Functionality Archives

Functionality

Burdens Can’t Be Avoided No Matter How They’re Dressed Up

By Mike Baldwin on Jan 5, 2023
Posted In Patents

Addressing a multitude of issues, the US Court of Appeals for the Federal Circuit affirmed the district court’s ruling dismissing infringement of one patent and finding a trade dress invalid but reversed the invalidation of the other patent and vacated dismissal of an inequitable conduct defense. Mosaic Brands, Inc. v. Ridge Wallet LLC, Case Nos. 22-1001, -1002 (Fed. Cir. Dec. 20, 2022) (Newman, Prost, Stark, JJ.)

Mosaic Brands sued Ridge Wallet alleging infringement of a patent relating to a combination money clip and card holder adapted to retain paper currency and to removably store flexible cards such as credit cards, as well as Mosaic’s associated trade dress. Ridge denied the allegations and counterclaimed that Mosaic infringed a Ridge patent directed to a nearly identical wallet. In response to the counterclaim, Mosaic raised inequitable conduct as an affirmative defense.

During claim construction, the district court construed the terms “lip” and “varying thickness” in Mosaic’s patent. Following claim construction, the parties stipulated to noninfringement of Mosaic’s patent. The district court also found the trade dress of Mosaic’s wallet to be functional and thus invalid. As to Ridge’s patent, the district court granted summary judgment of invalidity based on a prior art product sold by Mosaic, and further denied summary judgment that Ridge had obtained its patent through inequitable conduct. Mosaic filed a motion for reconsideration regarding the inequitable conduct defense and to clarify remaining merits issues. The district court exercised its discretion to address the defense and identify deficiencies. The district court noted that Mosaic had only met a portion of its burden and later proceedings would present an opportunity to present more evidence of inequitable conduct. Both parties appealed.

The Federal Circuit first addressed a potential issue of appellate jurisdiction since the assertion of inequitable conduct was an affirmative defense and not a counterclaim yielding a final judgment to review. The Court found it had jurisdiction because the inequitable conduct defense merged and became final when the judgment denying summary judgment for inequitable conduct was entered.

Turning to the merits, the Federal Circuit addressed the two claim terms appealed by Mosaic. Mosaic argued that the district court’s interpretation of “lip” was too narrow because it required the lip to be made of “extruded plastic.” The Court quickly dispatched this argument by citing the specification of Mosaic’s patent, which described the lip as being made of extrudable plastic and extolled the benefits of such material. The Court focused on the context of how the patent used the phrase “the present invention” and found it to be limiting. As to the other claim term (“varying thickness”), Mosaic advocated for a plain and ordinary meaning of the term. The Court rejected Mosaic’s argument, finding that Mosaic failed to provide intrinsic evidence or meaningful explanation of how the district court’s construction differed from the plain and ordinary meaning. As such, the Court found that the district court made no error in either construction.

Turning to the appeal of Ridge’s patent, the Federal Circuit found that [...]

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Functionality Dooms Alleged Trade Dress Protection

By Kathleen Lynch on Nov 29, 2022
Posted In Trademarks

The US Court of Appeals for the Eighth Circuit affirmed summary judgment of noninfringement in a trade dress suit, finding that the trade dress was functional and the attorneys’ fee award—as diminished by the district court—was appropriate. Pocket Plus, LLC v. Pike Brands, LLC, Case No. 21-3414 (8th Cir. Nov. 15, 2022) (Gruender, Melloy, Erickson, JJ.)

Since 2009, Pocket Plus has sold vertically oriented pouches that attach to waistbands or belts to carry water bottles, cell phones and other small objects. Pike Brands, d/b/a Running Buddy, began selling similar pouches in 2012 and introduced a vertical version in 2015. In 2021, Pocket Plus sent cease and desist letters to Running Buddy, then sued for trade dress infringement under Iowa common law and the Lanham Act. Running Buddy moved for summary judgment, arguing that Pocket Plus’s trade dress was unprotectable. Running Buddy also threatened Rule 11 sanctions because of the weakness of the case. After winning summary judgment, Running Buddy moved to recover attorneys’ fees, which the district court partially granted. Both parties appealed, with Pocket Plus challenging the summary judgment grant and both parties challenging the amount of the attorneys’ fee award.

