Amicus Curiae Brief — Wal-Mart Stores, Inc. v. Samara Brothers, Inc.

-

No. 99-150

Supreme Court, U.S.

99

— NOV 17 1995

Supreme Court of the United States...

WAL-MART STORES, INC.,

Petitioner,

V.

SAMARA BROTHERS, INC.,

Respondent.

On Writ oF CERTIORARI TO THE

UNITED STATES CourRT OF APPEALS FOR THE SECOND CIRCUIT

—_-——

—

BRIEF OF PRIVATE LABEL MANUFACTURERS

ASSOCIATION AS AMICUS CURIAE IN SUPPORT

OF REVERSAL OF THE DECISION BELOW

-_-

ARTHUR M. HANDLER

Counsel of Record

RoBerT S. GOODMAN

KRISTIN T. Roy

Burns HANDLER & Burns LLP

Attorneys for Amicus Curiae

Private Label Manufacturers

Association

220 East 42nd Street

Suite 3000

New York, New York 10017

(212) 687-1300

156250 @) Counsel Press LLC

FORMERLY LUTZ APPELLATE SERVICES

(800) 274-3321 + (800) 359-6859

What must be shown to establish that a product’s

design is inherently distinctive for purposes of

Lanham Act trade-dress protection?

Question Presented

Table of Contents

Table of Cited Authorities

Preliminary Statement

il

TABLE OF CONTENTS

Interest of Amicus Curiae ....

Summary of Argument

-. £ - 2 = ek oF es 2 eee ee

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I. Section 43(a) Trade Dress Analysis .......

A. Lanham Act Section 43(a) ..........

B. The Law Of Trade Dress ............

l.

Section 43(a) Provides Protection

EE 6 i4 cence aveseoe

Primary Goals Of Trade Dress

Protection

a.

Protection Of Consumers From

Confusion

II.

Ill.

iii

Contents

b. Trade Dress Law Fosters

Competition By Avoiding

Monopolization And Promoting

The Free Flow Of Information

And Ideas In The Marketplace

Product Configuration Trade Dress Is Less

Likely To Be An Indicator Of Source

Than Other Types Of Trade Dress And

Accordingly Should Be Subject To A Stricter

Standard For Achieving Trade Dress

A ery Perr Terr rer

B. The Proper Test For Product

ee

This Court Should Adopt The Duraco Test

For Inherent Distinctiveness .............

A. Prong One: Unusual And Memorable

B. Prong Two: Conceptually Separable

ee

Page

10

10

14

16

18

18

iv

Contents

C. Prong Three: Likely To Serve Primarily

As A Designator Of Origin Of The

PUES oc ccacccveséaceceevesseseese

IV. The Second Circuit Applied An Incorrect

Test For Inherent Distinctiveness And In Any

Event Misapplied The Definition To The

|. gg) lt Perrier rrr re

V. The Need For A Strict Standard In Product

Configuration Cases Is More Acute When

Trade Dress Protection Is Sought For An

Bative Product Lime .....cccccccccsccces

CE... cccenthescéeeesankeennaneeesssaus

Page

20

21

23

25

TABLE OF CITED AUTHORITIES

Page

Cases:

American Home Prods. v. Barr Lab., 656 F. Supp.

1058 (D.N.J.), aff'd, 834 F.2d 368 (3d Cir. 1987)

96006000000060b00K6 008s we beud Meweeeuncos 9

Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489

Ee EE Suvdsdusachedobonseideaeses 5, 6, 8

Bristol-Myers Squibb Co. v. McNeil-P.P.C., Inc., 973

Paes CE a GED évsvnccoedevececece 9

Central Hudson Gas & Elec. Corp. v. Public Serv.

Comm. of New York, 447 U.S. 557 (1980) ..... 9

Clamp Mfg. Co. v. Enco Mfg. Co., 870 F.2d 512 (9th

Cir.), cert. denied, 493 U.S. 872 (1989) ....... 10

Coach Leatherware Co. v. AnnTaylor, Inc., 933 F.2d

SE ccncceensdeeticéntescaness 19

Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S.

PED addnccéddenudunecnseduedddasess 5, 7,8

Conopco, Inc. v. May Dep't Stores Co., 46 F.3d 1556

(Fed. Cir. 1994), cert. denied, 514 U.S. 1078

DE 4860600060 0000000 bndbeuvoeeBuatetes 9

Crescent Tool Co. v. Kilborn & Bishop Co., 247 F.

