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Beauty and the Beast: Protecting Small-scale Luxury Cosmetics Brands’ IP from Counterfeiters and Competitors

Posted by Tulip Mahaseth on Friday, Nov 30, 2018

Beauty and the Beast: Protecting Small-scale Luxury Cosmetics Brands’ IP from Counterfeiters and Competitors

Small-scale luxury cosmetics producers are often faced with a plethora of confusing options when it comes to protecting their intellectual property - Red Points lays out the options.

  • Original and creative brand logos, packaging, and designs can be protected by copyright with relative ease.
  • Fanciful, arbitrary, suggestive trademarks can also protect brand names and other identifying features.
  • Patents can be used to protect packaging and design, but are risky for product composition, as it would give away product secrets to competitors.
  • Other protections, like trade secrets and trade dress, have their place in cosmetics brand protection.

Cosmetics brands can seek to copyright or trademark their brand logo, product packaging, and product design, as well as seek patent protection for their functional or non-obvious product packaging, product design, compositions, and methods of production.  Alternatively, such companies could also choose to keep their product compositions and methods of production trade secrets. Since brand name recognition and consumer loyalty are crucial to the success of these companies, they need to take measures to protect their intellectual property and assert their IP rights against counterfeiters and competitors effectively.  This article summarizes the scope of IP protection that US copyright, trademark, patent, and trade secret laws offer, and the pros and cons of seeking such protection.

 

Copyright Protection for Brand Logo, Product Packaging and Product Design

The American Constitution grants Congress the power to enact copyright laws in order to "promote the Progress of Science and useful Arts."  Under copyright law, originality does not mean a non-obvious or an innovative creation but merely an independent creation (not merely a copy of someone else’s work) that has a modicum of creativity.  See Feist Publications, Inc. v. Rural Telephone Service Co., 499 U.S. 340 (1991).  Hence, as long as a company’s brand logo has not been copied from another source and meets the requisite modicum of creativity standard, which is a very low standard, it would be eligible for copyright protection.

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While copyright law protects the expression of ideas, patent law protects inventions or embodiments of useful ideas. Baker v. Selden, 101 U.S. 99 (1879).  Therefore, copyright law cannot be used to protect a useful article, which is an "article having an intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information."  17 U.S.C. § 101. Useful non-obvious cosmetic product packaging and product design would be eligible for patent protection but not copyright protection.  The Supreme Court in Star Athletica, LLC v. Varsity Brands, Inc, further elaborated that “[a] feature incorporated into the design of a useful article is eligible for copyright protection only if the feature (1) can be perceived as a two-or three-dimensional work of art separate from the useful article, and (2) would qualify as a protectable pictorial, graphic, or sculptural work - either on its own or fixed in some other tangible medium of expression - if it were imaged separately from the useful article into which it is incorporated.”  Therefore, to be eligible for copyright protection under US law, cosmetics product packaging and product design would have to fulfill both conditions of the Star Athletica test.

Finally, it is important to note that copyright eligibility alone does not determine copyright infringement.  To successfully sue a competitor or counterfeiter for copyright infringement in court, a small-scale luxury cosmetics company would have to 1) demonstrate copyright eligibility for their brand logo, product packaging, or product design, and 2) show that the infringing logo, packaging or design are substantially similar to their own.  

 

Trademark Protection for Brand Name, Brand Logo, Product Packaging and Product Design

To successfully sue a competitor or counterfeiter for trademark infringement in court, a small-scale luxury cosmetics company would have to 1) demonstrate that they have a valid mark protecting their brand name, logo, product packaging, or product design, and 2) show that the infringing name, logos packaging, or design are likely to cause confusion with their own marks in the minds of reasonable consumers. Trademark includes any word, name, symbol, or device, or any combination thereof that distinguishes a product from products of other producers in the marketplace and which is perceived by consumers as an indicia of product source. 15 U.S.C. § 1127.  The Lanham Act protects trade dress as well, which includes product packaging and product design.  Marks such as fanciful, arbitrary, and suggestive marks are "inherently distinctive." Abercrombie & Fitch Co. v. Hunting World, 537 F.2d 4 (2nd Cir. 1976).  Fanciful or made-up marks (such as “Kodak”) and arbitrary marks (such as “Apple” computers) do not bear any relationship to their products.  Suggestive marks are suggestive of their products, while not being merely descriptive, such as “Wrangler” jeans. Marks that are "not inherently distinctive" need to acquire secondary meaning under the Lanham Act to be valid trademarks.  Secondary meaning can be acquired by not inherently distinctive marks when they are perceived by consumers as an indicia of product source. Generally, secondary meaning is proved in court by evidence such as "size of the seller, the number of actual sales made, large amounts spent in promotion and advertising, the scope of publicity given the mark, and any similar evidence showing wide exposure of the buyers' class to the mark in question."  McCarthy, § 15.30. Given that acquiring secondary meaning requires significant investment in advertising and publicity, small-scale luxury cosmetics companies could play it safer by choosing an “inherently distinctive” (fanciful, arbitrary, or suggestive) trademark instead.

