TrafFix ruling on expired utility patent needs to be re-evaluated

In determining what constitutes product design and what does not, it has often been held that functional components of a product are not entitled to trade dress protection. This again came to the fore when the case arose in TrafFix Devices Inc. vs. Marketing Displays Inc. over whether an expired utility patent prohibits the patentee, or assignee, from asserting trade dress protection in the product configurations of the invention claimed in the expired patent.

After the circuits failed to arrive at a consensus, the Supreme Court based its decision on the functionality doctrine, which is now codified in the US Trademark (Lanham) Act. It held that a “utility patent is strong evidence that the features therein claimed are functional.” The onus lies on anyone who claims trade dress protection in an expired patent containing those features, to prove that they are not functional, but merely ornamental.

This decision led to yet another split in the lower courts over how it can be interpreted based on the functionality doctrine.

Post-TrafFix confusion

The TrafFix decision exposed a more fundamental design flaw in the functionality doctrine itself. It addressed only the effect an expired utility patent has on the functionality doctrine. Since the structure and function of the claimed invention would be protected in an expired utility patent, the TrafFix functionality doctrine does not appear to be opposing the view that there is a federal right to “copy and use” the inventions of expired patents.

However, the confusion arose when the Supreme Court held that anyone who claims trade dress protection must prove that the feature is “merely an ornamental, incidental, or arbitrary aspect of the device.”

Post-TrafFix, if an expired design patent claimed the ornamental aspects of a device, it could mean that the design patent would be proof of the non-functionality of the product configuration trade dress. If it is indeed so, then the TrafFix ruling is in direct opposition to the “copy and use” right. But if it is not, then there is an obvious flaw in the functionality doctrine, and it would not be able to resolve unavoidable conflicts between claims to product configuration trade dress protection in the ornamental aspects of a device and the inventions of expired design patents that claimed the same product features.

The Supreme Court did not address this issue in its TrafFix opinion, probably because the expired patent at issue was a utility, and not a design patent. However, it addressed the “right to copy” issue in more general terms, citing the Supreme Court’s decision in Bonito Boats Inc. vs. Thunder Craft Boats Inc., which held that “trade dress protection must subsist with the recognition that in many instances there is no prohibition in copying goods and products. Allowing competitors to copy will have salutary effects in many instances.”

The Supreme Court decided in the Wal-Mart vs. Samara Bros. case, that in a civil action for infringement of unregistered trade dress, product configuration trade dress will be distinctive, and therefore protectible, only upon a showing of secondary meaning.

Justice Scalia, writing for the court, partially answered the concerns of all device producers, inasmuch as the court found that there can never be inherently distinctive product configuration trade dress. He said: “Competition is deterred, however, not merely by successful suit but by the plausible threat of successful suit, and given the unlikelihood of inherently source-identifying design, the game of allowing suit based upon alleged inherent distinctiveness seems to us not worth the candle.”

Going by that, a producer who believes that his device has source-identifying product configuration trade dress, but does not wish to risk losing that in a race to secondary meaning with potential competitors, will ordinarily file a design patent application that claims the non-functional, ornamental features of the product configuration trade dress of the device. He will then have the 14-year term of the design patent within which he can claim exclusive rights to use the product configuration trade dress in the market, thereby preventing any competitors from vying for the secondary meaning slot.

In these 14 years, if he obtains secondary meaning with the aid of the design patent laws and seeks to either register it as a distinctive trademark, or to enforce its unregistered trade dress after the design patent expires, it is still very unclear about what should be the fair outcome. One of the following is, however, likely to happen:

(i) He will succeed both ways by arguing that its product configuration trade dress is non-functional under the post-TrafFix functionality doctrine and that is protectible wholly independently of the design patent laws;

(ii) He will fail under either option, because upon the expiry of the producer’s design patent, the federal patent laws gave rise to a federal right to “copy and to use” the claimed ornamental features of the device in favour of all other producers.

TrafFix should be re-evaluated

Despite the rule that functional features may not be the subject of trade dress protection, trade dress had practically become the equivalent of an expired design patent. Beyond that, it is perhaps time to re-evaluate the matter under the Patent Clause of the US Constitution. That is because the functionality doctrine, as per the TrafFix ruling, is inherently incapable of resolving the design patent issue.