Wal-Mart Stores v. Samara Brothers

• Decision Date: 22 March 2000
• Docket Number: 99150
• Citation: 146 L.Ed.2d 182,529 U.S. 205,120 S.Ct. 1339
• Parties: STORES, INC., PETITIONER v. SAMARA BROTHERS, INC.Supreme Court of the United States
• Court: U.S. Supreme Court

529 U.S. 205

120 S.Ct. 1339

146 L.Ed.2d 182

WAL-MART STORES, INC., PETITIONER v SAMARA BROTHERS, INC.

No. 99-150

Supreme Court of the United States

Argued January 19, 2000

Decided March 22, 2000

Syllabus

Respondent Samara Brothers, Inc., designs and manufactures a line of children's clothing. Petitioner Wal-Mart Stores, Inc., contracted with a supplier to manufacture outfits based on photographs of Samara garments. After discovering that Wal-Mart and other retailers were selling the so-called knockoffs, Samara brought this action for, inter alia , infringement of unregistered trade dress under 43(a) of the Trademark Act of 1946 (Lanham Act). The jury found for Samara. Wal-Mart then renewed a motion for judgment as a matter of law, claiming that there was insufficient evidence to support a conclusion that Samara's clothing designs could be legally protected as distinctive trade dress for purposes of 43(a). The District Court denied the motion and awarded Samara relief. The Second Circuit affirmed the denial of the motion.

Held : In a 43(a) action for infringement of unregistered trade dress, a product's design is distinctive, and therefore protectible, only upon a showing of secondary meaning. Pp. 3-10.

(a) In addition to protecting registered trademarks, the Lanham Act, in 43(a), gives a producer a cause of action for the use by any person of "any ... symbo[l] or device ... likely to cause confusion ... as to the origin ... of his or her goods." The breadth of the confusion-producing elements actionable under 43(a) has been held to embrace not just word marks and symbol marks, but also "trade dress"--a category that originally included only the packaging, or "dressing," of a product, but in recent years has been expanded by many courts of appeals to encompass the product's design. These courts have correctly assumed that trade dress constitutes a "symbol" or "device" for Lanham Act purposes. Although 43(a) does not explicitly require a producer to show that its trade dress is distinctive, courts have universally imposed that requirement, since without distinctiveness the trade dress would not "cause confusion ... as to ... origin," as 43(a) requires. In evaluating distinctiveness, courts have differentiated between marks that are inherently distinctive-- i.e. , marks whose intrinsic nature serves to identify their particular source--and marks that have acquired distinctiveness through secondary meaning-- i.e. , marks whose primary significance, in the minds of the public, is to identify the product's source rather than the product itself. This Court has held, however, that applications of at least one category of mark--color--can never be inherently distinctive, although they can be protected upon a showing of secondary meaning. Qualitex Co. v. Jacobson Products Co., 514 U. S. 159 , 162-163. Pp. 3-6.

(b) Design, like color, is not inherently distinctive. The attribution of inherent distinctiveness to certain categories of word marks and product packaging derives from the fact that the very purpose of attaching a particular word to a product, or encasing it in a distinctive package, is most often to identify the product's source. Where it is not reasonable to assume consumer predisposition to take an affixed word or packaging as indication of source, inherent distinctiveness will not be found. With product design, as with color, consumers are aware of the reality that, almost invariably, that feature is intended not to identify the source, but to render the product itself more useful or more appealing. Pp. 6-9.

(c) Two Pesos, Inc. v. Taco Cabana, Inc., 505 U. S. 763 , does not foreclose the Court's conclusion, since the trade dress there at issue was restaurant deor, which does not constitute product design, but rather product packaging or else some tertium quid that is akin to product packaging and has no bearing on the present case. While distinguishing Two Pesos might force courts to draw difficult lines between product-design and product-packaging trade dress, the frequency and difficulty of having to distinguish between the two will be much less than the frequency and difficulty of having to decide when a product design is inherently distinctive. To the extent there are close cases, courts should err on the side of caution and classify ambiguous trade dress as product design, thereby requiring secondary meaning. Pp. 9-10. 165 F. 3d 120, reversed and remanded.

On writ of certiorari to the united states court of appeals for the second circuit

Scalia, J., delivered the opinion for a unanimous Court.

Justice Scalia delivered the opinion of the Court.

In this case, we decide under what circumstances a product's design is distinctive, and therefore protectible, in an action for infringement of unregistered trade dress under 43(a) of the Trademark Act of 1946 (Lanham Act), 60 Stat. 441, as amended, 15 U. S. C. 1125(a).

