MalacoLeaf fails to net victory in fish-shaped candy dispute

In MalacoLeaf AB v Promotion in Motion Inc, the US District Court for the Southern District of New York has dismissed the plaintiff's complaint that the defendant's fish-shaped candy infringed, among other things, its trade dress rights in its own fish-shaped candy. The court held that animal-shaped candy is common within the candy industry and that the plaintiff's product design was generic and functional.

MalacoLeaf manufactures a soft, fish-shaped gummy candy sold under the mark SWEDISH FISH or THE ORIGINAL SWEDISH FISH. The candy is widely distributed. Promotion in Motion (PIM) markets and promotes a rival fish-shaped gummy candy under the mark FAMOUS SQWISH CANDY FISH.

MalacoLeaf brought an action before the US District Court for the Southern District of New York, claiming trade dress infringement and dilution based on its fish-shaped product design. PIM argued that the design was generic and functional. The court agreed that it was generic, noting that the Swedish Fish design is "a classic example of a design that is not used to identify source, but rather to render the product itself more appealing, especially to children". It also stated that animal-shaped gummy candy is common within the candy industry and pointed to other gummy candy shapes, such as bears, worms and dinosaurs. Finally, the court found that MalacoLeaf's complete failure to police its trade dress for decades was additional evidence that the trade dress was generic.

Despite this finding, the court examined the functionality aspect of MalacoLeaf's product design. Here again, it sided with PIM. MalacoLeaf, said the court, had failed to provide any evidence that supported its non-functionality position. Also, the common elements between MalacoLeaf's candy and PIM's candy, such as the head, tail and scale pattern, were necessary attributes to portray any fish. Since MalacoLeaf's product design trade dress was generic and functional, the court granted PIM's motion for summary judgment on the product design trade dress infringement and dilution claims.

In its suit, MalacoLeaf had also claimed (i) trademark infringement based on its marks (the registered mark SWEDISH FISH and the unregistered mark THE ORIGINAL SWEDISH FISH), and (ii) trade dress infringement and dilution (under New York anti-dilution statute) based on its packaging. In determining if there was a likelihood of confusion, the court applied the familiar standard of Polaroid Corp v Polarad Elec Corp and, with respect to both the word marks and the product packaging, considered:

• the strength of MalacoLeaf's marks;
  
  
• the similarity of both parties' marks;
  
  
• the proximity of each parties' goods;
  
  
• the concept of bridging the gap;
  
  
• actual confusion;
  
  
• bad faith;
  
  
• the sophistication of purchaser; and
  
  
• the quality of goods.

It found that only one of these eight factors, sophistication of purchaser, favoured MalacoLeaf's position. Since six of the eight factors favoured PIM (bridging the gap was found to favour neither party), the court held that the "only reasonable conclusion that may be reached from the undisputed evidence" was that PIM had not infringed MalacoLeaf's marks or packaging trade dress. MalacoLeaf's claim for dilution of its trade dress was also dismissed because its trade dress was found to be weak and had not attained the distinctiveness required by New York statute.

The court also rejected MalacoLeaf's false advertising claim, which was based on a novel argument regarding PIM's use of the terms 'Famous' and 'New' on its packaging. MalacoLeaf contended that PIM could not use both 'Famous' and 'New' because the combination created ambiguity. The court reasoned that although ambiguous, the use of the terms was not literally false. As a result, MalacoLeaf should have submitted additional evidence to show how consumers perceive the terms.

Howard J Shire and Kevin J Prey, Kenyon & Kenyon, New York