SD EE Garcesesvednadkend badd souks 7,8

vi

Cited Authorities

Page

Duraco Prods., Inc. v. Joy Plastic Enter., Ltd., 40

Poe OES GH Gee COED cccsccccccessceess passim

EFS Mktg., Inc. v. Russ Berrie & Co., 76 F.3d

GF Gh GEE bbc ccccencevecccasceesess 11-12

Esercizio v. Roberts, 944 F.2d 1235 (6th Cir. 1991),

cert. denied, 505 U.S. 1219 (1992) ........... 14

Henri Bendel, Inc. v. Sears, Roebuck & Co., 25

F. Supp.2d 198 (S.D.N.Y. 1998) ............. 8

Herman Miller, Inc. v. Palazzetti Imports & Exports,

Inc., 998 F. Supp. 757 (E.D. Mich. 1998) ...... 9

1.P. Lund Trading ApS v. Kohler Co., 163 F.3d 27

ls Bere Terre TT TTT Te 10

Knitwaves, Inc. v. Lollytogs, Ltd., 71 F.3d 996 (2d

Se, GED okcccuccensdvéoeusiecesecdeceeess 21

Landscape Forms, Inc. v. Columbia Cascade Co.,

113 F.3d 373 (2d Cir. 1997) ............-. 10, 21, 24

Publications Int'l, Ltd. v. Landoll, Inc., 164 F.3d 337

(7th Cir. 1998), cert. denied, 119 S. Ct. 1498

SD bh dace edchecescencdeadccocenseovess 7,19

Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159

DEED cecovandedédeccocessoceteneawers 6,7, 11,19

vil

Cited Authorities

Page

Regal Jewelry Co. v. Kingsbridge Int'l, Inc., 999

F. Supp. 477 (S.D.N.Y. 1998) ............... 24

Rose Art Indus., Inc. v. Raymond Geddes and Co.,

31 F. Supp.2d 367 (D.N.J. 1998) ............. 24

Samara Bros., Inc. v. Wal-Mart Stores, Inc., 165 F.3d

ME db ateecusssteedacdeieaeen 22, 23

Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225

SE Ko Odcuscknidevesdueededébdbaeccdons 5,7,8

Sports Traveler, Inc. v. Advance Magazine

Publishers, Inc., 25 F. Supp.2d 154 (S.D.N.Y.

EEE, Awnseeneneseudsatdashinesenteeescs 9

Stormy Clime Ltd. v. ProGroup, Inc., 809 F.2d 971

DE Mn: ponunenenevaweedean cenedes 7, 13,14

Thomas & Betts Corp. v. Panduit Corp., 65 F.3d 654

(7th Cir. 1995), cert. denied, 516 U.S. 1159 (1996)

peUEbUSS RES Se hbeDneeduechedndensceneddnns 10, 13

Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763

DD witeduteeuddcunaadavesades 3, 5, 6, 8, 15, 21

Versa Prods., Co. v. Bifold Co. (Mfg.) Ltd., 50 F.3d

189 (3d Cir.), cert. denied, 516 U.S. 808 (1995)

sbeRdnebbedenensdbeteceucesdedewsVivrcbes 12

vill

Cited Authorities

Page

Wallace Int'l Silversmiths, Inc. v. Godinger Silver

Art Co., 916 F.2d 76 (2d Cir. 1990), cert. denied,

Sy es SUED ccccevescdavcbecececess 7

Weight Watchers Int'l, Inc. v. Stouffer Corp., 744

F. Supp. 1259 (S.D.N.Y. 1990) .............. 9

Winner Int'l LLC v. Omori Enter., Inc., 60

F. Supp.2d 62 (E.D.N.Y. 1999) .............. 11

Statute:

Lanham Act Section 43(a), 15 U.S.C. § 1125(a) ... passim

Rule:

PG IE BF vic ccctccecosccedsusess l

Other Authorities:

J. THomas McCartuy, | MCCARTHY ON TRADEMARKS

AND UNFAIR COMPETITION § 2:8 (4th ed. & Supp.

SE Sendonudsekicsecucbuseddstsceeenten 6

PLMA’s 1998 Private Label Yearbook .......... 2

PLMA’s 1999 Private Label Yearbook .......... 1

RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 16

SN 66 seedesdventacanesdcesssceesesains 10

ix

Cited Authorities

Page

RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 17,

I Fe 19

Sen. Rep. No. 1333, 79TH Cona., 2p Sess. (1946),

reprinted in 1946 U.S.C.C.A.N. 1274 ......... 5

|

PRELIMINARY STATEMENT

Pursuant to Rule 37 of the Supreme Court Rules, Private

Label Manufacturers Association (“PLMA”), with the

consent of the parties, submits this brief as amicus curiae in

support of reversal of the majority decision below (Newman,

CJ. dissenting).'

INTEREST OF AMICUS CURIAE

PLMA is a major trade association representing over

3,200 companies which are involved in the manufacture and

distribution of private label or store brand products, i.e., items

sold under the retailer’s or wholesaler’s brand name in

supermarkets, drug chains and mass merchandisers

throughout the United States. Store brand products include:

over-the-counter drugs, health and beauty care items,

packaged and processed foods, beverages, snacks, household

cleaners, outdoor and leisure products, auto aftercare and a

wide range of other general merchandise.

For the fifty-two (52) week period ending December 31,

1998, store brands accounted for $35.4 billion in supermarket

sales and 19.9% of supermarket unit sales. At drug chains,

store brands accounted for $2.9 billion in sales and 13.4%

of unit sales. With respect to mass merchandisers, store

brands accounted for $5.0 billion in sales and 11.8% of unit

sales. PLMA's 1999 Private Label Yearbook at 3 (statistics

compiled by Information Resources, Inc.). Overall, private

label accounts for over $43 billion in annual sales at

1. All parties have consented to the filing of this brief by letters

filed with the Clerk of the Court. Counsel for PLMA authored this

brief in whole and no person or entity, other than PLMA, made a

monetary contribution to its preparation or submission.

2

U.S. supermarkets, drug chains, and mass merchandisers

combined — approximately one out of every five products

sold isa store brand.

From the consumers’ point of view, store brands

represent substantial savings for products of comparable or

superior quality and performance to the leading national

brands. Typical of the savings that consumers enjoyed in

1997 were $1.4 billion for carbonated beverages, $423

million for vitamins, and $339 million for disposable diapers.

Purchasers of store brands saved some $15.8 billion in

supermarkets, drug chains, and mass merchandisers in 1997.

See PLMA’s 1998 Private Label Yearbook at 10-11 (based

on statistics compiled by Information Resources, Inc.).

