Abercrombie & Fitch Stores, Inc. v. American Eagle Outfitters

OPINION BOGGS, Circuit Judge.

This case pits an old hand at trademark law against the new kid on the block: Abercrombie & Fitch sued American Eagle Outfitters to stop American Eagle from infringing what A&F describes as its unregistered "trade dress," made protectable by Section 43(a) of the Lanham Act. A&F claimed that AE impermissibly copied the designs of certain articles of clothing, in-store advertising displays, and a catalog. The district court granted summary judgment in favor of American Eagle, reasoning that Abercrombie & Fitch had sought protection for something that did not constitute trade dress at all. Abercrombie timely appealed. . . .

In TrafFix, the Court identified two forms of functionality. The first, traditional functionality, deems a feature functional when "'it is essential to the use or purpose of the device or when it affects the cost or quality of the device.'" Qualitex "expand[ed] upon the meaning of this phrase [by] observing that a functional feature is one the 'exclusive use of which would put competitors at a significant non-reputation-related disadvantage.'" But the competitive disadvantage comment did not displace the traditional functionality standard from Inwood Laboratories. Instead it explained the policy underlying the functionality doctrine in a way readily adaptable to the problem of aesthetic functionality, the issue presented in Qualitex. Thus, the "significant non-reputation-related disadvantage" to competitors approach is the second form of trade dress functionality.

None of the design features that Abercrombie claims as its trade dress is essential to the use or purpose of the garments, catalog, and stores they adorn. The design features surely affect the cost and quality of the garments and the design of the catalog affects its cost and aesthetics (which determines, in part, its quality as a device for selling clothing), so a jury question exists as to whether the designs are functional in the traditional sense. However, no reasonable jury could deny the existence of a "significant non-reputation-related disadvantage" that would be imposed on competitors by protecting Abercrombie's claimed trade dress. That form of functionality governs the analysis of this case. . . .

The two most common "tests" of aesthetic functionality under the competition theory prove useful in this case. "The test for 'comparable alternatives' asks whether trade-dress protection of certain features would nevertheless leave a variety of comparable alternative features that competitors may use to compete in the market. If such alternatives do not exist, the feature is functional; but if such alternatives do exist, then the feature is not functional."

"The 'effective competition' test asks . . . whether trade dress protection for a product's feature would hinder the ability of another manufacturer to compete effectively in the market for the product. If such hinderance is probable, then the feature is functional and unsuitable for protection. If the feature is not a likely impediment to market competition, then the feature is nonfunctional and may receive trademark protection." The same principle applies to trade dress law. . . .

We turn first to Abercrombie's clothing designs. Abercrombie's complaint itself identifies the functions of the design elements it selected: use of the word performance "conveys the image of an active line of . . . clothing"; use of the words authentic, genuine brand, trademark, and since 1892 "convey the reliability of the . . . brand;" and so on. Use of these elements in combination with one another and with Abercrombie's trademarks on clothing bearing "primary color combinations . . . in connection with solid, plaid and stripe designs" and made from "all natural cotton, wool and twill fabrics" creates reliable rugged and/or athletic casual clothing drawn from a consistent texture, design, and color palette. Were the law to grant Abercrombie protection of these features, the paucity of comparable alternative features that competitors could use to compete in the market for casual clothing would leave competitors at a significant non-reputational competitive disadvantage and would, therefore, prevent effective competition in the market.

Giving Abercrombie a monopoly on the words its claims form part of its trade dress would hamstring any competitor's ability to convey the reliability of its own brand. The English language currently contains a limited list of synonyms for reliable and other words that convey a product's integrity. While Abercrombie designers deserve credit for using the company's age as a creative indicator of their products' reliability, few other verbal formulations adequately or efficiently convey this concept. The same is true of using suggestive symbols like lacrosse sticks and the ski patrol cross on clothing to convey the product's athletic nature or capacity to invoke images of athleticism. Producers have a limited range of sports and sporting equipment to choose from in attempting to convey this idea in this manner on clothing. Producers could go without such images or devise wholly new ways of conveying the athleticism concept in connection with casual clothing, but at present these features are ones that "competitors would have to spend money not to copy but to design around." The lack of comparable alternatives to pleasing design features means that granting an injunction would deny consumers the benefits of a competitive market. In short, these design features are "something that other producers of the [casual clothing] have to have as part of the product in order to be able to compete effectively in the market . . . [it is not] the kind of merely incidental feature which gives the brand some individual distinction but which producers of competing brands can readily do without."

