Branding: What’s in a Name?

 

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Branding is usually approached from a marketing perspective or from the perspective of a trademark attorney. In this transdisciplinary workshop, hear from experts on market analytics, consumer psychology, and trademark law to learn how to build a better brand for a start-up or a new product line. Participate in a rich discussion with experts in these fields and engage with the concepts through in-class group exercises. Learn why some brands soar and others flop. Earn 1 Kentucky and Ohio CLE credit at this workshop on June 10, 2014 in Blue Ash. Learn more.

Learning Objectives:

  1. Working knowledge of brand equity management principles
  2. An introduction to brand equity management tools, including the Young & Rubricam Power Grid
  3. Discover which words and colors fascinate us neurologically
  4. How to measure your brand equity – an introduction
  5. The basics on how to avoid trademark infringement
  6. How to select marks that may be eligible for federal trademark protection
  7. How to build an integrated legal and business brand management strategy

Special thanks to our facilitators:

  • Kenneth B. Germain, distinguished senior fellow, NKU Chase College of Law; of counsel, Wood Herron & Evans
  • Frank R. Kardes, Ph.D., professor of marketing, UC
  • Aron Levin, Ph.D., professor of marketing, NKU Haile/US Bank College of Business; director, Marketing Research Partnership Program at NKU

This workshop is part of the “Small Business Essentials Series” hosted by the Cincinnati Business Courier and sponsored by NKU Chase College of Law.  NKU Alumni, contact Lindsey Jaeger at 859.572.5783 or jaegerL1@nku.edu for a 15% discount code.

Red Shoes diary has a new entry – Louboutin trademark revived

In a reversal of the lower court and its fortunes Christian Louboutin, the Second Circuit reversed the determination of the District Court to hold that the red outsoles flashed by the fashionable does indeed have secondary meaning in the fashion marketplace – at least when used when not matching the color of the uppers.

Writing for the unanimous panel, Judge José A. Cabranes, acknowledged that the Louboutin outsoles have “the requisite ‘distinctiveness’ to merit protection.”

Louboutin’s trademark, consisting of a red, lacquered outsole on a high fashion woman’s shoe, has acquired limited “secondary meaning” as a distinctive symbol that identifies the Louboutin brand. … [W]e limit the trademark to uses in which the red outsole contrasts with the color of the remainder of the shoe. We conclude that the trademark, as thus modified, is entitled to trademark protection.

At the core of the debate is the concept of aesthetic functionality. Purely aesthetic product features can be protected as trademarks if they are source-identifying and non-functional.

Functionality has two definitions: “a functional feature is one the exclusive use of which would put competitors at a significant non-reputation-related disadvantage. … [A] feature is also functional when it is essential to the use or purpose of the device or when it affects the cost or quality of the device.” (TrafFix Devices, Inc. V. Marketing Displays, Inc. 532 U.S. 23 (2001) (internal quotes omitted)).

Color is generally not functional for a product unless the color changes the effectiveness of the product. So pills can be marketed based on color (e.g. little blue pills) as can home insulation (pink). Like any other trademark, the color identifier is still limited to the specific goods (so pink can also designate cancer-awareness organizations).

In the case of fashion shoes, it has worked. “As a result of Louboutin’s marketing efforts, the District Court found, the “flash of a red sole” is today “instantly” recognizable, to “those in the know,” as Louboutin’s handiwork.”

Nonetheless, the law has long recognized the concept of aesthetic functionality. As the 1938 Restatement of Torts explains, “[w]hen goods are bought largely for their aesthetic value, their features may be functional.” I have elsewhere described the importance of aesthetic value as of the social relevance of a product. Objectively identical items (such as stuffed animals) are subjectively more or less important to the consumer. For example, Elmo is more valuable to a toddler than other puppets. In the absence of copyright protection, trademark should not provide a monopoly over such relevance.

Keeping with this line of reasoning, the Louboutin court updated the aesthetic functionality test by stating “a mark is aesthetically functional, and therefore ineligible for protection under the Lanham Act, where protection of the mark significantly undermines competitors’ ability to compete in the relevant market.”

At the same time, the Louboutin trademark works because of its contrast with the shoe upper. But more importantly, Louboutin cannot own the ability to make red shoes that have matching uppers and outsoles. It has no trademark in such use precisely because other designers need to make monochrome shoes and the public does not identify such shoes from a single source. Matching the uppers and outsoles is a more general style and therefore aesthetically functional.

The approach of the Second Circuit provides a reasonable balance between trademark holders and competitors. It helps the public because it recognizes both the value of the trademarks for the purchasers and the needs for other designers to remain competitive and creative.

