Opinion ID: 15871
Heading Depth: 3
Heading Rank: 2

Heading: Protectible marks and trade dress

Text: The district court considered the Plaintiffs’ marks, “Pebble Beach,” “Pinehurst,” and “Harbour Town,” and the image of the lighthouse and found them to be protectible. See Pebble Beach, 942 F. Supp. at 1537-41. In the case of the design of the three golf holes, the district court determined that the configuration of a golf hole is nonfunctional, but it found that only Sea Pines’s golf-hole design was protectible. See id. at 1555-61. Tour 18 challenges only the district court’s findings that the Sea Pines’s golf-hole design is protectible and that Sea Pines has protectible rights in the lighthouse. Tour 18 does not challenge the district court’s finding that the Plaintiffs’ other marks are protectible. The Plaintiffs challenge the district court’s finding that Pebble Beach and Pinehurst’s golf-hole designs are not protectible. We consider the golf-hole designs and the lighthouse in turn.
Turning first to the district court’s traditional tradedress analysis of Tour 18's challenge to the protectibility of the designs of the Plaintiffs’ golf holes, Tour 18 attacks the district court’s findings that a golf-hole design is nonfunctional and that Sea Pines’s golf-hole design is protectible in that it is inherently distinctive or alternatively has acquired secondary meaning. The Plaintiffs challenge the 15 district court’s findings that Pebble Beach and Pinehurst’s golf holes are not inherently distinctive and are therefore unprotectible, but they do not challenge its finding that neither golf-hole design has acquired secondary meaning.
The Lanham Act protects only nonfunctional distinctive trade dress; this limitation “serves to assure that competition will not be stifled by the exhaustion of a limited number of trade dresses.” Two Pesos, 505 U.S. at 775. “[A] design is legally functional, and thus unprotectible, if it is one of a limited number of equally efficient options available to competitors and free competition would be unduly hindered by according the design trademark protection.” Id. (citing Sicilia Di R. Biebow, 732 F.2d at 426); see also Sunbeam Prods., 123 F.3d at 251 n.6. “The ultimate inquiry . . . is whether characterizing a feature or configuration as protected will hinder competition or impinge upon the rights of others to compete effectively in the sale of goods.” Id. at 255 (internal quotation marks omitted) (quoting Sicilia Di R. Biebow, 732 F.2d at 429). Thus, functionality “secures for the marketplace a latitude of competitive alternatives,” Taco Cabana, 932 F.2d at 1119, and “balanc[es] the interest in facilitating innovation against the interest in fostering competition in the free market,” Sunbeam Prods., 123 F.3d at 255. A collection of functional features in a product design does 16 not necessarily make the combination of those features functional and therefore unprotectible. See Sunbeam Prods., 123 F.3d at 256; Taco Cabana, 932 F.2d at 1119. Where the trade dress of a product consists of a particular configuration of features, the functionality of the design turns on “whether its design as a whole is superior to other designs, not on whether its component features viewed individually each have a function.” Vaughan Mfg. Co. v. Brikam Int’l, Inc., 814 F.2d 346, 350 (7th Cir. 1987) (emphasis added). In determining whether competition would be stifled, we have considered whether the feature or combination of features is “superior or optimal in terms of engineering, economy of manufacture, accommodation of utilitarian function or performance.” Sicilia Di R. Biebow, 732 F.2d at 429; see also Sunbeam Prods., 123 F.3d at 255. The Supreme Court has stated the question more generally as whether the trade dress is “‘essential to the use or purpose of the article or if it affects the cost or quality of the article,’ that is, if exclusive use of the feature would put competitors at a significant nonreputation-related disadvantage.” Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 165 (1995) (quoting Inwood Lab., Inc. v. Ives Lab., Inc., 456 U.S. 844, 850 n.10 (1982)). The district court determined that the golf-hole designs at issue here are nonfunctional, noting that there is an “unlimited number of alternative designs” to the Plaintiffs’ golf-hole designs and that no evidence indicated that the Plaintiffs’ 17 designs are superior to the many available alternatives. See Pebble Beach, 942 F. Supp. at 1556. In finding that competition would not be hindered by protecting the Plaintiffs’ golf-hole designs, the district court noted that one of Tour 18’s experts testified that protecting the design of the golf holes from copying would not unduly injure competition and that Tour 18’s director of marketing testified that a golf course need not copy golf-hole designs in order to be competitive in the Houston market. See id. Tour 18 first attacks the district court’s finding that golf holes are nonfunctional by defining its product as a golf course that provides replicas of famous golf holes. It claims that such a product requires that it be able to copy famous golf holes in order to have any commercial success in delivering its product: a course copying famous golf holes. While Tour 18’s product may be a golf course the commercial success of which has been based upon copying golf holes, it nevertheless is still just a collection of golf holes. Features that contribute to the commercial success of a product are not thereby necessarily classed as functional. In Sicilia Di R. Biebow, this court rejected the argument that functionality should be defined in terms of commercial success or marketing effectiveness because such a definition would allow a second comer to copy the protectible trade dress of a product whenever the product became successful and preferred by consumers. See 732 F.2d at 428. Tour 18 argues that in Qualitex 18 the Supreme Court overruled this holding with its citation of Justice White’s concurrence in Inwood Laboratories, which stated that “[a] functional characteristic is an important ingredient in the commercial success of the product.” See Qualitex, 514 U.S. at 165 (internal quotation marks omitted) (quoting Inwood Lab., 456 U.S. at 863 (White, J., concurring in the result)). However, these two statements are not inconsistent. Justice White’s statement is merely an acknowledgment that a functional feature is by definition important to the commercial success of a product because without the functional feature a viable, competitive product could not be produced and because competition would be injured if such a feature were protectible by trademark law. The converse, however, is not true. To define functionality based upon commercial success would allow the second comer to trade on the first comer’s goodwill, purely because it would be easier to market his product and not because he could not produce a viable, competitive product. Such a rule does not promote innovation, nor does it promote competition, leaving no reason to narrow trademark protection. The logical extension of this argument would practically obliterate trademark protection for product design because a defendant could always argue that its innovative product is a widget that provides a replica of the most popular or most prestigious widget on the market, thus requiring that the defendant be allowed without further analysis to copy the plaintiff’s widget. 19 Tour 18 then argues that every feature of a golf hole and how it is configured affects how the hole plays, making any golfhole design functional. Without citing any authority, Tour 18 urges a rule that a feature or configuration of features is functional unless “a specific design can be made another way without affecting use, purpose, cost, quality or commercial desirability.” This rule is much broader than any applied in this circuit or by the Supreme Court and could conceivably render any design functional because any change would undoubtedly somehow affect cost, use, or commercial desirability. Additionally, the Supreme Court limited its statement that trade dress is functional if the trade dress is essential to the use or purpose of the product or affects the cost or quality of the product with the following language: “that is, if exclusive use of the features [or combination of features] would put competitors at a significant non-reputation-related disadvantage.” Qualitex, 514 U.S. at 165. This language makes it clear that any effect must be great enough to significantly disadvantage competitors in ways other than consumer preference for a particular source. Next, Tour 18 contends that Qualitex imposes as a threshold inquiry in the functionality analysis the question of whether the trade dress serves “any other significant function.” See 514 U.S. at 166. It argues that this question must be considered before concerns of competition and available alternative designs 20 can be addressed. This is a misreading of Qualitex, which held that, in certain circumstances, color can be a registerable trademark. See id.. Where the Supreme Court uses the language “without serving any other significant function,” it is stating that color alone may sometimes meet the basic legal requirements for use as a trademark. See id. at 166 (citing PATENT AND TRADEMARK OFFICE, U.S. DEP’T OF COMMERCE, TRADEMARK MANUAL OF EXAMINING PROCEDURE § 1202.04(e), at 1202-13 (2d ed. May 1993) (approving registration of a color that indicates source, provided that “there is [no] competitive need for colors to remain available in the industry” and the color is not “functional”), and 1 J. MCCARTHY, MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION §§ 3.01[1], 7.26, at 3-2, 7-113 (3d ed. 1994) (noting that the requirements for protecting a word or symbol as a trademark are that it be (1) a symbol (2) used as a mark (3) to identify and distinguish one’s goods, but that it not be functional)). This language in Qualitex, as supported by its accompanying citations, is just another way of stating that functionality, with its consideration of the needs of competition, bars Lanham Act protection to functional features and configurations, which by definition serve a significant function other than source-identification. As noted earlier, functionality takes into account whether protecting a particular feature or combination of features would “hinder competition or impinge upon the rights of others to compete effectively.” See Sunbeam Prods., 123 F.3d at 255 21 (internal quotation marks omitted). Therefore, Qualitex does not create a threshold inquiry in the functionality analysis. Additionally, we have held that nonfunctional trade dress may still have some utility--i.e., serve a function other than source-identification--and still be legally nonfunctional. See Sicilia Di R. Biebow, 732 F.2d at 429. Having rejected Tour 18’s challenges to the district court’s analysis, and after reviewing the evidence, we find that the district court did not clearly err in finding that the Plaintiffs’ golf-hole designs are nonfunctional.6
Trademarks and trade dress are distinctive and protectible if they serve as indicators of source. See Taco Cabana, 932 F.2d at 1119-20. Trademarks and trade dress are classified into the following categories: (1) generic, (2) descriptive, (3) 6 Tour 18 also argues that the district court failed to consider the aesthetic functionality of a golf hole. This circuit has rejected the doctrine of aesthetic functionality. See Sno-Wizard Mfg., Inc. v. Eisemann Prods. Co., 791 F.2d 423, 426 n.3 (5th Cir. 1986); Sicilia Di R. Biebow, 732 F.2d at 42829. Tour 18 argues that the Supreme Court acknowledged aesthetic functionality in Qualitex with its reference to aesthetic functionality and the Restatement (Third) of Unfair Competition. See Qualitex, 514 U.S. at 170 (citing RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 17 cmt. c., at 175-76 (1995)). However, the ultimate inquiry in aesthetic functionality is the same as utilitarian functionality: “‘whether the recognition of trademark rights would significantly hinder competition.’” Id. (quoting RESTATEMENT, supra, § 17 cmt. c.). Without deciding the viability of aesthetic functionality in this circuit, we note that, based upon the testimony of Tour 18’s witnesses that protecting the golf-hole designs would not burden competition, the golf-hole designs at issue are not aesthetically functional. 22 suggestive, (4) arbitrary, or (5) fanciful. See Two Pesos, 505 U.S. at 768 (citing Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9 (2d Cir. 1976)); Sunbeam Prods., 123 F.3d at 252. The last three categories--suggestive, arbitrary, and fanciful--are inherently distinctive, requiring no additional showing to be protectible, “‘because their intrinsic nature serves to identify a particular source of a product.’” Sunbeam Prods., 123 F.3d at 252 (quoting Two Pesos, 505 U.S. at 768). A mark or trade dress is descriptive if it “identifies a characteristic or quality of an article or service, such as its color, odor, function, dimensions, or ingredients.” Zatarains, Inc. v. Oak Grove Smokehouse, Inc., 698 F.2d 