Finally, Abercrombie is not saved by its characterization of its trade dress as the combination of different design features on its clothing: denying American or other producers the right to combine these functional design features with their own trademarks on clothing bearing certain generic designs (unspecified "solid, plaid, and stripe designs," without more, are indisputably generic) made from generic fabrics would undoubtedly force these competitors to spend money to design around Abercrombie's creations. There can be no dispute that preventing other producers from combining these design elements in the way Abercrombie does would prevent them from competing effectively in the market for casual clothing aimed at young people. No reasonable jury could find to the contrary. Remand for further proceedings in the district court on this question would be a waste of judicial resources, not to mention the parties' time and money.

We reach the same conclusion with respect to Abercrombie's claim of trade dress in its in-store display setups and use of college students as sales associates. Forbidding clothiers to use college students to sell garments to or for college-age people indubitably prevents them from effectively competing in the market for casual clothing directed at young people.

Abercrombie's catalog is a different matter entirely. Of course, the Quarterly has certain functions, including "the creation of a cutting edge 'cool' Abercrombie image," and, presumably, selling clothes. But that does not make the catalog's overall design functional. Nor does the presence of many functional elements in the Quarterly's design. Even if the elements Abercrombie identifies were all separately functional, as American argued and the district court held, A&F's arrangement of these features can constitute more than the sum of its non-protectable parts. . . .

A&F has chosen to print its catalog on an unusual kind of paper, leaving competitors a variety of other paper options. The clothes offered for sale appear in "clothesline" or "cutout" form (the garments appear on the page as if hanging from a clothesline, i.e., not on a model), while many catalogs show garments on a model or display them in other ways. Colorbars are a useful mechanism for communicating the available selection of colors, but the same information can be provided in a handful of other ways. Abercrombie uses grainy images of exceptionally fit and attractive young people in outdoor (often collegiate) settings, alone and in groups, wearing more or less A&F clothing in ways that convey their allegiance to the brand while also seemingly attempting to create a sexual mystique about the wearer. The Quarterlies in the record rarely deviate from this pattern, but clothing retailers have an infinite variety of options for surrounding their clothes with pleasing or desirable imagery that avoids showing scantily clad college students in a grainy photograph. Finally, the record demonstrates that clothing catalogs have included so-called lifestyle editorial content for some time. But mail order retailers can still sell their clothes and create an aura about their products without including such content, although this method seems to have recently become a particularly effective way of creating demand. At the very least, the evidence in the record creates a genuine issue of material fact as to whether protection of the design features chosen by Abercrombie for its catalog leaves open sufficient comparable alternate methods of marketing clothing to young people by mail, such that granting A&F a monopoly on its distinctive configuration would not hinder the ability of another manufacturer to compete effectively in the market. Here, the Seventh Circuit's verbal formulation of the issue seems particularly apt: "whether the [combination of] features . . . is something that other producers of the product in question would have to have as part of [their catalog] in order to be able to compete effectively in the market . . . or whether it is the kind of merely incidental [configuration] which gives the brand some individual distinction but which producers of competing brands can readily do without."

Abercrombie claimed three "things" as its trade dress. Its clothing designs and its in-store presentation are not protectable because they are functional, despite their distinctiveness. As to the overall design of the A&F Quarterly, however, we will assume that it satisfies the distinctiveness and non-functionality conditions for protectability because, for purposes of the instant appeal, American conceded secondary meaning and the record evidence raises genuine issues as to the material fact of non-functionality. We therefore proceed to assess whether Abercrombie could prevail on its trade dress infringement claim.

In order to prevail on a Sec. 43(a) claim, a plaintiff must establish the existence of a likelihood of confusion as to the source or origin of the plaintiff's and defendant's products. This court has held that "the general concept underlying the likelihood of confusion is that the public believe that the [mark or dress] owner sponsored or otherwise approved the use of the trademark" or trade dress. . . . At this point, Abercrombie has had little opportunity to develop evidence of actual confusion or other evidence that would carry its burden of proving confusing similarity.

Nevertheless, "this court has made clear that likelihood of confusion is a question of law and thus an appropriate issue for summary judgment. The legal conclusion that confusion is likely must rest on the particular facts of the case, but when all of the material facts have been determined, the ultimate determination of likelihood of confusion lies within the exclusive jurisdiction of the court."
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For the foregoing reasons, we conclude that Abercrombie's clothing designs and in-store presentations are legally functional non-protectable trade dress and that Abercrombie could not possibly have carried its burden of proving that American's catalog was confusingly similar to what we have presumed is the protectable trade dress of Abercrombie's Quarterly. On this basis, we AFFIRM the judgment of the district court in favor of defendant American Eagle Outfitters, Inc.