By B. Brett Heavner,Finnegan, Henderson, Farabow, Garrett & Dunner
Although long thought dead, the trademark doctrine of aesthetic functionality continues to arise occasionally from the dead like a zombie to terrify trademark owners with the prospect of having their trademarks declared invalid and completely unprotectable. In fact, the past two years have been a virtual zombie apocalypse with no less than six trademark cases in which aesthetic functionality was raised as a defense by an alleged infringer.
Fortunately, the U.S. courts have reversed or vacated the scariest aspects of aesthetic functionality. However, given the doctrine's failure to stay dead, trademark owners would be well advised to understand it and be prepared should they encounter it in future enforcement actions. A close study of the recent aesthetic functionality cases, as well as a few cases from the past, reveal certain themes from which trademark owners can glean best practices to reduce the risk posed by this doctrine.
According to Supreme Court precedent, aesthetic functionality arises when protection of a purported proprietary mark would “put competitors at a significant non-reputation related disadvantage.”1 Unfortunately, this definition is not particularly clear, and the Supreme Court has given no guidance on what sort of “disadvantage” it means, and how to determine what is “significant.”
In practice, the doctrine arises (a) when the asserted mark is denied protection because it does not actually identify the source of the products (traditional aesthetic functionality), or (b) when the asserted mark is protected, but the defendant has allegedly not infringed because it is only using the mark aesthetically and not as a source identifier (defensive aesthetic functionality).
Traditional aesthetic functionality has been invoked when the mark is actually the principal decorative feature of the product (such floral patterns and inspirational wording on dinner china)2 or is actually the product itself (such as the shape of a vent designed to blend in with surrounding roofing tiles).3
Defensive aesthetic functionality arises when the defendant uses the mark allegedly as ornamentation on a product to show support or affection for an institution, rather than as a source identifier.4
In nearly every case in which a trademark owner was “victimized” by the aesthetic functionality doctrine, the trademark owner exhibited poor trademark management or otherwise undercut the “source identifying” role of its own trademark. These cases provide a list of missteps that can expose trademark owners to an aesthetic functionality attack.
In many cases where trademarks were invalidated due to aesthetic functionality, the owners of purported trademarks failed to follow the most elementary of practices necessary to protect their trademarks, such as failing to use the TM symbol to provide notice of its trademark claim;5 not placing the purported mark on packaging, tags, or labeling;6 not using written notices on packaging that identify and claim ownership of the trademark;7 and failing to highlight the claimed trademark in advertising.8 If the purported trademark is not immediately obvious to the consumer as a source identifier, the failure of the owner to educate the consumer of its source identifying significance can be fatal.
In a recent 2011 example, Mattel Inc. and MGA Entertainment were embroiled in heated litigation over the intellectual property rights associated with the Bratz brand of dolls, including the doll's packaging. Ultimately the court held that the Bratz doll packaging (specifically a combination of trapezoid shaped boxes in bright patterns) was aesthetically functional and therefore not protectable as a trademark.
This decision was based on a perfunctory analysis of aesthetic functionality that merely cited the Restatement of Torts' broad characterization of box color and shape as being “aesthetically functional.”9 The court's analysis was devoid of any actual application of the aesthetic functionality test to the facts of the case.
Nevertheless, we may glean at least some lessons from the Bratz case. It appears that the true rationale for the court's invalidation of the doll box trade dress was MGA Entertainment's general failure to treat the Bratz box shape and appearance as a source identifier. In its secondary meaning analysis the court characterized the record as lacking any evidence that MGA Entertainment had either clearly defined the elements of its packaging trade dress, or had taken steps to make consumers associate the box shape and color solely with the Bratz product. The court specifically cited MGA Entertainment's failure to mention the shape or coloring of the boxes in the Bratz advertisements, and its failure to feature the supposedly unique box design in news articles or press releases relating to the Bratz doll.
Had MGA Entertainment taken these standard actions necessary to establish trademark protection, it would have been much more difficult for the court to dismiss MGA's trade dress claim via a bald conclusion that the box was aesthetically functional unsupported by any legal analysis.
