Justice Kennedy Authored Trade Dress, False Advertising Rulings

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By Anandashankar Mazumdar

U.S. Supreme Court Justice Anthony Kennedy, who on June 27 announced his intent to retire, wrote two landmark trademark law cases during his 30 years on the court.

The rulings, both backed by the full court at the time, contributed to understanding the limits of the Lanham Trademark Act, the federal law that governs trademark infringement, false advertising, and related claims.

Patent Defeats Trademark

The 2001 ruling in Traffix Devices, Inc. v. Mktg. Displays, Inc. limited what kinds of product features a company could claim as its trade dress. Trade dress is a subset of trademark law that allows a company to stop competitors from copying packaging or product design.

For example, the Coca-Cola Co. has trade dress rights in the distinctive hourglass shape of its soda bottle, because consumers recognize the shape by itself as a sign that the product is Coca-Cola’s. But if a product or packaging feature is functional, that is, if it enhances the product in some way, then it can’t be claimed as trade dress. So, if the Coke bottle shape had a practical purpose, like preventing slippage, Coca-Cola couldn’t stop a competitor from using it.

Kennedy’s opinion in Traffix said the existence of a patent covering a product feature was strong evidence that the feature was functional.

In the case, Marketing Displays Inc. tried to stop rival Traffix Devices Inc. from copying its design for a spring-mounted wind resistant sign stand used in traffic and construction sites.

The 9-0 court said the existence of a patent on the spring mounting—even an expired one—weighed against Marketing Displays’ trade dress claim.

The ruling became a milestone in trade dress law. Federal courts routinely cite Traffix when deciding whether a company can stop competitors from copying a product feature.

FDA Approval Doesn’t Preclude Lanham Act Claim

Kennedy wrote for a unanimous court again in 2014’s Pom Wonderful LLC v. Coca-Cola Co. Pom Wonderful, which makes pomegranate-based beverages, sought to stop Coca-Cola from labeling a Minute Maid-brand drink as “pomegranate blueberry” when it had next to no pomegranate or blueberry content.

Coca-Cola argued that Pom Wonderful couldn’t attack its label with a false advertising claim under the Lanham Trademark Act, because the Food and Drug Administration has approved the label.

The FDA was exercising its authority under the Food, Drug, and Cosmetic Act to protect the public health and safety, according to the ruling. This purpose didn’t clash with the Lanham Act’s purpose of protecting consumers from deception.

The two federal laws were complementary, Kennedy said, and one labeling law didn’t preclude a lawsuit under another statute affecting product labels.

Kennedy, 81, who has been the court’s swing vote for the past decade, will retire effective July 31.

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