Summary: A recent Federal Circuit decision held that a multi-color mark applied to product packaging can be inherently distinctive as trade dress and, therefore, registrable under the Lanham Act without proof of secondary meaning.  Whether a particular trade dress is inherently distinctive requires an analysis of the Seabrook factors to determine whether, considering the overall impression created by the trade dress, consumers will assume the trade dress is associated with a particular source.

In the matter of In re Forney Indus., No. 2019-1073, 2020 U.S. App. LEXIS 11006, at *1 (Fed. Cir. Apr. 8, 2020), the Federal Circuit vacated a ruling by the Trademark Trial and Appeal Board (the “Board”) that a color mark can never be inherently distinctive in the context of trade dress and that multi-color marks on product packaging cannot be inherently distinctive in the absence of a well-designed peripheral shape or border.

On May 1, 2014, Forney Industries, Inc. (“Forney”) filed Trademark Application No. 86/269,096 for a mark consisting of a combination of colors on packaging for various welding and machining goods. Id. at *2.  Specifically, Forney’s proposed mark included “the color red fading into yellow in a gradient, with a horizontal black bar at the end of the gradient.” Id. at *12.

Forney sought registration based on use in commerce under Section 1(a) of the Lanham Act, 15 U.S.C. § 1051(a). Id. at *2. The examining attorney refused registration, alleging the mark was not inherently distinctive and noting that “[s]uch marks are registrable only…with sufficient proof of acquired distinctiveness.” Id.  Forney appealed to the Board, alleging its proposed mark was product packaging trade dress, which can be inherently distinctive and, therefore, registrable without proof of acquired distinctiveness. Id. at *3-4.

In affirming the examining attorney’s refusal to register, the Board acknowledged trade dress can be inherently distinctive, but found that a particular color on product packaging can never be inherently distinctive and may only be registered upon a showing of acquired distinctiveness. Id. at *4-5.  Forney appealed the Board’s decision to the Federal Circuit. Id. at *5.  The Federal Circuit vacated the Board’s decision, holding “that color marks can be inherently distinctive when used on product packaging, depending upon the character of the color design.” Id. at *8.

In its analysis, the Federal Circuit noted that a trademark broadly includes “any word, name, symbol, or device, or any combination thereof” used by any person “to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others.” Id. at *6 (citing 15 U.S.C. § 1127).  Trade dress, on the other hand, “involves the total image of a product and may include features such as size, shape, color or color combinations, texture, graphics, or even particular sales techniques.” Id. (quoting Elmer v. ICC Fabricating, Inc., 67 F.3d 1571, 1578 (Fed. Cir. 1995)) (internal quotations and citation omitted).  However, when trade dress “serves the same source-identifying function as a trademark,” the trade dress can be registrable as a trademark. Id.

Marks are deemed inherently distinctive and entitled to protection if “their intrinsic nature serves to identify a particular source of a product.” Id. (quoting Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768 (1992)); see also, Wal-Mart Stores v. Samara Bros., 529 U.S. 205, 210 (2000).  Thus, a product’s trade dress is protectable upon a showing of inherent distinctiveness. Id.  On the other hand, trade dress that is not inherently distinctive may be protectable if the trade dress has acquired distinctiveness, meaning that the mark has “become distinctive of the applicant’s goods in commerce.” Id. (quoting 15 U.S.C. § 1052(e), (f)).

The Federal Circuit further explained that, to determine whether a particular trade dress is inherently distinctive, the relevant question is “whether the trade dress ‘makes such an impression on consumers that they will assume’ the trade dress is associated with a particular source.” Id. at *13 (citing Seabrook Foods, Inc. v. Bar-Well Foods Ltd., 568 F.2d 1342, 1344 (C.C.P.A. 1977)). Therefore, the court noted the following Seabrook factors must be considered in assessing this question: “(1) whether the trade dress is a ‘common’ basic shape or design; (2) whether it is unique or unusual in the particular field; (3) whether it is a mere refinement of a commonly-adopted and well-known form of ornamentation for a particular class of goods viewed by the public as a dress or ornamentation for the goods; or inapplicable here, (4) whether it is capable of creating a commercial impression distinct from the accompanying words.” Id. at *13-14 (citing Seabrook, 568 F.2d at 1344).

