Trademarks, Trade Dress and Franchising: Nothing Bundt Confusion

April 23, 2021Articles The Legal Intelligencer

Many know the shape of the iconic Coca-Cola bottle, a registered trademark since 1976, serial no. 73088384, the McDonald’s Golden Arches, serial no. 733790054, or the red, white and green waterfall awning of Rita’s Italian Ice, design mark serial no. 75694665. Now the franchisor of Nothing Bundt Cakes is entitled to enjoin others from replicating the unique frosting pattern of a cake. The case is Nothing Bundt Cakes v. Thornton d/b/a All About Bundt Cakes, U.S. Dist. Ct., E.D. Texas (Feb. 22, 2021).

Nothing Bundt Cakes obtained an unopposed injunction against its competitor All About Bundt Cakes from using a similar frosting pattern. Nevertheless the court reviewed the facts and law to support the injunction. Nothing Bundt Cakes is in the business of the production and retail sale of Bundt cakes. It operates over 300 franchise locations throughout the United States and Canada with total enterprise revenues exceeding $100 million annually. Since 1998, the company has continuously used in interstate commerce a unique frosting pattern, which according to their trademark registration at no. 3,526,479, “consists of long, narrow strips of tubular ring-shaped frosting that expand radially outward from the center of each Bundt cake to a point on the outer edge of the cake … applied around the entire perimeter of the Bundt cake’s ring shape.” Here is a  rendering of this frosting pattern:

Nothing Bundt Cakes alleged that its frosting pattern is recognizable throughout the country and indicates to the consuming public that any Bundt cake with this unique frosting pattern originated solely from Nothing Bundt Cakes. In support of its application to register the frosting pattern with the U.S Patent and Trademark Office (USPTO), the company submitted a survey of 304 consumers, 83% of which indicated that they associated the frosting pattern with Nothing Bundt Cakes’ products and used this survey evidence as its primary basis for finding that the frosting pattern had obtained a secondary meaning. On Nov. 4, 2008, the U.S. Patent and Trademark Office registered Nothing Bundt Cakes’ unique frosting pattern.

Like Nothing Bundt Cakes, defendant Kerri Thornton’s business is primarily the retail sale of Bundt cakes. Also like Nothing Bundt Cakes, Thornton advertises and sells Bundt cakes online. Bundt Cakes’ counsel sent Thornton a demand letter alleging that: her use of the word mark “Anything Bundt Cakes” was likely to cause confusion with the word mark ”Nothing Bundt Cakes,” and her tubular frosting pattern was likely to cause confusion with Nothing Bundt Cakes’ trademarked frosting pattern. In response to this letter, Thornton changed her business name to “All About Bundt Cakes,” but she continued to use the same frosting pattern. Nothing Bundt Cakes sent a second demand letter, yet its local franchisees continue to report Thornton’s use of the same frosting pattern.

Nothing Bundt Cakes requested that the court enter a preliminary injunction prohibiting Thornton from using Nothing Bundt Cakes’ trademarked frosting pattern on her cakes and in her marketing and advertising.

The court applied the traditional trademark infringement analysis to determine whether a preliminary injunction was warranted. In order to succeed on a claim of trademark infringement under the Lanham Act, a plaintiff must show: that it owns a “legally protectable trademark,” and that a defendant’s use of their mark “creates a likelihood of confusion as to source, affiliation or sponsorship.” To be protectable, a mark must be “distinctive” in one of two ways. First, a mark is inherently distinctive if its intrinsic nature serves to identify a particular source … Second, a mark has acquired distinctiveness, even if it is not inherently distinctive, if it has developed secondary meaning, which occurs when, in the minds of the public, the primary significance of the mark is to identify the source of the product rather than the product itself. This distinctiveness is subject to a seven factor test, which the court concluded weighed in favor of Nothing Bundt Cakes.

The court also found that Nothing Bundt Cakes is the first and senior user of the frosting-pattern mark. Because Nothing Bundt Cakes’ frosting-pattern mark is eligible for protection and because Nothing Bundt Cakes has shown that it is the senior user, Nothing Bundt Cakes was found to have a protectable right in the mark and an analysis of the likelihood of confusion was necessary to determine if Nothing Bundt Cakes is likely to succeed on its infringement claim.

To determine whether use of a mark creates a likelihood of confusion as to affiliation, sponsorship or source, courts consider the “digits of confusion.” The digits comprise a nonexhaustive list that includes the following seven factors: the type of mark allegedly infringed, the similarity between the two marks, the similarity of the products or services, the identity of the retail outlets and purchasers, the identity of the advertising media used, the defendant’s intent and any evidence of actual confusion. Without any rebuttal from Thornton, the “digits of confusion” weighed in favor of Nothing Bundt Cakes. Nothing Bundt Cakes has proven a high likelihood of success on the merits of its infringement claim.

The court found that Nothing Bundt Cakes has shown that it has experienced a loss of control of reputation and a loss of goodwill. To show that it has lost control of its reputation, Nothing Bundt Cakes does not have to prove that Thornton is offering inferior services, only that there is the possibility that the services or goods are not to the satisfaction of Nothing Bundt Cakes. The evidence confirms that Nothing Bundt Cakes has developed goodwill in at least the Dallas-Fort Worth community, that Thornton is operating in that same community, and that Nothing Bundt Cakes has no control over the goods and services offered by Thornton. Thus, Nothing Bundt Cakes has shown that it has lost control of its reputation and affiliated goodwill. Based on such evidence, Nothing Bundt Cakes has met its burden of demonstrating irreparable harm resulting from Thornton’s actions.

The court also found that the balance of equities also favors Nothing Bundt Cakes. The harm to Nothing Bundt Cakes resulting from Thornton’s use of her likely infringing frosting pattern outweighs any minimal costs that may be imposed on Thornton by terminating her use of the frosting pattern. The burden of losing control of its mark, the loss of customers, and the harm to Nothing Bundt Cakes’ reputation and goodwill are greater than the cost to Thornton, who has failed to identify any cost not created by her own likely infringing activities. The court concluded that because Nothing Bundt Cakes has met its burden to show a likelihood of success on the merits concerning its infringement claim against Thornton, it has also shown that a preliminary injunction will serve the public interest by avoiding public confusion over the goods sold under the mark.

The important lesson is to trademark the appearance of any signature product of the company whenever possible, and to enforce the trademark. The trademark functions as a sign or advertising as to the affiliation of the company to the product and the source of the goods. No company can afford confusion over the source of the goods, so enforce your trademarks early and often.

Reprinted with permission from the April 23 issue of The Legal Intelligencer. (c) 2021 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.