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It is the classic tale of the one that got away, with a twist. When Malaco Leaf AB, a Swedish candy manufacturer, sued Closter, N.J.-based Promotion in Motion Inc. two years ago in federal court in Manhattan 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 looked promising. Just two years before that, Pepperidge Farm was able to stop Nabisco from marketing its fish-shaped product, a goldfish-shaped cracker, by successfully claiming trademark rights to “Goldfish” crackers. But fish-shaped or not, crackers are not candy, and earlier this month, in Malaco Leaf AB v. Promotion in Motion Inc., 2003 U.S. LEXIS 17086, Sqwish Candy Fish swam away with a summary judgment by Judge William H. 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, in a decision that did not surprise Promotion in Motion’s lawyer, Richard S. Mandel of Cowan, Liebowitz & Latman. “We were confident all along our defense would prevail,” Mandel said. “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, largely due to Wal-Mart Stores Inc. v. Samara Bros. Inc., 529 U.S. 205 (2000), a U.S. Supreme Court ruling 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, Judge Pauley found in Malaco Leaf, because in the candy business, the fish design is generic. There are at least 69 different fish-shaped candies on the market, the court found, along with other animal-shaped gummy candies, including bears, worms and dinosaurs. Malaco’s failure to police its trade dress “for decades,” and the nonfunctional nature of its product design, also proved fatal to its product design claim. The court also made short shrift of 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, since “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 before Judge Pauley on its claim that Promotion in Motion violated false advertising laws by calling its Sqwish Candy Fish “Famous” on its packaging. “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,” the court wrote.

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