In re Forney Indus., Inc.

• Decision Date: 08 April 2020
• Docket Number: 2019-1073
• Citation: 955 F.3d 940
• Parties: IN RE: FORNEY INDUSTRIES, INC., Appellant
• Court: U.S. Court of Appeals — Federal Circuit

955 F.3d 940

IN RE: FORNEY INDUSTRIES, INC., Appellant

2019-1073

United States Court of Appeals, Federal Circuit.

Decided: April 8, 2020

William W. Cochran, II, Cochran Freund & Young, LLC, Fort Collins, CO, argued for appellant. Also represented by James R. Young.

Mary Beth Walker, Office of the Solicitor, United States Patent and Trademark Office, Alexandria, VA, argued for appellee Andrei Iancu. Also represented by Thomas L. Casagrande, Christina J. Hieber, Thomas W. Krause, Joseph Matal.

Before Dyk, O’Malley, and Chen, Circuit Judges.

O’Malley, Circuit Judge.

Forney Industries, Inc. ("Forney") appeals from a decision of the Trademark Trial and Appeal Board ("the Board") which affirmed the trademark examining attorney’s refusal to register Forney’s proposed mark on grounds that the proposed mark is of a type that can never be inherently distinctive. In Re Forney Indus., Inc. , 2018 WL 4348337 (T.T.A.B. Sept. 10, 2018) (" Board Op. "). Because the Board erred by holding that: (1) a multi-color mark can never be inherently distinctive, and (2) product packaging marks that employ color cannot be inherently distinctive in the absence of a well-defined peripheral shape or border, we vacate and remand for further proceedings.

I. BACKGROUND

Forney sells accessories and tools for welding and machining in packaging that displays its proposed mark, shown below:

On May 1, 2014, Forney filed Trademark Application No. 86/269,096 for its proposed mark for packaging for various welding and machining goods based on use in commerce under Section 1(a) of the Lanham Act, 15 U.S.C. § 1051(a). Forney sought to register the mark without showing acquired distinctiveness. In its application, Forney identified its mark as a "color mark" and, as to the colors claimed, noted that "[t]he colors black, yellow and red is/are claimed as a feature of the mark." Joint Appendix ("J.A.") 23. Forney described its mark as follows: "[t]he mark consists of a solid black stripe at the top. Below the solid black stripe is the color yellow which fades into the color red. These colors are located on the packaging and or labels." Id.

In an Office Action dated September 16, 2014, the examining attorney refused registration under Sections 1, 2, and 45 of the Lanham Act because the mark "is not inherently distinctive." Id. at 39. The examining attorney noted that "[s]uch marks are registrable only on the Supplemental Register or on the Principal Register with sufficient proof of acquired distinctiveness." Id. The examining attorney requested, inter alia , a revised drawing depicting a single three-dimensional view of the goods or packaging showing those features that Forney claimed as its mark, and a revised color claim and mark description. Id. at 40–41. The Office Action also noted that the colors in Forney’s submitted drawing differ from those in the color claim and mark description, noting that Forney’s submitted drawing shows the color orange but the description omits reference to that color. Id. at 41.

In response, Forney revised the mark description as follows: "The mark consists of the colors red into yellow with a black banner located near the top as applied to packaging for the goods. The dotted lines merely depict placement of the mark on the packing backer card." J.A. 66. On May 14, 2015, the examining attorney again refused to register Forney’s proposed trademark, stating that the mark was not inherently distinctive, and should be registrable only on the Supplemental Register, or, on the Principal Register with sufficient proof of acquired distinctiveness. Id. at 75.

Forney appealed this decision to the Board, arguing that its proposed mark should be treated as product packaging claiming multiple colors. Board Op. at *2. According to Forney, its proposed mark is "product packaging trade dress that may be inherently distinctive and, therefore, registrable without proof of acquired distinctiveness." Id.

The Board affirmed the examining attorney’s refusal to register, treating the proposed mark as a color mark consisting of multiple colors applied to product packaging. Relying on the Supreme Court’s decisions in Two Pesos, Inc. v. Taco Cabana, Inc. , 505 U.S. 763, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992), Qualitex Co. v. Jacobson Prod. Co. , 514 U.S. 159, 115 S.Ct. 1300, 131 L.Ed.2d 248 (1995), and Wal-Mart Stores, Inc. v. Samara Bros. , 529 U.S. 205, 120 S.Ct. 1339, 146 L.Ed.2d 182 (2000), the Board found that, when assessing marks consisting of color, there is no distinction between colors applied to products and colors applied to product packaging. Board Op. at *3. The Board acknowledged that, under Two Pesos , trade dress can be inherently distinctive, although the decision "is silent" on how to determine inherent distinctiveness of trade dress. Id. at *4. Further, the Board acknowledged that, under Qualitex , color applied to a product may serve as a trademark upon a showing of acquired distinctiveness. Id. According to the Board, Wal-Mart "clarifies that, while certain types of product packaging may be inherently distinctive source indicators, a color mark, that is a mark consisting of color—whether applied to a product or its packaging—is not among them." Id. at *5. The Board concluded that " Wal-Mart and Qualitex together make clear that ‘a particular color on a product or its packaging’ ... can never be inherently distinctive and may only be registered on a showing of acquired distinctiveness." Id. (citing Wal-Mart , 529 U.S. at 212, 120 S.Ct. 1339 ).

