Trademark Cases of the United States Supreme Court

Justices of the United States Supreme Court

With every October comes a new Term at the United States Supreme Court.  Arguments are underway in the October 2012 Term, which will last through the end of June 2013.  As part of our continuing look at intellectual property and the United States Supreme Court, here is a bit of a SCOTUS primer on trademark law. For our primer on SCOTUS fair use cases please see Copyright Fair Use Cases of the United States Supreme Court.

In 1879 the United States Supreme Court first had the opportunity (and necessity) to address whether Congress had been granted in the Constitution the power to enact legislation to protect trademarks.  See In re Trademark Cases, 100 U.S. 82, 91-92 (1879) (“Are the acts of Congress on the subject of trade-marks founded on any rightful authority in the Constitution of the United States?”).

In so deciding this issue the Supreme Court addressed whether Congress could act pursuant to the Intellectual Property Clause, and then turned to whether Congress could act pursuant to the Commerce Clause.  The Supreme Court ultimately answered the first question in the negative and decided not to directly answer the second question posed. The Supreme Court did, however, give something of an advisory opinion when it pointed out that the Congress could regulate trademarks pursuant to their power to regulate interstate commerce if the regulation pertained not to trade between citizens of the same State, but rather to trade between citizens of different states.

In this regard the Supreme Court stated:

[A] glance at the commerce clause of the Constitution discloses at once what has been often the subject of comment in this court and out of it, that the power of regulation there conferred on Congress is limited to commerce with foreign nations, commerce among the States, and commerce with the Indian tribes. While bearing in mind the liberal construction, that commerce with foreign nations means commerce between citizens of the United States and citizens and subjects of foreign nations, and commerce among the States means commerce between the individual citizens of different States, there still remains a very large amount of commerce, perhaps the largest, which, being trade or traffic between citizens of the same State, is beyond the control of Congress.

When, therefore, Congress undertakes to enact a law, which can only be valid as a regulation of commerce, it is reasonable to expect to find on the face of the law, or from its essential nature, that it is a regulation of commerce with foreign nations, or among the several States, or with the Indian tribes. If not so limited, it is in excess of the power of Congress. If its main purpose be to establish a regulation applicable to all trade, to commerce at all points, especially if it be apparent that it is designed to govern the commerce wholly between citizens of the same State, it is obviously the exercise of a power not confided to Congress.

In re Trademark Cases, 100 U.S. at 96-97.

Since 1879 there have been many cases involved trademark issues that have wound up the top Court in the United States.  But a summary start to finish of all Supreme Court trademark cases is even a bit ambitious for us in a single article.  Thus, what follows is a summary of those trademarks issues that have reached the Supreme Court over the last generation.

Park ‘N Fly, Inc. v. Dollar Park and Fly, Inc., 469 U.S. 189 (1985) – In August 1971 the Petitioner, an operator of long-term parking lots, registered a trademark consisting of the logo of an airplane and the words “Park ‘N Fly.” Roughly six years later, Petitioner was granted incontestable status of its trademark. Respondent, another long-term airport parking lot service, called its business “Park and Fly.” Petitioner filed an infringement suit against Respondent in the US District Court for the District of Oregon, requesting the permanent enjoinment of “Park and Fly.” Respondent counterclaimed seeking cancellation of Petitioner’s trademark as generic and merely descriptive. The District Court held in favor of Petitioner finding the mark to not be generic while stating that an incontestable mark cannot be invalidated by claiming that it is merely descriptive. The Court of Appeals reversed holding that incontestable status can provide a defense against invalidation of a mark but could not be used to enjoin another party’s use. Therefore, Respondent could defend its infringing use by attempting to show that the mark was merely descriptive. The Court of Appeals held that Petitioner’s mark was in fact merely descriptive. The Supreme Court reversed the Court of Appeals decision affirming the District Court’s holding that infringement of an incontestable mark cannot be defended by showing that the trademark is merely descriptive.

Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992) – Respondent, Taco Cabana, Inc., sued Petitioner, Two Pesos, Inc., alleging trade dress infringement under ¢43(a) of the Lanham Act. Respondent claimed that Petitioner infringed the décor and atmosphere of its Mexican restaurants. The original suit was in a Texas trial court. The jury held that Two Pesos has infringed Taco Cabana’s trade dress. Petitioners argued that their use of the trade dress was legally acceptable because Respondents failed to show that the trade dress had acquired secondary meaning although they were able to prove that the mark was inherently distinctive and nonfunctional. Petitioners argued that a no secondary meaning was a contradiction to a finding of inherent distinctiveness.  The Court of Appeals affirmed the jury’s decision and rejected Petitioner’s arguments. The case was again appealed, this time to the Supreme Court and granted certiorari concerning the issue of whether secondary meaning is needed even upon a mark’s identity as inherently distinctive. The Supreme Court affirmed, holding that a showing of secondary meaning is unnecessary when the trade dress at issue is inherently distinctive.

Qualitex Co. v. Jacobson Products Co., 514 U.S. 159 (1995) – Petitioner, Qualitex Company sued its competitor, Jacobson Products, alleging trademark infringement of its green gold shade of dry cleaning press pads. Qualitex claimed that the green gold color was eligible for trademark protection under the Lanham Act as it attained secondary meaning among consumers, and Jacobson’s infringing use was causing confusion among its consumers. Qualitex prevailed in the District Court although the decision was reversed in the United States Court of Appeals for the Ninth Circuit. The Ninth Circuit refused to allow trademark protection for the green gold press pad as the Lanham Act did not include trademark protection based solely on color. The Supreme Court reversed the Ninth Circuit’s holding finding that the green gold color and colors, in general, can be trademarked as long as the color attained secondary meaning as a source identifier in the eyes of consumers. The Supreme Court did, however, also place a somewhat broad catch-all limitation upon the trademarking of color, saying that color can be trademarked unless there is some special reason that convincingly militates against the use of color alone as a trademark.  One such example of a special reason would be where the color provided a particular functionality.  Thus, the Supreme Court explained the rule in this way: “[W]here a color serves a significant nontrademark function… courts will examine whether its use as a mark would permit one competitor (or a group) to interfere with legitimate (nontrademark related) competition through actual or potential exclusive use of an important product ingredient.”  Although the Supreme Court did not decide the issue, the case does cite approvingly lower court decisions that denied the color green from being trademarked as it relates to farm equipment, the color black as being trademarked relative to outboard engines and the color blue being trademarked relative to fertilizer.

Traffix Devices, Inc. v. Marketingdisplays, Inc., 532 U.S. 23 (2001) – Respondent, Marketing Displays, Inc., sued Petitioner, TrafFix Devices alleging infringement of its trade dress in its “dual-spring design,” used in temporary road signs, under the Trademark Act of 1964. Respondent was granted a patent on such dual-spring design mechanism though the patent had recently expired. The District Court granted Petitioner’s motion for summary judgment finding the device to be functional and a lack of secondary meaning in the dual-spring design trade dress. The Sixth Circuit reversed the District Court holding that Respondent’s design was capable of trade dress protection and noted a split in the Circuit Courts as to whether an expired patent can acquire trade dress protection of its design. The Supreme Court ultimately reversed the holding of the Sixth Circuit and remanded the case for further proceedings consistent with the opinion.  In so doing, the Supreme Court did not foreclose the possibility completely for trade dress protection where there has been an expired patent, but explained there is a heavy burden: “Where the expired patent claimed the features in question, one who seeks to establish trade dress protection must carry the heavy burden of showing that the feature is not functional, for instance by showing that it is merely an ornamental, incidental, or arbitrary aspect of the device.”  The Supreme Court did clearly determine that functional features may not be the subject of trade dress protection.

Wal-Mart Stores, Inc. v. Samara Brothers, Inc., 529 U.S. 205 (2000) – Respondent, Samara Brothers, sued Petitioner, Wal-Mart Stores, Inc., alleging infringement of its unregistered trade dress in the design of its children’s line of clothing. The jury in the District Court held for Samara, finding a violation of trademark infringement. Petitioner renewed its motion for judgment as a matter of law claiming Respondent failed to present evidence that its trade dress was distinctive as acquiring secondary meaning under §43 of the Lanham Act. The District Court rejected the motion for judgment as a matter of law and affirmed the jury’s verdict. Upon appeal, the Second Circuit affirmed. The Supreme Court reversed and remanded the Second Circuit’s decision. The Supreme Court held that unregistered trade dress is not inherently distinctive and secondary meaning must be shown in order to provide trademark protection.

Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003) – Respondent, associated corporations that owned the “VICTORIA’S SECRET” trademark sued Petitioner, owner of the retail store, “Victor’s Secret,” alleging trademark dilution under the Federal Trademark Dilution Act (FTDA). Respondent presented evidence of potential trademark dilution by claiming that petitioner’s actions were likely to blur and tarnish their distinctive trademark. The District Court granted respondents summary judgment on the FTDA claim, and the United States Court of Appeals for the Sixth Circuit affirmed, finding that respondents’ trademark was “distinctive” and that the evidence established “dilution” even though no actual harm had been proved.  The question question the Supreme Court granted certiorari to decide was whether objective proof of actual injury to the economic value of a famous mark (as opposed to a presumption of harm arising from a subjective “likelihood of dilution” standard) is a requisite for relief under the FTDA. The Supreme Court found that the Victoria’s Secret trademark was unquestionably valuable and petitioners did not challenged the conclusion that it qualifies as a “famous mark” within the meaning of the statute.  The Supreme Court, however, determined that the FTDA text unambiguously requires a showing of actual dilution, rather than a likelihood of dilution. The Supreme Court went on to find that there was no evidence of any lessening of the capacity of the Victoria’s Secret trademark to identify and distinguish goods or services sold in Victoria’s Secret stores or advertised in its catalogs.  Therefore, there was no dilution within the meaning of the FTDA. The Supreme Court ultimately held the granting of summary judgment was improper and unwarranted.

KP Permanent Makeup, Inc. v. Lasting Impression I, Inc., 543 U.S. 111 (2004) – Petitioner, KP Permanent Makeup sued Respondent, Lasting Impressions, for declaratory judgment pertaining to the trademark “micro color” which was registered by Respondent but used by Petitioner prior to such registration. Furthermore, the trademark achieved incontestable status. Upon being sued, Respondent filed a counterclaim alleging that Petitioner had infringed its trademark. Petitioner responded by alleging the affirmative defense of fair use. The District Court granted summary judgment for Petitioner finding that the use of the mark was fairly used prior to Respondent’s registration of the mark. Respondent appealed and the United States Court of Appeals for the Ninth Circuit reversed finding that the fair use defense was assessed improperly as Petitioner failed to meet its burden of negating the likelihood of consumer confusion as was typical in the Ninth Circuit (but not all circuits) for defendants raising the fair use defense. The Supreme Court held for the Petitioner. The fair use defense does not place the burden upon the defendant to negate the likelihood of consumer confusion because such a requirement is not explicitly within the fair use doctrine nor can it be implicitly inferred from the doctrine.  The Supreme Court explained: “[A] plaintiff claiming infringement of an incontestable mark must show likelihood of consumer confusion as part of the prima facie case, 15 U.S.C. § 1115(b), while the defendant has no independent burden to negate the likelihood of any confusion in raising the affirmative defense that a term is used descriptively, not as a mark, fairly, and in good faith.”


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Join the Discussion

2 comments so far.

  • [Avatar for Dan]
    October 17, 2012 10:44 am

    The following link is to the Google database of Supreme Court trademark decisions:

  • [Avatar for EG]
    October 17, 2012 08:22 am

    Gene and Michael,

    Here’s a key paragraph from my article that I wrote on Wal-Mart v. Samara Brothers:

    The effort to make life easier for consumers and the lower federal courts was laudable. Unfortunately, the Supreme Court has created a dividing line for trade dress that bears little resemblance to reality in general, and marketplace reality in particular. To say that packaging can be inherently distinctive trade dress, while product design cannot, is extremely artificial and focuses attention on the wrong issue (type of trade dress) rather than the right issue (is that trade dress by its nature inherently distinctive). The standard imposed by the Supreme Court’s decision in Samara Brothers is also so rife with subjectivity that the lower federal courts may be inclined to “flip a coin” to determine the dividing line between packaging and product design.

    The Supreme Court distinguished Two Pesos, holding that trade dress in Two Pesos (the décor of a restaurant) was more like product packaging, not product design as in Samara Brothers. As I explained in my article, that distinction is problematic, especially for some products where the dividing line between product design and packaging becomes very murky.

    Scalia wrote the opinion in Samara Brothers. When it comes to IP law, he’s clearly out of his legal element.