## In the



# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it
N os. 07

- 1435 & 10

- 2670 S PE CI AL I Z ED S EA T I NG, I NC .,

P la intif f/C o un tercla im D efend a nt-A pp ellee, v. G R EE NWI CH I NDUSTRIE S, L. P. , do i ngb us i ne ss a s Cl ar i n,

D e f e ndan t/ Count e r cl ai m Pla i nt i f f

-Appe l l ant
.

A pp ealsfr o m the United S t ates Di strictC our t fo r the N o rthernDi stricto f Illino is, Eas tern Div isi on. No . 05 C1197

—Jam es F. H old erm an, Chief Ju dge .
A RG UE D M AY 24, 2010

— D ECI DE D A UGUS T 11, 2010

Befo re E A S T E RB R OO K, Chi e f Judg e, a nd P OSNERa nd E VANS, C ircu it Judges . E A S T E RB R OO K, Chie

f Judg e . Fo r m or e t h an 80 ye ar s, C lar in has been m aki ng x-fra m e fo l ding chai rs . In 1999 i t a pp l i ed f orr egi str ati on o fo n e parti cul arx- f ra m e desi gn as a tr adem ar k. The Patent and Tr adem ar k Offi ce i ss u ed R e g i s t r a t i o n No
. 2 , 8 0 3 , 8 7 5 i n J a n u a r y 2 0 0 4
. T h i s i s t he re gi ste re d m ar k:2 N os. 07

- 1435 & 10

- 2670

The p ri nci pal r egi ste r describes i t thus: “a co nfi gura ti on ofa f ol ding c h air co ntai ni ng an X-fra m e pr ofi l e, a fl at ch an ne l fla nk ed o n e ac h s i de byr o l l ed edg es a r o und the peri m ete r ofthe chai r, two cr oss bar s with a fl at channel and ro l l ed edges at the back bot tom o fthe chai r, o ne cr oss ba r wi th a fl at ch an ne l an d r o l l ed edg es o n th e fr o nt bot tom , pro tr ud i ng fe et, and a b ack supp or t, the outer sid es of w h ich sla n t in w ar d .” Clar i n w as acqui re d by Gre enw i ch I nd ustr i es i n 199 3. We r e f e r t o G r e e n wi c h I n d u s t r i e s as Cl a r i n, th e n a me un d er w hich i t d oes bu siness
. H arvey H ergott, Clarin’s gen eral m an ager at th e tim e of t h e a cq uisition, left l ate r that yea r and, after honor i ng a fi ve- yea r re str i cti ve c o v e n a n t, j o i n e d S p e c i a l i z e d S e a t i n g, I n c . , i n 2 0 0 1 , t wo yea rs afterhi s s on Alfre d had fo un d ed thatbusi ness. S pec i al i ze d c o m pet es i n Cl ar i n’ s pr i nc i palmar k et : theN os. 07

- 1435 & 10

- 2670 3 sal e o ff ol ding chai rs to aud ito ri um s, spor ts sta dium s, conve nti on ce nters, and otherpl aces thatneed t o depl o y l o ts of seats , whi cho wner s wantt o b e as l i g ht an d c o mpa c t a s po s s ib l e f o r s t o r a g e whe n no t i n use. Speci al i zed se l l s a f ol ding chai r that to an un trai ned eye l oo ks lik e Cl ar i n’s tr adem ar k c hai r. There ar e di ff er ences i n const ructi on a nd detai l ; the chai r i s not a sl avi sh knock off, but the basi c desi gn tr acks the regi ste re d m ar k. T h at sim ilar ity h ad led to th is l itig at ion in w hi ch Speci al i zed so ught a decl ar ato ryj ud gm ent that i ts de si g n do es no t vi o l at e Cl ar i n’ s r i g ht s underthe Lan ha m Act, 1 5 U. S
. C. § § 10 51 –1 12 9, a nd C lari n c o unte r cl ai m ed f o r a n i nj unc ti o n. Clar i n has b een using the m ar k l ong enough f ori ts re gi str ati on t o be “i ncontes tabl e” und er15 U
. S. C. §106 5. The w or d “i ncontes tabl e” i s m i slea d ing, however, because an i ncontesta b le m ar k m ay be c onte ste d, and def ea te d, o n many groun d s. The pr i nc i pale ff ec t o fi nc o ntes tabl e s tatus i s t o re li eve the tr adem ar k pr opri eto r of any need to sho w “s eco nd ar y m eani ng”

