THE NONFUNCTIONALITY REQUIREMENT FOR DESIGNS IS IT DYSFUNCTIONAL

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THE NONFUNCTIONALITY REQUIREMENT FOR DESIGNS (IS
IT DYSFUNCTIONAL?)

• JOHN S. ARTZ
• May 10, 2007

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INTRODUCTION

• Discuss design patent standards
• Specifically, the functionality doctrine
• Current state of the law
• How it has evolved
• What to expect from future
• What can we learn from how functionality
  standard for trade dress has evolved?

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PRELIMINARY OPINIONS

• Functionality doctrine greatly expanded
• If one demonstrates each element of design
  functional, it may be invalid
• The effect of alternative designs minimized
• Value and scope of Design Patents reduced
• Almost have to choose between Design Patent/Trade
  Dress or Utility Patent protection

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DESIGN PATENT STANDARDS

• Design Patents governed by Federal Statute
• Allow protection for any new, original and
  ornamental design for an article of manufacture.
  35 U.S.C. 171 (2006)
• Design patents are directed to the appearance of
  an article.
• Design patents not permissible for designs that
  are primarily functional
• This is the province of utility patents

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CURRENT FUNCTIONALITY ANALYSIS (I)

• Most recent case addressing functionality test.
  PHG Technologies, LLC v. St. John Companies,
  Inc., 469 F.3d 1361 (2006)
• If the patented design is primarily functional
  rather than ornamental, the patent is invalid.
• The design of a useful article is deemed to be
  functional when the appearance of the claimed
  design is dictated by the use or purpose of the
  article.

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CURRENT FUNCTIONALITY ANALYSIS (II)

• Whether the patented design is dictated by the
  function of the article of manufacture rests on
  analysis of overall appearance.
• This appears to be mere lip service
• Court stated (fn 2) this court invariably also
  considers whether the elements of the design are
  themselves dictated by the purpose or use of the
  article of manufacture. PHG, 469 F.3d 1369.
• Current focus on individual elements

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CONSIDERATIONS BEARING ON FUNCTIONALITY

• Factors relevant to analysis of whether overall
  appearance of design dictated by functional
  considerations
• Whether protected design represents best design
• Whether alternative designs would adversely
  affect utility of specified article
• Existence of any utility patents
• Whether advertising touts functional benefits
• Any elements of design not dictated by function.

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ALTERNATIVE DESIGNS

• In PHG, the Court stated
• The presence of alternative designs may or may
  not assist in determining whether the challenged
  design can overcome a functionality challenge.
• However, a full inquiry into the alleged
  alternative designs
• includes a determination as to whether the
  alleged alternative designs would adversely
  affect the utility of the specified article,
  such that they are not truly alternatives

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PATENTS AT ISSUE (I)

• Two Design Patents at issue related to medical
  patient identification labels
• Include eleven rows of labels
• First nine rows contain three labels
• Tenth and eleventh row have differently-sized
  labels
• One for pediatric wrist bands
• One for adult wrist bands
• Second Design Patent includes the border

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PATENTS AT ISSUE (II)
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DISTRICT COURT

• District Court granted PHG Motion for Preliminary
  Injunction
• Found PHG likely to prevail on infringement
• No substantial challenge to validity of patents
• Designs not dictated by function because labels
  could be arranged in variety of different ways
• Arrangement of labels thus primarily ornamental

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ST. JOHNS POSITION

• On appeal, St. Johns contended Patents invalid
  as functional
• Presented evidence from prosecution of parent
  utility patent
• Contended that medical labels merely byproduct of
  functional considerations
• Demonstrated that changing placement of various
  sizes of labels located at bottom of sheet would
  affect utility

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PHGS POSITION

• PHG argues
• Because alternative designs exist, patented
  design not dictated by function
• St. Johns analysis focuses on individual
  features of design not overall appearance
• Configuration of medical labels chosen because it
  was aesthetically pleasing

