Don’t Upset the Apple Cart …

Apple Inc. ("Apple") sued Samsung Electronics Co. ("Samsung") on April 15, 2011 in U.S. District Court for the Northern District of California alleging that Samsung's line of smart phones and tablet computers (referred to as "Galaxy products") copy Apple's iPhone, iPod touch, and iPad line of products as well as product packaging.  (Interestingly, Apple was Samsung’s second-largest client in 2010 after Japan’s Sony Corp, accounting for four percent of the South Korean firm’s 155 trillion won ($142 billion) annual revenues.)

The lawsuit makes wide-ranging charges against Samsung which puts the industry on notice not to copy Apple's “look and feel.”  Apple alleges that everything from the product shape and the icons on the screen of the Galaxy products …

to the way the Galaxy products are packaged infringe Apple's trade dress and trademarks.

Of significance to Apple’s “look and feel” claims is that both companies prominently display their respective trademarks on their products - "Samsung" house mark (on the front) and Apple's logo (on the back.)  In 2007, the Third Circuit held (Splenda® case) that the prominent presence of another well-known word or design mark may cause enough difference in the overall commercial impressions to weigh similarity in the defendant’s favor.  McNeil Nutritionals, LLC v. Heartland Sweateners, LLC, 511 F.3d 350 (3d Cir. 2007) (In this case, both packages had a number of similar elements, including the orientation, overall yellow background color, blue lettering, and photographs of uses for the sweetener, but the defendant’s package prominently displayed the Food Lion name, therefore no infringement was found.)  Samsung will likely rely on this reasoning in its defense.  Apple may counter that the addition of a trade name does not necessarily alleviate the problem of confusion of marks, and indeed, can aggravate it, as a purchaser could well think Apple had licensed Samsung as a second user.  It will help if Apple can prove that Samsung has a history of cross-branding its products with other well-known consumer electronic companies (e.g., Apple, Sony, or LG.)

To establish trade dress infringement, Apple must prove that the allegedly infringing design is (1) non-functional, (2) inherently distinctive (or has acquired secondary meaning), and (3) consumers are likely to confuse the source of Samsung’s product with that of Apple.  Samsung will likely argue (probably early on in the case) that the features that Apple is trying to protect are primarily functional, e.g., rectangular shape is easier to grasp than other shapes, rounded corners are easier to grasp than sharp corners, black screen is easier on the eye than a white screen, etc.   Even if Apple overcomes the functionality attack, it still must prove that there is a likelihood of confusion.  Samsung will likely make some of the following arguments.  One, similar to the Splenda® case, the accused products have the name "Samsung" prominently displayed on front; therefore, it is unlikely consumers would rely on the potentially distinctive configuration of the products to identify the source.  Likewise, the name "Samsung" is prominently displayed on the product packaging; therefore, it is unlikely consumers would rely on the potentially distinctive packaging configuration to identify the source. Two, a new smart phone or tablet purchasing experience is a major decision for most consumers – leading them to thoroughly check out the Galaxy products and comparison shop before spending hundreds of dollars and signing a long-term contract.  The law recognizes that the attention given by purchasers increases with the cost of an item, so more care is given to higher priced items, which may lead to a lower likelihood of confusion.  For example, in the Splenda® case, the Third Circuit found that the consumer’s degree of care in making purchasing decisions was greater than normal because a lot of consumers purchase/choose artificial sweeteners for health reasons, which lessens the likelihood of confusion because consumers would likely pay greater attention to product packaging.  However, Apple can strengthen its case by submitting evidence of “actual confusion” (e.g., misdirected inquiries related to sales or support) which is often considered the most persuasive evidence of likelihood of confusion because it is a good indicator of future confusion.  Accordingly, although the overall product shape and packaging of the Galaxy products may closely resemble Apple's trade dress, Apple may have a hard time actually proving that consumers are likely to be confused as to the source of the Galaxy products.

Similarly, to establish trademark infringement, Apple must at least demonstrate that an appreciable number of ordinarily prudent consumers of the type of product in question are likely to be confused as to the source of the Samsung’s device.  On its face, Apple’s claim appears fairly strong because the Apple trademarks are well-known and some of the application icons on the Galaxy products closely resemble Apple's registered trademarks on several iOS system icons.  However, Samsung will likely argue that the icons are not likely to lead consumers to believe that Apple made or is associated with its products.  One, the icons are not consistently available and visible to the consumer. They are only visible when the product is turned on.  Even then, the icons are typically not available when the consumer navigates applications.  Two, many of the icons are different enough that the consumer will likely not be confused, e.g., phone icon, speech bubble icon, and gears icon.  Three, the "Samsung" house mark is prominently displayed above the icons.  As is standard, this claim will likely turn on which party presents more compelling survey evidence regarding whether the icons are likely to lead consumers to believe that Apple made or is associated with the Galaxy products.

There is enough gray area regarding functionality and actual/likelihood of confusion that both sides are going to have their work cut out for them.  At this point, however, it seems that Samsung may be in a slightly better position.