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Two manufacturers of large inflatable swan-shaped pool floats made a splash in a New York appeals court earlier this month.  The Second Circuit rejected a New York company’s attempt to claim exclusive trade dress rights to a swan-shaped pool float, calling the endeavor “impermissibly overbroad.”

In August 2016, Long Island based pool products enterprise, Swimline International Corp., filed a claim for trade dress infringement against Funboy LLC, a California based pool float manufacturer, in the United States District Court, Eastern District of New York.  Swimline (formerly known as International Leisure Products, Inc.) alleged that Funboy was selling “knock-offs” of Swimline’s inflatable swan pool float. (Both products are pictured below).  While Swimline acknowledged that it holds no registered trademark in its swan design, Swimline alleged its swan float’s trade dress was a protectable composite of various swan-themed elements, including the orange coloration of the swan toy’s beak and the conical shape of the swan toy’s tail.  Ultimately, the District Court dismissed Swimline’s claim in November 2017 after concluding that Swimline failed to adequately allege protectable trade dress in its pool toy.  On appeal this month, the Second District agreed and affirmed the District Court decision.

Swimline’s Swan Float                                          Funboy’s Swan Float

To successfully state a claim for trade dress infringement, the plaintiff bears the burden of establishing protectable trade dress rights under trademark law.  A trademark is a name, mark, figure or symbol that distinguishes the goods and services of one seller from another seller.  Trademarks function as source identifiers, which allow consumers to know where a product came from and avoid confusion.  Trademarks also function as a way for trademark owners to build a reputation and brand loyalty in the marketplace.  Trademarks can exist in things like words, designs, colors, sounds, product shapes (as claimed here), and even scents. What trademark law doesn’t allow, however, is a company to try and monopolize words or symbols or product shapes that competitors might need to conduct their own businesses. This is where Swimline’s claim went belly up.

In the Swimline case, the Second Circuit reasoned that the swan float was not protectable as trade dress for two reasons.  First, the swan float is generic – i.e., that it was a swan-shaped pool float shaped like a swan.  As the Second Circuit put it, trademark protection is “not intended to protect innovation by giving the innovator a monopoly over a useful product feature.”   The purpose of the trademark should be to identify the product’s source, and here, the court said the swan-shaped pool float represents the type of design choice that is “almost invariably” intended “to render the product itself more useful or more appealing” rather than to “identify the [product’s] source.”  Second, the court said that Swimline could not identify the elements and features that actually distinguished its trade dress.  Swimline “[appeared] to be seeking protection for a trade dress that would encompass any bird-shaped pool float with even a passing resemblance” to Swimline’s float, and trade dress rights should not be extended for the purpose of protecting “an idea, a concept, or a generalized type of appearance.”  Swimline’s use of subjective phrases to describe its trade dress like “a pleasing appearance” or “aesthetic proportion” left the Court to guess at what was actually claimed.  For those reasons, the court called Swimline’s claimed trade dress “impermissibly broad,” and affirmed dismissal of Swimline’s case.

When used correctly, trade dress can be a powerful tool to enable consumers to build special connections with products.  Trade dress is not to be used, however, as a way to monopolize on a product’s shape in an anti-competitive manner.  A protectable trade dress needs to be distinctive, non-generic, and definite enough to allow competitors, customers, and the courts to recognize it as a trademark.  So, in the end, although Funboy may have ruffled Swimline’s feathers by designing a similar swan float, Swimline did not have protectable trade dress rights to the swan float in the first place.

Last week I was fortunate to attend the Managing the Trademark Asset Lifecycle Conference, hosted by World Trademark Review.  The topics discussed throughout the day touched on everything from assessing portfolio strength and valuation to leveraging the financial value of a brand.  Although it is impossible to touch on all the points covered during this full-day conference, there were several high-level takeaways worth sharing.

