Functionally non-protectable: Federal Circuit nixes Apple's trade dress claims against Samsung

United States of America

On May 18 2015 the Federal Circuit became the latest court to weigh in on the smartphone war between Apple and Samsung (Apple Inc v Samsung Electronics Co Ltd (2014-1335, 2015-1029). In an opinion authored by Chief Judge Prost, the Federal Circuit overturned the jury’s verdict that Samsung infringed Apple’s trade dress, finding that each of Apple’s asserted trade dress designs is functional and non-protectable.

Apple asserted trade dress infringement based on two product designs, one registered and one unregistered.  Despite the fact that the parties’ briefed trade dress issues without distinguishing between the two trade dresses, the Federal Circuit analysed the designs separately, in part due to the fact that the Lanham Act provides that different evidentiary presumptions apply to registered trade dress.

Apple asserted unregistered trade dress covering the design and graphical user interface of its iPhone 3G and 3GS products, consisting of the following:

  • a rectangular product with four evenly rounded corners;

  • a flat, clear surface covering the front of the product;

  • a display screen under the clear surface;

  • substantial black borders above and below the display screen and narrower black borders on either side of the screen;

  • when the device is on, a row of small dots on the display screen, a matrix of colourful square icons with evenly rounded corners within the display screen, and an unchanging bottom dock of colourful square icons with evenly rounded corners set off from the display’s other icons.

Apple, the party asserting infringement, bears the burden of proving that its trade dress is not functional. The Federal Circuit analysed the asserted trade dress under the Ninth Circuit’s Disc Golf factors:

  1. whether the design yields a utilitarian advantage;
  2. whether alternative designs are available;
  3. whether advertising touts the utilitarian advantages of the design; and
  4. whether the particular design results from a comparatively simple or inexpensive method of manufacture.

Despite the fact that the court applied the Disc Golf factors, as urged by Apple, the court noted that the Supreme Court’s holding in TrafFix that “a feature is also functional when it affects the cost or quality of the device” short circuits some of the Disc Golf factors.

In considering the Disc Golf factors, the court found that there was insufficient evidence to support a jury finding in favour of non-functionality on any factor. First, the court held that the asserted trade dress has a utilitarian advantage. Notably, the question is not, as Apple argued, whether the design had an “unusual usability” or led to “superior performance”, but whether the unregistered trade dress “serves no purpose other than identification”.

With respect to the “availability of alternative designs”, Apple argued that there are a number of designs that competitors could choose. Apple’s arguments failed, however, because it did not show that any of the alternatives offered exactly the same features as the asserted trade dress.

Regarding advertising, Apple pointed to a number of advertising samples based on Apple’s “product as hero” approach, which feature the design of the product as the key component of its advertisements. The Federal Circuit found that the advertising highlighted the use of the graphical interface and not just aesthetics. Apple failed to show that the advertised demonstrations of the iPhone’s touch screen were not promoting the utilitarian features of the design.

Finally, Apple argued that its trade dress does not result from being relatively simple or inexpensive to manufacture, pointing to the expensive high-grade steel and scratch resistant glass incorporated in its iPhones.  These expenses, however, were found to be outside the scope of the defined trade dress and, consequently, were disregarded. 

Because Apple failed to show that there was substantial evidence to support a finding of non-functionality of the unregistered trade dress, the decision of the district court was reversed.

In addition, Apple asserted US Trademark Registration No 3,470,983, a federally registered trade dress covering design details of 16 icons on the iPhone’s screen, including (among many others):

  • an icon depicting the letters 'SMS' in green inside a white speech bubble on a green background;

  • an icon depicting a map with yellow and orange roads, a pin with a red head, and a red-and-blue road sign with the numeral 280 in white; and

  • an icon depicting distinctive configuration of Apple’s media player device in white over an orange background.

Under the Lanham Act, a federal registration is prima facie evidence of non-functionality, which switches the burden of production of evidence of non-functionality to the accused infringer. Importantly, however, once the burden of production is met, the party asserting trade dress infringement still bears the burden of proof to show non-functionality.

The court noted that the individual elements claimed within the trade dress are clearly functional. Apple did not seriously contest this point. Instead, Apple argued that Samsung improperly attacked the individual elements of the trade dress, rather than considering the trade dress taken as a whole. However, as the court noted, where the whole is “nothing other than the assemblage of functional parts, there can be no non-functional ‘overall appearance’”. The court found no evidence that suggesting that the total combination negated the functionality of the individual elements.

As Samsung’s evidence of functionality met its burden of production, the burden of proof shifted back to Apple.  But because Apple’s briefs discussed the non-functionality of the registered trade dress together with the unregistered trade dress, its arguments suffered from the same flaws as those made in connection with the unregistered trade dress.

Based on its analysis, the court reversed the district court’s denial of Samsung’s renewed motion for judgment as a matter of law that Apple’s asserted trade dresses are functional and therefore non-protectable. In doing so, the Federal Circuit reinforced the principle that plaintiffs face a high-bar when asserting product configuration trade dress, particularly when analysed under Ninth Circuit law.

Jeffrey J Catalano, Brinks Gilson & Lione, Chicago

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