I

Respondent Samara Brothers, Inc., designs and manufactures children's clothing. Its primary product is a line of spring/summer one-piece seersucker outfits decorated with appliques of hearts, flowers, fruits, and the like. A number of chain stores, including JCPenney, sell this line of clothing under contract with Samara.

Petitioner Wal-Mart Stores, Inc., is one of the nation's best known retailers, selling among other things children's clothing. In 1995, Wal-Mart contracted with one of its suppliers, Judy-Philippine, Inc., to manufacture a line of children's outfits for sale in the 1996 spring/summer season. Wal-Mart sent Judy-Philippine photographs of a number of garments from Samara's line, on which Judy-Philippine's garments were to be based; Judy-Philippine duly copied, with only minor modifications, 16 of Samara's garments, many of which contained copyrighted elements. In 1996, Wal-Mart briskly sold the so-called knockoffs, generating more than $1.15 million in gross profits.

In June 1996, a buyer for JCPenney called a representative at Samara to complain that she had seen Samara garments on sale at Wal-Mart for a lower price than JCPenney was allowed to charge under its contract with Samara. The Samara representative told the buyer that Samara did not supply its clothing to Wal-Mart. Their suspicions aroused, however, Samara officials launched an investigation, which disclosed that Wal-Mart and several other major retailers--Kmart, Caldor, Hills, and Goody's--were selling the knockoffs of Samara's outfits produced by Judy-Philippine.

After sending cease-and-desist letters, Samara brought this action in the United States District Court for the Southern District of New York against Wal-Mart, Judy-Philippine, Kmart, Caldor, Hills, and Goody's for copyright infringement under federal law, consumer fraud and unfair competition under New York law, and--most relevant for our purposes--infringement of unregistered trade dress under 43(a) of the Lanham Act, 15 U. S. C. 1125(a). All of the defendants except Wal-Mart settled before trial.

After a weeklong trial, the jury found in favor of Samara on all of its claims. Wal-Mart then renewed a motion for judgment as a matter of law, claiming, inter alia , that there was insufficient evidence to support a conclusion that Samara's clothing designs could be legally protected as distinctive trade dress for purposes of 43(a). The District Court denied the motion, 969 F. Supp. 895 (SDNY 1997), and awarded Samara damages, interest, costs, and fees totaling almost $1.6 million, together with injunctive relief, see App. to Pet. for Cert. 56-58. The Second Circuit affirmed the denial of the motion for judgment as a matter of law, 165 F. 3d 120 (1998), and we granted certiorari, 528 U. S. ___ (1999).

II

The Lanham Act provides for the registration of trademarks, which it defines in 45 to include "any word, name, symbol, or device, or any combination thereof [used or intended to be used] to identify and distinguish [a producer's] goods ... from those manufactured or sold by others and to indicate the source of the goods ... ." 15 U. S. C. 1127. Registration of a mark under 2 of the Act, 15 U. S. C. 1052, enables the owner to sue an infringer under 32, 15 U. S. C. 1114; it also entitles the owner to a presumption that its mark is valid, see 7(b), 15 U. S. C. 1057(b), and ordinarily renders the registered mark incontestable after five years of continuous use, see 15, 15 U. S. C. 1065. In addition to protecting registered marks, the Lanham Act, in 43(a), gives a producer a cause of action for the use by any person of "any word, term, name, symbol, or device, or any combination thereof . . . which ... is likely to cause confusion . . . as to the origin, sponsorship, or approval of his or her goods . ..." 15 U. S. C. 1125(a). It is the latter provision that is at issue in this case.

The breadth of the definition of marks registrable under 2, and of the confusion-producing elements recited as actionable by 43(a), has been held to embrace not just word marks, such as "Nike," and symbol marks, such as Nike's "swoosh" symbol, but also "trade dress"--a category that originally included only the packaging, or "dressing," of a product, but in recent years has been expanded by many courts of appeals to encompass the design of a product. See, e.g. , Ashley Furniture Industries, Inc. v. Sangiacomo N. A., Ltd. , 187 F. 3d 363 (CA4 1999) (bedroom furniture); Knitwaves, Inc. v. Lollytogs, Ltd. , 71 F. 3d 996 (CA2 1995) (sweaters); Stuart Hall Co., Inc. v. Ampad Corp. , 51 F. 3d 780 (CA8 1995) (notebooks). These courts have assumed, often without discussion, that trade dress constitutes a "symbol" or "device" for purposes of the relevant sections, and we conclude likewise. "Since human beings might use as a `symbol' or `device' almost anything at all that is capable of carrying meaning, this language, read literally, is not restrictive." Qualitex Co. v. Jacobson Products Co., 514 U. S. 159, 162 (1995). This reading of 2 and 43(a) is buttressed by a...