Ornamental use of pun is aesthetically functional (defendant-side functionality in the wild!)

LTTB LLC v. Redbubble, Inc., No.  18-cv-00509-RS (N.D. Cal. Jul. 12, 2019)
Defendant-side functionality! This is a concept I’ve been
arguing exists for years (see, e.g., the result in Louboutin v. YSL), and now
it is no longer immanent in the caselaw but fully arrived!
Here, it serves another way to protect noncommercial speech
despite the Honey Badger case:
while a source-identifying
trademark may embody a pun, no one can claim exclusive rights to use the pun
merely by printing it on t-shirts, other ‘[w]earable garments and clothing,”
“[p]aper for wrapping and packaging,” or “tote bags,” or similar products and
calling it a “trademark.” Even if a trademark embodying a pun is otherwise
enforceable where there is a likelihood of source confusion, the trademark
holder cannot prevent others from using the pun in contexts that do not imply
Plaintiff’s applications to register “LETTUCE TURNIP THE BEET”
were initially rejected as decorative/ornamental when they showed the phrase
“emblazoned” on products, but allowed after it submitted specimens using on
product labels and hang tabs—the application was rejected when plaintiff first
suggested the phrase merely would be emblazoned across those products. The
registrations became incontestable.  Although
the court didn’t apply file wrapper estoppel, it did use the PTO’s reasoning to
bolster its conclusion that plaintiff’s enforceable marks didn’t entitle it to preclude
others from making the joke on t-shirts or elsewhere.
Anyway, defendant lets artists upload designs to be printed
on products such as apparel, phone cases, stickers, bags, wall art and so on.  Products featuring the phrase “Lettuce Turnip
the Beet” or similar phrases allegedly have been offered for sale on the Redbubble
site.  Its no-secondary-liability
argument might otherwise have created a triable issue of fact, the aesthetic
functionality of the phrase when used as a phrase demanded summary judgment for
Redbubble’s defense was either about the rule that “decorative
or ornamental” features are not subject to trademark protection or about the
exclusion for “aesthetic functionality.” “Case law has not always clearly
distinguished between the two concepts, which undoubtedly are related and
overlap.” However characterized, it succeeded. 
Despite Au-tomotive Gold, aesthetic functionality still exists in
the 9th Circuit, and here no reasonable trier of fact “could
conclude that consumers seek to purchase products based on LTTB’s
reputation—whether ‘genuine’ LTTB products or those produced by any
competitors. Rather, as LTTB’s evidence and argument make clear, consumers are
interested in purchasing products displaying the pun.”  [So this isn’t completely limited to defendant-side
functionality. To the extent that LTTB’s claimed rights are based on exclusive
use of the pun as the decoration for clothes, de facto secondary meaning can’t
protect that. Although the
term isn’t generic, declaring it aesthetically functional produces the same
result for what could in other circumstances (if used on clothes tags) be an
arbitrary designation.]

Screenshot from plaintiff’s Etsy store, showing P’s own variable, ornamental uses
LTTB argued that this argument “would permit a t-shirt bearing
a copy or near copy of the Nike swoosh logo or some other registered design
mark,” so the fact of ornamentation can’t produce functionality. But there’s a
key difference: “Nike, Volkswagen, and Audi all developed their trademark
rights by selling goods under those brand names, and have at least arguably
gained brand loyalty for those products, as opposed to mere consumer interest
in the specific names, independent of the reputation the companies developed when
selling the products.”  International
Order of Job’s Daughters v. Lindeburg & Co., 633 F.2d 912 (9th Cir. 1980),
also supported Redbubble.  And
Redbubble’s case was stronger because LTTB wasn’t a group with which consumers
could express allegiance by buying products displaying the pun. “The products
are simply the vehicle for distributing the claimed ‘trademark,’ rather than
the other way around, where a trademark is used to identify the source of the
goods.”  Using an already-established
mark to sell t-shirts would have been a different case.
None of this was to say that LTTB’s registered marks were
“per se” invalid (though it sure sounds like a holding of limited secondary
meaning).  [Side note: secondary meaning
isn’t necessary for an arbitrary mark, though one might reasonably argue that
should change if secondary meaning failed to develop over a long time despite
the theoretical arbitrariness of the term. 
But what ornamentality/decorativeness really does is provide a way to
manage the presumptive source-indicating function of arbitrary/fanciful
symbols: in fact there are lots of ways to use many such signals that don’t
almost automatically signal trademark function. 
Ornamentality is our way of managing that reality for supposedly “inherently
distinctive” words or designs.]  Rather,
the decorativeness of the use prevented LTTB from showing a likelihood of
confusion as to source, “where the mere use of the pun on the face of various
products cannot be source-identifying.” 
“LTTB may not … recover for alleged trademark infringement based on any
competitors’ use of the very kind of designs that the PTO found not to be
eligible for trademark protection.”  As
in Job’s Daughters, a use could be confusing if it led consumers to assume
source/sponsorship, but there was no sufficient evidence “that any purchaser of
allegedly infringing items inferred from use of the pun that the product was
produced, sponsored, or endorsed by any particular person or entity, such as
Incontestability didn’t matter because this wasn’t a finding
of invalidity of the marks, but a limit on the scope of LTTB’s rights, and
because incontestability doesn’t bar a functionality challenge.

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