Court Opinion

ID: 9486132
Source: CourtListenerOpinion
Date Created: 2023-08-05 11:38:47.653494+00
Date Added: 2024-06-11T17:51:32.560544
License: Public Domain

NIEMEYER, Circuit Judge,
dissenting:
While the majority treats this case as if it involved solely the cancellation of a trademark registration, I respectfully submit that such an analysis overlooks the antecedent issue of whether an enforceable trademark exists. Moreover, the question of whether Shakespeare’s registration may be canceled is analytically distinct from the question of whether a defense to its enforcement exists, and the two are governed by different statutory provisions. The initial question, therefore, which is not addressed by the majority but which is dispositive of the ease, is whether this court should enforce the trademark, not whether this court should cancel it (the relief prayed for in the counterclaim). When the doctrine of functionality, the full extent of which is not articulated in the majority’s opinion, is applied, the judgment of the district court must be affirmed.
The doctrine of functionality is an extra-statutory doctrine, neither defined nor limited by the express provisions of the Lanham Trademark Act, which denies a perpetual monopoly of that which is functional. Despite the absence of a textual basis for this doctrine, it is integrated into the Act because of the presumption that Congress did not intend to upset the well-established principle that trademark protection is inapplicable to the functional. The doctrine of functionality is a public policy trump card that may be played against an otherwise valid trademark, not an element to be considered in determining a mark’s validity. Even if every presumption is made in favor of the existence of a trademark — that the mark enables determination of source, that it distinguishes the relevant goods, and that it has secondary meaning — these factors will not allow a functional feature to be monopolized beyond the limits imposed by the law of patents in compliance with the Constitution. See U.S. Const., art. I, § 8, cl. 8 (empowering Congress to grant exclusive rights to inventions only for “limited times”). As is shown below, the law is properly summarized by texts that teach:
Even if a functional feature has achieved consumer recognition (secondary meaning) of that feature as an indicia of origin, the feature cannot serve as a legally protecta-ble symbol.
J. Thomas McCarthy, Trademarks and Unfair Competition, § 7.26 (3d ed. 1992).
Before discussing the nature of the doctrine of functionality, I must revert to the facts and the findings of the district court which place the case before us directly under the doctrine.
I
For years fishing rods have been made from fiberglass, both hollow and solid. Hollow fiberglass rods are lighter and less expensive than solid ones, but they also are more inclined to break, particularly at the tip. While solid rods are stronger, they are also heavier and more expensive than hollow ones. Shakespeare Company, one of the leading manufacturers of fishing rods, developed a process to make use of the benefits of each type of rod by combining a hollow fiberglass base with a solid fiberglass tip.
With the introduction of graphite in the mid-1970’s, Shakespeare developed yet a stronger and lighter rod by using a hollow graphite base with a solid fiberglass tip, and it obtained a patent on the process of combining the graphite base with a fiberglass tip. *1100Consequently, for years only Shakespeare sold rods with hollow graphite bases and solid fiberglass tips. The natural color of the graphite was charcoal gray and that of the fiberglass was clear or a whitish translucence.
While Shakespeare was at first troubled by the lack of aesthetic value in the two-colored rod, with its acceptance by consumers Shakespeare sought to capitalize on its homely appearance, denominating it the “Ugly Stik.”
Shakespeare applied to the Patent and Trademark Office for registration of marks for the name and the appearance of the rod. The Patent and Trademark Office granted both. The mark covering the appearance of the rod claims exclusive right to market a rod
in which the tip portion of the shaft between the tip and the second line guide elements consists of a whitish, translucent material in contrast to the opaque remainder of the shaft.
United States Trademark Registration No. 1,261,786 (registered on the principal register). To enhance the appearance of the rod, Shakespeare added dye to darken the rod’s gray base and made efforts to clarify the resin in the tip. These changes, however, are not material to the issues in this ease, because Shakespeare’s mark extends beyond rods so altered and through it Shakespeare seeks to preclude Silstar Corporation of America, Inc., a competing manufacturer of rods, from selling a rod with a hollow graphite base and a fiberglass tip — a rod in which both graphite and fiberglass materials have been left with their natural appearance.
