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Trade Dress
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Don’t Tread on Illinois’ Absolute Litigation Privilege

by | Oct 17, 2024 |

Addressing when Illinois law’s “absolute litigation privilege” bars certain counterclaims, the US Court of Appeals for the Federal Circuit affirmed a district court’s summary judgment finding that the plaintiff lacked a valid trade dress and reversed the district court’s decision that declined to apply the absolute litigation privilege as a complete defense to all of the alleged infringer’s counterclaims. Toyo Tire Corp v. Atturo Tire Corp., Case No. 22-1817 (Fed. Cir. Oct. 4, 2024) (Moore, Clevenger, Chen, JJ.) (nonprecedential).

Toyo and Atturo are competitors in the tire design business. After perceiving widespread copying of its tire designs, Toyo filed a district court action asserting design patent infringement and trade dress infringement against Atturo. Atturo asserted counterclaims, including false designation of origin under the Lanham Act and several state law counterclaims. The district court eventually dismissed with prejudice Toyo’s design patent infringement claims and proceeded with just the trade dress infringement claim.

A primary issue in the case was the description of the asserted trade dress. In its complaint, Toyo identified its trade dress merely as “the overall appearance” of its line of tires. Over the course of discovery, disputes arose concerning Toyo’s failure to distinctly describe its asserted trade dress. Toyo answered an interrogatory that requested this information with a non-limiting definition. The district court compelled Toyo to provide a more specific answer, which Toyo did by providing highlighted images.

Toyo’s fact witness was subsequently deposed under Fed. R. Civ. P. 30(b)(6) and gave answers that were inconsistent with Toyo’s interrogatory response. This led the district court to compel more testimony on what exactly the asserted trade dress contained, and which tire features met the definition of the trade dress, and which did not. On the advice of counsel, the corporate witness declined to answer more than 100 different questions. Toyo’s inability to describe its trade dress continued into expert discovery. When it served its expert reports, Toyo introduced yet another aspect of its trade dress – that the trade dress only included two-dimensional aspects. Toyo introduced this new argument to support the requirement that to qualify as trade dress the designated feature must be nonfunctional.

Atturo moved for sanctions. In granting the sanctions, the district court barred Toyo from asserting only the two-dimensional aspects of the trade dress, precluding Toyo from continually shifting its position because doing so “would effectively lead to trial by ambush.” Having struck the only argument that could save the trade dress from invalidity, the district court granted summary judgment of invalidity on both functionality and lack of secondary meaning.

Trial then proceeded only on Atturo’s counterclaims. The jury returned a verdict in favor of Atturo on six of the counterclaims, awarding $10 million in compensatory damages and $100 million in punitive damages. The district court set aside the jury verdict as it related to counterclaims of defamation and liability under the Illinois Deceptive Trade Practices Act. Both parties appealed.

The Federal Circuit affirmed the district court’s issuance of discovery sanctions, and the grant of [...]

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Sole Searching: Trade Dress Hopes Booted as Functional, Nondistinctive

by | Apr 25, 2024 |

The US Court of Appeals for the Fourth Circuit affirmed a district court’s summary judgment grant in a trademark dispute, finding that the district court did not err in concluding that a subset of design elements lacked distinctiveness in the public’s view. TBL Licensing, LLC v. Katherine Vidal, Director of the United States Patent and Trademark Office, Case No. 23-1150 (4th Cir. Apr. 15, 2024) (Quattlebaum, Gregory, Benjamin, JJ.)

TBL Licensing is commonly known as Timberland, the prominent footwear manufacturer. Timberland tried to register specific design elements of its popular boot as protected trade dress with the US Patent & Trademark Office (PTO). In its application, Timberland provided a detailed written description of the boot design elements it sought to register as protectable trade dress. Timberland also included a drawing of these design elements.

The PTO rejected Timberland’s application, finding that the design was functional and lacked distinctiveness. Timberland appealed to the Trademark Trial & Appeal Board, which affirmed. Timberland then challenged the Board’s decision in the US District Court for the Eastern District of Virginia. The district court granted summary judgment in favor of the PTO because Timberland’s design was functional and had not acquired distinctiveness. Timberland appealed.

