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On March 20, 2001, for the second year in a row, a unanimous U.S. Supreme Court decided a trade dress case, an area of law that traditionally has not received much of the Court’s attention. The subject of this latest case is far removed from the fashion question of Wal-Mart Stores, Inc. v. Samara Brothers, Inc., [FOOTNOTE 1]the trade dress case decided by the Supreme Court last year, which involved the design of a line of children’s outfits. This year’s trade dress case, TrafFix Devices, Inc. v. Marketing Displays, Inc., [FOOTNOTE 2]is about the dual spring design of temporary road sign stands and the effect of an expired utility patent on determining whether such design is “functional” and consequently not protectible under trademark law. Neither the ultimate outcome of the ‘TrafFix’ case nor most of the reasoning of the Court’s opinion, authored by Justice Anthony M. Kennedy, come as a particular surprise. What, however, is somewhat remarkable and should prompt a closer examination of the current state of trade dress law is the fact that Supreme Court attention was required at all to determine that a product design touted as successfully achieving the purpose of resisting strong gusts of wind and previously protected by a utility patent was “functional.” Functionality or, conversely, non-functionality is a very important concept in trade dress law. The term “trade dress” refers to those aspects of a product or its packaging legally protectible as a trademark, most notably under the Lanham Act. [FOOTNOTE 3] By far the thorniest issues in the area of trade dress concern affording trademark protection to the design, particular feature or overall look or image of a product itself. This branch of trade dress is generally referred to as “product configuration” or “product design.” The main reason protecting the design or features of a product under trademark law has been so troubling is that trademark protection is not limited in time — it persists for as long as the mark continues to be used in commerce — unlike patent or copyright (which though quite long, is at least finite) protection. Despite the reservations of some courts and commentators about the danger of inhibiting legitimate market-place competition by granting, what are essentially perpetual monopoly rights in product features, it is by now axiomatic that product configuration may be entitled to protection under trademark law. However, there are two crucial prerequisites to that protection which are designed to guard against perpetual monopolies in products themselves while promoting the legitimate aim of trademark law to protect source identification. These prerequisites are non-functionality and distinctiveness. [FOOTNOTE 4] Distinctiveness in trademark law means that a mark serves to identify the source (i.e., the producer) of a product. Last year in the Wal-Martdecision, the Supreme Court established the rule that in order for unregistered product configuration trade dress to be protectible, its proponent must establish secondary meaning, that is, make an evidentiary showing that the trade dress has come to be identified as an indicator of source. [FOOTNOTE 5]This year in the TrafFixdecision, the Supreme Court provides some guidance regarding the functionality requirement. The TrafFixopinion addresses “functionality” in two respects. It clarifies the threshold definition of functionality and resolves the conflict among Circuit Courts regarding “the effect … an expired [utility] patent [should have] on a claim of trade dress infringement.” [FOOTNOTE 6] DEFINING FUNCTIONALITY For the reasons summarized above, something which is functional cannot be protected under trademark law. In clarifying what the proper definition of “functionality” is, in TrafFixthe Supreme Court essentially reconfirms its own prior definition articulated 19 years ago in Inwood Laboratories, Inc. v. Ives Laboratories, Inc., [FOOTNOTE 7]which is 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.” [FOOTNOTE 8] Though this definition has generally been followed, a subsequent Supreme Court decision, Qualitex Co. v. Jacobson Products Company, Inc. [FOOTNOTE 9]expanded on the Inwoodtest by saying that a feature is functional if its exclusive use “would put competitors at a significant non-reputation-related disadvantage.” [FOOTNOTE 10] This additional statement of the functionality test has generally led the courts to inquire into whether there is only a limited number of possible available alternatives to the design sought to be protected. In particular, the Sixth Circuit in TrafFixtook this portion of the functionality test so far as to say that hindering competition “somewhat” is not enough, the competitors’ non-reputation-related disadvantage must be significant [FOOTNOTE 11]and concluded that the dual spring design is not necessarily functional