Trade Dress On Trial
The Case of Wal-Mart Stores, Inc. v. Samara Brothers, Inc.
If you've ever exclaimed at a party, "Are those Steve Madden shoes you're wearing?" you have a good inkling of what "trade dress" is. In legal terms, it's an area of intellectual property law that refers to the distinctive "look" or "feel" that accrues to a particular consumer product. Think not just fashion apparel, but the blueberry-colored sheath on an iMac, or the way the employees at Burgerville tear off only the bottom portion of the straw's wrapper before inserting it into your Mocha Perk Shake with Yo-Cream, leaving a little paper cap that seems to nod at you and say, "I know you've had a hard day, and I love you." It refers, in other words, to that all-important marketing tool called "branding."
March 22, 2000 was a fateful day for trade dress law. On that early spring afternoon, the Supreme Court decided a trade dress suit brought by Samara Brothers Inc., a small, New Jersey-based clothing manufacturer, against retail giant Wal-Mart. Beginning in 1996, Samara Brothers had accused Wal-Mart of selling cut-rate copies of their charming and long-popular children's seersucker playsuits. Its original designs, the plaintiff argued, were easily distinguished by the following: seersucker fabric; large bold appliques attached to large collars and pockets; general absence of printed images, black outlines, alphanumeric characters, three-dimensional features or heavy ornamentation such as bibs or fringe; and full-cut, one-piece conservative bodies.
By March 2000, two lower courts, The United States District Court for the Southern District of New York and the Second Circuit Court, had already sided with Samara. They declared Wal-Mart guilty of piracy with willful intent to deceive customers and stuck the retailer with a bill for $1.6 million in damages and fees. The proposed damages represented a drop in the bucket in relation to the mega-chain's assets, but the Circuit Court's ruling, if upheld, was poised to launch a tsuname against the multi-billion dollar garment knock-off industry.
What is trade dress, according to the law? Most of us are familiar with trademarks–words and symbols like "Pepsi" and their little blue and red sphere. The concept of trade dress is an outgrowth of the trademark, representing the whole universe of non-word, non-symbol marks that companies use to identify their products as their own. Colors, shapes, textures, and even sales techniques. Like other forms of intellectual property, trade dress determines ownership and control of specific pieces of the cultural commons.
In recent years, trade dress suits have become more and more popular with companies that invest big dollars in building multi-sensory brand identities. This competitive tactic reflects an economy increasingly dominated by rapidly established national/global chains and a marketing environment ruled by visual signals and flashy product design for even the most lowly articles (toothbrushes, sponges). Interestingly, as the use of trade dress law has grown, the difficulty of isolating product design and packaging as mere "dressing" has become more apparent. Design, after all, straddles the boundary between function and aesthetics, often operating under a logic of its own making. As Justice Scalia mused rhetorically during deliberations for the Wal-Mart case, "Isn't a function of a dress to look pretty? A piece of cloth that covers the body, that's all there is to a dress."
The law struggles to keep a bead on these distinctions between the dress and the dressing, so to speak. Following is a look at that struggle, part political drama, part comedy of errors, all of it coming down, in its brief whirl on the Supreme Court stage last March, to the single hypothetical instance, proposed by Justice Scalia, of "a cocktail shaker shaped like a penguin."
Trade Dress: Lifting the Historical Skirt
Back in 1987, in a foundational precedent in the realm of trade dress law, Fuddruckers restaurant took Doc B.R. Others restaurant to court for copying what it claimed was a highly distinctive style of restaurant décor and customer service. Fuddruckers basically purveys hamburgers in an environment of butchery-as-spectacle, letting diners view the production of their meals from carcass to platter. In its suit, the restaurant proposed that its proprietary trade dress consisted of the following: large condiment and appetizer bars, two-by-four white tiles, neon signs, mirrors, director's chairs, visible food preparation and storage areas, and the practices of offering a free restaurant newspaper and selling bones to customers for their dogs. Doc B.R. Others, Fuddruckers complained, had copied its décor outright.