With the expiration of Shakespeare’s patent for the process of manufacturing a hollow graphite rod with a solid fiberglass tip, Sil-star began manufacturing similar rods to obtain the same functional benefits. Silstar, however, used a method of manufacture different from that covered by Shakespeare’s patent. Silstar contends it chose to leave the graphite and fiberglass materials with their natural appearance “in order that the consumer will understand and appreciate the qualities which the rod possesses and because it is the easiest, least expensive and most desirable method of making its rod.”
When Silstar’s rod first appeared under the name Silstar Power Tip Crystal rod, Shakespeare asserted that it owned a trademark in the appearance of a rod with a gray base and clear tip like Silstar’s. Moreover, it noted that its mark had been published by the trademark office for over five years and had become incontestable under 15 U.S.C. § 1065. In response to Silstar’s contention that Shakespeare could not claim a mark in the functional design of the rod, Shakespeare argued that once a mark becomes incontestable, it cannot be canceled by the court under 15 U.S.C. § 1119, because Congress did not provide an express exception to incontestability under 15 U.S.C. §§ 1065 & 1115, based on the fact that a mark is a functional design. The district court disagreed and ordered that the mark be canceled.
The facts which the district court found following trial and on which it based its opinion are critical because they are amply supported by the evidence in the record, and the majority opinion accepts them for the basis of its decision, as do I.
The district court found that after Shakespeare developed the process of manufacturing a hollow graphite rod with a solid fiberglass tip, it sold the rod for approximately one year with the natural appearance “which resulted from the manufacturing process.” The base was charcoal gray, the natural color of graphite, and the tip was “whitish-translucent, or clear,” which is the natural color of fiberglass. The court found that Shakespeare chose to market the rod with the two-color appearance so that “consumers could see and identify the unique appearance of the rod and recognize the enhanced features of the graphite base and the solid fiberglass tip. The appearance of the enhanced features derived from the natural colors of the materials used.” While Shakespeare enhanced the natural colors, the mark it claims covers the materials with their natural appearance:
The mark is used by applying it to the goods in that the mark is the color configuration of the fishing rod as shown in the drawing in which the tip portion of the shaft between the tip and the second line guide elements consists of a whitish, trans*1101lucent material in contrast to the opaque remainder of the shaft.
The court found that the appearance described in the trademark was the natural appearance of the functional features of a graphite rod with a solid fiberglass tip and to alter this natural appearance would impose additional costs on a manufacturer. The court concluded about the Shakespeare mark:
In this case there is no alternative design to Shakespeare’s mark which would be as effective in communicating to consumers the fact that the rod is made of a graphite base and a solid fiberglass tip since the clear tip and opaque base represent the natural colors of the graphite and fiberglass resin which compose the rod. To allow Shakespeare to have a perpetual monopoly on the color configuration would unquestionably hinder competition since it would preclude all competitors from using the natural and most effective means of marketing their products, and would require them to use a less effective and more costly method.
The court found that Silstar’s Power Tip Crystal rod, other than having the same col- or of the graphite base and fiberglass tip, was significantly different from Shakespeare’s in appearance. It found that Silstar chose to leave the graphite and fiberglass in their original state in order that “consumers can see and understand the qualities the rod possesses.” The court concluded similarly, “whatever attention is drawn to the clear tip on the [Silstar] Power Tip Crystal rod serves merely to inform a prospective purchaser of the components and attributes of the rod.”
Having found that Shakespeare’s mark is nothing more than the manifestation of its functional features and therefore not subject to registration, i.e. it is nothing more than the natural appearance of functional materials used in their most inexpensively displayed state, the district court ordered the Commissioner of Patents and Trademarks to cancel Shakespeare’s mark for the two-colored rod.
II
Preservation of the freedom to copy functional features is the issue in this case. This freedom has constitutional, statutory, and common law underpinnings. It is this freedom which the doctrine of functionality embodies.