PLMA has a direct and substantial interest in the

preservation of open, competitive markets in which

manufacturers may offer consumers quality goods at

reasonable prices as an alternative to national branded

products. PLMA’s amicus curiae submission is intended to

support innovation in product design and consumer choice

and to demonstrate the need for this Court to adopt, in the

context of product configuration trade dress, a precise

definition of “inherently distinctive,” which is consistent with

the legislative purpose of Section 43(a) of the Lanham Act

and avoids the creation of undesirable and unauthorized

monopolies in the guise of “trade dress” over common-place

configurations of individual products.

SUMMARY OF ARGUMENT

PLMA submits this amicus curiae brief in support of

reversal of the majority decision of the Second Circuit Court

of Appeals which adopted and misapplied an incorrect

definition of “inherent distinctiveness” in concluding that

~ spetmial Tatas

3

the commonplace elements found in certain of respondent’s

products were entitled to trade dress protection in the absence

of secondary meaning.

The federal law of unfair competition, codified by

Section 43(a) of the Lanham Act, has its roots in the tort of

deceit. The law is intended to protect consumers from

confusion as to the source of origin of the product. The law

of unfair competition is not intended to hinder competition

or grant monopoly power.

It is essential that this Court reiterate these well

established principles and protect the public interest by

preserving the balance between free and fair competition in

the marketplace and the limited and carefully circumscribed

monopolies inherent in the statutory and judicially mandated

protections found in the patent, trademark and copyright

laws. The temptation to judicially expand these statutory

monopolies on a case by case basis in the lower courts so as

to embrace a myriad of statutorily unprotected shapes, forms,

sizes and appearances of commonplace products must be

recognized and avoided. In product configuration cases

where secondary meaning? is absent, the formulation of a

narrowly phrased definition of “inherently distinctive,” an

element introduced by this Court in Two Pesos, Inc. v. Taco

Cabana, Inc., 505 U.S. 763 (1992), is essential so as to settle

any split between the circuit courts, reduce the volume of

trade dress litigations and provide legal guidance and

certainty for manufacturers of competing products.

2. The term “secondary meaning” is used to refer broadly to

the consumer’s association of the appearance of a product’s trade

dress and the product’s identity, reputation and goodwill. Two Pesos,

Inc. v. Taco Cabana, Inc., 505 U.S. 763, 766 n.4 (1992).

4

The broad reach and potentially anti-competitive effects

of the Second Circuit’s decision in the case at bar, which

applied a vague and imprecise definition of “inherently

distinctive” to an entire line of product configurations,

underscores the need to adopt a uniform judicial standard

for determining whether a specific product configuration not

protected by patent or registered copyright or trademark

constitutes protectable trade dress, absent secondary

meaning.

PLMA, as amicus curiae, respectfully submits that there

is a significant distinction between labels, packaging and

other types of trade dress, which are inherently distinctive

and clearly serve as indicators of source of manufacture and

constitute protectable trade dress on the one hand and the

configuration of the product itself, which oft-times embodies

pleasing but commonplace design elements not perceived

as an indicator of source of manufacture on the other. Such

distinction requires in product configuration cases retention

of the rule that secondary meaning must be proven. PLMA

also supports this Court’s adoption of the Third Circuit’s

definition of “inherently distinctive” set forth in Duraco

Products, Inc. v. Joy Plastic Enterprises, Ltd., 40 F.3d 1431

(3d Cir. 1994).

ARGUMENT

I.

SECTION 43(a) TRADE DRESS ANALYSIS

A. Lanham Act Section 43(a)

The narrow question on which this Court granted

certiorari must be considered in the context of the history

5

and statutory purpose of the Lanham Act. The tort of unfair

competition has been codified in the federal law by Section

43(a) of the Lanham Act, as amended, 15 U.S.C. § 1125(a)

(“Section 43(a)”). By enacting Section 43(a), which in the

words of this Court, “creates a federal remedy for making ‘a

false designation of origin, or any false description or

representation, including words or other symbols tending

falsely to describe or represent the same. . . .” Congress has

thus given federal recognition to many of the concerns that

underlie the state tort of unfair competition... .” Bonito

Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 166

(1989). “The law of unfair competition has its roots in the

common-law tort of deceit: its general concern is with

protecting consumers from confusion as to source.” Bonito

Boats, 489 U.S. at 157; Sen. Rep. No. 1333, 79th Cong., 2d

Sess. (1946), reprinted in 1946 U.S.C.C.A.N. 1274, 1275.

This concern is exemplified by the analytical test for trade

dress infringement articulated by this Court in Two Pesos:

[U]nder the Lanham Act [§ 43(a)], the ultimate

test is whether the public is likely to be deceived

or confused by the similarity of the marks... .

Whether we call the violation infringement, unfair

competition or false designation of origin, the test

is identical — is there a ‘likelihood of confusion?’

505 U.S. 763, 780 (1992) (Stevens, J. concurring).

This Court has continuously reaffirmed Congress’

policy, reflected in the trademark, patent and copyright laws,

to “promote invention while at the same time preserving free

competition.” Sears, Roebuck & Co. v. Stiffel Co., 376 U.S.

225, 230-31 (1964); Bonito Boats, 489 U.S. at 144; Compco

Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234 (1964).

6

B. The Law Of Trade Dress

1. Section 43(a) Provides Protection For Trade Dress

It is well established that trade dress is entitled to

protection in the same manner as trademarks pursuant to

Lanham Act Section 43(a). As this Court held in Two Pesos,

505 U.S. 763 (1992), for trade dress to be entitled to

protection: (1) the trade dress must be inherently distinctive

or have acquired distinctiveness through secondary meaning,

and (2) there must be a showing of likelihood of confusion

with defendant’s trade dress. This Court made clear in 7wo

Pesos, which did not involve product configuration, that

“proof of secondary meaning is not required to prevail on a

claim under § 43(a) of the Lanham Act where the trade dress

at issue is inherently distinctive.” 505 U.S. at 776.

