Image: Anastasia Beverly Hills

Anastasia Beverly Hills’ “hard candy”-colored highlighting powder is not likely to be confused with the products of a separate beauty brand that goes by the same name, a U.S. federal appeals court says. The nearly 25-year old Hard Candy filed suit in April 2016 in a Florida federal court after the buzzy Anastasia Beverly Hills released its limited edition Gleam Glow highlighter kit in December 2015, which consisted of four different peachy shades of facial highlighter, one of which was called “hard candy.”

In response to Anastasia Beverly Hills’ use of the “hard candy” name on the palette, as well as in its “marketing materials and social media posts,” Hard Candy – which was acquired by LVMH Moët Hennessy Louis Vuitton in 2000 and subsequently sold off just three years later – filed suit, asserting claims of trademark infringement and unfair competition, and seeking nearly “every remedy permitted by the Lanham Act,” the U.S. federal law governing trademarks.

However, instead of seeking actual damages (i.e., monetary damages tied to the loss/harm suffered by the plaintiff), Hard Candy wanted the court to order that Anastasia be disgorged of any profits that it made in connection with its use of the allegedly infringing “hard candy” mark.

That actual damages versus disgorgement distinction is critical, as it resulted in Hard Candy’s request for a jury trial being denied, with the district court opting to hear the case, itself. The reasoning? The remedies that Hard Candy was seeking were equitable in nature, and thus, did not give rise to the Seventh Amendment right to a civil jury trial, which is limited to claims seeking legal – as opposed to equitable – relief.

After a three-day bench trial, the U.S. District Court for the Southern District of Florida found that there was no likelihood of confusion between the two brands’ use of “hard candy.”

In addition to a lack of confusion, the court found that Anastasia Beverly Hills had successfully made a descriptive fair use argument, asserting that it was not using the term “hard candy” in a trademark capacity (i.e., to identify the source of the highlighter product). Instead, Anastasia argued that it selected the “hard candy” name because “the product had a shimmer that reminded [founder Anastasia Soare] of candies that her grandmother gave her when she was young.” As such, the name was being used “in a descriptive sense because ‘it was used to describe the sheen’ of the makeup shade that the term labeled.”

In siding with Anastasia, the lower court noted that the $1 billion-plus brand “introduced evidence that cosmetics companies regularly describe shades with words that are not literal color descriptions, like the other three shades in the kit named ‘Starburst,’ ‘Mimosa,’ and ‘Crushed Pearl,’” and thus, Hard Candy is barred from “preventing others from accurately describing a characteristic of their goods.”

Hard Candy swiftly appealed the lower court’s decision, arguing that, among other things, it should have been given a jury trial because “it was seeking to recover Anastasia’s profits as a ‘proxy’ for the damages it suffered due to infringement,” and that such a “basis for seeking profits … means that the remedy is not equitable in nature and carries with it the right to a jury trial.” Moreover, Hard Candy argued that the court “should have stopped weighing [the likelihood of confusion] factors after it recognized that Anastasia’s use of the term ‘hard candy’ was formally identical to [its] mark HARD CANDY.”

Deciding the case this spring, the U.S. Court of Appeals for the Eleventh Circuit disagreed. A three-judge panel for the court stated that proxy or not, “the remedy of an accounting and disgorgement of profits for trademark infringement is equitable in nature.” The right to a jury trial extends only to suits involving legal rights and “just because Hard Candy seeks a monetary recovery does not mean that it is entitled to a jury trial.” With that in mind, the court held that “a plaintiff seeking the defendant’s profits in lieu of actual damages is not entitled to a jury trial.”

As for the district court’s trademark infringement and fair use determinations, the Eleventh Circuit found “no error and, therefore, affirmed” the decision. The appeals court asserted that “the District Court did not err in ruling that Anastasia’s use of ‘Hard Candy’ does not create a likelihood of confusion [because] while Anastasia uses the same words, all in capital letters, the court must consider the overall impression created by the use of the mark as a whole.”

Speaking specifically to Anastasia’s descriptive fair use argument, the court stated that  “it is not necessary that a descriptive term depict the [product] itself, but only that the term refer to a characteristic of the [product],” which would be the shimmer in this case.

As Harvard Law professor Rebecca Tushnet stated in her recent coverage of the case, “Despite what the Supreme Court said [in 2004 in KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc.],” when it held that the party making a classic fair use defense to trademark infringement does nothave the burden of showing that there is an absence of likelihood of confusion, “this case highlights—no pun intended—that descriptive use just doesn’t work anymore as a separate defense.”

“On the flip side,” Tushnet asserts, “even if we’ve abandoned use as a trademark, as an independent limit on infringement, that doesn’t mean it’s not relevant to whether confusion is likely.”

*The case is Hard Candy, LLC v. Anastasia Beverly Hills, Inc., 921 F.3d 1343 (11th Cir. 2019).