Forney Indus., Inc. v. Daco of Mo., Inc.

• Decision Date: 29 August 2016
• Docket Number: No. 15–1226,15–1226
• Parties: Forney Industries, Inc., a Colorado corporation, Plaintiff–Appellant, v. Daco of Missouri, Inc., a Missouri corporation, d/b/a KDAR Company, Defendant–Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

835 F.3d 1238

120 U.S.P.Q.2d 1035

Forney Industries, Inc., a Colorado corporation, Plaintiff–Appellant,

v.Daco of Missouri, Inc., a Missouri corporation, d/b/a KDAR Company, Defendant–Appellee.

No. 15–1226

United States Court of Appeals, Tenth Circuit.

Filed August 29, 2016

Christopher Benson, Austin, Texas (William W. Cochran, Cochran Freund & Young, Fort Collins, Colorado, with him on the briefs), for Plaintiff–Appellant.

Jack D. Robinson, Spies, Powers & Robinson, P.C., Denver, Colorado, for Defendant–Appellee.

Before HARTZ, EBEL, and MORITZ, Circuit Judges.

HARTZ, Circuit Judge.

Plaintiff Forney Industries, Inc. (Forney) manufactures and sells a variety of products. Its largest product line is retail metalworking parts and accessories. The issue in this case is whether the use of colors in its packaging of that product line is a protected mark under § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a).

Forney's packaging has, since at least 1989, used some combination of red, yellow, black, and white coloration. It describes the mark it seeks to protect as follows:

The Forney Color Mark is a combination and arrangement of colors defined by a red into yellow background with a black banner/header that includes white letters. More specifically, the Forney Color Mark includes red and yellow as the dominate [sic] background colors. Red typically starts at the bottom of the packaging, continues up the packaging and may form borders. Red may also be used in accents including but not limited to lettering. Yellow typically begins higher than the red and continues up the packaging. Yellow may also provide borders and be used in accents including but not limited to lettering. A black banner is positioned toward the top of the package label or backer card. Black may also be used in accents including but not limited to lettering. White is used in lettering and accents.

It has also provided five pictures of its packaging over the years, reproduced below with Forney's caption for each:

Aplt. Br. at 7–8.

Forney alleges that Defendant Daco of Missouri, Inc., which does business as KDAR Co. (KDAR), infringed on its protected mark by packaging KDAR's “Hot Max” products with similar colors and a flame motif. Forney offered examples of KDAR packaging compared to that of the competing Forney product, some of which are reproduced below:

Aplee. App. Vol. I at 21, 23.

The district court granted summary judgment to KDAR and we affirm. Forney's use of color, which was not associated with any particular shape, pattern, or design, was not adequately defined to be inherently distinctive, and Forney failed to produce sufficient evidence that its use of color in its line of products had acquired secondary meaning (that is, that the relevant public understood those colors to identify Forney as the source).

I. Legal Background

Passed in 1946 in an effort to prevent unfair competition in interstate commerce, the Lanham Act contains “an unusual, and extraordinarily helpful, detailed statement of the statute's purposes.” Lexmark Int'l, Inc. v. Static Control Components, Inc. , ––– U.S. ––––, 134 S.Ct. 1377, 1389, 188 L.Ed.2d 392 (2014) (internal quotation marks omitted). That statement says:

The intent of this chapter is to regulate commerce within the control of Congress by making actionable the deceptive and misleading use of marks in such commerce; to protect registered marks used in such commerce from interference by State, or territorial legislation; to protect persons engaged in such commerce against unfair competition; to prevent fraud and deception in such commerce by the use of reproductions, copies, counterfeits, or colorable imitations of registered marks; and to provide rights and remedies stipulated by treaties and conventions respecting trademarks, trade names, and unfair competition entered into between the United States and foreign nations.

15 U.S.C. § 1127.

The Act's protection “embrace[s] not just word marks, such as ‘Nike,’ and symbol marks, such as Nike's ‘swoosh’ symbol, but also ‘trade dress,’ ” Wal–Mart Stores, Inc. v. Samara Bros. , 529 U.S. 205, 209, 120 S.Ct. 1339, 146 L.Ed.2d 182 (2000). We have defined trade dress as “an object's total image and overall appearance, [which] may include features such as size, shape, color or color combinations, texture, graphics, or even particular sales techniques.”¹ Savant Homes, Inc. v. Collins , 809 F.3d 1133, 1146 (10th Cir. 2016) (internal quotation marks omitted).

The Lanham Act provides trademark protection under two separate sections. First, under § 2 of the Act, 15 U.S.C. § 1052, a party can seek protection of its trademark by registering it with the United States Patent and Trademark Office. See Wal–Mart Stores , 529 U.S. at 209, 120 S.Ct. 1339. This “entitles the owner to a presumption that its mark is valid.” Id . “But the failure to register a [mark] does not preclude its protectability.” Savant Homes , 809 F.3d at 1147. Unregistered marks are protected from infringement under § 43(a) of the Act, 15 U.S.C. § 1125. See Savant Homes , 809 F.3d at 1147.