— i n other w or ds, w hetherco nsum er s a sso ci ate a m ar k with a par ti cul ar producer i s no t r el evantwh en the m ar k i s i ncontestabl e. C lar in ’s c u s t o m e r s b u y in bu lk a n d are so p h ist ica te d ; i t i s e xceedi ngl y unl i kel y that a ny o fthem i s co nfuse d ab ou t w h o m ak es w h ich c h air . B ec au se th e m ar k is i ncontes tabl e, however, the abse nce ofconfusi on does not m att er . S ti l l, ni ne defenses ar e a vai l abl e t o a per son c ha r g e d wi th i nfr i ng i nga n i nc o nt e s t a b l e m a r k

. 1 5 U. S
. C. §111 5( b)

. S peci al i zed S eat i ng as ser ted two o fthes e def en se s: tha t “the r eg i st r at i o n . . . was o bt aine d fr au du-4 N os. 07

- 1435 & 10

- 2670 len tly ” (§ 11 15 (b )(1) ) an d th a t “ th e m ar k is fu n c tio n al” (§1115(b)(8))

. T h e d ist ric t c ou rth eld a b en c h tria l a n d ru led in Speci al i zed’ s f avo r on bo th o fthese i ssues . 47 2 F
. S up p. 2d 99 9 ( N
. D. I l l

. 2 00 7)
. The j udg e f o und th atthe x- f r ame c o nstru c ti on i s functi onalbec ause i t was desi gned to be an opti m altr adeoffbet w een a chair ’ s wei ght ( and thus i ts co st, s i nc e li g ht erc ha i r s us e l es s st ee l ) a nd i ts s tr en g th ; an x- f ra m e chai r al so f ol ds i tse l fnatur ally w h en kno cked ove r ( an i m port ant co nsi derat ion for l ar ge audito ri um s, w h ere i t i s v i talthatchai rs noti m pede exi t i fa fi re o r panic bre aks o u t); the fl at channel atthe sea t’ s e dge, wher e th e att ac hm en t to the fr ame s l i des s o tha t th e ch a i r c a n f o l d , wa s d e s i g n e d f o r s t r e n g th a n d a t t a ch i ng ho o k s to li nka c ha i r wi thi ts ne ar es t ne i g hb o r ; the f ro n t an d back cro ss bar s co ntribute s tr ength ( and al l ow th i nne r tubingt o b e use d i n the r es t o fthe fr ame) ; a nd th e i n wa r d

- s l o p i n gfr a me o ft h e b a c ks u p p o r ta l l o ws th e ch air to su p p ort g r eater vertical l oad s tha n C lari n’s ol der “ a-back ” desi gn, wh i ch the “b -b ack” desi gn, depict ed i n the tr ade m ar k r egi str ati on, succe eded. The abackdesi gn i s o n the l eft a nd the b-backo n the ri ght:N os. 07

- 1435 & 10

- 2670 5

Cl ar i n c ha i r s wi th a-ba ckde si g ns f ai l ed when th e audience at r ockco ncer ts, se eki ng a bett ervi ew , sa t o n top o fthe chai rs ’ bac ks and pu t thei r f eeto n the sea ts. The tubi ng buckl ed at the bend i n the f ra m e. T h e b -b ack de si gn i s l ess l i kel y t o buckl e when som eone si ts on i t, and i t a l so produces a so m ew h at w i der b ack, wh i ch concert prom ote rs se e a s a bene fi t. ( Patr ons som eti m es t r y t o g e tcl o s e r t o th e s t a g e b y s t e p p i n gth r o u g h r o ws ofchai rs . The ga p between b-b ac k chai rs i s s m al l er, so th ey are m or e e ffec tiv e a t k ee p in g c ro w d s in p lac e.) H avi ng co ncl ud ed not onl y that the o ver al l desi gn o f C l a r i n ’ s ch air is fu n c tio n al, bu t a lso th at ea c h fea tu re is functi onal, the distri ct j ud ge add ed that Clar i n had def r au ded th e Pa te nta nd Tr ade m ark Offi ce b y g i vi ng mi s l e a d i n g l y i n c o mp l e t e a n s we r s t o th e t r a d e ma r ke x a mi n er ’ s q u e s t i o n s . T h e e x a mi n e r i n i t i a l l y tu r n e d d o wn Clar i n’s pro posalto r egi ste r th e d esi gn as a tr adem ar k, o b s e r vin g t h at th e d es ign ap p ea re d to be fu n c tio n al. C lar in rep lied th at th e d es ign w as ch os en for a es t h et ic ra therthan functi onalr eas ons. ( This w as not a co m ple te answ er, as at tr acti venes s i s a ki ndo ffuncti on. Se e Jay Fra nc o & So ns, Inc. v. Fra nek, N o. 09