  • The Three F’s of Intellectual Property Audits: Foresight, Fluidity And Flexibility. As with many facets of corporate life, too many companies wait to audit their Intellectual Property (“IP”) until the need arises.  This approach often leads to unnecessary scrambling, stress and lost opportunities.  Rather than taking a defensive or reactive approach to auditing, companies should think proactively, instituting budget-appropriate processes whereby data is routinely collected and maintained in accessible form.
  • Getting Rid Of The “IP Department” Mentality. One of the biggest mistakes a company can make is to limit the involvement of in-house IP counsel or the portfolio management team in the day-to-day management of the company.  IP affects all aspects of the company, from marketing and sales to international tax and finance, and IP counsel should be involved in all meetings where such issues are being discussed.
  • In-House Counsel As Brand Ambassadors and Educators. IP counsel and portfolio managers should be acting as brand ambassadors, not enforcement agents.  Although there may be instances where reactive steps must be taken, every effort should be made to continuously and positively educate company personnel regarding the use and importance of IP which, at the same time, should create additional enthusiasm regarding the brand.
  • The New IP Portfolio: Not Your Grandparents’ IP. Although obvious to some, companies need to recognize that IP is no longer simply about trademark and copyright registrations.  IP touches all aspects of a company’s public persona, from its customer lists and goodwill to its website, internet domains/extensions, and social media handles.  These valuable assets can no longer be ignored.
  • Attorneys As Revenue Generators: Help Me Help You. Attorneys are often brought in when an issue arises (the reactive/defensive approach).  However, IP attorneys are uniquely equipped with the insight and experience to add value and identify potential opportunities that may be overlooked by corporate decision-makers.  IP attorneys cannot identify opportunities if they remain in the dark as to the day-to-day operations and goals of the company.  Taking time to brainstorm with counsel is an investment worth making.
  • Adjusting To The Times: The Evolution of a Brand. Companies that refuse to recognize change or are resistant to evolving their brands will be left behind.  One great example came from Colm Dobby, Associate General Counsel for Mastercard Inc., who discussed the evolution of the “Master” brand in light of the fact that “Cards” are no longer the only or preferred mechanism to purchase goods and services with credit.
  • Beware Of Domain-Driven Branding. The Internet has revolutionized the way companies market and sell their goods and services.  As a result, many companies now consider an Internet domain more important than the overall brand itself.  In some cases, companies will look to the availability of a particular domain when considering a new brand.  Others have initiated a process of buying up all potentially similar domains (and domain extensions) to discourage others from building a brand based solely on the availability of a particular domain.  Although domains are undeniably important, companies should not be blind to other considerations when analyzing the strength of a brand.

If I want to start using a trademark similar to someone else’s, does it matter whether other people are using similar marks? Last week, in Jack Wolfskin Ausrustung Fur Draussen Gmbh & Company KGAA v. New Millennium Sports, S.L.U., the United States Court of Appeals for the Federal Circuit said “yes.”

In Jack Wolfskin, Jack Wolfskin applied to the United States Patent and Trademark Office to register a paw print as a trademark for clothing, footwear, and accessories. New Millennium Sports, S.L.U. opposed the application on the ground that it was likely to be confused with its previously registered mark for clothing, a logo that included a similar paw print and the word “KELME.”

“Likelihood of confusion” is the touchstone of trademark infringement, and a likelihood of confusion between a newly applied-for trademark registration and an already-registered mark requires rejection of the application. The Trademark Trial and Appeal Board (the section of the United States Patent and Trademark Office that handles such disputes) rejected Jack Wolfskin’s application, finding a likelihood of confusion between Jack Wolfskin’s paw print logo and New Millennium’s previously-registered logo.

The Court of Appeals disagreed and held that Jack Wolfskin’s paw print logo should register. The Court of Appeals found no likelihood of confusion for two reasons. First, the Court of Appeals held that the inclusion of the word “KELME” in New Millennium’s registered mark undercut any likelihood of confusion.

Moreover, the Court of Appeals held that Jack Wolfskin’s extensive evidence of other registrations and uses of paw print logos showed that New Millennium’s mark was weak. “Weak” trademarks receive relatively narrow protection under the trademark law. Here, because the evidence showed numerous other paw print registrations and uses, the Court of Appeals found that consumers would expect that many different companies include paw prints in their trademarks and would not assume that all products paw print logos come from one source. The Court of Appeals therefore held that no likelihood of confusion existed and that Jack Wolfskin was entitled to register its paw print mark.

The decision has important implications for the selection and enforcement of trademarks – and the defense of infringement claims. It emphasizes that registrations and uses of similar marks by third parties can dramatically undercut claims of likely confusion.

Here is link to the Federal Circuit’s decision: http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/14-1789.Opinion.8-17-2015.1.PDF