The Origins of the Watermelon Candy War
Around two decades ago, PIM, a candy manufacturer, introduced the world to Sour Jacks Wedges, a chewy watermelon-flavored candy shaped like a wedge. Its eye-catching design consisted of layers of vibrant colors: green on top, a white band in the middle, and a larger red section at the bottom. PIM marketed these candies as "The Ultimate Shape of Sour" and encouraged consumers to "Respect the Wedge." In a bid to secure its unique candy design, PIM sought to trademark the wedge shape.
The United States Patent and Trademark Office (USPTO) requested PIM to incorporate specific colors into its trademark application. Subsequently, PIM registered the shape of the wedge with distinct colors: an upper green section speckled with white, a narrow middle white section, and a lower red section, also speckled with white. Over time, PIM expanded its lineup to include Sour Jacks Wedges in various flavors, each adorned with colors corresponding to its taste. Eventually, the USPTO granted PIM a supplemental registration for a tricolored wedge without specifying the colors.
In 2019, Haribo introduced its own chewy watermelon candy in the form of an elongated watermelon wedge, featuring the classic red, white, and green colors. This move prompted PIM to take legal action, alleging trademark and trade dress infringement under the Lanham Act, specifically sections 15 U.S.C. 1114(1) and 1125(a)(1)(A). Haribo, in turn, countered by claiming that PIM's trade dress was functional and sought to cancel PIM's trademark.
The Third Circuit's Decision: Functionality of Candy Design
The heart of this candy trademark dispute lies in the functionality of the design. The Third Circuit, which heard the case, ultimately rejected PIM's argument. The court concluded that every element of the candy's trade dress serves a singular function - to identify its flavor - and as such, is ineligible for trademark protection. The court's ruling hinged on the principle that a design becomes functional if it serves any purpose beyond branding.
In its decision, the Third Circuit cited a precedent of Ezaki Glico v Lotte International America, in which it emphasized that even if a design simultaneously promotes a brand and enhances product functionality, it should still be considered functional and, consequently, unprotectable. The court asserted that if design elements such as shape and color primarily serve the same function - in this case, flavor identification - they should be treated as a whole, rather than separate elements.
Implications for the Candy Industry
The PIM vs. Haribo case has broader implications for the candy industry and trademark law as a whole. Trademarks are essential tools for companies to protect their brand identities and distinguish their products from competitors. In the world of candy, where appearance and taste play a pivotal role in consumer choice, the shape and color of a product can be just as crucial as its name.
This case underscores the importance of a delicate balance between branding and functionality in trademark law. While companies strive to create distinctive, eye-catching designs to attract customers, they must be wary of crossing the line into functionality. If a design element primarily serves a functional purpose, such as identifying the flavor of a candy, it may not be eligible for trademark protection.