Timberland argued that the district court improperly segmented the design during its functionality analysis. Timberland argued that the district court failed to meaningfully consider the design as a whole, and even if it did, the court erred in considering specific factors, including the availability of alternative designs and the design’s simplicity in manufacturing. The court also relied on inapposite patents and advertisements as evidence to support its functionality finding, an analysis that Timberland argued was improper.

The Fourth Circuit affirmed the district court’s decision. While acknowledging the potential error in the district court’s failure to analyze the design holistically, the Court ultimately found that the limited design elements Timberland sought to register lacked secondary meaning – a crucial element for trade dress protection. The Court employed a secondary meaning analysis to assess public perception of Timberland’s design and considered various factors, including advertising expenditures, consumer studies, sales success, unsolicited media coverage, attempts at imitation and length of exclusive use.

Applying each factor, the Fourth Circuit determined that the district court did not clearly err in finding that the design elements lacked distinctiveness. The Court explained that the district court highlighted flaws in Timberland’s consumer survey, noting suggestive questions and a lack of focus on the claimed design features. The district court also emphasized that Timberland’s advertising expenditures did not effectively link the claimed design features with Timberland in consumers’ minds. Timberland’s arguments regarding sales success, media coverage and attempts at plagiarism were also found insufficient to establish secondary meaning. Lastly, the presence of similar-looking boots from other manufacturers undermined Timberland’s claim of exclusivity in using the design.

Lacking direct consumer survey evidence, the Fourth Circuit determined that Timberland’s circumstantial evidence failed to [...]

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Parody of Iconic Sneaker Isn’t Entitled to Heightened First Amendment Protection

by | Dec 14, 2023 |

The US Court of Appeals for the Second Circuit upheld a temporary restraining order and preliminary injunction enjoining use of a trademark and trade dress associated with an iconic sneaker design over a First Amendment artistic expression defense. Vans, Inc. v. MSCHF Product Studio, Inc., Case No. 22-1006 (2d Cir. Dec. 5, 2023) (per curiam). This case is the first time a federal appeals court has applied the Supreme Court of the United States’ recent decision in Jack Daniel’s v. VIP Products, which clarified when heightened First Amendment protections apply to expressive uses of another’s trademark and trade dress.

MSCHF Product Studio is a Brooklyn-based art collective known for provocative works that critique consumer culture. It sells its works in limited releases during prescribed sales periods called “drops.” It promoted and sold a shoe called the “Wavy Baby,” which is a distorted, corrugated version of the iconic black-and-white Vans Old Skool sneaker. MSCHF claimed that the product was a commentary on consumerism in sneakerhead culture and that the Wavy Baby shoes were not meant to be worn but were instead “collectible work[s] of art.”

MSCHF promoted the shoes using the musician Tyga. Vans sent MSCHF a cease-and-desist letter and a week later filed a six-count complaint in federal court, including a claim for trademark infringement under the Lanham Act. The following day, Vans filed a motion for a temporary restraining order, seeking to have the court enjoin the sale of the Wavy Baby shoes. Nevertheless, MSCHF proceeded with its pre-planned drop of the Wavy Baby sneakers and sold 4,306 pairs of the Wavy Baby in one hour.

About a week later, after oral argument on the temporary restraining order (TRO) motion, the district court granted Vans’s motion. The district court concluded that Vans would likely prevail in showing a likelihood of consumer confusion and rejected MSCHF’s contention that the Wavy Baby was entitled to special First Amendment protections because it was an artistic parody. MSCHF appealed.

The Second Circuit held the appeal in abeyance pending the Supreme Court’s Jack Daniel’s decision. In that case, Jack Daniel’s sued the maker of a squeaky dog toy that resembled the iconic whiskey bottle and used puns involving dog excrement in place of the actual language of the Jack Daniel’s label. In a unanimous decision, the Court clarified that special First Amendment protections (as used in the Rogers test for expressive works that incorporate another’s trademark) do not apply when a trademark is used as a source indicator—that is, “as a mark.”

