If you don’t like low-cost imitator brands, you’ll love this decision

Moroccanoil, Inc. v.
Zotos Int’l, Inc., 2017 WL 319309, — F. Supp. 3d –, No. 16-7004 (C.D. Cal.
filed Jan. 19, 2017)
The court granted a
preliminary injunction in this trademark case, using the “serious questions
going to the merits” standard, which others consider dubious after eBay
Irreparable harm came from the potential threat to plaintiff’s high-end
brand positioning if people believed it also appeared in discount stores.
Moroccanoil
distributes hair and body care products in the United States featuring “argan
oil to revitalize and replenish hair.” It has incontestably registered
trademarks for MOROCCANOIL and for design marks for hair care products.  It also alleged, and the court found,
protectable rights in a trade dress including:
(1) a distinctive turquoise blue color; (2) copper orange lettering,
graphics and background design elements; (3) copper orange and white lettering,
the word “MOROCCANOIL” in vertical and horizontal orientation, graphics and
background design elements on a turquoise blue background; and (4) an amber
bottle packaged in a rectangular blue box.
registered marks

trade dress

This combination,
the court found, was nonfunctional, inherently distinctive product packaging serving
“a purely aesthetic purpose comprised of specific colors, fonts and styles,”
and, though suggestive marks are presumptively weak, Moroccanoil’s advertising
and promotion in major media outlets had added commercial strength.  Moroccanoil positions itself as a premium
product, sold on its own website as well as “premium” salons and spas,
“high-end” retailers such as Saks, Neiman Marcus, Barneys, Nordstrom and
Sephora, and “upscale” beauty supply stores such as Planet Beauty and Design
Collection.
Zotos is a
“professional beauty industry leader that manufactures and markets a range of
hair care products.” Zotos began to sell hair care products featuring argan oil
known as “Luxe Majestic Oil” in packaging with the term “MAJESTIC OIL” in
vertical white lettering with an orange fleur-de-lis symbol in front of a blue
background.
Majestic oil

Zotos’ largest
client is Sally Beauty Supply, a retailer chain that sells beauty supplies at
value prices. Zotos’ products appeal to consumers in the market for “a
lower-priced alternative to hair care brands that are typically sold at higher
price points at high-end department stores and salons.” Zotos used flyers, in-store
displays and emails that stated: “Compare to Moroccanoil® and Save” and “If you
like Moroccanoil® products, you’ll LOVE our new Luxe Majestic Oil line.”  (I found a saved email online using the
tagline “Naturelle Pro Majestic Oil was created to compete as a low cost alternative
to MoroccanOil brand”—does adding “compete” change anything?  What about the Sally Beauty webpage where
there are a number of different “compare and save” options presented?)
 

compare to display

like/love page from Sally Beauty

like/love ad on the same page for Bed Head/BTZ

like/love ad on the same page for Biolage/Biotera

As to similarity, Zotos
argued that vertical lettering was functional and common in hair care products,
and that the shades of blue were clearly distinct, and that an amber bottle was
functional for liquid products.  The
court found that product names “Moroccanoil” and “Majestic Oil” are
sufficiently distinct, and the injunction wouldn’t cover the name, but the
appearance of the products was “strikingly similar”: similar white vertical
lettering, similar placement of an orange symbol, and a similar blue background,
even if an amber bottle by itself was functional.
There was no
consumer evidence of confusion; Moroccanoil’s survey found that 41% of
respondents believed that Majestic Oil products were manufactured by or
associated with Moroccanoil.  The survey
was flawed—it used the Squirt format,
which is “most appropriate where a product with a weak mark is sold in close
proximity to the alleged infringer in the marketplace,” and though it’s
possible for consumers to encounter both products online, it was unclear that a
significant number of consumers would encounter the marks in close proximity.  Still, the court found the survey to be “some
evidence” of likely confusion.
Though the products
were sold in different types of stores, the court found that the parties targeted
the same general class of purchasers – female consumers of hair care products,
as evidenced by Zotos’ “efforts to target and capture Moroccanoil customers”
through its comparative advertising, such as “If you like Moroccanoil, you’ll
LOVE Luxe Majestic Oil!”  Zotos argued
that this tactic expressly distinguished its products, but Zotos products are
sold on the Internet without the “comparative advertising.” Plus, the term
“our” in (one) Zotos’ ad – “If you like Moroccanoil® products, you’ll LOVE our
new Luxe Majestic Oil line” – “may appear ambiguous to consumers as to whether
the companies are associated with each other.”
The court found
Zotos’ intent neutral; it was obviously aware of Moroccanoil but there was no evidence
of intent to confuse.
Overall, the factors
favored Moroccanoil.
Irreparable harm: since
Zotos was targeting Moroccanoil with its like/love ads, Moroccanoil argued that
Zotos was interfering with Moroccanoil’s ability to maintain its image as a
premium brand.   Moroccanoil’s expert
report by “an independent consultant in the professional beauty industry”
claimed that once the public perceives a brand is no longer “premium,” it is
“difficult, if not impossible, to reinstate the premium position,” using
examples of beauty brands such as Miss Clairol and Sebastian Shaper “whose ‘premium’
products declined in sales once such products entered the mass market consumer
retail channel.” Given the survey evidence, the court found a risk of
irreparable injury to Moroccanoil’s customer good will and reputation.
The court enjoined
Zotos from distributing its Majestic Oil products in their current packaging.  It accepted Moroccanoil’s testimony that it might
be possible to repackage the product. 
Thus, Majestic Oil could be required to recall the product from Sally
Beauty’s brick-and-mortar stores and distribution centers.

from Blogger http://ift.tt/2k7ARFJ

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