Court Opinion

ID: 27210
Source: CourtListenerOpinion
Date Created: 2010-04-25 09:05:51+00
Date Added: 2024-06-11T09:38:27.751194
License: Public Domain

UNITED STATES COURT OF APPEALS
                         FOR THE FIFTH CIRCUIT

                               No. 00-60875

                     EPPENDORF-NETHELER-HINZ GMBH,

                               Plaintiff - Appellee - Cross-Appellant,

                                     v.

                 RITTER GMBH; RK MANUFACTURING, INC.,
                          Defendants - Appellants - Cross-Appellees.

                               No. 01-60658

                     EPPENDORF-NETHELER-HINZ GMBH,
                                               Plaintiff - Appellee,

                                     v.

                 RITTER GMBH; RK MANUFACTURING, INC.,
                                            Defendants - Appellants,

           Appeals from the United States District Court
              for the Southern District of Mississippi

                              April 22, 2002

Before JONES and DeMOSS, Circuit Judges, and FELDMAN,1 District
     Judge.

EDITH H. JONES, Circuit Judge:

      1
            United States District Judge of the Eastern District of Louisiana,
sitting by designation.
           Defendants-Appellants Ritter GMBH and RK Manufacturing,

Inc., appeal the district court’s judgment that they infringed upon

Eppendorf-Netheler-Hinz GMBH’s trade-dress rights in violation of

the Lanham Act, 15 U.S.C. § 1125(a).           For the reasons discussed

below, we conclude that Eppendorf failed to carry its burden of

proof on the issue of non-functionality, and reverse the judgment

of the district court.

                             I. BACKGROUND

           Eppendorf is a German company which manufactures medical

and laboratory equipment.      At issue in this case is Eppendorf’s

line of disposable pipette tips2 and dispenser syringes capable of

accurate and rapid “multiple dispensing” of liquids.          Eppendorf’s

disposable pipette tips are sold in the United States marked with

the word-marks “COMBITIPS,” “EPPENDORF” and “EPPENDORF COMBITIPS”

(hereinafter referred to as “Combitips”).         Eppendorf manufactures

eight Combitip sizes, from .05 milliliters to 50 milliliters.           All

eight sizes are designed to fit into the “Combitip Dispenser

Syringe”. By attaching a Combitip to the dispenser syringe, a user

can rapidly dispense liquids in precisely measured aliquots.

           Ritter   is   a   German       manufacturer   specializing    in

injection-molded plastic products.           In the early 1990s, Ritter

      2
            Pipette tips attach to dispenser syringes, and are frequently
replaced to avoid contamination.   Pipette tips are commonly known in the
marketplace as “tips”.

                                      2
began manufacturing disposable pipettes virtually identical to the

Combitips.     At that time, there was a large American market for

disposable pipettes, and the market was dominated by Eppendorf.3

Ritter, through its American distributor, RK Manufacturing, Inc.,

entered the American market in March of 1994.           Ritter’s disposable

pipettes were marked with the word-mark “RITIPS” (hereinafter

“Ritips”) and distributed in boxes marked with Ritips and Ritter’s

name.    Ritter also introduced its own dispenser syringe, known in

the market as the “Ripette”.        However, the Ritips were compatible

with Eppendorf’s Combitip Dispenser Syringe, and the Ritips were

marketed as a “direct replacement” for Combitips.              Ritter priced

its Ritips below Eppendorf’s Combitips in an attempt to acquire

market share from Eppendorf.

            In June of 1998, Eppendorf filed suit in the Eastern

District of New York against Ritter and RK, asserting various

trademark and trade dress infringement claims under § 43(a) of the

Lanham Act, 15 U.S.C. § 1125(a).           Eppendorf’s suit was transferred

to the Southern District of Mississippi.             Eppendorf alleges that

Ritter    infringed    on   its   trade      dress   rights   by   “slavishly

mimick[ing]” the design and trade dress of the “entire family of

Eppendorf [Combitips].”       Second Amended Complaint at 6.        Eppendorf

      3
            According to the trial testimony, Eppendorf had sold over 10 million
Combitips in the United States by 1989. Over the past 20 years, Eppendorf has
sold almost 150 million Combitips.