- 2155 ( 7th Ci r. A ug. 11 , 2010 ) , sl i p op. 10 –12 . B u t w e nee d not pursue that subj e c t
. ) Cl a r i n o b s e r v e d th a ta p a t e n ti th e l d o n a n x - f r a me c ha i r, No
. 1 , 9 4 3 , 0 5 8 , i s s ue d in 1 9 3 4 , di d n o ti nc l ud e all of t h e fe at u re s in th e m ar k’s d e s i g n . W h at C lar in did not t el l the exam i ner i s that i t hel d thre e o ther pa t e nt s o n x- f r a me de s i g ns : No
. 1 , 6 0 0 , 2 4 8 , i s s ue d in 1 9 2 6; N o. 2, 137, 803, iss u ed in 1 938; and N o. 3, 127, 218, i ssued i n 1 96 4. The di st r i ct j ud ge co nc l ude d tha t th e f o ur6 N os. 07

- 1435 & 10

- 2670 patents col l ecti vel y c over ev ery feature ofthe desi gn subm i tte d fo r a t ra dem ar k e xcept the b-back, and that as the b

-backi s a fu n cti onali m prove m ent o verthe a-back Clar i n shoul d have di scl ose d al l o fthes e uti l i ty patents. H ad it d o n e s o , th e jud ge th ou gh t, th e e x am in er w ou ld have re fused to r egi ste r the pr opose d m ar k. Clari n’s appeal was del aye d by s ett l em ent ne got i ati ons. B ri efi ng and ar gum ent were defer re d untilafter they bro ke d ow n. I t was furtherdel aye d by the di str i ct cour t’ s f ai l ure to entera properj ud gm en t, a com m on p ro b lem in t h e N or th er n D ist ric t of Illin ois . See , e.g., R ush U niversi ty M ed ical C ent erv. Le avitt, 53 5 F
. 3d 735 (7t h C ir. 20 08 ). Th e jud ge st at ed t h a t Sp ec ializ ed is enti tl ed to a decl ar ato ryj u d gm ent that the r egi str ati on i s i nv a l i d b e c a us e o fb o th f r a ud a nd fun c t i o na l i ty. A decl ar ato ryj ud gm ent m ust be se t ou t on a se parat e do cumentc o nt aini ngi ts t er m s. F ed. R. Ci v. P. 5 8( a)
. The j udg m en t i n thi s ca se do es no t do tha t. The pa r ti es , a nd perhaps the di str i ct j u d ge , se em to have as sum ed that, i fthe j ud ge’ s o pini on nam es th e winner, no one need bother w i th the st ep o f p ro du ci ng a conci se decl ar ati on in a sep arate d ocu m en t. B ut “[i ]fcou rts are to requ ire that othe rs follow regul arpro cedures, co urts m ust do so as w ell .” H o lling sw o rth v . P erry, 130 S. Ct
. 705, 715 (2010 ). Clar i n com pli cate d m att er s byo m i tti ng the defecti ve j udg m en t f r o m the a ppen di x to its b r i ef, de spi te the re quir em ent in Cir cui t Rul e 3 0(a) that i t be i ncl ud ed

— and de s pi t e c o un s e l ’ s r e pr e s e nt a t i o n t o the c o ur t, se e Ci r cui t Rul e 30 ( d) , tha t Rul e 30 ( a) ha d b ee n f o l l o wed. The cour t di sco ver ed the p ro b lem on i ts own , and at or al ar gum ent we questi oned w h et her appell ate j uri sdic ti on exi sts gi ven the abs ence ofany re l i ef

. S ee, e. g., H o r n v .N os. 07

- 1435 & 10

- 2670 7 Transc on Lines, Inc. , 8 98 F.2d 58 9 (7th C ir. 1990); Aze ez v. Fai r m an , 7 95 F
. 2d 12 96 ( 7th Ci r . 1 98 6)
. W e i nv i te d the parti es to re turn t o the di str i ct c ourtan d ask the j ud ge to i ssue a pro per decl ar ato ryj ud gm en t. They di d, the j ud ge did, and Cla ri n’s new app eal( N o. 10

- 2670 ) has been conso l i dated w i th the o ri gi nal o ne ( N o. 07

- 1435 )
. The cas e i s atl as t r ea dy f o r de ci si o n. F i ndi ng s o f f ac t m ade afte r a be nc h tr i al m us t stand un less clearl y erroneou s. Fed

