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Crossing the Line in Trademark Infringement

Sam Iverson

Richard Karkpatrick

Pillsbury Winthrop Shaw Pittman LLP

Most new brands are not for product innovations but rather for imitations, i.e., products intended to compete with—and capture market share from—existing successful sales leaders. American law encourages copying in the economic interests of lower prices, wider product availability, and, in theory, higher quality for consumers. An important caveat is that the copying not violate exclusive intellectual property rights. In the case of trademarks and distinctive packaging, for which there are exclusive rights, copiers may go up to a certain line, but cannot cross it. Because the test for infringement is vague and probabilistic—“likelihood of consumer confusion”—the competitor is never sure where the line is until a judge or jury draws it. The attempt is judged by the outcome. If the new brand falls short of the line and is judged non-infringing, it is hailed as brilliant marketing. If the new brand is over the line and is judged an infringement, industry observers shake their heads at the infringer’s foolhardiness.

Retailers with store brands have a recognized but limited exemption from the perplexity. They may imitate the general color scheme of name brand packaging and shelve the store brand package adjacent to it; the similar color indicates to consumers general product equivalency and invites them to “compare and save.” The limitations are that the store brand package must plainly display exactly that—the store brand (word mark)—and make no prominent use of the name brand word mark. (Nominative fair use of a small-sized notice, such as “Compare to Brand X,” all in ordinary font, is permitted.) Even this widely practiced sales technique has its limits. Sometimes the retailer exceeds the generous allowance and is found to infringe the name brand.

An example is found in a trademark infringement case brought by the owner of the SPLENDA mark and yellow packaging for sweetener.

Defendant produced the packaging for private label equivalents (1–4) for four different retail grocers. (Suing it relieved the Splenda owner from the awkwardness of suing major customers.) The trial court found trade dresses 3 and 4 to be confusing with Splenda under the similarity factor, but not 1 and 2. Ultimately, the court found no likelihood of confusion as to any based on the complete multi-factor infringement test. The Third Circuit Court of Appeals reversed as to 2 and 4, finding ultimate likelihood of confusion as to them even though the well-known store brands (Stop & Shop (2) and Giant (4)) were top center. Yet the Safeway box, with its less prominent store brand logo, bottom right (1), was found not likely to confuse. The Food Lion store brand was unquestionably prominent on box 3 and also was found not to be an infringement.

A major reason for the mixed outcome seems to have been the use of standard store packaging features: the vertical device of a darker color shade on the left side of the Food Lion box (3), and the “S” shape or wave on right side of the Safeway box (1). These features were used on many kinds of Food Lion and Safeway store brand products displayed throughout their respective aisles. Customers shopping those stores would be conditioned—by viewing such packaging storewide—to recognize the features as added signals differentiating the store brands from the name brand SPLENDA box. As much as any other trademark infringement case, this one shows how fine the line is between infringement and non-infringement. McNeil v. Heartland (2007).

Apart from “consumer conditioning” by repeated exposure to store brands, there is an additional trademark law theory to support the apparent judicial indulgence. A defendant’s mark does not infringe if it simply “calls to mind” the plaintiff’s mark. The Federal Circuit’s predecessor court held: “The fact that one mark may bring another mark to mind does not in itself establish likelihood of confusion. . . . The very fact of calling to mind may indicate that the mind is distinguishing, rather than being confused by, two marks.” For more cases, see Kirkpatrick, Likelihood of Confusion in Trademark Law (PLI Press 2021) 1:5.2.

The name brand/store brand package color exception, however limited, is unavailable to the accused in run-of-the-mill trademark infringement cases. Water Pik once wanted to compete in the over-the-counter sinus irrigator market, where leading brands were SinuCleanse and NeilMed. After unsuccessfully trying to acquire the SinuCleanse product line, Water Pik proceeded to imitate it. A marketing executive wrote in an email: “[L]et’s pursue both a ‘hybrid’ of the NeilMed/SinuCleanse designs . . ..” As for the latter, the mark chosen was “SinuSense.” An executive assistant to Water Pik’s CEO wrote in an email that she was “concerned that people may confuse [SinuSense] with SinuCleanse.” The owner of SinuCleanse implicitly agreed and sued Water Pik. The packages in issue are shown as follows:

The brand names both shared the Sinu- prefix and a one syllable suffix with a short “e” sound followed by the letter string “-nse.” Both boxes used flowing blue water imagery. Water Pik, however, used its famous house brand top center on its box front. Such pros and cons are factual in nature; the weighing and balancing is usually the province of a jury. The ultimate outcome of this case, however, was that the Tenth Circuit Court of Appeals agreed with the trial judge that, as a matter of law, there was no likelihood of consumer confusion and no need for a jury. Water Pik, Inc. v. Med-Systems (2013).