Perhaps the most forceful and analytically complete statement of the doctrine of functionality is found in In re Deister Concentrator Co., 289 F.2d 496 (C.C.P.A.1961). In Deister, the Court of Customs and Patent Appeals refused registration of a rhombohe-dral coal sorting table because the court found the shape to be dictated by functional concerns. The court noted that while the table’s rhombohedral shape may well have acquired secondary meaning with the public,
what appellant fails to take into account is that as to some words and shapes the courts will never apply the “secondary meaning” doctrine so as to create monopoly rights. The true basis of such holdings is not that they cannot or do not indicate source to the purchasing public but that there is an overriding public policy of preventing their monopolization, of preserving the public right to copy. A certain amount of purchaser confusion may even be tolerated in order to give the public the advantages of free competition.
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It seems to us that this case perfectly exemplifies what we mean by a functional or utilitarian shape which is incapable of acquiring a legally recognizable “secondary meaning” or of becoming an enforceable trademark for the simple reason that, absent patent protection, the public has the right to copy the shape and enjoy its advantages. Under no circumstances can it be accorded the legal protection to which trademarks are entitled. This being so, there is no need to consider the extensive efforts made by the use of what appellant calls advertising “gimmicks” featuring “rhomboidal” shapes or otherwise, to turn this outline shape of the goods, per se, into *1102a registrable mark. It has attempted the impossible.
289 F.2d at 505.
The Court of Customs and Patent Appeals later succinctly and forcefully restated its holding in Deister as follows:
In our Deister opinion we pointed out that, in line with consistent decisions of the United States Supreme Court and other courts, nothing which the public has or would have a right to copy, in the absence of valid patent or copyright protection, can be the subject of a valid trademark registration and' that this is so irrespective of public acceptance of the subject matter sought to be registered as an indication of source. We pointed out that this is a fundamental principle of the law of trademark ownership which is outside the provisions of the trademark statute (the Lan-ham Act), to which the provisions of that statute are subservient. We also pointed out that the principle applies without regard to the effort or money expended in an attempt to create trademark rights in something which the public has or will have the right to copy.
In re Pollak Steel Co., 314 F.2d 566, 567 (C.C.P.A.1963).
The successor to the Court of Customs and Patent Appeals, the Federal Circuit, has made clear that the functionality defense is based on the vindication of the public’s right to copy and is brought into play only after the elements of trademark ownership have been established. In Black & Decker, Inc. v. Hoover Service Center, 886 F.2d 1285 (Fed.Cir.1989), the court laid out some basic principles related to the functionality defense while vacating a clearly erroneous finding that the shape of a hand-held vacuum’s bowl was functional:
The Court of Appeals for the Second Circuit, whose law we apply to a denial of an injunction against trademark infringement in that Circuit, has stated that the accused infringer bears the burden of establishing the functionality defense, a defense created to insure its right to compete effectively by adopting the configuration claimed as a trademark. Thus the defense arises out of public policy and only after plaintiff has shown a basis for claiming a trademark right in the configuration. When upheld, the defense turns the balance against the risk of consumer confusion and in favor of competition by permitting others to use the configuration when, because of its functionality, they must do so to compete efficiently and thus effectively. That result has been stated as “functional features cannot be trademarks.” See J. McCarthy, Trademarks and Unfair Competition § 7:26 (2d ed. 1984).
Proof that a configuration of goods is functional in the legal sense is a complete defense to establishment of a trademark right that a plaintiff would otherwise have in that configuration.
Black & Decker, 886 F.2d at 1291 (emphasis added; some citations omitted); see also In re Morton-Norwich Products, Inc., 671 F.2d 1332, 1336-37 (C.C.P.A.1982) (trademarks for product designs are limited to “nonfunctional” features); In re Water Gremlin Co., 635 F.2d 841, 843-44 (C.C.P.A.1980) (same).
The Third Circuit has also set out the rationale for the doctrine of functionality at some length, in the context of denying trade dress protection to a roofing seam found functional:
To allow indefinite trademark protection of product innovations would frustrate the purpose of the limited duration of patents to foster competition by allowing innovations to enter the public domain after seventeen years. As the United States Supreme Court stated nearly a century ago:
It is self evident that on the expiration of a patent the monopoly created by it ceases to exist, and the right to make the thing formerly covered by the patent becomes public property. It is upon this condition that the patent is granted. It follows, as a matter of course, that on the termination of the patent there passes to the public the right to make the machine in the form in which it was constructed during the patent.
