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A Tale of Two Cookies: Third Circuit Dunks Cookie Stick Trade Dress Claims

In a recent decision, Ezaki Glico v. Lotte International American Corporation, the Third Circuit rejected a manufacturer’s claims of trade dress infringement regarding Pocky, a chocolate covered cookie stick which Ezaki Glico invented in the 1970s.[1] The court concluded that Pocky’s overall shape and look—cookie sticks partially coated in chocolate—were functional and thus not protected from competitor imitation.

The Third Circuit’s decision, which focused on the definition of “functionality” as it pertains to product design, carries important implications for marketing products in the food and beverage industries.

Trade Dress Background

Before diving into the Ezaki Glico facts, a few words on trade dress:

In the world of marketing and advertising, certain product features, such as color and shape, may—in the mind of the consumer—become synonymous with the product itself.  For example, a little blue box, with a white ribbon, evokes images of a shimmering diamond Tiffany solitaire.  Red soles on a pair of high-heeled pumps left two luxury footwear brands, Louboutin and YSL, waging war in the courtroom for several years. 

These features, which the Lanham Act refers to as “trade dress,” encompass the “design and appearance of the product” as well as features like graphics, packaging, size, shape, and even color.[2] A company can gain protection for its trade dress by registering it with the United States Patent and Trademark Office.  Alternatively, even if unregistered, trade dress can acquire protected status through the company’s repeated and consistent use of it such that it acquires “secondary meaning”—which is to say that consumers who see a certain container shape, graphic, or packaging come to associate that feature with the manufacturer. 

Trade dress owners often seek to prevent competitors from using their trade dress and trading on their goodwill in the marketplace by bringing claims for infringement under the Lanham Act.  To assert trade dress infringement, a party must prove that the design has acquired a secondary meaning or is inherently distinctive, and that the infringer’s use of the design or feature is likely to create confusion about who makes the product.[3]

However, as particularly relevant to Ezaki Glico, even product features that are distinctive and have become important marketing tools are not necessarily protected from imitation if they are also “functional.”  Unlike patent law, which protects product inventions for a limited time, trademark and trade dress protections allow the manufacturer to monopolize the feature in perpetuity.  To encourage competition in the marketplace, the functionality doctrine prohibits a manufacturer from monopolizing “a useful product feature” and acts as a defense against infringement claims.[4] If a court concludes that a feature is functional, then it is not entitled to protection as trade dress—and if that invalidated trade dress has been registered with the PTO, the registration is cancelled.

The Ezaki Glico Case

Several decades ago, Ezaki Glico invented Pocky, a cookie stick with a chocolate-less handle that promoted easy sharing and mess-free snacking, and packaged in hand-sized cardboard containers.  Ezaki Glico then registered the product configuration as a trade dress, and also registered a patent for the Pocky manufacturing method.

In the 1990s, Lotte imitated Pocky’s design and launched in the United States its own remarkably similar looking, chocolate-dipped cookie sticks under the name Pepero.  In 2015, Ezaki Glico sued Lotte for trade dress infringement.

Ezaki Glico’s suit crumbled, however, when the district court concluded that because the cookie stick design was functional, Ezaki Glico did not have protectable trade dress. 

The Third Circuit affirmed. On appeal, the core issue facing the Third Circuit was how to define “functionality.”  Ezaki Glico argued that trade dress is functional only if it is “essential” to the product’s use or purpose; thus defined, the cookie stick design could not be functional because cookies come in other shapes and sizes.  Lotte, on the other hand, asserted that functionality meant merely that the cookie shape served a useful purpose, and the stick design was undoubtedly useful because it made Pocky easier for consumers to hold without smearing chocolate on their hands.

The Third Circuit considered several factors in conducting its inquiry, including (1) the “usefulness” of the cookie’s shape, such as whether it was ornamental and identified Ezaki Glico as the source; and (2) the manner in which Ezaki Glico advertised its Pocky product.  These factors, the court concluded, supported Lotte’s position.  First, the court decided that functionality means that “the shape need only be useful, not essential” and that “features that make a product cheaper or easier to make or use” are functional.[5]  Though not essential for consumption, Pocky’s shape and partial chocolate coating made it “work better as a snack.”  That is, consumers could handle the cookie more easily and without mess because the handle was not fully coated in chocolate.  The panel also placed great weight on the fact that Ezaki Glico itself had “promoted” the cookie’s convenient design as one conferring functional utility—i.e., by describing it as a portable cookie that “lends itself to sharing anytime, anywhere, and with anyone.”[6]  Thus, the court held, Pocky’s shape was functional and not entitled to trade dress protection.

Other courts, when tasked with ascertaining whether trade dress is functional, have similarly focused on advertising that touts the utilitarian advantages of the product features in question.  For example, in 2017, the Second Circuit affirmed a judgment following a bench trial that the plastic bag closures on bags of bread—which the manufacturer advertised as a “closure [that] is simple and uniquely suited to its function”—were indeed functional and thus, not protectable trade dress.[7]

With that said, advertising that highlights the functional benefits of some of the features of a product’s look and design will not necessarily vitiate all trade dress protection.  For example, in a trade dress infringement suit recently before the Seventh Circuit, the manufacturer of a French press had marketed its coffee press as “function-driven,” but typically advertised the domed shape of a French press’s lid, knobs, feet, and handle in ways that highlighted the “classic look” of the carafe.  The panel held that despite the functional promotion of the press itself, the domed shape of a French press’s lid, knobs, feet, and handle were protectable as a trade dress as all these features were purely ornamental and neither “essential to the use or purpose” nor a “competitive necessity.”[8]

Takeaways for Manufacturers

To protect their trade dress, marketers should carefully consider how they promote certain product features.  A manufacturer’s emphasis on ease of consumption, handling, or storage may make product features more susceptible to a “functionality” defense—and thus unwittingly empower competitors to imitate the product’s look and design with impunity.  Accordingly, in devising marketing and advertising, manufacturers should be mindful of highlighting the functional features of their products’ branding and packaging.

[1] Ezaki Glico Kabushiki Kaisha v. Lotte Int’l Am. Corp., 977 F.3d 261, 270 (3d Cir. 2020).

[2] See Fun-Damental Too, Ltd. v. Gemmy Indus. Corp., 111 F.3d 993, 999 (2d Cir. 1997); Rose Art Indus., Inc. v. Swanson, 235 F. 3d 165, 171 (3d Cir. 2000).

[3] TrafFix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23, 28 (2001).

[4] Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 165 (1995).

[5] Ezaki Glico, 977 F.3d at 268-69.

[6] Id. at 269.

[7] See Schutte Bagclosures Inc. v. Kwik Lok Corp., 193 F. Supp. 3d 245, 272 (S.D.N.Y. 2016), aff’d 699 F. App’x 93 (2d Cir. 2017).  

[8] Bodum USA Inc. v. A Top New Casting, 927 F.3d 486, 491-92 (7th Cir. 2019); see also Blumenthal Distributors v. Herman Miller, 963 F.3d 859, 867-68 (9th Cir. 2020) (office chair design was not functional because many of its utilitarian features, like arm rests and back, were designed with an aesthetic focus and advertising emphasized “distinctive appearance”).