Brunswick Corp. v. British Seagull Ltd.

• Citation: 35 F.3d 1527,32 U.S.P.Q.2d 1120
• Decision Date: 14 September 1994
• Docket Number: Nos. 94-1049,94-1050,s. 94-1049
• Parties: BRUNSWICK CORPORATION, Appellant, v. BRITISH SEAGULL LIMITED and Outboard Marine Corporation, Cross-Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Page 1527

35 F.3d 1527

32 U.S.P.Q.2d 1120

BRUNSWICK CORPORATION, Appellant, v. BRITISH SEAGULL LIMITED and Outboard Marine Corporation,

Cross-Appellants.

Nos. 94-1049, 94-1050.

United States Court of Appeals, Federal Circuit.

Sept. 14, 1994.

Rehearing Denied; Suggestion for Rehearing

In Banc Declined Oct. 24, 1994.

Timothy J. Haller, Niro, Seavone, Haller & Niro, Chicago, IL, argued for appellant. With him on the brief were John C. Janka and Michael P. Mazza; Raymond P. Niro, Samuel L. Alberstadt and Raymond P. Niro, Jr., of counsel.

Robert E. Clemency, Michael, Best & Friedrich, Milwaukee, WI, argued for cross-appellants. With him on the brief was Lee J. Geronime.

Before: MAYER, RADER, and SCHALL, Circuit Judges.

RADER, Circuit Judge.

The Mercury Marine division of Brunswick Corporation appeals the decision of the Patent and Trademark Office's Trademark Trial and Appeal Board (Board) sustaining Opposition Nos. 80,900 and 80,901. British Seagull Ltd. v. Brunswick Corp., 28 USPQ2d 1197 (TTAB 1993). The Board refused to register the color black as a mark for Mercury's outboard motors. Because the color black is de jure functional in this instance, this court affirms.

BACKGROUND

Mercury has manufactured and sold marine outboard engines for over thirty years. In 1962, Mercury introduced its first all black outboard engine. Since 1964, all Mercury outboard engines have been black. ^* In the last three decades, Mercury has spent over $100 million in advertising and generated $3 billion dollars in sales of its outboard motors. Some of Mercury's advertisements focused on Mercury's "all black" color. Mercury engines were not, however, the only black outboard engines on the market during that time. British Seagull Ltd., Sears, Roebuck & Co., and Outboard Marine Corp. also produced black engines or dark engines virtually indistinguishable from black.

On April 27, 1988, Mercury filed an application to register the color black for outboard engines on the Principal Register. Relying on 15 U.S.C. Sec. 1052(f) (Supp. V 1993), Mercury claimed that the color black, while not inherently distinctive, acquired secondary meaning and served as a trademark for Mercury's outboard engines. The Examining Attorney allowed the registration. British Seagull Ltd. and Outboard Marine Corp. (the opposers) filed Opposition Nos. 80,900 and 80,901. Upon motion of the parties, the Board consolidated the oppositions.

The Board considered the proposed mark's functionality:

[A]lthough the color black is not functional in the sense that it makes these engines work better, or that it makes them easier or less expensive to manufacture, black is more desirable from the perspective of prospective purchasers because it is color compatible with a wider variety of boat colors and because objects colored black appear smaller than they do when they are painted other lighter or brighter colors. The evidence shows that people who buy outboard motors for boats like the colors of the motors to be harmonious with the colors of their vessels, and that they also find it desirable under some circumstances to reduce the perception of the size of the motors in proportion to the boats.

British Seagull, 28 USPQ2d at 1199. The Board concluded that the color black, applied to the engines, is de jure functional because of competitive need.

The Board next ruled on evidentiary matters. The Board refused to consider materials which Mercury submitted to the Examining Attorney to show registrability under 15 U.S.C. Sec. 1052(f) because they were not part of the record in the inter partes opposition proceeding. The Board also denied the opposers' request to exclude some of Mercury's evidence: Harold Exhibit 5, DuCoty Exhibits 1 & 2, the Mantis survey, Mellenthien Exhibit 253, Piper Exhibits 2 through 6, and related testimony.

On the merits of distinctiveness, the Board held that Mercury did not show secondary meaning. Mercury presented, inter alia, a survey (the Mantis survey) in which 73% of the respondents associated black outboard engines with a single source. The Board found that this survey did not show that black was a source indicator for Mercury goods.

The Board also found that Mercury's use of black on outboard engines was not exclusive. Several of Mercury's competitors in the outboard market had engines colored black or dark colors easily perceived as black. Moreover, Mercury contributed to third party use of black on outboards by supplying an all black engine to an independent retailer for resale to the general public.