Singer Mfg. Co. v. June Mfg. Co., 163 U.S. 169, 185, 16 S.Ct. 1002, 1008, 41 L.Ed. 118 (1896).
*1103Merchant & Evans, Inc. v. Roosevelt Bldg. Products Co., 963 F.2d 628, 633-34 (3d Cir.1992).
While the doctrine of functionality facilitates the copying of functional ideas, behavior which might appear to some to be unattractive, copying furthers competition that is key to our chosen economic system, a system which does not leave room only for conduct that is genteel. Indeed, the Supreme Court has observed that the limited time periods given to patentees by the Constitution and our patent laws create “a federal right to copy and to use.” Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 165, 109 S.Ct. 971, 985, 103 L.Ed.2d 118 (1989). Judge Medina once reflected on the harshness of our system’s practice of allowing copying of that which is in the public domain, even when such copying results in one party benefiting from the labor of another:
[A]t first glance it might seem intolerable that one manufacturer should be allowed to sponge on another by pirating the product of years of invention and development without license or recompense and reap the fruits sown by another. Morally and ethically such practices strike a discordant note. It cuts across the grain of justice to permit an intruder to profit not only by the efforts of another but at his expense as well.
But this initial response to the problem has been curbed in deference to the greater public good. For imitation is the life blood of competition. It is the unimpeded availability of substantially equivalent units that permits the normal operation of supply and demand to yield the fair price society must pay for a given commodity. Unless such duplication is permitted, competition may be unduly curtailed with the possible resultant development of undesirable monopolistic conditions. The Congress, realizing such possibilities, has therefore confined and limited the rewards of originality to those situations and circumstances comprehended by our patent, copyright, and trade-mark laws. When these statutory frameworks are inapplicable, originality per se remains unprotected and often unrewarded. For these reasons and with these limitations the bare imitation of another’s product, without more, is permissible. And this is true regardless of the fact that the courts have little sympathy for a wilful imitator.
American Safety Table Co. v. Schreiber, 269 F.2d 255, 271-72 (2d Cir.), cert. denied, 361 U.S. 915, 80 S.Ct. 259, 4 L.Ed.2d 185 (1959).
The doctrine of functionality is well established and has long been applied, drawing its strength from constitutional underpinnings. Article I, section 8, clause 8 of the U.S. Constitution empowers Congress, “To Promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” This formulation, stressing the limited time for which rights in discoveries are to be secured, was a direct response to the long history of British grants of private monopolies. The doctrine of functionality furthers this constitutional value, as well as conforming trademark law to Congress’ statutory scheme set forth to govern patents. As the Supreme Court has explained, patent law has three goals:
First, patent law seeks to foster and reward invention; second, it promotes disclosure of inventions to stimulate further innovation and to permit the public to practice the invention once the patent expires; third, the stringent requirements for patent protection seek 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, 99 S.Ct. 1096, 1099, 59 L.Ed.2d 296 (1979). Two of these — the preservation of free use of functional ideas in the public domain and the passage of technology to the public sphere upon a patent’s expiration — are potentially at odds with trademark law. Only through strict observation of the doctrine of functionality may the courts avoid frustration of the congressional policies underlying patent law, which provides for the passage of utilitarian product features into the public realm within a set time frame. Patent law was intended by .Congress to be the sole source of protection for functional features. The three other areas of intellectu*1104al property law — trademark, copyright, and design patent — share the basic policy of the functionality doctrine: that the public interest in free competition prohibits functional or utilitarian product features from achieving protection beyond that offered by the patent laws. 1 Jerome Gilson, Trademark Protection and Practice § 2.14 (1993).
Three major Supreme Court eases have articulated the constitutional policy of denying perpetual protection to functional innovations, Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 84 S.Ct. 784, 11 L.Ed.2d 661 (1964), Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234, 84 S.Ct. 779, 11 L.Ed.2d 669 (1964), and Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 109 S.Ct. 971, 103 L.Ed.2d 118 (1989). In each of these cases the Court invalidated state-created grants of perpetual protection to functional designs under state unfair competition law, holding such grants inconsistent with the Supremacy Clause because of the manifested congressional intent to limit protection of such inventions to those protections provided in the patent law. Although the Sears-Compco-Bonito Boats trilogy does not directly control this case, it stands for the general principle that there is a strong federal policy against granting perpetual private rights in functional designs. In passing the Lanham Act, Congress intended neither to repudiate this policy nor to disturb the traditional exclusion from trademark protection of functional features.
