Advantages and Limitations of Trade Dress Registration (Using iPod Nano Registration as an Example)

By Robert X.

This blog posting discusses the pros and cons of trade dress registration using the iPod Nano as an actual example. The table below contains a drawing for the trade dress registration (registration # 3,365,816, top left) and five different brands of MP3 players found in the market. Can you tell which MP3 player the registered trade dress protects?

Drawing in trade dress registration:


(1):


(2):


(3):


(4):


(5):



The answer is that the registration is owned by Apple Inc. and is based on Apple’s 1st generation iPod Nano. The current and 5th generation of iPod Nano is # 3 in the table. If you cannot match the drawing to any of the players, it is because the design of the iPod Nano has changed from 1st generation to the current generation. (Note: the MP3 players are made by: (1) JWin, (2) Coby, (3) Apple, (4) Sandisk, (5) Coby.)

A photo of the 1st generation iPod Nano was used as part of the evidence in the trademark application file, shown below. Compared to the photo, the drawing does not show color, texture, polish, and build quality of the unit, and the symbols “MENU”, play, back, and forward are missing. The differences between the drawing and the photo are substantial, so is this a problem for the validity of the trade dress registration?




Trademark registration is based on the drawing. The first question is: what is the trade dress this registration is supposed to protect: is it the drawing, the actual iPod as depicted in the photo, or something in between? A common sense answer is that it cannot be something in between because it is undefined as to where in between. One may argue that because the registration is intended to protect the actual trade dress, the registration should protect the actual trade dress based on the photo. On the other hand, the actual photo is only shown in the application file. The examiner examined the application based on the drawing. Over, in a trademark search, only the drawing is shown on the trademark registration. Moreover, if more than one photos are used (for example, showing the iPod’s front, back, and side), which photo controls? So the argument seems to favor the drawing. In fact, this is the view expressed by the 6th Circuit in the dicta in Gibson Guitar Corp. v. Paul Reed Smith Guitars, LP, 423 F.3d 539, 546 (6th Cir. 2005). The case dealt with a registration for the trade dress of an electric guitar where the drawing was 2-dimensional and showed only the contour of the guitar. The court stated: “[W]e do not believe that the two-dimensional drawing included in the LP Trademark should be construed to create a trademark on the entire guitar as depicted in photographs accompanying the trademark application (including the location and style of knobs, switches, and other hardware).” Id.
If the trade dress registration is based on the drawing, then there are questions as to the validity of the registration.

Lack of secondary meaning. In the trade dress application, the color picture of the iPod was used in the declarations filed to prove “acquired distinctiveness.” In each of the declaration, a customer or a sales person vouched that when they see a picture of an iPod, they could immediately recognize that it is an iPod made by Apple. Because the registration is based on the drawing instead of the photo, the proper question should be whether the declarants could recognize the drawing as an iPod. Because the declarations focused on the wrong question, the application failed to show that the drawing was recognized by an appreciable number of relevant consumers as an indication of product origin or sponsorship. Thus, the registration is invalid.
In contrast, traditional stylized (or design) trademark registration has much less of such problem because they are usually simple and distinctive even when reduced to a drawing. For example, the Nike swoosh, the Apple with a bite, and Mercedes Star are simple and distinctive. One can easily recognize these marks by looking a drawing without seeing a photo.

Distinctiveness or genericness. To be registrable, product designs always require a showing of acquired secondary meaning; thus, a product design needs to be not generic to be capable of acquiring secondary meaning. The features that remain in the iPod drawing include (1) the square shape of the screen, (2) the square shape of the entire unit, (3) the circular shape of the control dial, and (4) the arrangement of the square and the circle. The square shape of the screen was disclaimed in the amended application because the examiner thought it was functional. The square shape of the entire unit should have been disclaimed as well because the rectangular shape is generic to most mp3 players. The circular shape of the control is also generic because such dial controls have long been used in TV remote controls and are widely popular on portable electronics. Lastly, the arrangement of the square and the circle is likely generic because there are only two possible arrangements of the square screen and the circular control: the circle on the top, or at the bottom. Overall, the impression of the drawing is so generic that it is unlikely to acquire secondary meaning.
The drawing omitted the symbols “MENU”, play, back, and forward. This would have been a good idea if this were a patent because patent coverage is wider if there are fewer limitations in the claims. However, here it seems that removal of these symbols further renders the drawing unrecognizable as an iPod Nano.