The Second Circuit concluded that the Jack Daniel’s case “forecloses MSCHF’s argument that Wavy Baby’s parodic message merits higher First Amendment scrutiny” because, even though the product is a parody, the Rogers test does not apply if the mark is also used as a source identifier. The Second Circuit drew a direct parallel between Wavy Baby and the punning dog toy in the Jack Daniel’s case, noting that in both cases the infringing product evoked the protected trademark and [...]

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Just How Similar Must Competing Marks Be to Survive Dismissal?

by | Oct 5, 2023 |

After a de novo review, the US Court of Appeals for the Sixth Circuit affirmed in part and reversed in part a district court’s motion to dismiss, finding the competing marks sufficiently similar to avoid dismissal, and the attorneys’ fee award. Bliss Collection, LLC v. Latham Companies, LLC, Case Nos. 21-5723; -5361 (6th Cir. Sept 21, 2023) (Mathis, Bush, JJ.) (Larsen, J., dissenting).

This case between Bliss and Latham was the latest installment in a series of cases between the children’s clothing companies after a Bliss founder left to start Latham as a competitor company. Here, Bliss sued Latham for infringement of three trademarks for Bliss’s stylized lowercase “b” logo, appearing as if stitched out in thread. Bliss sued for federal copyright infringement, federal trademark infringement, federal trade dress infringement, federal false designation of origin and misappropriation of source, federal unfair competition, trademark under Kentucky law and unfair competition under Kentucky law.

The competing marks are depicted below:

Latham moved to dismiss, and the district court dismissed the federal copyright and trade dress claims. The district court did not initially dismiss the remaining claims, but later did so after a motion for reconsideration. The district court determined that Latham was not entitled to attorneys’ fees because the case was not exceptional, and Bliss had brought the suit in good faith. Bliss appealed the federal trademark infringement, federal trade dress infringement and trademark infringement under Kentucky common law only.

The Sixth Circuit focused its analysis on whether the amended complaint properly alleged that Latham’s logo was a use of Bliss’s trademark. The Court noted that dismissal was not warranted for anything but the most extreme cases, concluded that this was not such a case and reversed.

The Sixth Circuit found that Latham used the accused mark “in a trademark way” (i.e., to identify goods). Then, weighing the Frisch factors to determine likelihood of confusion between the marks, the Court found that the similarity between the marks and their “impression” favored Bliss despite the fact “that the logos share no words or homophones.” Overall, the Court found that five of the eight factors favored Bliss and that two were neutral. Only the likelihood of purchaser care factor was found to favor Latham. The Court thus found that Bliss had plausibly alleged a likelihood of confusion and that its complaint stated a federal trademark infringement claim. Applying the same logic to the state trademark claims, the Court also reversed the dismissal of those claims.

The Sixth Circuit affirmed the dismissal of the trade dress claim, however, because Bliss failed in its affirmative duty to plead facts in support of nonfunctional trade dress.

Turning to the attorneys’ fee award, the Sixth Circuit found that the mere fact that Bliss sued Latham was not sufficient to warrant an “exceptional” case finding in terms of an award for fees. The Court was also unpersuaded that the trade dress claim was worthy of a fee award as [...]

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Watermelon Sugar: Candy Shape and Color Deemed Functional

by | Sep 21, 2023 |

The US Court of Appeals for the Third Circuit upheld a district court’s decision that a candymaker cannot trademark the shape and colors of watermelon candy, finding that the combined colors and shape of the candy are functional because they help signal to consumers that the candies have a watermelon flavor. PIM Brands Inc. v. Haribo of America, Inc., Case No. 22-2821 (3rd Cir. Sept. 7, 2023) (Chagares, Bibas and Matey, JJ)

PIM is a leading confectionary company that introduced its Sour Jacks Wedges, a chewy gummy candy, in the early 2000s.

PIM obtained a federal trademark registration in “the shape of a wedge for candy, with an upper green section with white speckles, followed by a narrow middle white section and followed by a lower red section with white speckles.”

