Monday, December 03, 2012

Pistachio bins as protectable marks

Paramount Farms Intern. LLC v. Keenan Farms Inc., 2012 WL 5974169 (C.D. Cal.)

“This trade dress infringement action concerns the appearance of bins used to hold pistachios in grocery stores.”  Paramount sued Keenan under §43(a) and coordinate state law, and also brought a federal dilution claim.  Keenan argued that the claimed dress was functional, lacked secondary meaning, and was unlikely to be confused with Keenan’s competing bins.  The court initially announced it was granting Keenan’s motion for summary judgment in toto, but in the written opinion it only killed the dilution claim and preserved the infringement claims.

Paramount claimed the following elements of its in-store bins as protectable, though unregistered, trade dress, with a first use in 2007:

(1) the prominent use of a unique bright green color; (2) the thin, sans serif font for the word "pistachios" which is displayed in all capital letters; (3) the vertical orientation of the word "pistachios," which is written from bottom to top; (4) use of the color black, as trim or otherwise, drawing contrast to the unique bright green color; and (5) images of pistachios.

Kennan began using new bins in 2011.  These are the parties’ bins.


Kennan initially argued that the claim failed because Paramount’s product line didn’t have a “consistent overall look.”  But Paramount was only seeking protection for the pistachio bins, which could have a protectable trade dress.  This was true even if not every bin or ad Paramount produced had the five elements of the claimed trade dress.  (There’s a bit of a wiggle here: as we’ll see below, the claimed secondary meaning for the bins comes from the presence of some of these elements in ads.)

Keenan didn’t argue utilitarian functionality, but rather the general “non-reputational disadvantage”/aesthetic kind of functionality, since competitors need to use bright green against a dark background and images of pistachios.  But the functionality of individual elements isn’t dispositive, and Keenan didn’t show that the combination here, including the sans serif, thin font, and vertical orientation of “pistachios” as well as the color and images, was functional.  Thus Keenan failed in its burden on summary judgment.  (Since there’s no registration, isn’t the burden on plaintiff to show nonfunctionality?  Wouldn’t it have to come forward with some evidence of nonfunctionality, such as the possibility of noninfringing bins that used the functional elements like pictures of pistachios and the use of green?  Especially since it’s apparently suing Walgreens over different pistachio bins, this would seem to be important.)

Keenan also argued that the bins weren’t inherently distinctive since all the claimed elements were in use before by pistachio competitors, but the court found an issue of fact on whether the overall combination was fanciful and therefore distinctive. “In the Court's view, the stark contrast between two colors-black and bright green, the use of capitalized, thin, sans serif print, and the vertical printing of ‘pistachios,’ together create an overall impression of modern simplicity. By contrast, none of the competitor's pistachio bins combined these same elements to create a comparable impression. For example, the other brands predominantly used other color combinations such as green and blue, green and yellow, or red and green.”  Thus, this was more than a mere refinement of existing trade dress.

There was also a triable issue on secondary meaning given the circumstantial evidence.  Evidence of deliberate copying could also support an inference of secondary meaning, though competitors may copy product features for a variety of reasons, including a belief in their functionality.  Paramount showed evidence of extensive sales and advertising, including TV ads that “contain elements to educate viewers” about the trade dress. At the end of each ad, Paramount’s pistachio package emerges from a pistachio shell, in an image identical to that found on its bin.  Paramount has used similar ads and coupons. 

And there was circumstantial evidence of intentional copying.  Before 2007, none of Keenan’s bins “remotely” resembled the allegedly infringing bin—in 2004, its bin was dark green and red, with “Snack Zone” in military font.  A 2005 bin used “pistachios” printed vertically, the words were in thick serif and the rest of the bin was dark green and yellow.  The 2008 and 2009 bins were predominantly green and yellow and again used a thick serif font.  In 2011, though, Keenan used a monochrome bright green background with "pistachios" in thin, sans serif font, scrolling from the bottom up.  This clear similarity supported an inference of deliberate copying, especially because there was only one other pistachio producer who uses in-store display bins.  (This would seem to interact with functionality: if the use of in-store display bins is a useful sales technique, then the form is functional.  However, that may also create an obligation on other users of that technique to stay further away from the other, nonfunctional elements of Paramount’s trade dress.)  “Given that Defendant had many options to choose from, the fact that it selected a trade dresses so similar to Plaintiff's lends weight to the inference that it deliberately copied.”