On the other hand, several more recent 2012 cases rejected aesthetic functionality defenses, specifically noting each of the steps that the trademark owners took to use their purported trademark as source identifiers. In a dispute of great interest to the alcoholic beverage industry, the distillers of Maker's Mark brand bourbon accused Diageo of infringing the Maker's Mark trade dress encompassing a dripping red wax seal closure by placing a nearly identical seal on Diageo's new tequila product. Diageo argued in its defense that the dripping red wax seal on Maker's Mark brand bourbon was aesthetically functional and therefore not protectable.10
The court rejected this argument reasoning that “red wax is not the only pleasing color of wax … nor does it put competitors at a significant non-reputation related disadvantage to be prevented from using red dripping wax.”11 The court also admiringly recounted Maker's Mark's extensive efforts to portray the dripping wax seal to consumers as part of its identity, noting 50 years of consistent use, an extensive advertising campaign that “focuses almost entirely on branding the red dripping wax,” as well as the significant public attention that the wax seal has received through the media, and the incontestable nature of Maker's Mark's trademark registrations for the red wax seal.12 Against this backdrop of effective trademark promotion and management, it would have been difficult for the court to deny the fact that the red wax seal operated as a source identifier.
In another 2012 decision, Guess Inc. invoked the aesthetic functionality defense in an attempt to invalidate Gucci America's trademark rights in its “Diamond Motif” trade dress (which Guess was accused of infringing).13 However, the court rejected the defense in almost the same manner as the Maker's Mark case, noting that the record showed the “Diamond Motif” trade dress to be a well-known source identifier, which Gucci “used for more than purely aesthetic reasons, and therefore [the Diamond Motif] is not ornamental.”
Gucci wisely introduced evidence of its (1) 50 years of extensive advertising expenditures highlighting the “Diamond Motif”; (2) its unsolicited media coverage for the “Diamond Motif”; and (3) its high volume of sales of products bearing the Diamond Motif.” In the face of this evidence, it was nearly impossible for Guess Inc. to show that it had a competitive need to use a similar Diamond-like design on its products.
Even in cases where the purported trademark had been properly promoted as a source identifier, the trademark owner's own actions can undermine its trademark rights and provide ammunition for an aesthetic functionality challenge.
For example, in a 2011 dispute between fashion designers Christian Louboutin and Yves Saint Laurent, the U.S. District Court for the Southern District of New York found that the color red as applied to the outsole of designer Christian Louboutin's women's shoes was aesthetically functional, and therefore unprotectable, despite Christian Louboutin's substantial evidence of consumer recognition and successful trademark registration of the red outsole mark.14
In interviews and during the litigation, Christian Louboutin had unwittingly undermined his trademark claim by extolling the significant aesthetic reasons for choosing the color red for his outsoles. At various times he described the red outsole as “engaging, flirtatious.” He also stated that he chose the red color to give his shoe styles ”energy“ and because red is dangerous. And he stated that red is “sexy“ and ”attracts men to the women who wear my shoes.”15
Unfortunately for Louboutin, the court was generally skeptical of granting trademark rights to a single color in the fashion industry (which it compared to painting and art rather than a commercial product). Moreover, the court felt that Louboutin was overreaching in trying to prevent other shoe designers from using red on their outsoles in a non-source identifying manner when the color red was part of the overall artistic design of the shoe (in this case, Yves Saint-Laurent's entirely monochromatic red shoe). The court therefore seized on Louboutin's aesthetic praise of the color red to hold that the red outsole was “aesthetically functional” and that single colors cannot operate as source identifiers for the fashion industry.16
Fortunately, Louboutin's 2012 appeal of this decision was at least partially successful in that the appellate court found the red outsole to be a valid trademark.17 The Second Circuit held that the trial court's per se rejection of single color marks in the fashion industry was contradictory to the U.S. Supreme Court's Qualitex decision,18 which held that single color can operate as a trademark upon a showing of secondary meaning. Further, the appellate court held that Louboutin's red outsole had acquired sufficient secondary meaning to merit trademark protection (citing Louboutin's significant evidence of its source identifying promotional efforts). But, the appellate court limited the trademark protection to shoe designs in which the red outsole contrasts in color with the remaining parts of the shoe (likely absolving Yves-Saint Laurent from liability for trademark infringement).