2. Primary Goals Of Trade Dress Protection

a. Protection Of Consumers From Confusion

As discussed above, the ultimate aim of trade dress

law is protection of the consumer from confusion, mistake

and deception in commerce. 15 U.S.C. § 1125(a); Bonito

Boats, 489 U.S. at 157; J. THomas McCartuy, 4 McCartuy

ON TRADEMARKS AND UNFAIR COMPETITION § 2:8 at 2-15 (4th

ed. & Supp. 1999). Trade dress that functions as a source

indicator may inform consumers as to different product

characteristics, including source, price, quality and type of

product. Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159,

163-65 (1995). Misperceptions as to any of these may result

in confusion, and harm the deceived consumers financially,

physically or otherwise. Qualitex, 514 U.S. at 164-65.

7

b. Trade Dress Law Fosters Competition By

Avoiding Monopolization And Promoting The

Free Flow Of Information And Ideas In The

Marketplace

Unfair competition law is not and was never intended to

be used as an anti-competitive device to prevent or handicap

new market entrants. See Publications Int'l, Ltd. v. Landoll,

Inc., 164 F.3d 337, 340 (7th Cir. 1998), cert. denied, 119

S. Ct. 1498 (1999); Wallace Int'l Silversmiths, Inc. v.

Godinger Silver Art Co., 916 F.2d 76, 81 (2d Cir. 1990),

cert. denied, 499 U.S. 976 (1991); Stormy Clime Ltd. v.

ProGroup, Inc., 809 F.2d 971, 978 (2d Cir. 1987); Crescent

Tool Co. v. Kilborn & Bishop Co., 247 F. 299, 301 (2d Cir.

1917) (Hand, CJ).

Trade dress law generally promotes competition by

avoiding monopolization and promoting the free flow of

information. See Qualitex, 514 U.S. at 168-70; Sears,

Roebuck & Co., 376 U.S. at 230-31; Compco Corp., 376

U.S. 234.

Monopolization by a dominant market participant can

harm the consumer by increasing costs and limiting product

choice and availability. Accordingly, it has long been the

rule that established market manufacturers may not use their

dominant position in the market to exclude new entrants.

Crescent Tool, 247 F. at 301. “It is a first principle of

trademark law that an owner may not use the mark as a means

of excluding competitors from a substantial market.” Wallace

Int'l Silversmiths, 916 F .2d at 81; Stormy Clime, 809 F.2d at

978. Trade dress law, therefore, should not be applied so as

to permit an entrenched manufacturer to obtain an unfair

competitive position by monopolizing a relatively

insignificant alleged trade dress which has not acquired

secondary meaning.

In Bonito Boats, this Court acknowledged this well

established fundamental tenet by, among other things,

quoting with approval from Judge Learned Hand’s statement

in Crescent Tool, 247 F. 299:

[T)he plaintiff has the right not to lose his

customers through false representations that those

are his wares which in fact are not, but he may

not monopolize any design or pattern, however

trifling. The defendant, on the other hand, may

copy plaintiff's goods slavishly down to the

minutest detail: but he may not represent himself

as the plaintiff in their sale.

489 U.S. at 157; Sears, Roebuck & Co., 376 U.S. 225;

Compco Corp., 376 U.S. 234. Clearly, copying, even

“slavish” copying, of trade dress elements by a competitor

is permissible so long as the competitor avoids source

confusion. Bonito Boats, 489 U.S. at 157. “It is not ipso facto

‘unfair competition,’ . . . for one boldly to copy a competitor’s

product; it is only ‘unfair competition’ to trade off another’s

good will and in the process dupe consumers into mistaking

one’s products for another’s.”’ Duraco, 40 F.3d at 1448.

3. Emboldened by this Court’s relaxation of the requirement

of secondary meaning in Two Pesos, numerous litigations have been

initiated seeking trade dress protection under the Lanham Act for

all manner of products without regard for originality or designation

of origin, thereby essentially ignoring the doctrine that copying is

permissible so long as the competitor avoids source confusion. See.

e.g., Henri Bendel, Inc. v. Sears, Roebuck & Co., 25 F. Supp.2d

198 (S.D.N.Y. 1998) (unsuccessfully claiming competitor's green

(Cont'd)

9

So long as consumer confusion is avoided through

labelling, packaging or other designation separate and apart

from the product itself, a manufacturer does not offend

principles of trade dress law and does not infringe trade dress

by offering a product of similar appearance. Consumers

benefit from the availability of the alternative products and

having product equivalency information at a glance;

consumers, for example, know that a store brand product is

produced by a party other than a recognized national brand.

Conopco, Inc. v. May Dep't Stores Co., 46 F.3d 1556 (Fed.

Cir. 1994), cert. denied, 514 U.S. 1078 (1995); Bristol-Myers

Squibb Co. v. McNeil-P.P.C., Inc., 973 F.2d 1033 (2d Cir.

1992); American Home Prods. v. Barr Lab., 656 F. Supp.

1058 (D.N.J.), aff'd, 834 F.2d 368 (3d Cir. 1987). In addition

to fostering consumer choice and price savings, this

“information exchange” decreases shopping time, provides

information about significant characteristics of competing

products, and advances the societal interest in providing full

information to consumers. Weight Watchers Int'l, Inc. v.

Stouffer Corp., 744 F. Supp. 1259, 1277 (S.D.N.Y. 1990)

(quoting Central Hudson Gas & Elec. Corp. v. Public Serv.