Several years later, the Supreme Court heard another suit, this one filed by a Mexican restaurant named Taco Cabana against one of its competitors, Two Pesos. Taco Cabana argued that Two Pesos had copied their building's exterior, sign, kitchen floor plan, décor, menu, serving equipment, uniforms, and other features reflecting their Mexican theme – overall, a "festive eating atmosphere having interior dining and patio areas decorated with artifacts, bright colors, paintings and murals." In both cases, the courts awarded damages to the plaintiffs, determining that their décors constituted trade dress schemes that other restaurants would be barred from imitating.
Though they may not make it into our newspapers or general history books, Fuddruckers and Taco Cabana are important precedents, heirs to our nation's legacy of intellectual property law as much as the inventions of Thomas Edison or the films of Steven Spielberg. In fact, each of these three groupings is aligned with a different prong of intellectual property, each one providing a useful context for describing the others. More or less, intellectual property law breaks down into three categories: functional innovations (the light bulb, the Leatherman), artistic creations (E.T., Goonies) and source-identifying marks (the Adidas triple stripe, "Step to the Real"). Patents protect functional innovations, copyrights protect artistic works, and trademarks and trade dress protect different types of source identifying marks. In particular, trademarks guard words, symbols, and slogans, while trade dress (a later-arriving concept) protects "almost anything at all that is capable of carrying meaning,"1 e.g. a colorful cotton blanket adorning a restaurant's wall.
The historic purpose of granting patents and copyrights has been to stimulate investment in the creation of better products, so consumers may enjoy them. The idea, dating back to the Constitution, is to balance the country's need to reward innovation against its need to keep useful ideas in the public sphere. Thus, monopoly rights on the sale of patented and copyrighted products are granted only for certain products and only for a certain amount of time,2 allowing innovators a reasonable period to recoup their investment and turn a profit, after which time the innovation reverts to the public domain. Trademarks and trade dress protections, on the other hand, have an even more limited purpose, one aimed at preventing consumer deception. By giving companies monopoly use of various "marks" (say, the name "iMac") the law prevents people from inadvertently purchasing a low-quality imitation of what they wanted (say, a piece of cheap candy sheathed in bright blue sugar instead of a computer). In a lyrical turn of legal phrase, they prevent "the misappropriation of goodwill attaching to a mark." Unlike patents and copyrights, the rights to trademarks and trade dress never expire, because as mere "marks" they're considered infinitely abundant and not intrinsically valuable.
It seems that most people have at least an intuitive grasp of these legal protections and–disregarding monkey-wrenching opponents like Negativland, RTMark, and Adbusters–approve of them. Indeed, one could argue that the quintessential American dream has firmly shifted from owning real property to holding a patent on a better depilatory or selling an original screenplay to Paramount Pictures.
Putting Trade Dress to the Test
Like a handgun buyer submitting to a criminal background check, Taco Cabana had to pass two long-established litmus tests in order to win trade dress protections for its interior décor. In order to prove that customers would be likely to confuse Two Pesos' product with its own, the restaurant first had to show that its décor was distinctive. In legal parlance, "distinctiveness" refers to the very definition of a trademark–its function as a source-identifier. In 1976, Judge Friendly, presiding over the trademark case Abercrombie & Fitch Co. v. Hunting World, Inc., sought to put a fine point on this concept. In a flourish of jurisprudence worthy of the Swiss linguist Ferdinand de Sausseure, he devised a scale to measure the "metaphorical distance between the sense of a mark and its referent," or to what extent a trademark literally described the product being sold. Although Judge Friendly designed his system with word marks in mind, the Abercrombie Scale of Distinctiveness has since come to inform the court's judgements of distinctiveness for trade dress as well. It looks like this:
Fanciful marks are at the top of the scale. These are words like Kodak or Nabisco, which have no dictionary definition and therefore no "inherent" relationship to their referents, photographic products and biscuits. They're the best candidates for trademark protections. Second are arbitrary marks, which have a dictionary meaning, but don't relate directly to the product–like "The Mamas and the Papas" referring to a rock band. Third are suggestive marks, which hint at the commodity, without actually naming it. Then come descriptive marks, which literally describe the product, and finally generic marks, which actually name the product, like the word "bread" when it actually refers to bread. Generic marks should never win trademark protections, because a bread company holding a trademark on the word "bread" would gain terribly unfair advantages against its competitors.3
This whole scale is divided in two parts. Just as a person with a clean criminal record has an easy time getting a concealed weapons permit, marks that rank high on the Abercrombie scale are on firm footing for winning trademark protections. These marks, in the upper three categories, are considered "inherently" distinctive, easily recognizable as source-signifiers. But marks that fall further down the scale can win trademark protections another way, by showing "distinctiveness by secondary meaning." For example, say the New York Times Co. wants a trademark on the slogan "All the News That's Fit to Print." Despite the fact that this is a "descriptive" mark–number four on the Abercrombie Scale–the Times could make the case that the public, over time, had come to make a firm association between the phrase and the company. This, too, can form the basis for a trademark case.
