What is a Trademarked Color Worth?

This is one of the questions posed in New NGC, Inc. d/b/a National Gypsum Company, NGC Industries, LLC, and National Gypsum Properties, LLC v. Alpinebay, Inc.  National Gypsum manufactures a popular drywall product known to be fire-, moisture- and mold-resistant.[1]  On June 13, 2019, National Gypsum filed suit against Alpinebay, alleging that the latter was infringing trademarks related to both the name and the color of its signature PURPLE® drywall products.[2]  According to the complaint, Albinebay was allegedly selling building products making use of the “purple” name, as well as the color itself.  On May 23, 2023, following a six-day trial, the jury returned a verdict in favor of National Gypsum and awarded damages amounting to $5.5 million.   

The gypsum board market is substantial—one research report estimated the size the U.S. market in 2020 at $12.6 billion.[3]  In this growing market, National Gypsum’s Purple products stood apart from competitor offerings.[4]  After National Gypsum’s introduction of PURPLE® drywall, Aplinebay began offering waterproofing building products under the PURPLE GUARD and PURPLE BOX marks.[5]  The question then posed to the court and the jury was whether National Gypsum’s “purple” coloring constituted a trademarkable use, and what, if any, damages were caused by Alpinebay’s alleged infringement.

Can You Trademark a Color?

We first turn to the Lanham Act for guidance.[6]  The Act states a protectable trademark must “be distinctive in a way that is not essential to a product’s function.”[7]

In Zatarain’s, Inc. v. Oak Grove Smoke House, Inc.[8] the Fifth Circuit divided trademarks into four categories: arbitrary/fanciful, suggestive, descriptive, and generic.[9] 

Colors were not originally included in the Lanham Act, which was written in 1946.[13]  Then, in March 1995, the U.S. Supreme Court handed down its decision in Qualitex Co. v. Jacobson Products Co., holding that colors may be registered as trademarks.[14]  This decision clarified the Lanham Act to include the registration of color trademarks.[15]  The requirements for a color to be used as a trademark comports with the aforementioned requirements for any protectable brand element; namely, that the color is identifiable and can distinguish the seller’s goods from others while serving it is no “function” in the product itself.[16]  

The stipulation that a color must be distinctive in some way that is not essential to function creates a push-pull dynamic.  Surely, we can all picture the “safety orange” tone and white stripe used in roadside traffic cones, but those colors clearly serve a purpose—we can see the cones more easily.  Thus, while certainly “distinctive,” this is also a color palette with a purpose. 

Much has been written regarding the definition of “functional,” but what does it mean to be a distinctive color?  What is the threshold?

Not Green, Not Blue…

According to National Gypsum’s allegations, prior to introduction of their purple products, drywall was typically produced in two colors—white and green.  Those in the construction industry may also have been familiar with “blueboard,” a drywall alternative used specifically for veneer plaster.[17]  National Gypsum introduced its PURPLE® drywall in 2003.[18]  Its products are popularly recognized to be resistant to fire, moisture, mold, and mildew, tough against scratches, scuffs, and dents, sound dampening, and more.  While these characteristics are not derived from the use of the color purple, the distinctive color became synonymous with National Gypsum’s brand and quality over time.[19]

Thus, it would appear that “National Gypsum Purple” satisfied the same criteria as its spiritual predecessors such as “UPS Brown” and “Louboutin Red;” distinctive, but functionally irrelevant.  Ultimately, the jury agreed, finding that Alpinebay infringed trademarks related to not only the PURPLE® name, but also the use of the color itself in building products.  All that was left was to quantify the financial harm associated with Alpinebay’s infringement.

From a damages perspective, if one’s mark is distinct and protectable, the IP owner has the following damages remedies:

In National Gypsum Company, Justin Lewis, CEO of Truest Consulting, was retained to provide expert opinions quantifying these measures of damages.  During the case, Mr. Lewis testified that Alpinebay had profited by approximately $5.5 million through its sale of infringing building products.  Ultimately, the jury agreed, finding that Alpinebay infringed trademarks related to not only the PURPLE® name, but also the use of the color itself in building products.

If you’re interested in learning more about trademark disputes and how it impacts the determination of damages, reach out to Justin Lewis or the Truest team at www.truestconsulting.com. 






Sources:

[1] https://www.fbmsales.com/products/moisture-mold-resistant-drywall/

[2] Complaint, ProForm Finishing Products, LLC f/k/a New NGC, Inc. d/b/a National Gypsum Company et al. v. Alpinebay, Inc. (Case No. 19-cv-03978), June 13, 2019.

[3] https://www.grandviewresearch.com/industry-analysis/gypsum-board-market

[4] https://www.fbmsales.com/products/moisture-mold-resistant-drywall/

[5] Complaint, ProForm Finishing Products, LLC f/k/a New NGC, Inc. d/b/a National Gypsum Company et al. v. Alpinebay, Inc. (Case No. 19-cv-03978), June 13, 2019.  See also, https://www.alpinebay.com/purple-guard-2.

[6] The Lanham Act was enacted by Congress in 1946 and “provides for a national system of trademark registration and protects the owner of a federally registered mark from the use of similar marks if such use is likely to result in customer confusion, or if the dilution of a famous mark is likely to occur.”  See https://www.law.cornell.edu/wex/lanham_act.

[7] https://www.law.cornell.edu/wex/lanham_act.

[8] Zatarain’s, Inc. (“Zatarain”) was the manufacturer and distributor of food products.  Two of its products were “Fish-Fri” and “Chick-Fri” which were coatings or batter mixes used to fry foods.  Oak Grove Smokehouse, Inc. (“Oak Grove”) was a competitor of Zatarain and began marketing "fish fry" and "chicken fry" products.  The district court found Zaratin’s “Fish-Fri” mark did have a secondary meaning, however, Oak Grove and Visko, another competitor, had a “fair use” defense.  See https://casetext.com/case/zatarains-inc-v-oak-grove-smokehouse-inc.

[9] https://casetext.com/case/zatarains-inc-v-oak-grove-smokehouse-inc.

[10] https://casetext.com/case/soweco-inc-v-shell-oil-co#p1184.

[11] https://casetext.com/case/vision-ctr-v-opticks-inc#p115.

[12] https://casetext.com/case/american-heritage-life-ins-v-heritage-life-ins#p11.

[13] https://uscode.house.gov/statviewer.htm?volume=60&page=427#

[14] https://corporate.findlaw.com/intellectual-property/u-s-supreme-court-decides-colors-alone-may-be-registered-as-a.html

[15] https://caselaw.findlaw.com/court/us-supreme-court/514/159.html

[16] https://caselaw.findlaw.com/court/us-supreme-court/514/159.html

[17] https://www.fbmsales.com/products/moisture-mold-resistant-drywall/.

[18] https://www.nationalgypsum.com/who-we-are/blog/innovation/discover-benefits-purple-xp-drywall-mold-moisture-mildew-resistant-technology

[19] Complaint, ProForm Finishing Products, LLC f/k/a New NGC, Inc. d/b/a National Gypsum Company et al. v. Alpinebay, Inc. (Case No. 19-cv-03978), June 13, 2019.

[20] 15 U.S.C. 1117 (Section 35 of the Lanham Act): Recovery for Violation of Rights, published at https://www.bitlaw.com/source/15usc/1117.html.