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Trade Dress in the Food and Beverage Industries: Manufacturer's and Retailer's Views
 



Industry Perspectives


Mark Hiddleston
Elkington and Fife LLP, London, United Kingdom
Richard Young
Quarles & Brady LLP, Chicago, Illinois, United States

This treatment is intended to offer manufacturers and retailers in the food and beverages industry guidance on issues related to the legal protection afforded to the configuration of a product and its packaging. It is intended to provide insight into the common problems faced in the industry rather than to provide a detailed legal analysis.  

While many of these problems are, of course, common to trademark owners across all fields, there are specific issues relating to product appearance that are unique to the food and beverage industry, such as the mutually dependent relationship between manufacturers and large national supermarket chains and other retail outlets.  Both parties would likely be reluctant to damage their relationship in the event of a dispute. Even though the general principles covered are applicable throughout most jurisdictions around the world, the specifics of the law of trade dress vary from country to country and it is therefore important to obtain the guidance of  a qualified practitioner in any jurisdiction of interest before taking action in that jurisdiction.

  1. Manufacturer’s View

    In launching a new product, a manufacturer frequently needs to navigate a number of trade dress configuration issues.  A company may introduce or develop a new type of food or beverage product with the potential for long-term substantial sales and package it in a unique, distinctive manner to gain market recognition.  Food and beverage producers often look to adopt packaging which is easily recognized and remembered, and that communicates the desired message to consumers. There could be substantial costs in developing, market testing and producing such packaging.


  2. A. Bundle of Rights

    1. Common law rights that arise without the need for registration, including the right to prevent passing off, or unfair competition.
    2. Trademark registrations for words, logos, three-dimensional bottles or containers,  packaging or other relevant distinctive elements such as smells or color.
    3. Design rights or industrial copyright (if available) in relation to specific aspects of the shape or configuration of a product.
    4. Design registration for aspects of the shape, configuration or surface ornamentation of the product.
    5. Copyright in certain elements of the packaging.

    B. Particular Challenges

    This patchwork of protection available for product appearance can be confusing and costly, especially for a small company. The rights afforded to aspects of trade dress and the judicial interpretation of those rights also can vary considerably from country to country and there can be substantial costs in registering and policing the various aspects of protection available. Moreover, the time required for registrations to issue or the uncertainty surrounding the protectability of certain elements may render protection for certain types of products, such as products to be launched for a seasonal or periodic market such as Christmas or the Chinese New Year, effectively unavailable.
    For the manufacturer, it may be difficult to protect some types of product appearance or attributes.  Because consumers have traditionally regarded word marks as the primary identifier of the source of goods, non-traditional trademarks such as 3D marks, packaging, color, sounds and smells are often found to lack the requisite distinctive character to be protectable.
    In some cases it may be possible to prove acquired distinctiveness of product appearance with evidence of secondary meaning, i.e., evidence that consumers regard the appearance or packaging or sound or smell as identifying the source of the product.  However, where an item of trade dress or getup is always used with a word mark members of the public may still identify the product only by reference to the word mark and the appearance of the product may not be protectable. (*1)
    Lastly, if the appearance of the product is functional, protection may be barred completely. Factors relevant in determining whether product appearance is functional include whether:

    1. it is essential to the use or purpose of the product, or
    2. it affects the cost or quality of the article, or
    3. competitors would be at a competitive non-reputation-related disadvantage without it, or
    4. the appearance is one of only a limited number of equally efficient options available to competitors, or
    5. the shape is necessary to obtain a technical result. (*2)

    Product shape is very often found to be functional and therefore not protectable.


  3. Retailer's View

    A retailer, meanwhile, often feels strong pressure to produce a competing product under its house brand. This can be particularly relevant for value-oriented retailers in that their customers likely expect a competing, lower-priced product. To communicate the comparability of the house-branded product to the consumer, the retailer often looks for a “trigger” in the form of similar packaging or labelling to evoke the branded product in the consumer’s mind.


  4. Case Scenario

    To illustrate the interplay of these perspectives in practice, it may be useful to consider the following specific example. A manufacturer intends to launch a new chocolate confectionary called MACEDONIAN BEEHIVES, which will be in the shape of a beehive. The chocolate is flavored with honey from Macedonia, which has a substantial reputation for the quality and flavor of its honey. The packaging is in the colors black and yellow to mimic a bee and also bears a prominent representation of the Macedonian flag. The product will be launched in October in readiness for the Christmas market. Sales forecasts indicate that the product may take off quickly.