786, 790 (5th Cir. 1983) (citations and internal quotation marks omitted). A descriptive mark or trade dress is protectible only when it has “acquir[ed] a secondary meaning in the minds of the consuming public.” Id. A generic mark or trade dress is never protectible because it connotes “a particular genus or class of which an individual [product] or service is but a member . . . , rather than the more individualized characteristics of a particular product.” Id. (citations and internal quotation marks omitted). The district court found that Pebble Beach and Pinehurst’s golf-hole designs were not inherently distinctive because they were variations on commonplace themes in the design of golf holes. See Pebble Beach, 942 F. Supp. at 1557-58. Sea Pines’s golf-hole design, however, is inherently distinctive according to 23 the district court because the incorporation of the lighthouse adds an “arbitrary source-identifying feature[].” Id. at 1558. Additionally, the district court determined that Sea Pines’s golf-hole design had acquired secondary meaning in the public’s mind. See id. at 1561. As to Pebble Beach and Pinehurst’s golfhole designs, the district court found no evidence to support a conclusion that either design had acquired secondary meaning. See id. at 1560-61. The Plaintiffs argue that the district court should have found Pebble Beach and Pinehurst’s golf holes to be inherently distinctive. However, Pebble Beach and Pinehurst’s golf-hole designs do not fall into any of the three inherently distinctive classifications. Arbitrary and fanciful marks or trade dress “bear no relationship to the products or services to which they are applied.” Zatarains, 698 F.2d at 791. The trade dress of Pebble Beach and Pinehurst’s golf holes is a configuration of commonplace features of a golf hole and therefore does bear a relationship to the product, a golf hole. A suggestive mark or trade dress “suggests, rather than describes, some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services.” Id. The configurations of the features in Pebble Beach and Pinehurst’s golf-hole designs create golf holes and nothing more. They require no exercise of one’s imagination to realize that one 24 is viewing a golf hole. Therefore, the district court did not clearly err in finding that Pebble Beach and Pinehurst’s golfhole designs were not inherently distinctive.7 Tour 18 argues that Sea Pines’s golf-hole design is not protectible because a golf hole’s trade dress is generic and because, even if it is descriptive, the Plaintiffs failed to present evidence that demonstrates that Sea Pines’s trade dress has acquired secondary meaning. In general, a golf hole’s trade dress may be generic, but Sea Pines’s inclusion of the distinctive lighthouse in the design of the golf hole takes it out of the generic classification because it emphasizes the “individualized characteristics” of this particular golf-hole 7 The Plaintiffs argue that their golf-hole designs are unique and therefore inherently distinctive, urging us to equate uniqueness with inherent distinctiveness. However, something that is inherently distinctive is unique, but the converse is not necessarily true. A product may be unique and yet fail to be sufficiently distinctive to indicate source. See 1 MCCARTHY ON TRADEMARKS, supra, § 8:13, at 8-35 to 8-36 (“A product or package feature is not inherently distinctive merely because there is no other product on the market that looks exactly the same.”). If uniqueness were the test, then [p]resumably, it could be said about the trade dress of any new product that no competitive product combines precisely the same elements in its trade dress. . . . [Such a test] essentially would require a finding of inherent distinctiveness whenever a new product enters the market. Turtle Wax, Inc. v. First Brands Corp., 781 F. Supp. 1314, 1321 (N.D. Ill. 1991) (citing Blue Coral, Inc. v. Turtle Wax, Inc., 664 F. Supp. 1153, 1163 (N.D. Ill. 1987)); see also Duraco Prods., Inc. v. Joy Plastic Enters., 40 F.3d 1431, 1447-48 (3d Cir. 1994). Thus, uniqueness alone cannot be the test for inherent distinctiveness. 