Court Opinion

ID: 2681259
Source: CourtListenerOpinion
Date Created: 2014-06-30 07:01:11.989665+00
Date Added: 2024-06-11T09:41:06.720122
License: Public Domain

PUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT

                             No. 13-2044

MCAIRLAIDS, INC.,

                Plaintiff – Appellant,

           v.

KIMBERLY-CLARK CORPORATION; KIMBERLY-CLARK WORLDWIDE, INC.;
KIMBERLY-CLARK GLOBAL SALES, LLC,

                Defendants – Appellees.

Appeal from the United States District Court for the Western
District of Virginia, at Roanoke.  Samuel G. Wilson, District
Judge. (7:12-cv-00578-SGW-RSB)

Argued:   May 13, 2014                      Decided:   June 25, 2014

Before DUNCAN and WYNN, Circuit Judges, and J. Michelle CHILDS,
United States District Judge for the District of South Carolina,
sitting by designation.

Vacated and remanded by published opinion.    Judge Duncan wrote
the opinion, in which Judge Wynn and Judge Childs joined.

ARGUED: Frank Kenneth Friedman, WOODS ROGERS, PLC, Roanoke,
Virginia, for Appellant.     Andrew G. Klevorn, KATTEN MUCHIN
ROSENMAN LLP, Chicago, Illinois, for Appellees.        ON BRIEF:
Joshua F.P. Long, J. Benjamin Rottenborn, Michael J. Hertz,
WOODS ROGERS, PLC, Roanoke, Virginia, for Appellant. Jeffrey A.
Wakolbinger, KATTEN MUCHIN ROSENMAN LLP, Chicago, Illinois;
Kevin   P.  Oddo,  LECLAIRRYAN,   PC,  Roanoke,   Virginia,  for
Appellees.
DUNCAN, Circuit Judge:

       McAirlaids,    Inc.    filed    suit          against    Kimberly-Clark         Corp.

for    trade-dress     infringement          and       unfair        competition       under

§§ 32(1)(a)    and    43(a)    of    the    Trademark          Act    of    1946    (“Lanham

Act”), 15 U.S.C. §§ 1114(1)(a) and 1125(a), and Virginia common

law.     The district court granted summary judgment in favor of

Kimberly-Clark, and McAirlaids appeals.                         Because questions of

fact preclude summary judgment, we vacate and remand.

                                           I.

                                           A.

       McAirlaids    produces        “airlaid,”         a      textile-like         material

composed of cellulose fiber.               Airlaid is used in a wide variety

of     absorbent     goods,     including             medical        supplies,       hygiene

products, and food packages.               To make airlaid, cellulose fiber

is shredded into “fluff pulp,” which is arranged into loosely

formed     sheets.      In    contrast          to     most     of    its    competitors,

McAirlaids fuses these fluff pulp sheets through an embossing

process that does not require glue or binders.

       McAirlaids     patented       its        pressure-fusion            process,     U.S.

Patent No. 6,675,702 (filed Nov. 16, 1998) (“702 Patent”), J.A.

365–78, and the resulting product, U.S. Patent No. 8,343,612

(filed May 22, 2009) (“612 Patent”), J.A. 496–500.                                  In this

process,    sheets    of     fluff    pulp       pass    at     very       high    pressures

                                            2
between      steel   rollers     printed        with    a    raised     pattern.             The

rollers leave an embossing pattern on the resulting material,

and    the    high-pressure      areas     bond        the    fiber     layers        into     a

textile-like product.           In order for McAirlaids’s fusion process

to adequately hold together the airlaid, the embossed design

must fall within certain general size and spacing parameters.

       McAirlaids has chosen a “pixel” pattern for its absorbent

products:      the   high-pressure       areas       form    rows     of   pinpoint-like

dots on the material.                McAirlaids registered this pattern as

trade dress with the U.S. Patent and Trademark Office (“PTO”)

with    the     following       description:         “the      mark     is       a    [three-

dimensional] repeating pattern of embossed dots” used in various

types    of    absorbent       pads.      U.S.       Trademark        Registration           No.

4,104,123, J.A. 249.

                                           B.

       McAirlaids initiated this lawsuit against Kimberly-Clark in

the    Western    District      of     Virginia      after     Kimberly-Clark           began

using   a     similar    dot    pattern    on     its       GoodNites      bed       mats,    an

absorbent      product     manufactured         in     a     manner     different        from

McAirlaids’s pads.

