Groeneveld Transport Efficiency, Inc. v. Lubecore International, Inc.
Breaking stride with several other appellate courts (including the U.S. Court of Appeals for the Federal Circuit), the U.S. Court of Appeals for the Sixth Circuit ruled that the competitive necessity test is only applicable in cases of "esthetic functionality," not in cases of utilitarian functionality, reversing a $1.2 million trade dress infringement jury award. Groeneveld Transport Efficiency, Inc. v. Lubecore International, Inc., Case Nos. 12-3545, -3576 (6th Cir., Sept. 12, 2013) (Gilman, J.) (White, J., dissenting).
Groeneveld is an American company that has made and sold automated lubrication services (ALS) devices, the primary component of which is a grease pump, for over 40 years. In the 1980s, Groeneveld began marketing its EP0 grease pump. Lubecore is, as the Court describes, "the new kid on the block," having been founded in Canada in 2007 by a former Groeneveld employee. In 2007 Lubecore designed a competitive grease pump, which Groeneveld recognized as a "virtual copy" of the Groeneveld EP0 grease pump, and began selling it in the United States in 2009.
Groeneveld filed suit in 2010 alleging that Lubecore's grease pump infringed Groeneveld's trade dress rights in the configuration of its EP0 pump. The complaint asserted Lanham Act claims of trade dress infringement, false advertising and unfair competition, and related state law claims. A seven-day jury trial was held in October 2011. After Groeneveld rested its case, Lubecore moved for judgment as a matter of law (JMOL) under Rule 50 of the FRCP. The Court granted Lubecore's motion with respect to all claims except for the trade dress infringement claim, which was submitted to the jury. The jury returned a verdict in favor of Groeneveld, finding willful trade dress infringement and awarding Groeneveld $1,225,000 in damages. This appeal followed.
In reversing the award and remanding the case for entry of judgment in favor of Lubecore on all claims, the 6th Circuit relied heavily on the Supreme Court's seminal TrafFix case, which previously reversed the Sixth Circuit in a trade dress infringement case. The 6th Circuit interpreted TrafFix as holding that "competitive necessity is an appropriate avenue of inquiry . . . only in cases of 'esthetic functionality,' not in cases of utilitarian functionality where a design is essential to the use or purpose of a device." Thus, the 6th Circuit rejected Groeneveld's evidence to the effect that none of its competitors other than Lubecore felt it necessary to make a similar-looking pump to perform the same function of delivering grease to a commercial truck engine as irrelevant to the central issue of "whether Groeneveld's design 'is essential to the use or purpose of the article or if it affects the cost or quality of the article.'" Finding Groeneveld's evidence on that score to be deficient, the 6th Circuit reversed the court's entry of judgment in favor of Groeneveld on its trade dress infringement claim.
Judge White, in dissent, disagreed with the majority and its interpretation of the holding in TrafFix. The dissent would have affirmed the award and the district court's judgment in favor of Groeneveld, asserting that TrafFix held only that the existence of alternative designs cannot by itself render a trade dress non-functional where it is otherwise functional, but not ruling out the relevance of such evidence to the determination of whether the design in question is in fact functional, citing decisions from a number of other appellate courts, including the Federal Circuit.
Practice Note: Other than avoiding courts in the 6th Circuit for your product configuration trade dress infringement case, Groeneveld's most significant lesson may be the importance in such a case of focusing the court's attention, for example with the testimony of an expert engineer or the like, on the specific features of a product that are not dictated by functional concerns.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
