourses in trade dress and design patent disputes. First, to prevail in a trade dress infringement suit, a plaintiff must demonstrate that the defendant’s introduction of its trade dress is likely to cause confusion in the marketplace.39 Unlike patent protection, trade dress protection does not necessarily preclude the wholesale copying of a plaintiff’s trade dress by a defendant.40 Rather, the public can produce product designs similar to the protected trade dress, so long as there is no likelihood of confusion in the marketplace.41

In determining a likelihood of confusion, the court will take into account a variety of considerations such as: the similarity of the designs at issue, the similarity between the parties’ actual products, the strength of the plaintiff’s trade dress as an indicator of origin, similarities in the parties’ advertising strategies, similarities in the parties’ customers and channels of distribution, the defendant’s intent in adopting its trade dress design, and the actual consumer confusion between the parties’ designs.42 Should the court find trade dress infringement, the Lanham Act provides remedies such as preliminary and/or permanent injunction; damages; either the defendant’s profits or the plaintiff’s actual damages, including cost of advertising; and in exceptional cases, treble and statutory damages, and attorneys’ fees and costs.43

Although a design patent provides sufficient means to protect designs, enforcing design patents has been difficult given the legal test applied in design patent infringement cases.44 Recently, however, the U.S. Court of Appeals for the Federal Circuit in Egyptian Goddess, Inc. v. Swisa, Inc., reestablished the ordinary observer test as the controlling doctrine applicable to design patent infringement.45 Therefore, design patent infringement is now found when an ordinary observer, acting as purchaser, perceives the patented and accused designs as substantially the same.46 Where infringement is found, design patent remedies include preliminary and/or permanent injunction, and compensatory damages “to the owner to the extent of his total profit, but not less than $250.”47 Specifically, the Patent Act “requires the disgorgement of the infringer’s profits to the patent holder, such that the infringers retain no profit from their wrong.”48

In 2012, Apple Inc. received a $1.05 billion dollar jury award, decreased to $600 million on appeal, after suing Samsung for patent and trade dress infringement.49 In the case, Apple had obtained both trade dress protection and utility patents for its iPhone and iPad designs.50 Specifically, the design patents extend to the many famous ornamental features of Apple’s devices, such as the flat black face, the metallic bezel, and the distinctive matrix of applications. The Apple iPhone holds trade dress protection in the design and appearance of the iPhone together with its distinctive user interfaces and product packaging.51 This case highlights not only the economic importance of intellectual property law but also serves as an example of a product design owner maximizing its protection by overlapping its rights.

Dual Protection: Obtaining the Best of Both Worlds

There is debate as to whether both trade dress protection and design patent protection should coexist.52 While the prevailing view is that trade dress protection is available for product designs that were once covered by a design patent upon a showing of secondary meaning, some courts have questioned the right of the trademark owner to claim secondary meaning when such secondary meaning is established solely due to the exclusive design patent protection.53

The majority of courts today will enjoin an infringer of a design covered by an expired design patent so long as the trade dress has acquired secondary meaning.54 In In re Mogen David Wine Corp., the Court of Customs and Patent Appeals held that “trademark rights . . . which happen to continue beyond the expiration of a design patent, do not ‘extend’ the patent monopoly,” because patent and trademark rights “exist independently of it, under different law and for different reasons.”55 Courts, such as the Southern District of New York, have since followed suit and ruled on the issue of trade dress validity where there is a design patent in place.56

Overall, your client can expect that some courts will honor the combination of design patent and trade dress protection, thus allowing a continuation of protection to her designs after the expiration of a design patent.

Conclusion

Combining design patent and trademark rights is a smart strategy for companies to protect their three-dimensional brands. When used together, design patents and trade dress protection can be a rewarding combination, affording your client’s brand valuable protection before the new product designs are introduced into the marketplace.

In light of the above, what is the couture hair accessories designer’s best shot of keeping her anticipated oversized hair bows out of competitors’ hands and free of the discount store knockoffs? Your client’s product design is nonfunctional, unique, and original in size. In combination with its possible surface ornamentation and color, the design is eligible for both trade dress protection and design patent protection. In addition, your client has not released her product design to the public, making it an excellent candidate for design patent protection. Once a design patent is obtained, your client can protect her oversized hair bows while showing them on the runway and selling them to the public. Once consumers begin associating the designs with your client’s brand, your client can apply for federal trade dress protection. Therefore, your client may secure a design patent before her product hits the runway and then obtain trade dress protection through continuous use in commerce and acquired secondary meaning. This is an effective way to protect her brand and provide the best recourse, should litigation arise.