       The district court bifurcated the issues in this case.                                In

the first phase, the only question before it was whether the dot

pattern on McAirlaids’s absorbent products was functional, and

thus    not    protectable      as     trade    dress.         At     this   stage,          the

                                           3
district court found that the dot pattern was functional.                                        It

determined that there were no disputes of material fact because

McAirlaids’s           evidence             of      nonfunctionality              “consist[ed],

essentially of its say-so.”                       McAirlaids, Inc. v. Kimberly-Clark

Corp., 2013 WL 3788660, No. 7:12-cv-00578-SGW-RSB, *4 (W.D. Va.

July 19, 2013).            The district court therefore granted summary

judgment in favor of Kimberly-Clark.                         McAirlaids appeals.

                                                  II.

     We review de novo the district court’s grant of summary

judgment       based    on    its          finding      of   functionality.             Ga.     Pac.

Consumer Prods., LP v. Von Drehle Corp., 618 F.3d 441, 445 (4th

Cir. 2010).         Summary judgment is appropriate when “there is no

genuine       dispute    as       to   any       material       fact     and   the      movant    is

entitled to judgment as a matter of law.”                                  Fed. R. Civ. P.

56(a).     It is an “axiom that in ruling on a motion for summary

judgment, ‘[t]he evidence of the nonmovant is to be believed,

and all justifiable inferences are to be drawn in his favor.’”

Tolan    v.    Cotton,       134       S    Ct.    1861,     1863       (2014)    (per    curiam)

(quoting Anderson            v.    Liberty         Lobby,       Inc.,    477     U.S.    242,    255

(1986)) (alteration in original).

     Functionality--the only issue presented by this case--is a

question       of   fact      that,          like       other     factual        questions,       is

generally put to a jury.                     In re Becton, Dickinson & Co., 675

                                                    4
F.3d    1368,       1372    (Fed.     Cir.        2012);        Clicks      Billiards,       Inc.    v.

Sixshooters, Inc., 251 F.3d 1252, 1258 (9th Cir. 2001).                                              “A

genuine question of material fact exists where, after reviewing

the record as a whole, a court finds that a reasonable jury

could return a verdict for the nonmoving party.”                                       Dulaney v.

Packaging       Corp.      of     Am.,    673      F.3d     323,      330     (4th    Cir.    2012).

Because       “[c]redibility             determinations,              the     weighing       of     the

evidence,       and      the    drawing       of        legitimate       inferences         from    the

facts    are     jury      functions,             not    those     of    a    judge,”       we     must

determine       whether         the      evidence          in     this       case    “presents       a

sufficient          disagreement         to       require       submission to          a    jury     or

whether it is so one-sided that one party must prevail as a

matter of law.”            Liberty Lobby, 477 U.S. at 255, 251–52.

                                                  III.

       Trademark law indefinitely protects designs that “identify

a product with its manufacturer or source.”                                    TrafFix Devices,

Inc.    v.    Marketing         Displays,          Inc.,        532    U.S.    23,     28    (2001).

Patent       law,     on    the     other         hand,     “encourage[s]            invention      by

granting       inventors        a     monopoly           over    new     product       designs      or

functions for a limited time.”                          Qualitex Co. v. Jacobson Prods.

Co., 514 U.S. 159, 164 (1995).                             The so-called “functionality

doctrine       prevents         trademark           law,        which       seeks     to     promote

competition         by     protecting         a    firm’s        reputation,         from    instead

                                                    5
inhibiting          legitimate          competition      by     allowing         a    producer          to

control    a     useful         product     feature.”           Id.        Therefore,            when     a

company    wants          to    protect     a    functional       feature            of   a    product

design, it must turn to patent law rather than trademark law.

Rosetta Stone Ltd. v. Google, Inc., 676 F.3d 144, 161 (4th Cir.

2012).         It    also       follows     that       proof     of    a    design          element’s

functionality is a complete defense in a trademark-infringement

action.     Shakespeare Co. v. Silstar Corp. of Am., 9 F.3d 1091,

1102    (4th     Cir.          1993).      Although       the    functionality                doctrine

originated in the common law, it has now been incorporated into

the Lanham Act, which prohibits registration of trade dress that

is “as a whole . . . functional.”                      15 U.S.C. § 1052(e).