    A. The Manufacturer’s Perspective
    1. Protection Without Registration
      Certain aspects of the appearance of the MACEDONIAN BEEHIVES product may be protected without the need for registration.
      1. Copyright. International Copyright will exist in original aspects of any logo,
        design work and labeling applied to the packaging, as well as any ornamental design
        of the product itself or its packaging. This protection is created automatically, with no
        need to apply or register. In some jurisdictions, however, copyright in aspects of 3D
        shapes may be limited or lost upon industrial application of the Design, but instead a
        corresponding Design Right may be granted for a limited period.
      2. Design Rights. Depending upon local national law, the ornamental design of
        useful articles may be separately protected under design rights or as industrial
        designs. In some jurisdictions, including the EU, Design rights may be available,
        without the need for registration, in aspects of the shape and configuration including
        the beehive shape and possible aspects of the packaging. Design rights will generally not protect graphics, text or other two dimensional aspects of the product or its packaging.
      3. Passing Off/Rights on an Unregistered Basis. The manufacturer may also
        rely on common law rights to protect its product appearance. These rights may vary
        from country to country and may be found in common law trademark protection and
        protection against unfair competition and passing off. Protection for product
        appearance under common law generally requires that the appearance be distinctive
        and have a reputation (i.e., that it symbolizes the goodwill of the company). (*4) As
        such, common law rights will generally not be available until the product’s
        appearance has been the subject of heavy advertising and promotion.
    2.  Rights by Registration The manufacturer may also obtain protection through registration of rights. In most cases, a registration will strengthen the rights to be protected and provide the manufacturer with a stronger position in litigation.
      1. Word Mark. Although Macedonia has a reputation in relation to honey, the mark MACEDONIAN BEEHIVES may overall be registrable. However, it may take between a few months and several years, depending upon the country, for the mark to become sufficiently distinctive to be registrable. This delay in the acquisition of protectable rights may be problematic if the product is to be launched, for instance, for the Christmas market or will be used for a promotion of only limited duration. In these circumstances, the manufacturer may have limited -- or perhaps, no -- protection at the most crucial point in the product’s life.
      2. Shape of the Product and Packaging. It may be possible to register aspects of the shape of the product or its packaging. To register product shape or packaging, the manufacturer will likely have to prove that the product appearance has the requisite distinctive character for registration. (*5) Once the product has been in the marketplace for some time, typically a period of years, it may be possible to register the shape on the basis of acquired distinctiveness.
      3. Colors. The color combination black and yellow may also be capable of trademark registration. However, again, the manufacturer will almost certainly have to prove acquired distinctiveness. (*6) Because the colors black and yellow are commonly associated with bees and honey it will likely be difficult to prove acquired distinctiveness of that color combination for a product made with honey. Proof of acquired distinctiveness must be provided for single color trademarks which, in some countries, may not be protectable at all.
      4. Design Registration. Some countries (as well as the European Union) have established a system for registration of original or new industrial designs. In those countries, it may be possible to register aspects of the surface ornament applied to the packaging and the shape or configuration of the beehive and packaging. In contrast to the unregistered design right, a design registration may protect two-dimensional aspects of the product or its packaging and the term of protection is longer (up to 25 years). The advantage here is that registration is often quick and relatively inexpensive. It is also possible to protect an infinite number of designs in a single Community Design registration. Again, in the case of a Community Design registration, such an application can be filed within a period of 12 months of first marketing of the product. However, in practical terms, if the launch is to take place quickly, it may be preferable to file the application as soon as possible.
B. The Retailer’s Perspective If the MACEDONIAN BEEHIVES product becomes successful, there may be pressure for the retailer to produce its own look- alike product to compete.
    1. Word Mark
      The retailer may freely refer to Macedonia or the Macedonian flag in relation to products containing ingredients from this country. The retailer is likely to be precluded, however, from using the name MACEDONIAN BEEHIVES or other marks that may be confused with MACEDONIAN BEEHIVES. In relation to a chocolate confection made with honey from Macedonia, the MACEDONIAN BEEHIVES mark is weak and the retailer may therefore be able to “come closer” to the manufacturer’s mark with impunity. For example, the retailer may call its product MACEDONIAN HONEY CONFECTION or even MACEDONIAN BEE HONEY CONFECTION.
    2. Packaging and Shape