There are even more extreme examples of a trademark owner's comments utterly destroying its trademark claim.
For example, in a 2001 trademark opposition, O'Hagin's Inc. claimed trade dress rights in the configuration of its rooftop air vents, which were designed to look like ceramic roofing tiles.19 Unfortunately, O'Hagin's own advertising played an enormous part in the Trademark Trial and Appeal Board's decision that they were aesthetically functional.
During the trademark opposition, O'Hagin's competitor submitted numerous O'Hagin advertisements extolling the virtues of the air vent's “unique” shape, which was specifically designed to blend in with the surrounding ceramic roofing tiles. O'Hagin's advertisements even contained the following damning description of the vent's shape as being “functional in design, [to] camouflage the existence of vents and be aesthetically pleasing.” Obviously, granting exclusive rights to this design would put O'Hagin's competitors at a disadvantage, thus requiring a finding that configuration of the vent was unprotectable under the aesthetic functionality doctrine.
Of course, trademark owners need not go so far as to adopt only ugly designs to avoid aesthetic functionality problems. To be functional, good-looking or bad, the aesthetic aspect of the trade dress would need to put others in the field at a competitive disadvantage.
The TTAB made this very clear in a 2012 case dealing with a Al Johnson's Swedish Restaurant, whose purported trade dress consisted of a herd of live goats grazing on the restaurant roof, which was covered with growing grass.20 A petitioner (whose motives were never fully understood) sought to have the TTAB cancel the registration for the “goats on the roof” trade dress due to its alleged aesthetic functionality. Specifically, the petitioner argued that the goats were a form of entertainment and were attractive, and therefore were functional. The TTAB rejected this argument stating that trade dress may be both aesthetically pleasing and a source indicator. Because the record contained no proof that the aesthetic appeal of the goats was either the exclusive, or the superior, method of attracting restaurant patrons, the trade dress was not aesthetically functional, and the cancellation petition was dismissed.
In early 2011, the Ninth Circuit decided a case relating to the Betty Boop character which struck terror into the hearts of character-based logo owners everywhere.21 In that case, the supposed heirs of the cartoonist who created the lovable, sexy Betty Boop character sued a poster company for using Betty Boop without authorization on the posters it sold. The heirs claimed both copyright and trademark rights in the character. However, it appears that the heirs focused primarily on the copyright aspects of the dispute, and treated the trademark claims as a mere afterthought.
Although the heirs had a valid federal trademark registration for the Betty Boop character, they somehow failed to place that trademark registration in the record. Furthermore, the heirs failed to submit sufficient evidence to establish common law trademark rights in the character.
Although the heirs did manage to make the registration for the word mark “Betty Boop” of record, they failed to provide evidence of their declaration of incontestability. The copyright claim ultimately proved problematic because the heirs were unable to establish a clear chain of title transferring the original copyright to them. And the trial court rejected the heirs' trademark claims due to insufficient evidence establishing their trademark rights in the Betty Boop character and name.
On appeal, the Ninth Circuit affirmed the rejection of the copyright claim, but decided the trademark claim on a controversial, wholly new theory, not advanced by the defendants, namely “defensive aesthetic functionality.” Specifically, the court held that defendant's use of the “Betty Boop” name and image on various kinds of merchandise did not infringe the heirs' trademark rights (assuming that such rights existed) because the defendant was “not using Betty Boop as a trademark, but instead as a functional product.” In other words, the name and Betty Boop character image were not being used to indicate the source of the defendant's posters; instead, they were “functional aesthetic components” that made the defendant's merchandise more attractive to consumers for reasons unrelated to origin.
The Ninth Circuit's holding greatly disturbed character logo owners as it had the potential to destroy trademark rights in any attractive character, since it would be impossible for the owner to prevent manufacturers from placing the characters on their products in a decorative manner. The heirs filed petitions for rehearing and rehearing en banc, which were accompanied by a large number of amicus briefs from trademark owners and IP bar groups, all uniformly condemning the Ninth Circuit's original decision. Fortunately, the Ninth Circuit en banc panel withdrew its first opinion in August 2011, and replaced it with one that omits the discussion of defensive aesthetic functionality, instead finding that the heirs had presented insufficient evidence to establish trademark rights in the character, and remanding the case for further evaluation of the Betty Boop word mark claim. 654 F.3d 958, 97 USPQ2d 183 (9th Cir. 2011).
