Ambrit, Inc. v. Kraft, Inc.
1 U.S.P.Q. 2d (BNA) 1161, 812 F.2d 1531, 1986 U.S. App. LEXIS 34649 (1986)
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Rule of Law:
A product's trade dress is protectable under the Lanham Act if it is inherently distinctive, primarily non-functional, and a competitor's trade dress is confusingly similar. A registered trademark is considered abandoned and subject to cancellation after prolonged non-use, and subsequent resumption of use does not retroactively cure the abandonment.
Facts:
- Since 1928, The Isaly Company, Inc. ('Isaly') manufactured and sold a five-ounce, chocolate-covered ice cream bar under the name 'Klondike'.
- Since the 1940s, the Klondike bar has been wrapped in a distinctive pebbled foil featuring the colors silver, blue, and white, along with the prominent figure of a polar bear.
- In 1979, Isaly entered into an agreement with Kraft, Inc. ('Kraft') for Kraft to distribute the Klondike bar in Florida, where it achieved high sales.
- After the success in Florida, Kraft expressed interest in purchasing Isaly or having Isaly package the bars for Kraft under the 'Sealtest' name, which Isaly rejected.
- In late 1979, Kraft began developing its own identical ice cream bar, choosing the name 'Polar B'ar' from a list of unused trademarks its predecessor had used from 1929-1932 but had not been used since.
- Kraft hired design firms to create packaging for its Polar B'ar, providing them with Klondike samples and instructing them to replicate the functional features, such as the foil wrapper and six-pack tray.
- The final design for the Polar B'ar wrapper featured a pebbled silver foil, the color royal blue, and a graphic of a polar bear.
- In 1982, after launching its Polar B'ar, Kraft terminated its distribution agreement with Isaly for the Klondike bar.
Procedural Posture:
- The Isaly Company, Inc. sued Kraft, Inc. in the U.S. District Court.
- Isaly alleged claims including trade dress infringement under the Lanham Act and later amended its complaint to seek cancellation of Kraft's 'Polar B'ar' trademark.
- After a trial, the district court found in favor of Isaly on the trade dress infringement claim and entered an injunction against Kraft.
- The district court rejected Kraft's laches defense but also denied Isaly’s request to cancel Kraft’s 'Polar B’ar' trademark.
- Both Kraft and Isaly appealed the district court's decision to the U.S. Court of Appeals for the Eleventh Circuit.
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Issue:
Does a competitor's product packaging infringe upon the trade dress of an existing product when it incorporates similar elements creating a confusingly similar overall impression, and can a trademark registration be cancelled for abandonment despite recent extensive use after decades of non-use?
Opinions:
Majority - Wisdom, Senior Circuit Judge
Yes, Kraft's packaging infringes on Isaly's trade dress, and its trademark for 'Polar B'ar' must be cancelled due to abandonment. To establish trade dress infringement, a plaintiff must prove the dress is (1) inherently distinctive, (2) primarily non-functional, and (3) that the defendant's dress is likely to cause confusion. The court found Isaly's Klondike wrapper, a complex composite of color, texture, and graphics, was inherently distinctive and its appearance was non-functional. On the issue of likelihood of confusion, the court evaluated seven factors and found they weighed in Isaly's favor: the products were identical, sold in the same stores to the same customers, used similar advertising, and Kraft's actions showed an intent to emulate Klondike's successful trade dress. Regarding the trademark, the court held that Kraft's non-use of the 'Polar B'ar' mark for nearly 50 years constituted prima facie abandonment. Kraft's resumption of use in 1980 did not retroactively cure this abandonment, as trademark rights flow from use, not from mere registration or a later-formed intent to resume use. Therefore, the registration was cancelled.
Analysis:
This case is a foundational decision in trade dress law, clarifying that the 'total image' of a product's packaging is protectable, even if individual elements like colors or common images are not. It establishes that a defendant's intent to 'come as close as the law will allow' to a competitor's successful trade dress can be powerful evidence of likelihood of confusion. The ruling on trademark abandonment provides a clear precedent that prolonged non-use extinguishes rights to a mark, which cannot be revived simply by resuming use years later, preventing the 'warehousing' of trademarks.
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