TrafFix greases the functionality skids

United States of America

In Groeneveld Transport Efficiency Inc v Lubecore International Inc (Case Nos 12-3545/3576, September 12 2013), breaking stride with several other appellate courts (including the US Court of Appeals for the Federal Circuit), the US Court of Appeals for the Sixth Circuit has ruled that the competitive necessity test is only applicable in cases of “aesthetic functionality”, not in cases of utilitarian functionality, reversing a $1.2 million trade dress infringement jury award.

Groeneveld Transport Efficiency Inc is a US company that has made and sold automated lubrication services devices, the primary component of which is a grease pump, for over 40 years. In the 1980s Groeneveld began marketing its EP0 grease pump. Lubecore International Inc is, as the court described, “the new kid on the block”, having been founded in Canada in 2007 by a former Groeneveld employee. In 2007 Lubecore designed a competitive grease pump, which Groeneveld recognised as a “virtual copy” of the Groeneveld EP0 grease pump, and began selling it in the United States in 2009.

Groeneveld filed suit in 2010 alleging that Lubecore’s grease pump infringed Groeneveld’s trade dress rights in the configuration of its EP0 pump. The complaint asserted Lanham Act claims of trade dress infringement, false advertising and unfair competition, and related state law claims. A seven-day jury trial was held in October 2011. After Groeneveld rested its case, Lubecore moved for judgment as a matter of law under Rule 50 of the Federal Rules of Civil Procedure. The court granted Lubecore’s motion with respect to all claims except for the trade dress infringement claim, which was submitted to the jury. The jury returned a verdict in favour of Groeneveld, finding wilful trade dress infringement and awarding Groeneveld $1,225,000 in damages. This appeal followed.

In reversing the award and remanding the case for entry of judgment in favour of Lubecore on all claims, the Sixth Circuit relied heavily on the Supreme Court’s seminal TrafFix case, which previously reversed the Sixth Circuit in a trade dress infringement case. The Sixth Circuit interpreted TrafFix as holding that “competitive necessity is an appropriate avenue of inquiry... only in cases of ‘aesthetic functionality’, not in cases of utilitarian functionality where a design is essential to the use or purpose of a device”. Thus, the Sixth Circuit rejected Groeneveld’s evidence to the effect that none of its competitors other than Lubecore felt it necessary to make a similar-looking pump to perform the same function of delivering grease to a commercial truck engine as irrelevant to the central issue of “whether Groeneveld’s design ‘is essential to the use or purpose of the article or if it affects the cost or quality of the article’”. Finding Groeneveld’s evidence on that score to be deficient, the Sixth Circuit reversed the court’s entry of judgment in favour of Groeneveld on its trade dress infringement claim.

Judge White, in dissent, disagreed with the majority and its interpretation of the holding in TrafFix. The dissent would have affirmed the award and the district court’s judgment in favour of Groeneveld, asserting that TrafFix held only that the existence of alternative designs cannot by itself render a trade dress non-functional where it is otherwise functional, but not ruling out the relevance of such evidence to the determination of whether the design in question is in fact functional, citing decisions from a number of other appellate courts, including the Federal Circuit.

Other than avoiding courts in the Sixth Circuit for your product configuration trade dress infringement case, Groeneveld’s most significant lesson may be the importance in such a case of focusing the court’s attention, for example with the testimony of an expert engineer or the like, on the specific features of a product that are not dictated by functional concerns.

Michelle C Burke, McDermott Will & Emery LLP, Chicago 

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