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Between patents and

trade marks
Darius C Gambino of DLA Piper analyses recent trends in trade dress
litigation, and suggests tips for an enforcement plan

O 1 MINUTE
ne of the benefits of patent litigation is the abil-
ity to obtain fairly sizable damages awards
under either a “reasonable royalty” or “lost prof-
its” theory. However, patent litigation is com-
plicated and costly, and injunctions are often
READ
difficult to obtain. Trade mark litigation typi- Trade dress litigation lies somewhere
cally provides a more straightforward path to an injunction, but between patent and trade mark litiga-
damages awards are much smaller. Trade dress litigation pro- tion, offering some of the benefits of
vides an avenue that lies somewhere between patent and trade each. Since a pair of Supreme Court
mark litigation, offering some of the benefits of each. For exam- cases decided in the early 2000s, many
ple, trade dress cases typically have a less complex trial schedule began to aggressively pursue enforce-
as compared to patent case (with no Markman hearing). Trade ment of trade dress rights, and court fil-
dress cases can also offer significant damages awards, the ability ings have risen sharply. Differences of
to obtain an early injunction, and a leaner trial budget. opinion remain across the Circuit Courts
of Appeal with regard to many trade
Trade dress has garnered a significant amount of attention in dress principles, especially with issues
the past 15 years due in large part to a pair of Supreme Court of functionality. But some core concepts
cases decided in the early 2000s – Wal-Mart v Samara Bros and have emerged, which provide a meas-
Traffix Devices v Marketing Displays. These two cases followed ure of predictability that was previously
closely on the heels the Supreme Court decision in Two Pesos v lacking in the trade dress field. In addi-
Taco Cabana, a case explicitly recognising that restaurant décor tion, recent damages awards in trade
could be protected as trade dress without a showing of second- dress cases have been sizable enough
ary meaning. This trifecta of cases brought attention to the con- to make trade dress litigation an attrac-
cept of trade dress, and reinvigorated filings with the US tive litigation alternative. These dam-
Trademark Office for this “fourth” type of intellectual property ages awards may be small compared to
(beyond patents, trade marks and copyrights). some patent litigation awards, but they
are sizable enough to make a trade
In Wal-Mart, the Supreme Court found that the “look and feel” dress trial worthwhile. Brand owners
of a line of children’s clothing could not be protected as trade concerned about incursions on the
dress without proof of secondary meaning. This ruling was in “look and feel” of their products should
direct opposition to Two Pesos, which held that a showing of consider adding a trade dress enforce-
secondary meaning was not required for the protection of ment plan to their overall strategy.

