It is the classic story. The young and exciting new competitor enters the market, attempting to shake things up and change the game, and when their efforts prove successful, those already existing in the industry rush to copy what they believe is attributable to the newcomers success. It is called competition. This is what drives the market, preventing stagnation and keeping industries moving forward. Yet, in a recent case Kind LLC, the new competitor, attempted to preliminarily enjoin Clif Bar & Company from infringing on what it argued was protectable trade dress under Lanham Act Section 43(a).
The Southern District of New York heard the trade dress infringement case in which Kind attempted to prevent Clif from releasing their Mojo bar in packaging which Kind alleged infringed upon the wrapper of their healthy fruit and nut bars (both product packages are pictured above). Kind argued the similarity between the two product packages was likely to generate consumer confusion. In order to grant a preliminary injunction the court had to first find the trade dress was protectable and then further find there was a likelihood of consumer confusion. While the District Court denied Kind’s motion to restrain Clif from packaging their Mojo bar in the disputed trade dress, Clif agreed to settle due to Kind’s threats to appeal the decision. While the settlement terms have not been fully disclosed, Clif ultimately agreed to alter its packaging plans for its Mojo snack bars.
While there are many different aspects of the case worthy of attention and analysis, there are a few especially interesting components. In standard Second Circuit fashion, the District Court applied the Abercrombie test for determining the inherent distinctiveness of the trade dress. It focused on six main elements of Kind’s product packaging including:
“(1) packaging with a transparent, rectangular front panel revealing a large portion of the bar itself; (2) a horizontal stripe bisecting the transparent front panel containing the flavor of the bar in text; (3) a text description of the product line (e.g. “Fruit & Nut,” “Plus,” or “Nuts & Spices”) in line with the horizontal stripe bisecting the transparent front panel; (4) a vertical black band, offset to the side of the package, containing a bulleted list of many of the bar’s key healthful attributes; (5) opaque vertical bands, or end caps, at either edge of the product package; and (6) a 40g size, in a slender shape.”
Based on these factors, the court made the surprising and rare decision that the trade dress was descriptive. This was surprising as most product packaging is deemed arbitrary under the Abercrombie spectrum, as there are a plethora of combinations of features available for use in the composition of the trade dress. In arguing the Kind wrapper was descriptive, the court explained that the product features are described by elements such as the transparent front panel and the horizontal bar detailing the product flavor. Charles Baxter, one of the lead attorneys on the case, argued in his appeal brief that the court handled analysis of the trade dress incorrectly, as he asserted that it should not be based on individual elements, but instead on the overall perception of the product’s packaging, considering the totality of the snack’s appearance.
Because the court found the trade dress was descriptive, to be protectable the court needed to find that the Kind wrapper had developed secondary meaning. This would show consumers associate the packaging with Kind’s product and the wrapper serves the purpose of identifying the product for consumers. Any one of the six enumerated packaging features appears generic when examined individually, as they are commonly seen in the industry. But this analysis should have examined to the overall commercial impression created by amalgamation of all of these features to determine if they had acquired distinctiveness. Unfortunately, the parties were never given the opportunity to test for exactly what was making consumers react to the product, as the case never reached the Second Circuit. Without a survey to test if the packaging had source identifying power, absent the word marks and brand names, it is unclear if the combination of the features making up the product packaging really serve to denote product source to the average consumer.
The other aspect of the case worth consideration is the element of actual consumer confusion. Kind’s consumer confusion survey measured net confusion through asking state of the art questions and found confusion rates of 15%. This is on the lower bounds of confusion rates accepted by courts, and should be analyzed and understood with care. What is this 15% representative of? Arguably not much. First, there is a segment of the population that will always be confused, despite differences in product packaging and even when provided with the clearest branding available. If those people are included in the 15%, then the percentage of the population genuinely confused by these specific health bar wrappers is lower than it appears. Secondly, the survey failed to test for what actually caused the confusion. The lack of controls incorporated in the survey provided “no way of measuring or seeing whether one or two elements of the trade dress are the ones causing confusion and the others are simply superfluous.” The third issue with confusion rates this low is that, if the 15% is acknowledged as a legitimate showing of confusion a cost could be imposed on the 85% of people for whom the Clif logo is functioning as a positive source identifier.
I find this problematic. As discussed above, it was never proven through survey evidence that Kind’s packaging, without the Kind logo, conveyed to consumers the source of the product. This is coupled with the questionable levels of consumer confusion that do not appear to be very probative given the reasons aforementioned. Yet, Clif changed its product packaging for its Mojo bar. While, arguably Clif ended up with a better wrapper, with clearer branding that is more aesthetically appealing, this may not have been the case. Kind had the power through the threat of appealing the District Court decision, to force Clif to change its package in a way that may have not been beneficial to consumers. For example, the new Mojo design could have abandoned the transparent front panel altogether, denying the consumer the ability to see the bar they were buying before tearing open the packaging. Is this the result we want? Is this what trademark law was designed to do? While Kind should be protected against mimicry creating consumer confusion for packaging that is truly distinctive of source, they should not be given the ability to force out a competitor who is lawfully copying a product packaging design that has proven successful. This lawful copying is what generates competition and drives the economy and the legal system should be hesitant before giving parties the ability to combat the power of market forces.
Lara Cohen is a J.D. candidate, 2017, at NYU School of Law.