because there are possible alternatives. ‘COMPETITIVE NECESSITY’ The Supreme Court”s TrafFixdecision, however, cuts off the so-called “competitive necessity” inquiry into available alternatives, making it clear that the proper articulation of the functionality test is the original Inwood Laboratoriesone — whether the feature “is essential to the use or purpose of the article or if it affects the cost or quality of the article.” The Court distinguishes the additional Qualitexinquiry into a “significant non-reputation-related disadvantage” as being applicable only in cases of aesthetic functionality. [FOOTNOTE 12] It is interesting to note here that in making this distinction the Court appears to be reviving the concept of “aesthetic functionality,” which was never clearly and consistently articulated or applied and has been criticized by case law as well as commentators. [FOOTNOTE 13] If this is indeed the Court’s intention, doing so in a case about springs that make road side signs wind-resistant only opens the issue without providing any meaningful guidance to practitioners and the lower courts. Is seems to this author that if aesthetic functionality is to make a come back, it should have been squarely addressed by the Supreme Court in last year’s Wal-Mart decision which involved attractive clothing designs that, admittedly, had no purely utilitarian function. In TrafFix, the Court also clarifies the consequences of a finding that a particular feature is functional. One result, which follows from the definitional clarification, is that competitors need not attempt to design around a functional feature, no matter how distinctive — they have a right to use it as is (unless, of course, the feature is protected under some other law, such as by a patent). The second result is that a functional feature cannot be considered part of product configuration trade dress, even if the claimed trade dress is not just this feature alone, but the totality or combination of a number of other features as well. Marketing Displays, Inc. (MDI), the proponent of the trade dress claim in TrafFix, argued that its trade dress consisted of a combination of features, none of which other than the dual spring, nor the way in which they were combined, were found by the Supreme Court to be distinctive so as to warrant trade dress protection. Because MDI’s dual-spring design was previously protected by a utility patent and was only copied by MDI’s competitor, TrafFix, after the patent expired, in its decision the Supreme Court took the opportunity to resolve the conflict among Circuit Courts’ approaches to the effect an expired utility patent should have on a subsequent claim of trade dress protection. DIVERGENT APPROACHES The two basic divergent approaches of the Federal Appellate Courts, as well as of the parties and some of the amici in the TrafFixlitigation, regarding an expired utility patent can be articulated as (1) the bright line rule that inclusion of a feature in a utility patent forecloses the possibility of that feature being subsequently protected as trade dress [FOOTNOTE 14]and (2) the view that a feature disclosed in a utility patent should be subjected to a functionality analysis, as any other alleged trade dress, meaning that it is not automatically disqualified by virtue of the expired patent. The TrafFixdecision resolves this conflict somewhere roughly in the middle — short of the bright line rule, but greatly raising the burden of proving non-functionality [FOOTNOTE 15]for the party seeking trade dress protection. “A prior patent, [according to the Court,] has vital significance in resolving the trade dress claim. A utility patent is strong evidence that the features therein claimed are functional. If trade dress protection is sought for those features the strong evidence of functionality based on the previous patent adds great weight to the statutory presumption that features are deemed functional until proved otherwise by the party seeking trade dress protection. 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 the feature is not functional, for instance by showing that it is merely an ornamental, incidental, or arbitrary aspect of the device.” [FOOTNOTE 16] Applying this rule to the case before it, the Supreme Court noted a number of factors leading to the conclusion that not only did MDI not carry the high evidentiary burden, but that it could not have done so. [FOOTNOTE 17] DOCTRINE OF EQUIVALENTS In arriving at this conclusion, the Court relied on numerous statements made by MDI in its patent application, during prosecution of the patent and in patent infringement litigation, in which MDI was successful in arguing that a competitor’s design with dual springs close together (as opposed to spaced apart as claimed in MDI’s patent) infringed its patent under the doctrine of equivalents. The basic practical advice that should be taken from the