25 design rather than connoting golf holes in general. See Zatarains, 698 F.2d at 790. Therefore, the district court did not clearly err in finding that Sea Pines’s golf-hole design was not generic. As Sea Pines’s golf-hole design is not generic, it is protectible if it has acquired secondary meaning.8 That a particular mark or trade dress has acquired secondary meaning can be proven by a consideration of the following evidence: (1) length and manner of use of the mark or trade dress, (2) volume of sales, (3) amount and manner of advertising, (4) nature of use of the mark or trade dress in newspapers and magazines, (5) consumer-survey evidence, (6) direct consumer testimony, and (7) the defendant’s intent in copying the trade dress. See RESTATEMENT, supra, § 13 cmt. e; see also Duraco Prods., 40 F.3d at 1452; Zatarains, 698 F.2d at 795; 2 MCCARTHY ON TRADEMARKS, supra, § 15:30. While each of these types of evidence alone may not prove secondary meaning, in combination they may indicate that consumers consider the mark or trade dress to be an indicator of source. See Zatarains, 698 F.2d at 795. In considering this evidence, the focus is on how it demonstrates that the meaning of 8 The district court found that the inclusion of the lighthouse made such a significant difference that Sea Pines’s golf-hole design is inherently distinctive and thus by definition not generic. See Pebble Beach, 942 F. Supp. at 1558-59. We need not consider whether Sea Pines’s golf-hole design is inherently distinctive because we affirm infra the district court’s finding that the golf-hole design has acquired secondary meaning. See Sunbeam Prods., 123 F.3d at 252-53. 26 the mark or trade dress has been altered in the minds of consumers. See id. For example, in the case of advertising, spending substantial amounts of money does not of itself cause a mark or trade dress to acquire secondary meaning, but advertisements may emphasize “the source significance of the designation through prominent use of the [mark or trade dress]” and are therefore likely to alter the meaning of the mark or trade dress in the minds of consumers. See RESTATEMENT, supra, § 13 cmt. c, at 110. The district court based its finding of secondary meaning upon Sea Pines’s extensive advertising; unsolicited publicity of the trade dress of Sea Pines’s golf hole, including the lighthouse, in golf publications; and Tour 18’s intent to copy and use the trade dress prominently in its advertising. See Pebble Beach, 942 F. Supp. at 1559-61. Tour 18 argues that the district court erred in relying upon the advertising and publicity because they touted the design of the golf hole for its playing qualities and not as a designation of source. While some of Sea Pines’s advertising and publicity does promote the playability of the golf hole, the trade dress of Sea Pines’s golf hole, including the lighthouse, is prominently used in the advertising and the publicity of the Harbour Town Golf Links in a manner other than simply to promote the playing qualities of the golf hole. See id. at 1559-60. Therefore, the district court did not clearly err in finding that Sea Pines’s trade dress had 27 acquired secondary meaning.9
Tour 18 does not challenge the protectibility of depictions of the lighthouse; rather, it challenges Sea Pines’s rights in the lighthouse. Tour 18 argues that Sea Pines no longer has any 9 Tour 18 also argues that it presented survey evidence indicating that the Plaintiffs’ golf-hole designs had not acquired secondary meaning in the minds of consumers. Through the testimony of an expert, Tour 18 presented a survey of the public’s reactions to pictures of the Plaintiffs’ golf holes. The survey was entitled “An Investigation of the ‘Inherent Distinctiveness’ of Selected Golf Holes.” During its expert’s testimony about the survey, Tour 18’s counsel asked if the expert had an opinion as to whether Pebble Beach or Pinehurst’s golfhole designs had acquired secondary meaning. Tour 18’s counsel did not ask the same question about Sea Pines’s golf-hole design. This omission implies either that the survey was not probative in relation to whether Sea Pines’s golf-hole design had acquired secondary meaning or that the survey would have supported a finding of secondary meaning, an inference not in Tour 18’s interests. Tour 18 chose not to present the survey as probative of whether Sea Pines’s trade dress had acquired secondary meaning as evidenced by the omitted question and by its failure to argue no secondary meaning for the Sea Pines’s golfhole design in its closing argument, and we therefore do not find error in the district court’s failure to factor in