532 U.S. 23 (2001), 99-1571, Traffix Devices, Inc. v. Marketing Displays, Inc

Docket Nº:Case No. 99-1571
Citation:532 U.S. 23, 121 S.Ct. 1255, 149 L.Ed.2d 164, 69 U.S.L.W. 4172
Party Name:TRAFFIX DEVICES, INC. v. MARKETING DISPLAYS, INC.
Case Date:March 20, 2001
Court:United States Supreme Court

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532 U.S. 23 (2001)

121 S.Ct. 1255, 149 L.Ed.2d 164, 69 U.S.L.W. 4172

TRAFFIX DEVICES, INC.

v.

MARKETING DISPLAYS, INC.

Case No. 99-1571

United States Supreme Court

March 20, 2001

Argued November 29, 2000

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

Syllabus

Respondent, Marketing Displays, Inc. (MDI), holds now-expired utility patents for a "dual-spring design" mechanism that keeps temporary road and other outdoor signs upright in adverse wind conditions. MDI claims that its sign stands were recognizable to buyers and users because the patented design was visible near the sign stand's base. After the patents expired and petitioner TrafFix Devices, Inc., began marketing sign stands with a dual-spring mechanism copied from MDI's design, MDI brought suit under the Trademark Act of 1946 for, inter alia, trade dress infringement. The District Court granted TrafFix's motion for summary judgment, holding that no reasonable trier of fact could determine that MDI had established secondary meaning in its alleged trade dress, i. e., consumers did not associate the dual-spring design's look with MDI; and, as an independent reason, that there could be no trade dress protection for the design because it was functional. The Sixth Circuit reversed. Among other things, it suggested that the District Court committed legal error by looking only to the dual-spring design when evaluating MDI's trade dress because a competitor had to find some way to hide the design or otherwise set it apart from MDI's; explained, relying on Qualitex Co. v. Jacobson Products Co., 514 U.S. 159, 165, that exclusive use of a feature must put competitors at a significant non-reputation-related disadvantage before trade dress protection is denied on functionality grounds; and noted a split among the Circuits on the issue whether an expired utility patent forecloses the possibility of trade dress protection in the product's design.

Held:

Because MDI's dual-spring design is a functional feature for which there is no trade dress protection, MDI's claim is barred. Pp. 28-35.

(a) Trade dress can be protected under federal law, but the person asserting such protection in an infringement action must prove that the matter sought to be protected is not functional, 15 U.S.C. §1125(a)(3). Trade dress protection must subsist with the recognition that in many instances there is no prohibition against copying goods and products. An expired utility patent has vital significance in resolving a trade dress claim, for a utility patent is strong evidence that the features therein claimed are functional. The central advance claimed in the expired utility

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patents here is the dual-spring design, which is an essential feature of the trade dress MDI now seeks to protect. However, MDI did not, and cannot, carry the burden of overcoming the strong evidentiary inference of functionality based on the disclosure of the dual-spring design in the claims of the expired patents. The springs are necessary to the device's operation, and they would have been covered by the claims of the expired patents even though they look different from the embodiment revealed in those patents, see Sarkisian v. Winn-Proof Corp., 697 F.2d 1313. The rationale for the rule that the disclosure of a feature in a utility patent's claims constitutes strong evidence of functionality is well illustrated in this case. The design serves the important purpose of keeping the sign upright in heavy wind conditions, and statements in the expired patent applications indicate that it does so in a unique and useful manner and at a cost advantage over alternative designs. Pp. 28-32.

(b) In reversing the summary judgment against MDI, the Sixth Circuit gave insufficient weight to the importance of the expired utility patents, and their evidentiary significance, in establishing the device's functionality. The error was likely caused by its misinterpretation of trade dress principles in other respects. " 'In general terms 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 the article.' " Qualitex, supra, at 165 (quoting Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844, 850, n. 10). This Court has expanded on that meaning, observing that a functional feature is one "the exclusive use of [which] would put competitors at a significant non-reputation-related disadvantage," Qualitex, supra, at 165, but that language does not mean that competitive necessity is a necessary test for functionality. Where the design is functional under the Inwood formulation there is no need to proceed further to consider competitive necessity. This Court has allowed trade dress protection to inherently distinctive product features on the assumption that they were not functional. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 774. Here, however, beyond serving the purpose of informing consumers that the sign stands are made by MDI, the design provides a unique and useful mechanism to resist the wind's force. Functionality having been established, whether the design has acquired secondary meaning need not be considered. Nor is it necessary to speculate about other design possibilities. Finally, this Court need not resolve here the question whether the Patent Clause of the Constitution, of its own force, prohibits the holder of an expired utility patent from claiming trade dress protection. Pp. 32-35.

