In PIM Brands Inc v Haribo of America Inc (Case Number 22/2821, 7 September 2023, Chagares, Bibas and Matey), the US Court of Appeals for the Third Circuit upheld a district court’s decision that a sweet maker cannot trademark the shape and colours of a watermelon candy. The combined colours and shape of the candy were ruled functional because they help signal to consumers that the sweets have a watermelon flavour.
PIM is a leading confectionary company that introduced its Sour Jacks Wedges, a chewy gummy candy, in the early 2000s.
PIM obtained a federal trademark registration for ‘the shape of a wedge for candy, with an upper green section with white speckles, followed by a narrow middle white section and followed by a lower red section with white speckles’.
Haribo, a well-known German confectionery company, introduced its own watermelon-flavoured sweet treat in 2019. Like the Sour Jacks Wedges, Haribo’s candy is red, white and green, with an elongated watermelon wedge shape. PIM sued Haribo for trademark and trade dress infringement under the Lanham Act and for unfair competition under New Jersey common law, alleging that Haribo copied PIM’s Sour Jacks Wedges design.
Haribo countered that PIM’s trade dress was functional and requested that the district court cancel PIM’s trademark. Haribo claimed that it designed its chewy candy’s shape and colours to match its watermelon flavour and that PIM’s trademark should not have been granted since it closely resembles an actual slice of watermelon. The district court agreed, finding that PIM’s trademark design was indeed functional and therefore not protectable since the combination of colour and shape helps to identify the candy’s watermelon flavour. PIM appealed.
While it acknowledged that the colouring of its watermelon candy was functional since it identified the flavour, PIM argued that the candy’s wedge shape identified the brand. PIM challenged the district court’s decision because it did not consider the wedge shape in isolation from the colours when assessing functionality.
The Third Circuit rejected PIM’s argument, concluding that each feature of the candy’s trade dress serves a single function – to identify its flavour – and is therefore ineligible for trademark protection. The court explained that a design is functional if it is useful for anything beyond branding. Citing its 2021 decision in Ezaki Glico v Lotte International America, the Third Circuit explained that “[e]ven if the design chosen both promotes a brand and also ‘makes a product work better’, it is functional and unprotectable”. The court maintained that if design choices such as shape and colour serve the same function (eg, to identify the flavour), then they should be considered together.
PIM further argued that its Sour Jacks Wedges do not exactly match the image of a watermelon: they noted that the bottom could be more curved and have a thinner band of darker green, the wedge could be wider, the point could be sharper and a deeper red, and there could be black seeds. The court rejected this argument, noting PIM’s own admission that “because this candy is an impulse buy” it “do[es]n’t need to be the Mona Lisa”.
In affirming the district court’s decision, the Third Circuit recognised that while functionality is a powerful doctrine, it is not a high bar. All the design needs to do is give the product a significant competitive edge beyond identifying its source. The court explained that PIM may have created the wedge shape to distinguish its product from the rest of the market, but common sense dictates that consumers think of signifies a slice of watermelon based on both the sweet’s colour scheme and shape. Since PIM’s candy resembles a slice of watermelon, it is functional and therefore unprotectable.
McDermott Will & Emery