      The shape of the MACEDONIAN BEEHIVES product as well as the yellow and black colors applied to its packaging is likely to be descriptive of confectionery containing honey and therefore unprotectable. If, however, the manufacturer somehow succeeded in obtaining a design or trademark registration for the beehive shape or black and yellow colors, this defense could be foreclosed.
    3. Violation of Rights in Product Configuration
      For a retailer developing a product designed to trigger in the consumer’s mind a leading branded product, there will be the natural concern whether the house-branded product does more than simply evoke the branded product: does it cross the line and violate the rights of the manufacturer of the branded product? For the manufacturer, the issue will be the same. The question is where is the line between permissible “calling” to mind of the branded product and impermissible infringement? Whether the configuration of a product or its packaging violates another’s rights in the appearance of its product will depend primarily on the similarity in appearance of the respective products.
        1. Consumer Confusion
          If consumers of the product are likely to be confused about the source of the product because of the similarities in the appearance, the product likely infringes under trademark or unfair competition (passing off) law. The following factors may bear on whether consumers are “likely to be confused.”
          1. How similar are the products in appearance?
          2. Are the respective goods similar? The fact that both products are foods or beverages will likely not be sufficient to show confusion. Generally, food or beverage products must be intermingled on the shelf or shelved near one another or be related in some way for there to be confusion. Confectionary products are typically shelved together. Honey would generally not be shelved with confectionaries. Even so, the simultaneous use of MACEDONIAN BEEHIVES for both honey flavored confectionary and honey could be confusing in view of the relatedness of the two.
          3. Are the respective goods sold through the same or similar channels of commerce or are they complementary in some sense? Again, merely being sold or distributed through food or beverage channels will likely not be enough to establish confusion.
          4. What are the circumstances of purchase of the respective goods? For example, are the goods typically purchased on impulse or are they purchased only after careful consideration? Arguably, some food and beverage products will be purchased on impulse.
          5. Is the product appearance famous or well-known?
          6. Is the product appearance distinctive or is similar product appearance widely used?
          7. Are the similar elements upon both product packaging descriptive?
          8. Has anyone been confused because of the similarity of the product appearance?
          9. Has the product appearance been in use for some time without any confusion?
          10. Does the similarity relate to the packaging and not the word marks used with the products? In some jurisdictions more weight will be given to word marks and use of a different word mark could be sufficient to avoid a finding of confusion. Product appearance, however, may generally be used for comparison as in comparative advertising or explicitly as in point of sale advertising stating “compare to [the branded product]” provided that the use does not cause confusion and the comparison is not misleading.
        2. Substantial Similarity of the Products
          Even if the products are not likely to be confused, if their appearance is substantially similar there may still be copyright infringement in certain aspects of the product labelling or possibly the shape of the product or its packaging.
        3. Substantially the Same Appearance In some countries, such as the United States, if the appearance of the product, when reviewed by an ordinary observer, is substantially the same as a design that is patented the design patent may be infringed. Design patent infringement is determined without regard to the circumstances in the marketplace or whether the patented design is even manufactured or sold.
        4. Association with Famous Product Appearance
          In many countries, if the product appearance is sufficiently similar to the appearance of another’s famous product for goods that do not compete, such that consumers will associate the two, the famous product appearance is diluted because the famous product appearance may identify two different sources.
        5. Free Ride
          In many countries, and in the European Union, if the product appearance is sufficiently similar to the appearance of another’s famous product for goods that do not compete, such that consumers will associate the two, the junior use may be enjoined on the basis that it “free rides” on the appearance of the famous product.
        6. Intent to Mislead
          Intent of the second user, while relevant, is not dispositive for claims of infringement. But where the second user intends to mislead consumers or to substitute its goods for those of the first user, other claims may arise. (*7)
          1. Passing Off
            If consumers seeking to purchase one product are instead sold a different product, the sold product has impermissibly been “passed off” as the product originally sought. Thus, if the consumer purchases the house brand honey flavoured chocolates believing them to be MACEDONIAN BEEHIVES, the retailer is liable for passing off.
          2. Counterfeiting
            In the United States, if an identical or substantially indistinguishable copy of another’s product is produced as part of an intentional or calculated effort to deceive consumers into believing that they are purchasing the genuine product, the copier is guilty of counterfeiting, the most egregious form of passing off. Counterfeiting may also be subject to criminal prosecution in many countries.