Comm. of New York, 447 U.S. 557, 561-62 (1980)). It is

clear that both the anti-monopoly and educational aims of

trade dress law are enhanced by vigorous competition

between competing manufacturers and likewise diminished

by an unwarranted judicial expansion of the definition of

(Cont'd)

and white cosmetics bag infringed on its brown and white cosmetics

bag); Sports Traveler, Inc. v. Advance Magazine Publishers, Inc.,

25 F. Supp.2d 154, 163 (S.D.N.Y. 1998) (seeking protection for

magazine cover); Herman Miller, Inc. v. Palazzetti Imports &

Exports, Inc., 998 F. Supp. 757 (E.D. Mich. 1998) (seeking

protection for shape of lounge chair and ottoman). The economic

burden of such litigation is ultimately reflected in the costs of the

product and borne by the consumer, and hence impacts on the public

interest.

10

“inherently distinctive” as exemplified by the majority

decision below.

PRODUCT CONFIGURATION TRADE DRESS IS

LESS LIKELY TO BE AN INDICATOR OF SOURCE

THAN OTHER TYPES OF TRADE DRESS AND

ACCORDINGLY SHOULD BE SUBJECT TO A

STRICTER STANDARD FOR ACHIEVING TRADE

DRESS PROTECTION

A. Product Configurations Distinguished

Trade dress protection may be extended to the non-

functional characteristics of a product’s configuration.

See, e.g., 1.P. Lund Trading ApS v. Kohler Co., 163 F.3d 27

(ist Cir. 1998); Thomas & Betts Corp. v. Panduit Corp., 65

F.3d 654, 663-64 (7th Cir. 1995), cert. denied, 516 U.S. 1159

(1996); Clamp Mfg. Co. v. Enco Mfg. Co., 870 F.2d 512,

516-17 (9th Cir.), cert. denied, 493 U.S. 872 (1989);

RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 16 (1995).

Product configurations are fundamentally different, however,

from other types of trade dress, such as labelling and

packaging. Landscape Forms, Inc. v. Columbia Cascade Co.,

113 F.3d 373, 377-78 (2d Cir. 1997); Duraco Prods., Inc. v.

Joy Plastic Enter., Ltd., 40 F.3d at 1431, 1433-34 (3d Cir.

1994).

For example, since the vast majority of private label

purchases are on-the-spot decisions, consumers often rely

on a product’s configuration to identify the category or

function of the product. Pleasing or educative product

configurations are often referred to as “aesthetically

functional” configurations and, like other functional trade

fi

~—_— =

-

Ce ek a ee ee

1]

dress, are not entitled to trade dress protection. Qualitex Co.

v. Jacobson Prods. Co., 514 U.S. 159, 170 (1995) (“The

‘ultimate test of aesthetic functionality,’ . . . ‘is whether the

recognition of trademark rights would significantly hinder

competition.’ ”’).

Any product configuration which is not intended to and

does not attempt to identify the source of manufacture or

designation of origin of the product should not be entitled to

trade dress protection. Duraco, 40 F.3d at 1448-49; Winner

Int'l LLC v. Omori Enter., Inc., 60 F. Supp.2d 62, 66

(E.D.N.Y. 1999). For example, a manufacturer of dry cereals

who chooses to market a round corn flake should not be heard

to complain if a competitor does likewise, assuming the

existence of packaging and labelling accurately denoting

source of manufacture and the absence of secondary meaning.

It is highly unlikely that a round corn flake will be intended

or understood by the consumer to denote source of origin.

To provide trade dress protection in such a case would be to

improperly grant monopoly power to a single enterprise and

impair competition and the public interest.

As the Second Circuit noted in EFS Marketing, Inc. v.

Russ Berrie & Co.:

[P]roduct-configuration trade dresses are less

likely than packaging-configuration dresses to

serve the source-identification function that is a

prerequisite to Lanham Act protection. We

recognized that consumers do not associate the

design of a product with a particular manufacturer

as readily as they do a trademark or a product-

packaging trade dress. They are more likely to be

attracted to the product for the product’s features,

12 13

protection of product configurations. E.g., Thomas & Betts

Corp., 65 F.3d 654; Duraco, 40 F.3d at 1447. When

considering “product configuration:”

rather than for the source-identifying role the

features might play.

76 F.3d 487, 491 (2a Cir. 1996). The Third Circuit in Duraco

reached 9 similar conclusion: A proper approach to inherent distinctiveness

must distinguish between nonfunctional but

desirable designs — which, absent secondary

meaning, unfair competition law has no interest

in precluding others from copying — and

nonfunctional designs representing to consumers

[U]nlike packaging, a product configuration t

differs fundamentally from a product’s trademark, |

insofar as it is not a symbol according to which

one can relate the signifier (the trademark or

perhaps the packaging) to the signified (the the source of the goods — which unfair

product). competition law does and should forbid others

from copying.

Duraco, 40 F.3d at 1440.

Duraco, 40 F.3d at 1448.

Accordingly, when addressing product configurations,

courts must bear this distinction in mind and be vigilant to

ensure that competition is protected and the purpose and

intent of trade dress law is upheld. As the Third Circuit held

in Versa Products, Co. v. Bifold Co. (Manufacturing) Ltd.:

A prior Second Circuit panel has co

ARS p rrectly recognized

Since trademark protection extends for an

unlimited period, expansive trade dress protection

Where product configurations are concerned, we

must be especially wary of undermining

competition. Competitors have broad rights to

copy successful product designs when those

designs are not protected by (utility or design)

patents. It is not unfair competition for someone

to trade off the goodwill of a product. . . it is only

unfair to deceive consumers as to the origin of

one’s goods and thereby trade off the good will

of a prior producer.

for the design of products would prevent some

functional [or descriptive] products from

enriching the public domain. This threat is

particularly great when ... a first manufacturer

seeks broad trade dress protection for a product

on the ground that its ... features ... [are]

distinctive.