       A   product             feature      is     functional--and               therefore              not

protectable as a trademark or trade dress--“if it is essential

to the use or purpose of the article or if it affects the cost

or     quality       of    the     article.”            Qualitex,          514       U.S.     at        165

(citation       and       internal       quotation       marks        omitted).             In     other

words, a feature is functional if “it is the reason the device

works,”    or        its       exclusive     use       “would    put       competitors             at    a

significant non-reputation-related disadvantage.”                                     TrafFix, 532

U.S. at 34, 32 (citations and internal quotation marks omitted).

       On appeal, the parties agree that the pressurized bonding

points are themselves functional because these areas actually

fuse the layers of fluff pulp into a textile-like material.                                         The

                                                   6
parties, however, dispute whether McAirlaids’s chosen embossing

pattern     is    functional.      McAirlaids           argues    that    the    district

court erred by misapprehending the significance of its utility

patents under TrafFix and by failing to consider the facts in

the light most favorable to McAirlaids, the nonmoving party.                            We

address each contention in turn.

                                         A.

       In TrafFix, the Supreme Court emphasized that a “utility

patent is strong evidence that the features therein claimed are

functional.”       532 U.S. at 29.       In that case, Marketing Displays,

Inc. (“MDI”) created a mechanism to hold outdoor signs upright

in    windy      conditions,    and     MDI       brought       suit     for    trademark

infringement against TrafFix Devices, a competitor that copied

its signs’ “dual-spring design.”                      Id. at 25–26.        MDI’s dual-

spring mechanism was the “central advance” of several expired

utility patents, which were of “vital significance in resolving

the   trade      dress   claim.”       Id.       at    29–30.     Given    the    utility

patents and other evidence of functionality, the Court concluded

that the dual-spring mechanism was functional rather than “an

arbitrary flourish.”           Id. at 34.             The Court then held that it

need not “speculat[e] about other design possibilities” because

it    had   already      established    that          the   design   feature     “is   the

reason the device works.”          Id. at 33–34.

                                             7
     The parties dispute the proper application of TrafFix to

the present case.       Kimberly-Clark argues that McAirlaids’s pixel

pattern is analogous to the dual-spring mechanism in TrafFix,

and thus not protectable as trade dress.            McAirlaids, however,

argues     that   TrafFix   is    inapplicable.     Although      TrafFix   is

certainly instructive, we agree with McAirlaids that it can be

distinguished on two grounds.

     First, the burden of proof is different.              In TrafFix, the

dual-spring mechanism in question was not registered as trade

dress with the PTO.         Therefore, under the Lanham Act, MDI had

the “burden of proving that the matter sought to be protected

[wa]s not functional.”           15 U.S.C. § 1125(a)(3).    In this case,

however, McAirlaids’s pixel pattern was properly registered as

trade dress.        J.A. 32.     Its registration serves as prima facie

evidence     that     the   trade    dress   is   valid,    and     therefore

nonfunctional.       15 U.S.C. § 1057(b); Christian Louboutin S.A. v.

Yves Saint Laurent Am. Holdings, 696 F.3d 206, 224 (2d Cir.

2012).     The presumption of validity that accompanies registered

trade dress “has a burden-shifting effect, requiring the party

challenging the registered mark to produce sufficient evidence”

to show that the trade dress is invalid by a preponderance of

                                       8
the evidence. 1         Retail Servs., Inc. v. Freebies Publishing, 364

F.3d 535, 542 (4th Cir. 2004).                         Therefore, Kimberly-Clark--the

party challenging a registered mark--has the burden of showing

functionality by a preponderance of the evidence in this case,

whereas        in   TrafFix,    MDI--the         party     seeking   protection     of    an

unregistered mark--had the burden of proving nonfunctionality.

