On April 8, 2020, the U.S. Court of Appeals for the Federal Circuit issued a precedent-setting opinion adding further clarity to the evolving body of law on a vexing question: Under what circumstances can a producer obtain U.S. trademark registration for a mark consisting solely of color?

The specific issue presented in the matter of In Re: Forney Industries, Inc., Case 19-1073, was whether a particular color pattern displayed on product packaging for welding and machining accessories and tools (shown below) can be deemed to be “inherently distinctive” and thus eligible for registration without any required showing of “acquired distinctiveness” (aka “secondary meaning”).

The Trademark Trial and Appeal Board (the Board) had answered “no.” The Federal Circuit found this decision unsupported by the controlling U.S. Supreme Court precedents that have spoken on the matter in related (but not identical) contexts. The Board decision was vacated and remanded for further proceedings.

For those not already fluent in the terminology and concepts involved here, we offer a brief primer. A trademark is any word, name, symbol, device or combination thereof that a producer uses to identify and distinguish its goods or services from those of another and to indicate their source. To qualify for registration (and more generally to be enforced against infringing third parties) a mark must either (1) be inherently distinctive – that is, its “intrinsic nature serves to identify a particular source”[i] or (2) the mark owner must establish that the mark, through substantial use in commerce, has acquired distinctiveness (or secondary meaning) – that is, when “in the minds of the public, the primary significance of a product feature . . . is to identify the source of the product rather than the product itself.”[ii]

Courts have reached different conclusions on “inherently distinctive” versus “acquired distinctiveness” when the mark is displayed on (or actually consists of) the product as opposed to displayed on packaging for the product. Three Supreme Court decisions set the guideposts.

Two Pesos, Inc. v. Taco Cabana, Inc.[iii] held that the distinctive combination of design elements of a Mexican restaurant – interior and patio dining areas with artifacts, bright colors, paintings and murals – can be entitled to protection as inherently distinctive trade dress, without any required showing of acquired distinctiveness.[iv]

Qualitex Co. v. Jacobson Prod. Co.[v] held that color alone – in that case, the green-gold shade of a dry-cleaning pad – could be protected as a trademark, but only upon a showing of acquired distinctiveness.

Wal-Mart Stores, Inc. v. Samara Bros.[vi] involved a children’s clothing manufacturer’s claim (among others) that “knockoff” clothing designs sold by Wal-Mart infringed its unregistered trade dress rights in the design of its garments. The Supreme Court, noting the holding in Qualitex that product color could be protected as a trademark only upon proof of acquired distinctiveness, held likewise that product design could receive trade dress protection only upon proof of acquired distinctiveness.

The Board read Two Pesos, Qualitex and Wal-Mart together to declare that a mark consisting only of one or more colors could never be deemed “inherently distinctive” and therefore could be registered only by showing that the mark through use in commerce had acquired distinctiveness. In reaching this conclusion, the Board drew no distinction between a color mark on the product itself (Qualitex) versus, as in this case, a color mark shown on the product packaging.

The Federal Circuit disagreed, finding that a mark displayed on packaging is significantly different than a mark shown on the product itself. The court found no clear determination in any of the Supreme Court cases that color on packaging could never be found inherently distinctive. On the contrary, these cases acknowledge that while color on a product would rarely be regarded by a consumer as a designation of source, consumers react differently to product packaging, because “the very purpose of . . . encasing [a product] in a distinctive packaging is most often to identify the source of the product.”[vii]

The court also rejected the Board’s alternative (and seemingly inconsistent) holding that a color mark on packaging can be found inherently distinctive but only if it is encased in a “well-defined peripheral shape or border.” The court declared that “nothing in the case law” mandates such an arbitrary additional requirement. Rather, whether the color mark – encased or otherwise – is inherently distinctive is to be decided based on the recognized criteria; that is, does the color mark on the packaging “make such an impression on consumers that they will assume” the trade dress is associated with a particular source?[viii]

By removing the absolute bar against ever affording inherent distinctiveness to a mark consisting of color alone used on packaging, this decision will have a profound and positive impact on producers seeking to claim and protect such marks. As thoughtfully observed by general counsel of a prominent industrial products distributor,[ix] the belief that a color mark on packaging could be secured only upon proof of acquired distinctiveness was itself enough to discourage companies from even seeking to claim rights for such marks. This is because a showing of acquired distinctiveness typically entails evidence of many years of use in commerce accompanied by advertising and marketing efforts calculated to support the finding, all done without the benefit of a presently enforceable mark. And the United States Patent and Trademark Office reaction to such proof has been notoriously inconsistent and unpredictable.

Now, at least, knowing the tests that will be applied and with a positive outcome possible, mark owners that believe they have created a color-based mark for packaging that will pass the inherently distinctive test can file their application for registration and have an answer within a reasonable time.

[i] Two Pesos v. Taco Cabana, Inc., 505 U.S. 763, 768 (1992).

[ii] Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U. S. 844, 851, n. 11 (1982).

[iii] 505 U.S. 763 (1992).

[iv] “Trade dress” is a category of trademark that originally included “only the packaging, or ‘dressing,’ of a product, but in recent years has been expanded by many courts of appeals to encompass the design of a product.” Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S. 205, 210-211 (2000).

[v] 514 U.S. 159 (1995).

[vi] 529 U.S. 205 (2000).

[vii] Wal-Mart, 529 U.S. at 212.

[viii] Seabrook Foods, Inc. v. Bar-Well Foods Ltd., 568 F. 2d 1342, 1344 (C.C.P.A. 1977).

[ix] See “Trademarking Color on Product Packaging” by Shannon McCue.