Notes

For further guidance on international law showing protection granted or refused to various items of packaging see INTA’s online publication, Trade Dress: International Practice and Procedures at http://www.inta.org/TradeDress/Pages/TradeDress.aspx

 

  1. For cases where protection had been granted on the basis of acquired distinctiveness/secondary meaning, see:
    1. In the Japanese case Chocolaterie Guylian NV/SA v Japan Patent Office registration was allowed for the 3D shape of a chocolate bar on the basis of acquired distinctiveness. [See: http://applications.inta.org/apps/tdil/case/1684/].
    2. Similarly, in the South Korean case Binggrae Co., Ltd. v Haitai Dairy Co., Ltd. allowed a preliminary injunction based upon rights acquired in a 3D Bottle shape through use over a 30 year period. [See:http://applications.inta.org/apps/tdil/case/1368/].

    3. However, for the difficulty of establishing acquired distinctiveness/secondary meaning for items of shape or packaging where the use is combined with a word mark see:
    4. In the EU case, August Storck Kg v OHIM (cases T-402/02) an applicant had used for a substantial period a specific shape for a candy wrapper and a lozenge sweet. The General Court rejected evidence intending to show that an application for a mark consisting of the sweet wrapper had acquired distinctiveness because the various evidence filed showed use of the shapes only in combination with the word marks WERTHER’S and WERTHER’S ORIGINAL.  The evidence therefore failed to establish that the Relevant Consumer viewed the shapes in question in a trademark sense.
    5. See also the Israeli case, Strauss Ice Cream Ltd v Noga Ice Cream Ltd, where the Court rejected a case based on passing off of elements of ice cream packaging; the respective products were sold under the marks La Cremeria and Cremissimo. The Court noted that that confusion was further prevented by brand names and manufacturer logos prominently appearing on each product, and by the fact that products were retailed side by side. [See: http://applications.inta.org/apps/tdil/case/1716/].
    6. In the UK case, Societe Des Produits SA v Unilever Plc [2003] E.T.M.R. 681, Unilever had used for a substantial number of years in the UK a product with an unusual shape of ice cream product. The applicant filed evidence pointing to substantial recognition amongst members of the public in the UK of the shape of the ice cream confection. However, the Court rejected the application because Unilever had failed to establish either that it had used the shape to denote trade origin or that members of the public relied upon that shape to denote trade origin. The evidence showed that the shape was always used in combination with the word VIENNETTA.

    1. In the EU case, Koninklijke Philips Electronics NV v. Remington Consumer Products, on a referral to the Court of Justice relating to the validity of Philips’ trade mark registration for the device of a three-headed shaver, the court noted that a sign consisting exclusively of the shape of a product is unregistrable by virtue thereof if it is established that the essential functional features of that shape are attributable only to the technical result. The grounds of refusal or invalidity of registration imposed by the provision could not be overcome by establishing that there are other shapes which allow the same technical result obtained. [See: ttp://applications.inta.org/apps/tdil/case/1492/].
    2. In the US case, Dippin' Dots, Inc. v. Frosty Bites Distribution, LLC, the court noted that to prevail in its trade dress infringement claim, the claimant would have to show that the product designs were confusingly similar, the elements and combination of elements were not functional, and that the trade dress had acquired secondary meaning. In the subject case, the court held that in relation to items of trade dress for an ice cream product, the color was functional because it indicated the flavor of the ice cream, that the size was functional because it improved the texture of the product by eliminating ice crystals, and that the shape was functional because it was a product of a patented method that creates a uniform free-flowing "bead." [See: http://applications.inta.org/apps/tdil/case/1353/].

    1. In the US case, Dippin' Dots, Inc. v. Frosty Bites Distribution, LLC, the color applied to an ice cream product was held to be functional because it indicated the flavor of the ice cream. [See: http://applications.inta.org/apps/tdil/case/1353/]
  2. For cases where the claimant established reputation/goodwill in an item of product appearance see:
    1. In the UK, in Reckitt & Colman Products Ltd v Borden, the Court commented that to succeed, a claimant must establish:
      1. That it has goodwill in the UK in the item of get-up, etc;
      2. That there is a likelihood of confusion or misrepresentation through the defendant’s action;
      3. That the claimant is likely to suffer damage as a result of that misrepresentation.