Guidance in the inquiry into the bounds of the functionality doctrine is found in the fundamental theory underlying trademark protection. The presumption is that everyone has the right to use expressions, though Congress may grant a monopoly over particular usages to encourage trade. In re Deister Concentrator Co., 289 F.2d 496, 501-02 (C.C.P.A.1961). The fundamental goals of the Lanham Act are in no way compromised by its recognition of the doctrine of functionality. Those goals are explicitly stated by the Act:
The intent of this Act is to regulate commerce within the control of Congress by making actionable the deceptive and misleading use of marks in such commerce; to protect registered marks used in such commerce from interference by State, or territorial legislation; to protect persons engaged in such commerce against unfair competition; to prevent fraud and deception in such commerce by the use of reproductions, copies, counterfeits, or colorable imitations of registered marks; and to provide rights and remedies stipulated by treaties and conventions respecting trademarks, trade names, and unfair competition entered into between the United States and foreign nations.
15 U.S.C.A. § 1127. These goals were restated by the Supreme Court in Park ‘N Fly, Inc. v. Dollar Park and Fly, Inc., 469 U.S. 189, 105 S.Ct. 658, 83 L.Ed.2d 582 (1985):
The Lanham Act provides national protection of trademarks in order to secure to the owner of the mark the goodwill of his business and to protect the ability of consumers to distinguish among competing producers. See S.Rep. No. 1333, at 3, 5. National protection of trademarks is desirable, Congress concluded, because trademarks foster competition and the maintenance of quality by securing to the producer the benefits of good reputation. Id., at 4. .
469 U.S. at 198, 105 S.Ct. at 663.
The incontestability rights created by the Lanham Act are intended only to further these goals. Incontestability increases a producer’s certainty that it will be able to retain the benefits of the good reputation it builds for itself, and thereby promotes the Lanham Act’s fundamental goal of fostering competition. Id. (discussing relevant statutory history). The purpose of incontestability is to “provide a means for the registrant to quiet title in the ownership of his mark.” Id. This property metaphor is a common one, with incontestability often being compared to adverse possession — both establish title through lack of opposition. The failure to contest ownership waives an attack on title to real property; it does not, however, create property in that which is not subject to ownership. By the same token, the fact that title in a trademark is quieted does not imply that the value of that title has somehow increased. If title to a trademark was useless at the *1105outset, as is title to a trademark in a functional feature, it remains so even if conclusively established.
Ill
The well supported findings of the district court may be summarized to conclude that the appearance of the Shakespeare rod resulted solely from the natural appearance of materials assembled for the purpose of providing a lighter and stronger fishing rod. The invention was to attach a clear fiberglass tip to a hollow graphite base — with materials selected for their function and not appearance. Consistent with the natural appearance of the materials — fiberglass (a whitish translucence) and graphite (an opaque charcoal gray) — Shakespeare’s trademark claims exclusive right to sell a rod that has a “whitish, translucent” tip and any “opaque” base. Thus, when Silstar manufactured a rod, assembling the same materials for the same functional purpose, Shakespeare brought suit even though Silstar left the materials in their original appearance and used the least expensive method of manufacture. It is uncon-trovertible that this appearance is nothing more than a manifestation of the product’s functional design, as found by the district court.
There are at least three different ways in which the two-tone appearance feature in which Shakespeare claims its trademark is functional: (1) it is uniquely effective in communicating to the public that high-quality materials, fiberglass and graphite, are included in the product; (2) it is the cheapest form in which the product may be produced (additional expense is involved in disguising the product’s natural appearance, as the district court found as a fact); and (3) its appearance is the natural byproduct of a strong, light, and efficient design chosen for practical, not aesthetic, reasons. Each aspect alone would leave the appearance unprotectable. See, e.g., W.T. Rogers Co. v. Keene, 778 F.2d 334, 339 (7th Cir.1985) (“a functional feature is one which competitors would have to spend money not to copy but to design around_”); Schwinn Bicycle Co. v. Ross Bicycles, Inc., 870 F.2d 1176, 1189 (7th Cir.1989) (same); Best Lock Corp. v. Schlage Lock Co., 413 F.2d 1195, 1199 (C.C.P.A.1969) (“It is settled law that a configuration of an article cannot be registered as a trademark if the purpose of the configuration is to contribute functional advantages to the article in which it is embodied or if the configuration results from functional considerations.”)