the survey as to this issue. Additionally, the survey showed that nine percent of active golfers surveyed identified Sea Pines’s golf hole in a way indicating source--e.g., “legendary light house hole,” “a golf course in Hilton Head, S.C.,” and “18th hole harbor [sic] town.” While this may not be enough to establish secondary meaning on its own, see, e.g., Roselux Chem. Co. v. Parsons Ammonia Co., 299 F.2d 855, 862 (C.C.P.A. 1962) (finding 10% to be insufficient to establish secondary meaning); Zippo Mfg. Co. v. Rogers Imports, Inc., 216 F. Supp. 670, 689-90 (S.D.N.Y. 1963) (finding 25% to be insufficient); see also 2 MCCARTHY ON TRADEMARKS, supra, § 15:45 n.9 (cautioning against using 25% as a benchmark), it does not negate the showing made by the Plaintiffs, establishing that Sea Pines’s trade dress has acquired secondary meaning through evidence of Sea Pines’s advertising, unsolicited publicity, and Tour 18’s intent. 28 rights in the lighthouse because (1) it does not own the lighthouse and (2) by its course of conduct, it has abandoned the lighthouse as a mark. In response to the first argument, we adopt the reasoning of the district court: The Lanham Act does not require a party to “own” a word, symbol, or other identifying mark before it may be granted protection from infringement. Rather, all that is required is that a party “use” the mark in commerce to identify its services and distinguish them from the services of others. 15 U.S.C. § 1127; see [Boston Prof’l Hockey Ass’n v. Dallas Cap & Emblem Mfg., Inc., 510 F.2d 1004, 1014 (5th Cir. 1975)] (noting that under trademark law, a party acquires rights to a symbol in the public domain through use of the mark and the public’s association of the mark with the user). Id. at 1541 (footnote omitted); see also 1 MCCARTHY ON TRADEMARKS, supra, § 7:100-:101. Tour 18 styles its argument as attacking Sea Pines’s interest in the structure of the lighthouse itself and not in the image of the lighthouse, arguing that the only connection between the golf course and the lighthouse is that the lighthouse can be seen from the course. However, Harbour Town Golf Links was built by the same entity that constructed the lighthouse and the evidence demonstrates that the placement and design of the course and the lighthouse were specifically designed to create the relationship between the course and the lighthouse. This is not a case where the only connection is the coincidence of proximity or location. The connection between the course and the lighthouse is much greater and dates back to the conception of both. Sea Pines has used depictions of the 29 lighthouse in relation to golfing services since 1969, and the district court did not clearly err in finding that the lighthouse has achieved secondary meaning in relation to golfing services in the minds of consumers. The sale of the lighthouse to Fogelman’s predecessor, while reserving trademark rights in depictions of the lighthouse, does not alter this finding. In relation to abandonment, Tour 18 argues that Sea Pines’s failure to police third-party uses of the lighthouse as a mark has caused the mark “to lose its significance as a mark,” thus constituting abandonment under 15 U.S.C. § 1127. As Tour 18 argues, this form of abandonment does not require any intent to abandon on the part of Sea Pines. See id.; RESTATEMENT, supra, § 30 cmt. c; 2 MCCARTHY ON TRADEMARKS, supra, § 17:8. However, the evidence shows, as the district court discussed, that Sea Pines has not failed to police third-party uses of depictions of the lighthouse; rather, it has aggressively policed third-party uses. See Pebble Beach, 942 F. Supp. at 1541. Additionally, the district court’s finding of secondary meaning in the lighthouse mark for golfing services shows that the lighthouse has not lost its significance as a mark for golfing services, despite the third-party uses in relation to other products and services. Those third-party uses are only relevant to the strength of the mark in this case and do not evidence abandonment. See Sweetheart Plastics, Inc. v. Detroit Forming, Inc., 743 F.2d 1039, 1048 (4th Cir. 1984) (citing 1 J.T. MCCARTHY, TRADEMARKS AND 30 UNFAIR COMPETITION § 17:5, at 779-80 (2d ed. 1984)); RESTATEMENT, supra, § 30 cmt. c; see also Amstar Corp. v. Domino’s Pizza, Inc., 615 F.2d 252, 259 (5th Cir. 1980); 2 MCCARTHY ON TRADEMARKS, supra, § 17:17, at 17-27.