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 UNITED STATES TRADE DRESS
Clearline Technologies roof support block
restaurant décor trade dress. Collectively, Two Pesos and Wal-
Mart drew a hard line distinction between product packaging
trade dress (such as restaurant décor) and product design trade
dress (such as the design of children’s clothing), with the former
being capable of protection without a showing of secondary
meaning, and the latter requiring specific proof of secondary
meaning. Traffix exposed and expanded upon one more im-
portant element of a trade dress case – the concept of function-
ality. The plaintiff in Traffix attempted to protect as trade dress
the design of a road construction sign that was the subject of
an expired utility patent. The Supreme Court made clear that
trade dress cannot protect any shape or packaging that provides
functional benefits to the consumer, and that expired utility
patents are strong evidence of functionality.
With the above principles in mind, many began to aggressively
pursue enforcement of trade dress rights, and court filings have
risen sharply since 2002. Case decisions rendered since that
time have provided a helpful framework for litigating trade dress
disputes. While significant differences of opinion remain across
the Circuit Courts of Appeal with regard to many trade dress
principles (most notably with respect to issues of functionality),
some core concepts have emerged. These core concepts pro-
vide a measure of predictability that was previously lacking in
the trade dress field. In addition, recent damages awards in trade
dress cases have been sizable enough to make trade dress litiga-
tion a viable litigation alternative.
Recent trade dress awards
In 2011, a Texas jury awarded a plaintiff more than $5.8 million
in damages for infringement of trade dress in rooftop support
blocks for power lines (Clearline Technologies v Cooper B-Line).
A California jury awarded a trade dress plaintiff more than $8
million in damages in 2012 for infringement of the bottle design
for hair care products (Mixed Chicks v Sally Beauty Supply). In
2014, after a four day bench trial, Judge Baer of the Southern
District of New York awarded more than $3.2 million in an in-
Herman Miller’s “Eames” Office Chair US TM Reg No. 3,105,591 for the “Eames” chair
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Mixed Chicks haircare products
fringer’s profits to a plaintiff luxury watch manufacturer (Aude-
mars Piguet v Swiss Watch Int’l d/b/a/ Swiss Legend). The award
in that case was later trebled and increased to a total of about
$11.7 million.
More recently, a California jury granted Herman Miller $8.4
million in damages for infringement and dilution of its Eames
office chair trade dress by a competitor (Blumenthal Distributing
dba Office Star v Herman Miller). A Pennsylvania jury also re-
cently gave more than $5 million in damages to a plaintiff who
claimed trade dress in the container and packaging for a fig
spread (Dalmatia Import Group v FoodMatch). While these
damages awards might seem like small potatoes compared to
some patent litigation awards, they are sizable enough to make
a trade dress trial worth the effort.
Take the Herman Miller case, for example. Herman Miller began
pursuing Office Star for infringement of the trade dress in two
chairs (The Eames and The Aeron) in December 2013
through a cease and desist letter. Well prior to sending the letter,
Herman Miller had secured US Trademark Registrations on
the “Eames” and “Aeron” chairs. The application to register the
“Aeron” chair was filed in March 2000, right around the same
time Wal-Mart was making headlines at the Supreme Court. In
response to the letter, Office Star filed a declaratory judgment
action, looking for a finding that Herman Miller’s trade dress
was not infringed. Interestingly, Office Star did not initially chal-
lenge the validity of the “Eames” and “Aeron” chair registrations
(US TM Reg Nos. 3,105,591 and 2,754,826). In the litigation,
Herman Miller asserted these registrations, along with com-
mon law trade dress rights in variations of the chairs designs. In
October 2016, after a nine-day trial and two days of delibera-
tions, the jury determined that certain versions of the “Eames”
chairs sold by Office Star were likely to cause confusion of con-
sumers, and awarded Herman Miller $3.3 million in actual
damages, and another $5.1 million in treble damages for wilful
infringement. Notably, the jury cleared Office Star of Herman
Miller’s claims relating to the “Aeron” chairs.
US TM Reg No. 2,754,826 for the “Aeron” chair

