Don’t Underestimate the Value of Your Point-of-Purchase Displays

By: DEAN R. KARAU & THOMAS R. HIPKINS

December 2007

Most marketing executives and creative people don’t realize that there could be “gold” buried in their point-of-purchase displays. If you or your team have created a display that has new functional features, new decorative elements that are unique in any way, or has features that consumers will link to you as the source of the products on the display, you may be able to protect your new creation. Treating point-of-purchase displays as intellectual property can prevent competitors from using similar displays and also generate income through licensing rights in the displays to others.

Before using your newly-created display, you should ask yourself which features make it superior to those of your competitors. You may have valuable intellectual property if the display’s unique features fall into one or more of the following categories:

• Source-Identifying, Non-Functional Features
• New Ornamental Features
• New Functional Features

If It Makes Customers Think of You, Protect It with Trade Dress.

If your display has non-functional features that make consumers think of your company as the source of the product when they see the display, you may be able to protect those features as trade dress—a unique form of a trademark. Though trademarks commonly take the form of words or slogans, they also can be design features—and anything else (e.g., logos, colors, smells, sounds)—that help a consumer connect a product to its source.

Three examples of displays that are trade dress registered with the U.S. Trademark Office are shown below—one for displaying school supplies, one for displaying cookies, and a third simply having a distinctive look.

The functional aspects of displays, such as shelves, hooks, and the like, are not protected. But the non-functional aspects are—the shapes of the pencil and cookie jar displays or other unique ways of displaying products. These non-functional aspects are the “intellectual property” of the owners, who can prevent anyone else from using a display that would confuse consumers as to whose product is being displayed. In addition, the owner can even license to others the right to use the display in exchange for a royalty.

A particularly unique “point-of-purchase display” is in Anheuser-Busch’s recent U.S. trademark registration for its team of Clydesdale horses, wagon, drivers, and dog, shown below.

Any competitor hitching up a team of horses to a wagon full of beer can expect to hear from Anheuser-Busch’s lawyers.

Registering trade dress is relatively inexpensive, and by registering your trade dress you garner important advantages, such as a presumption that your trade dress is valid nationwide. Likewise, and perhaps most important, trade dress protection does not expire but continues for as long as the public continues to associate the trade dress with your company.

It may take time for the public to associate the non-functional features of your display with your company, delaying your ability to enforce trade dress rights. However, you may be able to address that problem through design patent law.

If It’s New and Ornamental, Protect It with a Design Patent.

If your point-of-purchase display includes ornamental features that look new and different compared with any known display, you may be able to protect these features with a design patent. Like trade dress, design patents cannot protect functional features—that is the sole province of utility patents. But unlike trade dress, design patent law has nothing to do with preventing consumer confusion. Rather, design patents provide incentives for creating innovative ornamental designs.

Target Corporation has a design patent for a point-of-purchase kiosk. Target’s design patent covers various ornamental features of its upright display kiosk for consumer electronics. With this design patent, Target can prevent others from using (or license others to use) display kiosks that create substantially similar visual effects in the eyes of an ordinary observer.

In many ways, design patents are similar to trade dress. For instance, both are inexpensive to obtain compared to utility patents, and both protect only against designs that look substantially similar. Despite these similarities, design patents differ from trade dress in two important respects. First, because of the different rationales, a design patent can protect new ornamental features of your point-of-purchase display even before the consuming public has begun associating them with your company. Second, unlike trade dress rights, which can continue indefinitely, design patents expire after 14 years.

A common strategy is to obtain a design patent to protect your display immediately upon launch and then obtain a trade dress registration once consumers begin associating a display with your product—which could be immediately or could take time. The trade dress will continue to protect your design after the design patent expires.

If It’s New and Functional, Protect It with a Utility Patent.

If your display includes features that function differently from any known display, you may be able to protect those features with a utility patent. A utility patent may conjure up images of Thomas Edison or the Wright brothers, but inventions with far less societal impact can still be innovative enough to qualify for protection.

Wal-Mart has a utility patent for a point-of-purchase hardware display. Wal-Mart’s patented display has a unique structure for holding a variety of trailer hitch components in a stable fashion. Though the innovation does not rise to the level of a light bulb or an airplane, Wal-Mart can use its utility patent to prevent others from using (or license others to use) point-of-purchase displays with similar functional features.

A significant advantage of utility patents is that they are often more difficult to “design around” than trade dress or design patents. A utility patent on a functional feature of a point-of-purchase display can protect against all knockoffs having that functional feature, even if they look very dissimilar. Changing how a display functions is almost always more difficult than changing the display’s appearance.

However, because utility patents place a greater roadblock in your competitors’ paths, they often cost more. In addition, utility patents have a finite duration (usually 20 years from the date of filing), though that duration exceeds the life cycle of most point-of-purchase displays.

Don’t underestimate the intellectual property in your point-of-purchase displays. Your display may have one, two, or all three of the types of protectable features. Ask an intellectual property attorney to help you assess whether your displays have those features to get an expert opinion before putting your display in the marketplace. Doing your homework before launching a new type of display can pay off handsomely in the long run.