Pim Brands Inc v. Haribo of America Inc ( 2023 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 22-2821
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PIM BRANDS INC.,
Appellant
v.
HARIBO OF AMERICA INC.
_______________
On Appeal from the United States District Court
for the District of New Jersey
(D.C. No. 2:19-cv-14183)
District Judge: Honorable Madeline C. Arleo
_______________
Argued: June 20, 2023
Before: CHAGARES, Chief Judge, and BIBAS and MATEY,
Circuit Judges
(Filed: September 7, 2023)
Jonathan Z. King [ARGUED]
Richard S. Mandel
COWAN, LIEBOWITZ & LATMAN, P.C.
114 W. 47th St., 21st Floor
New York, NY 10036
Leah Kelman
David R. King
HERRICK, FEINSTEIN LLP
One Gateway Center, 9th Floor
Newark, NJ 07102
Counsel for Appellant
Michael Cukor [ARGUED]
MCGEARY CUKOR LLC
150 Morristown Rd., Suite 205
Bernardsville, NJ 07924
Mark J. Liss
Tamara A. Miller
Laura M. Schaefer
LEYDIG, VOIT & MAYER, LTD.
180 N. Stetson Ave., Suite 4900
Chicago, IL 60601
Counsel for Appellee
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OPINION OF THE COURT
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BIBAS, Circuit Judge.
Hot summer days call for a slice of watermelon: a juicy, red
wedge with a green-and-white rind. Some candy companies
evoke this image by using colors alone, making their candies
red, white, and green. But the watermelon effect is significantly
stronger if the red-white-and-green candy is shaped like a
wedge. Because the tricolored shape is recognizable as
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watermelon flavored, the whole appearance is useful. So a candy-
maker cannot block competitors from using the combined
shape and colors by trademarking that combination. We will
thus affirm the District Court’s grant of summary judgment.
I. COMPETING CANDIES: WATERMELON WEDGES
PIM makes candies. Two decades ago, it rolled out a new
chewy candy: Sour Jacks Wedges. The original version is water-
melon flavored. Its colors match its flavor: a green layer topped
by a thin white band and then a larger red section. And the
candy is shaped like a wedge. PIM advertised the candy as
“The Ultimate Shape of Sour” and told consumers to “Respect
the Wedge” and to keep “Livin’ on the Wedge.” Compl. ¶¶ 15–18.
Once the new candy had been on the market for more than
a decade, PIM tried to trademark just “the shape of a wedge for
candy.” JA 194. The Patent and Trademark Office rejected it,
requiring the company to add colors. PIM obliged, registering
a trademark in “the shape of a wedge for candy, with an upper
green section with white speckles, followed by a narrow mid-
dle white section and followed by a lower red section with
white speckles.” Registration No. 5,029,701. Its trademark
looks like this:
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JA 137. It is this trademark—the watermelon-colored wedge—
that is at issue.
PIM later started making Sour Jacks Wedges in other fla-
vors. Each has a color to match its fruity flavor, like green for
green apple or yellow for lemonade. But all are in the same
wedge shape. The Patent Office later granted PIM a supple-
mental registration for a tricolored wedge with unspecified col-
ors. That trademark is not before us today.
Haribo also makes candies. It recently introduced its own
chewy watermelon candy. Its version is an elongated water-
melon wedge. Like PIM’s, Haribo’s candy is red, white, and
green. Haribo says it designed the candy’s shape and colors to
match its flavor: watermelon.
PIM thinks Haribo’s design copies its own. So it sued for
trademark and trade-dress infringement under the Lanham Act
and for unfair competition under New Jersey common law.
15 U.S.C. §§ 1114(1), 1125(a)(1)(A). Haribo countered that
PIM’s trade dress was functional (and unprotectable for other
reasons not before us on appeal), so it asked the court to cancel
PIM’s trademark. But because PIM’s mark is registered, it is
presumptively valid. § 1057(b). So Haribo bore the burden of
proving that it is functional. § 1115(a), (b)(8).
The District Court held that Haribo had borne that burden
and granted it summary judgment on functionality. Because
PIM’s combination of colors and shape helps identify the
candy’s watermelon flavor, the court reasoned, it is functional
and so not protectable as trade dress.
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PIM now appeals. It criticizes the District Court for not fo-
cusing on the wedge shape in isolation from the colors. It ad-
mits that the candy’s color is functional because it identifies
the flavor. But it argues that the wedge shape separately iden-
tifies the brand.
