Opinion ID: 15871
Heading Depth: 3
Heading Rank: 5

Heading: Effect of Sears-Compco

Text: In addition to its attack on the district court’s traditional trade-dress analysis, Tour 18 contends that it has the unfettered right to copy the Plaintiffs’ golf-hole designs and lighthouse under the Intellectual Property Clause of the Constitution. See U.S. CONST. art. I, § 8, cl. 8. Tour 18 points to Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225 (1964), and Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234 (1964), to demonstrate that unfair-competition law cannot protect product designs or configurations to which no current, valid patent applies. We disagree. First, Sears and Compco, both decided the same day, concerned the preemption of state trade-dress protection by federal patent law and barred the use of state unfair-competition laws to prohibit the copying of products that are not protected by federal patents. See Sears, 376 U.S. at 231-32 (copying of a lamp); Compco, 376 U.S. at 237-38 (copying of a reflector for a fluorescent light fixture). This bar to state prohibitions on copying includes nonfunctional designs and designs that have achieved secondary meaning. See Compco, 376 U.S. at 238. However, the Supreme Court noted that “other federal statutory the Plaintiffs have failed to demonstrate that the district court clearly erred in its factual findings on dilution by tarnishment. Therefore, we affirm the district court’s finding of no dilution by tarnishment because we have no definite or firm conviction that a mistake has been made. 43 protection,” in addition to the patent laws, may bar copying of a product. See id. at 238. In Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989), the Supreme Court reaffirmed its Sears-Compco holdings that limit state protection of product designs and noted that the application of Sears-Compco to nonfunctional product design must take into account competing federal policies as evidenced by the Lanham Act. See id. at 166. Thus, federal trademark protection is not limited by the preemption holdings in Sears-Compco. See Thomas & Betts Corp. v. Panduit Corp., 138 F.3d 277, 286 (7th Cir. 1998) (noting that the Sears-Compco and Bonito Boats holdings have no effect on the scope of federal trademark or unfair-competition law), petition for cert. filed, 67 U.S.L.W. 3152 (U.S. July 28, 1998) (No. 98179). Second, the federal trademark laws are “other federal statutory protection,” and their protection of product designs and configurations does not conflict with the federal patent laws or the Intellectual Property Clause. The patent laws and the trademark laws have two entirely different and consistent purposes, addressing entirely different concerns. See generally Thomas & Betts, 138 F.3d at 283-89 (discussing the origins and competing policies of the patent and trademark laws). The patent laws serve (1) “to foster and reward invention,” (2) “to promote[] disclosure of inventions to stimulate further innovation and to permit the public to practice the invention 44 once the patent expires,” and (3) “to assure that ideas in the public domain remain there for the free use of the public.” Aronson v. Quick Point Pencil Co., 440 U.S. 257, 262 (1979); see also Duraco Prods., 40 F.3d at 1446 (noting that the policy of encouraging innovative designs is the province of the patent and copyright laws). The principal purposes of the trademark laws are to avoid consumer confusion and to protect the goodwill of the trademark owner’s business. See Park ’N Fly, Inc. v. Dollar Park & Fly, Inc., 469 U.S. 189, 198 (1985); Duraco Prods., 40 F.3d at 1446 n.10. While the federal trademark laws provide a trademark or trade-dress owner indefinite protection unlike the limitedduration protection provided by the patent laws, traditional trade-dress analysis limits the scope of product designs or configurations that can be protected to avoid conflict between the two areas of law. See Kohler Co. v. Moen Inc., 12 F.3d 632, 642 (7th Cir. 1993) (“[A]ny conflicts between the patent laws and the Lanham Act should be resolved by a careful application of traditional bases for determining the propriety of trademark protection such as likelihood of confusion, functionality, and distinctiveness.”); see also Qualitex, 514 U.S. at 164-65 (noting that the functionality doctrine prevents trademark law from inhibiting legitimate competition by protecting useful product features, which is the province of patent law); Duraco Prods., 40 F.3d at 1451; W.T. Rogers Co. v. Keene, 778 F.2d 334, 337 (7th 45 Cir. 1985) (noting that the defense of functionality prevents any conflict between the federal patent and trademark laws, especially with a trade-dress infringement suit requiring secondary meaning (i.e., distinctiveness) and a likelihood of confusion). Third, in the more than thirty years since Sears-Compco, Congress and the courts have recognized that federal unfaircompetition law provides protection to product designs and configurations consistent with the patent laws. See Bonito Boats, 489 U.S. at 166. Courts have developed federal unfaircompetition law and have protected product designs and configurations. See, e.g., American Greetings Corp. v. Dan-Dee