Stormy Clime Ltd. v. ProGroup, Inc., 809 F.2d at 97

(2d Cir. 1987). P -2d at 971, 978

The adoption of an overly expansive definition of

50 F.3d 189, 207 (3d Cir.), cert. denied, 516 U.S. 808 (1995).

Some of the circuit courts have held that plaintiffs must meet

a higher standard of establishing entitlement to trade dress

“inherently distinctive” product configurations is contrary

to the public interest and will improperly grant monopoly

14

protection to product configurations which are not intended

to identify the source of origin and which have not acquired

secondary meaning. Such monopolies are contrary to the

legislative purpose and intent of trade dress law, will stifle

competition and undermine the ability of competitors to

inform consumers of the category or function of the product.

B. The Proper Test For Product Configurations

Any definition of protectable trade dress with regard to

product configurations must reflect the foregoing concerns

and provide a clear guideline under which competitors can

innovate, design and market their products. Such definition

must protect the balance between innovation and competition

sought by Congress.‘ The absence of such definition or the

continuation of a vague definition which invites

misapplication to the facts of a particular case threatens to

provide unreasonable and unlimited Section 43(a) protection

for every ostensibly new shape, appearance or image of a

product, and, arguably, for every new combination of

commonplace elements embodied in a trade dress when taken

as a whole. Virtually any commonplace product in the

supermarket or neighborhood drug store could be a candidate

for a trade dress protection claim.

The most effective method of evaluating product

configurations to ensure open competition and to protect

4. Stormy Clime, 809 F.2d at 978 (“courts must be sensitive to

whether a grant of trade dress protection would close all avenues to

a market that is otherwise open in the absenc* of a valid patent”);

Esercizio v. Roberts, 944 F.2d 1235, 1241 (6th Cir. 1991), cert.

denied, 505 U.S. 1219 (1992).

15

consumers is to require a finding of secondary meaning.°

Inasmuch as product configuration rarely operates as a

designator of origin and appropriate labelling and packaging

can be counted on to serve such function, innovation will be

hampered minimally, if at all, by requiring proof of secondary

meaning as a pret. quisite to granting trade dress protection

to a product configuration. Such a burden is far outweighed

by the benefits to competition and consumers which will

result from requiring a showing of secondary meaning in

product configuration cases. Reaffirmation of the secondary

meaning requirement will properly prevent the inappropriate

grant of monopoly power to product configurations which

do not operate as designators of origin.

If, however, this Court elects to extend Two Pesos to

the instant product configuration case, a determination which

PLMA vigorously opposes, it is imperative that this Court

adopt a narrow and concise definition of “inherently

distinctive” such as the definition articulated by the Third

Circuit in Duraco.

5. Such a requirement does not conflict with this Court's

holding in Two Pesos because such holding was with respect to

product packaging and did not address the unique elements of

product configuration outlined above. It would be a leap for this

Court to now expand the law of trade dress to protect product

configurations like the ones at bar which are integral parts of the

products and reflect little or no innovation.

16

III.

THIS COURT SHOULD ADOPT THE DURACO TEST

FOR INHERENT DISTINCTIVENESS

In Duraco, the Third Circuit held that to be inherently

distinctive, a product configuration must be:

(1) unusual and memorable; (2) conceptually

separable from the product; and (3) likely to serve

primarily as a designator of origin of the product.

40 F.3d 1431, 1448-49 (3d Cir. 1994).

In Duraco, plaintiff's most profitable products were

planters shaped like grecian urns. /d. at 1434. Although

constructed of plastic, plaintiff maintained that the key to

the success of the was “that a careful combination of

ornamental features creates in them [the planters] the illusion

of marble, cement, or stone construction.” /d. at 1434.

Defendant was one of several manufacturers which

competed with plaintiff in the “plastic planter market.”

Id. at 1435. Defendant began production of the “ultimate

urn” which was “strikingly similar in appearance” to

plaintiff's grecian urns. /d. The record evidence established

differences in quality, capacity and center of gravity. /d.

Upon learning of defendant’s competing planters,

plaintiff brought suit claiming “the total composition of all

the elements of its urns’ configuration, including the rim,

the finish, the joining of the top and bottom halves, and the

color” constituted trade dress entitled to protection by the

patent and trademark laws. /d.

17

In holding that the plaintiff's planters were not inherently

distinctive, the Third Circvit properly recognized that

pursuant to the facts, the court was dealing “exclusively with

trade dress said to inhere in the product itself, rather than

trade dress alleged in a product’s packaging.” /d. at 1439. In

choosing to apply a three-prong definition, the Third Circuit

concluded that such definition embodied the “proper set of

circumstances for treating a product configuration as

inherently distinctive.” /d. at 1448. Specifically, the Third

Circuit stated:

These circumstances are characterized by a high

probability that a product configuration serves a

virtually exclusively identifying function for

consumers — where the concerns over “theft” of

an identifying feature or combination or

arrangement of features and the cost to an

enterprise of gaining and proving secondary

meaning outweigh concerns over inhibiting

competition, and where consumers are especially

likely to perceive a connection between the

product’s configuration and its source.

Id.

An understanding of the Duraco definition requires

analysis of each of its constituent elements. At its heart, each

of the prongs seeks to ensure that the alleged trade dress

will be protected only when the product configuration is

recognized and functions as a designation of origin, the

fundamental rationale of trade dress law. In the event a

product’s configuration does not meet each of the required

three prongs of the Third Circuit’s definition of “inherently

distinctive,” it is unlikely that consumers will identify the

18

product’s configuration with the source of the product.

