TrafFix permits consideration of alternative designs

The US Supreme Court held in TrafFix Devices Inc v Marketing Displays Inc that once a product feature is found to be functional, evidence of alternative designs need not be considered. Following on from that decision, two federal appellate courts, the Ninth Circuit in Talking Rain Beverage Co v South Beach Beverage Co and the Sixth Circuit in Antioch Co v Western Trimming Corp, have now interpreted it to permit, under certain circumstances, consideration of evidence of alternative designs in determining the functionality of trade dress features.

In TrafFix, the Supreme Court rejected a rule that would bar an expired patent holder from asserting trade dress rights. Instead, it held that a utility patent may be considered strong evidence that the design features are functional and, therefore, not protectable. Moreover, the court rejected a competitive necessity test pursuant to which a feature is deemed functional if "exclusive use of [the feature] [...] would put competitors at a significant non-reputation-related disadvantage". Said the court: "Where the design is functional [...] there is no need to proceed further to consider if there is a competitive necessity for the feature." Once functionality is established, there is no need to "engage [...] in speculation about other design possibilities".

In Talking Rain, the Ninth Circuit, while stating that it was applying the Supreme Court test for functionality, nevertheless found that, when determining whether a feature is functional, courts should examine whether:

  • the advertising touts the utilitarian advantages of the design;

  • the particular design results from a comparatively simple or inexpensive method of manufacture;

  • the design yields a utilitarian advantage; and

  • alternative designs are available.

After determining that each of the first three factors weighed in favour of a finding of functionality, the court then rejected the plaintiff Talking Rain Beverage's argument that its design was one of many possible designs, and cited TrafFix holding that "the mere existence of alternatives does not render a product non-functional". The court explained that it considered the fourth factor, notwithstanding TrafFix, because "the existence of alternative designs may indicate whether the trademark itself embodies functional or merely ornamental aspects of the product".

In Antioch, the Sixth Circuit granted summary judgment, finding that the lower court had properly reached the conclusion that "the essential feature of [the plaintiff Antioch's] claimed product configuration trade dress is its dual strap hinge design, which is unquestionably functional". The Sixth Circuit nonetheless stated that "the Supreme Court did not [...] reject the possibility that the competitive-necessity test might be applicable in certain contexts". The court further observed that the Federal Circuit (consistent with the Ninth Circuit's approach in Talking Rain) had previously held that evidence of alternative designs can be "a legitimate source of evidence to determine whether a feature is functional in the first place". The Sixth Circuit, however, neither adopted nor rejected this view, but instead stated that, at a minimum, TrafFix held that a court is "not required to examine alternative designs when applying the traditional test for functionality".

TrafFix continues to be a source of controversy, although the differing views may be reconciled. The Ninth Circuit's view in Talking Rain that TrafFix permits consideration of alternative designs may arguably be explained by the lack of a design utility patent in that case. If a design patent has expired, as in TrafFix and Antioch, then there is less need to consider evidence of alternative designs, since there is already "strong evidence" that the feature is functional. On the other hand, if there is no expired patent, as in Talking Rain, then courts may need to look to additional evidence, including alternative designs, to determine whether a particular feature is functional in the first instance.

Robert Alpert and Yuval Marcus, Ladas & Parry, New York

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