Opinion ID: 706034
Heading Depth: 2
Heading Rank: 1

Heading: Trade Dress Infringement and Unfair Competition

Text: 29 ICC further argues that the court erred in denying its motion for JMOL that it did not infringe HTH's asserted trade dress or violate Florida unfair competition law. ICC contends that HTH's trade dress is primarily functional and thus not protectable. HTH responds that substantial evidence supports the jury's implicit finding that the overall trade dress of HTH's sign is primarily nonfunctional. 30 Because trade dress issues are not unique to the exclusive jurisdiction of the Federal Circuit, we defer to the law of the regional circuit in which the district court sits. Imagineering, Inc. v. Van Klassens, Inc., 53 F.3d 1260, 1263, 34 USPQ2d 1526, 1528 (Fed.Cir.1995). Thus, Eleventh Circuit law applies in this case. 31 Section 43(a) of the Lanham Act, 15 U.S.C. Sec. 1125(a) (1994), creates a federal cause of action for trade dress infringement. Original Appalachian Artworks, Inc. v. Toy Loft, Inc., 684 F.2d 821, 831 (11th Cir.1982). Trade dress involves the total image of a product and may include features such as size, shape, color or color combinations, texture, graphics, or even particular sales techniques. John H. Harland Co. v. Clarke Checks, Inc., 711 F.2d 966, 980, 219 USPQ 515, 528 (11th Cir.1983). While trade dress historically referred to product packaging and labeling, modern definitions encompass the shape and design of a product itself. Id.; see also 1 J. THOMAS MCCARTHY, MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION Sec. 7.25 (3d ed. 1994) (MCCARTHY).). 32 To prevail on a trade dress infringement claim under section 43(a), a plaintiff in the Eleventh Circuit must prove three elements: (1) its trade dress is inherently distinctive or has acquired secondary meaning, (2) its trade dress is primarily nonfunctional, and (3) the defendant's trade dress is confusingly similar. AmBrit, Inc. v. Kraft, Inc., 812 F.2d 1531, 1535 (11th Cir.1986), cert. denied, 481 U.S. 1041, 107 S.Ct. 1983, 95 L.Ed.2d 822 (1987). In the Eleventh Circuit, the plaintiff has the burden of proving nonfunctionality. Id. Cf. MCCARTHY Sec. 7.26[d] (discussing split in the circuits concerning burden of proving functionality/nonfunctionality). Functionality is a question of fact, subject to the substantial evidence standard of review on appeal. John H. Harland, 711 F.2d at 982, 219 USPQ at 529-30. 33 As the Supreme Court recently stated in Qualitex Co. v. Jacobson Products Co., --- U.S. ----, 115 S.Ct. 1300, 131 L.Ed.2d 248 (1995): 34 In general terms, a product feature is functional, and cannot serve as a trademark, if it is essential to the use or purpose of the article or if 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. 35 Qualitex, --- U.S. at ----, 115 S.Ct. at 1304 (quoting Inwood Lab., Inc. v. Ives Lab., Inc., 456 U.S. 844, 850 n. 10, 102 S.Ct. 2182, 2187 n. 10, 72 L.Ed.2d 606 (1982)). The doctrine also embodies the related principle that trademark or trade dress law may not be used to secure patent-like protection in useful product features. As the Court observed in Qualitex:The functionality doctrine prevents trademark law, which seeks to promote competition by protecting a firm's reputation, from instead inhibiting legitimate competition by allowing a producer to control a useful product feature. It is the province of patent law, not trademark law, to encourage invention by granting inventors a monopoly over new product designs or functions for a limited time, 35 U.S.C. Secs. 154, 173, after which competitors are free to use the innovation. If a product's functional features could be used as trademarks, however, a monopoly over such features could be obtained without regard to whether they qualify as patents and could be extended forever (because trademarks may be renewed in perpetuity). 36 Qualitex, --- U.S. at ----, 115 S.Ct. at 1304; see also Keene Corp. v. Paraflex Indus., Inc., 653 F.2d 822, 824, 211 USPQ 201, 203 (3d Cir.1981) (The purpose of the rule precluding trademark significance for functional features is to prevent the grant of a perpetual monopoly to features which cannot be patented.... Products or features which have not qualified for patent protection but which are functional are in the public domain, and are fair game for imitation and copying.). 37 At trial, HTH asserted a protectable trade dress in a rigid, two-sided aerodynamic sign body with a clear plastic window mounting member, and with the two sides extending generally vertically and generally parallel with the direction of the vehicle travel when mounted upon a vehicle side window. Elmer, slip op. at 4. The trial court, in granting its injunction, accepted that concept. HTH's '994 utility patent, however, indicates that this purported trade dress is composed entirely of useful product features. According to the specification at col. 2, l. 67 through col. 3, l. 1, the two-sided aerodynamic sign body provides an aerodynamic configuration which has a minimum of wind drag when mounted upon a vehicle. In addition, [t]he window mount is formed of a generally transparent plastic material, in order to permit the driver to see through the window mount. Col. 1, 11. 56-59. An opaque window mount would be unacceptable because it would block the driver's vision when the sign is in use on a vehicle. Finally, the sign must extend generally vertically and parallel to the vehicle so that the advertising on the sign may be read by the public when the sign is in use. These features are functional because they provide useful advantages, and affording HTH exclusive rights in them would put competitors at a significant non-reputation-related disadvantage. Qualitex, --- U.S. at ----, 115 S.Ct. at 1304. 38 HTH concedes that the individual elements of its asserted trade dress are functional. However, HTH contends that, when combined, the overall appearance of these functional elements yields a nonfunctional, and thus protectable, trade dress. HTH further contends that there were a variety of sign designs available to ICC that were not confusingly similar to the overall appearance of its sign. The availability of alternative designs, HTH argues, shows that the asserted trade dress is nonfunctional. 