       Second, the utility patents in TrafFix protected the dual-

spring         mechanism,    which    was        the    same   feature    for   which    MDI

sought trade-dress protection.                    See TrafFix, 532 U.S. at 30.           In

contrast, McAirlaids’s utility patents cover a process and a

material, but do not mention a particular embossing pattern as a

protected element.             J.A. 365–78, J.A. 496–500.                  The Court in

TrafFix acknowledged that “a different result might obtain” when

“a   manufacturer           seeks    to    protect        arbitrary,     incidental,     or

ornamental aspects of features of a product found in the patent

claims, such as arbitrary curves in the legs or an ornamental

pattern painted on the springs.”                       TrafFix, 532 U.S. at 34.           In

such       a   case,   the    court       must    “examin[e]     the     patent   and    its

       1
       “If sufficient evidence . . . is produced to rebut the
presumption, the presumption is neutralized and essentially
drops from the case.” Retail Servs., 364 F.3d at 543 (citation
and internal quotation marks omitted); see also Ga.-Pac.
Consumer Prods., LP v. Kimberly-Clark Corp., 647 F.3d 723, 727
(7th Cir. 2011).

                                                 9
prosecution history to see if the feature in question is shown

as a useful part of the invention.”               Id.

       Here, McAirlaids’s patents cover a production process and a

material, while the trade dress claimed is a particular pattern

on    the   material     that    results    from    the    process.           Unlike    in

TrafFix, therefore, the pattern is not the “central advance” of

any     utility    patent.        See    532      U.S.    at     30.      Neither       of

McAirlaids’s patents refer to a particular embossing pattern.

Both patents reference line-shaped as well as point- or dot-

shaped pressure areas, but the patents also directly acknowledge

that embossing studs of different shapes can be used, including

lines,      pyramids,     cubes,        truncated        cones,     cylinders,         and

parallelepipeds.         J.A. 365, 374–77, 499.            In fact, the diagrams

of the 702 Patent show hexagonal shapes rather than circles.

J.A. 368, 372.        Therefore, while McAirlaids’s patents do provide

evidence      of   the   dots’   functionality,          they     are   not    the   same

“strong evidence” as the patents in TrafFix.                        See 532 U.S. at

29.

       Because the facts of this case are different from those

presented to the Supreme Court in TrafFix, TrafFix’s holding

about    alternative     designs    is     inapplicable         here.     As    we   have

noted,      TrafFix   instructed     that       courts    need    not   consider       the

availability of design alternatives after the functionality of a

design element has been established.                532 U.S. at 33–34.           As the

                                           10
Federal Circuit has observed, however, TrafFix did not hold that

“the availability of alternative designs cannot be a legitimate

source of evidence to determine whether a feature is functional

in the first place.”         Valu Engineering, Inc. v. Rexnord Corp.,

278 F.3d 1268, 1276 (Fed. Cir. 2002).                      Thus, TrafFix did not

alter     our   precedents      that        look     to     the      availability       of

alternative     designs   when    considering,            as    an   initial       matter,

whether     a   design    affects          product    quality         or      is    merely

ornamental.     See, e.g., Tools USA & Equipment Co. v. Champ Frame

Straightening Equipment Inc., 87 F.3d 654, 659 (4th Cir. 1996).

Therefore, when we address the alleged factual disputes below,

we consider evidence of alternative designs.

                                           B.

        Next, McAirlaids argues that the district court improperly

weighed the evidence in the record when it determined that the

pixel pattern is functional.               Kimberly-Clark contends that the

record    clearly    indicates    that       McAirlaids         selected      its   pixel

pattern due to functional considerations and that the embossing

design affects the pads’ strength, absorbency, and elongation

(i.e., stretchiness).        McAirlaids counters that it has presented

sufficient evidence to create a genuine factual question as to

whether    their    selection    of    a    pattern       was   a    purely    aesthetic

choice among many alternatives.             We agree.

                                           11
      When       assessing       a    design    element’s          functionality,       courts

often     look     at     (1)    the       existence        of    utility     patents,       (2)

advertising focusing on the utilitarian advantages of a design,

(3) the availability of “functionally equivalent designs,” and

(4)     the      effect     of       the     design     on        manufacturing.            Valu

Engineering,        278    F.3d       at    1274    (citing        In    re   Morton-Norwich

Prods., Inc., 671 F.2d 1332, 1340–41 (C.C.P.A. 1982)).                                We thus

review    the     evidence       relating      to     these       factors,    taken    in    the

light     most    favorable          to    McAirlaids,       as    the    nonmoving     party,

noting     at    the    outset        that    the     PTO    already       determined       that

McAirlaids’s embossing pattern is not functional by registering

it as trade dress. 2            J.A. 32.