Unbelievably, the zombies continued to attack Betty Boop on remand. On Nov. 12, Judge Audrey Collins of the U.S. District Court for the Central District of California issued a decision in favor of the defendants that specifically reinstated the original Ninth Circuit holding that use of the Betty Boop word mark on the posters was aesthetically functional. Fleisher Studios Inc. v. A.V.E.L.A. Inc., No. 2:06-cv-06229-ABC-MAN (C.D. Cal. Nov. 14, 2012) (85 PTCJ 100, 11/23/12). Collins concluded once again that the defendants did not use the Betty Boop word marks as a source identifier, but merely as decorative artistic elements of the poster. She further reasoned that since the heirs had not established trademark rights to the Betty Boop character itself, the defendant would be at a considerable disadvantage in not being able to use the word mark Betty Boop alongside the depiction of the character. So, once again the owners of character-based logos face the potential for a zombie apolcalypse. One can only speculate that had the heirs done a better job of marshalling their evidence of trademark rights in the character and the associated word mark, the issue of aesthetic functionality might never have arisen.
The origin of the defensive aesthetic functionality “zombie apocalypse” can be traced back to two older cases involving trademarks that were not properly policed. In 1977, Job's Daughters, a women's fraternal organization, sued a jeweler who was selling jewelry that incorporated the organization's emblems without permission. The organization prevailed on its infringement claim at the trial court, but the jeweler appealed and managed to convince the U.S. Court of Appeals for the Ninth Circuit to reverse using an aesthetic functionality rationale.22
The Ninth Circuit held that while the Job's Daughters insignia was indisputably used to identify the organization, in the context of this case, the name and emblem were functional aesthetic components of the jewelry, in that they were being merchandised on the basis of their intrinsic value, not as a designation of origin or sponsorship for the jewelry. The Ninth Circuit pointed out that the organization's emblem had appeared on unlicensed jewelry made by numerous unrelated entities and had been used by the defendant jeweler for over 21 years without objection by the organization. The failure of the organization to police its mark apparently made the court sympathetic to the jeweler's novel aesthetic functionality defense, thereby paving the way for the doctrine to potentially do untold damage to trademark owners everywhere.
In 1983, the University of Pittsburgh faced a similar situation when it sued Champion Products over its sales of clothing and other textile goods bearing the “Pitt” emblem.23 Unfortunately for the university, Champion was able to persuade the court that an aesthetic functionality defense was appropriate since the Pitt emblem was used to ornament the clothing, and was not used as a “source identifier.” Champion's position was bolstered by the fact that the university had allowed Champion to use its emblem for 47 years, and even sold Champion's products at its bookstore before belatedly objecting to the unauthorized use of the mark. So, it was hardly surprising that the court grasped for a reason to deny trademark protection to the university in that case.
These cases have been widely criticized, with the Ninth Circuit itself backing away from Job's Daughters, and most courts refusing to adopt the theory of defensive aesthetic functionality advanced by the Job's Daughters and University of Pittsburgh cases.24 Still, as shown by the most recent 2012 Betty Boop decision, this precedent creates a risk of aesthetic functionality rising from the dead to threaten trademark owners with loss of their trademark rights.
While the prospect of an aesthetic functionality “zombie attack” is terrifying to trademark owners, a close examination of the cases reveals that following traditional trademark best practices can save the day. Trademark owners can become zombie slayers by (a) consistently treating trademarks and trade dress as “source identifiers,” (b) avoiding statements highlighting a function that would be important to competitors, (c) carefully documenting all trademark rights for use in litigation, and (d) consistently policing trademark and trade dress rights. In short, with appropriate planning and care, there is no reason to fear a trademark zombie apocalypse.
B. Brett Heavner is a partner at Finnegan, Henderson, Farabow, Garrett & Dunner, Washington, D.C. He has a diverse practice that includes all aspects of trademark and unfair competition law, with a particular emphasis on trademark infringement, counterfeiting, and false advertising litigation. He can be reached at email@example.com or (202) 408-4073.
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