IP Law Daily, TRADEMARK—5th Cir.: District court erred in analysis of trade dress protectability, Copyright Act standing, (Jul 14, 2022)

By George Basharis, J.D.

The district court misapplied the factors established by the Fifth Circuit to evaluate the protectability of unregistered trade dress.

The U.S. Court of Appeals in New Orleans reversed and remanded a decision by a district court holding that the maker of unique tableware did not have standing under the Copyright Act and failed to establish that it had protectible rights in unregistered trade dress. The company sued a competitor claiming the competitor’s products copied the look and feel of its unique tableware. The district court dismissed the company’s copyright claims for lack of standing and found the company did not satisfy its burden of establishing that its unregistered trade dress acquired a secondary meaning. However, the company had standing through the Copyright Act’s safe harbor provision for innocent registration errors. Moreover, the Fifth Circuit found the lower court’s analysis of secondary meaning was flawed, requiring a reconsideration of the evidence and overall re-weighing of the circuit’s trade dress factors (Beatriz Ball, LLC v. Barbagallo Company, LLC, July 12, 2022, per curiam).

Beatriz Ball is the maker of handmade, metallic tableware. One of the company’s most popular collections is its Organic Pear line. The defining characteristic of the Organic Pearl line is a pearl border that is unique to each piece of tableware in the collection. Beatriz Ball has four registered copyrights protecting in its Organic Pearl designs. The company also has an unregistered trade dress for the “look and feel” of the Organic Pearl collection.

In 2016, Barbagallo Company, which does business as Pampa Bay, began to market and distribute products that looked nearly identical to many of the pieces in the Organic Pearl collection. Beatriz Ball sued Pampa Bay claiming the company’s products were copies of the Organic Pearl designs and infringed on Beatriz Ball’s registered copyrights and its unregistered trade dress.

The district court dismissed Beatriz Ball’s copyright infringement and unfair competition claims under the Lanham Act, finding the company lacked standing to bring the claims because the company’s copyrights listed Beatriz Ball Collection as the claimant rather than Beatriz Ball. Beatriz Ball Collection assigned ownership of the copyrights to Beatriz Ball the day before the lawsuit was filed but the trial court found that assignment did not specifically transfer Beatriz Ball Collection’s right to sue for prior infringements. Moreover, the court ruled against Beatriz Ball on its trade dress infringement claim. After careful analysis, the trial court found that Beatriz Ball had not met its burden of establishing that the company’s unregistered trade dress had acquired a secondary meaning, a prerequisite for protection of an unregistered trade dress under the Lanham Act.

Copyright Act standing. On appeal, Beatriz Ball argued that Beatriz Ball and Beatriz Ball Collection were the same entity and that the assignment was executed before the lawsuit was filed out of an “abundance of caution.” The Fifth Circuit found that the assignment was not necessary and that Beatriz Ball had standing through the Copyright Act’s safe harbor for innocent errors on copyright registrations. The court noted that the Copyright Act provides that a registration with inaccurate information can support an infringement action as long as the misstatement was unknowing. The court explained that the mistakes on Beatrice Ball’s copyright registrations were “quintessential” examples of the unknowing errors the Act’s safe harbor was meant to excuse. They were made by “nonlawyer employees” who were unfamiliar with the registration process and mistakenly listed the company’s trade name instead of its proper corporate designation on the copyright applications. The court concluded that the identity error was the precise situation the safe harbor was intended to address.

Trade dress. Beatriz Ball also challenged the district court’s conclusion that its Organic Pearl trade dress was not protectible under the Lanham Act. Specifically, the district court determined that Beatriz Ball’s Organic Pearl collection lacked the acquired distinctiveness of protectible trade dress. Unregistered trade dress is protectible only if a product’s design identifies the source of the product rather than the product itself; in other words, the design has acquired a secondary meaning. The Fifth Circuit has adopted seven factors to be considered in determining whether secondary meaning has been shown. The factors include: length and manner of use of the mark or trade dress; volume of sales; amount and manner of advertising; nature of use of the mark or trade dress in newspapers and magazines; consumer survey evidence; direct consumer testimony; and the defendant’s intent in copying the trade dress.

The district court examined each of the seven factors at length and found that only the first factor favored Beatriz Ball’s claim. According to the trial court, most of the other factors weighed against the claim. The Fifth Circuit did not agree, and found the lower court “clearly erred” in analyzing three of the trade dress factors: volume of sales, the nature of use of Organic Pearl trade dress in newspapers and magazines, and Pampa Bay’s intent in copying the trade dress.

The lower court reasoned that it could not evaluate the success of the trade dress in the market without knowing the volume of sales specific to the Organic Pearl collection. Although the sales chart offered by Beatriz Ball was not clearly labeled, the Fifth Circuit rejected the district court’s conclusion that the chart showed only total sales and not sales attributable to the Organic Pearl collection. The Fifth Circuit said that on remand the lower court must re-examine whether evidence of the millions of dollars in sales of Beatriz Ball tableware favored a finding of secondary meaning.

Similarly, the Fifth Circuit said that evidence of publications that featured third-party promotions of Organic Pearl pieces should be reconsidered by the lower court, which improperly focused on internal advertising and self-promotion when evaluating the nature of use of the trade dress in newspapers and magazines. The Fifth Circuit also explained that the name “Organic Pearl” did not have to be associated with Beatriz Ball. What mattered, according to the appellate court, was whether the specific features of the collection were associated with the company.

The district court did not address Pampa Bay’s intent directly, but counted the factor against Beatriz Ball after finding widespread use of the company’s alleged trade dress in the tabletop industry. Rejecting the court’s finding, the Fifth Circuit said the lower court should not have isolated certain features of the Organic Pearl designs because trade dress consists of the totality of features and overall appearance. The court noted the trade dress exhibited many unique features, and Pampa Bay incorporated most of those features in its designs. The Fifth Circuit observed that a visual comparison of Pampa Bay’s products to the Organic Pearl line made it difficult to deny that there was an intent to copy, and the district court clearly erred by finding otherwise. The Fifth Circuit additionally noted that the difference in quality between the products did not support a finding that there was no copying, especially because the purpose of the Lanham Act is to protect against infringers who infuse the market with lesser quality versions of protected products. Consequently, the appellate court said the sum of errors in the district court’s analysis of secondary meaning required reconsideration of the evidence and overall re-weighing of the factors.

Concurring opinion. Circuit Judge Gregg Costa filed a concurring opinion. Judge Costa agreed with the majority that Beatriz Ball had standing and that the secondary meaning analysis should be reconsidered. Judge Costa offered his views on the seeming anomaly created by the federal rules, which afford less deference to bench trials than jury trials. In this case, the trial court’s detailed and intensive factfinding and thorough explanations were given less deference on appeal than would have been given to a jury’s verdict had it rejected Beatriz Ball’s trade dress claim by marking a simple “No” on the verdict form. Judge Costa surmises that the difference in treatment is rooted in the Seventh Amendment’s deference to jury trials.

The Case is No. 21-30029.

Attorneys: Marie Breaux (M Breaux Intellectual Property Law, LLC) for Beatriz Ball, LLC. Marc Stephen Whitfield (Taylor, Porter, Brooks & Phillips, LLP) for Barbagallo Co., LLC d/b/a Pampa Bay.

Companies: Beatriz Ball, LLC; Barbagallo Co., LLC d/b/a Pampa Bay

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