A small Colorado intellectual property law firm won a major victory in a trademark case on April 8, and the precedent-setting decision from the Federal Circuit is expected to make it easier for other companies that want to register so-called “color marks.”
William Cochran and James Young of Cochran Freund & Young represented Fort Collins-based Forney Industries, a producer of metalworking and welding supplies. Forney wanted to register a mark — essentially a combination of colors — to be used on product backer cards. The proposed mark consists of the colors red fading into orange and then yellow, with a black bar at the top.
Forney applied to register the mark in May 2014 and was refused because, the examining attorney said, the mark is not “inherently distinctive.” A trademark must demonstrate distinctiveness in order to be registered.
THE DIFFICULTY OF DISTINCTIVENESS
A mark may be considered “inherently distinctive,” and thus easily registered, if it is obvious to consumers the mark identifies the source of the product, rather than describing the product itself. Examples include made-up names like Clorox and Kodak or symbols like the Nike swoosh or McDonald’s golden arches, which don’t evoke or describe the underlying goods.
According to the Trademark Manual of Examining Procedure, color marks are “never inherently distinctive,” and the examining attorney told Forney the only way to register its proposed color combo under the rules is to show “acquired distinctiveness,” which means consumers have come to exclusively associate the mark with a particular product, brand or company.
Showing acquired distinctiveness is “a long, hard process,” said Cochran. “You have to do lots of advertising.”
Building materials maker Owens Corning became the first company to successfully trademark a color — namely, the pink of its fiberglass insulation — in the mid-1980s by showing acquired distinctiveness. The Federal Circuit made that decision in large part due to the company’s decades of multi-million-dollar advertising campaigns that linked the product to the color through slogans like “think pink” and use of the Pink Panther cartoon in ads.
“Our client, An the other hand, never did any ‘look for’ advertising,” Cochran said. “What they did is they sold approximately half a billion dollars’ worth of product using this mark.”
REJECTIONS AND APPEALS
Forney reapplied for the mark with a few changes but was refused again in 2015. The examining attorney said the mark was not inherently distinctive and the company must show proof of acquired distinctiveness if it wanted the protections that come with registration on the U.S. Patent and Trademark Office’s Principal Register.
Forney then appealed to the Trademark Trial and Appeal Board, which concluded that a color mark cannot be inherently distinctive when applied to trade dress — that is, a product’s design or packaging. The TTAB also concluded that, even if a color mark could be inherently distinctive, it needs a “well-defined peripheral shape or border” in order to do so, and Forney’s proposed mark didn’t qualify.
“They said that our mark does not have a peripheral shape, like the Nike swoosh, and therefore it cannot be inherently distinctive,” Cochran said. “They came up with that argument out of whole cloth.”
“Nothing in the case law mandates such a rule,” the Federal Circuit said of the TTAB’s “peripheral shape” argument. The Federal Circuit also said that Supreme Court precedent “simply does not support the Board’s conclusion that a product packaging mark based on color can never by inherently distinctive.”
To support its decision, the Federal Circuit brought up Forney’s own trademark infringement lawsuit against automotive parts maker Daco of Missouri, which, Forney alleged, had infringed on its packaging design with a similar red, yellow and black design. Forney lost that case, but the 10th Circuit held in its 2016 opinion that “the use of color in product packaging can be inherently distinctive.”
The Federal Circuit concluded that, rather than “blanketly holding” that colors cannot be inherently distinctive, the TTAB should have considered four criteria, known as the Seabrook factors, to determine the inherent distinctiveness of Forney’s trade dress.
The Seabrook factors are: 1) whether the trade dress is a “common” basic shape or design; 2) whether it is unique or unusual in a particular field; 3) whether it is a mere refinement of a common and well-known form of ornamentation for a particular class of goods and 4) whether it is capable of creating a commercial impression distinct from accompanying words.
The Federal Circuit vacated the TTAB’s decision and remanded the case for further proceedings.
DAY IN COURT
Forney’s case was the third Cochran had argued in front of the Federal Circuit. He lost the first two, both patent matters, but the experience prepared him for what to expect in Washington.
“It’s like an oral exam,” Cochran said. “The judges have some really tough questions, and you’ve got to come up with an answer that makes sense that can convince them that you’re correct.”
To prepare for the oral hearing, Cochran reviewed several Supreme Court cases to make sure he knew them well and understood the arguments in each.
But the most important part of his preparation was thinking of all the questions the judges might ask and having answers prepared.
“What sort of questions? I mean questions out of left field that they may ask,” Cochran said. “And sure enough, they asked those questions. And I was ready.”
The hearing before Forney’s was a multi-billion-dollar case, Cochran said, with 20 to 30 attorneys in attendance from each side. When it was Cochran’s time to approach the counsel table, it was just him and one sheet of paper with a few handwritten notes.
“The other side had most of the trademark office there in the gallery,” he said. “They had books and manuals and everything else there.”
But Cochran knew from experience there was no time to be leafing through legal tomes during the questioning.
“You just have to be able to answer these questions the best way you can and anticipate what they’re going to ask, and have a good, reasoned argument why you’re right,” he said. “And that seemed to work very well.”
WHAT NOW?
Forney’s fight isn’t over. The USPTO could try to appeal the case to the Supreme Court or ask the Federal Circuit to hear the case en banc. The case could be remanded to the TTAB to have the board determine whether Forney’s color mark is inherently distinctive based on the Seabrook factors. The TTAB might also be able to raise new issues about Forney’s proposed mark.
But if the Federal Circuit’s ruling is upheld, it will be a big change. For starters, Young said, the USPTO will need to update its manual, which still says color marks can’t be inherently distinctive.
Applicants who want to register a color mark for product packaging will no longer have to go through the “long, drawn-out procedure” of proving acquired distinctiveness, Cochran said.
If they can show their mark is inherently distinctive under the Seabrook factors, he added, they should be able to register it.
Young expects the case to be cited in common-law trademark infringement lawsuits. If Forney had already had this decision in its corner during its infringement case against Daco, he added, things “might have gone differently.”
“It’s a big case. This has large economic effects,” Cochran said. “It’s going to be cited quite a bit.”
— Jessica Folker