In recent USPTO news, Trader Joe’s, the supermarket chain known for its eclectic and unique foodstuffs, recently filed an opposition to registration of the mark “Trader Schmo,” which is described as designating a wide variety of Kosher foods. Understandably, Trader Joe’s took issue with the mark, and particularly its use in the food category. The company instituted an opposition (which I cannot help but note is #999,999), arguing that “Trader Schmo” will confuse consumers because consumers will naturally switch “Joe’s” with “Schmo,” given the popular phrase “Joe Schmo.”

This is not the first time Trader Joe’s has taken legal action to protect its brand. Notably, just a couple years ago the company sued “Pirate Joe’s,” a counterfeiter with a backstory almost too unbelievable to be true. Pirate Joe’s was a “rebel Canadian grocery operation,” which bought Trader Joe’s products in the United States and “smuggle[d] them across the border to Vancouver” to sell them. Pirate Joe’s eventually ran aground under the immense pressure of its legal fees.

Pirate Joe’s Comes Crashing Down, Credit: Georgia Straight

This new dispute reminds me of the famous “Dumb Starbucks” experiment by comedy TV series Nathan For You. Over one weekend in 2014, the show opened a coffee shop that looked just like a real Starbucks, except that its name and every drink it sold was preceded by the word “dumb.” The comedian behind the prank (or “art“) claimed that “Dumb Starbucks” was permissible fair use because both the use of the Starbucks mark, as well as the store itself, was one big parody. One cannot help but notice some parallels to Trader Schmo; the latter word refers to a hypothetical “dumb” person.

Comedian Nathan Fielder, Credit: New Yorker

Dumb Starbucks and Trader Schmo raise difficult questions about permissible comedic use under trademark law. On the one hand, the marks free ride on the notoriety of other marks, bringing attention. On the other, it seems unlikely the marks would cause actual consumer confusion, making them harmless jokes. Whether Trader Schmo runs afoul of the Lanham Act will likely depend on two major inquiries: (1) whether it constitutes infringement or dilution, and (2) whether statutory fair use defenses apply.

InfringementPreviously on this blog, I explained that infringement usually centers on likelihood of confusion, which is evaluated using a variety of factors:

whether the use is related, the strength of the mark, proximity of the use, similarities of the marks, evidence of actual confusion, marketing channels employed, the degree of care likely to be exercised by consumers, the user’s intent in selecting the mark, and the likelihood of expansion of product/service lines.

The factors could support a finding of infringement here. The uses are related (food). The strength of the Trader Joe’s mark rides the line between arbitrary and fanciful to descriptive; who is Trader Joe in the abstract, and what does he sell? Surely the marks are similar…sounding. But on the other hand, would an average Joe really mistake Trader Schmo for Trader Joe’s? As a counter, though, it seems reasonable to infer that Trader Schmo was selected because it is similar to Trader Joe’s.

Dilution: So there might be infringement. How about dilution? This occurs when the similarity between the accused mark and a famous mark is likely to impair the distinctiveness or reputation of the famous mark. Dilution does not require any actual or likely consumer confusion. Depending on how good Trader Schmo’s Baba Ganoush, Gefilte fish, Matzo ball soup, and Borscht taste, Trader Joe’s could have an argument for dilution–especially if Trader Schmo’s grows large enough to undermine the distinctiveness of Trader Joe’s as a famous brand.

Fair Use: Generally speaking, the fair use provisions for infringement and dilution both require: (1) that the accused mark be used in a descriptive sense and not as a mark, and (2) that use of the accused mark be fair and in good faith. However, fair use does not provide a defense to infringement if there is likelihood of confusion–but we’ll gloss over that for now.

First, Trader Schmo could arguably be descriptive, delineating traded products. And the word ‘schmo’ has Jewish roots, which could describe the Kosher foods the mark designates. On the other hand, Trader Schmo isn’t inherently descriptive in that it actually describes a product or a characteristic or quality (e.g., Vision Center, a store for glasses). And it’s being used as a mark. So fair use might not even apply.

Assuming descriptiveness, the second element (the ‘fair’ aspect of the doctrine of fair use) often implicates the kinds of First Amendment interests that protect parody, satire, and criticism. But there’s no indication that Trader Schmo is intended to comment on Trader Joe’s. Moreover, courts have rejected the idea that a use is “fair” or in good faith if its similarity to a protected mark is deliberately concocted to garner attention. Trader Joe’s could have a good case for that here–just as Starbucks likely had against Dumb Starbucks.