As for likely confusion, the court also found a triable issue.  The bins were similar in color; the use of “pistachios” in thin, all-capitalized, sans serif font, scrolling from bottom to top; and images of outsize pistachios, creating a striking similarity.  In context, in some Wal-Mart stores, the bins are immediately adjacent to each other, magnifying the similarity.  (In other circumstances, the opportunity for side-by-side comparison makes confusion less likely; most stores sell the generic cola next to the Coca-Cola, but that tends to make it easier to tell the two apart despite the similar color schemes.)  There were also differences between the bins, including the Keenan logo at the top of the bin, different pistachio shapes, and dark green versus black trim.  “The impact of these differences, however, is substantially reduced in light of Plaintiff's evidence that the top of Defendant's bin is often cut off by grocery stores, so that the Keenan Farm's logo, as well as the complementary dark green, is entirely absent.”  This factor weighed “decisively” in favor of likely confusion, by which the court meant Keenan had to lose its summary judgment motion.

Mark strength also weighed in Paramount’s favor because of the evidence that the mark was either inherently distinctive or had seconary meaning. (This simply can’t be true as stated; protectable doesn’t mean strong, or else strength would always favor the plaintiff who had a minimally valid mark.)

There was no evidence of actual confusion, but that wasn’t necessary, especially because the use was so new.  Proximity of the goods and marketing channels favored confusion.  The court also rejected Keenan’s argument that pistachio consumers are generally college educated and that pistachios are expensive as nuts go.  “College graduates may be just as prone to exercise less care when buying something as inexpensive as a bag of nuts. Moreover, even if pistachios are expensive as far as nuts go, that does not change the fact that nuts are a relatively low cost commodity.”  In addition, only one other company uses in-store display bins for its pistachios, so one might reasonably infer that consumers aren’t accustomed to discriminating between pistachio bins, and thus less likely to exercise care once they spot a bin they associate with a particular producer (again see the interaction with functionality).

The court also reiterated its conclusions about the possibility of finding intentional copying.  “It is difficult to imagine why Defendant would suddenly change its bins to look less like its own packaging, and more like the bin and packaging of its competitor. The reasonable inference is that Defendant was intentionally copying Plaintiff's trade dress to take advantage of its reputation among consumers.”

In balancing the factors, the court took note of the fact that the actual packaging of Keenan pistachios was “readily distinguishable” from Paramount’s.  The use of different names or distinctive logos can reduce the likelihood of confusion, and that principle applied with greater force here, “since the packages are distinguished not only by the presence of each party's name or logo, but also by unique package designs.”  There was still a triable issue of fact, though—the question was properly left to the jury.  A reasonable consumer could conclude that Paramount was endorsing Keenan’s pistachios, or even that Paramount actually owned Keenan and was marketing them as a different product line.  (Ordinarily we don’t expect side-by-side competitors, distinctively packaged—by concession—to come from the same source; there’s a case about this.)  Given the evidence of secondary meaning, it’s reasonable to infer that a consumer who sees a bin that strongly resembles Paramount’s bin would associate the pistachios in the bin with Paramount.  This is especially true given the lower level of care exercised with respect to relatively inexpensive items and given that few competitors use bins to display pistachios.  “A reasonable consumer who is unaccustomed to discriminating among several bins is more likely to rely on heuristics at the point of sale.”  And the evidence of intentional copying was also relevant: a jury could find an intent to mislead.

Turning to dilution, the court preposterously found a triable issue on federal fame, even though the evidence doesn’t come close to showing that the claimed mark was “widely known among the general consuming public” just because Paramount spent a lot of money on advertising elements of this unregistered mark and made a lot of pistachio sales.  The court seemed particularly impressed that the brand has a Facebook page with almost 300,000 likes.  However, Paramount offered no argument for why Keenan’s use would cause blurring—why consumers who saw the Keenan trade dress and then subsequently saw the Paramount trade dress would think of both parties, or of Keenan alone.  So summary judgment was granted on dilution.

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