New trademark standard set by FoCo company’s court win

FORT COLLINS — Companies across the nation have a new set of rules regarding use of colors in their branding, thanks to a trademark case won this year by a longtime Fort Collins manufacturer.

The opinion issued April 8 in Washington by the U.S. Court of Appeals for the Federal Circuit “changes the United States Trademark Office’s interpretation and implementation of trademark law with respect to marks that consist of colors,” said William Cochran, an attorney with Fort Collins-based intellectual-property law firm Cochran, Freund & Young LLC. “The opinion by the federal circuit will guide courts in the future, as well as the U.S. Patent and Trademark Office, as to whether a mark that consists of color can be considered to be inherently distinctive in order to obtain a registration, or whether acquired distinctiveness must be shown.

The impact of the ruling, Cochran said, is that, “now, corporations can go out and use color patterns and be assured they can get protection as long as they’re using it on the packaging. They can establish rights to those color designs. It opens up a whole new avenue for companies selling products.”

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The issue involved Forney Industries, an 88-year-old family-owned tool, equipment and accessory product company headquartered in Fort Collins. Some of the company’s tools that are sold in retail outlets are packaged on cards whose front shows the tool, which is mounted in blister-sealed plastic. Besides displaying the Forney logo, the card on which the tool is mounted features a black bar across the top, then a yellow background that fades into red.

After losing an infringement case regarding that color scheme, Forney sought to trademark it but was turned down in January by the Patent and Trademark Office. Cochran and law partner James Young then appealed to the federal district and won.

“Companies that use color marks will now be able to obtain federal registrations using a straightforward and well-defined set of rules for showing inherent distinctiveness of their marks,” Cochran said. “As stated by the court, an applicant must show that the color mark meets the tests set forth in Seabrook Foods Inc. v. Bar-Well Foods Ltd.”  In that 1977 U.S. Supreme Court ruling, a three-part test for “inherent distinctiveness” was developed, he said: Is the color scheme’s design or shape a common, basic shape or design, is it unique or unusual in the particular field, and is it a refinement of a commonly adopted or well-known form of ornamentation for a particular class of goods.

“I argued the red and yellow bands with the intervening gradient of yellow to red, and the black stripe on top, meets the requirements of the Seabrook case in 1977,” he said.

Before the Forney decision by the federal circuit, Cochran said, “there was a blanket restriction on finding that a mark consisting of colors is inherently distinctive. As such, a drawn-out and expensive process of showing acquired distinctiveness was required in order to obtain a registration.

“One of the judges asked me, ‘What if you just had two colors, divided by a straight line — say, yellow on the left and red on the right? How is that different?’ I said basically the colors had to create a geometric pattern or design,” Cochran said.

“My argument was, this is a pattern or design, and it’s very distinctive in this industry. Nobody else uses a gradient of colors like that, plus has a black stripe at the top. We met the requirements of the restatements of torts and the Seabrook test.

“The second argument was that our color mark is on the packaging itself, not on the product,” he said. Referencing the 2000 case of Wal-Mart Stores Inc. v. Samara Brothers Inc., “I relied upon a statement from the great Justice Antonin Scalia. He said that when people look at product packaging, they normally think it’s an indication of source — in other words, a trademark. But if it’s on the product — if you buy a pair of pliers and it’s got different colors on it — that’s different.

“We noodled over this a lot, and the explanation we came up with is that when people see color on a product, they think it’s decoration and it’s not a mark. But when they see color on the packaging, they think it’s a mark,” Cochran said. “That’s pretty much what Scalia said in the Wal-Mart case.”

The federal circuit remanded the Forney case back to the patent and trademark office to get the Forney branding issued. “We haven’t gotten the registration yet, but the decision means as long as it meets the Seabrook test, we’re good,” Cochran said.

“I pretty much did this pro bono for Forney,” he said, partly because he hadn’t prevailed in the earlier infringement case. “We could not stop this other guy in the 10th Circuit, so that was some of my motivation for going through this big, long appeal. I felt like we could win this, and we did. It took some time; I lost a lot of money on this, but it was worth it. It was a landmark case — and this is unusual for a small firm from Colorado to win a landmark trademark case,” he said.

“I really thought I was going to the Supreme Court on this, but they gave up,” Cochran said. “The trademark office has gotten burned several times going to the Supreme Court, so I don’t think they had any particular interest in going up there and getting killed for ‘In Re: Forney.’”

Why would the trademark office go to the trouble of further contesting the federal district’s ruling instead of changing its rule manual, as it must do in the wake of the Forney case?

Cochran remembered something said by Irving Kayton, his patent law professor at George Washington University: “The patent office would fight to the death to not have to do additional work.”