Ezaki Glico v. Lotte: Trademarks

The Third Circuit held Pocky's snack-stick design functional and unprotectable as trade dress, reading functional to mean useful rather than essential.

In Ezaki Glico Kabushiki Kaisha v. Lotte International America Corp., 986 F.3d 250 (3d Cir. 2021), the Third Circuit held that the design of Pocky, the chocolate-covered biscuit stick that has been a global snack icon for decades, is functional and therefore unprotectable as trade dress. Judge Stephanos Bibas opened the opinion by calling the case “a tale of more than just desserts,” and closed it with “That’s the way the cookie crumbles.” Between those lines sits one of the most consequential trade-dress rulings of the past decade. The panel (Judges McKee, Bibas, and Fuentes, No. 19-3010) affirmed summary judgment for Lotte, holding that a product feature is functional whenever it is useful, not only when it is essential. The original opinion was filed October 8, 2020, and an amended opinion issued January 26, 2021; the Supreme Court denied certiorari on November 1, 2021, cementing a standard that gives product-configuration trade dress in the Third Circuit its narrowest modern reading.

At a glance

Case: Ezaki Glico Kabushiki Kaisha v. Lotte International America Corp., 986 F.3d 250 (3d Cir. 2021), No. 19-3010
Decided: Argued July 9, 2020; filed October 8, 2020; amended opinion January 26, 2021; opinion by Bibas, J., joined by McKee and Fuentes, JJ.; affirming Arleo, J. (D.N.J.)
Holding: “Functional” under the Lanham Act means useful, not essential; because every feature of Pocky’s registered configuration serves the practical ends of holding, eating, sharing, or packing the snack, the trade dress is functional and not protectable.
Status: Final; certiorari denied November 1, 2021 (No. 20-1817).

Ezaki Glico, a Japanese confectionery company, has made Pocky for more than half a century: thin, stick-shaped biscuits partly coated in chocolate or flavored cream, some topped with crushed almonds, with the end of each stick left bare to serve as a handle. It began selling Pocky in the United States in 1978 and fortified the product with intellectual property, including two registered product-configuration trade dresses. The first claimed, in the registration’s words, “an elongated rod comprising biscuit or the like, partially covered with chocolate”; the second added almonds. Ezaki Glico also held a utility patent for a “Stick Shaped Snack and Method for Producing the Same.”

Lotte began making Pepero, a strikingly similar chocolate-coated biscuit stick, in 1983, and had sold it in the United States for over three decades. Between 1993 and 1995 Ezaki Glico sent cease-and-desist letters; Lotte briefly paused, then resumed, and for roughly two decades Ezaki Glico took no further action. In 2015 it sued in the District of New Jersey for trade-dress infringement and unfair competition under sections 32 and 43(a) of the Lanham Act, 15 U.S.C. §§ 1114, 1125(a)(1)(A), with parallel New Jersey claims. After discovery, Judge Madeline Cox Arleo granted Lotte summary judgment on the ground that Pocky’s product configuration is functional. Ezaki Glico appealed.

Functional means useful

The appeal turned on a single definitional question: what does “functional” mean? Ezaki Glico argued that a feature is functional only if it is essential to the product’s use or purpose, building its case around one phrase from Qualitex Co. v. Jacobson Products Co., 514 U.S. 159 (1995). The Third Circuit rejected that reading as too narrow. Because the Lanham Act does not define functionality, the court began with ordinary meaning: a feature is functional if it is designed chiefly from the point of view of use, that is, if it is practical and utilitarian. In a word, useful. As the opinion put it, the word requires nothing more.

The court anchored this reading in the architecture of federal IP law. Patent law, not trademark law, protects inventions that are new and useful, 35 U.S.C. § 101, and it does so only for limited times. Trademark law protects branding: features that identify a product’s source. Citing TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23 (2001), and Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S. 205 (2000), Judge Bibas stressed that trade dress must be kept in its lane. The USPTO cannot register any mark that, as a whole, is functional, 15 U.S.C. § 1052(e)(5); functionality remains a defense even against incontestable registrations, § 1115(b)(8). If the Lanham Act protected designs that were useful but not essential, it would invade the Patent Act’s domain and let sellers evade the patent bargain’s time limits.

The court then catalogued four kinds of evidence that can show functionality: direct evidence that a feature makes the product work better; a marketer’s own promotion of a feature’s usefulness, which is “strong evidence” of functionality; a utility patent claiming the features, per TrafFix; and proof that there are only a few ways to design the product. The existence of alternative designs, the court cautioned, does not by itself make a design non-functional.

