Fifth Circuit applies trademark protection to universities’ colour schemes

In Board of Supervisors for Louisiana State University Agriculture and Mechanical College v Smack Apparel Co (Cases 07-30580 and 07-30887, November 25 2008), the US Court of Appeals for the Fifth Circuit has upheld a district court decision recognizing trademark rights in the colour schemes used by certain major universities.

In June 2004 four universities, along with their official licensing agent, filed a district court action against Smack Apparel Company alleging various trademark infringement and unfair competition claims. The universities claimed trademark rights in certain unregistered colour combinations. Smack, a Florida apparel company, manufactured a range of t-shirts that featured each of the universities’ familiar colour combinations, along with additional printed messages relating to the schools. The universities claimed that:

the colour combinations, when used in conjunction with other school identifying indicia, were immediately recognizable as source indicators; and
Smack’s shirts were likely to deceive, confuse and mislead consumers as to source or sponsorship.

The parties filed cross-motions for summary judgment on the issue of liability for trademark infringement and the court granted summary judgment to the universities. A jury trial determined damages. The jury returned a verdict in favour of the universities, awarding both actual damages and lost profits. The court also enjoined Smack from further selling the shirts. Smack appealed the summary judgment order. The universities appealed the district court’s denial of their post-verdict motion for attorneys’ fees. The Fifth Circuit affirmed both district court decisions.

In affirming the infringement claim, the Fifth Circuit found that the universities had demonstrated both ownership of legally protectable marks and a likelihood of confusion. It was agreed that the colours were not inherently distinctive, but the universities were able to establish secondary meaning based on a variety of factors, including:

their longstanding use of the colour combinations;
the significant sales volume of licensed products containing the colours;
the well-known nature of the colours as shorthand for the schools themselves; and
Smack’s own belief that consumers would associate the colours with the universities.

In addition, the court used the Taco Cabana likelihood of confusion test to find a strong likelihood of consumer confusion. Particularly important to this decision was the overwhelming similarity between Smack’s shirts and the universities’ own licensed products and Smack’s intent to profit from the reputation of the universities. In the court’s view, whether or not consumers actually care that products are officially licensed did not affect the likelihood of confusion analysis.

After finding both secondary meaning and a likelihood of confusion, the court discussed several additional issues. First, it declined to accept Smack’s functionality argument, finding the colour schemes to have no significance other than as trademarks of the schools. Smack argued that the shirts allow groups of people to bond, show loyalty to their schools and identify other fans. The court rejected this “aesthetic functionality” argument. The court also rejected Smack’s nominative fair use defence because the infringing shirts improperly suggested affiliation with the universities, and rejected its laches defence because of unclean hands.

Finally, the court discussed the issue of damages, upholding the jury’s award of actual damages, despite a lack of evidence regarding actual confusion, and affirming the district court’s refusal to award attorneys’ fees. The court noted that the deliberate copying and proven bad faith did not per se require an award of attorneys’ fees, especially since the universities' infringement claims were based on somewhat novel legal issues.

Ron N Dreben and Daniel Marks, Morgan Lewis, Washington DC

Fifth Circuit applies trademark protection to universities’ colour schemes

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