The District Court had jurisdiction under 15 U.S.C.
§§ 1119, 1121(a), and 28 U.S.C. §§ 1331, 1338, and 1367. We
have jurisdiction under 28 U.S.C. § 1291.
We review the District Court’s grant of summary judgment
de novo. Ezaki Glico Kabushiki Kaisha v. Lotte Int’l Am.
Corp., 986 F.3d 250, 255 (3d Cir. 2021). We ask whether any
material fact is genuinely disputed and whether, viewing the
facts most favorably to PIM, Haribo merits judgment as a mat-
ter of law. Id. A dispute is “ ‘genuine’ … if the evidence is such
that a reasonable jury could return a verdict for the nonmoving
party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). Functionality turns on a finding of fact. Ciba-Geigy
Corp. v. Bolar Pharm. Co., 747 F.2d 844, 850 (3d Cir. 1984).
So summary judgment is proper only if, given the correct legal
standard, no reasonable jury could find the trade dress non-
functional.
Functionality is materially the same under federal and state
law. Ezaki Glico, 986 F.3d at 255. So we, like the parties, focus
on federal trademark law.
We consider the trade dress as it is presented to us. See J.
Thomas McCarthy, 1 McCarthy on Trademarks and Unfair
Competition § 7:76 (5th ed. 2023) (“[I]t is largely up to the
plaintiff to define what aspect is claimed as protectable trade
dress.”). PIM limited its claims to the trade dress described in
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its primary federal trademark registration: a wedge shape in
watermelon colors.
II. PIM’S WEDGE SHAPE, TOGETHER WITH ITS COLORS,
USEFULLY SIGNALS THE CANDY’S WATERMELON FLAVOR
A. Trademark law does not protect useful designs
1. A design is functional if it is useful for anything beyond
branding. Trademarks protect buyers and sellers by flagging
the goods’ source. Trade dress, a subset of trademark, protects
distinctive choices (like size, shape, and color) that make up
“the overall look of a product.” Ezaki Glico, 986 F.3d at 255
(internal quotation marks omitted). Unlike utility patents,
which protect useful designs, trademarks protect features that
are arbitrary, ornamental, or the like. Id. at 255–56. Compare
35 U.S.C. § 101, with 15 U.S.C. § 1127. So a trademark can be
cancelled if it “comprises any matter that, as a whole, is func-
tional.” 15 U.S.C. § 1052(e)(5); see also § 1064(3). To be func-
tional, the trade dress as a whole “need only be useful, not es-
sential.” Ezaki Glico, 986 F.3d at 258. If it is functional, com-
petitors may copy it freely.
Functionality is not a high bar. Trade dress is limited to de-
sign choices that serve only to brand a product. If a design
choice “would put competitors at a significant non-reputation-
related disadvantage,” then it is functional. Qualitex Co. v. Ja-
cobson Prods. Co., 514 U.S. 159, 165 (1995). Even if the de-
sign chosen both promotes a brand and also “makes a product
work better,” it is functional and unprotectable. Ezaki Glico,
986 F.3d at 258. “So long as the design improves cost, quality,
or the like, it cannot be protected as trade dress.” Id.
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2. If design choices serve the same function, we consider
them together. PIM asks us to look at the wedge shape in iso-
lation. It suggests that under Ezaki Glico, we must analyze each
feature of the trade dress independently to figure out whether
each is “[it]sel[f] nonfunctional or help[s] make the overall de-
sign distinctive.” Appellant’s Br. 26. But that claim overreads
Ezaki Glico.
That case dealt with a different kind of confectionery con-
troversy. Ezaki Glico shaped its cookies into sticks and coated
them partly with chocolate. It claimed that combined design as
a trade dress. But the stick shape let it fit more cookies into
each package. And dipping only part of the stick in chocolate
helped people eat it without getting chocolate on their hands.
986 F.3d at 259. Ezaki Glico claimed as much in its ads. Id. at
260. Because each element of the claimed trade dress served a
function (or in that case, two separate functions), the whole
trade dress was functional. Id. at 257–59.
Sometimes, as in Ezaki Glico, design choices for features
serve discrete functions. But here, we have two features (shape
and color) whose designs serve a single function—identifying
the flavor. So this case answers a follow-up question: When a
trade dress has an identifiable function, do we need to analyze
each feature separately to see if it independently contributes to
that function? No.