Absent such identification, as discussed above, the product S

configuration should not be entitled to trade dress protection.

A. Prong One: Unusual And Memorable

The unassailable starting point is an inquiry as to whether

the alleged trade dress is “unusual and memorable,” i.e.,

whether the configuration evidences uniqueness and a high

degree of creativity. The purpose of the “unusual and

memorable” prong of the definition is to ensure that the

product configuration has “the capacity to distinguish goods

in a consumer’s mind — the first prerequisite for inherent

distinctiveness.” Duraco, 40 F.3d at 1449. The product

configuration “must partake of a unique, individualized

appearance, so that a consumer informed of all the options

available in the market could reasonably rely on it to identify

a source.” Jd. Clearly, commonplace configurations

and many combinations of otherwise commonplace

configurations are so lacking in uniqueness that they would

fail to satisfy this element.

B. Prong Two: Conceptually Separable From The

Product

A product configuration must also be “conceptually

separable from the product” to be inherently distinctive and

entitled to trade dress protection. Duraco, 40 F.3d at 1448.

This requirement is necessary to ensure that consumers

“recognize its [the product’s] symbolic (signifying)

character.” Jd. at 1449. Prong two thus requires product

configurations which have not yet acquired secondary

meaning to nonetheless be “recognizable by the consumer

‘as an indicium of source, rather than a decorative symbol

19

or pattern... .” " /d. In explaining its rationale for this prong,

the Third Circuit stated:

As with trademarks, an inherently protectable

product configuration must, at least conceptually,

be “something other than, and separate from, the

merchandise.” Davis v. Davis, 27 F. 490, 492

(C.C. Mass. 1886). That is, the configuration for

which protection is sought must not appear to the

consumer as a mere component, or the essence,

of the product gestalt, but rather must appear as

something attached (in a conceptual sense) to

function in actuality as a source designator — it

must appear to the consumer to act as an

independent signifier of origin rather than as a

component of the good.

Id. at 1449-50 (citations omitted). In essence, the element of

the product configuration claimed to constitute protectible

trade dress must be separate and apart from the product itself,

thus giving reasonable assurance that, like packaging or

labelling, the elements of the configuration are distinct from

the product and function as an identifier of source. This prong

of the definition also serves to assure that features of the

product configuration which are aesthetically functional

remain outside the scope of protectable trade dress. Qualitex

Co. v. Jacobson Prods. Co., 514 U.S. 159, 170 (1995);

Publications Int'l, Ltd. v. Landoll, Inc., 164 F.3d 337, 339-

42 (7th Cir. 1998); Coach Leatherware Co. v. AnnTaylor,

Inc., 933 F.2d 162, 171 (2d Cir. 1991); REstTaTEMENT (THIRD)

OF UNFAIR ComPETITION § 17, Comment c, at 175-76 (1995).

In Duraco, for example, the Third Circuit held that

plaintiff's product configuration was not separable from the

product itself and therefore failed the second-prong of the

20

“inherently distinctive definition.” “[T]}he features of the

Grecian Classics for which Duraco seeks protection are

designed to achieve the goui of having the planter appear as

if constructed of marble or stone, and thus constitute part

and parcel of the overall product.” Duraco, 40 F.3d at 1452.

C. Prong Three: Likely To Serve Primarily As A

Designator Of Origin Of The Product

This prong quite correctly requires that to be inherently

distinctive a product configuration must be likely to serve

to identify the source of the product. Duraco, 40 F.3d

at 1450. In the words of the Third Circuit:

If the configuration itself, separate from the

product, is likely to serve some substantial

purpose other than as a designation of origin —

that is, besides to set it apart from other sources’

products in consumers’ minds — then it cannot

be inherently distinctive, but must acquire

secondary meaning before becoming entitled to

protection against copying.

Id.

This prong differs from the concept of secondary

meaning in that it does not focus on consumers’ actual mental

associations between the product and source of origin, but

instead “focuses on whether a consumer would likely

perceive the feature or combination or arrangement of

features as something that renders the product intrinsically

more desirable regardless of the source of the product, or

primarily as a signifier of the product’s source.” Jd. To allow

trade dress protection of product configurations which did

not meet this test solely because the “configuration is pleasant

21

rather than because it identifies the source of the product

would risk seriously transgressing the protective zones

mapped by the patent laws.” /d.

In sum, the three prong definition formulated by the

Third Circuit is consistent with fundamental principles of

trade dress law and best accomplishes the balance sought by

Congress between encouraging innovation and protecting an

innovator’s good will on the one hand and promoting and

protecting market competition and consumer well-being on

the other.

IV.

THE SECOND CIRCUIT APPLIED AN INCORRECT

TEST FOR INHERENT DISTINCTIVENESS AND IN

ANY EVENT MISAPPLIED THE DEFINITION TO

THE FACTS OF THE CASE

The majority opinion below is in error because the two-

judge majority applied an overly broad definition of

“inherently distinctive” to the facts, a definition which clearly

was not authorized or suggested by 7wo Pesos or any other

decision of this Court. The Second Circuit appears to limit

its inquiry into whether a product configuration is “inherently

distinctive” to only the issue of “whether the design was

likely to be understood as an indicator of the product’s

source.” Landscape Forms, Inc. v. Columbia Cascade Co.,

113 F.3d 373, 378 (2d Cir. 1997); Knitwaves, Inc. v.

Lollytogs, Ltd., 71 F.3d 996, 1008 (2d Cir. 1995).

