3 Interesting Lanham Act Decisions (2 trade dress and 1 contributory infringement)

Two 7th Circuit trade dress/functionality decisions

The same panel of the Seventh Circuit, with the same judge writing, decided two separate product configuration trade dress cases on the same day, both involving registered, incontestable dresses, and both on functionality grounds (what are the odds?). In Jay Franco & Sons, Inc. v. Franek, No. 09-2155 (7th Cir. Aug. 11, 2010), the court (Easterbrook, J.) held that registered, incontestable trade dress consisting of a round-shaped beach towel was functional, because it allowed tan-seeking users to pivot to follow the sun without moving the towel. The court cited not only the registrant’s own promotional materials, but also a third-party utility patent claiming the round shape for a beach towel. The court also thought the design was aesthetically functional because the round shape was pleasing, and there aren’t many other pleasing alternative shapes.

And in Specialized Seating, Inc. v. Greenwich Industries, L.P., No. 07-1435 (7th Cir. Aug. 11, 2010), the court (again, Easterbrook, J.) held that the registered, incontestable trade dress consisting of the design of a metal folding chair was functional. The plaintiff itself had obtained four utility patents on different aspects of the chair, and together they covered every element covered in the trade dress. Because that finding alone invalidated the trade dress, the court did not reach the issue of whether the registrant defrauded the PTO by “neglecting” to mention three of its patents to the trademark examining attorney.

4th Circuit “tied product” contributory infringement decision

In Georgia Pacific Consumer Prods., PL v. Von Drehle Corp., No. 09-1942 (4th Cir. Aug. 10, 2010), the plaintiff GP manufactured the touchless “enMotion” paper towel dispenser for commercial customers. It then leased the dispensers to its distributors with the right to sublease them to its commercial customers, but only for use with GP’s expensive “enMotion” paper (which did not sport any trademarks that users could see when using the dispenser). The defendant manufactured cheap replacement rolls and specifically targeted its sales to establishments who were “subleasing” the “enMotion” dispensers. Analogizing this fact pattern to a branded COKE soda fountain in which an establishment uses generic cola, the Fourth Circuit held that the defendant committed contributory infringement, because end users would be likely to think that the paper being dispensed from the “enMotion” dispenser was “enMotion” paper.

TV Guide summaries of recent TM and copyright decisions

In the past three weeks, there have been a few interesting appeals court decisions on trademark and copyright issues. Here is my take on the salient points:

• The 9th Circuit -- following recent Federal Circuit precedent concerning "[THING].COM" marks -- held that the alleged word mark ADVERTISING.COM was generic for "on-line advertising services." Advertise.com, Inc. v. AOL Advertising, Inc., No. 10-55069 (9th Cir. Aug. 3, 2010).

• In a fact-intensive "likelihood of confusion" decision notable only for the parties' and the court's seeming confusion over what "initial interest confusion" is, the 8th Circuit held that the defendant's SENSORYFLAVORS mark for "flavor delivery systems" (which I think is basically a line of flavor enhancing food additives) did not infringe its rival's SENSIENT FLAVORS mark, particularly in light of the sophisticated corporate customers each party sold to. Sensient Tech. Corp. v. SensoryEffects Flavor Co., No. 09-2686 (8th Cir. July 21, 2010).

• Two copyright decisions turned on the proper filtering out of unprotectable ideas. In Mattel, Inc. v. MGA Entertainment, Inc., No. 09-55673 (9th Cir. July 22, 2010), a Mattel employee (under an employment agreement assigning his work product to Mattel) two-timed his employer by providing a rival toy company with the idea for, and sketches and a crude sculpt of, a doll that MGA eventually transformed into the successful BRATZ line of dolls and characters. In an entertaining opinion by Judge Kozinski, the 9th Circuit held that the district court improperly enjoined the rival and improperly transferred its BRATZ line to Mattel. The main thrust of the opinion was that the finished BRATZ characters were too different from the rough sketches and crude sculpt that Mattel owned (through the employment agreement) once the unprotectable "ideas" were filtered out. On the same day, the 11th Circuit resolved a dispute between rival "binkie" (i.e., baby pacifier) makers on the same basis. In Baby Buddies, Inc. v. Toys "R" Us, Inc., No. 08-17021 (11th Cir. July 22, 2010), the products were binkies embodying a teddy bear and a ribbon bow into the design. Like the 9th Circuit in the Bratz case, the 11th Circuit held that, once the idea of a teddy bear shaped and ribbon bow-bearing binkie was filtered out, the way the defendant (Toys "R" Us) expressed those ideas was not substantially similar to the plaintiff's design.
  

11th Circuit trademark decision puts cart before horse

In a dispute involving a Hollywood restaurant's claim that an Atlanta restaurant infringed its mark, the 11th Circuit seemed unnecessarily to go through an entire (and error-filled) likelihood of confusion analysis before ruling that the defendant was a good faith, geographically remote junior user. Instead of viewing the "good faith, geographic remoteness" argument as an affirmative defense, however, it expressly viewed it as an additional likelihood of confusion factor.

In Tana v. Dantanna's, No. 09-15123 (11th Cir. July 15, 2010), the plaintiff (Dan Tana) is the owner of an Italian restaurant in Hollywood called Dan Tana's. Defendant Dantanna's is a surf-and-turf restaurant with a sports theme in Atlanta. Among the controversial statements the court made in the likelihood of confusion analysis was its holding that the "goods and services provided in the parties' restaurants are strikingly dissimilar." I.e, Italian restaurant vs. sporty surf-and-turf joint. This seems far too fine a distinction to make where comparing the parties' services. In my view, sit-down place vs. sit-down place is about as far as this sort of parsing should go. In addition, the court concluded that the parties do not engage in similar advertising because they have different websites, which the court opined would suggest "two completely unrelated restaurants." Again, the court is parsing it too fine and missing the point. That both parties advertise primarily via the Internet should weigh in favor of confusion, not against it.

The court ultimately reached the right result (exonerating the defendant), but the court's unnecessary likelihood of confusion discussion will provide unfounded excuses for infringers in future cases.