                                       3
contends    that   Ritter     infringed     upon   eight    elements   of    the

Combitips’s trade dress: (1) the flange on top of the tip; (2) the

fins connecting the flange to the body of the tip; (3) the plunger

head; (4) the plunger; (5) the length of the tips; (6) the eight

sizes of the tips; (7) the coloring scheme on the tips; and (8) the

angle of the stump on the tips.             Eppendorf also contends that

Ritter willfully and intentionally infringed upon its trade dress

rights.

            In June of 2000, Eppendorf’s claims were tried before a

jury in the Southern District of Mississippi.              The jury returned a

verdict for Eppendorf, finding that Ritter and RK infringed upon

Eppendorf’s trade dress rights.           The jury also determined that

Ritter and RK willfully violated Eppendorf’s trade dress rights by

marketing the Ritips with an intent to confuse or deceive.                  The

jury awarded Eppendorf $750,000 in lost profits and $250,000 in

lost licensing fees. The district court entered final judgment for

Eppendorf for $1,000,000 in damages awarded by the jury, and an

additional $750,000 in enhanced damages on the basis of the jury’s

finding    of   willful     infringement.       The   district    court     also

permanently enjoined Ritter and RK from selling or marketing in the

United States dispenser syringes or syringes of “a confusingly

similar design” to Eppendorf’s syringes.

                                      4
            Ritter and RK now appeal. They contend, inter alia, that

Eppendorf failed to carry its burden of proving that the eight

elements are non-functional.       Eppendorf cross-appeals the district

court’s denial of its motion for attorneys’ fees and pre-judgment

interest.        For the reasons discussed below, we conclude that

Eppendorf failed to carry its burden of proving non-functionality

and find it necessary to reverse the judgment of the district

court.

                                II. DISCUSSION

                                      A.

            The Lanham Act, 15 U.S.C. § 1125(1), establishes a cause

of action for trade dress infringement.             “Trade dress” refers to

the design or packaging of a product which serves to identify the

product’s source.       Traffix Devices, Inc. v. Marketing Displays,

Inc., 523 U.S. 23, 28, 121 S. Ct. 1255, 1259 (2001).           The purpose of

trade dress protection, like trademark protection, is to “secure

the owner of the [trade dress] the goodwill of his business and to

protect the ability of consumers to distinguish among competing

products.”       Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763,

774, 121 S. Ct. 2753, 2760 (1992) (citation omitted).

            Trade dress protection, however, is not intended to

create patent-like rights in innovative aspects of product design.

Trade    dress    protection,    unlike    patent   law,   does   not   foster

                                      5
innovation         by     preventing     reverse    engineering    or     copying    of

innovative product design features.                 See J. THOMAS MCCARTHY, MCCARTHY

ON   TRADEMARKS   AND   UNFAIR COMPETITION, § 6:3 (4th ed. 2001) (“Unlike patent

law, the purpose of trademark and trade dress law is to prevent

customer confusion and protect the value of identifying symbols,

not to encourage invention by providing a period of exclusive

rights.”).              “Trade   dress    protection    must    subsist     with    the

recognition that in many instances there is no prohibition against

copying goods and products.”              Traffix, 523 U.S. at 29, 121 S.Ct. at

1260.        Therefore,          trade    dress    protection   extends     only     to

incidental, arbitrary or ornamental product features which identify

the source of the product.               If a product feature is functional, it

cannot be protected trade dress.                   Unless protected by patent or

copyright, functional product features may be copied freely by

competitors in the marketplace. Id. “Allowing competitors to copy

will have salutary effects in many instances. ‘Reverse engineering

. . . often leads to significant advances in technology.’”.                         Id.

