Yesterday, the Supreme Court significantly weakened trademark law in regards to "trade dress", the idea that companies can sue other producers for resembling the design of their product. While the case benefitting Wal-Mart's right to "knock-off" the design of other more expensive products has a bias towards market winners -- since designs that consumers automatically associate with a certain company still seem to get protection -- the decision is likely to prevent some of the more idiotic trademark lawsuits where companies with big bank acounts have tried to squash other people. The Etoys case comes to mind. ---
Tony Mauro American Lawyer Media March 23, 2000
In the second decision of the day, the Court -- also by a 9-0 vote -- offered a bright-line trademark law rule that will make it easier for discount retailers and private label manufacturers to copy popular designs.
In the case of Wal-Mart Stores v. Samara Brothers, the justices ruled that under trademark law, product design is like color and therefore cannot be protected unless it has acquired a "secondary meaning" that links it uniquely to the manufacturer.
The case before the Court involved children's clothing manufactured for Wal-Mart that replicated the design of clothes made by Samara.
"In the case of product design, as in the case of color, we think consumer predisposition to equate the feature with the source does not exist," Justice Antonin Scalia wrote.
Consumers, Scalia continued, "are aware of the reality that, almost invariably, even the most unusual of product designs -- such as a cocktail shaker shaped like a penguin -- is intended not to identify the source but to render the product itself more useful or more appealing."
The only exception would be where the design -- such as a Coke bottle -- has become identified with a single manufacturer.
The ruling is a significant development in trademark law, says Fordham University law Professor Hugh Hanson.
"No other court has ruled this way," said Hanson. "The Court is putting its thumb on the scale on the side of competition. It's a pro-competition, almost populist decision."
So-called knockoff manufacturers and retailers who might have been fearful of being sued before will probably be bolder in copying appealing designs because of the ruling, Hanson said.