The Board concluded that Mercury's all black color for outboard engines was not registrable. Mercury appeals from the Board's decision holding that the color black applied to its engines is de jure functional and without secondary meaning. The opposers cross-appeal the Board's decision to admit Harold Exhibit 5, DuCoty Exhibits 1 & 2, the Mantis survey, Mellenthien Exhibit 253, and Piper Exhibits 2 through 6.

ANALYSIS

I. De jure Functionality

A.

A trademark is "any word, name, symbol, or device, or any combination thereof" used by a marketer "to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown." 15 U.S.C. Sec. 1127 (1988). A trademark protects only features which are not functional. Textron, Inc. v. United States Int'l Trade Comm'n, 753 F.2d 1019, 1024, 224 USPQ 625, 628 (Fed.Cir.1985). "In general terms, a product feature is functional if it is essential to the use or purpose of the article or if it affects the cost or quality of the article." 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). Such functional features cannot receive trademark protection.

Like any other mark, the use of color--if functional--cannot serve as a trademark. In re Owens-Corning Fiberglas Corp., 774 F.2d 1116, 1120-21, 227 USPQ 417, 419 (Fed.Cir.1985). When "the color applied to goods serves a primarily utilitarian purpose it is not subject to protection as a trademark." Id.

Functionality is a question of fact, In re Morton-Norwich Products, Inc., 671 F.2d 1332, 1340, 213 USPQ 9, 15 (CCPA 1982), and depends upon the totality of the evidence, Owens-Corning, 774 F.2d at 1120. A determination of functionality is reviewed for clear error. See Stock Pot Restaurant, Inc. v. Stockpot, Inc., 737 F.2d 1576, 1578, 222 USPQ 665, 666 (Fed.Cir.1984). This court does not reweigh the evidence to decide anew whether the applicant's mark is functional. See id. at 1579. Rather, this court "accept[s] the [Board's] factual findings unless they are clearly wrong." Id.

B.

Functionality reflects a tension between two fundamental principles of trademark law. See Morton-Norwich, 671 F.2d at 1336-37. On the one hand, "there exists a fundamental right to compete through imitation of a competitor's product, which right can only be temporarily denied by the patent or copyright laws." Id. at 1336. Because trademark protection is potentially perpetual in duration, protection of a functional trademark would defeat that fundamental right. On the other hand, the functionality doctrine also reflects the individual's right to protect symbols which identify the source of particular goods. Id. at 1337. In sum, the right to protect a product feature serving as a source indicator is limited by "the need to copy [articles which are not protected by patent or copyright], which is more properly termed the right to compete effectively." Morton-Norwich, 671 F.2d at 1339 (emphasis in original).

In balancing these two policies, this court acknowledges a distinction between de facto functional features, which may be entitled to trademark protection, and de jure functional features, which are not:

In essence, de facto functional means that the design of a product has a function, i.e., a bottle of any design holds fluid. De jure functionality, on the other hand, means that the product is in its particular shape because it works better in this shape.

In re R.M. Smith, Inc., 734 F.2d 1482, 1484, 222 USPQ 1, 3 (Fed.Cir.1984) (citations omitted) (quoting Morton-Norwich, 671 F.2d at 1338). Thus, merely labeling a design feature as functional will not necessarily defeat registrability. In re Teledyne Indus., Inc., 696 F.2d 968, 971, 217 USPQ 9, 11 (Fed.Cir.1982). Rather, de jure functionality rests on " 'utility,' which is determined in light of 'superiority of design,' and rests upon the foundation [of] ... 'effective competition.' " Morton-Norwich, 671 F.2d at 1340.

Contrary to Mercury's assertion, the test for de jure functionality does not involve inquiry into whether a particular feature is "essential" to compete at all:

If the feature asserted to give a product distinctiveness is the best, or at least one, of a few superior designs for its de facto purpose, it follows that competition is hindered. Morton-Norwich does not rest on total elimination of competition in the goods.

In re Bose Corp., 772 F.2d 866, 872, 227 USPQ 1, 6 (Fed.Cir.1985) (emphasis added).

In sum, the "crux" of the distinction between de facto and de jure functionality--determining eligibility for trademark protection or not--is a design's effect on competition. Morton-Norwich, 671 F.2d at 1341. Thus, the policies underlying the functional limitation on trademark protection explicitly invoke an inquiry into competitive fairness. Therefore, the Board did not err by basing its finding of de jure functionality on competitive need.

C.

Turning to the present case, the Board determined that "black, when applied to [Mercury's] outboard marine engines, is de jure functional because of competitive need." British Seagull, 28 USPQ2d at 1199. The color black, as the Board noted, does not make the engines function better as engines. The paint on the external surface of an engine does not affect its mechanical purpose. Rather, the color black...