Endnotes

1. 15 U.S.C. § 1051; 35 U.S.C. §§ 101, 171.

2. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 764 n.1 (1992); see Christian Louboutin S.A. v. Yves Saint Laurent Am. Holding, Inc., 696 F.3d 206, 212 (2d Cir. 2012) (holding that under Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159 (1995), a single color could qualify for protection, even for goods in the fashion industry).

3. TrafFix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23, 32 (2001).

4. Id. at 28.

5. 529 U.S. 205, 215 (2000).

6. Id. at 212–14.

7. Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 851 n.11 (1982).

8. Ark Plas Prods., Inc. v. Value Plastics, Inc., 913 F. Supp. 1246, 1252 (W.D. Ark. 1996).

9. Id.

10. See In re Owens-Corning Fiberglass Corp., 774 F.2d 1116 (Fed. Cir. 1985).

11. See L.A. Gear, Inc. v. Thom McAn Shoe Co., 988 F.2d 1117 (Fed. Cir. 1993) (finding that fashion items take readily to development of secondary meaning upon mass media promotion; moreover, L.A. Gear’s advertising and promotion were extensive, and the public demand for this design was shown, by sales figures, to have been rapidly achieved).

12. Disc Golf Ass’n v. Champion Discs, Inc., 158 F.3d 1002, 1009 (9th Cir. 1998); In re Caterpillar Inc., 43 U.S.P.Q.2d 1335 (T.T.A.B. 1997).

13. No. 12 Civ. 3599, 2012 WL 3240442 (S.D.N.Y. Aug. 7, 2012).

14. 15 U.S.C. § 1125(a).

15. Aromatique, Inc. v. Gold Seal, Inc., 28 F.3d 863, 873 (8th Cir. 1994).

16. 15 U.S.C. § 1058.

17. Park ’N Fly, Inc. v. Dollar Park & Fly, Inc., 469 U.S. 189, 194–95 (1985) (noting that an incontestable registration can be rebutted on the grounds that the mark has become generic, the registrant has abandoned the mark, the registration (or incontestable status) was obtained fraudulently, or the mark is being used to represent the source of the goods or services in connection with which it is used); see also 15 U.S.C. § 115(b).

18. Ohio Art Co. v. Lewis Galoob Toys, Inc., 799 F. Supp. 870, 886 (N.D. Ill. 1992).

19. Autumnpaper Ltd. v. Steve Madden, Ltd., No. 09 CIV 8332, 2009 WL 5452790 (S.D.N.Y. Oct. 1, 2009); Pebble Beach Co. v. Tour 18 I, Ltd., 942 F. Supp. 1513 (S.D. Tex. 1996).

20. Winning Ways, Inc. v. Holloway Sportswear, Inc., 913 F. Supp. 1454, 1472 (D. Kan. 1996); see also Thomas & Betts Corp. v. Panduit Corp., 65 F.3d 654, 657 (7th Cir. 1995).

21. Moza, Inc. v. Brasseur, Inc., No. 10-11865, 2012 WL 3717716 (E.D. Mich. July 31, 2012), adopted by 2012 WL 3871716 (E.D. Mich. Aug. 28, 2012).

22. TrafFix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23, 29 (2001) (finding that trade dress protection must subsist with the recognition that in many instances there is no prohibition against copying goods and products).

23. Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S. 205, 215 (2000); Urban Grp. Exercise Consultants, Ltd. v. Dick’s Sporting Goods, Inc., No. 12 Civ. 3599, 2012 WL 3240442 (S.D.N.Y. Aug. 7, 2012).

24. Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665, 677–78 (Fed. Cir. 2008) (en banc).

25. Kohler Co. v. Moen Inc., 12 F.3d 632, 638 (7th Cir. 1993).

26. 35 U.S.C. § 171; 37 C.F.R. § 1.151.

27. 35 U.S.C. § 103.