(citing Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S.
141, 160, 109 S. Ct. 971 (1989)).

              The Lanham Act expressly limits the scope of trade dress

protection by providing that “the person who asserts trade dress

protection has the burden of proving that the matter sought to be

protected is not functional.”                     15 U.S.C. § 1125(a)(3).           The

requirement of non-functionality “prevents trademark law, which

                                             6
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.”                    Qualitex Co. v.

Jacobson Products Co., Inc., 514 U.S. 159, 164, 115 S. Ct. 1300,

1304 (1995).         “Protection of functional product features is the

province of patent law, which confers a monopoly over new product

designs for a limited time only, after which competitors are free

to copy at will.”             Abercrombie & Fitch Stores, Inc v. American

Eagle Outfitters, Inc., 280 F.3d 619, 640 (6th Cir. 2002) (citing

Qualitex, 514 U.S. at 164, 115 S. Ct. 1300).

                It is clear that functional product features do not

qualify for trade dress protection.                 However, the definition of

“functionality” has not enjoyed such clarity. See J. THOMAS MCCARTHY,

MCCARTHY   ON    TRADEMARKS   AND   UNFAIR COMPETITION, § 7:67 (4th ed. 2001)

(discussing the “plethora of definitions” for functionality).                     In

Traffix, the Supreme Court recognized two tests for functionality.

First,     the     Court      recognized   the    “traditional”    definition     of

functionality: “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 an article.’”

Traffix, 532 U.S. at 32, 121 S. Ct. 1255 (citations omitted). Under

this traditional definition, if a product feature is “the reason

the device works,” then the feature is functional.                 Id. at 34.   The

availability of alternative designs is irrelevant.                  Id. at 33-34.

                                           7
            In   addition      to    the    traditional       definition,        Traffix

recognized a second test for functionality: “a functional feature

is one the ‘exclusive use of which would put competitors at a

significant      non-reputation-related           disadvantage.’”         Id.    at    32

(quoting    Qualitex, 514 U.S.       at   165,    115 S. Ct. 1300).     This

“competitive necessity” test for functionality is an expansion of

the traditional test. Id.           The Court emphasized, however, that the

“competitive necessity” test is not “a comprehensive definition” of

functionality.       Id. at 33.      The primary test for functionality is

the    traditional    test,    and    there      is    no   need   to   consider      the

“competitive necessity” test where a product feature is functional

under the traditional definition.               Id. at 33-35.

            Eppendorf correctly argues that before Traffix, this

circuit had adopted a “utilitarian” test of functionality.                        Under

this    utilitarian     test,       “[t]he      ultimate      inquiry      concerning

functionality [] is whether characterizing a feature or configura-

tion as protected ‘will hinder competition or impinge upon the

rights of others to compete effectively in the sale of goods.’”

Sicilia Di R. Biebow & Co. v. Cox, 732 F.2d 417, 429 (5th Cir.

1984) (citation omitted); see also, Pebble Beach Co. v. Tour 18 I

Ltd., 155 F.3d 526, 537-38 (5th Cir. 1998); Sunbeam Products, Inc.

v. West Bend Co., 123 F.3d 246, 255 (5th Cir. 1997).                     This court’s

“utilitarian” test, with its focus on the ability of competitors to

                                            8
compete effectively in the marketplace, is virtually identical to

the    “competitive       necessity”       test   discussed     in    Traffix.

Accordingly, Traffix supersedes the definition of functionality

previously adopted by this court. The “utilitarian” test, although

still valid as a secondary test, is not a comprehensive definition

of functionality.         Traffix, 532 U.S. at 32-33.            In light of

Traffix, the primary test for determining whether a product feature

is functional is whether the feature is essential to the use or

purpose of the product or whether it affects the cost or quality of

the product.     Id.4

                                       B.