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PHG HOLDING (I)

• Federal Circuit noted
• Evidence indicated that multitude of alternative
  designs exist
• But, no findings on whether alternatives would
  adversely affect utility of medical label sheet.
• No findings on whether alleged alternatives are
  functionally equivalent
• Placed burden on Patentee (PHG)
• Evidence from St. John indicates that other
  designs w/out novel features affect utility

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PHG HOLDING (II)

• Court vacated district courts grant of
  preliminary injunction
• St. John (alleged infringer) raised substantial
  question as to validity of design patents at
  issue
• Location of wristband-sized labels dictated by
  use and purpose of medical label sheet
• Gave strong consideration to statements made to
  PTO in connection with utility patent

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BEST LOCK (I)Best Lock Corp. v. Ilco Unican
Corp., 94 F.3d 1563 (Fed. Cir. 1996)

• Design Patent on key blade blank
• Court found it invalid key blade design was
  dictated solely by functional considerations
• Any aesthetic appeal of key blade design shown
  in 636 patent is the inevitable result of having
  a shape that is dictated solely by functional
  concerns.
• Also, asserted a utility patent on same features

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BEST LOCK (II)

• Interesting competitive design analysis
• Best Lock argued that key blade blank could have
  variety of different shapes
• Court disagreed
• Held that any attempt to create a key blade with
  different design would fail as it would not fit
  into corresponding lock
• However, lock not shown in patent
• While not specifically stated, appears utility
  patent existence impacted decision

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BERRY STERLING (I)Berry Sterling Corp. v.
Prescor Plastics, Inc., 122 F.3d 1452 (Fed. Cir.
1997)

• Vacating Summary Judgment of invalidity due to
  functionality
• Design patent related to beverage cup
• Court found D.C. erred by failing to analyze
  overall appearance instead of individual
  elements. (Compare to PHG case).
• determination of whether patented design is
  dictated by function of article rests on analysis
  of overall appearance

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BERRY STERLING (II)
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BERRY STERLING (III)

• Criticized D.C. for not considering alternative
  designs
• We have held that when there are several ways to
  achieve the function of an article of
  manufacture, the design of the article is more
  likely to serve a primarily ornamental purpose.
• Alternative design one of various factors to
  consider when analyzing functionality issue

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ROSCO V. MIRROR LITE (I)Rosco, Inc. v. Mirror
Lite Co., 304 F.3d 1373 (Fed. Cir. 2002)

• Court reversed finding that design patent for
  school bus mirror invalid as functional
• Case provides narrowest application of
  functionality doctrine
• We apply a stringent standard for invalidating a
  design patent on grounds of functionality the
  design of a useful article is deemed functional
  where the appearance of the claimed design is
  dictated by the use or purpose of the article.

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ROSCO V. MIRROR LITE (II)
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ROSCO V. MIRROR LITE (III)
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ROSCO V. MIRROR LITE (IV)

• Court held
• If other designs could produce the same or
  similar functional capabilities, the design of
  the article in question is likely ornamental, not
  functional.
• Court found that other mirrors have non-oval
  shapes provide similar function
• Court thus relied on existence of alternative
  designs as evidence of non-functionality

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ROSCO V. MIRROR LITE (V)

• This is despite fact that
• Patentee (Rosco) represented to PTO that its
  mirror provided superior field of view
• Rosco touted features of mirror, including
  aerodynamic feature in marketing materials
• Court required ML to show that there are no
  designs other than Roscos claimed design that
  have same functional capabilities
• Burden on alleged infringer

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TRADE DRESS

• Trade dress is also available to protect product
  designs under certain circumstances
• Governed by Lanham Act
• Intended to provide protection to product designs
  that have become source identifiers or are
  indicative of source or origin

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TRADE DRESS ELEMENTS

• To demonstrate entitlement to trade dress
  protection it must be shown that
• The product design has acquired secondary meaning
• The product design is not functional

