The Federal Circuit decides that multi-color marks used on product packaging may be inherently distinctive



April 14, 2020

Intellectual Property Alert

Author(s): Jennette W. Psihoules, Janet M. Garetto

The Federal Circuit vacates and remands the Trademark Trial and Appeal Board’s recent decision finding that Forney Industries, Inc.’s (Forney’s) proposed multi-color mark can never be inherently distinctive, and product packaging marks that use color cannot be inherently distinctive in the absence of a well-defined peripheral shape or border in In Re Forney Indus., Inc., Case No. 2019-1073 (Fed. Cir. Apr. 8, 2020).

Forney sells accessories and tools for welding and manufacturing. It uses the following mark with its goods:

intellectual-property-alert-2020-04-14

Forney filed U.S. Trademark Application No. 86/269,096 for the above mark with the U.S. Trademark Office on May 1, 2014, for packaging for various welding and machining goods without a showing of acquired distinctiveness. Forney included a color claim for the colors black, yellow, and red and described the mark as consisting of the colors red into yellow with a black banner located near the top as applied to packaging for the goods with the dotted lines merely depicting placement of the mark on the packing. The application was refused as not inherently distinctive under Sections 1, 2, and 45 of the Lanham Act. Forney appealed the decision to the board. The board affirmed the examining attorney’s determination, treating the mark as a color mark consisting of multiple colors applied to product packaging.

In formulating its decision, the board appeared to apply two different standards with respect to whether multi-color marks used on packaging can be inherently distinctive. First, the board looked to the Supreme Court’s decisions in Qualitex Co. v. Jacobson Prod. Co., 514 U.S. 159 (1995) and Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S. 205 (2000) to conclude that a particular color on a product or its packaging can never be inherently distinctive and may only be registered with a showing of acquired distinctiveness. But, the board then went on to hold that a color mark consisting of color applied to product packaging cannot be inherently distinctive unless it is in association with a well-defined peripheral shape or border. The board ultimately found Forney’s mark not inherently distinctive.

The Federal Circuit finds that the board erred by concluding that: (i) a color-based trade dress mark can never be inherently distinctive without differentiating between product design and product packaging marks and (ii) product packaging marks that use color cannot be inherently distinctive in the absence of an association with a well-defined peripheral shape or border.

The Federal Circuit advises that neither the Supreme Court nor it has directly addressed the question of whether a multi-color mark applied to packaging can be inherently distinctive. For guidance, the court looks to Supreme Court decisions discussing the inherent distinctiveness of trade dress, including Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992), Qualitex, and Wal-Mart. In these cases, at no point did the Supreme Court conclude that a trade dress mark based on color in the product packaging context can never be inherently distinctive. In fact, the cases suggest that color marks used on product packaging can act as source identifiers. Here, the Federal Circuit finds that Forney’s multi-color product packaging mark falls within the category of marks that are capable of acting as source identifiers and being inherently distinctive. The court notes that it is possible that Forney’s mark could be perceived by consumers to suggest the source of the goods in that type of packaging and that the board should have considered whether Forney’s mark satisfies the Federal Circuit’s criteria for inherent distinctiveness.

As to the board’s second conclusion, this court finds that the case law does not support that a color mark must be associated with a specific peripheral shape or border in order to be inherently distinctive.The Federal Circuit opines that Forney is not trying to stop others from using the colors black, yellow, and red, but rather to protect the particular combination and arrangement of these colors as reflected in the mark drawing. The court further advises that what must be considered is whether the combination and arrangement of the colors and the particular design the colors create act as a source identifier. The court concludes that the board was incorrect in holding that a multi-color mark used on product packaging can never be inherently distinctive and that it must be associated with a well-defined peripheral shape to be inherently distinctive.

The Federal Circuit vacates and remands the case for the board to consider whether Forney’s mark is inherently distinctive for the uses proposed, considering the impression created by an overall view of the claimed elements.

This decision opens up a path to trademark registration for multi-color marks used with product packaging that would have been limited to common law-based claims. This ruling may prompt an increase of trademark applications for these types of marks before the U.S. Trademark Office. Additionally, the determination that multi-color, product packaging marks are capable of being inherently distinctive may be used as a tool for brand owners to seek greater protection of their brands and products. Companies, like retailers and goods manufacturers, with distinctive multi-color marks should take stock of their trademark portfolios to see if any marks may now be federally protectable under these loosened standards and consider seeking registration before the U.S. Trademark Office.

The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.

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