Functionality. There are several factors in analyzing the functionality of a product design for trade dress protection. For brevity, we focus on the fundamental question of whether the exclusive use of the trademarked feature would put competitors at a significant non-reputation related disadvantage. Here we find many products are based on the same simple design, but each with variations (including Apple’s own product, which includes features not found in the drawing). Because the drawing contains only the basic design elements that the other designs necessarily build upon, the other manufactures are likely disadvantaged if they are not allowed to use the basic design elements. Thus, it is likely that the basic design in the drawing is functional.

Changing Product Design. Product designs change faster than traditional trademarks such as logos. For example, the shape of iPod Nano has undergone major changes twice. On the other hand, trade dress registrations must be given narrow interpretation because many products look alike. Thus, as product design changes, the trade dress registration based on the design will likely be abandoned. This is not a huge problem for trade dresses such as the gold fish shape for a cracker because there is no incentive to change. However, the design of an iPod is dictated by its function. For example, the demand for photo and video functions dictates that the current generation has a larger screen.

Advantages of registration despite validity concerns. Trademark registration is inexpensive, and the protection afforded by registration is on top of any trade dress right the owner already has. A federal registration on the Principal Register is prima facie evidence of validity, which becomes incontestable after five years. In case of litigation, registration shifts the burden to the defendant to prove that the mark is invalid. A trademark registration also serves as a nationwide notice to potential infringers. In this case, even if a potential infringer could successfully challenge the validity of the iPod trade dress registration, it cannot say it does not have notice. Then if Apple wins on the merit of the case based on its trade dress right in the iPod itself, the infringement would be more likely to be found to be willful because of the notice.

In applying for a trade dress registration, attention needs to be paid to the drawing to reflect the right amount of detail of the product to get the maximum level of protection. The registration can include a short description, so this should be used to capture additional features that cannot be expressed in the drawing. The registration can take one to two years to complete, so it is probably not worth the effort if the design is expected to change quickly, or if the designs of similar products have been changing every year. Used properly, trade dress registration is helpful to provide additional protection to the brand owner.

Apple v. Psystar (and the “Apple tax”): Legal Analysis

by John S.

Apple Computers is perhaps the best in the business at garnishing favorable press. Everyone knows about the iPhone, iPod, and the new iPad from the commercial blitzkrieg surrounding Apple’s key note addresses. In addition to its key note addresses, Apple has also produced a line of popular commercials entitled “Mac v. PC”. These commercials, among other things, tell consumers about Apple’s Mac OS X: an alternative to windows. The commercials suggest that Mac OS X is superior to Windows because of its stability, ease of use, and invulnerability to viruses and malware. What is implied, however, but not immediately clear from watching the commercials is that Mac OS X is only available on Apple computers; if you want the advantages of Mac OS X, then you need to buy an Apple.

This can be a sore point for many consumers, because the starting price of the cheapest Apple computer is the $599 mini, which doesn’t even include a monitor. To get the full Mac OS X experience, a consumer needs to spend at least $1000 (which is about the price of Apple’s cheapest laptop). Computer geeks everywhere are more than happy to tell you that this high entry price is due to the “Apple tax”.

Without digging too deeply into the issue, here is a quick overview of what the “Apple tax” means: an Apple computer costs approximately 15% more than a PC with comparable hardware specifications; this is largely uncontested. This 15% price difference is called the “Apple tax”, and PC fans argue this is the price that Apple charges for the privilege of using a computer with Mac OS X (again assume this simple model for the sake of the argument, there are other points to be made as to aesthetic design, reliability, etc). This poses the question of whether it is fair for Apple to create an extremely competitive and desirable operating system while at the same time confining it to expensive Apple computers.

In April 2008, Psystar felt that this was not fair, and began selling computers with Mac OS X pre installed for the low price of $399. Since Mac OS X will not work on non-Apple hardware, Psystar had to a create a modified version of Mac OS X that bypassed this limitation, and then pre-installed the modified operating system on all of their computers. Predictably, Apple sued Psystar in July of 2008 for copyright infringement, trademark infringement, and software licensing violations seeking statutory damages and a permanent injunction. The resulting Apple v. Psystar case was widely followed by numerous internet communities because it asked, for the first time, not if Apple’s business model was fair, but if it was legal.

Analyzing the Case

The case begins with an analysis of the copyright infringement claims from Apple. To succeed on a copyright infringement claim, Apple had to prove that it was the owner of the copyright, and then prove that Psystar violated one of the exclusive rights granted by the copyright in question. Apple easily demonstrated its ownership of the copyright on Mac OS X, and then alleged that Psystar violated its exclusive reproduction, distribution and derivative works rights.