Dalmatia Fig Spread US TM Reg No. 3,667,716 for Dalmatia fig spread jar
One point key to Herman Miller’s victory was the discovery of
some important documents a few months prior to trial. These
documents indicated that Office Star had acknowledged the
fame and non-functional aesthetics of the chair designs, and in-
tentionally copied the designs despite repeated warnings from
their customers and manufacturers. Based on this discovery,
Herman Miller also asserted that Office Star had failed to timely
institute a litigation hold, resulting in the loss of many other doc-
uments. This spoliation argument resulted in an adverse infer-
ence instruction to the jury. After some post-trial motions, the
award in Herman Miller was ultimately lowered from $8.4 mil-
lion to $6.3 million. The decrease centred around Herman
Miller’s damages calculation with respect to trade mark dilution,
with the court finding that the $5.1 million in treble damages
should be reduced to simply $3 million. In any event, $6.3 mil-
lion is a substantial sum to recover in a trade dress case, and it
would appear to justify Herman Miller’s investment of more
than two years of litigation expenses.
The Dalmatia case is also interesting, as it involved not only
trade dress claims, but claims under the recently-enacted De-
fend Trade Secrets Act of 2016 (DTSA). In fact, this decision
was the first jury verdict under the DTSA. The $5 million award
remains under some post-trial scrutiny due primarily to a dis-
pute over the effective date of the DTSA. However, only about
$1 million of the $5 million awarded by the jury is attributed
to the trade secret count; the remainder is assigned to trade
mark infringement and counterfeiting claims. So, even without
the DTSA claims, the award should still be around $4 million.
The plaintiff ’s claims in Dalmatia were focused on former busi-
ness partners that allegedly copied the unique packaging for a
fig spread after a parting of ways. The plaintiff claimed to be the
purveyor of the top-selling fig jam in the US, and asserted that
the defendants conspired to create their own competitive fig
jam using plaintiff ’s recipes and packaging after ending their
distribution relationship. Plaintiff had registered the shape of its
fig jam container with the US Trademark Office in 2009, about
seven years prior to the litigation. Following a four-week trial,
the jury ruled in favour of plaintiff on its claims of misappropri-
Globefill’s “Crystal Head” Vodka
UNITED STATES TRADE DRESS
Foodmatch Divina Fig Spread
ation of trade secrets, trade mark infringement and trade mark
counterfeiting. Currently, the parties are briefing a motion for
attorneys’ fees filed by the plaintiff in May 2017, seeking about
$1.7 million in fees. Like the result in Herman Miller, the Dal-
matia case shows that damages awards in trade dress cases often
justify the initial investment.
The next big award may be in a case involving competing spirits
companies (Globefill v Elements Spirits). The plaintiff Globefill
was started by movie star (and Ghostbuster) Dan Aykroyd to
produce and sell Crystal Head, a high-quality vodka packaged
in clear bottles shaped like a skull. The defendant, Elements
Spirits, produces “Kah” brand tequila and sells it in ‘sugar skull’
bottles. Globefill filed its trade dress case against Elements Spir-
its in 2010, and lost a first jury trial in November 2013. After an
appeal to the Ninth Circuit, Globefill was granted a new trial.
On March 29 2017, a California jury returned a verdict for
Globefill, finding Elements Spirits had willfully infringed the
skull-head trade dress. One point that particularly hurt Ele-
ments Spirits was testimony from a witness who recounted a
request by the company’s founder to make a plaster cast of the
Crystal Head bottle as the starting point for the tequila bottle
design. In April of this year, Globefill filed a motion for disgorge-
ment of Element Spirits’ profits (estimated at $13.4 million),
and requested payment of its attorneys’ fees (estimated at $4.3
million). In a tentative ruling in June, US District Judge Con-
suelo Marshall awarded Globefill only $870,000 in Elements
Spirits’ profits, noting that the $13.4 million claimed by Globe-
fill represented Elements Spirits’ total sales, and did not take
into account overhead and expenses. A few months later, the
court entered a permanent injunction which barred any future
sales of Kah tequila by Elements Spirits; retailers were permitted
to retain and dispose of any inventory purchased before March
29 2017 (the date of the jury verdict). In September, Judge Mar-
shall issued her final ruling on damages, confirming the award
of $870,000 in lost profits, but denying Globefill’s request for
attorneys’ fees. Part of the reason Elements Spirits’ profits were
so low is because they were selling through a third party, and al-
legedly only receiving an 8% royalty on sales. The total sales of
Kah ‘Sugar Skull’ Tequila bottles
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 UNITED STATES TRADE DRESS
US TM Reg No. 3,361,597 for the Christian Louboutin ‘red sole’ shoe
the third party were over $10 million, and Globefill asserted
that the third party was a front for Elements Spirits’ to avoid li-
ability; based on the evidence of record, Judge Marshall did not
agree. As to attorneys’ fees, Judge Marshall found the case not
to be exceptional under the Octane Fitness ‘totality of the circum-
stances’ standard. Specifically, the court noted the limited evi-
dence of actual confusion and the sophistication of purchasers
as reasons why the case was not exceptional.
The Globefill case is far from over, and the parties will continue
to jockey over damages for months to come. Attorneys for
Globefill have publicly stated that they will appeal Judge Mar-
shall’s damages ruling to the Ninth Circuit. If Globefill can con-
vince the Ninth Circuit that its damages are greater than
Elements Spirits’ alleged actual profits, the current figure of
$870,000 may wind up in the $1-3 million range when all is
said and done. Based on the conduct described in the case (El-
ements Spirits’ founder allegedly lied under oath and concealed
evidence), it also seems possible that the Ninth Circuit will re-
verse the denial of attorneys’ fees. We will have to wait and see,
but Globefill’s total recovery in this case may ultimately exceed
$5 million.
Concerns over trade dress damages
While such developments on the damages front are positive
for trade dress plaintiffs, there are some recent negatives. One
concerns the doctrine of aesthetic functionality, which gained
some notoriety with the Christian Louboutin v YSL “red sole”
shoe case in 2012. As the Supreme Court set out in Traffix, trade
dress cannot protect any configuration or packaging that would
provide a functional or utilitarian advantage. The doctrine of
“aesthetic” functionality holds, however, that a configuration,
colour or shape may be functional even if it has no practical
function, so long as competitors “need to use it” to compete.
YSL’s argument in Louboutin was just that: that it needed to use
a contrasting red sole on its shoes to compete in the fashion in-
dustry. Ultimately, the court found otherwise, and upheld
Louboutin’s trade dress registration (US TM Reg No.
3,361,597).
The aesthetic functionality doctrine has been criticised by
many scholars (most notably Professor Thomas McCarthy, the
author of the seminal treatise on trade marks). The criticism
stems from the fact that the term “aesthetic functionality” is itself
an oxymoron, as aesthetics are defined by art and beauty, not
function. At the time Louboutin was decided, the aesthetic func-
tionality doctrine was all but dead in many Circuits, but two re-
cent decisions suggest it may be poised for a comeback.
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Organic Spices’ “Spicely”
Morton & Bassett spice container brand container
In Millennium Labs v Ameritox (April 2016), the Ninth Circuit
endorsed the doctrine for the first time in over 10 years in a case
involving the format of medical reports. A few months later, in
Sweet Street Desserts v Chudleigh’s (July 2016), the Third Circuit
affirmed a lower court finding that the registered and incon-
testable shape of an apple turnover dessert was aesthetically
functional. In April of this year, a district court in California
court seized upon the Ninth Circuit’s endorsement, and ap-
plied the aesthetic functionality doctrine in a case relating to
spice containers (Morton & Bassett v Organic Spices). Ultimately,
the court there found the trade dress at issue not aesthetically
functional.
The trade dress asserted by the plaintiff in Morton & Bassett was
not registered with the US Trademark Office, but generally
comprised see-through spice containers with specific lettering.
The defendant’s spice containers were also see-through and in-
cluded a similar lettering pattern. At summary judgment, the
defendant asserted that a see-through container was functional
both in a utilitarian sense, and in an aesthetic sense. The court
found insufficient evidence to grant summary judgment on ei-
ther ground. On the aesthetic functionality point, the court
found that the defendant had not put forth sufficient evidence
to show that it needed to use a see-thorough container in order
to compete. This case is set for a trial in September 2017. While
the court did not find sufficient undisputed facts to decide the
functionality issues on summary judgment, these issues will
surely be raised again at trial, and the result may revitalise the
doctrine of aesthetic functionality within the Ninth Circuit, and
elsewhere.
Trade dress enforcement plans
Trade dress litigation is an evolving area of law that contains
many of the positives of both patent and trade mark litigation,
with few of the negatives. A simplified trial schedule (with no
Markman hearing), significant damages awards, the ability fairly
easily obtain an injunction, and a leaner trial budget all make
trade dress litigation an interesting option. Brand owners con-
cerned about incursions on the “look and feel” of their products
should consider adding a trade dress enforcement plan to their
overall strategy.
The strategy begins with early identification of unique and aes-
thetic designs and colour schemes, and continues on with reg-
istration of such designs with the US Trademark Office. As the
Herman Miller and Dalmatia cases demonstrate, going into
court with a well-established trade dress registration signifi-
cantly increases your chances of success at trial. Thus, it is im-
 UNITED STATES TRADE DRESS