The Eighth Circuit began by noting that the issue of validity was complicated by Pocket Plus’s shifting explanation of what its trade dress was, explaining that its “definition evolved throughout the litigation,” becoming increasingly detailed. Eventually, the Court reasoned that regardless of which definition prevailed, the result was the same.

Addressing the noninfringement finding, the Eighth Circuit recited the relevant legal principles, explaining that to prove infringement, a plaintiff must show that its trade dress is nonfunctional and distinctive and that a lack of protection may confuse customers. The Court explained that it must consider trade dress in its entirety—not as individual elements—and determine whether features are protectable “arbitrary embellishment” or simply essential to product use. In this case, Pocket Plus never registered its trade dress so it did not benefit from a presumption of nonfunctionality. Pocket Plus argued that its vertical orientation and over-the-hip design were nonfunctional elements since competitors made pouches differently and that packaging illustrations likewise made the trade dress nonfunctional. The Court was not persuaded, finding that each feature the plaintiff pointed to was designed to “affect [the pouch’s] suitability for carrying objects,” making each feature essential to purpose and therefore functional. Because the Court found functionality, it affirmed noninfringement without addressing the other requirements.

The Eighth Circuit next considered the attorneys’ fees. Under the Lanham Act, a court may, in its discretion, grant attorneys’ fees to the winning party but only in “exceptional cases” after “considering the totality of the circumstances.” Pocket Plus argued that this case was not “exceptional” while Running Buddy argued that the district court abused its discretion in awarding only a portion of the attorneys’ fees.

The Eighth Circuit addressed both exceptionality and the amount awarded, in turn. To be “exceptional,” a case must be objectively unreasonable, motivated by ill will or frivolous. The Court noted Pocket Plus’s weak [...]

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Not So Clean: Federal Circuit Upholds Trade Dress Preliminary Injunction, Finds Defenses Improperly Plead

By Kathleen Lynch on Nov 17, 2022
Posted In Trademarks

The US Court of Appeals for the Federal Circuit upheld a “narrow” preliminary injunction in a trade dress case, finding that the opponent of a registered configuration mark failed to prove its lack of secondary meaning and functionality defenses. SoClean, Inc. v. Sunset Healthcare Solutions, Inc., Case No. 21-2311 (Fed. Cir. Nov. 9, 2022) (Newman, Lourie, Prost, JJ.)

SoClean manufactures Continuous Positive Airway Pressure (CPAP) machines. SoClean sued Sunset—a former distributor of SoClean products—for patent infringement and later added trademark infringement claims. At issue in this appeal was a single SoClean mark “for the configuration of replacement filters for its sanitizing devices.”

SoClean requested a preliminary injunction to stop Sunset from making or selling allegedly infringing CPAP filters. The district court granted the injunction but narrowly tailored the injunction to only enjoin Sunset from selling its filter cartridges without Sunset’s own brand name attached to the filter drawing so that customers would not falsely believe they were buying SoClean products. Sunset appealed.

While a party seeking preliminary injunction must prove all four eBay elements, this appeal focused on just one: “likelihood of success on the merits.” Sunset argued that the district court abused its discretion in finding that SoClean would likely defeat Sunset’s lack of secondary meaning defense and its functionality defense.

After noting that the parties agreed that SoClean’s trade dress was protectable only upon a showing that it had obtained secondary meaning, the Federal Circuit divided the secondary meaning issue into two subparts:

Whether the district court should have questioned the validity of SoClean’s registration in light of Sunset’s evidence
Whether the district court held Sunset to an improperly high standard of proof.