. R. Civ. P. 52(a)( 6); Ande rs on v. B es se m erCity, 4 70 U. S
. 5 64 ( 19 85 )
. Al th o ug h “ func tional i ty” i s the “ul ti m ate is su e” in a cas e s uch as thi s, an “ul ti m ate ” i ssue ( such a s w hetherthe defe nd ant was ne g l i g en t or enga g ed i n r ac i aldi sc r i m i na ti o n) r emai ns one o f “fact” u nd er this stan d ard , becau se it i s gen erate d by a pp l yi ng l ega l princ ip les to f actualco ncl usi ons. Se e, e.g ., Ici cle Sea

f oods, Inc . v. Wor t hi ngt on , 47 5 U.S
. 70 9 (1986); Pul l m an- St anda r d v
. Swi nt, 456 U
. S. 273 (1982). “Functi onal i ty” cer tai nl y i sn’ t an i ssue of l aw ; i t repre
sen ts a fact-sp ecifi c con clusion abou t w he th er asp ects of a d es ign are “e s s e n tia l to t h e u se or p u rp os e o f th e a rt icle ori fi t a ff ects the cos t o r quali ty ofthe ar ti cl e”. Inwood Lab or at or i e s , Inc . v. Ive s La b or at or i e s , Inc . , 45 6 U .S. 84 4, 85 0 n. 10 ( 1982 ) ; se e a l so Tr af Fix D e vi ce s , Inc . v. M arke t i ng D ispla ys, Inc . , 5 32 U. S
. 2 3, 3 2–33 ( 20 01 )
. M an y de ci si o ns ap p ly R u le 5 2’s s t a n d ar d to a fin d in g t h at a m ar k is fu n c t i on al. Se e, e.g ., Servi ce Idea s, Inc . v. Traex C o rp . , 84 6 F.2d 1118 , 1 123 (7th Cir. 1988); Peb b l e Beac h Co. v. Tour18 I Ltd

. , 155 F.3d 5 2 6 , 5 37 (5th C ir. 1998); Fuj iKogyo Co. v. Paci f i c Bay Int e r nat i onal, Inc . , 461 F.3d 675 , 681 (6th C ir. 2006 ); Cl am p M anu

f ac t ur i ng Co. v. Enc o M anu f ac t uring8 N os. 07

- 1435 & 10

- 2670 Co
. , 870 F.2d 512 , 51 4 ( 9 t h C ir. 1989); Epi c M e t al s Corp. v. So uliere, 99 F. 3d 1034, 1037 (11th Cir. 1996). Cl ar i n t r i es t o evad e t hi s st an dar d o fr ev i ew b y c o nte ndi ngtha t th e di st r i ctj udg e’ s fi ndi ng s wer e i nfl uenced by leg al e rr or s. W e don’ t s ee any. The di str i ct j u d g e s t a r t e d fr o m th e p r o p o s i t i o n, wh i c h th e S u p r e me C ou rtart icu lat ed inTrafFix , that cl ai m s i n an e xpir ed uti l i ty patent presum pti velyar e functi onal

. S i nce uti l i ty pat en ts a re supposed to be re str i cted t o i nventi ons that h av e u tilit y, an d th u s a r e fu n c tio n al, th at ’s a se n sib le st ar tingpo i nt

— and sin c e i nventi ons cove re d by uti l i ty pat en ts pa ss i nt o the publ i c do m ain whe n the pa te nt expir es, i t i s i napp ro pri ate to use tr adem ar k l aw to aff or d extended prote cti on t o a pate nted i nventi on. S ee a l so Jay Franco , s l i p o p. 5 –8
. Cl ar i n i ts el fo bt aine d f o ur ut il ity pate nt s for asp ects of th e x-fram e f o ld ing ch air. These pate nts di scl ose ev er y a spect ofthe ass er ted tr adem ar k desi gn exce pt f orthe b-back . A nd the dist ri ct j udg e di d no t co m m i t a cl ea r e r r o r b y c o nc l udi ng that the b -b ack desi gn i s a functi onali m prove m ent o ver the a

-backdesi gn. Thi s m ean s th at the t ra dem ar k desi gn i s fu n cti onalas a unit, and that eve ryi m port ant a spect ofi t i s i n depend entl y functi onal