portant to think about registering trade dress not just when lit-
igation is imminent, but well before such a time. Many federal
district courts will rely heavily on the opinion of the USPTO
when it comes to issues of intellectual property validity, so hav-
ing a US Trademark Registration covering your trade dress can
be vital to prevailing in Federal Court.

Beyond simply registering trade dress with the US Trademark

Office, one should also consider alternative but equivalent
forms of protection for product shapes, colours and packaging.
Design patents and copyrights provide related and coextensive
forms of protection, and both may be obtained without any
showing of secondary meaning (although novelty and original-
ity are required). The 15-year exclusivity period provided by a
design patent may be used to create evidence of secondary
meaning. For example, the design patent may be enforced
against infringers in the first five years after a product’s intro-
duction, to establish the five years of ‘continuous and exclusive
use’ that the US Trademark Office typically accepts as proof of
secondary meaning. A copyright registration may similarly pro-
vide proof of non-functionality, as the Copyright Office will
not register functional works. Such evidence may prove valu-
able in the event that the US Trademark Office raises function-
ality concerns in a trade dress application.

Trade dress is an important intellectual property right in today’s

world. In every situation where you would think about regis-
tering and enforcing patents and trade marks, think also about
trade dress. If you carefully orchestrate your strategy, you will
likely be able to enforce trade dress with less effort, and at a
lower overall cost, with the same results.

© Darius C Gambino. He is a partner in the

Philadelphia Office of DLA Piper (US) and the
author of Trade Dress: Evolution, Strategy &
Darius C Practice from LexisNexis
Gambino

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