Taco Cabana was a landmark case mainly because it represented the first time that product design–trade dress–made a sally to the upper reaches of the Abercrombie Scale. Before, the assumption had always been that shapes, smells, and "looks" resembled word marks in certain ways, but were hidebound in comparison. A design couldn't float like a word above a product, referring to it without risking being confused or melded with it; the look of a toothbrush or the style of a hiking boot couldn't be pegged as "generic" or "fantastic". By default, the kinds of marks that belonged to trade dress had always had to pass the secondary meaning test to win protections. With Taco Cabana, this changed. Framing the restaurant's décor as an evidently whimsical sort of "packaging" for the principal product (food), the court–for the first time–gave a company trade dress protections based on inherent distinctiveness.
Distinctiveness was the first test Taco Cabana had to pass. Legal precedent also demanded that Taco Cabana's décor comply with something called the "functionality doctrine." Coined in a pretty aphorism, it says: "The first company to make an airplane cannot use the characteristic shape of an airplane as its trademark, thereby condemning its rivals to build airplanes that don't fly." At issue were Taco Cabana's floor plan and serving equipment, which were included in the long list of items granted to the restaurant for their proprietary use. The court mounted an odd argument about why these obviously functional items should be permanently deeded to a private company. In a difficult to discern but all-important shift away from precedent, the court argued that the two items would be protected as trade dress because they were "primarily" source identifying marks, despite their functional qualities. A number of legal scholars were non-plused by the decision, seeing it as the equivalent of trademarking an airplane design on the basis that it "primarily" evoked the image of a beautiful bird. It was not only a betrayal of the functionality doctrine, but an attack on the very nexus of intellectual property's three prongs. Aesthetically pleasing or not, critics said, things that help products to fly (literally or figuratively) should never be permanently excised from the public domain.
Taco Cabana changed the climate for trade dress cases considerably. Without having to prove secondary meaning, it became much easier for litigants to win their cases, appropriating a range of hitherto "commonly" held design and packaging schemes, from festively decorated taquerias to garishly adorned children's playsuits. Perhaps worse, with the functionality doctrine in decline, private companies were granted open season on a more valuable sector of the intellectual commons, gaining better position to poach functional innovations for their perpetual use.
Presumably sensing the gathering, irremediable slide of our country's shapes and smells into the coffers of businessmen, the Supreme Court agreed to hear Wal-Mart's appeal against Samara Brothers. Samara had initially filed suit against Wal-Mart in 1996, when a Samara clerk was tipped off to Wal-Mart's doings by a confused J.C. Penney clothing buyer who complained that the retailer was selling Samara's playsuits below Penney's cost. Samara's lawyers soon discovered that Wal-Mart had mailed pictures of their playsuits to a factory in the Philippines, where near-duplicates were being manufactured and tagged with Wal-Mart's "Small Steps" and "Cuties by Judy" labels. Incensed that Wal-Mart was selling copies of their own designs, the smaller company immediately filed suit, arguing that their designs were "inherently distinctive" trade dress. Following the Two Pesos precedent, Samara won its case the first time and again on appeal.
By the time the suit reached the Supreme Court, the garment industry was watching carefully to see what rules would apply. During deliberations, the matter of inherent distinctiveness moved to the center of the debate. The justices' musings on this concept ranged from the inane to the psychedelic. Justice Scalia avowed that a trendy shoe with "a big lump" over the toe that was "ugly as sin" was inherently distinctive and should be protected. Justice Breyer asked his colleagues to consider the example of a "hairbrush shaped like a grape," questioning (rather coyly?) whether objects shaped like other objects could truly be called distinctive. Justice Sandra Day O'Connor submitted her usual "It's like pornography. I know it when I see it."
