Federal Judge Foils Attempt to Cancel Trademark Registrations for Distinctive Reynolds Wrap Packaging

In an ongoing dispute between rival aluminum foil manufacturers Reynolds Consumer Products Inc. (Reynolds) and Handi-Foil Corp. (Handi-Foil), a federal judge in the Eastern District of Virginia recently ruled that Reynolds had not abandoned its federal trademark registrations for its distinctive packaging designs, despite making several alterations to its packaging since obtaining the registrations in 1977. Rather, in granting partial summary judgment in Reynolds’ favor, the Court found that Reynolds had successfully invoked the doctrine of “tacking” as a defense to Handi-Foil’s claim that Reynolds had abandoned its original marks. (See Reynolds Consumer Products Inc. v. Handi-Foil Corp., No. 1:13-cv-00214 [E.D. Va. Feb. 27, 2014].)

Reynolds is a well-known manufacturer of consumer aluminum food storage and cookware products. It first began selling its ubiquitous Reynolds Wrap aluminum foil in 1947, and later obtained two federal trademark registrations for its product packaging in 1977. (See U.S. Reg. Nos. 1,067,092 and 1,070,888 [the 1977 Registrations].) Over the course of the ensuing decades, Reynolds made several incremental changes to its package design, and in 1997 Reynolds submitted — and the US Patent and Trademark Office (PTO) accepted — an updated specimen reflecting how its package design was being used in commerce at that time. Similarly, in 2007, Reynolds again submitted another modified specimen reflecting its current use of the design, which retained “the familiar blue, silver, and pink color-pattern,” but “used a series of curved silver lines to separate the blue and pink areas.” Then in 2008, Reynolds further modified its packaging to alter the proportions of the fields and the writing and to replace certain text in the design. Relevant examples of the evolving packaging designs are set forth below:

The present dispute arose after Handi-Foil began selling an aluminum foil roll product in March 2012, pitching its product as comparable to Reynolds Wrap aluminum foil. In 2013, Reynolds sued Handi-Foil for false advertising and trademark infringement based on its rights in the 1977 Registrations, claiming that Handi-Foil’s packaging is “nearly identical” to Reynolds’ design, given its use of colors, fonts, graphics, and other elements that allegedly mirror the look and feel of Reynolds’ competing products. In answering Reynolds’ complaint, Handi-Foil asserted a counterclaim seeking to cancel Reynolds’ registrations on the ground that Reynolds had abandoned the original marks through its gradual evolution of the Reynolds Wrap packaging.

In considering a claim of abandonment, a court must determine whether the owner of a trademark registration has deliberately discontinued its use of the registered mark in US commerce, with no intent to resume such use in the future. If abandonment is proven, the trademark owner can no longer claim exclusive rights to the mark, effectively freeing third parties to use the abandoned mark without recourse. Under federal law, a presumption of abandonment arises when there has been three or more consecutive years of non-use.

Where, however, a trademark owner properly invokes the doctrine of “tacking,” minor alterations to a trademark will not result in the abandonment of the original mark. Rather, the original mark will remain valid, and the owner may continue to assert the first-use or priority date of the original mark. The modern standard for this defense requires that courts consider whether the altered mark is the “legal equivalent” of the earlier mark, and a tacking defense will only succeed if the marks in question create “the same, continuing commercial impression.” Courts have been careful to note that this is a more stringent standard than the “confusingly similar” test used to determine trademark infringement.

In the Reynolds case, the Court held that because Reynolds admitted that the marks currently in use are not the same as the marks as registered in 1977 and that it had no intention of resuming use of the former marks, Reynolds therefore conceded the key elements of Handi-Foil’s prima facie abandonment claim. Thus, the Court reasoned, because Reynolds sought to utilize tacking as an affirmative defense, Reynolds bore the burden of proving that the Reynolds Wrap packaging, as currently sold, creates the same continuing commercial impression as the registered mark.

Nevertheless, despite the stringent standard for tacking, the Court ruled that Reynolds had indeed met its burden. Crucially, the Court found that “the logical points of comparison are the Reynolds Wrap box as currently used in commerce and the box as registered with the PTO” and therefore considered only the 2007 specimen, which was the latest specimen accepted by the PTO in connection with Reynolds’ maintenance of the 1977 Registrations. This decision was likely outcome-determinative, as the Court went on to conclude that, based on sight alone, “a reasonable juror could not find that the marks in question fail to produce a continuing commercial impression.” Accordingly, the Court granted summary judgment in favor of Reynolds on this claim.

This case illustrates the importance of seeking trademark registration for unique design components and packaging at the earliest practicable date, as well as the risks inherent in modernizing the look and feel of a company’s brand. While changes to a trademark or unique design are often desirable in order to keep pace with societal trends and preferences, trademark owners must be careful to avoid making inadvertent, material alterations to important trademarks or else risk abandoning their rights in their original marks.

Arent Fox will continue to monitor this case. For more information about the Reynolds case, or other trademark questions, please contact Anthony V. Lupo or Anthony D. Peluso.