Reproduction Right

Apple claimed that Psystar violated its exclusive right to copy Mac OS X when Psystar made copies of Mac OS X and installed those copies on its non-Apple computers. Psystar admitted that they made copies of Mac OS X, but in its defense responded with a fair use defense and a statutory defense under §117(a). However, as the judge said in his decision, Psystar failed to properly plead §117(a), never mentioned the four fair use factors, and cited to irrelevant case law in its fair use defense. The court found that Psystar violated Apple’s exclusive reproduction right.

Distribution Right

Apple next contended that Psystar violated its distribution right by offering and selling Mac OS on Pystar computers to the public. Psystar again admitted to violating this right. In its defense, Psystar claimed protection under the First Sales Doctrine. The First Sales Doctrine provides that “the owner of a particular copy...lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of copyright owner, to sell or otherwise disposte of the possession of that copy”. Again the judge wasted little time in dispelling this defense. Psystar’s Mac OS X copies were clearly not protected by the First Sales Doctrine because Psystar’s copies were unauthorized, illegal copies, thus violating the “lawfully made under this title” requirement. The judge also felt the case law Psystar cited was not on point and irrelevant. For these two reasons, the court ruled that Psystar violated Apple’s distribution rights of Mac OS X.

Right to Create Derivative Works

Apple next alleged that Psystar violated its right to create derivative works of Mac OS X. The right to create a derivative work essentially means that Apple has the right to create a work based upon Mac OS X. Apple said Psystar violated this right when it created the modified version of Mac OS X to run on the Psystar hardware. Psystar contended that their modified version of Mac OS X didn’t violate this right because they didn’t modify Apple’s source code. The judge did not find Psystar’s argument persuasive, and pointed out that if one were to remove the files Psystar added to Mac OS X, the operating system would even be able to boot onto a computer. The judge further added that Psystar failed to supported its argument with valid case law, while Apple reinforced its arguments with relevant case law. Again Psystar was found to have infringed on Apple’s copyright.

Contributory Infringement

The last copyright infringement claim brought against Psystar was contributory infringement: “one infringes contributorily by intentionally inducing or encouraging direct infringement.” Psystar was accused of contributory infringement because it sold its unauthorized copies of Mac OS X to the public. Psystar didnt offer a defense on this issue.

Copyright Misuse Defense

However, although it lost on all the copyright infringement claims, Psystar still had a chance to win this case with a doctrine called “Copyright misuse”. Copyright misuse is a defense to copyright infringement which “forbids the use of a copyright to secure an exclusive right or limited monopoly not granted by the Copyright office and which is contrary to public policy.” A misused copyright is invalid and thus cannot be infringed upon.

Psystar argued that Apple’s attempt to use a copyright to tie Mac OS X to Apple hardware constituted copyright misuse because it was violative of public policy. This argument relies on the idea of the “Apple Tax” (discussed above): it is simply unfair to the public to tie a good operating system to extremely expensive hardware.

However, on this issue the law seems not to have supported Psystar’s argument. The court pointed to cases that constituted copyright misuse, and distinguished the copyright use by Apple from those cases. For example, the court first highlighted a 9th circuit decision that invalidated an AMA copyright on a coding system. AMA required contracting parties to ONLY use AMA”s coding system and nothing else. Apple never prohibited purchasers from using competitors products, it simply prevents users from using Mac OS X on competitors products. To be analogous to the AMA coding system, Apple would have had to force users to agree to never use Windows after purchasing Mac OS X. The court’s second illustrative case of copyright misuse was a 4th circuit decision. A company, Lasercomb, required purchasers of its software to agree to forego utilization of the creative ability of all its officers, directors, and employees in the area of of CAD/CAM die-making software (the kind of software that Lasercomb made) for a period of ninety-nine years. Apple’s copyright use was no where near as egregious as Lasercomb, Apple simply tries to control the use of its own software where as Lasercomb tried to control the business practices of its customers; an area clearly outside of Lasercomb’s copyright.

After analyzing the case law, the court felt that Apple’s use of its copyright on Mac OS X was distinguishable and therefore not violative of public policy. Psystar’s copyright misuse defense failed.