Court’s close examination of MDI’s own statements is that “anything you say in the course of procuring and enforcing a utility patent may and will be used against you in a trade dress claim.” The Court, nevertheless, clearly leaves open the possibility that a feature included in the claims of an expired utility patent could be found to be non-functional, thus explicitly refusing to address the Constitutional claim, based on the Patent Clause, [FOOTNOTE 18]advanced by TrafFixand some of the amici to the effect that the patent bargain with the public — a monopoly for a limited time to reward invention and encourage its disclosure — carries with it the affirmative right to copy the subject matter of an expired patent. In TrafFix, as in last year’s Wal-Martopinion, the Supreme Court continues to caution “against misuse or over-extension of trade dress.” [FOOTNOTE 19]However in doing so and in the process of distinguishing some of its own precedent, the Court leaves unresolved some essential and difficult issues. First, as already mentioned, it is not clear what to make of the seeming revival of aesthetic functionality. Second, is the issue of what treatment should be accorded to a feature, shown to be non-functional though part of a previously patented invention, which has acquired secondary meaning during the period of exclusive use protected by the patent. For example, the Seventh Circuit specifically addressed this issue in Thomas & Betts Corp. v. Panduit Corp., stating that “evidence establishing secondary meaning must also show that any connection between the trade dress of the product and its producer does not primarily stem from the expired utility patent.” [FOOTNOTE 20] Finally, though this list is not meant to be exhaustive, there is a potential head on constitutional conflict that, to some extent, has been set up by the Wal-Martand TrafFixdecisions. The conflict is between design patents and trade dress protection in a hypothetical situation where an ornamental design previously protected by a design patent acquires secondary meaning during the period it is protected from copying by the patent. After expiration of the design patent, trade dress protection is claimed. The basic trade dress functionality test would be, obviously, of no use in resolving such a conflict. In fact, the same test — “essential to the use of the article” — is applied to determine functionality (and thus ineligibility) for purposes of design patents. [FOOTNOTE 21] Perhaps this is a situation when aesthetic functionality would be essential to resolving the conflict, such that something that is aesthetically functional (applying the “competitive necessity” test) can be protected by a design patent or copyright but not under trademark law. Inna Fayenson is a partner of Kronish Lieb Weiner & Hellman LLPin New York. ::::FOOTNOTES:::: FN1529 U.S. 205 (2000). FN2(S. Ct. 1255 (2001)) FN315 U.S.C.A. �1125(a). FN4 FN5 Wal-Mart, 529 U.S. 205. FN6 TrafFix, 532 U.S. at ___. FN7456 U.S. 844, 72 L.Ed.2d 606, 102 S.Ct. 2182 (1982) (holding that color of prescription medication pills is functional because people, at times, rely on color to identify different types of medicine). FN8 Id.,456 U.S. at 850, note 10. FN9514 U.S. 159, 131 L.Ed.2d 248, 115 S.Ct. 1300 (1995) (holding that the particular gold-green shade of dry cleaning press pads could serve as a trademark). FN10 Id., 514 U.S. at 165. FN11 FN12 TrafFix, 532 U.S. at ___. The court in TrafFixwent on to characterize the Qualitexcase as one where “aesthetic functionality was the central questions, there having been no indication that the green-gold color of the laundry press pad had any bearing on the use or purpose of the product or its cost or quality.” However, it is not clear from the Qualitexopinion itself that it was addressing only the concept of aesthetic functionality. FN13 See, e.g.,J. Thomas McCarthy on Trademarks and Unfair Competition ��7:80-7:82 (4th ed. 2000). FN14 See, e.g., Vornado Air Circulation Systems, Inc. v. Duracraft Corp.,58 F.3d 1498, at 1500 (10th Cir. 1995) (“Where a product configuration is a significant inventive component of an invention covered by a utility patent . . . it cannot receive trade dress protection”). FN15In a 1999 amendment to the Lanham Act, Congress clarified that the burden of proof rests on the proponent of the claimed trade dress to establish that it is not functional. Previously, there was a split among the Circuit Courts as to which party bore the burden. 15 U.S.C.A. �1125(a)(3). FN16 TrafFix, 532 U.S. at ___. FN17 Id., at ___. FN18Art. I, �8, cl. 8. FN19 TrafFix, 532 U.S. at ___ . FN20138 F.3d 277, at 294 (7th Cir. 1998). FN21 See, e.g., Berry Sterling Corp. v. Pescor Plastics, Inc., 1999 U.S. App. LEXIS 20789 (Fed. Cir. 1999) citing L.A. Gear, Inc. v. Thom McAn Shoe Co., 988 F.2d 1117, at 1123 (Fed. Cir. 1993).

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