Haribo, a well-known German confectionery company, introduced its own watermelon-flavored sweet treat in 2019. Like the Sour Jacks Wedges, Haribo’s candy is red, white and green, with an elongated watermelon wedge shape. PIM sued Haribo for trademark and trade dress infringement under the Lanham Act and for unfair competition under New Jersey common law, alleging that Haribo copied PIM’s Sour Jacks Wedges design.

Haribo countered that PIM’s trade dress was functional and requested that the district court cancel PIM’s trademark. Haribo claimed that it designed its chewy candy’s shape and colors to match its flavor (watermelon) and that PIM’s trademark should not have been granted since it closely resembled an actual slice of watermelon. The district court agreed, finding that PIM’s trademark design was functional and not protectable since PIM’s combination of colors and shape helps identify the candy’s watermelon flavor. PIM appealed.

PIM acknowledged that the coloring of its watermelon candy was functional since it identified the candy’s flavor. However, PIM argued that the candy’s wedge shape identified the brand and challenged the district court’s decision because it did not consider the wedge shape in isolation from the colors when assessing functionality.

The Third Circuit rejected PIM’s argument, concluding that each feature of the candy’s trade dress serves a single function, which is to identify its flavor, and therefore is ineligible for trademark protection. The Court explained that a design is functional if it is useful for anything beyond branding. The Court cited to its 2021 decision in Ezaki Glico v. Lotte International America, explaining that “[e]ven if the design chosen both promotes a brand and also ‘makes a product work better,’ it is functional and unprotectable.” The Court went on to explain that if design choices (e.g., shape and color) serve the same function (e.g., identifying the flavor), they should be considered together.

PIM further argued that its Sour Jacks Wedges do not match exactly with watermelon, noting that the bottom could be more curved and have a thinner band of darker green, the wedge could be wider, the point could be sharper and a deeper red, and there could be black seeds. [...]

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It’s a Hard Rock Life: Guitar-Shaped Hotel Warrants Trademark, but Hilton Doesn’t

by | Jun 22, 2023 |

In a twin set of precedential opinions, the Trademark Trial & Appeal Board laid the foundation for determining whether building designs can be trademark protected as service marks. In re Palacio Del Rio, Inc., Ser. Nos. 88412764; 88437801 (TTAB May 25, 2023) (Shaw, Goodman, Hudis, ATJs); In re Seminole Tribe of Florida, Ser. No. 87890892 (TTAB May 25, 2023) (Taylor, Greenbaum, Johnson, ATJs).

The subjects of the opinions were the designs of the Hilton Palacio del Rio in San Antonio, Texas, and the Seminole Hard Rock Hotel & Casino in Hollywood, Florida. The Board concluded that the former was nondistinctive trade dress, whereas the latter constituted protectable trade dress. For reference, the two designs at issue appear below:

In the Hilton case, Hilton sought separate registrations for the three-dimensional design of the “River” and “Street” sides of its hotel building due to their “unique and readily recognizable design,” consisting of a pattern of alternating protruding and receding rectangular shapes created by the assembly of the hotel’s modular guest rooms. Similarly, Seminole Tribe argued that its guitar-shaped building was akin to product packaging that can be protected under trade dress.

In both cases, the Board anchored its analysis in Supreme Court precedent in Two Pesos v. Taco Cabana (1992) and Wal-Mart Stores v. Samara Bros. (2000), but with a different result in each case. As an initial matter, in both the Hilton and Seminole cases, the Board confirmed that a building structure, if inherently distinctive and not mere product design, could constitute protected trade dress. The Board analogized a hotel’s design to product packaging, which dispensed with the need to show secondary meaning.

Where the outcomes diverged, however, was the distinctiveness of the buildings that the two entities sought to protect. In the Hilton case, the Board determined that the record did not demonstrate that the Palacio del Rio’s building design was sufficient to differentiate it from competitor hotels. Although Hilton submitted customer declarations claiming that the Rio’s design was unique, the Board did not credit such evidence on the grounds that the customers did not have personal knowledge about what was commonplace in the hotel industry and that the declarations were substantively scant.