The Court of Customs and Patent Appeals has decided a case analogous to this one, involving whether a design consisting of the even application of a reflective substance to the tips of fenceposts could constitute a trademark or was barred from such recognition by its functionality. While the applicant argued that other manufacturers could easily make use of this technology while distinguishing their posts by applying the reflective substance in a distinctive pattern (such as a spiral), this argument was soundly rejected:
Here we have appellant’s admission that reflective coating on the top of a fence post is functional.
Here we have the ultimate contention that all appellant relies on for registrability in this case is the distinctiveness of its “design.” The short answer is that there is no design. While the argument recites a number of possible arbitrary designs, appellant’s own design is chimerical. The solicitor’s brief contains a very practical answer to this argument, of which we approve, and which occurred to us independently, as follows:
In this case, a simple method of applying the functional reflective coating to the functionally designed metal post is to suspend the post top-downwards and dip it into the coating supply. This method of coating will inevitably produce the coating design shown in appellant’s drawing. To permit appellant to assert trademark rights in its alleged mark would clearly have the effect of unjustifiably giving appellant a perpetual monopoly on the simplest and cheapest use of a simple process of applying a functional reflective coating to a functionally designed metal fence post.
In re Pollak Steel Co., 314 F.2d 566, 570 (C.C.P.A.1963).
*1106The majority opinion would not appear to take issue with the conclusion that Shakespeare’s mark is functional. Indeed, it appears to embrace it, concluding only that functionality is not a statutory ground for cancellation. “Functionality is not one of such grounds [statutorily given for cancellation] and it may not be used as a basis for cancellation of a registration more than five years old.” Majority at 1097.
IV
The majority’s focus on cancellation diverts attention to a non-determinative issue— whether the scope of the federal courts’ power to cancel registrations is coterminous with that of the patent office. The federal courts are granted broad equitable powers over trademark registrations by 15 U.S.C. § 1119:
In any action involving a registered mark the court may determine the right to registration, order the cancellation of registrations, in whole or in part, restore canceled registrations, and otherwise rectify the register with respect to the registrations of any party to the action. Decrees and orders shall be certified by the court to the Commissioner, who shall make appropriate entry upon the records of the Patent and Trademark Office, and shall be controlled thereby.
The majority cites many authorities for the proposition that this authority granted the courts is concurrent with that of the patent office. This may well be true as a general matter, but the present case involves a claim that that office has attempted an act beyond its power and undertaken actions repugnant to federal policy as expressed by the Constitution and statutory enactments. None of the authorities cited deals with such a situation, rendering their broad statements dicta insofar as they are phrased to seem relevant to this very different situation.
That the federal courts, in enforcing a trademark, are allowed to assess independently whether that trademark is permissible as a matter of law seems to me to flow from the judicial power described in Marbury v. Madison, 5 U.S. (1 Cranch) 137, 2 L.Ed. 60 (1803). As important, the doctrine of functionality, which goes to the question of whether an enforceable trademark ever existed, was never rejected by the Lanham Act. On the contrary, it is tacitly embraced, and every court that has considered the doctrine has so assumed. To conclude otherwise would imply that Congress intended to alter the underlying constitutional policies of restricting monopolies on function to promote copying and competition.
Whether this court should order cancellation of the plaintiffs trademark on the grounds of functionality is a secondary, not a dispositive, question. Even if the registration is allowed to stand, that does not preclude us from denying enforcement of a mark when such enforcement would be repugnant to the policies embodied in this nation’s laws. I would affirm the district court’s judgment on the grounds that because of its functionality, Shakespeare’s trademark cannot be enforced.
For the reasons given, I respectfully dissent.