Interaction between trade dress and copyright discussed by district court

The recent district court decision in Blue Nile Inc v Ice.com Inc (Case C06-1002RSL, Western District of Washington, January 18 2007) addresses the issue of whether a party can bring trade dress and unfair competition claims along with a claim for copyright infringement when a competitor copies the 'look and feel' and the content of that party's website.

Blue Nile markets and sells fine jewellery, particularly diamonds, solely over the Internet. Over the past decade, Blue Nile has become a successful internet business, rivalling other high end jewellery retailers in its volume of diamond sales.

Ice.com Inc bought the domain name 'diamond.com' in 2006 and began selling fine jewellery, including diamonds, at the 'diamonds.com' domain name. In response, Blue Nile filed a lawsuit in federal court in Washington State, claiming that Ice.com allegedly wrongfully used its copyrighted 'Blue Nile Diamond Search', its 'cushion-cut' diamond copyrighted photograph and its overall 'look and feel' for the web pages found on 'diamond.com'. In its complaint, Blue Nile asserted claims of copyright infringement under the federal Copyright Act, trade dress infringement under the Lanham Act, and consumer protection, unfair competition, unjust enrichment, breach of the implied covenants of good faith and fair dealing and breach of contract under Washington State law. On Ice.com's motion to dismiss all the claims except the copyright infringement claim, the court considered the well-accepted doctrine of copyright pre-emption and, in particular, its application to the Lanham Act trade dress infringement claim.

It is well-established that the federal copyright law pre-empts any state law claims that provide for "equivalent rights" unless the state law claims have an "extra element" which changes the nature of the action. Since all of Blue Nile's state law claims incorporate the copyright claim, the district court held that the state law claims constituted equivalent rights. To avoid copyright pre-emption, the extra element must "transform the nature of the action". Under the facts alleged in the complaint, the district court held that the state law claims did not "transform the nature of the action" to anything different from a copyright infringement claim. Accordingly, the district court dismissed all of the state law claims Blue Nile alleged in its complaint.

Blue Nile's trade dress claim, however, met a different fate. Relying on the complaint's allegations claiming infringement of the "design and presentation of diamond search features", the court held that Blue Nile's trade dress infringement claim at least at this early juncture of the proceeding should not be pre-empted by the copyright infringement claims asserted in the complaint. The court went on to hold that a website's 'look and feel' constitutes a claim "outside the purview of the Copyright Act". Ultimately, the district court noted that whether there is a protectable 'look and feel' to the website will be determined by the development of the facts. While it may be that the facts will determine that the copyright claim and the trade dress claim amount to the same claim, the determination as to whether these claims amount to coextensive allegations cannot be made on a motion to dismiss. Factual development of this "novel trade dress theory" will determine if trade dress look and feel can survive as a separate claim.

How Blue Nile subsequently defines its trade dress likely will determine the ultimate fate of the claim under the doctrine of copyright pre-emption, whether at a trial or on a motion for summary judgment. For now, the parties will be allowed to engage in discovery on both claims - copyright infringement and trade dress infringement.

Rochelle D Alpert, Morgan Lewis, San Francisco