By George Basharis, J.D.
Japanese confectionary company’s Pocky cookie stick’s shape was useful and not entitled to trade-dress protection.
A functional design that is useful, even if it is not an essential feature of a product, is not entitled to trade-dress protection, the U.S. Court of Appeals for the Third Circuit determined, affirming dismissal of a trademark lawsuit filed against the maker of a copycat chocolate-covered cookie. Trade dress protects only features that are ornamental or arbitrary and therefore identify a product’s source, it does not protect useful features that are normally protected by patent law, the court explained (Ezaki Glico Kabushiki Kaisha v. Lotte International America Corp., October 8, 2020, Bibas, S.).
Japanese confectionary Ezaki Glico Kabushiki Kaisha invented a chocolate-covered cookie stick called Pocky. The end of each Pocky cookie is left partly uncoated and serves as a handle. The design is registered as a trade dress. Ezaki Glico started to sell Pocky in the United States in 1978. In 1983, Lotte International America Corp. started to sell a similar stick-shaped cookie called Pepero. Like Pocky, Pepero cookies are only partially coated with chocolate and leave one end of the stick uncovered. Ezaki Glico notified Lotte of its registered trade dress and asked the company to stop selling Pepero. In 2015, Ezaki Glico sued Lotte claiming trademark infringement and unfair competition under the Lanham Act and similar state laws.
The district court dismissed the action, finding that Pocky’s design was functional and not protected as trade dress. On appeal, Ezaki Glico argued that because the stick-shaped cookie design was not an essential feature of the snack, it was not functional. The Third Circuit did not agree.
The court distinguished patents, which are intended to promote and protect inventions that are "new and useful" for a limited time, from trademarks, which protect the overall look of products and identify their source. Product designs that are functional may be patented but they are not entitled to trade dress protection. Because "functional" is not defined by the Lanham Act, the court gave the word its ordinary meaning, saying that something that was functional was useful. The court observed that its definition was supported by U.S. Supreme Court precedent recognizing that the functionality doctrine protected competition by keeping a producer from monopolizing a "useful" product feature. A functional design might be essential, but application of the doctrine is not limited to essential features.
Evidence of functionality may be found in a design that makes a product work better, and Pocky’s design made it work better as a snack, the court said. Pocky’s uncoated handle made the snack useful: it was easy to hold, and a consumer could eat it without getting chocolate on their hands. It also made the snack easy to pack. Ezaki Glico even advertised Pocky’s "no mess handle" as making the snack easier to handle and to enjoy. The possibility of other designs and shapes did not make Pocky’s design any less useful, the court explained.
A utility patent also is strong evidence of functionality but Ezaki Glico’s Pocky patent was for a method of making the snack’s stick shape. Consequently, the district court erroneously considered the patent as evidence of functionality. Nonetheless, viewed as whole, Pocky’s trade dress was functional, or useful, and the lower court’s error was immaterial, the Third Circuit concluded. "That’s the way the cookie crumbles," the court said.
This case is No. 19-3010.
Attorneys: Jessica L. Ellsworth (Hogan Lovells US LLP) for Ezaki Glico Kabushiki Kaisha, Ezaki Glico USA Corp. John J. Dabney (Snell & Wilmer) for Lotte International America Corp, Lotte Confectionery Co., Ltd.
Companies: Ezaki Glico Kabushiki Kaisha Ezaki Glico USA Corp.; Lotte International America Corp; Lotte Confectionery Co., Ltd.
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