. I t l oo ks the way i t doe s i n ord erto be a be tte r chai r, noti n or der t o be a bet ter w ay ofi de nt i fy i ngwh o ma de i t( the fun c t i o n o fa t r adem ark). W e d o n ot d ou b t t h a t t h e r e a re m an y ot h er av aila b le functi onal desi gns. So m eti m es the functi on of th e functio na l i tydo ct r i ne i s to pr ev en t fi r m s f r o m a ppr o pr i at i ng basi c f or m s ( such as the c i rcl e) thatgo i nto m any de-N os. 07

- 1435 & 10

- 2670 9 sig n s. O u r c on te m p or an eo u s o p in ion inJay Franco di scusses thatas pect o f t h e functi onal i ty doctr i ne. Thi s doe s n ot im p ly th at p re se rv in g b as ic e lem en ts for t h e p u b lic d om ain is the d octrine’s onlyr ol e. Ano the r g o a l , as TrafFix s tr es se d, i s to s epa r at e th e sp he res of p aten t and trad em ar k l aw , and to ensu re th atthe t er m o fa pat en t i s no t ex te nde d b ey o nd the peri od authoriz ed by the l egi sl atur e. A desi gn such a s Cl ar i n’ s x- f r ame c ha i r i s func ti o na l not becaus e i t i s th e o nl y way t o do thi ng s, b utb ec au se i t r epr esents on e ofm any s ol uti ons to a pro bl em . Cl ar i n tel l s us that othe r desi gns a re st ro nger, o r thi nner, o r l ess l i kel y t o col l apse w h en so m eone si ts on the bac kr est, o r l i ghter an d so ea sier to carry an d se t u p . G ran ted

. Bu t as C lari n’s

‘ 24 8 pat en t st at es , th e x- f r ame des i g n ac hi ev es a favorabl e s tr ength- to- w ei ght r ati o. Pl ast i c chai rs ar e l i ghter bu t w eaker. Y -fram e ch airs are stronger bu t use m ore me t a l ( a n d s o a r e h e a v i e r a n d m o r e e x p e n s i v e ) ; s o me al ter nati ve desi gns m ust be m ad e with box- shaped m eta l pi ec es to ac hi ev e st r en g th, a nd thi s adds t o wei g hta nd th e c os t o f fab ric at ion . Th e list of alt er n at i v e d es ign s is ver y l ong, and i t is easy to see w hy hu nd re ds ofdi ff er entl oo ki ng f ol ding chai rs ar e o n the m ar ket

. W hat thi s s ays to us i s thatall o fthe d es ign s ar e funct i o n a l, i n th e s e n s e th a tth e y r e p r e s e n td i f f e r e n tc o mprom i ses al ong the a xes o fw eig h t, str ength, ki nd o f m at er i al, e as e o fs etup, abi l i tyt o c o nne ct( “g an g ”) the ch ai r s to g ethe r f o r maxi m um s ea tingde ns i ty, a nd s o o n. A nove l o r dist i ncti ve sel ecti on o fat tr ibutes on these m any di m ensi ons can be pro tect ed f ora ti m e bya uti l i ty10 N os. 07

- 1435 & 10

- 2670 patent ora desi gn pate nt, but i t ca nnot be pro tect ed f o r ev er as o ne pr o duce r ’ s tr ade dr es s. W he n the pa te nt ex pi r es , o ther fi r m s ar e f r ee t o c o py the de si g n t o the l astdetai l i n or der t o i ncre ase co m p etit i on a nd dri ve d ow n th e p ric e t h at c o n s u m er s p ay . See , e.g., Bo nito Boats, Inc . v. Thun der C r af tBoat s , Inc . , 489 U
. S. 141 (1989); S e ars , Roe b u c k & Co
. v. S t i f f e l Co
. , 376 U
. S. 22 5 ( 1964 )
. Once H ar vey H er got t’ s r est ri cti ve cov enant e xpir ed, he was f re e t o do thatto o. Cl a r i n r e mi n d s u s th a t a p r o d u c t wh o s e o v e r a l l a ppeara nce i s di sti nctive can b e pr ote cted under the tr adem ar kl aws , e ve n tho ug h mos t o fthe pr o du ct’ s co nst itu en t e lem en ts se rv e s om e fu n c tio n . See , e.g., Se rv ice Ide as , 84 6 F
. 2d at 1123 ; W
. T. Rogers C o. v. Ke e ne, 77 8 F
. 2d 33 4, 3 39 –4 0 ( 7th Ci r . 1985)
. Tha t’ s tr ue e no ug h, b ut whatmade th e appe ar an ce “ di st i nc ti ve ” i n the se a nd si m i l arde ci si ons was a no n- func ti o na l a spe cto fthe d esign. Fo r exam ple , Ke e ne de a l t wi th a l e t t e r t r ay that had i rr egul arh ex ago ns as end caps; ea ch hexago n had an i nter i orcuto ut. End caps ser ve the fun cti on o f m aki ng l ett ertr ays st abl e a nd se parat i ng the low ertr ay f ro m the up per tr ay, and cutouts m ake them l i ghter whi l e r educi ngthe c o sto fmate r i al s, b utne i th erthe i r r egul ars ha pe o fthe he xa g o n n o r the s ha pe o fthe cut o uts e r v e d a nyfun c t i o n. T he y ma de the t r a y di s t i nctive and enab led c o ns um ers to de term ine w hich firm m ade i t. I fCl ar i n had plac ed a c ut ou t i n the back re st, or gi ve n i ta di s t i nc t i v e p a t t e r n, i tc o ul d c l a i m t ho se att ributes as tr ade dres s. But w hat Reg i str ati on N o. 2, 803, 875 cl ai m s i s the x- f ra m e profi l e with thr ee cro ssN os. 07