The crux of the final decision lay in a single sentence in the opinion written by Justice Scalia. "Consumers are aware of the reality," Scalia wrote, "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." The Court had finally made the clear proposition, through a rather absurd example, that inherent distinctiveness was a miserable test for granting trade dress protections to product design. "It seems to us," Scalia went on, "that design, like color, is not inherently distinctive." Trade dress suits for product design would, in the future, once again require proof of secondary meaning. Furthermore, the justices appeared to reinstate the functionality doctrine, implying that product designs that were "useful" or "appealing" weren't eligible for trade dress protections.
Although the court averred that their decision in no way contradicted Taco Cabana–which wasn't about "design," but rather "packaging"–the ruling did signal a severe reigning in of the loose trends in trade dress that Taco Cabana had helped to precipitate. The slope of the chute that had been toppling shape and texture combinations, interior décor schemes, and overall aesthetic impressions into the hands of private owners diminished considerably. Meanwhile, Samara Brothers had failed to assemble evidence–such as customer surveys, advertisements, and trade press coverage–to show that its playsuit design had acquired secondary meaning. With its inherent distinctiveness argument slashed and no backup in place, the company had nothing of real value to protect from Wal-Mart, the court ruled. Samara went down, and the court effectively enjoined Wal-Mart and other knock-off manufacturers to openly copy whatever designs they wished, as long as they didn't try to fool anyone.
Legal scholars will probably say that the clear outcome of the Wal-Mart ruling, despite its favor toward a predatory retail giant, is to bolster the historic, pro-competitive agenda of trademark and trade dress law. But many questions about trade dress persist, beginning with this matter of "competitiveness" in today's marketplace of mega-corporations. The shift back to the "secondary meaning" standard supposedly boosts competition by limiting trade dress protections to companies that can prove they've established positive brand identity with consumers. Yet, there's a problem here. As everyone knows by now, the mass media make it easy for wealthy interests to buy brand loyalty–from Nike shoes to major party political candidates–while making it all the more difficult for the meekly endowed to earn it through old-fashioned reputation for quality. It's especially tough for a small company to pass the secondary meaning bar if, within weeks of releasing a promising new product, goliaths like Wal-Mart or Target have under-paid Philippine factory workers stocking their warehouses with cheap knock-offs. As trade magazine WWD quoted attorney Joseph Dreitler the day after the ruling, "If someone knocks you off in three or four months, you have no recourse because you aren't able to acquire secondary meaning." This issue didn't register in the recent Supreme Court opinion, even though, a decade earlier, the justices who ruled on Taco Cabana criticized the secondary meaning test specifically because it made products "vulnerable [to trade dress infringements] in the early stages of marketing and development."
Courts might do the public a favor by worrying more about these indirect effects of trade dress rulings on the competitive market, and less about scales and categories.4 On this count, the Supreme Court went no further than to buy Wal-Mart's line that their customers "deserve the latest fashions at affordable prices." However unlikely, a less feeble analysis of price competition might have asked, "At what cost affordability?" As the recent debates over the WTO and global corporatism have highlighted, a vocal minority of Americans question the value of cheap goods that come at the cost of decaying wages, reliance on exploited overseas workers, the steamrollering of mom-and-pop businesses, environmental degradation, artistic censorship, and other sins of cost-cutting transnationals. (In fact, with a few big conglomerates controlling major industries like banking and air travel, price-gouging becomes a threat, obviating the consumer returns of corporate cost-cutting. Not to mention the problem of the public's diminishing confidence in the quality and safety of manufacturing–even design–farmed out to the cheapest bidder.)
