Trade dress is extremely important, and here’s a great story to illustrate why.
I have a friend that recently developed a good business selling a physical product on Amazon. As a side business, his revenue numbers were strong (i.e. $15,000-20,000 per month), and growing. He had developed a great brand name and even went so far as to trademark the name of his brand and his logo.
Everything was going good until a few months ago, when he had to take down his listing and pull back his inventory.
So why did he have to abruptly turn off his Amazon listing and why is he pulling back thousands of dollars in inventory now from Amazon that he is unable to sell?
He made one big mistake…. He forgot to consider trade dress when designing his product.
What is Trade Dress?
Trade dress is a form of intellectual property that can be registered, just like a trademark. It’s a legal term that refers to the visual appearance and design characteristics of a product, or it’s packaging, that signifies the uniqueness of the product to consumers.
According to Wikipedia:
Trade dress protection is intended to protect consumers from packaging or appearance of products that are designed to imitate other products; to prevent a consumer from buying one product under the belief that it is another. For example, the shape, color, and arrangement of the materials of a children’s line of clothing can be protectable trade dress (though, the design of the garments themselves is not protected), as can the design of a magazine cover, the appearance and décor of a chain of Mexican-style restaurants, and a method of displaying wine bottles in a wine shop.
Trade dress is regulated under the Lanham Act, a Federal statute that allows the owner of a particular trade dress to sue someone that copies their design, thereby infringing on the owner’s intellectual property. While the safest bet is to register your trade dress with the USPTO, the act does not require registration to enforce your common law rights.
What are the benefits of registering?
Even though the Lanham Act provides common law protection to anyone that may violate your intellectual property by copying your design, we still recommend registration of your trade dress where appropriate.
There are several advantages to doing so. The first main advantage to registering your trade dress is that by doing so, you will acquire nationwide constructive use and notice over the trade dress, thereby preventing others from using or registering your trade dress. The second main advantage to registering your trade dress is that you will attain “incontestable status” after five years, thereby eliminating many of the ways that someone might otherwise be able to challenge your registration.
Legal requirements to register
There are two main considerations when determining whether your trade dress can be registered. The first is whether or not the trade dress is “functional”. In other words, the trade dress cannot serve a functional purpose other than to create recognition of the product in the mind of the consumer.
The second consideration is that of “distinctiveness”. In other words, the trade dress must be perceived by consumers as representing a certain product. This can be difficult to show, because distinctiveness in product design must be shown through the continued and prolonged use of the trade dress in the market, thereby allowing the trade dress to derive secondary meaning such that consumers will associate the trade dress with the product or brand.
The bottom line?
If you are in the process of researching and sourcing a physical product to sell online, and you notice something distinctive about it that is unique to one of your competitors, you should take some time to research whether the competitor has registered any trade dress with the USPTO.
If your competitor has registered their trade dress, and you overlook or ignore that registration and move forward to invest thousands of dollars on inventory, you may be facing a stern cease and desist letter in your not to distant future. Not to mention, losing a lot of money in inventory costs, lost profits, and recovering unsellable product from Amazon.
Do you have questions about trade dress or how to protect your intellectual property generally? Give us a call or fill out our contact form to schedule a free strategy session.