IP Law Daily, TRADEMARK—SDCal: Drug-Testing Lab Could Proceed with Trade Dress Claim Against Competitor That Allegedly Copied Report Format for Lab Tests, (Oct 15, 2012)

By Mark Engstrom, J.D.

A specialty diagnostics laboratory (Millennium Laboratories, Inc.) could proceed with a trade dress infringement claim against a direct competitor (Ameritox Ltd.) in the market for urine- and saliva-based drug testing, the federal district court in San Diego has ruled (Millennium Laboratories, Inc. v. Ameritox, Ltd., October 12, 2012, Anello, M.). Millennium alleged that it provided physicians with lab tests reports in a format that included a specific combination of graphs and charts that constituted protected trade dress. According to Millennium, Ameritox sold confusingly similar lab reports that copied that trade dress.

Description of Millennium’s Trade Dress

Ameritox complained that Millennium failed to describe its trade dress with sufficient specificity. According to Ameritox, Millennium should have attached to its complaint an image of its purported trade dress, which would allow Ameritox to: (1) properly understand the aspects of that trade dress and (2) decipher which Ameritox reports were purportedly infringing.

The court agreed that images of Millennium’s trade dress and Ameritox’s allegedly infringing reports would help to clarify Millennium’s position. Nevertheless, Millennium was not required to attach an image of its trade dress to sufficiently state a claim for trade dress infringement. Millennium alleged that its trade dress consisted of: (1) a bell curve showing the distribution of results for all patients who tested positive for a specified prescription medication, as well as the test results for the individual patient that was prescribed that medication, and (2) a timeline showing the current test results for the individual patient and that patient’s previous test results for the same medication. It its opposition, Millennium also alleged that these two elements split into sub-elements: “the bell curve shows (A) all patients, and (B) the individual patient’s result. Furthermore, the timeline shows (A) the patient’s current result, and (B) the patient’s recent results.”

Although Millennium failed to provide a vivid, in-depth depiction of its purported trade dress, the court was satisfied that Millennium alleged sufficient facts to describe, and give Ameritox notice of, the claimed trade dress.

Allegations of Trade Dress Infringement

To state a claim for trade dress infringement, a plaintiff must allege that its trade dress: (1) was nonfunctional; (2) was either inherently distinctive or had acquired distinctiveness through secondary meaning; and (3) was likely to be confused with the defendant’s products by the consuming public. In this case, the Millennium’s complaint contained allegations of trade dress infringement that were sufficient to state a claim under federal notice pleading standards.

Non-Functionality. Millennium alleged sufficient facts to support a plausible inference that its claimed trade dress was nonfunctional. Trade dress protection was limited to non-functional product features, and the question of functionality was a factual one that could not be resolved on a motion to dismiss. Although Millennium’s test results design could ultimately prove to be purely functional, the opposite could be true as well. Construed liberally, Millennium’s complaint alleged facts to show that Millennium’s competitors would not need the features of Millennium’s report in order to compete without disadvantage.

Secondary Meaning. Millennium’s complaint contained factual allegations to support an inference that its test report trade dress had acquired distinctiveness through secondary meaning. A trade dress possessed secondary meaning when, in the minds of the public, the primary significance of a mark was the identification of the source of the product rather than the product itself.

In this case, Millennium alleged that: (1) its use of the alleged trade dress was exclusive from June 2011 until March 2012; (2) reports containing its trade dress were delivered directly to customers and prospective customers; (3) customers immediately expressed strongly favorable opinions regarding the new test report format; and (4) test users equated Millennium’s distinctive report format with its high quality services. According to the court, these facts raised a plausible inference that consumers generally viewed Millennium’s alleged trade dress as primarily identifying Millennium as the source of the product, rather than merely identifying the product itself.

Likelihood of Confusion. Millennium also alleged sufficient facts from which the court could infer a likelihood of consumer confusion. Specifically, Millennium alleged that: (1) Ameritox’s reports resembled Millennium’s reports so closely that consumers were likely to be confused about the source of Ameritox’s services; (2) Ameritox intentionally copied Millennium’s trade dress; and (3) Ameritox offered services that contained a copy of Millennium’s trade dress and offered those services to consumers who previously used Millennium’s products and associated the specified trade dress with Millennium. These facts were sufficient to raise a plausible inference of consumer confusion concerning the source of the test report services or the affiliation between Millennium and Ameritox.

Motion for a More Definite Statement

Millennium alleged the essential characteristics of its trade dress and the necessary elements of a trade dress infringement claim. Although the complaint was not “ideal,” the court determined that Millennium’s allegations were not “so vague, ambiguous, or unintelligible that Ameritox could not reasonably prepare a response.” Accordingly, Ameritox’s motion for a more definite statement was denied. The court noted that Ameritox “should be in a position to obtain specificity and an image of the trade dress” through discovery and Millennium’s initial disclosures.

The case number is 12CV1063-MMA (JMA)

Robert S. Gerber (Sheppard Mullin Richter & Hampton LLP) for Millennium Laboratories, Inc. Michael T. Murphy (K&L Gates LLP) for Ameritox, Ltd.

Cases: Trademark CaliforniaNews