You are more than likely familiar with Pocky, a popular stick-shaped biscuit cookie dipped in chocolate. Lotte, a South Korean conglomerate, makes its own version, called Pepero, which also consists of a thin biscuit cookie dipped in chocolate. Glico’s Pocky was the first such snack, but both have been selling in the United States for decades. On October 8, 2020, the Third Circuit affirmed the district court’s holding that the design of the biscuit cookie product was functional, and thus not eligible for trademark protection.
In 2015, Glico sued Lotte in federal court for trademark infringement and unfair competition. The District Court of New Jersey granted summary judgment for Lotte, finding that Pocky’s cookie design trade dress is functional, and thus not protectable; Glico appealed.
The Third Circuit noted the importance of protecting only features that prevent consumer confusion and safeguard the earned goodwill of the mark owner—not functional features that blur into the realm of patent law, which are protected for only a limited time. The Court found a feature is functional when it is “useful,” not when it is “essential,” as Glico argued. If it were otherwise, trademark protection would overlap patent protection, which covers inventions that are “new and useful.” Further, in Qualitex, the Supreme Court explained the purpose of excluding functional features was to keep one trademark owner from possessing a monopoly on a useful feature, which would stymie competition. The Third Circuit noted that a product feature is useful if it makes it cheaper or easier to use.
Considering the Pocky cookies, specifically, the Court discussed that the biscuit’s design makes it easier to eat—i.e., the uncoated end prevents getting chocolate on the consumer’s hands; the stick shape makes it easier to hold; and the thinness of the shape creates ease of packing the sticks into a box. Glico’s advertising promoted Pocky’s useful features. And, as far as alternative designs, while Lotte could have picked a different shape for its Pepero, that did not make Pocky any less useful. However, the Court also discounted Lotte’s argument that Glico’s utility patent proved that Pocky was functional—the patent was for a manufacturing method, not for the biscuit shape, and was, thus, irrelevant.
When a company is contemplating what aspect of its product are part of the product’s trade dress, it is vitally important to ensure that past, present, and future marketing and advertising decisions are in harmony with those trademark decisions. Advertising features as “convenient” or “useful” invites a functionality challenge and puts trademarks and design patents claiming the features at unnecessary risk.