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It is the classic tale of the one that got away, but with a twist. When Malaco Leaf AB, a Swedish candy manufacturer, sued Promotion in Motion Inc., a New Jersey company, two years ago in federal court in New York for trademark infringement, it probably thought it had a pretty good case. The giant Scandinavian candy company claimed that its rights to its product “Swedish Fish,” a fish-shaped gummy candy, were being infringed by “Famous Sqwish Candy Fish,” another pisciform gummy candy sold by its smaller competitor. The precedent, after all, looked promising. Two years earlier, Pepperidge Farm was able to stop Nabisco from marketing a goldfish-shaped cracker by successfully claiming trademark rights to its own popular line of “Goldfish” crackers. But fish-shaped or not, crackers are not candy. And so it was that Sqwish Candy Fish swam away recently with a summary judgment from U.S. District Judge William Pauley dismissing Malaco’s lawsuit. In its complaint, Malaco had asserted a smorgasbord of trademark infringement, dilution and false advertising claims. It lost on all counts. “We were confident all along our defense would prevail,” says Richard Mandel, a lawyer at Cowan, Liebowitz & Latman, who represented Promotion in Motion. “For one thing, the product’s fish shape is not protectable because there are schools of other fish-shaped candy on the market. Moreover, the trademarks and packaging in question contained significant differences that made confusion unlikely.” Malaco’s attorney, Philippe Bennett of Coudert Bros., was not available for comment. Malaco claimed that Sqwish Candy Fish infringed its mark based on both product design and packaging. But things had changed since Pepperidge Farm and Nabisco were battling it out. That’s largely due to Wal-Mart Stores Inc. v. Samara Bros. Inc ., 529 U.S. 205, a U.S. Supreme Court ruling handed down in 2000 that held that trade dress based on the design of a product can never be inherently distinctive, but must have acquired secondary meaning. Swedish Fish had no such secondary meaning, Pauley found in the dispute between the competing candy makers. There are at least 69 different fish-shaped candies on the market, noted the court, along with other animal-shaped gummy candies that include bears, worms and dinosaurs. Malaco’s failure to police its trade dress “for decades,” along with the nonfunctional nature of its product design, also proved fatal to its product design claim. The court also deep-sixed Malaco’s claim that Sqwish Fish infringed on its trademark “Swedish Fish,” finding there was no likelihood of confusion between the two marks. Most customers think of “Swedish Fish” as a generic term for gummy fish, and were unlikely to confuse it with “Sqwish Fish” in any event, the court found. Moreover, the packaging for the two products is different and the markets dissimilar; “Sqwish Fish” are sold mostly in movie theaters and video stores, not candy stores. In fact, of the eight factors considered by Second Circuit courts as a framework for evaluating likelihood of confusion under Polaroid Corp. v. Polarad Elec. Corp ., 287 F.2d 492 (2d Cir. 1961), only one factor — consumer sophistication — weighed in Malaco’s favor. Since gummy fish are typically an inexpensive impulse purchase, customers could get confused, the court ruled. Malaco also lost on its claim that Promotion in Motion violated false advertising laws by calling its Sqwish Candy Fish “Famous” on its packaging. Wrote Pauley: “Defendants’ use of the term ‘Famous’ on its packaging is a clear example of non-actionable puffery on which no reasonable customer would rely in making his purchase.” Tamara Loomisis a reporter atThe New York Law Journal , an American Lawyer Media publication affiliated with IP Magazine. Her email address is [email protected].

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