The Wonderful Company LLC v. Nut Cravings Inc.

Background

The Wonderful Company LLC and Cal Pure Produce Inc. sued Nut Cravings Inc. over the packaging of pistachio nuts. The Wonderful Company owns the WONDERFUL brand, and Cal Pure Produce markets and sells WONDERFUL pistachios as its licensee. The plaintiffs alleged that their packaging trade dress—the design and appearance of the packaging used to identify a product—consisted of predominantly black packaging, a bright green accent color, and a predominantly rectangular shape.

The complaint asserted six claims: (1) unregistered trade-dress infringement and false designation of origin under Section 43(a) of the Lanham Act; (2) registered trade-dress infringement under Section 32 of the Lanham Act; (3) trade-dress dilution under Section 43(c); (4) New York common-law unfair competition; (5) unfair competition under New York General Business Law Section 360-l; and (6) deceptive acts or practices under New York General Business Law Section 349. Nut Cravings moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint contains enough factual allegations to state a legally plausible claim. The plaintiffs opposed dismissal and asked for permission to amend if the complaint was dismissed.

Court’s Analysis

Unregistered trade-dress infringement

The court held that the complaint did not plausibly allege the elements needed for an unregistered trade-dress claim: distinctiveness, a likelihood that consumers would be confused, and nonfunctionality.

The alleged black and green colors could not be inherently distinctive, and a basic rectangular shape also was not inherently distinctive. The complaint likewise did not provide enough facts to show that the packaging had acquired “secondary meaning”—that consumers primarily associated the design with a single producer rather than merely with the product. The court noted missing or inadequate allegations about consumer studies, unsolicited media coverage, the number of products sold in the claimed packaging, attempts to copy the trade dress, and the length of exclusive use. General allegations about substantial advertising, the success of the WONDERFUL brand, and continuous exclusive use were insufficient.

The court also found that allegations of consumer confusion were conclusory. The complaint asserted that Nut Cravings was causing confusion and that the products were similar, but the court was not persuaded by the packaging images that consumers were likely to be confused. Finally, the complaint’s single conclusory statement that the trade-dress features were nonfunctional did not adequately plead nonfunctionality. The court dismissed Count I.

Registered trade-dress infringement

The court explained that Section 32 of the Lanham Act protects only registered trade dress. Because the complaint did not allege that the plaintiffs possessed registered trade dress, the court dismissed Count II.

Trade-dress dilution

The court dismissed Count III because the complaint did not plausibly allege that the WONDERFUL trade dress was famous. The court said that statements calling the trade dress famous, allegations of hundreds of millions of dollars in marketing and advertising, and the claim that the WONDERFUL brand was among the best-selling nut products did not show that the trade dress itself was recognized by the general United States consuming public as a famous mark.

New York claims

The court dismissed the common-law unfair-competition claim because the plaintiffs had not adequately pleaded a Lanham Act claim and had also failed to plead facts supporting bad faith. The allegation that Nut Cravings acted willfully was not enough.

The court dismissed the claims under New York General Business Law Sections 360-l and 349 because it found them preempted by federal law. The opinion states that the alleged harm was based on copying the plaintiffs’ design.

Disposition

Judge Mary Kay Vyskocil granted Nut Cravings’s motion to dismiss without prejudice. The plaintiffs were granted 14 days to amend their complaint. The clerk was directed to terminate docket entry 20.