–Sharon Armstrong, Attorney

What has a head but no neck, feet but no legs, a perfectly tipped hat but no arms, is 7’10” tall, and induces glee and cavities in people of all ages? The world’s largest dispenser of Pez, of course! A creation of the founders of the Burlingame Museum of Pez Memorabilia (the “Museum”) in Northern California, the enormous snowman-headed Pez dispenser likely appears to most consumers as no more than the ultimate homage to this legendary candy and dispenser and the place they have achieved in the popular consciousness.

The makers of Pez, however, beg to differ. In late June, Patrafico AG and Pez Candy, Inc., owners of the PEZ trademarks, trade dress and brand, sued the founders of the Museum for trademark infringement and related causes action stemming not only from the founders’ creation and promotion of the Snowman dispenser, but also from the founders’ alleged unauthorized manufacture and sale of unapproved Pez dispensers and related merchandise at the Museum. A copy of the complaint can be viewed here.

The plaintiff’s filing of this suit raises some crucial questions about the nature of well-known trademarks and trademark owners’ desire to see their brands protected through litigation. First, it is possible that the defendants will raise the defense of nominative fair use, which I’ve blogged about before here. In a nutshell, nominative fair use allows Party A to use Party B’s trademark provided that Party A’s use of the trademark is necessary to identify Party B or its goods and services and Party A doesn’t use the mark to suggest that it is endorsed by Party B. Here, the Museum, which has not only operated for over 14 years, but did so for many years under agreement and with the blessing of the plaintiffs, appears to use the PEZ trademarks and trade dress to refer to Pez candy and Pez dispensers only – not to refer to other types of candy, such as Hershey’s Kisses or Laffy Taffy. Though I’ve never visited the Museum, the Museum’s web site includes a disclaimer of affiliation with the plaintiffs and a note that PEZ is a registered trademark of the plaintiffs. All in all, such use would appear at first blush to pass the nominative fair use sniff test.

The gray area of this case involves, in part, the Museum’s unauthorized creation of the World’s Largest Dispenser of Pez and various Pez dispensers that the plaintiffs never authorized. One of the most interesting facets of the Pez “brand” is that so much of it is tied up with cross-licensing – Pez dispensers are certainly created with images of characters in the public domain, such as Santa Claus, but a large number of them are created with images of well-known characters owned by third parties, such as the Peanuts characters and Mickey Mouse. The Museum’s purported creation of unauthorized Obama and McCain Pez-heads – among other unauthorized merchandise – would then pose a chink in the armor of the nominative fair use defense.

Second, it is possible that the defendants will argue that PEZ has become generic for the dispensers and brick-shaped candy that bear the PEZ mark, primarily because there is no other brick-shaped candy on the market that can be used in PEZ dispensers or candy dispenser on the market that can dispense PEZ candy; one must use PEZ candy with PEZ dispensers to experience the full effect of the product. “Genericide” of a trademark occurs when the goods of services with which a mark is associated become synonymous with the trademark itself; it is, in essence, the dark side of fame, in which a mark and a product become so well-known in the minds of consumers that the brand and the products sold under it merge. Genericide is more likely to occur among products that are singular or revolutionary – for example, this or this – because consumers see the product and the brand as one and the same.   In this way, genericide is the ultimate defense – if a mark has become generic, then it can function only to identify a product and cannot function as a trademark capable of infringement. Here, the defendants would simply argue that consumers view the word “pez” as communicating the type of candy that is currently sold under the trademark PEZ®.

Even if the plaintiffs can overcome these defenses, however, one has to wonder if the makers of Pez are concerned about what their customers think of this suit and how that may affect the Pez brand in the long run (you can read what Seattle-ites think about it here). Pez is certainly a serious multi-million dollar business; a “Sleeping Yoda” dispenser is going for nearly $900 on eBay as I write this post. But to most of us, whether we are “PEZheads” who gather annually at Pez conventions or Gen X’ers who just seek a sweet bit of nostalgia, PEZ is first and foremost a type and brand of candy – one that we associate with positive connotations of fun, carefree days that are far more in demand than they are in supply. It remains to be seen whether the plaintiffs will follow in the footsteps of another famous brand that embraced an unauthorized homage and became a cultural icon or force the founders of the Museum to swallow its own brand of a bitter pill.