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FUNCTIONALITY

• The functionality doctrine was defined by the
  Supreme Court and defined in terms of competitive
  alternatives
• The Court in Qualitex stated a product feature is
  functional if it is essential to the use or
  purpose of the article of it affects the cost or
  quality of the article, that is, if exclusive
  use of the feature would put competitors at a
  significant non-reputation-related disadvantage

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DESIGN PATENT V. TRADE DRESS (I)

• Trade Dress and Design Patent have a
  non-functionality requirement
• Tests set forth in somewhat different language
• Design Patent Design features cannot be
  dictated by function
• Trade Dress Design features cannot be essential
  to the use or purpose of the article
• In application, the tests are the same

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DESIGN PATENT V. TRADE DRESS (II)

• Policies behind each are different
• Design Patent ensure that 14 year monopoly
  extends only to ornamental designs
• Trade Dress prevent indefinite protection for
  product designs that properly protectable by
  utility patent
• Burden different
• Design Patent presumed not functional and
  burden on alleged infringer (clear and convincing
  evidence)
• Trade Dress must be proven nonfunctional

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ALTERNATIVE DESIGNS

• Like with Design Patents, one factor in analyzing
  functionality issue of trade dress is
  availability of alternative designs

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AVAILABLE ALTERNATIVE TEST (I)

• The Restatement (Third) of Unfair Competition
  adopted a similar test
• a design is functional . . . if the design
  affords benefits . . . That are not practically
  available through the use of alternative
  designs.

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AVAILABLE ALTERNATIVE TEST (II)

• Other Courts of Appeals have interpreted the
  functionality language doctrine based on
  available alternatives
• In Fun-Damental, 2nd Cir. held design
  non-functional based on evidence of two
  alternative designs, competitor not at
  competitive disadvantage (Fun-Damental Too Ltd.
  v. Genny Indus. Corp., 111 F.3d 993 (2d Cir.
  1997))
• In Knitwaves, the 2nd Cir. held that protecting
  plaintiffs designs would not significantly
  restrict the number of designs available to
  competitors (Knitwaves, Inc. v. Lollytogs, Ltd.,
  71 F.3d 996 (2d Cir. 1995))

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AVAILABLE ALTERNATIVE TEST (III)

• In InstyBit, the 8th Cir. held that some
  features of plaintiffs trade dress may have been
  function, but plaintiff presented evidence that
  competing manufacturers have adopted different
  design features for their quick-change products
  (InstyBit, Inc. v. Poly-tech Indus., 95 F.3d 663
  (8th Cir. 1996))
• In Tools USA, the 4th Cir. held that trade dress
  of catalog was nonfunctional due to availability
  of alternative formats (Tools USA and Equip. Co.
  v. Champ Frame Straightening Equip., Inc., 87
  F.3d 654 (4th Cir. 1996))

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EFFECT OF UTILITY PATENT

• Majority of cases say utility patent does not
  preclude trade dress
• Sunbeam Prods., Inc. v. West Bend Co., 123 F.3d
  246 (5th Cir. 1997)
• Thomas Betts Corp. v. Panduit Corp., 138 F.3d
  277 (7th Cir. 1998)
• Midwest Indus. Inc. v. Karavan Trailers, Inc.,
  175 F.3d 1356 (Fed. Cir. 1999)
• Only Vornado adopted per se rule
• Vornado Air Ciruculation Sys., Inc. v. Duracraft
  Corp., 58 F.3d 1498 (10th Cir. 1995)

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TRAFFIX V. MDI

• In 2001, Supreme Court issued decision dealing
  with trade dress and functionality
• Issue in that case was effect of an expired
  patent on a claim of trade dress infringement.