- 1435 & 10

- 2670 11 bar s a nd a sl anted bac k su p p ort. A l l o fthe cl ai m ed f eatures ar e functi onal ; none w as add ed to pro du c e a d isti nc tive a p p e aran ce th at w ou ld h elp con su m ers i denti fy the pro du ct’ s s ourc e. B ec au se th e d ist ric t c ou rtd id n ot co m m it c l ea r er ro r in fi nd ing C lari n’s d esign to be fun ctiona l, i t is un ne c e s s ary to de ci de whethe r Cl ar i n c o m m i tt ed f r au d o n the Patent and Tradem ar k Offi ce. A l l a fi nd i ng o ffra ud does i s knock ou t th e m ar k’ s “ i ncontes tabl e” sta tus, and i ts r eg i st r at i o n, unde r § 11 15 ( b) ( 1)
. I t do es no t aff ec t th e m ark’s validity, bec ause a t ra dem ar k need n ot be re gi ste re d to be e nfo rce abl e. S ee O r i e ntExpre s s Tr adi ng Co. v. Fe de r at e d Depar t m e ntSt or e s , Inc . , 84 2 F.2 d 650, 65 3–54 ( 2d Cir

. 19 88) ( a t ra dem ar k c an be enf orced under 15 U .S. C. §112 5( a) eve n after i ts f edera l re gi str ati on is can celled for frau d ); Fa rO utPr oduc t i ons, Inc . v. O s kar, 24 7 F. 3d 986, 99 6 ( 9th Ci r. 20 01) (a t radem ar k c an be enf or ced und erstate com m on la w even aft eri ts f edera l r egi str ati on i s ca ncel l ed f orfrau d); se e a l so J
. Thom as M cCarthy, M cCar t hy on Trad e m arks an d Unfai rCom pe t i t i on §3 1: 60 ( 20 06 e d. )
. A fi nding o ffr au d the r efo r e woul d no t en d the c ase ; a fi nd i ng o ffuncti onal i ty does. C lar in co n te n d s t h at w e s h o u l d c on sid er th is t op ic ev en th ou gh it d oe s n ot affe c t Sp ec i a l i ze d ’s rig h t t o s ell a copycatchair, because i t m i ght m att erto at torneys’ fees , but fees have notbee n awarded. A deci si on o n l ega l i ssues j ust be cause they m i ght m att erto so m e l ate r dispute w oul d be a dvis or y. C lar i n al so appears to be co nc erne d tha t th e di st r i ctj udg e’ s fi ndi ngo ffr au d m i g ht aff ec t fut ur e l i ti g at i o n a g ains t a di ff er en t co m pet i to r, b ut12 N os. 07

- 1435 & 10

- 2670 i ssue precl usi on ( col l ate ra l es toppel ) appli es onl y t o iss u es ac tu ally and neces sari lyr eso l ved i n the fi rs t ca se. B row n v . Felsen , 442 U
. S. 127, 1 3 9 n.10 (1979); Re s t at e m e nt (Se cond) of Judgm ents §2 7 (is su e p re c l u s i on op er at es on ly ifthe earlier resolution w as “ess en tial to the j ud gm en t”). I t was no t ne ce ss ar y t o a ddr es s f r au d o n the PTO, s o the dist ri ct j ud ge’ s opi ni on on thi s subj ect does not h ave precl usi ve eff ect. A FFI RMED

8- 11- 10