Specifically in the context of restaurants, trade dress can include both the exterior and interior architecture of the restaurant, signs, interior floor plan, the decor, menus and cuisine.
Two Pesos
In the widely cited Two Pesos case, the Supreme Court held that trade dress is protectable under Section 43(a) of the Lanham Act if it has inherent distinctiveness, even though it has not yet acquired secondary meaning. While the Two Pesos Court settled the split in the circuits on this issue, the Court did not analyze two necessary elements of protectable trade dress: nonfunctionality and distinctiveness.
Functionality depends on whether trade dress is essential to a product's use. Courts will examine trade dress as a whole to determine functionality, so that even though individual seats or menus may be functional, when taken as a whole, the entire theme may be nonfunctional.
Various aspects of a restaurant's trade dress may be found to be nonfunctional. External features of a building, such as the castle design of the White Castle restaurants, were afforded trademark protection. See White Tower Sys., Inc. v. White Castle Sys. Corp., 90 F.2d 67 (6th Cir. 1937). Interior architectural features may also be protectable, such as dining booths encased in packing crates in a Polynesian restaurant. See Warehouse Restaurant, Inc. v. Customs House Restaurant, Inc., 217 U.S.P.Q. 411 (N.D. Cal. 1982); but see Prufrock Ltd., Inc. v. Lasater, 781 F.2d 129, 131-32 (8th Cir. 1986) (holding that using an exposed kitchen and large open dining area in "down home country cooking" restaurant is functional and not protectable).
The Decision
The District Court jury found Taco Cabana's trade dress to be nonfunctional, which trade dress is described as "a festive eating atmosphere...decorated with artifacts, bright colors, paintings and murals" with the building's exterior having a "vivid color scheme using top border paint and neon stripes."See Taco Cabana Int'l, Inc. v. Two Pesos, Inc., 932 F.2d 1113, 1117 (5th Cir. 1991). The Supreme Court did not choose to review this issue. Distinctiveness of trade dress may be proven by either showing its inherent distinctiveness or that it has acquired a secondary meaning. Trade dress is distinctive if it serves as a symbol of origin, according to the jury instructions of the Taco Cabana District Court. Taco Cabana, 932 F.2d at 1120. Certain types of marks, called fanciful, arbitrary and suggestive, are inherently distinctive because their "intrinsic nature serves to identify a particular source of a product." Two Pesos, 505 U.S. at 768. Descriptive marks, on the other hand, identify a product's qualities rather than identifying its origin, and must acquire a secondary meaning to be distinctive. Taco Cabana's trade dress was found by the jury to be inherently distinctive. The test used by the courts is unclear, and the outcome will depend on the facts on which the court or jury places the most emphasis.
Conclusion
Today, owners or franchisors of theme restaurants must be creative in the use of individual items in their business to create an overall unique dining environment and experience. Those who carefully develop their trade dress will likely benefit from the trend of many courts toward broadening the scope of protectable trade dress, thereby adding to the value of their theme restaurant concept.