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Inwood Labs. v. Ives Labs. - 456 U.S. 844, 102 S. Ct. 2182 (1982)

Rule:

To establish secondary meaning, a manufacturer must show that, in the minds of the public, the primary significance of a product feature or term is to identify the source of the product rather than the product itself. 

Facts:

A drug manufacturer patented a certain drug which it marketed under a registered trademark. After the patent expired, several generic drug manufacturers began marketing the drug and intentionally copied the appearance of the trademarked drug capsules. The holder of the trademarked drug instituted an action in the United States District Court for the Eastern District of New York under, among other things, 32 of the Trademark Act of 1946 (Lanham Act), alleging infringement of trademark. The District Court found that the generic drug manufacturers had not suggested, even by implication, that pharmacists should dispense generic drugs incorrectly identified under the trademark name of the original patent holder of the drug and entered judgment for the generic drug manufacturers. Without expressly stating that the District Court's findings were clearly erroneous, the United States Court of Appeals Second Circuit concluded, on appeal, that the generic drug manufacturers had violated § 32 of the Trademark Act of 1946.

Issue:

Did the appellate court err in overturning the district court’s decision?

Answer:

Yes

Conclusion:

Because the trial court's findings concerning the significance of the instances of mislabeling were not clearly erroneous, the Court held that they should not have been disturbed by the lower appellate court. The Court posited that the lower appellate court was not entitled simply to disregard the trial court's finding of functionality. Furthermore, the Court opined that although the pharmacists could be held liable for mislabeling the drugs, there was no evidence that petitioners conspired with the pharmacists or suggested the pharmacists mislabel the drugs, thus, the appellate court’s conclusion that petitioners violated § 32 of the Trademark Act of 1946 was reversed.

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