A different outcome appeared in 2020 in the field of automobile air fresheners. There, a market leader, known for its famous solid fragrance that dangles from innumerable car rearview mirrors (“Little Trees”), used the word mark BLACK ICE. Although defendant’s REFRESH product was doing comparatively well, defendant wanted a greater share of the market. According to internal emails that duly appeared in court, the CEO envisioned “a name like ‘Midnight Black’” and wrote, “If we really wanted to have some fun,” they “could also look at a dual [scent] with a Black Ice variant – along the lines of Midnight Black / Ice Storm.” Another employee suggested that they should “get as close to the Black Ice name as we can, without running into legal issues,” as “[w]e want the customers to immediately make the connection.” He did allow that “[w]e do want to avoid” a trademark infringement lawsuit, “obviously.”

The fun went sour, and the wish was vain; the contending products in suit appear as follows:

While the lower court found no infringement as a matter of law, the appeals court resoundingly differed. The court pointed to the REFRESH package pictures shown above. For one, the court separately magnified the phrase “Midnight Black™/Ice Storm™,” as shown. After reviewing defendant’s internal emails, the Second Circuit Court of Appeals, perhaps the most experienced in the United States with trademark infringement lawsuits, noted with asperity: “Rarely does an infringement case reveal such explicit evidence of bad faith.” The appeals court reversed and remanded the case to the lower court for trial. Car-Freshner Corporation v. American Covers.

The next two cases were similar to each other in that the trial courts found no infringement as a matter of law, but the appeals courts reversed and ordered the cases to proceed to trial.

In J-B Weld Company, LLC v. The Gorilla Glue Company (2020), J-B Weld, the manufacturer since 1969 of “J-B Weld” two-part epoxy adhesive, sued Gorilla Glue for trade dress infringement, alleging the latter’s GorillaWeld two-part epoxy adhesive packaging was an intentional copy of J-B Weld’s packaging. The blister pack hang cards were as follows:

Before trial, the lower court had found that the packages were so different that there was no infringement as a matter of law and dismissed the Complaint; the Gorilla Glue logo, brand name and color scheme outweighed the “architectural” similarities between the V-shaped tube arrangement; the use and emphasis of the word WELD; and the location of the product specification.

In sum, to the district court judge, the evidence of the packages themselves outweighed evidence that Gorilla Glue intended to copy J-B Weld. Crucial evidence once again came from the keyboards of the accused infringer’s designers. Gorilla Glue’s team repeatedly referenced J-B Weld’s packaging and expressed a desire to go “straight up against the top competitor” and to “create packaging that mimics the competitor’s architecture.” Gorilla Glue’s emails described three package design options, including one that was “[a]ligned” to the Gorilla brand; one that would “follow” the J-B Weld brand “closely”; and one that would “marry” the two designs. The GorillaWeld team also described packaging options as “[c]lose to JB Weld brand” and going “directly after [J-B Weld].” They described their target market as consumers who had used the J-B Weld product in the last six months. A Gorilla Glue employee had even called the GorillaWeld design a “knock off” of J-B Weld. The design outcome of the actual Gorilla Glue blister card, despite different logos and colors, was structurally similar to J-B Weld’s in the use of bars; angling of tubes; prominent display of the word WELD; and placement of product specifications.

The Eleventh Circuit appeals court concluded that J-B Weld had offered “substantial evidence that Gorilla Glue intended to ‘mirror,’ ‘copy,’ and ‘knock off’ J-B Weld Original’s trade dress, not simply to ‘construct a worthy competitor.’” The evidence demonstrated, the court held, that Gorilla Glue “intended to copy J-B Weld’s trade dress in order [to] ‘successfully mirror JB Weld at shelf.’” As such, the court found the evidence probative of a likelihood of confusion. Reasonable minds might draw different conclusions from the evidence. For that process to play out, the case was remanded for trial.

A final case that illustrates the difficulty of locating the line is Innovation Ventures, LLC, d/b/a Living Essentials v. N.V.E., Inc. (2012). Innovation Ventures (LE), creator of the “5-Hour Energy” drink, brought an action for trademark infringement against N.V.E. (NVE) for its “6 Hour Power” drink.