On a more philosophical level, the Wal-Mart case also leaves open big questions about public taste and connoisseurship–how consumers place value on product design. Scalia's contention that a product's design doesn't indicate its source is fine for his example of a penguin-shaped cocktail shaker, but there's a bigger universe out there. While probably no one has ever actually uttered the words, "Are those Bugle Boy jeans?" many people have certainly inquired, "Is that a Prada dress?" and "Do you like the Volkswagon commercials?" and, not so very differently despite legal distinctions to the contrary, "Don't you hate Kim Basinger?" In many, many instances, source-indication is design's highest aspiration, and on fairly frequent occasion it succeeds. Product design, especially in the realm of fashion, strives to make connoisseurs of consumers, to manufacture an audience that will recognize a brand's look, taste, aura and make. By acknowledging that marks can acquire secondary meaning, the court already makes this admission tacitly; Scalia's comment to the contrary merely pushes back the achingly obvious question about how product design eludes the law's strict categories of markings, technologies, and art works.
This disconnection between the stony edifice of the law and the shifting sands of public taste is illustrated most clearly, perhaps, in the 1988 case of Hartford House, Ltd. vs. Hallmark Cards, Inc, in which a small greeting card manufacturer accused Hallmark of copying the look of two of its popular greeting card lines, "AireBrush Feelings" and "Watercolor Feelings." The plaintiff, Hartford House, described the design scheme as follows: a two-fold card containing poetry on the first page; a rough edge stripe of color, or wide stripe, on the outside of the deckle edge of the first page; florescent ink for some of the colors; lengthy poetry, written in free verse, typically with a personal message; appearance of hand-lettered calligraphy on the first and third page with the first letter of the words often enlarged; etc.
What are people really buying when they buy an "Airebrush Feelings" card? According to the Tenth Circuit Court, which found in favor of Hartford House, they're buying a blank piece of paper "dressed" in florescent ink and free verse calligraphy. But legal scholar Tom W. Bell argues that these things are anything but trade dress.5 They're actually "the very good that consumers value," the things that make an Airebrush Feelings card an Airebrush Feelings card (relieving their purchasers, one presumes, of the terrible chore of expressing their own weighty, yet colorful and hazy emotions).
But what if we take Bell's argument to the extreme? Then we admit that you can't really say that consumers want Hartford House's deckle edge and the calligraphy, because what they really want is what the deckle edge and the calligraphy stand for, which is perhaps "Airebrush Feelings." And because meaning and desire reverberate in an endless pattern of deferral, we admit that this idea itself stands for something else, something hazy and drippy and arguably tasteful and beautiful, but ultimately ungraspable and different for everyone. We're stuck with the fact that intellectual property can't be platted like real estate. And we can't deny that our heavy-robed, stumpy-legged legal code will always be a poor match for our frenetic, image conscious economy. Or that legal interpretations will forever be subject to the pressures of cultural perceptions, political will, moneyed influence, and whatever Supreme Court justices think they know when they see it.
So how do we regulate the marketplace of meaning and desire? Monkey-wrenching with the private property system is one answer. Electing political leaders who care about consumer protections and the preservation of the intellectual commonwealth is an even better one. Legislating with our pocketbooks is always a good idea. In the end, as with so many things, the question is how to make our social institutions work by and for the people. That's, of course, a big question with many answers. But here's one simple tip, which we should teach every child in grade school and which my mother advised me long ago. It will help anyone tell a Hartford House from a Hallmark, the G.O.P. from the Greens, and a grape from a hairbrush. Read the label.
FN 1: Qualitex Co. v. Jacobson Products Co., 514 U.S. 159, 162 (1995).
FN 2: Until five years ago, the term of a patent was 17 years from the date of issuance. In a 1995 amendment to the Patent Act, which came out of the Uruguay Round GATT, the patent term was changed to 20 years from the date of application. Copyrights vary somewhat in duration, but in general, for works published after 1977, the copyright lasts for the life of the author plus 70 years.
FN 3: Although it's nice to imagine the alternate scenario, where every product would require its own name –"Buy Orowheat snaagh, a yeasted flour product that's great for sandwiches"; or moved beyond names entirely – "Only $19.99, a garment that covers your torso, using a vertical row of buttons for easy donning and a snugger fit. Made for the gal on the go."
FN 4: See Dinwoodie, Graeme B., "The Death of Ontology: A Teleological Approach to Trademark Law," Iowa Law Review (ITALIC), May 1999.
FN 5: "Virtual Trade Dress: A Very Real Problem," 56 Maryland Law Review. 384 (1997). The article is also available on-line at www.tomwbell.com, along with links to Bell's sketches, musical compositions, and patented inventions.