Nola Spice Designs, L.L.C. v. Haydel Enterprises, Inc., et. al.

Addressing issues of trademark validity and substantial similarity in a copyright infringement claim, the U.S. Court of Appeals for the Fifth Circuit upheld a district court’s grant of summary judgment that the challenged marks were not distinctive and thus unprotectable in a case involving the parties’ sale of goods relating to the Mardi Gras tradition of a “bead dog.” Nola Spice Designs, L.L.C. v. Haydel Enterprises, Inc., et. al., Case No. 13-30918 (5th Cir., Apr. 8, 2015) (Higginson, J.)

In Mardi Gras parades in New Orleans, parade participants throw strands of beads to onlookers. Onlookers in turn have traditionally created “bead dogs” by twisting the beads into the shape of a dog. In 2009, Haydel Enterprises, the owner of a New Orleans bakery, received trademark registrations for the word mark “MARDI GRAS BEAD DOG” and a bead dog design for king cakes, jewelry and clothing. Haydel later obtained a copyright registration in 2012 for its bead dog design. Haydel’s bead dog design included a collar formed by a series of spheres designed to look like Mardi Gras style beads. In 2012, Nola Spice began selling its own “bead dog” jewelry, made by twisting together beads and wire. After receiving a demand letter from Haydel to cease use of its “bead dog” design, Nola Spice sued Haydel for declaratory judgment that its use of the bead dog design did not violate the Lanham Act, and sought to cancel Haydel’s trademark registrations. Haydel asserted counterclaims for, inter alia, trademark infringement, unfair competition, trademark dilution and copyright infringement.

Trademark

In reviewing the district court’s Lanham Act decision de novo, the Fifth Circuit concluded that Haydel’s trademark registrations for “MARDI GRAS BEAD DOG” and its bead dog design were invalid because they were not distinctive. The Court employed the “imagination test” to assess the descriptiveness of the mark, and concluded that the word mark was not inherently distinctive because it conveyed information about Haydel’s clothing, jewelry and king cake, and “no reasonable juror could find that imagination is required to link Haydel’s clothing, jewelry and king cake to the phrase ‘Mardi Gras Bead Dog.’” To further support its conclusion, the Court relied on the finding that competitors likely would need to use the phrase “Mardi Gras bead dog” to describe their own products. Concerning Haydel’s bead dog design mark, the Court found that its design was substantially similar to the traditional bead dogs constructed by Mardi Gras parade onlookers and also was not inherently distinctive.

Because Haydel’s trademarks were not inherently distinctive, Haydel needed to prove that its marks had acquired secondary meaning. The Court found Haydel had failed to raise an issue of material fact on this point and thus affirmed the cancellation of Haydel’s trademark registrations and the grant of summary judgment in favor of Nola Spice on Haydel’s unfair competition and trademark dilution claims.

Copyright

The Fifth Circuit then analyzed Haydel’s copyright infringement claim. Disagreeing with the district court’s finding that Haydel’s copyright was not protectable under the merger doctrine, the Court nevertheless affirmed the district court’s grant of summary judgment because there was no substantial similarity between the protectable elements of Haydel’s registered copyright for its bead dog design and Nola Spice’s bead dog jewelry. The Court found that the only possible protectable element of Haydel’s bead dog design was the expression of the collar as a string of spheres to make a collar around the bead dog’s neck. Deeming this expression “minimal[ly] original[],” the Court noted that the collar was “quantitatively and qualitatively insignificant in relation to Haydel’s work as a whole” and held that no reasonable juror could find substantial similarity with Nola Spice’s bead dog jewelry based solely on Haydel’s expression of a collar.