Q1: What area of law does Two Pesos, Inc. v. Taco Cabana, Inc. primarily address?
Trademark/Trade Dress (Lanham Act)
Q2: What was the central legal issue in Two Pesos, Inc. v. Taco Cabana, Inc.?
Under Lanham Act § 43(a), must an unregistered trade dress that is inherently distinctive be shown to have acquired secondary meaning in order to be protectable against infringement?
Q3: What rule did the court apply?
Under Lanham Act § 43(a), unregistered trade dress is protectable upon a showing that (1) the trade dress is distinctive—either inherently distinctive or has acquired distinctiveness through secondary meaning; (2) the trade dress is nonfunctional; and (3) the defendant's use is likely to cause consumer confusion. Inherently distinctive, nonfunctional trade dress need not be shown to have acquired secondary meaning to be protected.
Q4: What was the court's holding?
No. Inherently distinctive, nonfunctional trade dress is protectable under § 43(a) of the Lanham Act without proof of secondary meaning, provided there is a likelihood of consumer confusion.
Q5: Why is Two Pesos, Inc. v. Taco Cabana, Inc. significant?
Two Pesos resolved a circuit split and established that inherently distinctive, nonfunctional trade dress enjoys immediate protection under § 43(a) without proof of secondary meaning. For students and practitioners, the case cements three elements of a trade dress claim: distinctiveness (inherent or acquired), nonfunctionality, and likelihood of confusion. It also foreshadows later Supreme Court refinements: Qualitex (single color can serve as a mark if distinctive) and Wal-Mart v. Samara (product design trade dress cannot be inherently distinctive and requires secondary meaning) while leaving intact the functionality bar later emphasized in TrafFix. The decision significantly affects pleading and proof in trade dress cases, allowing plaintiffs with inherently distinctive packaging or store decor to proceed without costly consumer-association surveys.