United States: A Case To Study On Patent And Trade Dress Protection

Last Updated: September 26 2014
Article by Anthony V. Lupo, Luna M. Samman and Yelee Y. Kim

The Fourth Circuit in McAirlands Inc. v. Kimberly-Clark Corp. recently held that ownership of a utility patent does not necessarily preclude a claim in trade dress rights, particularly where the patent does not specifically cover the asserted trade dress. Remanding the district court's decision granting summary judgment to Kimberly-Clark, the Fourth Circuit held that, although plaintiff McAirlaids owned a utility patent, this fact alone was not sufficient to warrant a finding that its textile pattern was functional and, therefore, not eligible for trade dress protection.

McAirlaids produces a textile material marketed under the brand "Airlaid," that is made from shredded cellulose fiber and used in various absorbent goods such as medical supplies, hygiene products, and food packages. The process to make the Airlaid textile, which involves passing sheets of fluff pulp through steel rollers at a high pressure, imprints an embossed dot pattern on the textile. McAirlaids owns two utility patents for the process of making the Airlaid textile, along with a federal trademark registration for the embossed dot pattern.

Kimberly-Clark, which also manufactures absorbent products, began to use a similar embossed dot pattern on its GoodNites bed mats, prompting McAirlaids to file suit for trademark infringement. Kimberly-Clark filed a motion for summary judgment asserting that, because McAirlaids' dot pattern was functional and therefore not entitled to trade dress protection, its infringement action should fail. The district court agreed and issued an order cancelling McAirlaids' federal registration.

McAirlaids appealed, arguing that in granting summary judgment to Kimberly-Clark, the district court misinterpreted the scope of its utility patents and failed to consider the remaining facts in the record. As set forth in Traffix Devices Inc. v. Marketing Displays Inc., a design that is "essential to the use or purpose of the article ... or affects the cost or quality of the article" is functional and cannot serve as a trademark. In determining functionality, courts look to a number of factors, including the existence of a utility patent, advertising touting the utilitarian features of a design, the effect of the design on manufacturing, and the availability of alternative designs.

While the Court recognized that a utility patent serves as strong evidence of functionality, McAirlaids successfully argued that, because its utility patents cover a process and not the specific embossed dot pattern, the patent should be afforded less weight in determining functionality. In light of the rebuttable presumption of nonfunctionality created by McAirlaids' federal registration for its dot pattern, the fact that the parties' products could incorporate different embossed patterns, and the existence of conflicting evidence as to functionality, the Fourth Circuit held that a genuine issue of material fact regarding functionality remained and that summary judgment was inappropriate.

This case highlights the intersection of patent and trade dress protection. While utility patents provide inventors a limited monopoly over functional aspects of a product, trade dress affords potentially perpetual protection for nonfunctional designs that associate a product with a manufacturer or source. Similarly, design patents protect the ornamental features of a design, but only for a period of 14 years. Although it is possible to protect the nonfunctional aspects of a design through trade dress or a design patent, claims made in a utility patent in some cases could have preclusive effects on asserting trade dress or design patent protection. Accordingly, prior to seeking intellectual property protection, companies should carefully consider which aspects of their product are functional and which aspects are nonfunctional. Once this analysis is conducted, companies should consider seeking trade dress and/or design patent protection relating to the nonfunctional aspects and utility patent protection relating to the functional aspects. Companies should be careful in how they characterize the functional aspects in their utility patent applications to avoid potential findings of functionality relating to aspects meant to be protected under trade dress or design patents.

In determining whether to seek trade dress and/or design patent protection, companies should be aware of several key differences between these IP schemes. Along with the duration of protection, the requirements for establishing design patent and trade dress rights are distinct. Trade dress protection requires proof of nonfunctionality and a showing that the design is inherently distinctive or that it has acquired distinctiveness through substantially exclusive use in commerce, that is, that consumers recognize the design as an indication of source. In contrast, acquired distinctiveness and use in commerce are not required for design patent protection; the design must be nonfunctional, novel and nonobvious. Depending on the nature of the design and whether or not it has been commercially used, a company may not be able to obtain protection under one or both of these schemes.

The enforcement of these rights also carries certain key distinctions. For example, trade dress infringement requires a showing of a likelihood of confusion as to source, sponsorship or affiliation, as determined by a balancing of factors such as the similarity of the designs and channels of trade. In contrast, the analysis for design patent infringement involves a side-by-side comparison between the figures in the patent and the allegedly infringing design to determine whether an ordinary observer, having knowledge of the prior art, would view the designs as substantially the same. Given this narrower comparison, it can be more difficult to succeed in a design patent infringement case, even where the overall look and feel of the designs is somewhat similar.

Companies developing a product may wish to obtain a design patent at the outset to establish early protection while establishing the acquired distinctiveness necessary for trade dress rights. However, if during this development, aspects of the design change, companies should be aware that the modified design may not necessarily be covered by the initial design patent or patent application. Companies should review existing design patents and patent applications to confirm that the modified designs are covered. If such new, modified designs are not covered in existing design patents or patent applications, one or more new applications can be filed to cover these new aspects. However, it should be noted that in some cases, a company's existing design patents could be used as prior art against a later-filed application directed to the modified design. Therefore, if a company comes up with an initial design but anticipates that modifications will be made to the design, it may be advisable to either wait until the design is finalized before filing a design application (if the modification will be made shortly after the development of the initial design), or, to the extent possible, file design applications initially including as many variations of the design as possible, including any anticipated modified designs.

* Originally published in Law360. To read the article at Law360, click here.

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