The Wonderful Company LLC v. Nut Cravings Inc.

Background

The Wonderful Company LLC (TWC) owns the WONDERFUL brand of pistachio nuts, and Cal Pure Produce Inc. (CPP) markets and sells those pistachios as TWC’s licensee. The plaintiffs claimed trademark rights in the appearance of WONDERFUL pistachio packaging. They identified six features of the claimed trade dress—the overall visual appearance of a product or its packaging: predominantly black packaging, a bright green accent color, sans serif lettering for “PISTACHIOS,” capital letters for “PISTACHIOS,” semi-circular curved windows showing pistachios, and the WONDERFUL mark.

The plaintiffs alleged that Nut Cravings used packaging with some similar features, including predominantly black packaging, a bright green accent color, a window showing pistachios, and the word “PISTACHIOS” in capital letters and a similar sans serif font. They alleged that these similarities were likely to confuse consumers about whether Nut Cravings’s products came from, or were affiliated with, the plaintiffs. The plaintiffs also alleged that Nut Cravings intentionally copied their packaging.

The Second Amended Complaint asserted two claims under the Lanham Act, the federal trademark statute: one for unregistered trade-dress infringement and false designation of origin under Section 43(a), and one for infringement of registered trade dress under Section 32(1). Nut Cravings moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal when a complaint does not state a legally sufficient claim. The court had previously dismissed the original complaint without prejudice and allowed amendment. The Second Amended Complaint was the plaintiffs’ third opportunity to plead their claims.

Unregistered Trade Dress

To state an unregistered trade-dress claim, the plaintiffs had to plausibly allege that their claimed design was distinctive, that Nut Cravings’s use was likely to confuse consumers, and that the design was nonfunctional. The plaintiffs also had to identify the specific features making up the claimed trade dress rather than claim protection for a general type of appearance.

The court rejected Nut Cravings’s argument that the plaintiffs had not described the trade dress precisely enough. The six listed features were sufficiently specific, even though the packaging and the registered trademark contained additional features that the plaintiffs did not include in their claimed trade dress.

The court also found that the plaintiffs plausibly alleged acquired distinctiveness, sometimes called secondary meaning. This means that consumers primarily associate the design with a particular source rather than merely with the product itself. The court relied on allegations about the plaintiffs’ advertising expenditures, advertising that emphasized the black-and-green packaging, consumer studies stating that 85% of snack-nut purchasers recognized the packaging, media coverage, sales success, prior efforts to combat alleged copying, and thirteen years of continuous and exclusive use.

The court nevertheless held that the plaintiffs did not plausibly allege a likelihood of consumer confusion. Applying the relevant likelihood-of-confusion factors, the court found that the packaging designs did not have a striking similarity or create the same overall impression. The court emphasized that Nut Cravings’s package used a large rectangular window rather than the two semi-circular curved windows alleged to be distinctive, displayed “PISTACHIOS” horizontally rather than vertically, prominently included “ROASTED SALTED” and other product information in white circles, and did not feature the WONDERFUL mark. The court also noted that Nut Cravings sold only through online retailers, while much of the plaintiffs’ alleged market involved brick-and-mortar stores; that the plaintiffs alleged no actual confusion; that the allegations did not support bad faith; and that the plaintiffs offered no allegations about the quality of Nut Cravings’s product. Although the low cost and impulsive nature of snack purchases favored the plaintiffs, the court concluded overall that confusion was not plausibly alleged.

The court separately held that the plaintiffs did not plausibly allege nonfunctionality. The complaint largely repeated the legal standard by asserting that the packaging features were not essential to the product or packaging and did not affect cost or quality. The court found those statements conclusory. It also rejected the plaintiffs’ reliance on the existence of alternative packaging designs as sufficient to establish nonfunctionality.

Registered Trade Dress

The plaintiffs’ registered trade-dress claim had the same basic elements as the unregistered claim, except that a registered trade-dress claimant did not have to plead nonfunctionality. The court held that the registered claim nevertheless failed because the plaintiffs had not adequately alleged a likelihood of confusion. The failure to plausibly allege that element defeated the registered claim.

Disposition

The court concluded that the Second Amended Complaint failed to state claims for both unregistered and registered trade-dress infringement. Because the plaintiffs had received multiple opportunities to amend and had not corrected the deficiencies identified earlier, the court dismissed the Second Amended Complaint with prejudice. The court granted Nut Cravings Inc.’s motion to dismiss with prejudice and directed the Clerk of Court to terminate the motion docket entry.