In the Seminole case, the Board found that the record reflected that no other hotel had the Hard Rock’s unique guitar design. Analogizing to In re Frankish Enterprises (TTAB 2015), in which a monster truck was found distinguishable from all other monster truck designs of record, the Board concluded that the guitar design was inherently distinctive.

Practice Note: Now that hotels have cracked the door open for building design trademarks, it remains to be seen whether other types of unique buildings will follow suit. As the two cases collectively demonstrate, developing a supportive record—i.e., one founded by compelling evidence of uniqueness—is likely necessary to secure a trade dress for building design.

Rick [...]

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Lanham Act Liability May Apply to Copyrighted Material

by | Jun 8, 2023 | ,

The US Court of Appeals for the Ninth Circuit found that liability under the Copyright Act and liability under the Lanham Act are not mutually exclusive and that liability under the Copyright Act does not negate trade dress damages under the Lanham Act. Jason Scott Collection, Inc. v. Trendily Furniture, LLC, Case No. 21-16978 (9th Cir. May 30, 2023) (Wardlaw, Bumatay, Schreier (sitting by designation), JJ.)

Jason Scott Collection (JSC) and Trendily Furniture are high-end furniture manufacturers that sell their products in the Texas market. In 2016, Trendily intentionally copied three unique furniture designs by JSC and sold them to Texas retailers. Both collections featured heavy carved wood pieces with detailed embellishments and metal elements. The record showed that Trendily’s collection had been based on photographs of the preexisting JSC collection. The Trendily pieces were so similar that even JSC had initially mistaken the furniture as its own when confronted by a retailer. After JSC filed suit, the district court granted summary judgment to JSC on its copyright claim. Following a bench trial, the district court held Trendily liable on the trade dress claim. On that claim, the district court awarded almost $133,000 in prospective lost annual profits over a period of three years, which amounted to about six times the almost $20,000 in retrospective gross profits awarded on JSC’s copyright claim. Trendily appealed.

To obtain a judgment for trade dress infringement, a plaintiff must prove that the claimed trade dress is nonfunctional, the claimed trade dress serves a source-identifying role because it is either inherently distinctive or has acquired a secondary meaning and the defendant’s product creates a likelihood of confusion. Trendily argued that JSC had not adequately established a secondary meaning (for trade dress the parties stipulated was not inherently distinctive) or likelihood of confusion. The Ninth Circuit, however, found that the district court found adequate evidence of secondary meaning through copying and through confusion by retailers and consumers in the high-end furniture market. The Ninth Circuit also found that the district court had correctly found likelihood of confusion, putting special emphasis on Trendily’s intentional and precise copying of the JSC pieces leading to retailer confusion.

Turning to the damages award, Trendily argued that because copying is a commercially acceptable and necessary act in terms of competition, Trendily should only be held liable under the Copyright Act, rather than for trade dress infringement under the Lanham Act. However, the Ninth Circuit affirmed that liability under the Copyright Act and liability under the Lanham Act are not mutually exclusive and that liability under the Copyright Act did not negate the judgment against Trendily for trade dress damages under the Lanham Act. The Court then affirmed the trade dress damages award, finding that the prospective damages incurred when one of JSC’s business relationships fell apart because of Trendily’s copied furniture were reasonably foreseeable and had been “satisfactorily demonstrated.” The Court emphasized that the law only required “crude measures of damages in cases of intentional infringement.”

Finally, the Ninth Circuit affirmed [...]

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On the Road Again: Alternative Designs May Impact Trade Dress Functionality Analysis

by | May 25, 2023 |

The US Court of Appeals for the Sixth Circuit reversed and remanded a summary judgment ruling, finding that there were genuine disputes of material fact regarding whether the plaintiff’s alleged trade dress was functional and therefore excluded from trade dress protection. DayCab Co., Inc. v. Prairie Tech., LLC, Case No. 22-5625 (6th Cir. May 11, 2023) (Moore, Clay, Stranch, JJ.)

