Trade Dress – Does it Have to Have Secondary Meaning?

Posted by on Sep 17, 2013

In a previous post we’ve touched on the idea of trade dress – the packaging of a product, and its “look and feel.”  The configuration of the product itself, such as the shape of a bottle, may also be considered trade dress.  Trade dress is protectable under the Lanham Act as something of value that may indicate the source or origin of a product.  Previously we mentioned two additional requirements: the trade dress cannot be functional, and it must be distinctive.  For example the color and shape of a bottle of Tide detergent is distinctive, but only because the packaging has acquired secondary meaning.  Today we ask the question whether a trade dress may be “inherently distinctive” – that is, protectable without having acquired secondary meaning.

We turn to the Supreme Court case of Two Pesos v. Taco Cabana.  The case involved the trade dress of a Mexican restaurant and alleged infringement by a competitor.

Background of the Case

Plaintiff Taco Cabana was a chain of fast-food Tex-Mex restaurants originating in San Antonio, Texas and eventually spreading to other areas of Texas.  The trade dress was described as “a festive eating atmosphere…decorated with artifacts, bright colors, paintings, and murals…the stepped exterior of the building is a festive and vivid color scheme using top border paint and neon stripes.  Bright awnings and umbrellas continue the theme.”

Circa 1985 a restaurant called Two Pesos came into being.  The court characterized the motif as ‘very similar’ to the trade dress of Taco Cabana.  Taco Cabana, of course, sued Two Pesos.  The jury found that Taco Cabana had a trade dress in its restaurant, the trade dress was not functional, the trade dress was inherently distinctive, and that the trade dress had not acquired a secondary meaning in Texas.  The jury also found that the alleged infringement created a likelihood of confusion for ordinary customers. (Recall this last finding is crucial to Lanham Act cases).  Both the district court and the court of appeals ruled that Two Pesos had violated Taco Cabana’s inherently distinctive trade dress.  Two Pesos appealed to the Supreme Court, arguing that secondary meaning was required for the trade dress to be protectable.

Analysis

Two Pesos cited several circuit court decisions that, prior to this case, had required secondary meaning, even in cases involving inherently distinctive trade dress.  In fact, the Supreme Court characterized Two Pesos’ argument as: a finding of no secondary meaning contradicts a finding of inherent distinctiveness.

The Court looked to the Lanham Act and its overarching aim of distinguishing goods based upon their source.  It cited the case of descriptive trademarks as an example: even though this type of mark requires secondary meaning, there are other (stronger) types of mark that adequately distinguish their products and are protectable without any showing of secondary meaning.

There was no basis, according to the Court, in the text of the Lanham Act for supporting Two Pesos’ argument.  The Lanham Act mentions secondary meaning only in the context of merely descriptive trademarks – the law does not mention secondary meaning in the context of distinctive trade dress.  The Court also declined to craft a rule that the defendant proposed, saying it would simply make it more difficult for parties to maintain their competitive position.   It was particularly concerned with small, start-up companies, saying it would be hard for them to protect their property, especially in situations where they started small in a limited market and then sought to expand.  (Recall that secondary meaning is generally tough to acquire and requires a great deal of advertising or commercial success to create the association in the mind of the public).

For this reason, and others, the Supreme Court found that inherently distinctive trade dress without secondary meaning was protectable under the Lanham Act.