It is rare in legal scholarship to be both novel and clearly correct at the same time. In Servicing Trade Dress: Demystifying the Tertium Quid, Professor Marlan pulls it off. He starts with a puzzling carveout in a key Supreme Court case in 2000, Wal-Mart Stores, Inc. v. Samara Brothers, Inc. That case drew a significant line between product packaging (which is eligible for immediate trademark protection if it is “inherently distinctive”—that is, if the court thinks that consumers would immediately recognize it as indicating the source of a product, not just product descriptions or decorations) and product design (which may only be protected by trademark law if it has gained “secondary meaning” by recognition in the marketplace over time). Product design isn’t as likely to signal source to consumers as words are, the Court reasoned, and, separately, it’s also very likely to provide non-source-related benefits. Most of the time, a cigar is just a cigar. Thus, trademark protection should be given sparingly, only when the claimant proves that the claimed design is actually serving a source-identifying function.
Wal-Mart’s rule makes it harder to bring anticompetitive lawsuits against competitors based on product design—the burden will be on the claimant both to prove that its claimed design is nonfunctional and also to prove that consumers are likely to perceive it as an indicator of source. This is particularly useful because competitors are likely to want to use similar product designs, not to confuse consumers, but to provide consumers with the same benefits.
But, in order to avoid overruling a previous case (Two Pesos, Inc. v. Taco Cabana, Inc.), the Wal-Mart Court distinguished the layout/décor of a restaurant as a “tertium quid,” a new and indefinite third category. The Court told us that the layout and décor of a restaurant were enough like product packaging to be eligible for inherent distinctiveness. Specifically, the Two Pesos Court adopted the description that the claimed trade dress was
[A] festive eating atmosphere having interior dining and patio areas decorated with artifacts, bright colors, paintings and murals. The patio includes interior and exterior areas with the interior patio capable of being sealed off from the outside patio by overhead garage doors. The stepped exterior of the building is a festive and vivid color scheme using top border paint and neon stripes. Bright awnings and umbrellas continue the theme.
(If you think that sounds like a bog-standard Mexican restaurant, you’re not wrong.) Restaurant trade dress (and perhaps any store décor) thus could receive trademark protection immediately upon use by a business, without building a reputation among consumers.
In further complicating the doctrine by distinguishing instead of overruling Two Pesos, the Court created a mess. This “tertium quid” has long bedeviled trademark scholars, not least because the Wal-Mart Court also said that, if there was doubt as to whether the claimed trademark matter was product design or product packaging, courts should err on the side of “design,” thus requiring secondary meaning. They should do this to protect legitimate competition and avoid overprotecting features that might be desirable to consumers for non-source-designating reasons, like the general attractiveness of a design. A layout of a store may have some features that are more like “packaging” for the services the store delivers, but at least some features are likely to be part of the services offered by the store—the “design.” So it would seem as if we should err on the side of requiring secondary meaning in cases of doubt. What, then, is the “tertium quid” of a restaurant layout that the Court said could be inherently distinctive?
Professor Marlan shows that there is an answer and that the Court should have overruled Two Pesos outright for coherence. He canvasses post-Wal-Mart cases to show that essentially all “tertium quid” cases involve services, which is useful to know, especially given that other parts of trademark law distinguish products from services for practical reasons. He also successfully uses the marketing literature, which discusses how companies should design services such as serving meals (restaurants) and providing airplane flights (airlines). That is, the marketing literature treats service design as analogous to product design. Given that service design, like product design, regularly attempts to provide actual benefits to consumers beyond source indication, such as an eating environment that makes them feel happy and also encourages them to eat quickly, it should be treated by trademark law like product design and thus not protected under trademark theories in the absence of secondary meaning. The last part of the article before the conclusion is a bit more speculative, but appropriately modest in its suggestions about the relationship between trade dress protection for services and the overcommodification of modern life.
As I was reading the article, I thought “of course!” but the issue hasn’t previously been explained in such a conceptually helpful way. The fact that the non-legal literature supports the claims he’s making is further evidence that Professor Marlan has hit on a compelling argument grounded in reality as well as in legal concepts.
In addition, the tertium quid problem raises its head in other contexts to which Professor Marlan’s analysis could usefully apply. For example, courts have long struggled to fit celebrity false endorsement claims into the trademark framework. The celebrity is usually well-known for being someone, and even if that celebrity came from a particular endeavor like football or music, that doesn’t constrain the fields in which they could plausibly endorse products or services. But that makes trademark logic hard to apply. Is the trademark any image of the celebrity whatsoever? Courts don’t like that because trademark prefers more tangible definitions. The appearance of deepfakes has increased these anxieties.
As one court in a voice-cloning case recently wrote, “[b]ecause marks can take essentially any form, courts must therefore be careful to ensure that they receive protection only when used as contemplated by the statute—that is, as marks.” The court found celebrity endorsement cases to be an “uneas[y]” fit with this principle, “as celebrities’ personas are also their products,” though at least for advertising cases the service of endorsement seems like the trademark use. Citing Jennifer Rothman, the court emphasized that “personal marks” are treated differently from other marks—they’re harder to register, and the law “is highly skeptical of efforts to restrict individuals from using their own identities in trade.” Basically, celebrities, because they signify attitudes, trends, and points of contention, are good to think with, which means that many uses of their identities won’t be source-identifying uses. Connecting the anticompetitive risks of overprotecting product and service design with the anticompetitive and anti-speech risks of overprotecting celebrity identity helps us understand both the justifications for and the limits of trademark protection.
Just as the layout and features of a store are regularly part of the services being sold, voices can be part of a product or a service: an audiobook narrator is not signifying source, but telling a story. Professor Marlan’s work, like Mark Lemley and Mark McKenna’s work on “the trademark spot” on products, fits into a larger story about the further development of the “use as a mark” doctrine to cabin trademark’s nearly unchecked expansion. It would be nice for courts to admit more often that “use as a mark” is, in significant part, a normative inquiry. To the extent that it is empirical, it is empirical as a rule of thumb—we presume, often irrebuttably, that many things do or do not automatically function as trademarks, or perform non-trademark functions for consumers that therefore preclude trademark protection. Professor Marlan’s use of the marketing literature on service design persuasively makes the case that we should include the design of services in our rule of thumb, “this probably isn’t a trademark.”
