Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992)

“Inherently distinctive trade dress deserves protection under the Lanham Act—even without proof of secondary meaning.”

Short Description

The U.S. Supreme Court held that if a business’s trade dress is inherently distinctive and nonfunctional, it can be protected under § 43(a) of the Lanham Act without having to show secondary meaning (i.e. consumer association built up over time).

Facts

⦁ Taco Cabana, a chain of Mexican-style fast food restaurants in Texas, had developed a unique “trade dress” (look and feel)—bright colors, neon stripes, murals, patios, garage doors separating interior and exterior patios, vibrant décor etc.

⦁ In 1985, Two Pesos opened restaurants that copied this distinctive trade dress in Houston and elsewhere. Two Pesos’ design themes mimicked Taco Cabana’s style very closely.

⦁ Taco Cabana sued Two Pesos under § 43(a) of the Lanham Act (for trade dress infringement) claiming that Two Pesos was likely to cause confusion among customers.

Issues / Findings / Reasoning

⦁ Trade dress must be nonfunctional and capable of identifying the source of a product or service.

⦁ Inherent distinctiveness: The Court found that Taco Cabana’s trade dress was inherently distinctive—it was original and immediately recognizable, without needing proof that customers had come to associate it over time.

⦁ Secondary meaning (i.e., proof that the public associates the trade dress with a single source over time) was not required in this case, because the dress was inherently distinctive.

⦁ Likelihood of confusion: The jury found and the Court agreed that customers could be confused by the similarity between the Two Pesos restaurants and Taco Cabana.

Judgment

⦁ The Supreme Court affirmed the lower courts’ rulings: Taco Cabana’s inherently distinctive trade dress was protected under § 43(a) even though secondary meaning was not established.

⦁ Two Pesos was liable for trade dress infringement.

Date

Decision date: June 26, 1992.