To make out a claim under § 43(a) for an unregistered mark, the plaintiff must prove: (1) “[the] identifying mark ... is inherently distinctive or ... has acquired distinctiveness through secondary meaning,” (2) the mark is nonfunctional, and (3) the competitor's alleged violation of the plaintiff's rights in its mark is likely to cause consumer confusion. Two Pesos, Inc. v. Taco Cabana, Inc. , 505 U.S. 763, 769, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992) ; see Savant Homes , 809 F.3d at 1147 (“To obtain relief under § 43(a), a plaintiff must show: (1) The trade dress is inherently distinctive or has become distinctive through secondary meaning; (2) There is a likelihood of confusion among consumers as to the source of the competing products; and (3) The trade dress is nonfunctional.” (internal quotation marks omitted)). As here, proving the first element is often the greatest hurdle. A mark is “inherently distinctive if its intrinsic nature serves to identify a particular source. Such [marks] almost automatically tell a customer that they refer to a brand and immediately signal a brand or a product source.” Sally Beauty Co. v. Beautyco, Inc. , 304 F.3d 964, 977 (10th Cir. 2002) (citations and internal quotation marks omitted). If the mark is not inherently distinctive, it can gain protection only once “it has developed secondary meaning, which occurs when, in the minds of the public, the primary significance of a mark is to identify the source of the product rather than the product itself.” Wal–Mart Stores, 529 U.S. at 211, 120 S.Ct. 1339 (brackets and internal quotation marks omitted).

The law relating to whether a trademark is inherently distinctive is more developed for word marks than it is for trade dress. Courts have generally adopted the framework laid out in Abercrombie & Fitch Co. v. Hunting World, Inc. , 537 F.2d 4 (2d Cir. 1976), which separates word marks into five categories to assist in determining whether a mark is inherently distinctive: (1) fanciful, (2) arbitrary, (3) suggestive, (4) descriptive, or (5) generic. See id. at 9–11 & n.12. For instance, “Kodak” is an example of a “fanciful” mark because it was “invented solely for [its] use as [a] trademark[ ].” Id. at 11 n.12 ; see Wal–Mart Stores , 529 U.S. at 210, 120 S.Ct. 1339. “Camel” cigarettes is an example of an “arbitrary” mark since it is a “common word ... applied in an unfamiliar way.” Abercrombie & Fitch Co. , 537 F.2d at 11 n.12 ; see Wal–Mart Stores , 529 U.S. at 210, 120 S.Ct. 1339. And “Tide” laundry detergent might be said to be “suggestive,” because even though it relates to the type of product at issue, “it requires imagination, thought and perception to reach a conclusion as to the nature of goods.” Abercrombie & Fitch Co. , 537 F.2d at 11 (internal quotation marks omitted); see Wal–Mart Stores , 529 U.S. at 210, 120 S.Ct. 1339. These three types of mark, “because their intrinsic nature serves to identify a particular source of a product, are deemed inherently distinctive and are entitled to protection.” Two Pesos , 505 U.S. at 768, 112 S.Ct. 2753. In contrast, “descriptive” marks—those that “forthwith convey[ ] an immediate idea of the ingredients, qualities or characteristics of the goods,” Abercrombie & Fitch Co. , 537 F.2d at 11 (internal quotation marks omitted); see Wal–Mart Stores , 529 U.S. at 213, 120 S.Ct. 1339 (giving “Tasty” bread and “Georgia” peaches as examples)—are not inherently distinctive, and therefore require proof of secondary meaning to be protected. See Two Pesos , 505 U.S. at 769, 112 S.Ct. 2753. Finally, words like “spoon” when used in connection with a spoon or “bowl” when used in connection with a bowl are “generic,” because they “refer ... to the genus of which the particular product is a species.” Abercrombie & Fitch Co. , 537 F.2d at 9 ; see id. at 10 n.11. Generic marks are not protectable under the Lanham Act. See Two Pesos , 505 U.S. at 768, 112 S.Ct. 2753.

Whether a product's trade dress is inherently distinctive is not as straightforward. At one time the courts of appeals split on whether trade dress could ever be inherently distinctive. See Two Pesos , 505 U.S. at 767, 112 S.Ct. 2753. That split was resolved in Two Pesos, where the Supreme Court held that a product's trade dress, like other forms of trademark, could be protected under the Lanham Act by showing that it was inherently distinctive. See id. at 773–74, 112 S.Ct. 2753. But courts have struggled to come up with a test. See generally 1 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 8:13 (4th ed.) (McCarthy). Some have appropriated the Abercrombie framework, see id. and this court gives it careful consideration.² But because that framework was designed for word marks, it is not surprising that it can be difficult to translate in the trade-dress context. See Miller's Ale House, Inc. v. Boynton Carolina Ale House, LLC , 702 F.3d 1312,...