DayCab manufactures conversion panels for tractor-trailer cabs. DayCab asserted Lanham Act and Tennessee Consumer Protection Act claims again Prairie Technology for trade dress infringement of its DayCab conversion kit. Prairie denied infringement and counterclaimed for declaratory judgment that DayCab’s trade dress was functional.

DayCab asserted that its product’s slant-back design, depth, rounded edges and gray color were protectable trade dress, explaining that it had carefully selected the angles, curves, tapers, lines, profile and appearance of the DayCab conversion kit. DayCab further argued that the 144-degree angle of the “slant-back” design, the dimensions of the depth and radius of the design, and the color were aesthetic and not functional. In support of its argument, DayCab presented competitor conversion kits to illustrate that there are many different appearances and ways to style conversion kits. DayCab attested that the only requirement for manufacturability is that the top of the fiberglass mold used for manufacturing the conversion kits must be slightly larger at the top than at the bottom. In response, Prairie presented expert testimony that the parties’ respective kits were not identical and that the panel’s depth, top body radius, lower body angle, flange/body radius and color were functional.

The parties filed cross motions for summary judgment. Prairie argued that DayCab could not prove that its trade dress was nonfunctional, had secondary meaning or that there was likelihood of confusion. The district court granted Prairie’s motion, finding that DayCab’s asserted trade dress was functional and therefore not protectable. The district court did not address secondary meaning or likelihood of confusion. DayCab appealed.

The Sixth Circuit reversed the district court’s summary judgment ruling, finding that the district court did not determine open questions about whether DayCab’s conversion kits’ slant-back design was functional. The Sixth Circuit further remanded because the district court did not consider whether Prairie’s kits infringed DayCab’s design. Regarding functionality of the conversion kit, the Court determined that existence of alternative designs and testimony from DayCab’s founder claiming that the design choices were aesthetic raised issues in the district court’s functionality ruling. The Court also noted that the existence of alternative designs was relevant to the functionality determination because they supported DayCab’s contentions that it designed the panel with aesthetic intent and that its resulting features were ornamental rather than functional.

The Sixth Circuit found that it was for the jury to determine secondary meaning and whether Prairie intentionally copied DayCab’s design. The Court also found that likelihood of confusion needed to be determined by a jury because of conflicting evidence: DayCab presented evidence that consumers inquired about ordering Prairie’s kits from DayCab because the products were similarly named and indistinguishable on [...]

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Burdens Can’t Be Avoided No Matter How They’re Dressed Up

by | Jan 5, 2023 |

Addressing a multitude of issues, the US Court of Appeals for the Federal Circuit affirmed the district court’s ruling dismissing infringement of one patent and finding a trade dress invalid but reversed the invalidation of the other patent and vacated dismissal of an inequitable conduct defense. Mosaic Brands, Inc. v. Ridge Wallet LLC, Case Nos. 22-1001, -1002 (Fed. Cir. Dec. 20, 2022) (Newman, Prost, Stark, JJ.)

Mosaic Brands sued Ridge Wallet alleging infringement of a patent relating to a combination money clip and card holder adapted to retain paper currency and to removably store flexible cards such as credit cards, as well as Mosaic’s associated trade dress. Ridge denied the allegations and counterclaimed that Mosaic infringed a Ridge patent directed to a nearly identical wallet. In response to the counterclaim, Mosaic raised inequitable conduct as an affirmative defense.

During claim construction, the district court construed the terms “lip” and “varying thickness” in Mosaic’s patent. Following claim construction, the parties stipulated to noninfringement of Mosaic’s patent. The district court also found the trade dress of Mosaic’s wallet to be functional and thus invalid. As to Ridge’s patent, the district court granted summary judgment of invalidity based on a prior art product sold by Mosaic, and further denied summary judgment that Ridge had obtained its patent through inequitable conduct. Mosaic filed a motion for reconsideration regarding the inequitable conduct defense and to clarify remaining merits issues. The district court exercised its discretion to address the defense and identify deficiencies. The district court noted that Mosaic had only met a portion of its burden and later proceedings would present an opportunity to present more evidence of inequitable conduct. Both parties appealed.