As to the first issue, the Court noted that federal registration is prima facie evidence of a mark’s validity. When, as here, the challenged mark was registered fewer than five years prior, the burden shifts from plaintiff to defendant, such that the defendant must rebut the presumption of validity. Sunset acknowledged that it had this burden, but its arguments to the district court focused only on the US Patent & Trademark Office’s decision to grant SoClean’s registration. The Court rebuffed that argument, noting that “scrutinizing the application process and deciding whether the trademark examiner was correct to issue the registration in the first place is the opposite” of the statutory presumption of validity.

Next, the Federal Circuit addressed Sunset’s standard of proof argument. The Court acknowledged that the district court misstated the law by suggesting that there was a “vigorous evidentiary requirement” on the challenging party, instead of simply a “preponderance of the evidence.” However, the Court also noted that the district court considered Sunset’s lack of secondary meaning evidence to be “equivocal, at best,” which “plainly fails to satisfy a preponderance-of-the-evidence standard.” Therefore, the Court judged the error to be harmless.

The Federal Circuit thus affirmed the finding that SoClean would likely defeat Sunset’s secondary meaning challenges.

The Federal Circuit next [...]

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Colorful Non-Functionality Argument Misses the (Design) Mark

By Paul Devinsky on Mar 4, 2021
Posted In Trademarks

Addressing the functionality of colors in design marks, the US Court of Appeals for the Second Circuit reversed the district court’s entry of judgment for a trademark owner on its unfair competition and trademark claims, ruling that where color is used as an indicator of size or parts matching, it is functional and does not qualify as trade dress. Sulzer Mixpac AG v. A&N Trading Co., Case No. 19-2951 (2d Cir. Feb. 18, 2021) (Pooler, J.)

Sulzer Mixpac and A&N Trading are competitors that manufacture and supply mixing tips, which dentists use to create impressions of teeth for dental procedures. Mixpac obtained trademarks for the colors yellow, teal, blue, pink, purple and brown (collectively, the Candy Colors) as applied to mixing tips. Mixpac filed suit against A&N, claiming unfair competition; common law trademark infringement; and trademark infringement, trademark counterfeiting and false designation of origin under the Lanham Act. A&N countersued, claiming that Mixpac’s use of the Candy Colors on mixing tips was functional and therefore not entitled to trademark protection. The district court concluded that Mixpac’s use of the Candy Colors was non-functional (based in part on the increased cost of adding color to the mixing tips, and noting that other competitors used clear tips), and entered judgment and a permanent injunction in favor of Mixpac. A&N appealed.

The Second Circuit reversed, explaining that the district court erred by failing to apply the Louboutin three-part aesthetic functionality test to Mixpac’s marks. Under the Louboutin test, to determine whether a design feature is non-functional and thus entitled to trademark protection, courts look to whether the design feature (1) is “essential to the use or purpose” of the product, (2) “affects the cost or quality” of the product, and (3) has a significant effect on competition. A&N argued that the mixing tips’ color coding helps users identify useful product characteristics, such as diameter, and that it aids users in selecting the correct tip. Applying the Louboutin test in the first instance and citing trial testimony, the Second Circuit concluded that the colors signify diameter, which assists users when selecting the proper cartridge, as the colors “enable users to quickly match the proper mixing tip with the proper cartridge, and (citing Louboutin) thereby ‘improve[] the operation of the goods.'”

Practice Note: In trade dress cases, be sure to apply the Louboutin three-part aesthetic functionality test. Failure to do so may lead to reversal on appeal. In this case, the Second Circuit noted that “[t]he district court erred because it did not apply this test when it considered only that Mixpac’s use of the Candy Colors adds to manufacturing costs and that other companies use different or no colors.”

Cookie Trade Dress Infringement Case Crumbles in Face of Functionality Challenge

By Eleanor B. Atkins on Oct 29, 2020
Posted In Trademarks

The US Court of Appeals for the Third Circuit found that trade dress protection did not extend to the design of a chocolate-dipped, stick-shaped cookie, because the product configuration was useful. Ezaki Glico Kabushiki Kaisha v. Lotte Int’l America Corp., Case No. 19-3010 (3d Cir. Oct. 8, 2020) (Bibas, J.).