NVE’s disgruntled former Vice President testified that, during market research for their product, NVE focused on 5-Hour Energy as “really the only one that we took seriously” in the energy shot market, noting that LE’s sales “were blowing up” and that NVE “needed to get [in] on this game or [it was] going to get left behind.” With respect to choosing the name, he stated that he focused on having a drink that was better than one that lasted only five hours; “6 Hours” answered. In discussing potential trademark issues with LE, however, NVE’s President discussed ways to differentiate the products, such as using a different bottle color. The lower court found no infringement as a matter of law and dismissed the case.

The Sixth Circuit Court of Appeals disagreed, finding that “any discussion of ‘5-Hour Energy’ at this early juncture focused on [LE’s] large market share and the need to catch up, rather than intent to copy it.” The court further considered that evidence existed that NVE had independent reasons for choosing its mark. Aside from the former VP’s testimony, the only evidence LE submitted to show intentional copying by NVE was an email with a brochure for 5-Hour Energy attached. The email stated: “Weren’t we going to make a product like this for the c-stores [convenience stores] [?] I’ll find out how this product is doing.” The court noted, however, that the email simply reflected discussions to make a similar energy shot to compete with, rather than to copy, the market leader.

The appeals court concluded: “This factually intensive issue is a close call and could, on a fair comparison of the evidence to date, be decided either way.” Questions that are “factually intensive” are reserved for judge and/or jury at trial.

* * *

These cases from four different courts of appeal are very different in character, but a common denominator to many readers must be the unpredictability of the outcomes. What appear to be clear cases of infringement were deemed by judges to be open questions, and vice versa. Three cases involved relatively rare appellate court reversals of district court decisions. Some cases were counterintuitively considered obvious on their face while others required intensive factual study.

The Splenda appeals court found that the same package company produced, for no apparent reason, two infringements and two non-infringements, all for reputable grocers. The Second Circuit in Car Freshner was determined to find that defendant inexcusably stole the “Black Ice” mark despite defendant’s repeated efforts to create two visually different marks, “Midnight Black™” and “Ice Storm™,” each with the superscript “™,” further distinguished by different background colors or separation on different lines—all minor elements compared to the REFRESH house mark. One can see how the hapless defendant might have, step by step, persuaded itself that it was avoiding the infringement line, forgetting that “Black Ice” is a strong mark, inherently and commercially. While the court superlatively damned the defendant’s internal emails as unusually incriminating, how different is their overall purport from the emails discovered in the glue case and the energy drink case? Arguably the sum and substance were not to confuse, but to call to mind the competing brand. Besides, consumers are unaware of internal corporate memos; they see packages for competing products presented in close proximity on self-service retail store shelves with unlimited time for inspection.

The four cases presented above, ranging from the relatively recent (2012) to the very recent (2020), continue a very long train of cases over many decades in which defendants deliberately assumed the risk of trying to come as close as possible to a competing brand. District and appellate courts have found infringement in cases where:

  • defendant “meant to copy [plaintiff’s] trade dress, at least ‘as much as the law would allow’”;

  • defendant “admitted that one of the objectives it had when it launched its new [product] was to get as much a share as possible from [plaintiff’s] market share”;

  • “defendant admits that its [mark] was designed to capture the customer’s attention by drawing upon the market recognition of [plaintiff’s] well known . . . trademark”;

  • defendant “ran the risk of creating a likelihood of unreasonable confusion in the minds of the public which would have inured to his benefit and to the detriment of [plaintiff] and the public”;

  • “[defendant] knew of the distinct possibility that the wrapper design it chose infringed the [plaintiff’s] trade dress. But [defendant] never sought an opinion from legal counsel on that issue”;

  • defendant admitted that it intended its mark and dress to be “reminiscent” of plaintiff’s;

  • defendant “admitted that its name . . . was coined to remind consumers of [plaintiff’s mark].”

See, Kirkpatrick, Likelihood of Confusion in Trademark Law (PLI Press 2021) 8:4.2.

The takeaways are plain. First, a simple rule everybody both knows and violates: write emails and texts with discretion. Second, when creating brands and designing logos and packages, do not try to come as close as you can to not infringing; you cannot know that you have crossed the line until it is too late. Unpredictability is bad for business.

Sam Iverson is a Senior Associate in the San Francisco office of Pillsbury Winthrop Shaw Pittman LLP. Sam worked at Pillsbury as a trademark paralegal for 3 years and has been an IP attorney at the firm for the past 5 years.

Richard Kirkpatrick is a Retired Partner of Pillsbury. He practiced trademark law for 40 years. He is author of the PLI treatise, Likelihood of Confusion in Trademark Law (read now on PLUS), which has been continuously in print for over 25 years and includes semi-annual supplements.

Disclaimer: The viewpoints expressed by the authors are their own and do not necessarily reflect the opinions, viewpoints and official policies of Practising Law Institute.

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