The Federal Circuit first addressed a potential issue of appellate jurisdiction since the assertion of inequitable conduct was an affirmative defense and not a counterclaim yielding a final judgment to review. The Court found it had jurisdiction because the inequitable conduct defense merged and became final when the judgment denying summary judgment for inequitable conduct was entered.

Turning to the merits, the Federal Circuit addressed the two claim terms appealed by Mosaic. Mosaic argued that the district court’s interpretation of “lip” was too narrow because it required the lip to be made of “extruded plastic.” The Court quickly dispatched this argument by citing the specification of Mosaic’s patent, which described the lip as being made of extrudable plastic and extolled the benefits of such material. The Court focused on the context of how the patent used the phrase “the present invention” and found it to be limiting. As to the other claim term (“varying thickness”), Mosaic advocated for a plain and ordinary meaning of the term. The Court rejected Mosaic’s argument, finding that Mosaic failed to provide intrinsic evidence or meaningful explanation of how the district court’s construction differed from the plain and ordinary meaning. As such, the Court found that the district court made no error in either construction.

Turning to the appeal of Ridge’s patent, the Federal Circuit found that [...]

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Functionality Dooms Alleged Trade Dress Protection

by | Nov 29, 2022 |

The US Court of Appeals for the Eighth Circuit affirmed summary judgment of noninfringement in a trade dress suit, finding that the trade dress was functional and the attorneys’ fee award—as diminished by the district court—was appropriate. Pocket Plus, LLC v. Pike Brands, LLC, Case No. 21-3414 (8th Cir. Nov. 15, 2022) (Gruender, Melloy, Erickson, JJ.)

Since 2009, Pocket Plus has sold vertically oriented pouches that attach to waistbands or belts to carry water bottles, cell phones and other small objects. Pike Brands, d/b/a Running Buddy, began selling similar pouches in 2012 and introduced a vertical version in 2015. In 2021, Pocket Plus sent cease and desist letters to Running Buddy, then sued for trade dress infringement under Iowa common law and the Lanham Act. Running Buddy moved for summary judgment, arguing that Pocket Plus’s trade dress was unprotectable. Running Buddy also threatened Rule 11 sanctions because of the weakness of the case. After winning summary judgment, Running Buddy moved to recover attorneys’ fees, which the district court partially granted. Both parties appealed, with Pocket Plus challenging the summary judgment grant and both parties challenging the amount of the attorneys’ fee award.

The Eighth Circuit began by noting that the issue of validity was complicated by Pocket Plus’s shifting explanation of what its trade dress was, explaining that its “definition evolved throughout the litigation,” becoming increasingly detailed. Eventually, the Court reasoned that regardless of which definition prevailed, the result was the same.

Addressing the noninfringement finding, the Eighth Circuit recited the relevant legal principles, explaining that to prove infringement, a plaintiff must show that its trade dress is nonfunctional and distinctive and that a lack of protection may confuse customers. The Court explained that it must consider trade dress in its entirety—not as individual elements—and determine whether features are protectable “arbitrary embellishment” or simply essential to product use. In this case, Pocket Plus never registered its trade dress so it did not benefit from a presumption of nonfunctionality. Pocket Plus argued that its vertical orientation and over-the-hip design were nonfunctional elements since competitors made pouches differently and that packaging illustrations likewise made the trade dress nonfunctional. The Court was not persuaded, finding that each feature the plaintiff pointed to was designed to “affect [the pouch’s] suitability for carrying objects,” making each feature essential to purpose and therefore functional. Because the Court found functionality, it affirmed noninfringement without addressing the other requirements.

The Eighth Circuit next considered the attorneys’ fees. Under the Lanham Act, a court may, in its discretion, grant attorneys’ fees to the winning party but only in “exceptional cases” after “considering the totality of the circumstances.” Pocket Plus argued that this case was not “exceptional” while Running Buddy argued that the district court abused its discretion in awarding only a portion of the attorneys’ fees.

The Eighth Circuit addressed both exceptionality and the amount awarded, in turn. To be “exceptional,” a case must be objectively unreasonable, motivated by ill will or frivolous. The Court noted Pocket Plus’s weak [...]

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