TWO PESOS, INC., PETITIONER v. TACO CABANA, INC. No. 91-971 SUPREME COURT OF THE UNITED STATES 505 U.S. 763; 112 S. Ct. 2753; 120 L. Ed. 2d 615; 1992 U.S. LEXIS 4533; 60 U.S.L.W. 4762; 23U.S.P.Q.2D (BNA) 1081; 92 Cal. Daily Op. Service 5571; 92 Daily Journal DAR 8910; 6 Fla. L. WeeklyFed. S 643 April 21, 1992, Argued June 26, 1992, Decided SUBSEQUENT HISTORY: As Amended July 2, 1992 PRIOR HISTORY: ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTHCIRCUIT. DISPOSITION: 932 F. 2d 1113, affirmed. View References Turn Off Lawyers' Edition Display DECISION: Inherently distinctive trade dress held protectable from infringement, under federal trademark law (15 USCS 1125(a)), without proof of secondary meaning. SUMMARY: A fast-food Mexican restaurant chain, alleging that a second chain which had opened restaurants with a very similar motif had thereby infringed the first chain's trade dress in violation of 43(a) of the Trademark Act of 1946 (Lanham Act) (15 USCS 1125(a)) (later amended)--which provided that any person who used, in connection with any goods or services, any false description or representation was liable to any person damaged by such use--brought an action against the second chain in the United States District Court for the Southern District of Texas. The District Court instructed the jury that trade dress--that is, the total image and appearance of a business--was protected under 43(a) if it either was inherently distinctive or had acquired a secondary meaning--that is, a unique association with a specific source. The jury found that the first chain's trade dress was inherently distinctive but had not acquired a secondary meaning, and the District Court entered a judgment for the first chain. In affirming, the United States Court of Appeals for the Fifth Circuit (1) ruled that the District Court's instructions had adequately stated the applicable law, and that the evidence supportedthe jury's findings, and (2) rejected the second chain's argument that a finding of no secondary meaning contradicted a finding of inherent distinctiveness (932 F2d 1113, 19 USPQ2d 1253). On certiorari, the United States Supreme Court affirmed. In an opinion by White, J., joined by Rehnquist, Ch. J., and Blackmun, O'Connor, Scalia, Kennedy, and Souter, JJ., it was held that the trade dress of a business may be protected under 43(a), based on a finding of inherent distinctiveness, without proof that the trade dress has secondary meaning, because (1) recovery for trademark infringement under 43(a) was generally available without proof of a secondary meaning; (2) there was no persuasive reason to apply different principles to trade dress, since (a) the protections of trademarks and trade dress under 43(a) served the same statutory purpose of preventing deception and unfair competition, (b) there was no textual basis in 43(a) for different treatment, and (c) requiringa secondary meaning for inherently distinctive trade dress would undermine the purposes of the Lanham Act (15 USCS 1051 et seq.) and could have anticompetitive effects; and (3) there was no basisin 43(a) to support the suggestion that the requirement of a secondary meaning for a trade dress came into being after some unspecified time. Scalia, J., concurring, expressed the view that (1) Thomas, J., was correct in stating that the language of 43(a) and its common-law derivation were broad enough to embrace inherently distinctive trade dress; but (2) this analysis was complementary to, rather than inconsistent with, the opinion of the court.Stevens, J., concurring in the judgment, expressed the view that the conclusion that a secondary meaning was not required to establish a trade dress violation under 43(a) was supported by the principle of stare decisis, in light of (1) the general consensus among the Federal Courts of Appeals that had addressed the question, and (2) Congress' codification of that consensus. Thomas, J., concurring in the judgment, expressed the view that (1) it followed from the language of 43(a) that the first user of an arbitrary package, like the first user of an arbitrary word, should be entitled to a presumption the package represented the first user without having to show that it did so in fact; and (2) this rule applied under 43(a) without regard to the rules that applied under the sectionsof the Lanham Act dealing with registration. LEXIS HEADNOTES - Classified to U.S. Digest Lawyers' Edition: [***HN1] TRADEMARKS AND TRADENAMES §7 protectability -- Lanham Act -- inherently distinctive trade dress -- lack of secondary meaning -- Headnote: [1A] [1B] [1C] [1D] [1E] [1F] The trade dress of a business--that is, the total image and appearance of a business--may be protectedunder 43(a) of the Trademark Act of 1946 (Lanham Act) (15 USCS 1125(a)) (later amended), without proof that the trade dress has a secondary meaning--that is, a unique association with a specific source--because (1) recovery for trademark infringement under 43(a) is generally available without proof of a secondary meaning; (2) there is no persuasive reason to apply to trade dress a general requirement of secondary meaning which is at odds with the principles generally applicable, under 43(a), to trademark infringement suits concerning distinctive words, symbols, or devices capable of identifying a producer's product, since (a) the protections of trademarks and trade dress under 43(a) serve the same statutory purpose of preventing deception and unfair competition, (b) there is no textual basis in 43(a) for treating inherently distinctive verbal or symbolic trademarks differently from inherently distinctive trade dress, given that 43(a) does not mention trademarks, trade dress, or secondary meaning, and (c) engrafting onto 43(a) a requirement of secondary meaning for inherently distinctive trade dress (i) would undermine the purposes of the Lanham Act (15 USCS 1051 et seq.)--to secure to business owners the goodwill of their businesses and to protect the ability of consumers to distinguish among competing products--by making more difficult the identification of a producer with its product, and (ii) could have anticompetitive effects by creating particular burdens on the startup of small companies; and (3) there is no basis in 43(a) to support the suggestion that the requirement of a secondary meaning for a trade dress comes into being after some unspecified time, since to terminate protection for failure to gain
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