Gateway, Inc., sells computers, computer products, computer peripherals, and com
ID: 2384664 • Letter: G
Question
Gateway, Inc., sells computers, computer products, computer peripherals, and computer accessories throughout the world. By 1988, Gateway had begun its first national advertising campaign using black and white cows and black and white cow spots. By 1991, black and white cows and spots had become Gateway’s symbol. The next year, Gateway registered a black and white cow spots design in association with computers and computer peripherals as its trademark. Companion Products, Inc. (CPI), sells stuffed animals trademarked as “Stretch Pets.” Stretch Pets have an animal’s head and an elastic body that can wrap around the edges of computer monitors, computer cases, or televisions. CPI produces sixteen Stretch Pets, including a polar bear, a moose, several dogs and a penguin. One of CPI’s top selling products is s black and white cow that CPI identifies as “Cody Cow,” which was first sold in 1999. Gateway filed a suit in a federal district court against CPI, alleging trade dress infringement and related claims. What is “trade dress”? What is the major factor in cases involving trade dress infringement? Does that factor exist in this case?
Discuss the definition of trade dress.
Discuss the elements of trade dress and how the elements directly relate to the above case.
Explanation / Answer
The term “trade dress” refers, in very general terms, to the “look and feel” of a product or its packaging. That product can be a series of books in the instance of publishers or it can be any other product or package. Whether or not the party claiming protectable rights in such trade dress can prevail on such claim depends on a number of factors used by the courts. Two cases, one coming out of the Sixth Circuit Court of Appeals and the other from the United States Supreme Court, afford an opportunity to review such factors. Grey et. al vs. Meijer, Inc. In Grey et. al vs. Meijer, Inc. this was the situation: the plaintiff marketed popcorn under the brand “The Popcorn Shoppe” and the bag containing the product had a design incorporated into the bag, which design the plaintiff contended was distinctive and should be protected under theories related to trade dress. The defendant, which operated retail stores, originally marketed plaintiff’s popcorn in addition to defendant’s own private label brand of popcorn but eventually, plaintiff’s line was discontinued due to poor sales. Defendant’s private label popcorn packaging was in some respects similar to that of plaintiff’s packaging and thus the issue thus was whether or not the plaintiff had any protectable rights in its “trade dress.” The Court stated the general rule regarding protection of trade dress. It stated in part: The Lanham Act’s protection of registered trademarks also extends to unregistered trade dress. [citing a case] To recover for trade dress infringement under § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), a plaintiff must prove by a preponderance of the evidence: (1) that its trade dress has obtained “secondary meaning” in the marketplace; (2) that the trade dress of the two competing products is confusingly similar; and (3) that the appropriated features of the trade dress are primarily nonfunctional. “Secondary meaning” refers to evidence that, upon seeing a name, book series title or in this instance, a packaging, the public has come to believe that the product related to such name, series title or packaging comes from a particular manufacturer (publisher, popcorn maker etc.) and that a similar use by another would create a likelihood of confusion in the minds of the public as to source. The Court then focused on the “likelihood of confusion” element and identified a list of 8 factors that a court might use to make that determination. Such factors are not conclusive nor exhaustive but instead are factors that, among other factors, help focus the discussion. Citing another case, the Court quoted: The general concept underlying likelihood of confusion is that the public believe that the mark’s owner sponsored or otherwise approved of the use of the trademark. The eight factors discussed by the Court are: 1. strength of the plaintiff’s mark; 2. relatedness of the goods; 3. similarity of the marks; 4. evidence of actual confusion; 5. marketing channels used; 6. likely degree of purchaser care; 7. defendant’s intent in selecting the mark; and 8. likelihood of expansion of the product lines. The Court discussed the said factors but let me cover the ones that are most significant in view of this article. The Court stated: The strength of a mark is a determination of the mark’s distinctiveness and degree of recognition in the marketplace. A mark is strong if it is highly distinctive, i.e., if the public readily accepts it as the hallmark of a particular source; it can become so because it is unique, because it has been the subject of wide and intensive advertisement, or because of a combination of both. The stronger the mark, all else equal, the greater the likelihood of confusion. … Strength of a plaintiff’s trade dress depends upon the interplay of two elements, the uniqueness of the trade dress and the investment in imbuing a trade dress with secondary meaning. Thus, the most mundane packaging may be infused with meaning by advertising and other promotional tools, rendering a strong trade dress. Likewise, particularly unique packaging even without any artificial efforts to establish a secondary meaning for the product may result in a strong trade dress. The combination of these two factors determines the relative strength or weakness of the trade dress. Because the plaintiff’s product enjoyed virtually no success in the marketplace, the Court agreed with the lower court that as such, the product and its packaging did not possess such secondary meaning as a result of the marketing efforts of the plaintiff. Additionally, since the packaging, in the minds of both courts, was not unique or distinctive, that packaging could not ride the “secondary meaning” bandwagon based on this element even despite its lack of financial success. Plaintiff had argued that including the term “Chicago Style” in its packaging afforded it uniqueness and because defendant had included that term as well, thus there was the likelihood of confusion in the minds of the public. However, the Court said that such term was in itself not unique because it was applied to many, many products. The Court then analyzed the similarity of the marks including the packaging and found them essentially different even though they had similar elements. As to the issues related to the marketing channels, the Court stated: The marketing channels factor requires a court to consider the similarities or differences between the predominant customers of the parties’ respective goods or services. [citing cases] A court must determine whether the marketing approaches employed by each party resemble each other. Id.; see, e.g., Wynn Oil, 839 F.2d at 1188 (finding national marketing effort of one party inevitably overlapped opponent’s local advertising campaign to some degree, although overlap probably would not increase likelihood of confusion significantly); Little Caesar Enters., Inc. v. Pizza Caesar, Inc., 834 F.2d 568, 572 (6th Cir. 1987) (finding sophisticated and televised advertising campaign by national fast-food chain was “quite different” from far less sophisticated advertising by small, local fast-food business). As to the likely degree of purchaser care in selecting the goods, the Court found that purchasers of popcorn, because, among other factors, the price was low, were not likely to exercise the same kind of care as if the price were higher and the goods more complex. Thus, in such instance, there was a greater likelihood of confusion because of such lessened “care.” However, the Court found that because the defendant’s private label brand was stocked in a different location in the store than the plaintiff’s brand (indeed, the plaintiff’s brand was given an “end cap” or displayed in the center of the aisle, both premium placements) that such factor was diminished in importance. Under different facts, this factor might have been more legally significant.
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