A high-level analysis of the Trader Schmo mark suggests it could constitute infringement or dilution and is not fair use. This conclusion underscores trademark law’s general distaste for humor when it comes to commerce, as opposed to actual social commentary and comparison.

-Wes Anderson, Attorney

When a company puts “DISTINCTIVE” on its own packaging, its usually a sign that it highly values its trade dress and product configuration rights. That’s certainly the case for Pepperidge Farm and its Milano cookies.

The commercial bakery giant has taken aim at Trader Joe’s, the popular grocery chain, for selling house-branded “Crispy Cookies” that borrow a few design cues from Pepperidge Farm’s MILANO cookie, the oval-shaped cookies held together with chocolate filling. See for yourself:

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Taking umbrage at Trader Joe’s rounded-rectangle sandwich cookies, Pepperidge Farm filed a complaint in the District of Connecticut, alleging trademark infringement and trademark dilution under the Lanham Act, common law, and Connecticut state law.

While Trader Joe’s isn’t using the MILANO name, it turns out Pepperidge Farm has a registration in hand for both MILANO the word mark and a separate registration for “a configuration of a cookie comprised of a filling sandwiched between two oval-shaped cookies.” The complaint makes reference to this as the “MILANO Configuration.” Obtaining such a registration can often be a significant undertaking, but Pepperidge Farm did not receive any functionality refusals and was able to show acquired distinctiveness in its cookie configuration.

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And Pepperidge Farm’s complaint meticulously claims other elements of its packaging – a “fluted paper tray” to hold the cookies, and the use of vertical, rather than horizontal, packaging – as part of its overall trade dress that Trader Joe’s mimics.

A sidenote: though they are ostensibly “for adults,” I haven’t had MILANO cookies since childhood, and in my past trips to Trader Joe’s I never noticed they were selling a similar product. Unfortunately, in doing my due diligence for this blog post, I was informed that the local Trader Joe’s was all out of the Crispy Cookies – even in the back! Evidently, they are quite the popular item in St. Louis Park, Minnesota, or there is such a thing as a “cookie-litigation hold.” In any case, my would-be taste test was foiled. I regret the omission.

Back to the merits: a likelihood-of-confusion claim may be tough sledding for Pepperidge Farm. Trader Joe’s is known for filling its stores with its own private label products in its stores, and these products frequently borrow naming and design cues from more famous brand names. What’s more, the products do not appear side-by-side in the marketplace; Trader Joe’s products are sold only in their own stores — so you won’t find the offending treats sold alongside MILANO cookies at your more conventional big-chain grocery store. In essence, it’s hard to envision a consumer buying TJ’s cookies and having any confusion as to whether they come from or are affiliated with Pepperidge Farm.

On the other hand, Pepperidge Farm’s dilution claim may have considerable merit: a dilution claim does not require consumer confusion, only that the MILANO Configuration be deemed a “famous mark” and that Trader Joe’s similar cookie configuration is likely to diminish the distinctive quality of the MILANO Configuration.

Proving the fame of the MILANO Configuration may be the sticking point, and Pepperidge Farm will need to marshal a wealth of evidence to show third-party recognition of the cookies’ shape, configuration, and packaging. The Pepperidge Farm complaint does make some reference to this, stating “the MILANO® cookies are instantly recognizable and due to their popularity, have appeared in pop culture and TV shows like Frasier, Will and Grace, Seinfeld, and Two and-a Half Men.”

I’d be shocked if this clip from Family Guy didn’t make its way into the conversation, with references to the MILANO name, packaging, and cookie shape along with an irreverent reference to the old tagline “Pepperidge Farm Remembers”:

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Remember those sweet, warm New England summers? Remember sippin’ lemonade underneath a shady tree? Remember when you hit that pedestrian with your car at the crosswalk and then just drove away? Pepperidge Farm remembers. But Pepperidge Farm ain’t just going to keep it to Pepperidge Farm’s self free of charge. Maybe you go out and buy yourself some of these distinctive Milano cookies, maybe this whole thing just disappears.

So, armed with all this public recognition, will the MILANO Configuration reign supreme? I suspect Trader Joe’s might just have a different product on store shelves once they are back in stock at my local shop.