In our April, 1994 Report, we discussed recent decisions by U.S. Courts of Appeal for the Eighth and Ninth Circuits (and two other, earlier cases) regarding the protectability and registrability of color alone as a trademark. One of those cases, Qualitex Co. v. Jacobson Products Co., Inc., 29 USPQ2d 1277 (9th Cir. 1994), is currently the subject of a petition for certiorari before the United States Supreme Court. A decision on whether the Court will hear the case is expected in October.
In a decision issued September 14, 1994, the United States Court of Appeals for the Federal Circuit affirmed a decision by the Trademark Trial and Appeal Board ("TTAB") sustaining an opposition to registration of the color black for marine outboard motors. Brunswick Corp. v. British Seagull Ltd., No. 94-1049,-1050, 1994 U.S. App. LEXIS 25150 (Fed. Cir. Sept. 14, 1994). The TTAB had sustained a competitor's opposition and refused registration on two basic grounds. First, the Board held that the color black was functional as used on outboard motors. Second, the Board found that the applicant's purported trademark was not distinctive because it was not shown to have acquired secondary meaning as a source indicator (despite the applicant's submission of survey evidence) and, also, the applicant's use of black on outboard engines was not exclusive.
The Appeal Reasoning
On appeal, the Federal Circuit stated that it was not necessary to reach the issue of distinctiveness since it upheld the refusal of registration based on the purported mark's functionality. The Court further stated that functionality is a question of fact and, thus, should be reviewed under the "clear error" standard.
The TTAB was convinced by the evidence submitted by the opposer that black is functional for outboard motors for two reasons. First, it is more desirable to prospective purchasers because it is color-compatible with a wider variety of boat colors. Second, black objects tend to appear smaller than lighter colored objects, and this was deemed a desirable quality for boat engines, which would be perceived as smaller in relation to the size of the boats with which they are used.
The Federal Circuit found these findings of fact to have been supported by the evidence, and thus not "clearly erroneous." The Court went on to say that these facts showed that there was a competitive need for engine manufacturers to use the color black on boat motors. The Court emphasized that the "competitive need" analysis is the crux of a determination of de jure functionality, and stated that the standard had been properly applied by the TTAB.
The Court went on to explain that its decision was wholly consistent with its 1985 ruling and guidelines set out in In re Owens-Corning Fiberglas Corp., 227 USPQ 417 (Fed. Cir. 1985), which allowed registration of the color pink for fiberglass insulation. The Court explained that it was not reviving the doctrine of aesthetic functionality, because "color compatibility and ability to decrease aesthetic motor size are not in this case mere aesthetic features." 1994 U.S. App. LEXIS 25150, at 17-18. But this analysis seems rather stretched to us in view of the blatantly aesthetic advantages of the color black which were noted by both the TTAB and the Federal Circuit, but which were deemed "functional" advantages.
Similarly, the Court applied a bit of circular logic to attempt to explain away the TTAB's reference in its decision to "color depletion theory" to support its denial of registration of the proposed mark. That theory, which holds that colors should not be allowed to be appropriated as trademarks because that would deplete the limited number of colors in the palette available to competitors, has been used by other courts to deny protection to color trademarks. But the Federal Circuit claimed that the TTAB only referred to "color depletion" in support of its position that the color black was functional and thus anti-competitive in this case, rather than to put forth the notion that color depletion theory alone should support a per se denial of registration of colors. Such a limited reference to "color depletion" is not, said the Court, improper. Here again, the plain language of the TTAB decision appears to belie the Federal Circuit's interpretation.
This case is significant, despite the Court's protestation in its opinion that it was not backtracking from Owens-Corning. In fact, the Federal Circuit has cracked open the door to the possible use of both aesthetic functionality theory and the color depletion theory as grounds for denial of registration of color trademarks, and as defenses in cases where infringement of such marks is alleged. Since both of those theories were cited by the Ninth Circuit in support of its order of cancellation of the color registration in the Qualitex case, one hopes that, if the Supreme Court indeed grants certiorari in that case, the appropriate weight, if any, to be given to those theories will be clarified.