Every feature of Pocky earns its keep

Applying that framework, the panel found no genuine dispute that Pocky’s registered configuration is useful through and through. Every claimed feature, the court held, “relates to the practical functions of holding, eating, sharing, or packing the snack.” The uncoated end exists so people can eat the snack without getting chocolate on their hands; Ezaki Glico’s internal documents showed the product was born when the company realized it could coat only part of the stick to leave a handle. The stick shape makes Pocky easy to hold and share, lets people eat it without opening their mouths wide, and allows many sticks to be packed compactly in one box.

Ezaki Glico’s own advertising sealed the analysis. The company touted “the no mess handle of the Pocky stick” as making it “easier for multi-tasking without getting chocolate on your hands,” and promoted the compact, shareable packaging. Under the court’s second evidentiary category, those promotions were strong evidence of functionality. And the nine alternative partly-coated snack designs Ezaki Glico identified could not save the dress: as the court explained, evidence of alternatives does not make a useful design non-functional.

One point cut in Ezaki Glico’s favor, though not far enough. The court held that the utility patent for a stick-snack manufacturing method was irrelevant, because under TrafFix a patent is strong evidence of functionality only when its “central advance” overlaps the claimed trade dress. The patent’s innovation was a better method of making the stick shape, not the shape itself. The district court had erred in relying on it, but the error was immaterial given the other evidence. Notably, the January 2021 amended opinion also softened a potential overreading of the holding, clarifying that just because an article is useful for some purpose, it does not follow that every design feature of that article is functional; the inquiry trains on the usefulness of the exact features claimed.

A cert petition and a standards fight

Ezaki Glico petitioned for certiorari, framing a conflict between the Third Circuit’s “useful” standard and the formulations of the Supreme Court and, it argued, nine other circuits, which ask under Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844 (1982), whether a feature is essential to the use or purpose of the article or affects its cost or quality. Amici including INTA and AIPLA urged review, warning that “useful” sweeps in nearly every product configuration, since almost any design choice does something. The Supreme Court denied the petition on November 1, 2021. As of July 2026 the decision stands as circuit law, and it has made the Third Circuit a distinctly hostile forum for product-configuration trade dress while other circuits continue to recite the Inwood formulation.

Open questions

How far does “useful” reach? Taken literally, almost every design feature is useful in some way. The amended opinion’s clarification helps, but the line between a useful feature and an “ornamental, incidental, or arbitrary” one remains unsettled.
Is there a real circuit split? The petition and amici said yes; Lotte said the outcomes converge in practice. Because certiorari was denied, the depth of the disagreement between “useful” and “essential” formulations remains untested at the Supreme Court.
What remains of aesthetic functionality in the Third Circuit? The court treated competitive necessity as one way of showing usefulness rather than a separate doctrine, leaving the relationship between utilitarian and aesthetic functionality analysis less than fully mapped.

Implications for brands and businesses

Watch your own marketing. Ezaki Glico’s “no mess handle” advertising became the evidence that undid its registrations. Promoting a design feature’s practical benefits builds a functionality record against you; promote the look as a signature of source instead.
Registration and incontestability are not armor. Both Pocky trade dresses were registered and incontestable, which merely shifted the burden to Lotte. Functionality remains a complete defense even against an incontestable registration under 15 U.S.C. § 1115(b)(8).
Alternative designs will not carry the day in the Third Circuit. Evidence that competitors could shape their products differently does not make your design non-functional there. Build the case that the claimed features are arbitrary or source-identifying, not merely that rivals have options.
Sequence your IP correctly. Useful product shapes belong in utility or design patents, with their limited terms. Trying to convert a functional configuration into perpetual trade-dress protection invites invalidation, and decades of coexistence (as with Pepero) can compound the problem.

Frequently asked questions

What did the Third Circuit mean by saying functional means useful? Because the Lanham Act does not define functionality, the court started from ordinary meaning: a feature is functional if it is practical or utilitarian, in a word useful, and the word requires nothing more. The court rejected Ezaki Glico’s narrower reading that a feature must be essential to the product, holding that a design that makes a product work better, or that the seller touts for its usefulness, is functional even if alternatives exist.

Does Ezaki Glico still own trademark rights in Pocky? Yes, in part. The decision held Ezaki Glico’s two registered product-configuration trade dresses, covering the partly chocolate-coated stick design, functional and therefore not protectable. It did not disturb the POCKY word mark or the brand’s packaging rights. What the company lost was the ability to use trademark law to stop competitors from selling similarly shaped chocolate-covered biscuit sticks such as Lotte’s Pepero.

Did the Supreme Court review the decision? No. Ezaki Glico petitioned for certiorari (No. 20-1817), arguing that the Third Circuit’s useful standard conflicted with the Supreme Court’s Inwood and TrafFix formulations and with other circuits. The Supreme Court denied the petition on November 1, 2021, leaving the decision, and the disagreement over how broadly to define functionality, in place.