28. Crocs, Inc. v. Int’l Trade Comm’n, 598 F.3d 1294 (Fed. Cir. 2010) (finding the accused products to embody the overall impression of the plaintiff’s ’789 design patent, protecting the overall shape and design elements of the clog sandal, in sufficient detail and clarity to cause market confusion).

29. 15 U.S.C. § 1065; 35 U.S.C. § 173.

30. 35 U.S.C. § 102(a)(1).

31. In re Morton-Norwich Prods., Inc., 671 F.2d 1332, 1342 (C.C.P.A. 1982) (holding that a design patent indicates that the design in not de jure functional); In re Honeywell, Inc., 187 U.S.P.Q. 576, 578 (T.T.A.B. 1975).

32. 734 F.2d 1482, 1485 (Fed. Cir. 1984) (holding that a design patent provides some evidence of nonfunctionality, but is not alone sufficient proof thereof).

33. 35 U.S.C. § 101.

34. TrafFix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23, 24 (2001).

35. Id.

36. In re Virshup, 42 U.S.P.Q.2d 1403, 1405 (T.T.A.B. 1997).

37. Id.

38. Berlin Packaging, LLC v. Stull Techs., Inc., 381 F. Supp. 2d 792, 799 (N.D. Ill. 2005) (quoting TrafFix, 532 U.S. at 30).

39. 15 U.S.C. §§ 1114, 1125(a).

40. See, e.g., Duraco Prods., Inc. v. Joy Plastic Enters., Ltd., 40 F.3d 1431, 1448 (3d Cir. 1994); Unital, Ltd. v. Sleepco Mfg., Ltd., 627 F. Supp. 285, 292 (W.D. Wash. 1985).

41. Kohler Co. v. Moen Inc., 12 F.3d 632, 634 (7th Cir. 1993).

42. Imagineering, Inc. v. Van Klassens, Inc., 53 F.3d 1260, 1264 (Fed. Cir. 1995).

43. 15 U.S.C. § 1117.

44. See Litton Sys., Inc. v. Whirlpool Corp., 728 F.2d 1423, 1444 (Fed. Cir. 1984) (holding under the point of novelty test that no matter how similar two designs are in the eyes of an ordinary observer, a design patent is not infringed unless the accused design appropriated the patented design’s novel features).

45. 543 F.3d 665, 677–78 (Fed. Cir. 2008) (en banc).

46. Id. at 677.

47. 35 U.S.C. § 289.

48. Nike, Inc. v. Wal-Mart Stores, Inc., 138 F.3d 1437, 1448 (Fed. Cir. 1998).

49. Apple, Inc. v. Samsung Elecs. Co., 678 F.3d 1314 (Fed. Cir. 2012).

50. Apple Inc. v. Samsung Elecs. Co., 888 F. Supp. 2d 976 (N.D. Cal. 2012).

51. Complaint at 25, Apple v. Samsung, 678 F.3d 1314 (No. 11-cv-01846-LHK).

52. 1 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 7:91 (4th ed. 2008).

53. See Ferrari S.p.A. Esercizio Fabriche Automobili e Corse v. Roberts, 944 F.2d 1235, 1241 (6th Cir. 1991) (stating that “Lanham Act protection is available to designs which also might have been covered by design patents as long as the designs have acquired secondary meaning”); Winning Ways, Inc. v. Holloway Sportswear, Inc., 903 F. Supp. 1457, 1460–61 (D. Kan. 1995) (holding that “[g]ranting trade dress protection to an item for which a patent has expired creates tension because the product may have obtained secondary meaning . . . precisely because the product was patented,” and that trade dress protection would not have an independent basis for secondary meaning, effectively extending the monopoly granted by the design patent).

54. Hubbell Inc. v. Pass & Seymour, Inc., 883 F. Supp. 955, 957–58 (S.D.N.Y. 1995).

55. 328 F.2d 925, 930 (C.C.P.A. 1964).

56. Topps Co. v. Gerrit J. Verburg Co., No. 96 Civ. 7302, 1996 U.S. Dist. LEXIS 18556 (S.D.N.Y. 1996); Krueger Int’l, Inc. v. Nightingale Inc., 915 F. Supp. 595, 604 (S.D.N.Y. 1996); Hubbell, 883 F. Supp. at 957–58.

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