Takeaway

Even a business with a relatively simple product can create value by making its product distinctive and  then protecting that distinctiveness. The key is to develop unique, non-functional features that customers can rely upon to identify the business and its products, and protect those features, for example with a federal trademark registration

Backstory

Nothing Bundt Cakes has built a business around Bundt cakes. Since anyone with a Bundt pan, the right ingredients, and an oven can bake a Bundt cake, Nothing Bundt Cakes — like any business — needed something to differentiate itself from other bakers. It found that differentiator in the way they frost their cakes.

Nothing Bundt Cakes protected its unique design as its trade dress and received a federal trademark registration as the icing on the cake:

Nothing Bundt Cakes now has over 300 franchise locations throughout the United States and Canada, which collectively earn over $100 million annually in revenue.

Enter a new competitor: All About Bundt Cakes. All About Bundt Cakes opened a Bundt cake business in Dallas-Fort Worth and allegedly copied Nothing Bundt Cakes’s distinctive frosting pattern:

Nothing Bundt Cakes couldn’t stop this new bakery form selling Bundt cakes, but it could protect the distinctive elements that it purposely incorporated into its product and the 21 franchisees it had in the area. Nothing Bundt Cakes sued All About Bundt Cakes in the Eastern District of Texas [4:20-cv-00813-SDJ, filed 10/22/20], seeking a preliminary injunction. When Anything Bundt Cakes failed to appear at the February 12 hearing, the Court granted the preliminary inunction.