      McAirlaids’s         fiber-fusion            process       and    resulting     material

are patented; however, as we have pointed out, the patents do

not extend to any specific embossing pattern or the shapes used

therein.         See J.A. 365–78, J.A. 496–500.                          Patents for other

nonwoven products specify that dot-shaped patterns are preferred

for embossed bonding, but such patents also indicate that many

designs can also be used.                  E.g., J.A. 212.

      2
       This case is not an anomaly--the PTO regularly registers
embossing   patterns  on   nonwoven  products   as  ornamental,
nonfunctional trade dress.    E.g., U.S. Trademark Registration
No. 1,968,976, J.A. 568; U.S. Trademark Registration No.
1,924,873, J.A. 576; U.S. Trademark Registration No. 2,988,862,
J.A. 588.

                                               12
       McAirlaids officials, including the engineer who selected

the company’s pixel pattern, have stated under oath that the

pattern was chosen “[b]ecause it looked nice” and “[w]e liked

it.”     J.A.    320.         Yet    the    company       has    arguably       touted   the

pattern’s functional attributes.                  In one marketing presentation,

McAirlaids      described        its    pads’      “unique       bonding      pattern”    as

increasing      absorbency,         J.A.    184,    and     images       of   McAirlaids’s

pixel pattern appeared on an advertisement referring to “German

engineering,” J.A. 208.

       McAirlaids executives and both parties’ experts testified

that   the    company     could      have    used    many       shapes    for    the   high-

pressure areas that fuse the fibrous layers together: squares,

triangles, wavy or straight lines, hearts, flowers, and so on.

J.A.   351–52,        1427,     1478–80,      1666–68.           In   fact,     McAirlaids

formerly produced airlaid imprinted with an embossing design of

intersecting diagonal lines, known as the “Harschur” pattern.

J.A. 252.     During the three-year period when it produced airlaid

with   both     the     pixel     and      the    Harschur       patterns,      McAirlaids

conducted quality control tests on each type of absorbent pad,

measuring      their      weight,       thickness,         tensile        strength,      and

elongation.       The pads’ performance tests for three measures--

                                             13
weight, thickness, and tensile strength--were nearly identical. 3

Although the elongation figures varied, both measurements were

within the normal range for absorbent pads. 4

      Despite the wide variety of available shapes and patterns,

the parties agree that any embossing design would be “[s]ubject

to the suitable matching of cellulose fiber length, compression

elements    spacing,    and    sufficient      compression    forces   to   cause

[]fiber fusion.”       J.A. 507; see also J.A. 792, Appellee’s Br. at

29.   In other words, an embossing design must meet general size

and spacing specifications to successfully bond the layers of

fluff pulp.    J.A. 1373–76.

      In light of the foregoing, we determine that McAirlaids has

presented    sufficient       evidence    to    raise   a    genuine   issue   of

material fact regarding the functionality of its pixel pattern.

In this particular case, deciding whether McAirlaids’s embossing

      3
       There was a one percent difference in the tensile strength
of the two patterns. The parties agree that this difference is
not statistically significant. J.A. 1466-68; 1559; 1669–71.
      4
        Kimberly-Clark   also   presented  evidence   from  tests
conducted on their own absorbent products, which are made using
a similar fiber-bonding process.        However, the scientific
validity of these tests is disputed for two reasons. First, the
tests were conducted on a single day by a student intern without
supervision.   J.A. 1745–51.    Second, the products tested may
have come from different foreign manufacturing facilities, so
there is no proof that the products were identical but-for their
embossing patterns.    J.A. 814–15, 1754, 1767.    Even Kimberly-
Clark’s expert agreed that the samples used “were not rigorously
prepared for testing.” J.A. 1701.

                                         14
pattern    affects   the   quality   of    its   pads    requires    weighing

evidence    and   making   credibility     determinations.          These   are

functions for a jury, not the judge.             See Liberty Lobby, 477

U.S. at 255.      In sum, there remains a dispute of material fact

as to whether a specific embossing pattern is “the reason the

device works” or “merely an ornamental, incidental, or arbitrary

aspect of the device.”      TrafFix, 532 U.S. at 34, 30.            Therefore,

summary judgment was inappropriate.

                                     IV.

     For the foregoing reasons, we vacate the judgment of the

district court and remand for further proceedings.

                                                        VACATED AND REMANDED

                                     15