The decision will motivate competitors to seek signature colors as yet another tool to separate their products in crowded and competitive marketplaces. Purple tablets, anyone?

Kentucky remains special as Sixth Circuit affirms bourbon’s dominant appeal.

Just as “all bourbon is whiskey, but not all whiskey is bourbon,” it is equally true that all trade dress constitutes trademarks but not all trademarks are trade dress. The U.S. Court of Appeals for Sixth Circuit made a series of fine distinctions recently in upholding an injunction against Jose Cuervo tequila from adopting a confusingly similar form of trade dress. The Sixth Circuit has found that the red wax seal on the Maker’s Mark bourbon whiskey is protected trade dress. The opinion by Judge Boyce Martin Jr. celebrated the uniqueness of bourbon and by extension easily afforded trade dress protection to a leading manufacturing.

Maker’s Mark had been using the red dripping wax seal since at least 1958 and had federally registered the trade dress. In 1995, Jose Cuervo began producint a premium tequila, “Reserva de la Familia.” In 2001 Cuervo modified the seal on the premium tequila to include the red dripping style of seal.

Two years later Maker’s Mark brought a lawsuit to stop the competition, suing Casa Cuervo S.A. de C.V., Jose Cuervo International, Inc., Tequila Cuervo La Rojeña S.A. de C.V., and Diageo North America, Inc. During the litigation, Cuervo reverted to its original red straight-edged wax seal but continued to seek cancellation of the Maker’s Mark trademark.

The litigation first established that the Maker’s Mark wax seal was not functional. It does not, in fact, seal the bottle. Other bourbon distilleries such as Buffalo Trace still use wax as a functional sealant, but the red dripping seal has no function. Secondly, the litigation established that for the market of distilled spirits, the red dripping seal served to distinguish Marker’s Mark from other brands.

The district court found and the Court of Appeals affirmed “that the Maker’s Mark red dripping wax seal is an extremely strong mark due to its unique design and the company’s singular marketing efforts.”

The Wall Street Journal enjoyed the flavor of the opinion.

Judge Martin’s opinion includes some interesting points:

Justice Hugo Black once wrote, “I was brought up to believe that Scotch whisky would need a tax preference to survive in competition with Kentucky bourbon.” While there may be some truth to Justice Black’s statement that paints Kentucky bourbon as such an economic force that its competitors need government protection or preference to compete with it, it does not mean a Kentucky bourbon distiller may not also avail itself of our laws to protect its assets. This brings us to the question before us today: whether the bourbon producer Maker’s Mark Distillery, Inc.’s registered trademark consisting of its signature trade dress element—a red dripping wax seal—is due protection, in the form of an injunction, from a similar trade dress element on Casa Cuervo, S.A. de C.V.’s Reserva de la Familiatequila bottles.  We hold that it is.  The judgments of the district court in this trademark infringement case are AFFIRMED.

The name “bourbon” at that time meant whiskey made from mostly corn in Kentucky or points west. But it was likely not until “sometime between 1823 and . . . 1845” that Dr. James Crow “perfect[ed] the sour-mash method of whiskey-making”—the dominant process in use today that, when coupled with aging in charred new oak barrels, produces modern bourbon’s familiar caramel color and distinctive taste.

Congress in 1964 designated bourbon as a “distinctive product[] of the United States,” 27 C.F.R. § 5.22(l)(1), and prescribed restrictions on which distilled spirits may bear the label “bourbon.” Federal regulations require that bourbon whiskey to, among other things, be aged in charred new oak barrels, contain certain proportions of mash ingredients, and be barreled and bottled at certain proofs. § 5.22(b). Importantly, whiskey made for consumption within the United States cannot be called bourbon unless it is made in the United States. § 5.22(l)(1).

The Court notes that ninety-five percent of bourbon is made in Kentucky. While the Court provides a footnote regarding the other five percent, as a member of a Kentucky law school, I’ll refrain from reproducing that here.

Since the injunction does not prohibit Cuervo from using a red wax seal located on the same areas of the neck of its bottle. The injunction applies merely to the red wax seal that includes the stylized drips of the Maker’s Mark trademark. For companies hoping to imbue support from the decision, trade dress remains a useful, but extremely limited, marketing strategy.

The decision was consistent with recent Supreme Court decisions such as Walmart Stores, Inc. v. Samara Bros., Inc. in which the Court upheld but restricted the role of trade dress under trademark law. Earlier decisions by the Court in Qualitex and Two Pesos, Inc. v. Taco Cabana, Inc. had been much more expansive, so the narrowing has been a better balance between competitors which better serves the public.