A mark is a source-identifying symbol. Consumers rely on marks to distinguish one brand of a product from another.[SUP]4[/SUP] When a consumer sees CREST on a tube of toothpaste, for example, he can be confident that the particular toothpaste tube came from the same source as every other tube marked CREST. This works, however, only if the consumer can rely on CREST to designate a single source of toothpaste. Trademark law protects this source-identifying function by preventing others from using the same or similar symbol in a way likely to confuse consumers. This protection is justified as reducing consumer search costs, avoiding harm to consumers from purchasing the wrong product, supporting seller incentives to maintain product quality, and preventing injury to or misappropriation of a seller’s goodwill.[SUP]5[/SUP]
The search cost rationale treats the mark as a device for efficiently communicating product information to the marketplace (1 McCarthy 2014, § 3:5; Landes & Posner 2003, pp. 166–168). When a mark reliably indicates a single source, consumers can use it to retrieve information about product quality that they learn from advertising, word of mouth, and personal experience. For example, assuming uniform quality, a consumer who sees CREST on a tube of toothpaste can be confident that the toothpaste in the tube has the qualities she expects from CREST toothpaste. Without the mark, consumers would have to search for this information in other, presumably more costly, ways. Moreover, if searching is too costly, consumers might buy another company’s inferior product bearing the same mark thinking it came from the original seller. The result would be allocative inefficiency, and possibly even serious personal injury to consumers.
In addition, with trademark protection, a seller can use the mark to communicate the high quality of its product to consumers, and this gives the seller an incentive to maintain and even improve that quality.[SUP]6[/SUP] Without trademark protection, competitors could sell lower quality products (presumably manufactured at a lower cost) under the same mark for a lower price.[SUP]7[/SUP] Consumers would buy at the lower price believing, incorrectly, that the competitor’s product is the same high quality as the original seller’s. The original seller then would be forced to lower the quality of its product to match the competitor’s price and recapture its customers. The result would be a ratcheting down of product quality.[SUP]8[/SUP]
Finally, courts from time to time have justified protection on the ground that free riding on a firm’s goodwill or injuring that goodwill is unfair (Bone 2006). In this regard, trademark law focuses on protecting sellers as well as consumers.[SUP]9[/SUP] However, these seller-focused justifications are highly controversial, and it is not clear how much of a role they play separate from consumer-based rationales (Bone 2012, pp. 1355–1357).
Thus, trademark law is different from copyright and patent. The latter aim to incentivize the creation of intellectual products—original works of authorship in the case of copyright and inventions in the case of patent. The primary purpose of trademark law is to prevent others from using source-identifying symbols to confuse consumers about source or sponsorship. Even the trademark policy of facilitating product quality is not necessarily about incentivizing product improvements, but rather about preventing the erosion of incentives already created by other forms of IP protection. To be sure, insofar as trademark protection allows a seller to reap greater profits, it can have the indirect effect of stimulating innovation, but this is not its primary purpose.
Trademark doctrine tracks this policy framework. Any type of symbol or device can serve as a trademark as long as it is capable of functioning as a source identifier. This includes words such as CREST for toothpaste, short phrases such as “YOU’RE FIRED” for entertainment services, and logos such as the Nike swoosh. It also includes visible features of a product’s configuration or packaging—so-called “trade dress.” Trade dress has been defined as “the total image of a product and may include features such as size, shape, color or color combinations, texture, graphics, or even particular sales techniques.”[SUP]10[/SUP] Examples include the visible dual-spring design of a road sign, the interior décor of a restaurant, the contrasting red color on the outsoles of Louboutin shoes, the smell of scented sewing thread, the sound of the NBC chimes, and even Goats-on-a-Roof, live goats grazing on the sod roof of a Swedish restaurant.[SUP]11[/SUP] Each of these features can become a source identifier if consumers associate the feature with products sold by only one firm.
To make out a prima facie case for trademark infringement, the plaintiff must prove that it owns rights in a protectable mark and that the defendant’s use of a similar mark infringes those rights (American Law Institute 1995, § 20). For a mark to be protectable, it must be distinctive, and for a mark to be distinctive, it must be at least capable of serving as a source identifier (2 McCarthy 2014, § 11:1). The rules for determining distinctiveness are somewhat complicated and there is no need to parse the details. Briefly, some marks, classified as “inherently distinctive,” are protected as soon as they are used in trade, whereas others require proof that the mark has acquired what is called “secondary meaning” (2 ibid., § 11:4).[SUP]12[/SUP] A mark is said to have secondary meaning when a significant portion of the consuming public actually uses it to identify a unique source of the product (2 ibid., § 16:34). For example, a fabricated word such as KODAK, coined just to serve as a mark, is inherently distinctive and protected as soon as it is used in trade, whereas a descriptive term such as FISH-FRI adopted as a mark for a batter mix used to fry fish requires proof of secondary meaning; that is, proof that consumers actually associate FISH-FRI with a batter mix sold by only one firm (the mark owner).[SUP]13[/SUP] The rules for determining the distinctiveness of trade dress are even more complicated, and once again there is no need to delve into the details. Roughly speaking, trade dress that is part of the packaging of a product can sometimes be inherently distinctive, whereas trade dress that is a component of the product itself can never be inherently distinctive and thus always requires proof of secondary meaning.[SUP]14[/SUP]
Once a mark owner establishes distinctiveness and satisfies all the other requirements for a valid mark, it must then prove infringement. A mark is infringed when the defendant’s use of the same or similar mark is likely to confuse consumers about source or sponsorship.[SUP]15[/SUP] This infringement rule applies in the same way to trade dress as to any other type of mark. Thus, a defendant can be enjoined from selling a competing product with the same trade dress feature if its use of that feature is likely to confuse consumers.
Trade dress protection, however, gives rise to a special problem not present for other types of marks.[SUP]16[/SUP] Preventing firms from copying a product feature gives the original seller more than the exclusive use of a source identifier. It also gives it a potential monopoly over the feature itself. This is a particular concern when the feature is connected with something that consumers want when they buy the product, such as the shape of a wrench that improves its leverage. Trademark law is not supposed to confer monopolies in products; that is the province of copyright and patent (1 McCarthy 2014, § 6:3). Trademark law is supposed to bolster competition by facilitating the efficient communication of product information to the market and preventing unfair methods of competition.
Functionality is the trademark doctrine designed to handle this problem. When it applies, the functionality doctrine bars protection for useful or aesthetically pleasing trade dress even when the defendant’s use of the same trade dress is likely to confuse consumers. Much of the controversy over the scope of the doctrine has to do with what is required to bar protection beyond the fact that the feature serves some utilitarian or aesthetic purpose important to the product’s value.[SUP]17[/SUP] There are two different approaches historically. One approach assumes that nothing more is required, that all trade dress that contributes substantially to the performance of a product is barred. The other approach uses a more fact-sensitive competitive necessity test. This test bars protection only when copying the trade dress is a competitive necessity, in the sense that there are no, or very few, alternative forms of trade dress that are not confusingly similar and that competitors can use to compete effectively in the relevant product market. Courts disagree about the specifics of how each approach should operate and the types of trade dress to which each should apply—and why.