Ezaki Glico is a Japanese confectionary company that makes and sells the snack food Pocky, which is a thin, stick-shaped cookie with one side dipped in chocolate (or a flavored cream) and the other uncoated. Pocky cookies have been sold in the United States for more than 40 years, during which time Ezaki Glico obtained two trade dress registrations for the Pocky design and a patent for a “Stick Shaped Snack and Method for Producing the Same.”

In 2015, Ezaki Glico sued its competitor, Lotte, alleging that Lotte’s similarly designed cookie, Pepero, infringed the Pocky trade dress. The district court granted Lotte’s motion for summary judgment, finding the Pocky product configuration functional and therefore not protected by trade dress. Ezaki Glico appealed.

Ezaki Glico argued that the Pocky trade dress is not functional because it is not essential to its design. The Third Circuit disagreed, stating “that test is too narrow.” The Court explained that functionality applies to features that are useful, even if they are not necessarily essential. The Court enumerated four indicators of functionality:

Evidence that the feature or design makes the relevant product work better
Examples of marketing materials touting the usefulness of the feature or design
Existence of a utility patent
Availability of other designs.

The Third Circuit found that most of these factors supported the finding of functionality. First, the design makes the product work better because “[e]very feature of Pocky’s registration relates to the practical functions of holding, eating, sharing, or packing the snack.” Ezaki Glico’s advertisements also promoted the functional features of Pocky’s design: they featured phrases such as “convenient design,” “the no mess handle of the Pocky Stick,” and “easier for multi-tasking without getting chocolate on your hand.” Likewise, the Court was unpersuaded by Ezaki Glico’s evidence of alternative designs, finding that “[e]very aspect of Pocky is useful. The nine other designs do not make it less so.”

The existence of the utility patent, however, was not a supporting factor in the functionality analysis. The Third Circuit explained that “the patent’s innovation is a better method for making the snack’s stick shape. The method is useful for making the shape whether or not the shape itself is useful for anything.” Although the district court improperly considered this factor in its analysis, the Third Circuit noted that the misstep was “immaterial” given that the district court ultimately reached the correct conclusion.

Practice Note: It is not necessary for a design feature to be essential for it to be considered functional. Trade dress may be considered functional—and therefore not protectable via trademark law—if it is merely useful to the design.

Knock It Off, Knockoffs? Ninth Circuit Affirms Trade Dress Rights but Not Fame

By Sarah Bro on Jul 9, 2020
Posted In Trademarks

Taking on issues of functionality and fame relating to trade dress rights, the US Court of Appeals for the Ninth Circuit affirmed in part and reversed in part the district court’s judgment after a jury trial on claims of infringement and dilution of trade dress rights in furniture. The Ninth Circuit distinguished utilitarian functionality from aesthetic functionality, and reaffirmed the high burden on the proponent of dilution to establish that the mark has become a “household name.” Blumenthal Distributing, Inc. DBA Office Star v. Herman Miller, Inc., Case Nos. 18-56471, -56493 (9th Cir. June 25, 2020) (Korman, J.).

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Belt Fastener Trade Dress Conveyed as Invalid for Being Functional

By Paul Devinsky on Apr 15, 2020
Posted In Trademarks

The US Court of Appeals for the Seventh Circuit affirmed a district court finding that a trade dress for a conveyor belt fastener was invalid as functional because its utilitarian advantages were disclosed in patents, advertising materials and internal corporate documents. Flexible Steel Lacing Co. v. Conveyor Accessories, Inc., Case No. 19-2035 (7th Cir. Apr. 7, 2020) (Ripple, J.).

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No Trade Dress Protection for Functional Shape and Color Scheme

By McDermott Will & Emery on Apr 9, 2020
Posted In Trademarks

Addressing the scope of trade dress protection, the US Court of Appeals for the Fourth Circuit found that the shape and color scheme of a product was functional and therefore only eligible for patent law’s protection of utilitarian inventions. CTB, Inc. v. Hog Slat, Inc., Case No. 18-2107 (4th Cir. Mar. 27, 2020) (Wynn, J.) (Keenan, J. concurring) (Rushing, J. concurring).

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