The court also acknowledged that, prior to Forney, neither the Supreme Court nor the Federal Circuit had “directly addressed whether a multi-color mark applied to product packaging can be inherently distinctive.” Id. at *8.  However, “several data points on inherent distinctiveness of trade dress” from the Supreme Court informed the Federal Circuit’s inquiry. Id.  First, the Federal Circuit noted that, in Two Pesos, “the Supreme Court held that inherently distinctive trade dress is entitled to protection without a showing of secondary meaning.” Id. at *8. (citing 505 U.S. at 776).  Second, the Federal Circuit acknowledged that, in Qualitex Co. v. Jacobson Prods. Co., the Supreme Court held that “there is no rule absolutely barring the use of color alone” as a trade dress. Id. at *9 (quoting 514 U.S. 159, 162 (1995)).  Third, the Federal Circuit relied on Wal-Mart as differentiating between product design and product packaging trade dress. Id. at *10 (citing 529 U.S. at 215-16).

Specifically, the Federal Circuit recounted the Supreme Court’s reasoning behind its holding in Wal-Mart (i.e., that product packaging can be inherently distinctive), whereas product design can be distinctive only upon a showing of secondary meaning. Id. at *10-11.  As the Federal Circuit observed, the Supreme Court reasoned that inherent distinctiveness can be attributed to product packaging because “the very purpose of … encasing [a product] in a distinctive packaging, is most often to identify the source of the product.” Id. (quoting Wal-Mart, 529 U.S. at 212).  By contrast, the Supreme Court noted in Wal-Mart that “product design almost invariably serves purposes other than source identification” and therefore requires secondary meaning. Id. at *10 (quoting Wal-Mart, 529 U.S. at 213).

With these guideposts in mind, the Federal Circuit concluded that the Board erred in finding that a proposed product packaging mark consisting of multiple colors is not capable of being inherently distinctive. Id. at *11.  The Federal Circuit also noted that “the Tenth Circuit held that ‘the use of color in product packaging can be inherently distinctive (so that it is unnecessary to show secondary meaning) in appropriate circumstances.’” Id. at *12 (quoting Forney Indus., Inc. v. Daco of Missouri, Inc., 835 F.3d 1238, 1248 (10th Cir. 2016)).  Accordingly, the Federal Circuit concluded that the Board erred by blanketly holding that “[c]olors alone cannot be inherently distinctive.” In re Forney Indus. at *12.  Thus, the Federal Circuit held “the Board should have considered whether Forney’s mark satisfies [the Seabrook factors] for inherent distinctiveness.” Id.

The Federal Circuit then considered the Board’s alternative finding that color may only be inherently distinctive when used in conjunction with a distinctive peripheral shape or border. Id. at *12-13.  Ultimately, the Federal Circuit found “nothing in the case law that mandates such a rule.” Id. at *13.  Accordingly, the court vacated the Board’s decision and remanded the case for the Board to consider Forney’s proposed mark under the Seabrook factors. Id. at *15.

The Federal Circuit’s holding in Forney provides affirmation that “color marks can be inherently distinctive when used on product packaging, depending upon the character of the color design.” Id.  In particular, as noted in Forney, the Supreme Court made clear that “inherent distinctiveness turns on whether consumers would be predisposed to ‘equate the [color] feature with the source.’” Id. (quoting Wal-Mart, 529 U.S. at 211).

While the Federal Circuit acknowledged that “color is usually perceived as ornamentation,” the court reasoned that “a distinct color-based product packaging mark can indicate the source of the goods to a consumer, and, therefore, can be inherently distinctive.” Id. (quoting In re Owens-Corning Fiberglas Corp., 774 F.2d 1116, 1124 (Fed. Cir. 1985)) (internal quotations omitted).  Accordingly, since Forney’s mark was both a color mark and a symbol, the Federal Circuit reasoned he was not attempting to protect red, black, and yellow in their entirety, but rather, only the particular color combination and design provided on his packaging. Id. at *14.  In such an instance, the court noted that a showing of secondary meaning is not required. Id. at *8.

TAKEAWAY: Forney is significant because proving secondary meaning is often difficult to accomplish and is always fact-intensive.  Accordingly, companies might consider evaluating their product packaging for opportunities to protect their trade dress with trademark registrations, including registrations for multi-color trade dress applied to such packaging.  Moreover, companies seeking to develop multi-color product packaging with a view towards registrability as a trademark might proactively consider the Seabrook factors to determine whether consumers will assume the trade dress is source-identifying.