$8 Million Trade Dress Infringement Verdict: Is Your Trade Dress Protected?

by Perkins Coie

A recent $8.1 million verdict in a trademark and trade dress infringement action is an emphatic reminder that businesses of all sizes should protect their trade dress as well as their trademarks.  Although smaller or startup companies may view trade dress protection as an unnecessary expense, this stunning victory over a much larger opponent illustrates the value of robust trademark and trade dress protection and enforcement.

In this case, Mixed Chicks LLC introduced a unique line of hair products for multiracial women and had the foresight to federally register the MIXED CHICKS trademark.  Mixed Chicks’ packaging design also was unique: translucent bottles and pumps, different colors for different products and prominent orange lettering on the bottles.

After Mixed Chicks declined to sell their products to Sally Beauty Supply, a hair care retail giant with 2,700 stores, Sally Beauty Supply introduced a “Mixed Silk” product line with translucent bottles that were exactly the same shape, carried the same orange lettering and contained product contents of the same color as Mixed Chicks’ bottles. 

Mixed Chicks’ federal court action for trademark and trade dress infringement resulted in a jury verdict of $7.3 million in punitive damages and $840,000 in actual damages.  After the verdict, Sally Beauty Supply offered to settle for $8.5 million, exceeding the jury award in order to avoid paying Mixed Chicks’ attorneys’ fees and costs. 

Arriving on the heels of Apple’s billion-dollar victory against Samsung Electronics for infringement of the iPhone® design, this is the second verdict in a brief period of time to base a large monetary award primarily upon trade dress infringement.  In short, these verdicts illustrate the value of protecting and enforcing trademark and trade dress rights, including product configuration and packaging. 

Below are some “take-away” lessons from these cases:

Always Register Trademarks:  Registration is an easy and cost-effective way to put your business in the best possible position in the event of litigation.  Federal registration provides a presumption of validity of the trademark and a presumption that the infringer had notice of your rights, as well as access to federal courts.  Therefore, a federal registration streamlines and reduces the cost and uncertainties of litigation.

Securing Trade Dress Protection: Trade dress protects nonfunctional features of a product design or its packaging, such as its color or shape.  To qualify for protection, the trade dress in a product design feature must achieve secondary meaning, which means that consumers associate the feature(s) with a particular company as the source or origin.  Secondary meaning can be acquired through focused advertising that emphasizes the trade dress aspect of the product.  For instance, Apple’s advertisements for the iPod® showed the shape and configuration the face of the product in white, against black, silhouetted figures. Advertisements that state, “Look for the [color or feature]” are extremely helpful as well.  Obtaining trade dress registration can require persistence; for example, Apple only recently secured trade dress registration for the configuration of its retail stores—2 1/2 years after filing the application and following two refusals from the Patent and Trademark Office.  Nevertheless, recent cases highlight the potential value of such perseverance. Moreover, trade dress in product packaging that is inherently unique or distinctive may not require a showing of secondary meaning.

Trade Dress Matters:  Judges and juries don’t consider claims in a vacuum.  The MIXED SILK mark might have been viewed as sufficiently dissimilar to MIXED CHICKS to avoid an infringement verdict, but the stronger claim of trade dress infringement undoubtedly “spilled over” and tipped the scales on the trademark claim.  Therefore, companies should consider—even before a product is “off the drawing board”—all available IP protection, including whether a product or product packaging have a shape, color and/or nonfunctional characteristic that could be the basis for trade dress protection.

Contact counsel to identify and develop effective strategies for registering and protecting your trademarks and trade dress, as well as other intellectual property.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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