            The crucial issue presented by this appeal is whether the

eight design elements of the Eppendorf Combitips are functional as

a matter of law.        This case was tried in June of 2000, almost ten

months before the Supreme Court decided Traffix.                 The district

court,   correctly      applying   this     circuit’s   utilitarian    test   of

functionality, instructed the jury as follows:

      A design or characteristic is nonfunctional if there are
      reasonably effective and efficient alternatives possible.

      4
             This court noted in Sunbeam that the utilitarian definition of
functionality “lowers the threshold for trade dress protection.” 123 F.3d at 255
n.18. This broad definition of functionality is not consistent with the Court’s
recent discussion of functionality. The Court, in Traffix, cautioned against
“misuse or over-extension of trade dress [protection].” See Traffix, 532 U.S.
at 29, 121 S. Ct. 1255 (citing Wal-Mart Stores, Inc. v. Samara Brothers, Inc., 529
U.S. 205, 213, 112 S. Ct. 2753 (1992)). A product feature that satisfies the
traditional definition of functionality is not shielded from functional status
merely because the feature is not a competitive necessity.

                                       9
       Hence, a product’s trade dress is functional only, one,
       if competitors need to incorporate it in order to compete
       effectively because it is essential to the product’s use,
       or, two, if it significantly affects the cost or quality
       of the article.      A design is functional and thus
       unprotectable if it is one of a limited number of equally
       efficient options available to competitors and free
       competition would be significantly disadvantaged by
       according the design trademark protection.

Relying on this instruction, the jury determined that the Combitips

were    non-functional.         Ritter    and        RK   Manufacturing     moved     for

judgment as a matter of law on the issue of functionality, and the

district court denied the motion.

             “We review de novo the district court’s ruling on a

motion for judgment as a matter of law, applying the same legal

standards     at    the   trial      court.”         Flowers    v.    Southern     Reg’l

Physicians Serv., Inc., 247 F.3d 229, 235 (5th Cir. 2001).                             In

reviewing a motion for judgment as a matter of law, “we consider

all    of   the    evidence,    drawing        all    reasonable      inferences      and

resolving     all    credibility       determinations          in    the   light      most

favorable to the non-moving party.”                       Id. (citations omitted).

Judgment as a matter of law will only be granted where the facts

and    inferences     point    “so    strongly       and    overwhelmingly       in   the

movant's favor that reasonable jurors could not reach a contrary

conclusion.”        Omnitech Int'l, Inc. v. Clorox Co., 11 F.3d 1316,

1322 (5th Cir. 1994).

                                          10
             Eppendorf contends that the evidence supports the jury’s

finding   of    non-functionality    because          “[t]he   evidence   clearly

established that there were alternative designs to each of the

eight non-functional features.”           Appellee’s Brief at 20.         Indeed,

there is extensive testimony in the record regarding available

alternative designs for each of the eight elements.                 For example,

Eppendorf’s expert testified that the number of fins under the

flange “could be increased or decreased or their appearance could

be changed.”       Appellee’s Brief at 5.        Thus, Eppendorf argues that

the   fins   are    non-functional   because          alternative   designs    are

available to competitors in the marketplace.

             Eppendorf’s    argument,         while    consistent    with     this

circuit’s utilitarian definition of functionality, is unpersuasive

in light of the Court’s discussion of functionality in Traffix. As

explained above, the primary test for functionality is whether the

product feature is essential to the use or purpose of the product

or if it affects the cost or quality of the product.                In Traffix,

the Court      determined   that   the     dual-spring     design   on    a   wind-

resistant road sign was functional because the dual-spring design

“provides a unique and useful mechanism to resist the force of the

wind.” 532 U.S. at 33, 121 S.Ct. at 1262.            The Court rejected the

argument that the springs were non-functional because a competitor

                                         11
could use three or four springs which would serve the same purpose.

Id.    The Court explained,

      There is no need, furthermore, to engage, as did the
      Court of Appeals, in speculation about other design
      possibilities, such as using three or four springs which
      might serve the same purpose. . . . The dual-spring
      design is not an arbitrary flourish in the configuration
      of [the road sign]; it is the reason the device works.
      Other designs need not be attempted.