Prior Second Circuit opinions have acknowledged the

need for a higher standard in product configuration cases

than in traditional trade dress cases. Landscape Forms, |13

F.3d at 378; Knitwaves, 71 F.3d at 1008. Unfortunately,

22

however, the unspecific nature and the limited inquiry

suggested by the Second Circuit’s definition of “inherently

distinctive” is prone to lead to a misapplication of the

definition to the particular facts and to the unwarranted

granting of trade dress protection, as in the case at bar.

The limited nature of the inquiry suggested by the

Second Circuit’s definition falls short of that employed by

the Third Circuit in Duraco. Among other things, the Second

Circuit formulation: (a) omits the important focus on

uniqueness of the configuration, (b) does not address the

distinction between the product and its dress, and (c) is vague

in its articulation of the element of consumer perception.

The absence of specificity and focus virtually assures that

the Second Circuit test of “inherently distinctive” trade dress

will create additional litigation and leave unresolved the

uncertainties now confronted by competing manufacturers

under the present unsettled state of federal law.°

It is important to note that protectable trade dress carries

with it no registration requirement or other public notice of

ownership. There is no regulatory mechanism for an initial

determination of the distinctiveness (or lack thereof) of a

product’s trade dress. A competitive entrant into a market

has no ability to ascertain whether any unregistered product

design or image is or is not in the public domain and no

opportunity to modify or alter his design to avoid a later

6. The Second Circuit's inability to apply its own test is

apparent from the split decision in the case at bar. After reviewing

the same facts and applying the same standard of law, the three

judge panel was unable to reach a unanimous conclusion as to how

the facts applied to the law, as evidenced by the dissenting opinion

of Judge Newman. See generally Samara Bros., Inc. v. Wal-Mart

Stores, Inc., 165 F.3d 120 (2d Cir. 1998) (Newman, CJ. dissenting).

wo os err

23

claim of trade dress infringement. The need for a clear

definition which takes note of the complexities of the

problem and the interests of consumers and competitors is

manifest. The Duraco definition appears to best address these

issues.

Application of the Duraco definition to the facts at bar

shows that the alleged trade dress herein is not inherently

distinctive and should not be afforded trade dress protection.

Samara dresses are not likely to be deemed “unusual and

memorable.” Seersucker fabrics in clothing are hardly

unique. Appliques are not novel to the children’s clothing

industry. Every day symbols such as strawberries and trains

are in no way unusual in children’s clothing styles.

Moreover, the alleged product configuration does not

appear to be separate from the product itself. The product is

a child’s dress. While the alleged trade dress may make the

product more appealing, there is no evidence that the “look”

was meant to identify source of origin. Samara Bros., Inc. v.

Wal-Mart Stores, Inc., 165 F.3d 120, 127-28 (2d Cir. 1998).

Samara’s product configuration not being separable from the

product itself should not be entitled to trade dress protection

absent proof of secondary meaning. Duraco Prods., Inc. v.

Joy Plastic Enter., Lid., 40 F.3d 1431, 1448-50 (3d Cir.

1994).

Vv.

THE NEED FOR A STRICT STANDARD IN PRODUCT

CONFIGURATION CASES IS MORE ACUTE WHEN

TRADE DRESS PROTECTION IS SOUGHT FOR AN

ENTIRE PRODUCT LINE

The need for a narrow definition of inherently distinctive

product configurations becomes even more acute when

24

considering a claim for trade dress protection not for a

specific product but for an entire “product line,” including

products which do not embody the specific elements claimed

as protectable trade dress. Courts have recognized the

additional concerns of extending protection from one product

configuration to an entire line of related product

configurations. See Landscape Forms, Inc. v. Columbia

Cascade Co., 113 F.3d 373, 378 (2d Cir. 1997); Regal

Jewelry Co. v. Kingsbridge Int'l, Inc., 999 F. Supp. 477,

486 (S.D.N.Y. 1998). As noted by the Second Circuit:

[A plaintiff] seeking to protect a series or line of

products faces a particularly difficult challenge

of showing that the appearance of its several

products is sufficiently distinct and unique to

merit protection as a recognizable trade dress. . . .

Accordingly, when protection is sought for an

entire line of products, cur concern for protecting

competition is acute.

Landscape Forms, 113 F.3d at 380 (cited with approval in

the dissenting opinion of Judge Newman in the case at bar);

Rose Art Indus., Inc. v. Raymond Geddes and Co.,

31 F. Supp.2d 367, 373 (D.N.J. 1998). Trade dress protection

should be granted to product lines in only extreme cases.

Landscape Forms, 113 F.3d at 380.

Adoption of the Duraco definition of “inherent

distinctiveness” will permit the lower courts to focus on the

relevant issues underlying a claim for protection of the trade

dress of a particular product configuration, and avoid the

inexact factual analysis reflected in the majority decision

below.

25

CONCLUSION

For each of the foregoing reasons, this Court should

reverse the Second Circuit’s determination below, reiterate

the need for secondary meaning where trade dress protection

is sought for a specific product configuration, and adopt the

definition of “inherent distinctiveness” contained in the Third

Circuit’s opinion in Duraco Products, Inc. v. Joy Plastic

Enterprises, Lid., 40 F.3d 1431 (3d Cir. 1994).

Respectfully submitted,

ARTHUR M. HANDLER

Counsel of Record

RosBert S. GOODMAN

KRrisTIN T. Roy

Burns HANDLER & Burns LLP

Attorneys for Amicus Curiae

Private Label Manufacturers

Association

220 East 42nd Street

Suite 3000

New York, New York 10017

(212) 687-1300