Trade dress, as a subset of trademark law, can offer potentially perpetual protection to a product’s design or packaging features if they aid consumers in identifying a product’s source. Yet these protected design features might be valued by consumers not only because of their source identifying function, but also because consumers find the design or package features beautiful, independent of the goodwill generated by the producer. Thus, under the doctrine of aesthetic functionality, manufacturers who produce red-soled shoes or whiskey with a melted wax seal might gain what courts have called a “non-reputation-related” competitive advantage, ultimately warranting the expropriation of the protected product feature into the public domain.
This Article argues that courts, in assessing questions of aesthetic functionality, should give particular weight to surveys asking consumers whether they would be better off if competitors were allowed to use a protected trade dress feature in their own products. Just as, under the doctrine of genericide, consumers are able to expropriate word marks if consumers find it more beneficial to associate the language feature of the trademark with competitors’ products, consumers should also be able to expropriate trade dress rights of a particular manufacturer if they find it more beneficial to have these design and packaging features available to the manufacturer’s competitors. Creating a genericide analog for cancelation of trade dress can further trademark’s central goal of protecting consumer welfare.
This Article reports “proof of concept” results of our proposed consumer surveys with regard to seven different forms of existing trade dress—including not only Louboutin’s red-soled shoes and Maker’s Mark’s red-drip wax seal, but also Gucci’s famous “diamond motif” and Emeco’s Navy chair. We implement our surveys as a between-subject randomized experiment that allows us to causally estimate the intensity of consumer preferences as well as the impact of “guiding” subjects on the likely consequences of forgoing trade dress protection. Our results, while at best suggestive, found that judicial assessments of functionality were often not predictive of consumer protection preferences. For example, a statistically significant majority indicated they would be better off if other manufacturers were allowed to produce Emeco’s Navy chair design, notwithstanding a contrary judicial holding. We also found that large consumer majorities chose to protect two iconic Veblen goods: the Louboutin shoe and the Gucci Diamond Motif, even when informed that such protection would likely lead to higher prices—indicating a desire to preserve trade dress’ power to sustain social distinction.
Design—which encompasses everything from shape, color, and packaging to user interface, consumer experience, and brand aura—is the currency of modern consumer culture and increasingly the subject of intellectual property claims. But the law of design is confused and confusing, splintered among various doctrines in copyright, trademark, and patent law. Indeed, while nearly every area of IP law protects design, the law has taken a siloed approach, with separate disciplines developing ad hoc rules and exceptions. To address this lack of coherence, this Article provides the first comprehensive assessment of the regulation of consumers’ aesthetic experiences in copyright, trademark, and patent law—what we call “the law of look and feel.” We canvas the diverse ways that parties have utilized (and stretched) intellectual property law to protect design in a broad range of products and services, from Pac-Man to Louboutin shoes to the iPhone. In so doing, we identify existing doctrines and principles that inform a normatively desirable law of look and feel that courts and Congress should extend throughout IP law’s protection of design. We argue that design law should protect elements of look and feel but remain sensitive to eliminating or mitigating exclusive rights in response to evolving standardization, consumer expectations, and context. Notably, our normative conception of design protection sometimes departs quite starkly from how courts have expansively conceptualized look and feel as protectable subject matter. Going further, we argue that the new enclosure movement of design, if not comprehensively reformed and grounded in theory, can erode innovation, competition, and culture itself.
Your client, CreativeSoft, produces CreativeDesign, a computer program that creates cards and brochures. In the 1990s, CreativeSoft sold the program on CD-ROMs. To keep up with the market, CreativeSoft now sells CreativeDesign2.0 only as a downloadable file from its website. CreativeSoft has come to your firm because MockSoft is selling CreativeDesign2.0 as its own product.
This reminds you of the Lanham Act § 43(a)(1)(A) “reverse passing off” (“RPO”) claim you brought against MockSoft when it sold CreativeDesign CD-ROMs packaged in MockDesign boxes. Now, MockSoft copies CreativeDesign2.0, removes copyright notices from the splash screens, and resells the program from its website. Further, MockSoft confuses customers by creating the impression that MockSoft is the origin of the program.
Should you file a RPO claim? You prevailed on this claim when MockSoft repackaged CreativeDesign CD-ROMs. However, a RPO claim may not survive the pleading stage of litigation if CreativeDesign alleges that MockSoft has repackaged CreativeDesign2.0. There is a risk of copyright preemption, and many district courts interpret a Supreme Court case, Dastar Corp. v. Twentieth Century Fox Film Corp., as precluding producers of digital products from bringing claims under § 43(a) of the Lanham Act. Why?
As demonstrated by the recent Second Circuit decision in Christian Louboutin v. Yves Saint Laurent America Holding, Inc., a shoe can certainly offer a great deal of legal controversy. In September 2012, the Second Circuit upheld the validity of designer Christian Louboutin’s trademark for the color red on the soles of his shoes. Although Christian Louboutin and the fashion media have called the case a victory for color trademarks, Louboutin’s affirmation of the “aesthetic functionality” doctrine will likely make defending color trademarks harder in the future. Further, a survey of color trademark registration activity and case law reveals that the Louboutin decision is an outlier, and the overwhelming tendency of courts is to weaken color marks in infringement lawsuits. Therefore, color mark applicants and current color trademark holders face steep obstacles in registering and protecting their color marks, and this battle will likely become more challenging in the near future.
Imagine you are the CEO of a new company in Silicon Valley, California. The company recently developed a revolutionary laptop screen that is not only entirely scratch resistant, but also allows for 3-D viewing. The company just entered into a contract with Orange Computer to be the sole manufacturer of Orange’s newly advertised “Made in Silicon Valley” computer. Located among the terms of the contract is a license, which allows the company to use Orange’s applicable patent and trademarks. As a result, the company heavily invests in its new enterprise and begins to profit. A few months later, however, Orange recognizes massive losses since it did not account for higher business costs in Silicon Valley. This forces Orange to file for bankruptcy and reject the license, leaving your company unable to manufacture its product without infringing on Orange’s trademarks. This risks your company’s vitality and ultimate existence.
The scenario above illustrates an example of a modern business practice-trademark licensing-and its tension with bankruptcy law. In today’s “[n]ew [w]orld,” intellectual property (“IP”) is an extremely important economic asset for many companies. An owner of IP has the ability to either (1) prevent others from using it or (2) authorize its use to a third party through licensing. The latter practice of licensing has grown significantly in the global economy, as it is a substantial source of revenue for many companies. Additionally, using IP to secure lending from a bank has become popular. Nevertheless, the value of IP licenses is limited due to risks created by economic hardships, with trademark licenses particularly vulnerable in cases of bankruptcy. In fact, since 1988, out of 1100 bankruptcy filings concerning IP, over 600 involve trademarks.
When the Internet allows Mexican consumers to buy infringing U.S. sneakers made in Korea, which nation’s trademark laws should apply?