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The U.S. Supreme Court’s recent decision in TrafFix Devices Inc. v. Marketing Displays Inc., 121 S. Ct. 1255 (2001), reflects the Court’s recent trend toward sharply curtailing the scope of trade dress protection for product designs. Certain steps can be taken, however, to improve the likelihood of obtaining trade dress protection notwithstanding the decision. THE ISSUE The functionality doctrine provides that trademark protection will not be accorded to product features that are necessary to the product at issue, irrespective of their source-identifying properties. It finds its genesis both in the Constitution’s Patent Clause, which provides that Congress may “promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries,” U.S. Const., Art. I, � 8, cl 8 (emphasis added), and in the goal underlying trademark law: the promotion of free and fair competition. Permitting a producer to monopolize indefinitely a preferred product feature will have the effect of reducing competition and thereby result in higher consumer prices and lower-quality goods. Definitions of functionality promulgated by the courts have focused variously on (1) the intrinsic benefits of the product feature being claimed and (2) the need for other manufacturers to utilize such product features to compete effectively. Compare Inwood Labs. Inc. v. Ives Labs. Inc., 456 U.S. 844, 850 n.10 (1982) (stating, in dicta, that “[a] product feature is functional if it is essential to the use or purpose of the article or if it affects the cost or quality of the article”) with Brunswick Corp. v. British Seagull Ltd., 35 F.3d 1527, 1532 (Fed. Cir. 1994) (finding the black color of an outboard motor design functional, because of “competitive need for the color black”), cert. denied, 514 U.S. 1050 (1995). Faced with the specific issue of whether trade dress claims for product features disclosed in expired or existing patents are protectable, the circuit courts have reached different conclusions. While acknowledging that the existence of a utility patent covering a claimed product feature is evidence of functionality, many courts had held that if equally effective alternative designs are available to the competitor, the product feature will not be considered functional. See, e.g., Thomas & Betts Corp. v. Panduit Corp., 138 F.3d 277 (7th Cir. 1998). The U.S. Circuit Court of Appeals for the Tenth Circuit, held, however, that a product feature is functional as a matter of law if it was a “significant inventive component” of the patent in which it was disclosed, irrespective of competitive need. See Vornado Air Circulation Systems Inc. v. Duracraft Corp., 58 F.3d 1498, 1500 (10th Cir. 1995). The court wrote that, “the inability freely to copy significant features of patented products after the patents expire impinges seriously upon the patent system’s core goals, even when those features are not necessary to competition.” Id.at 1508. THE ‘TRAFFIX’ DECISION In TrafFix, the plaintiff, Marketing Displays Inc., sought trade dress protection for its dual spring design for roadside signs, appropriate for placement at gas stations and similar locations. The design, which had been patented, provided stability against wind conditions. Rejecting the plaintiff’s evidence of alternative available designs as inadequate, the district court held the design to be unprotectable, because, among other reasons, the prior patent rendered it presumptively functional. Marketing Displays Inc. v. TrafFix Devices Inc., 971 F. Supp. 262, 275 (E.D. Mich. 1997). The Sixth Circuit reversed, holding that utility patent protection did not necessarily conflict with the trademark laws, which protected a different interest and that, in light of the availability of alternative designs, competition would not be unduly hindered by granting trade dress protection to the plaintiff. Marketing Displays Inc. v. TrafFix Devices Inc., 200 F.2d 929 (6th Cir. 1999). The court held that a product feature is functional only if “[e]xclusive use of [the] feature [would] put competitors at a significant non-reputation related disadvantage.” 200 F.3d at 940 (citations omitted). The Supreme Court granted certiori. Concerning the effect of the utility patent, the Court held that “[a] utility patent is strong evidence that the features claimed therein are functional. Where the expired patent claimed the features in question, one who seeks to establish trade dress protection must carry the heavy burden of showing that a feature is not functional, for instance, by showing that it is merely an ornamental, incidental or arbitrary aspect of the device.” Although the Court stopped short of setting a per se rule, and declined to reach any constitutional issues implicated by the Patent Clause, the Court’s holding creates an almost insurmountable burden for a plaintiff with a claimed trade dress feature that is an essential part of a patent. Essentially, the only way to avoid a finding of functionality when a patent is involved is to establish that the features claimed as trade dress “do not serve a purpose within the terms of the utility patent.” GENERAL DEFINITIONS OF FUNCTIONALITY The Court went on to discuss the appropriate definition of functionality. It held that the definition of functionality articulated in Inwood Labs, that “a product feature is functional if it is essential to the use or purpose of the article or if it affects the cost or quality” thereof, applies in the context of utilitarian features. Once that is established, the question of competitive need is irrelevant. “[T]he functionality of the spring design means that competitors need not explore whether other spring juxtapositions might be used.” Thus, the issue of utilitarian functionality is to be decided by addressing the intrinsic utility of the trade dress. The Court limited the Qualitexformulation, which focuses on competitive need, to cases involving “aesthetic functionality.” The aesthetic functionality doctrine, under which any aesthetically pleasing product element that was “an important ingredient in the commercial success of the product is deemed unprotectable regardless of its source-identifying properties, see Pagliero v. Wallace China Co., 198 F.2d 339, 343 (9th Cir. 1952), has largely been rejected. See, e.g., Villeroy & Bosch Keramische Werke K.G. v. THC Systems Inc., 999 F.2d 619, 621 (2d Cir. 1993). Instead, the courts essentially have determined the functionality of aesthetic features under the same standard as utilitarian features: They have deemed aesthetic features functional if allowing their exclusive use “would significantly hinder competition by limiting the range of adequate alternative designs.” Wallace Int’l Silversmiths Inc. v. Godinger Silver Art Co., 916 F.2d 76, 81 (2d Cir. 1990) (refusing trade dress protection for baroque silverware design), cert. denied, 499 U.S. 976 (1991). Thus, the Court, while tightening the functionality standard for utilitarian elements, essentially let the “competitive need” standard remain for nonutilitarian design features. AVOIDING ‘TRAFFIX’ JAMS The TrafFixdecision, along with last year’s Wal-Mart Stores Inc. v. Samara Bros. Inc., 529 U.S. 205 (2000), decision, which held that the Lanham Act does not protect product design trade dress on the basis of inherent distinctiveness, reflects a trend toward restricting trade dress protection for product designs. There are steps that plaintiffs can take, however, to increase the possibility of obtaining protection. For instance, a patentee with a product that will be marketed aggressively, and whose benefits ultimately will be dedicated to the public domain, may want to add some purely arbitrary design features to the product during the period of the patent monopoly. The patentee also may want to emphasize these features in his or her advertising and promotions. Doing so may afford the patentee an opportunity to develop secondary meaning in those features while he or she has the exclusive rights to manufacture the patented product. Also, whether or not a patent was involved, trademark practitioners should encourage their clients to highlight the arbitrary or ornamental features of their product designs and to attempt to create a strong brand association between the product and the original producer through the use of advertising and promotions. Finally, when arguing nonfunctionality for a useful product feature that was not the subject of a patent, a plaintiff may still attempt to argue that, based on the absence of competitive need (that is, because there are many other ways to achieve the same functionality without copying the appearance of the feature), the feature is not “essential” within the meaning of the Inwoodcase. In light of the Supreme Court’s clear intention to cut back on trade dress protection for product designs, however, it remains to be seen whether the courts will be receptive to such arguments. Glenn Mitchellis special counsel in Stroock & Stroock & Lavan’s Intellectual Property Department. He works out of the firm’s New York office, where he specializes in trademark, copyright and unfair competition law.

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