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MDIS TRADE DRESS (I)

• In mid 1970s, MDI adopted a new look for its
  sign stand for the traffic-control industry
• MDIs design had the following
• x-shaped legs
• a relatively narrow base
• a pair of closely spaced vertical coil springs
  on top of the base
• a vertical upright member
• a diamond shaped sign

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MDIS TRADE DRESS (II)
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TRAFFIXS DESIGN (I)

• In about 1994, TrafFix introduced a
  wind-resistant sign stand under the mark
  WindBuster
• Sign stand was virtually identical to MDIs
  WindMaster sign stand
• TrafFix sent one of MDIs sign stands to Korea
  for copying
• TrafFix design is similar to prior Winn Proofs
  sign stand, which was held to infringe under the
  doctrine of equivalents in a prior action brought
  by MDI

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TRAFFIXS DESIGN (II)
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PROCEDURAL HISTORY

• D.C. granted TrafFixs Motion for S.J. of
  Non-functionality
• Held MDI had no trade dress protection due to
  expired utility patent
• Sixth Circuit vacated and remanded
• Held that available alternatives test controlled
  and required remand on the issue of functionality
• Recognized circuit split regarding effect of
  expired utility patent on trade dress protection

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WRIT OF CERTIORARI

• TrafFix filed its Petition for a Writ of
  Certiorari
• The issue was whether this Court should resolve
  the circuit conflict-- expressly acknowledged and
  deepened by the Sixth Circuit below -- on whether
  federal trade dress protection extends to a
  product configuration covered by an expired
  utility patent.
• Cert. granted

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PARTIES POSITIONS

• TrafFix proposed an absolute rule that no trade
  dress protection should extend to any subject
  matter covered by an expired utility patent
• MDI asserted that such a per se rule ignored the
  differences between the patent and trademark laws
• Both parties addressed the issue of
  functionality, as did some of the amici

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EVIDENCE OF AVAILABLE ALTERNATIVES (I)

• MDI put forward evidence of six other competitive
  wind resistant sign stands
• TrafFix admitted that these sign stands were
  comparable in cost, quality and performance
• The competitors Eastern Metal (flat spring),
  Sign-Up (spring in a box), Dickey Tool
  (horizontal spring), Work Area Protection (two 45
  degree angled springs), Services Material
  (enclosed spring), and Korman Signs
  (teeter-totter springs)

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TRAFFIX HOLDING (I)

• Ct held
• A utility patent is strong evidence that the
  features therein claimed are functional. If
  trade dress protection is sought for those
  features the strong evidence of functionality
  based on the previous patent adds great weight to
  the statutory presumption that features are
  deemed functional until proved otherwise by the
  party seeking trade dress protection.

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TRAFFIX HOLDING (II)

• The Ct. also held
• Whether a utility patent had expired or there has
  been no utility patent at all, a product design
  which has a particular appearance may be
  functional because it is essential to the use or
  purpose of the article or affects the cost or
  quality of the article.

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EFFECT OF TRAFFIX (I)

• TrafFix made clear that just because alternatives
  are available not ipso facto nonfunctional
• Reaffirmed that functionality test is measured by
  whether feature is essential to the use or
  purpose of the article.
• Since TrafFix, Courts have struggled with
  application of this test like they did before
• Valu Engineering, Inc. v. Rexnord Corp., 278 F.3d
  1268

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EFFECT OF TRAFFIX (II)

• Competitive alternative test was most objective
  way to determine whether product feature was
  essential.
• However, if other factors (utility patent,
  statements in promotional material, etc.)
  demonstrated functionality, alternative designs
  not relevant.

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DESIGN PATENT

• With PHG, Design Patent law on functionality in
  same place as trade dress (Pre TrafFix)
• Alternative designs not always relevant
• If design otherwise dictated by use or purpose
  of article, alternative designs not relevant
• If utility patent present likely do not need to
  analyze alternative designs

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CONCLUSION

• Design patent test on functionality unclear
• Whether a design is dictated by use or purpose
  of article subjective and vague
• Appears if you can demonstrate functionality of
  each individual feature can invalidate patent
• Further, existence of alternative designs has
  little relevance