      4. The claimant established that a lemon-shaped plastic container containing lemon juice had acquired secondary significance. The defendant, Borden, in adopting a similarly shaped container had failed to take sufficient steps to distinguish the respective products. Borden did apply a label to its products but survey evidence established that customers paid virtually no attention to the label. [See: http://applications.inta.org/apps/tdil/case/1573/].
    2. In the UK case, United Biscuits v ASDA, a defendant supermarket chain sold a chocolate-coated sandwich biscuit under the name PUFFIN and predominantly red packaging including a cartoon depiction of a puffin bird. The claimant had sold successfully for a number of years a similar biscuit called PENGUIN in predominantly red packaging. The UK High Court found that a substantial number of consumers would think that the two products came from the same manufacturer. The Court noted the practice in recent years of supermarkets marketing their own-brand “look-a-like” products to compete with well-known brand leaders. The Court indicated that where the look-a-like product comes too close to the product it is designed to compete with, there will be passing off. On the other hand, where there is a clear differentiation, although the look-a-like has been inspired by an original product, there will be neither misrepresentation nor deception. [See: http://applications.inta.org/apps/tdil/case/1424/].

      However, where the get-up consists of a combination of non-distinctive elements, protection may be denied. See:

    3. In the US case, Big Island Candies, Inc. v Cookie Corner, the Court noted that if a product design consists of features that individually would be generic and unprotectable, the party alleging infringement must show that the combination of the elements is distinctive. The claimant had asserted the following elements as parts of its trade dress: (1) the rectangular shape of its cookie; (2) its bull-nosed corners; (3) the approximate size of the cookie; and (4) the diagonal chocolate dip. At various other points in the case, The claimant also included (5) the fact the cookie is shortbread (with or without nuts), (6) the curved longitudinal sides and (7) the fact that it is a two-bite cookie as additional elements of the trade dress, but the court did not allow the late addition of these elements. The Court held that the claimant’s cookie design was a non-distinctive combination of common design elements; there was nothing about the combination of elements that served a source-identifying function. [See: http://applications.inta.org/apps/tdil/case/1339/].
  3. There have been a number of cases in the EU looking at the registrability of 3D shapes. Examples of rejected applications include: (i) TyNant Spring Water Ltd’s Application [2000] R.P.C. 55 – an application for a bottle where the color depended upon the refraction of light through the glass. (ii) Yakult Honsha KK’s Trade Mark Application [2001] R.P.C. 756 – an application for the shape of a bottle. (iii) Bongrain SA’s Trade Mark Application [2005] R.P.C. 306 – an application for a striking and unusual shape of a cheese.
    Examples of accepted applications include:  Nestlé Waters France v OHIM [2004]
    E.T.M.R. 566 application for an unusual “bobbin”- shaped bottle designed with oblique horizontal grooves.
    1. In the EU case, Libertel Groep B.V. v Benelux Merkenbureuaeu, the Court was prepared to accept that a color per se may be found to have distinctive character for the purposes of registration. However, the Court commented that it was legitimate to take into account the general interest of not unduly restricting the availability of colors for other traders to use. A color could potentially be registrable provided that a verbal description of the mark was combined with the designation of the color using an internationally recognised identification code such as, for instance, the Pantone ® system.
      However, the Court recognised that members of the public are not generally in the habit of making assumptions about the origin of goods based upon their color or the color of their packaging.  As such, the Court indicated that in the case of color per se, a finding of distinctiveness would be inconceivable save in exceptional circumstances and, in particular, where the number of goods or services for which the mark is applied is very restricted and the relevant market very specific. [See: http://applications.inta.org/apps/tdil/case/1725/].
    2. In the Israeli case, Strauss Ice Cream Ltd v Noga Ice Cream Ltd, the court noted that a party cannot acquire exclusive rights in a single color unless such color acquires a secondary meaning whereunder such color is associated with the specific product. [See: http://applications.inta.org/apps/tdil/case/1716/].
    1. See the South African case, National Brands Limited v GM Patel Food CC, where the Court noted that in considering whether there is “deliberate copying”, it had to assess to whether the “copier” had provided a plausible explanation for adopting the relevant get-up for use in respect of its products. The Court also observed that the nature of the enquiry differed in cases of deliberate and so-called “innocent copying.” It held that, when “innocent imitation” takes place, it should focus its enquiry on the features of the offending design or get-up that are alleged to cause deception or confusion. The Court held that, if its conclusion, in those circumstances, is that “those features will cause deception and/or confusion, there is passing off.” [See: http://applications.inta.org/apps/tdil/case/1727/].
    2. See also the Australian case, Peter Bodum A/S and Bodum (Australia) Pty Ltd where the Court stated that in relation to passing off, there is no requirement that there be an actual subjective intention to mislead, but proof of deliberate borrowing of the features or get up of a rival product provides evidential value. Secondly, the misrepresentation need only be likely to lead the public to believe that the goods are those of the plaintiff. There is no requirement that actual deception be proved. [See: http://applications.inta.org/apps/tdil/case/1783/].

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