A trademark is a way of distinguishing product or service. In order to be registered, a mark must be capable of distinguishing the applicant's goods from those of others. 15 U.S.C.S. § 1052. Marks are often classified in categories of generally increasing distinctiveness; following the classic formulation set out by Judge Friendly, they may be (1) generic; (2) descriptive; (3) suggestive; (4) arbitrary; or (5) fanciful. The latter three categories of marks, because their intrinsic nature, serve to identify a particular source of a product, and are deemed inherently distinctive and are entitled to protection. In contrast, generic marks are not registerable as trademarks.
Respondent Taco Cabana, Inc., the operator of a chain of Mexican restaurants, sued petitioner Two Pesos, Inc., a similar chain, for trade dress infringement under § 43(a) of the Trademark Act of 1946 (Lanham Act), which provides that any person who uses in connection with any goods or services any false description or representation shall be liable to any person damaged by such use. The District Court instructed the jury that trade dress, which is the total image and appearance of a business, was protected under 43(a) if it either was inherently distinctive, or had acquired a secondary meaning or a unique association with a specific source. The jury found that the Taco Cabana, Inc.’s trade dress was inherently distinctive but had not acquired a secondary meaning. Because, as the jury was told, Taco Cabana's trade dress was protected if it either was inherently distinctive or had acquired a secondary meaning, judgment was entered awarding damages to Taco Cabana. In the course of calculating damages, the trial court held that Two Pesos had intentionally and deliberately infringed Taco Cabana's trade dress. On appeal, the Court of Appeals ruled that the instructions adequately stated the applicable law and that the evidence supported the jury's findings. In particular, the Court of Appeals rejected petitioner's argument that a finding of no secondary meaning contradicted a finding of inherent distinctiveness.
Did a finding of no secondary meaning contradict a finding of inherent distinctiveness?
The Court held that the appellate court correctly rejected the argument raised by petitioner, Two Pesos, Inc., that a finding of no secondary meaning contradicted a finding of inherent distinctiveness. The Court held that proof of secondary meaning was not required to prevail on a claim, where the trade dress at issue was inherently distinctive. Specifically, there was no persuasive reason to apply to trade dress a general requirement of secondary meaning which would be at odds with the principles generally applicable to infringement suits under 15 U.S.C.S. § 1125(a). Moreover, the Court posited that adding a secondary meaning requirement could have anticompetitive effects, creating particular burdens on the startup of small companies.