In a precedential ruling, the U.S Court of Appeals for the Federal Circuit weaved its way through Supreme Court precedent on the law of color marks in vacating (and remanding) the TTAB’s decision in In re Forney Industries, Inc., 127 USPQ2d 1787 (TTAB 2018), in which the Board had upheld a refusal to register a color mark for multiple colors applied to product packaging. [TTABlogged here]. The Board concluded that such a mark cannot be inherently distinctive, but the CAFC disagreed, holding that “color marks can be inherently distinctive when used on product packaging, depending upon the character of the color design.” In re Forney Industries, Inc.,2020 USPQ2d 10310 (Fed. Cir. 2020) [precedential].

Forney sought to register a mark comprising the colors “red into yellow with a black banner located near the top as applied to packaging” for metal hardware, welding equipment, safety goods and marking products. The Board had relied on Wal-Mart and Qualitex in concluding that “‘a particular color on a product or its packaging’ . . . can never be inherently distinctive and may only be registered on a showing of acquired distinctiveness.” Wal-Mart, 529 U.S. at 212.

As to Forney’s mark, the Board saw “no legal distinction between a mark consisting of a single color and one, such as [Forney’s], consisting of multiple colors without additional elements, e.g., shapes or designs.”

The CAFC found that the Board had “erred in two ways: (1) by concluding that a color-based trade dress mark can never be inherently distinctive without differentiating between product design and product packaging marks; and (2) by concluding (presumably in the alternative) that product packaging marks that employ color cannot be inherently distinctive in the absence of an association with a well-defined peripheral shape or border.”

With regard to the first point, the CAFC disagreed that the Supreme Court had made it clear that color, when on a product or its packaging, can never be inherently distinctive. The CAFC observed that the Supreme Court has not gone that far: it has not so ruled as to product packaging. The CAFC then held that “color marks can be inherently distinctive when used on product packaging, depending upon the character of the color design.”

The CAFC reasoned that, although “color is usually perceived as ornamentation,” In re Owens-Corning Fiberglas Corp., 774 F.2d 1116, 1124 (Fed. Cir. 1985), “a distinct color-based product packaging can indicate the source of the goods to a consumer, and, therefore, can be inherently distinctive.”

In Two Pesos, involving the registrability of restaurant decorthe Supreme Court assumed that the trade dress was inherently distinctive. Thus that case stands for the proposition that trade dress can be inherently distinctive. [Emphasis by CAFC]. In Qualitex, involving a green-gold color for a press pad, the Court found no “obvious theoretical objection to the use of color alone as a trademark” when that color has attained “secondary meaning.” Qualitex did not expressly hold that acquired distinctiveness is required to register a color mark, but in Wal-Mart, the Court, in discussing a product design mark, that, “with respect to at least one category of mark—colors—we have held that no mark can ever be inherently distinctive.” 529 U.S. at 211–212 (citing Qualitex, at 162–163).

In Wal-Mart, the Supreme Court “considered the fact that ‘product design almost invariably serves purposes other than source identification.'” Id. at 213. As to product packaging, however, the Court noted, “[t]he attribution of inherent distinctiveness to certain categories of . . . product packaging derives from the fact that the very purpose of . . . encasing [a product] in a distinctive packaging, is most often to identify the source of the product.”

Turning to the Forney’s proposed mark, the CAFC observed that the multi-color packaging is “more akin to the mark at issue in Two Pesos than those in Qualitex and Wal-Mart.

Indeed, it falls firmly within the category of marks the Court described as potential source identifiers. Supreme Court precedent simply does not support the Board’s conclusion that a product packaging mark based on color can never be inherently distinctive.

As the CAFC stated in Chippendales, 662 F.2d 1358 (citing Seabrook), nothing in the Wal-Mart decision affected established case law that product packaging may be inherently distinctive. The Board should have considered whether Forney’s proposed mark satisfied the Seabrook criteria for inherent distinctiveness.

Next considering the Board’s alternative conclusion, the CAFC found that the Board had again not comported with the holding here and in prior CAFC case law. “Without explaining why it was doing so, the Board found that a color may only be inherently distinctive when used in conjunction with a distinctive peripheral shape or border.”

The CAFC agreed with Forney that the proposed mark “is not just a ‘color mark’ but also a ‘symbol.'” Forney is not attempting to preempt the use of the colors, but only to protect the particular colors arranged in a particular design. The question for the Board is whether the proposed mark are “sufficiently indicative of the source of the goods contained in that packaging.” That assessment must be made “based on the overall impression created by both the colors employed and the pattern created by those colors.”

We conclude that the Board erred in stating that a multicolor product packaging mark can never be inherently distinctive. To the extent the Board’s decision suggests that a multi-color mark must be associated with a specific peripheral shape in order to be inherently distinctive, that too, was error. Accordingly, we vacate and remand for the Board to consider, whether, for the uses proposed, Forney’s proposed mark is inherently distinctive under the Seabrook factors, considering the impression created by an overall view of the elements claimed.

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TTABlog comment: So in the CAFC’s view, when the Supreme Court said “with respect to at least one category of mark—colors—we have held that no mark can ever be inherently distinctive,” it meant only product designs.

Text Copyright John L. Welch 2020.