Imports, Inc., 807 F.2d 1136 (3d Cir. 1986) (teddy bears); LeSportsac, Inc. v. K Mart Corp., 754 F.2d 71 (2d Cir. 1985) (luggage); Ideal Toy Corp. v. Plawner Toy Mfg. Corp., 685 F.2d 78 (3d Cir. 1982) (Rubik’s Cube); Truck Equip. Serv. Co. v. Freuhauf Corp., 536 F.2d 1210 (8th Cir. 1976) (semi-truck trailer); see also 1 MCCARTHY ON TRADEMARKS, supra, §§ 7:54, 8:4-:5; cf. id. §§ 7:94-:95 (noting that, since Sears-Compco, product designs and configurations have been allowed registration on both the principal and supplemental registers). In the face of this developing protection for product designs and configurations, Congress reenacted in 1988 the definition of trademark to include “any word, name, symbol, or device, or any combination thereof,” 15 U.S.C. § 1127. See Qualitex, 514 U.S. at 172-73. The Supreme 46 Court found in Qualitex that the reenactment of this language-- along with its legislative history explicitly referring to the Trademark Commission’s recommendation that the terms “symbol, or device” be left unchanged to allow registrations of color, shape, smell, sound, or configuration that function as a mark--undercut restrictive trademark precedent. See id. Thus, Congress and the Court have embraced a broad reading of the Lanham Act and its protections, which can encompass product designs and configurations. For the above reasons, the Intellectual Property Clause, the federal patent laws, and the Sears-Compco-line of cases do not preclude federal trademark protection for product designs and configurations. Accord, e.g., Kohler, 12 F.3d at 639-41; Ferrari S.P.A. Esercizio Fabriche Automobili E Corse v. Roberts, 944 F.2d 1235, 1240-41 (6th Cir. 1991); Keene Corp. v. Paraflex Indus., Inc., 653 F.2d 822, 823 n.1 (3d Cir. 1981); see also Kohler, 12 F.3d at 640 n.10 (noting that the Lanham Act differs in many respects from the state unfair-competition law at issue in SearsCompco); 1 MCCARTHY ON TRADEMARKS, supra, § 7:61. But see Kohler, 12 F.3d at 644-51 (Cudahy, J., dissenting); Ferrari, 944 F.2d at 1252-53 (Kennedy, J., dissenting); cf. Vornado Air Circulation Sys., Inc. v. Duracraft Corp., 58 F.3d 1498, 1510 (10th Cir. 1995) (finding that a nonfunctional feature that is part of a claim in a utility patent cannot be protected by federal 47 trademark law),16 cert. denied, 516 U.S. 1067 (1996).17 Finally, if the acid test of any theory is how it works in 16 In Vornado, the court found that a feature was both patentable and nonfunctional. See 58 F.3d at 1506. The decision has been criticized for its narrow definition of functionality which does not take into account the utilitarian definition used by this court. See 1 MCCARTHY ON TRADEMARKS, supra, § 7:68, at 7- 134 to 7-136. Therefore, if Vornado had applied this court’s traditional trade-dress analysis, any conflict between the patent and trademark laws would have likely been avoided. 17 Tour 18 contends that this court’s decision in North Shore Laboratories Corp. v. Cohen, 721 F.2d 514 (5th Cir. 1983), controls our resolution of the effect of Sears-Compco. In North Shore Laboratories, the plaintiff and the defendant both made a brown tire-patch material, and the plaintiff argued that, based upon a consent judgment, the defendant should be prohibited from making a tire-patch material the same color as its own. See id. at 516-18. Solely by interpreting the judgment, the court determined that the defendant had not violated the consent judgment through the manufacture and sale of his product. See id. at 518-21. After resolving the question before it, the court alternatively considered whether it could have enforced the consent judgment if the judgment had prohibited the defendant’s conduct. See id. at 521-24. The court looked to Sears-Compco for the public policy that the copying of unpatented products is permitted and promotes free competition. See id. at 522. It found that an injunction which barred the defendant’s manufacture and sale of a brown tire-patch product would conflict with this public policy. North Shore Laboratories’s alternative holding that a product’s color cannot be protected by federal trademark law has been overruled by subsequent Supreme Court authority. See Qualitex, 514 U.S. at 174. As discussed in the text, subsequent authority and Congress’s reenactment of the broad language in the definition of a trademark demonstrate that the alternative rationale of North Shore Laboratories is inconsistent with the subsequent development of federal trademark law. We note, however, that the result of the North Shore Laboratories decision’s alternative holding would hold true today, without its discussion of Sears-Compco, because the court also found that the color of the tire-patch material lacked the necessary secondary meaning and was functional. See North Shore Lab., 721 F.2d at 522-23. Each of these findings would independently bar Lanham Act protection to the color of the tire-patch product. 48 practice, we note that the application of traditional trade-dress analysis under the Lanham Act to the product configurations at issue here, the design of the Plaintiffs’ golf holes, has effectively left intact Tour 18’s right to copy the Plaintiffs’ golf holes, barring only its copying of the lighthouse.