IP Law Daily, TRADEMARK—S.D. Tex.: Texas swim school interior design trade dress was non-functional, not inherently distinctive, (Apr 25, 2023)

By Linda O’Brien, J.D., LL.M.

Genuine issues of material fact remained whether a swimming school business design trade dress had acquired secondary meaning and competitor’s use created a likelihood of confusion.

In a trade dress infringement action by a Texas swimming instruction school over a competitor’s alleged copying of its distinctive trade dress designs and using them in its own swim schools, the plaintiff presented sufficient evidence to show that the overall appearance of its interior design trade dress was non-functional, the federal district court in Houston, Texas has held. However, the plaintiff’s trade dress failed to quality as inherently distinctive. Additionally, fact issues remained regarding whether the claimed trade dress acquired secondary meaning and whether there was a likelihood of confusion among consumers. Thus, the plaintiff’s motion for summary judgment on the issue of non-functionality and the defendant’s motion for summary judgment on the issue of inherent distinctiveness were granted (Pengu Swim School, LLC v. Blue Legend, LLC, April 21, 2023, Palermo, D.).

In 2013, Lothar and Tiffany Hofbauer opened Pengu Swim Schools, which offers swim lessons to children in the greater Houston area. Lothar Hofbauer contended that the variety of colors in houses in South Africa inspired the design elements and colors in his trade dress and each swim school uses common visual elements that contributes to the company’s total image and overall appearance. In 2020, Blue Legend opened two competing swim schools in the Houston metropolitan area.

In May 2021, Pengu filed suit against Blue Legend, alleging that Blue Legend copied Pengu Swim School’s distinctive trade dress designs and used them in its own swim schools, creating a likelihood of consumer confusion between Pengu and Blue Legend. Specifically, the complaint alleged that numerous aspects of its swim schools’ unique design, including the decoration and arrangement of the dressing rooms, design surrounding the swimming pool, and swim lane divider colors, were inherently distinctive. Blue Legend’s interior decorative designs of its swim schools were nearly identical to Pengu’s, its trade dress was protectable, and Blue Legend has infringed its trade dress. Before the court were the parties’ cross-motions for summary judgment.

Inherent distinctiveness. The court found that Pengu did not establish that its trade dress was inherently distinctive. In Seabrook Foods, Inc. v. Bar-Well Foods Ltd., 568 F.2d 1342 (1977), a test was created to examine whether the claimed trade dress was a common basic shape or design, unique or unusual in a particular field, a mere refinement of a commonly adopted and well-known form of ornamentation, or capable of creating a distinct commercial impression. Although the plaintiff consistently defined its trade dress and identified seven elements as to provide competitors with notice of what was claimed, the evidence showed the various elements of the claimed trade dress were often used together, in slightly different combinations, in swim schools. Specifically, the colors in Pengu’s trade dress definition were commonly used by other swim schools, blue waves painted on swimming pool walls was a common theme, and numerous swim schools had dressing rooms lined up in rows. Even if Pengu showed that its elements in combination could be deemed unique, the elements of its trade dress were nothing more than refinements of commonly adopted and well-known features used in other swim schools. Therefore, Blue Legend was entitled to summary judgment of the issue of inherent distinctiveness, the court stated.

Secondary meaning. The length of use and evidence of intentional copying created an issue of material fact as to whether the trade dress acquired secondary meaning. Weighing in favor of finding secondary meaning, Pengu had used the claimed trade dress since 2013, invested approximately $879,000 in advertising and marketing the Pengu brand and design, and there was evidence Blue Legend intentionally copied Pengu’s trade dress. However, there was a lack of consumer survey evidence and consumer testimony. Thus, factual issues remained, the court explained.

Non-functionality. Pengu established as a matter of law that the overall appearance of its trade dress was non-functional. According to the court, to show that its trade dress was not essential to the use or purpose of providing swimming instruction, Pengu’s owner stated that the trade dress did not serve any function other than its purpose as a decorative design and to distinguish Pengu’s swim school services from those of its competitors. Photos were also submitted that depicted images of other swim schools were using combinations of features similar to Pengu’s trade dress. Blue Legend’s evidence of dressing room colors, arrangement of dressing rooms, shape and color choices for swim lane dividers, and sand colored flooring was insufficient to create a fact issue on functionality since the cited elements were “clearly more aesthetic in nature than functional.” Even if each element of Pengu’s individual trade dress was functional, the trade dress as a whole was primarily non-functional.

Infringement. There was a genuine dispute as to the likelihood of confusion. The similarity of services, identity of retail outlets and purchasers, and identity of advertising media was undisputed. While there was sufficient evidence of Blue Legend’s intent to copy to support an inference of an intent to infringe, there was no evidence that Blue Legend intended to confuse or capitalize on Pengu’s reputation. However, there was conflicting evidence of the similarity in the design of the swim schools, whether potential consumers had a heightened level of sophistication, and of actual consumer confusion, the court concluded.

The Case is No. 4:21-CV-1525.

Attorneys: David Martin Lodholz (Matthews Lawson McCutcheon Joseph, PLLC) for Pengu Swim School, LLC. Terry Blaine Joseph (Matthews Lawson McCutcheon Joseph, PLLC) for Pengu Swim School Riverstone, LLC and Pengu Swim School Cinco Ranch, LLC. Yanpin Yang (Law Office of Yang and Associates) for Blue Legend, LLC. Douglas H. Elliott (Elliott Law, PLLC) for Blue Legend Katy, LLC.

Companies: Pengu Swim School, LLC; Pengu Swim School Riverstone, LLC; Pengu Swim School Cinco Ranch, LLC; Blue Legend, LLC; Blue Legend Katy, LLC

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