39 The Eleventh Circuit has held that protectable trade dress may be found in an overall product appearance even when the product itself is functional or includes certain functional features. AmBrit, 812 F.2d at 1538 (That individual elements of packaging are functional does not ... render the package as a whole unprotectible.). In AmBrit, for example, the court affirmed a district court's finding that a foil wrapper design for an ice cream bar was primarily nonfunctional and thus protectable as trade dress. The wrapper's square size, bright coloring, pebbled texture, [and] polar bear and sunburst images rendered the wrapper nonfunctional because while [t]he actual wrapper may [have been] functional, ... its appearance [was] not. AmBrit, 812 F.2d at 1536, 1538. Similarly, in John H. Harland, the court affirmed a jury finding that the trade dress of a checkbook/carrying case was primarily nonfunctional. The court noted that, while certain features of the checkbook were functional, the jury reasonably could have found that other features were not, such as a decorative box around lines used to record information in the checkbook and the design and color of the carrying case. John H. Harland, 711 F.2d at 983-84, 219 USPQ at 531. 40 In contrast, HTH defined its trade dress to include only useful product features. To our knowledge, the Eleventh Circuit has not held protectable a trade dress that encompassed only useful product features. HTH did not show at trial, nor does it now explain, how combining the elements of its asserted trade dress renders the trade dress as a whole primarily nonfunctional. The '994 patent suggests the contrary, that the overall shape of HTH's sign is needed to provide a vehicle-mounted advertising sign with improved aerodynamics, driver visibility, and advertisement visibility. Furthermore, while evidence of alternative designs may be relevant, it was HTH's burden to prove that the availability of alternative designs substantially eliminates any competitive need for the features that HTH seeks to protect via trade dress. See Inwood Lab., 456 U.S. at 850 n. 10, 102 S.Ct. at 2187 n. 10. HTH made no such showing. HTH did not show, for example, that competitors in the relevant market have no functional need for aerodynamic versus nonaerodynamic designs. We are thus persuaded that there was no evidentiary basis upon which the jury reasonably could have relied in finding that the overall design of HTH's sign is primarily nonfunctional. 41 Moreover, patent law, not trade dress law, is the principal means for providing exclusive rights in useful product features. As the Court recognized in Qualitex, extending trademark/trade dress law to protect functional features might create perpetual, patent-like rights in unpatented or unpatentable items. Indeed, the district court's broad, functionally-defined injunction in this case has exactly that effect: it prevents ICC, indefinitely, from using any rigid, two-sided aerodynamic sign with a clear plastic window mount, the two sides extending vertically and parallel to the direction of vehicle travel. The injunction, in effect, broadens claim 1 of the '994 patent by protecting products lacking some of the limitations of the claim. HTH cannot, however, bypass the statutory requirements of the patent laws and obtain broadened patent protection under the guise of trade dress law. 42 Furthermore, once the '994 patent expires, the public will be entitled to practice the invention claimed in the patent. See Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 165, 109 S.Ct. 971, 985, 103 L.Ed.2d 118 (1989) (For almost 100 years it has been well established that in the case of an expired patent, the federal patent laws do create a federal right to 'copy and use.' ); see also Kellogg Co. v. National Biscuit Co., 305 U.S. 111, 59 S.Ct. 109, 83 L.Ed. 73 (1938). Enforcing a trade dress right defined, as it was here, to be essentially coextensive with, and in fact broader than, claim 1 of the '994 patent would frustrate that right because trade dress protection may last indefinitely and thus competitors could not effectively copy and use the invention after the patent expires. If the asserted trade dress had been narrowly defined to cover only one of the many product configurations within the scope of the claim, one might have a different case. In such case, upon expiration of the '994 patent competitors would be free to practice the '994 invention; they could sell aerodynamic vehicle-mounted signs. They simply could not choose a product configuration that would be confusingly similar to the trade dress of HTH's product. Here, however, the trade dress was broadly defined to be essentially coextensive with, and in fact broader than, the patent claim, and enforcing such a trade dress would effectively extend the life of the patent. 43 For these reasons, we are persuaded that HTH's asserted trade dress was primarily functional and thus unprotectable. The jury's contrary finding was not supported by substantial evidence. Because HTH's asserted trade dress was not protectable, we need not address whether the jury reasonably could have found that HTH proved the other elements of a trade dress claim. The district court's decision denying JMOL of noninfringement is therefore reversed. The court's judgment awarding compensatory damages and pre-judgment interest pursuant to the jury verdict of trade dress infringement is likewise reversed. 44 Finally, ICC argues that HTH's Florida common law unfair competition claim cannot stand because, as presented to the jury, the claim depended upon a showing of protectable trade dress. HTH makes no effort to defend the unfair competition verdict apart from its arguments concerning its Lanham Act claim. We agree with ICC that, because HTH's trade dress was not protectable, the jury's verdict of unfair competition was not supported by substantial evidence. We therefore also reverse the district court's decision denying JMOL that ICC did not violate Florida unfair competition law, together with its award of compensatory and punitive damages for unfair competition.