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For trade dress protection, the case law is somewhat more confusing.  In Two Pesos, Inc. v. Taco Cabana, Inc., 112 S.Ct. 2753 (1992), the Supreme Court held that trade dress can be inherently distinctive and is therefore protectable without a showing of secondary meaning.  However, subsequently in Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S. 205 (2000), the Supreme Court held that product design trade dress cannot be inherently distinctive, and that secondary meaning is required.  The Supreme Court distinguished Two Pesos by characterizing the trade dress in Two Pesos as product packaging. Therefore, to have a valid trade dress on a cosmetic product design the producer would have to establish secondary meaning by presenting any of the evidence mentioned above indicating that the trade dress product design is perceived by consumers as an indicia of product source.  On the other hand, a valid trade dress on a cosmetic product packaging can be inherently distinctive and may not need evidence of secondary meaning. Therefore, in litigation against trademark infringers, small-scale luxury cosmetics producers may want to characterize their trade dress as product packaging rather than product design to avoid making a showing of secondary meaning.

Furthermore, just like in copyright law, valid trademarks or trade dresses cannot be merely functional.  The aesthetic functionality test, described by the Supreme Court in Qualitex Co. v. Jacobson Products Co., Inc., 514 U.S. 159 (1995), asks “whether the recognition of trademark rights [in an aesthetic design feature] would significantly hinder competition.”  Similarly, the Supreme Court in TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23 (2001), stated that whether upholding the trademark “would put competitors at a significant non-reputation-related disadvantage” determines whether or not the mark is functional.  Non-obvious but functional product packaging or product design may qualify for patent protection instead.

Arguably, trademark rights are extremely important for small-scale luxury cosmetic producers because they not only allow producers to distinguish themselves from other competitors in the marketplace, but also serve as a representation of their goodwill and loyalty among consumers, which takes significant time and resources to cultivate.  Moreover, unlike copyright or patent protection, trademark protection is not limited by time as long as the marks continue to be used in the marketplace.

Patent Protection for Non-obvious Product Packaging, Product Design, Compositions and Methods of Production

Under US patent law, an invention is patent eligible when the claimed subject matter is: 1) patent eligible: process, machine, manufacture, or composition of matter, 2) useful, 3) novel, 4) non-obvious; and 5) fulfills the written description and enablement requirements such that person of ordinary skill in the art can understand, make and use the invention without engaging in undue experimentation.

The utility requirement of 35 U.S. Code § 101 is very easy to meet.  An invention would need to be “totally incapable of achieving a useful result” to lack utility.  Brooktree Corp. v. Advanced Micro Devices, Inc., 977 F.2d 1555, 1571 (Fed.Cir.1992).  A claim lacks novelty or is anticipated by prior art under 35 U.S. Code § 102, only if “each and every element as set forth in the claim is found, either expressly or inherently described, in a single prior art reference.” Verdegaal Bros. v. Union Oil Co. of California, 814 F.2d 628, 631, (Fed. Cir. 1987).  Under 35 U.S. Code § 103, the claimed invention would be obvious “if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art.”  The obviousness burden is often the hardest to meet.Functional non-obvious product packaging and product design that would not be eligible for copyright or trademark protection may qualify for patent protection.  Whereas ornamental design of product design or product packaging could be eligible for a design patent. Design patents are valid for 15 years from filing. To be eligible for a design patent, the design must be non-functional, ornamental, novel and non-obvious. 35 U.S.C. § 171.

Furthermore, cosmetic compositions and methods of making said compositions may also qualify for patent protection if the compositions and methods satisfy all five requirements as stated above.  However, unlike product packaging and product design, cosmetic compositions and methods of production are not apparent on the face of the marketed products. Therefore, by filing a patent application small-scale cosmetics producers risk revealing their proprietary compositions and methods of production to their competitors and potential counterfeiters.  Keeping these compositions and methods trade secrets is an alternative to patent protection. Trade secrets can be kept indefinitely unlike patents, which expire 20 years from filing. However, the disadvantage of keeping such information trade secrets, besides the obvious risks in maintaining secrecy, is that there is no ascertained period of exclusive use with trade secrets. If a competitor or a counterfeiter independently invents the same compositions or methods of producing them, then the cosmetics producer cannot prevent them from using or marketing said compositions.  At the same time, patents can take a long time to issue and can be expensive to obtain and enforce in court. Therefore, cosmetic compositions or methods of producing them that have take a significant amount of time and resources to research and develop, would be more suitable for patent protection.

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About the author

Tulip Mahaseth

Post Written by Tulip Mahaseth

Tulip Mahaseth, Ph.D., is a legal content contributor for Red Points. She is a Law Graduate at Foley & Lardner LLP, Palo Alto, where she practices patent prosecution and counseling. She received her JD, cum laude, from Northwestern University School of Law, where she was a George L. Quilici Scholar and Foley & Lardner Diversity Fellow. Tulip holds an M.S. and a Ph.D. in Microbiology from University of Illinois at Urbana-Champaign. She received her integrated M.S. in Biological Sciences with First Division honors from Birla Institute of Technology and Sciences, Pilani.