Turning to Forney’s mark, the Board found "no legal distinction between a mark consisting of a single color and one, such as [Forney’s], consisting of multiple colors without additional elements, e.g., shapes or designs." Id. at *6. According to the Board, Forney had not "attempted to combine its color mark with a uniform shape, pattern, or other distinctive design." Id. Contradicting its earlier finding that "a color mark consisting of multiple colors applied to product packaging is not capable of being inherently distinctive," the Board then held that a color mark consisting of color applied to product packaging cannot be inherently distinctive in the absence of an association with a well-defined peripheral shape or border. Id. at *3, *6 (citing Forney Indus., Inc. v. Daco of Missouri, Inc. , 835 F.3d 1238, 1250 (10th Cir. 2016) ). Apparently applying that standard, the Board found Forney’s mark not inherently distinctive. Id. Forney timely appealed. We have jurisdiction under 28 U.S.C. § 1295(a)(4)(B) and 15 U.S.C. § 1071(a)(1).

We address in turn both of the Board’s findings: (1) that a color mark can never be inherently distinctive in the trade dress context and (2) that, even if a color mark could be inherently distinctive, it cannot be absent a well-defined peripheral shape or border. Board Op . at *6.

II. DISCUSSION

We review the TTAB’s legal conclusions de novo and its findings of fact for substantial evidence. Real Foods Pty Ltd. v. Frito-Lay N. Am., Inc. , 906 F.3d 965, 971 (Fed. Cir. 2018). "The issue of inherent distinctiveness is a factual determination made by the [B]oard." Hoover Co. v. Royal Appliance Mfg. Co. , 238 F.3d 1357, 1359 (Fed. Cir. 2001). The correct standard to apply in determining inherent distinctiveness, however, is a legal question, which we review de novo. In re Chippendales USA, Inc. , 622 F.3d 1346, 1350 (Fed. Cir. 2010).

A.

A trademark 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 and to indicate the source of the goods[.]" 15 U.S.C. § 1127. Trade dress constitutes a "symbol" or "device" by which the goods of the applicant may be distinguished from the goods of others. Wal-Mart , 529 U.S. at 210–11, 120 S.Ct. 1339. Trade dress "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." Elmer v. ICC Fabricating, Inc. , 67 F.3d 1571, 1578 (Fed. Cir. 1995) (internal quotations and citation omitted). Trade dress is registrable as a trademark if it serves the same source-identifying function as a trademark. Marks are entitled to protection if they are inherently distinctive, i.e., "their intrinsic nature serves to identify a particular source of a product." Two Pesos , 505 U.S. at 768, 112 S.Ct. 2753. Thus, a product’s trade dress is protectable upon a showing of inherent distinctiveness. And if not inherently distinctive, marks may be protectable if they acquire distinctiveness, i.e., if they "become distinctive of the applicant’s goods in commerce." 15 U.S.C. § 1052(e), (f).¹

We find that the Board erred in two ways: (1) by concluding that a color-based trade dress mark can never be inherently distinctive without differentiating between product design and product packaging marks; and (2) by concluding (presumably in the alternative) that product packaging marks that employ color cannot be inherently distinctive in the absence of an association with a well-defined peripheral shape or border.

On the first point, the Board found, and the PTO contends, that Supreme Court case law, "make[s] clear that color, whether used on a product or its packaging, can never be inherently distinctive." Appellee’s Br. 11. We disagree. We do not believe that, to date, the Supreme Court has gone as far as the Board did here, where the mark is proposed for product packaging, as distinct from product design.

For the reasons explained below, we hold that color marks can be inherently distinctive when used on product packaging, depending upon the character of the color design. As the Supreme Court has made clear, inherent distinctiveness turns on whether consumers would be predisposed to "equate the [color] feature with the source." Wal-Mart , 529 U.S. at 211, 120 S.Ct. 1339. While it is true that "color is usually...