Wrap Up

After reading through the case a number of times I was left with a confusing question: why did Psystar let this case go to court? Psystar must have known they were violating Apple’s copyright in one way or another. Even though Pystar had defenses for some of the copyright infringement claims they completely conceded on contributory infringement. This leads me to believe that Psystar felt that they it might actually win on their Copyright Misuse defense. But, by looking at the AMA and Lasercomb precedents for Copyright Misuse (both of which Psystar cited in its response), it was fairly evident that both cases were distinguishable from Apple’s copyright use. So again, why would Psystar let this case go to court when it knew Pystar violated Apple’s copyright AND it should have seen that the Copyright Misuse cases did not support its position? It could have been a serious misjudgment by the attorneys involved or a strong conviction that a judge could be convinced that Apple’s business mode violated public policy and that the “Apple tax” was just plain wrong. Psystar gambled and lost.

Now, as a result of the Apple v. Psystar decision, there is no question that Apple’s copyright on Mac OS X is valid. Open source supporters around the world can continue to groan about the fairness of Apple’s restrictive software, but Apple v. Psystar makes it clear that tying Mac OS X to Apple hardware is legal.

Protectable Trademark or Symbol of Oppression?

By Aman S.

For years, activist groups have scrutinized the Washington Redskins and other collegiate and professional teams that incorporate references to or images of American Indians in their mascots. American Indian activists have particularly taken issue with the use of the term ‘Redskins’ by the Washington D.C. National Football League team for its offensive nature as a reminder of an oppressive past. Although fans of the team insist the term actually pays homage to one of the first Redskins’ head coaches who happened to be of Sioux heritage, other activists say otherwise. "Redskin' is the most derogatory word you can use to describe a Native American," says Bill Means, founder of the International Indian Treaty Council. The term originates from the bounty-hunting days, when colonies and companies would pay settlers for killing American Indians. Scalps, called "redskins," were used as trophies and proof of killing because it was too difficult to carry the entire body, says Suzan Harjo, one of the plaintiffs in the suit. "In some cases male scalps could be bought for 80 cents, women for 60 [cents], and children for even less. This term describes a heinous act," Harjo adds. Newsweek

On November 16, 2009, the Supreme Court denied a petition for certiorari in Harjo v. Pro-Football, Inc. The suit, brought by Native American activists, contested the validity of the Washington Redskins’ trademark rights in their name and logo. The six trademarks being challenged included the image of the Native American on the helmet, the image of a spear, the script version of the word Redskins, and the name of the professional cheerleading squad, the Redskinettes. The team registered those trademarks in 1967. The plaintiffs in the case argued that the trademarks are invalid because they are “scandalous, disparaging and may bring Native Americans into disrepute or contempt.” The Lanham Act prohibits the registration of such trademarks (words, logos, symbols) that are proven to be disparaging to a group of people. 15 U.S.C. § 1052(a). Given the history behind the term ‘redskin’, the issue of whether or not the team’s trademark is disparaging would have lead to a contentious debate.

However, the Supreme Court did not address whether the trademark was disparaging but whether the activist group’s claim was barred by the doctrine of laches, a legal technicality similar to a statute of limitations. On appeal, The Washington Redskins successfully argued that the plaintiffs slept on their rights and waited too long to assert their claim. The Supreme Court affirmed the Appellate Court ruling and denied the plaintiffs’ petition for certiorari. The Lanham Act does, however, provide for the cancellation of a trademark “at any time,” when the challenged mark is found to be disparaging. 15 U.S.C. § 1064(3).

Interestingly, on April 2, 1999, the Trademark Trial and Appeal Board ruled in favor of Harjo and the American Indians on the issue of disparagement and ordered that the Redskins’ trademark registrations be canceled. Harjo, 50 U.S.P.Q. 2d 1705 (TTAB 1999). The Washington Redskins then appealed that decision to the U.S. District Court for the District of Columbia. The district court ruled that the activists’ claim was barred under the doctrine of laches.

Although Harjo and the other plaintiffs were defeated in their efforts to invalidate the Washington Redskins trademark, another group of American Indian plaintiffs will now be able to pursue their disparagement claim against the team. That suit, Blackhorse v Pro-Football, Inc., was put on hold pending the outcome of Harjo but is now expected to move forward. We’ll see how the Washington Redskins trademark protection holds up this time around. One important issue to pay attention to will be the millions of dollars that the Redskins have invested in and earned from their trademark since its registration in 1967. The team will have a strong argument that it has created its own Redskins brand through extensive marketing and commerce, which will be an important factor when the validity of the mark is analyzed by the court. Stay tuned.