Fair Wind Sailing, Inc. v. Dempster, 764 F.3d 303 (3d Cir. 2014)

Two Virgin Islands sailing schools hit some choppy water recently when one school sued the other. Fair Wind Sailing (Fair Wind) alleged that its former employees, H. Scott Dempster and Larry Bouffard, copied its business in many respects when opening their competing sailing school, Virgin Island Sailing School (VISS). This copying, according to Fair Wind, amounted to trade dress infringement. Fair Wind identified its trade dress as the combination of its use of catamaran vessels, a unique teaching curriculum, student testimonials, and its registered domain name.

The similarities between the schools’ businesses are striking. VISS uses only 45-foot catamarans, just like Fair Wind. Additionally, the junior school uses identical teaching curricula, itineraries, and student feedback procedures to those used by Fair Wind. Web marketing for both schools is also identical. VISS even included on its website a picture of a catamaran owned by Fair Wind, student testimonials from students that Dempster taught while working for Fair Wind, and a reference to Bouffard’s tenure with Fair Wind.

On appeal, however, the Third Circuit affirmed the district court’s grant of the defendants’ motion to dismiss the trade dress infringement claim for failure to state a claim, explaining that a plaintiff must prove three elements to make out a trade dress infringement claim. First, the design must be nonfunctional, meaning it is not essential to the use or purpose of the service, does not affect the cost or quality of the service, nor does it put competitors at a significant non-reputation-related advantage if they are not allowed access to it. Second, the design must be inherently distinctive or have acquired secondary meaning. Finally, consumers must be likely to confuse the source of the plaintiff’s and defendant’s goods or services. The court further asserted that a plaintiff must identify the specific elements that make up its trade dress and that any alleged trade dress must create a visual impression on consumers.

The court then described Fair Wind’s alleged trade dress as nothing more than a “hodgepodge of unconnected pieces of its business, which together do not comprise any sort of composite visual effect.” Several of the elements Fair Wind claims as trade dress, the court opined, are not even visual aspects of the business. The court found that Fair Wind’s trade dress claim could not survive the motion to dismiss because Fair Wind’s had not adequately identified the overall look for which it claimed protection.

The court went on to address the functionality of Fair Wind’s alleged trade dress, asserting that even if the elements identified were trade dress, they affect the quality of Fair Wind’s business, rather than merely identifying Fair Wind as the source of its services. The court also rejected Fair Wind’s contention that the functional elements combined to create a nonfunctional trade dress because Fair Wind failed to explain the nonfunctional trade dress allegedly created.

Ultimately, Fair Wind’s failure to define its trade dress adequately left its claim dead in the water.