Rather than divide and conquer, when features’ designs to-
gether serve a function, we look at those designs together. As
we noted in Ezaki Glico itself, we analyze functionality “at the
level of the particular design chosen for feature(s).” Id. at 257.
When a product’s overall look serves some function, we ask
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whether that function is served by the whole or by some dis-
crete part of the trade dress. The trademark statute also sup-
ports this idea, stating that trademark protection is not available
for a mark “that, as a whole, is functional.” 15 U.S.C.
§ 1052(e)(5) (emphasis added). So if the whole trade dress
serves a single function, and each feature’s design contributes
to that same function, then the whole trade dress is functional.
As the parties agreed at oral argument, if a product’s picture
is enough evidence of its usefulness, the judge’s common-sense
assessment of functionality may suffice. They are right. Be-
cause the functionality bar is low, all the design need do is give
the product a significant competitive edge beyond identifying
its source. See Qualitex, 514 U.S. at 164, 169. And not all con-
sumers have to see the trade dress as serving a function beyond
identifying the product’s source. It is enough that all reasona-
ble jurors would conclude that a significant number of consum-
ers would see it that way. That is true here.
B. The watermelon-colored wedge shape serves a
function: identifying its flavor
The parties agree that the candy’s color scheme is func-
tional because it helps to identify its watermelon flavor. We
agree. Communicating the candy’s flavor is a legally recog-
nizable function. And the candy’s colors serve that function:
they are oriented like the fruit’s colors and evoke the fruit.
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The question is whether the candy’s colors alone signal its
flavor or whether the colors and shape combined further that
function. Though PIM disagrees, we think the two work to-
gether. On this issue, the parties’ photos are worth a thousand
words of briefing. Here is PIM’s candy side by side with real
watermelon slices:
Any reasonable juror would agree: The whole trade dress,
not just the colors, makes this candy resemble a watermelon
slice. The candy and the fruit share similar shapes and colors.
Even the orientations match: each has a long, wide, green base;
a thin, white layer running the length and width of the green
base; and a triangular, reddish-pink top covering that white
layer and angling up to a point.
PIM objects that the District Court focused on the candy’s
colors at the expense of its shape. Not so. The court rightly an-
alyzed the trade dress as a whole and whether any part of it
only advanced the brand. It even included a footnote about the
shape itself. The court was right not to divorce shape from
color. The two work together to resemble watermelon. PIM
may have worked to build a brand around the shape. But the
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wedge comes to us dressed in red, white, and green, and that
wedge looks like a watermelon.
As PIM notes, the shape and colors do not match exactly:
The bottom could be more curved and have a thinner band of
darker green. The wedge could be wider. The point could be
sharper and a deeper red. There could be black seeds. But as
PIM itself put it, because this candy is an impulse buy, it
“do[es]n’t need to be the Mona Lisa.” Oral Arg. 13:15–19. To
identify its flavor, the candy’s trade dress need not exactly
copy watermelon, but just evoke it.
And the shape contributes to the overall effect. Some
shapes for watermelon candies, such as sharks, ropes, and rib-
bons, detract from (or at least add no information beyond) the
colors. But the wedge shape contributes to the function. The
colors alone could leave some ambiguity: Is it watermelon or
strawberry? With the wedge shape, all ambiguity is gone—this
candy is a wedge of watermelon.
In that vein, the wedge might or might not identify the fla-
vor on its own or with other color schemes. That trade dress is
not before us; the watermelon-colored wedge is. The registered
trademark at issue defines the mark by both colors and shape.
So does PIM’s complaint. Plus, when we look at the pictured
candies, our eyes are drawn immediately to both their colors
and their shape. We think of a slice of watermelon based on
both its color scheme and its shape. And in this color scheme,
the candy looks like a watermelon wedge. So we hold that the
trade dress presented as a whole, colors and shape together,
makes the watermelon candy more identifiable as a slice of wa-
termelon. That is function enough.
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*****
PIM may have created the wedge shape to distinguish its
product from the rest of the market. But in doing so, it made a
candy reminiscent of a juicy watermelon wedge. That resem-
blance makes the whole trade dress of the red-white-and-green
wedge functional when applied to a watermelon candy. So PIM
cannot use its trademark to shut down Haribo’s competing
candy. We will affirm the judgment of the District Court with
further instructions to limit the cancellation order to the pri-
mary registration, leaving the supplemental registration intact
for another day.
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