Id. at 33-34, 121 S.Ct. at 1261.        Accordingly, the design features

for which Eppendorf seeks trade dress rights are functional if they

are essential to the use or purpose of the Combitips or affect the

cost or quality of the Combitips.           The availability of alternative

designs is irrelevant.

            In this case it is undisputed that the Combitips’s fins

provide necessary support for the flange.               Without the fins, the

flange is subject to deformation.            The only testimony offered by

Eppendorf to prove non-functionality of the fins related to the

existence    of     alternative   design     possibilities.       Eppendorf’s

functionality expert testified that the appearance and number of

fins could be changed without affecting the function of the fins.

Eppendorf did not prove, however, that the fins are an arbitrary

flourish    which    serve   no   purpose    in   the   Combitips.    Rather,

Eppendorf’s experts concede that fins of some shape, size or number

are necessary to provide support for the flange and to prevent

deformation of the product.         Thus, the fins are design elements

                                      12
necessary to the operation of the product.5              Because the fins are

essential to the operation of the Combitips, they are functional as

a   matter   of   law,   and   it    is    unnecessary    to    consider   design

alternatives available in the marketplace. Traffix, 532 U.S. at 33-

34, 121 S. Ct. at 1261.

             Likewise, a careful review of the record demonstrates

that Eppendorf failed to prove that the remaining Combitip design

elements are unnecessary, non-essential design elements.                   It is

undisputed    that:   (1)   The     flange     is   necessary   to   connect   the

Combitip to the dispenser syringe; (2) The rings on the plunger

head are necessary to lock the plunger into a cylinder in the

dispenser syringe; (3) The plunger is necessary to push liquids out

of the tip, and the ribs on the plunger stabilize its action; (4)

The tips at the lower end of the Combitips are designed to easily

fit into test tubes and other receptacles; (5) The size of the

Combitip determines the dispensed volume, and size is essential to

accurate and efficient dispensing; (6) The color scheme used on the

Combitip - clear plastic with black lettering - enables the user

easily to see and measure the amount of liquid in the Combitip, and

black is standard in the medical industry; and (7) The stumps of

      5
            Additionally, Eppendorf’s experts concede that some of the suggested
alternative designs would slightly increase the cost of the product.        This
provides further support for the conclusion that the fins are functional under
the traditional definition of functionality.

                                          13
the larger Combitips must be angled to separate air bubbles from

the liquid and ensure that the full volume of liquid is dispensed.

Thus,   all    eight   design     elements     identified    by     Eppendorf   are

essential to the operation of the Combitips.

              Eppendorf’s theory of non-functionality focused on the

existence     of    alternative    designs.       Eppendorf’s       design   expert

summarized Eppendorf’s approach to functionality: “My conclusion

was that to achieve the same functional purpose, [the design

elements identified by Eppendorf] can be changed significantly,

considerably       without   affecting     the   overall    intended      purpose.”

Although alternative designs are relevant to the                  utilitarian test

of functionality, alternative designs are not germane to the

traditional test for functionality.                   Each of the eight design

elements identified by Eppendorf is essential to the use or purpose

of the Combitips, and are not arbitrary or ornamental                     features.

Therefore,     no   reasonable     juror      could    conclude    that   Eppendorf

carried its burden of proving non-functionality.

                                   CONCLUSION

              We conclude that Eppendorf failed to carry its burden of

proving non-functionality.           Therefore, pursuant to 15 U.S.C. §

1125(a)(3), Eppendorf is not entitled to trade dress protection

because the eight Combitip product features are functional as a

matter of law.         Accordingly, we REVERSE the judgment of the

                                         14
district court and RENDER judgment for Ritter and RK Manufacturing.

We likewise VACATE the injunction entered by the district court.

Eppendorf’s cross-appeal is DENIED.

                                15