Thursday, July 11, 2019

Imaginative makeup color names as descriptive fair use

Hard Candy, LLC v. Anastasia Beverly Hills, Inc., 921 F.3d 1343 (11th Cir. 2019)

Hard Candy sued Anastasia, a competitor in the cosmetics industry, for infringement based on one of Anastasia’s “Glow Kits,” flip-open makeup palettes containing four different shades of facial highlighter.  The Gleam Glow Kit included the words “hard candy” in capital letters on the back and inside of the package to designate a peach-pink shade of makeup. “Anastasia says that it chose this name because the product had a ‘shimmer’ that reminded the developer of candies that her grandmother gave her when she was young.” “Hard candy” appeared in marketing materials and social media posts, as well as on the product itself.
front and back of kit


Hard Candy sought “every remedy permitted by the Lanham Act besides actual damages -- that is, it asked for an injunction to prevent future infringement, an accounting and the disgorgement of profits that the defendant made from the allegedly infringing goods, and declaratory relief, along with fees and costs.” The district court denied it a jury trial, held a bench trial, and found no likely confusion/descriptive fair use, and the court of appeals affirmed.

There was no Seventh Amendment right to a jury trial.  Hard Candy argued that it should have gotten a jury because it was seeking to recover Anastasia’s profits as a “proxy” for the damages it suffered due to infringement. Doesn’t matter; disgorgement is still an equitable remedy and doesn’t entitle the claimant to a jury trial.

The standard of review of the confusion finding after a bench trial was for clear error.  Factors that favored Hard Candy: product similarity, trade channel/customer/advertising similarity, and strength of mark (arbitrary and therefore strong). Note that “Hard Candy” was arbitrary for cosmetics generally—or at least, could be used in arbitrary fashion.  Factors that favored Anastasia: dissimilarity of marks/uses and lack of evidence of actual confusion.  The court also found no intent to infringe.

Hard Candy argued that the district court erred by finding that the “similarity of mark” factor favored Anastasia, since the words were identical. But it’s the overall impression that matters, and “formally” identical use of the same letters wasn’t enough. The manner of use matters too.  In the Gleam Glow Kit, the words HARD CANDY” appeared only on the back and inside of the kit, “nam[ing] one shade of a product that is otherwise clearly and prominently featured as an Anastasia Beverly Hills mark.”  It was not clear error to weigh descriptive use, or lack of use as a mark, as favoring Anastasia.  [Despite what the Supreme Court said, this case highlights—no pun intended—that descriptive use just doesn’t work any more as a separate defense.  On the flip side, even if we’ve abandoned use as a mark as an independent limit on infringement, that doesn’t mean it’s not relevant to whether confusion is likely.]  Mark placement, size, and use to identify a specific part of the product are definitely relevant to a similarity analysis.

Finally also argued that the district court placed too much weight on the lack of a showing of actual confusion. But, “[i]f consumers have been exposed to two allegedly similar trademarks in the marketplace for an adequate period of time and no actual confusion is detected either by survey or in actual reported instances of confusion, that can be powerful indication that the junior trademark does not cause a meaningful likelihood of confusion.” Here, Anastasia sold almost 250,000 Gleam Glow Kits; the product was touted on social media accounts with millions of followers.  “In this case, there was enough opportunity for confusion to make the absence of any evidence significant. … [H]undreds of thousands of cosmetics consumers purchased the allegedly infringing kit, several times more likely saw it on store shelves or online, and still there is no evidence that anyone, anywhere, was ever confused about whether Anastasia or Hard Candy was responsible for the product.” At a minimum, there was no clear error in weighing this in favor of Anastasia.

Anyway, Anastasia established descriptive fair use. The court of appeals endorsed the view that “it is not necessary that a descriptive term depict the [product] itself, but only that the term refer to a characteristic of the [product].”  And here’s an interesting bit that the court of appeals doesn’t even seem to notice: the use of Hard Candy as the name of the cosmetics brand was arbitrary, but the use of “hard candy” as the name of a specific color was descriptive.  I think this is the right result (though I might’ve called the brand name suggestive), but this case is pretty good evidence that manner of use matters a lot to whether something seems “inherently” to be a trademark. See also Thomas R. Lee, Eric D. DeRosia & Glenn L. Christensen, An Empirical and Consumer Psychology Analysis of Trademark Distinctiveness, 41 ARIZ. ST. L.J. 1033 (2009). 

Hard Candy argued that Anastasia’s use wasn’t descriptive, and that the district court disregarded “the central requirement” of consumer perception of the use.  But the district court did consider how a hypothetical consumer would perceive the use, considering “the overall context; the lettering, the type, the style, the size, [and] the visual placement” of the words on the product.  Anastasia also introduced evidence that cosmetics companies regularly describe shades with words that are not literal color descriptions, like the other three shades in the kit named “Starburst,” “Mimosa,” and “Crushed Pearl.”  This common practice was relevant to reasonable consumers’ perceptions of the use, not just to Anastasia’s subjective intent.  And no evidence of actual consumer perception is required to use the defense.

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