Kelly Toys Holdings v. Build-A-Bear Workshop is an ongoing case involving a smaller toy company suing the legendary Build-A-Bear. Kelly Toys manufactures and distributes its own plush toys called SQUISHMALLOWS, and Build-A-Bear sells things called SKOOSHERZ. But this wasn’t a trademark infringement case. Rather, the plaintiff alleged that it has a protectable trade dress and that it owns registered copyrights in its products. Most recently, Build-A-Bear filed a motion to dismiss.
The plaintiff provided a lot of details about the elements of its trade dress. After listing each element, the complaint provided a description of the reasoning behind each design choice. The plaintiff also noted there are other ways of doing plush toys that don’t look anything like theirs — but that doesn’t seem like a deciding factor in this case.
Of course, the defendant said Kelly Toys did not describe its trade dress with sufficient detail. The court disagreed. Rather, “trade dress” refers to the total image design and appearance. The test in the Ninth Circuit has three requirements: 1) the trade dress is nonfunctional, 2) it’s acquired secondary meaning, and 3) there’s substantial likelihood of confusion between the plaintiff’s and defendant’s products.
The court said that plaintiff’s five-element trade dress definition was enough to put Build-A-Bear on notice of what Kelly Toys contends is its protectable trade dress. The defendant tried to use another lawsuit Kelly Toys had brought against another toy company, where the plaintiff failed to adequately define their trade dress. But the court pointed out that Kelly Toys had built this case differently.
In THIS case, they not only provided their trade dress elements in more detail but also explained why they chose each element. So, plaintiff (and their attorneys) learned from their mistake in the prior, unrelated lawsuit and, this time had adequately pleaded their trade dress to survive a motion to dismiss.
If any of these elements were functional, it would have failed to be something that’s protected by trade dress. That wasn’t an argument that the defendant had made in this case, and in any event, it’s pretty hard to look at these toys and say that any part of them is functional.
One of the things that Build-A-Bear says is that there are 3,000 different products that Kelly Toys puts out — so Build-A-Bear said they couldn’t possibly allege a consistent trade dress. But the court said it was not going to impose a highly fact-intensive, all-or-nothing test at the pleading stage. Rather, whether there’s a consistent overall look, according to the Ninth Circuit, that’s a sufficient pleading. Refinement of the trade dress theory might take place over the course of litigation, which the court noted is a “common occurrence.”
Kelly Toys also alleged instances of actual consumer confusion. Actual confusion is not necessary to show a likelihood of confusion, but if a plaintiff has it, it’s worth its weight in gold and hard to dismiss. Kelly Toys also pleaded that its efforts to market the product and its reported sales volume were enough to demonstrate the secondary meaning. Discovery might later show that these things weren’t true or not adequate, but the fact that they’ve pleaded these details was enough to survive the motion to dismiss.
Kelly Toys also sufficiently pleaded a copyright infringement claim. The works were not so dissimilar that a casual observer could conclude that they were not substantially similar. Filtering out the non-protectable elements and looking at them side by side, this case showed sufficient similarity to survive the dismissal.
To me, the takeaway is that this plaintiff, after being involved in a few cases, had the opportunity to improve upon its claims and learn from its mistakes. Trade dress is pretty fact intensive, and very hard to demonstrate, but here they listed the elements with both detail and apparently credible explanations about their aesthetic choices. It took a team of the corporate plaintiff, the designer and their attorneys to succeed at this stage.