200 F.3d 929, reversed and remanded.

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Kennedy, J., delivered the opinion for a unanimous Court.

John G. Roberts, Jr., argued the cause for petitioner. With him on the briefs were Gregory G. Garre and Jeanne-Marie Marshall.

Deputy Solicitor General Wallace argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General Waxman, Assistant Attorney General Ogden, Jeffrey A. Lamken, Anthony J. Steinmeyer, and Mark S. Davies.

John A. Artz argued the cause for respondent. With him on the brief were John S. Artz, Robert P. Renke, and Lisa A. Sarkisian. [*]

Justice Kennedy delivered the opinion of the Court.

Temporary road signs with warnings like "Road Work Ahead" or "Left Shoulder Closed" must withstand strong gusts of wind. An inventor named Robert Sarkisian obtained two utility patents for a mechanism built upon two springs (the dual-spring design) to keep these and other outdoor signs upright despite adverse wind conditions. The holder of the now-expired Sarkisian patents, respondent Marketing Displays, Inc. (MDI), established a successful business in the manufacture and sale of sign stands incorporating the patented feature. MDI's stands for road signs were recognizable to buyers and users (it says) because the dual-spring design was visible near the base of the sign.

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This litigation followed after the patents expired and a competitor, TrafFix Devices, Inc., sold sign stands with a visible spring mechanism that looked like MDI's. MDI and TrafFix products looked alike because they were. When TrafFix started in business, it sent an MDI product abroad to have it reverse engineered, that is to say copied. Complicating matters, TrafFix marketed its sign stands under a name similar to MDI's. MDI used the name "WindMaster," while TrafFix, its new competitor, used "WindBuster."

MDI brought suit under the Trademark Act of 1946 (Lanham Act), 60 Stat. 427, as amended, 15 U.S.C. § 1051 et seq., against TrafFix for trademark infringement (based on the similar names), trade dress infringement (based on the copied dual-spring design), and unfair competition. TrafFix counterclaimed on antitrust theories. After the United States District Court for the Eastern District of Michigan considered cross-motions for summary judgment, MDI prevailed on its trademark claim for the confusing similarity of names and was held not liable on the antitrust counterclaim; and those two rulings, affirmed by the Court of Appeals, are not before us.

I

We are concerned with the trade dress question. The District Court ruled against MDI on its trade dress claim. 971 F.Supp. 262 (ED Mich. 1997). After determining that the one element of MDI's trade dress at issue was the dual-spring design, id., at 265, it held that "no reasonable trier of fact could determine that MDI has established secondary meaning" in its alleged trade dress, id., at 269. In other words, consumers did not associate the look of the dual-spring design with MDI. As a second, independent reason to grant summary judgment in favor of TrafFix, the District Court determined the dual-spring design was functional. On this rationale secondary meaning is irrelevant because there can be no trade dress protection in any event. In ruling on the functional aspect of the design, the District Court

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noted that Sixth Circuit precedent indicated that the burden was on MDI to prove that its trade dress was nonfunctional, and not on TrafFix to show that it was functional (a rule since adopted by Congress, see 15 U.S.C. § 1125(a)(3) (1994 ed., Supp. V)), and then went on to consider MDI's arguments that the dual-spring design was subject to trade dress protection. Finding none of MDI's contentions persuasive, the District Court concluded MDI had not "proffered sufficient evidence which would enable a reasonable trier of fact to find that MDI's vertical dual-spring design is non functional." 971 F. Supp., at 276. Summary judgment was entered against MDI on its trade dress claims.

The Court of Appeals for the Sixth Circuit reversed the trade dress ruling. 200 F.3d 929 (1999). The Court of Appeals held the District Court had erred in ruling MDI failed to show a genuine issue of material fact regarding whether it had secondary meaning in its alleged trade dress, id., at 938, and had erred further in determining...

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