Honeywell's circular shape mark given the cold shoulder

In Eco Manufacturing LLC v Honeywell International Inc, the US District Court for the Southern District of Indiana has ruled that the circular shape of a thermostat manufactured by Honeywell International is functional and therefore cannot be protected as a trademark.

Honeywell, a US company involved in various aspects of the technology industry, has long manufactured and sold a circular-shaped thermostat. Honeywell issued proceedings against a competitor, Eco Manufacturing, claiming that its manufacture of round thermostats violated Honeywell's trademark rights in the circular-shape. Eco responded with a declaratory judgment action in the District Court for the Southern District of Indiana requesting that the court affirm that Honeywell's shape mark is invalid. Meanwhile, Honeywell moved for a preliminary injunction to prevent Eco from manufacturing round thermostats.

The district court denied Honeywell's motion, finding that while there was a likelihood of confusion, the round thermostat design is functional and cannot be protected as a trademark or as a product configuration of trade dress.

Key to the district court's analysis was the fact that Honeywell had persuaded the US Patent and Trademark Office (PTO) to issue a utility patent (now expired) for the circular thermostat shape. The district court cited the Supreme Court's decision in the TrafFix Case and held that the utility patent was strong evidence that the thermostat features it covered, including the round shape, are functional and cannot be protected as trademarks. Once the patent had expired, said the court, the circular shape of the Honeywell thermostat entered into the public domain.

The court also rejected Honeywell's argument that the shape mark registration approved by the PTO in 1988 was now incontestable. The district court concluded that the registration was issued in error as the PTO's Trademark Trial and Appeal Board had "applied the wrong legal standard to a factual record that was both incomplete and misinterpreted on critical issues". These critical issues included evidence of competitors who were using circular-shaped thermostats and the coverage of Honeywell's expired utility patent. The court also noted that a claim of functionality is capable of defeating a mark owner's assertion that its registration is incontestable.

Honeywell's evidence that the circular shape of its thermostat had acquired secondary meaning to the extent that consumers automatically associate circular-shaped thermostats with Honeywell was also rejected by the court. While recognizing that there was a likelihood of confusion regarding the source of Eco's product, the district court reasoned that evidence of secondary meaning was not enough to save Honeywell's claim in the circular shape. The court observed that "the fact that years of advertising and exclusive use of the shape have led many buyers to associate the round design with Honeywell does not entitle Honeywell to perpetual and exclusive use of this functional product design".

David Fleming, Brinks Hofer Gilson & Lione, Chicago

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