Flexible Steel Lacing Company ('Flexco') and Conveyor Accessories Inc. ('CAI') are both companies that manufacture accessories and fittings for conveyor belts. Conveyor belts are constructed using pieces of rubber sheets that are held together, that eventually takes the form of an 'endless' belt. These rubber sheets are held together using belt fasteners. In this case, Flexco (the plaintiff) sued CAI (the defendant) citing that CAI had infringed Flexco's trademark registration that covers "a three-dimensional configuration of the curved beveled scalloped upper edge of a metal fastener,". Flexco brought in claims by citing:
- The Lanham Act, 15 U.S.C. §§ 1114 and 1125(a)
- Laws for unfair competition and trademark infringement
- The Illinois Uniform Deceptive Trade Practices Act, 815 ILCS 510/2.
The US Court of Appeals for the Seventh Circuit adjudicated upon the matter and affirmed the District Court's decision that the trade dress in question that was used for fastening rubber splices in conveyor belts would be invalid since it has utilitarian advantages and was functional in nature (Flexible Steel Lancing Co. v Conveyor Access Inc. 955 F.3d 632 (7th Cir 2020)). The bench arrived at this judgement by drawing inferences from Flexco's documents pertaining to the advantages revealed in patents, advertising records and, internal corporate communications. The below attached are diagrams of Flexco's belt fastener:
CAI contended at the District Court that the trade dress should be deemed to be invalid since the concave shaped "bevelled scallop" was a feature that was functional in nature. Thus, CAI filed a motion for a summary judgement. Subsequently, the District Court concurred with CAI's argument. It was noted by the District Court that upon examining the advertising records, Flexco's patent related documents (more specifically, the declarations that were conveyed to the USPTO) and internal communications, it was revealed that the belt fastener (especially its concave bevelled scallop) did have utilitarian advantages and that it played a functional role in the conveyer belt. Following this, Flexco appealed to the District Court to examine the existence of alternatives to the concave bevelled scallop. However, the District Court stated that the existence of alternatives to the concave bevelled scallop did not bring in any "material issues of fact" since the shape was functional in nature.
The second leg of this case deals with Flexco's appeal at the US Court of Appeals for the Seventh Circuit. Upon Flexco's appeal, the Seventh Circuit affirmed the District Court's decision. The Seventh Court elucidated that typically, a trade dress or a mere product feature would be considered as functional and thus, unprotectable if "it is essential to the use or purpose of the article or it if affects the cost of quality of the article." This means that if a particular feature of an article serves a functional purpose and is not just merely ornamental, it is unprotectable. The Court was of the opinion that utility patents may provide strong evidence to indicate the functionality of a particular feature. To this, Flexco argued that in the utility patents, only the functional features of the convex portions of the belt fastener (refer to label 88, figure 1) were revealed and not the functional features of the concave parts of the fastener (Refer to label 90, figure 1). However, the Court repudiated this argument. The Court further elaborated by stating that the utility patent revealed otherwise. It was noted by the Court that the utility patent made it abundantly clear that the "leading edge" of the fastener (note that, the leading edge includes both convex and concave shaped parts of the scalloped edge), plays a pivotal and functional role by improving the bite and profile of the fastener.
Furthermore, Flexco argued that the utilitarian advantages mentioned in the utility patent only concern the "two-rivet fasteners". The Court rejected this argument by stating that the sketches in the trademark registration papers did not restrict the trade dress to a fixed number of rivets. To this, Flexco contended that the primary motive behind affixing the concave beveled scallop was to "accommodate the two-rivet fastener's installation tool". The Court rejected this argument too stating that the utility patent releveled that the concave scallop had functional features (that included improving the fastener bite and profile, as stated earlier).
To further reaffirm the District Court's decision, the Seventh Circuit now examined Flexco's advertising records. The advertising documents explicitly state the utilitarian advantages of the bevelled scallop. It was stated in the records that the concave bevelled scallop had primarily three functional purposes:
(1) That it enabled the fastener to "interface seamlessly with belt cleaners, pulley lagging and other conveyor components;"
(2) "reduced hang-ups on cleaners, pulleys, etc." and
(3) "contributed to improved fastener profile resulting in increased compatibility with belt cleaners, and improved cleaner-tip wear."
To this, Flexco defended by stating that the aforementioned functional purposes were only applicable to the convex parts of the scalloped edge and not the concave parts. However, the Court examined the company's internal communications via email evidence, that stated otherwise. The Court referred to emails sent by the company's engineering manager which evidently stated that "the main purpose of the scalloped edge will be to prevent fasteners from getting scraped off by the cleaner". Furthermore, a confidential memo signed by Flexco's vice president of engineering indicated that the scallop edged fastener would perform much more efficiently than a straight edge fastener. It was noted by the Court that all the evidences referred to the scalloped edge as a whole and did not differentiate between the convex and concave parts of the fastener. The Court also noted that during the prosecution of its trademark application, Flexco made statements implying that the concave bevelled scallop had utilitarian features.
All the pieces of evidence at hand explicitly conveyed that the concave bevelled scallop carried functional features. However, Flexco further argued that the summary judgement was ambiguous and improper. They contended that this was because CAI did not provide any evidences indicating that the utilitarian advantages could not be imparted by other designs. The Court declined this argument. The Court explained that since CAI has already provided evidence indicating that Flexco's trade dress had utilitarian advantages and functional purposes, the onus of proving otherwise shifts to Flexco. This means that, Flexco had to prove if the trade dress in question was merely an ornamental aspect pertaining to the fastener. However, Flexco could not prove this.
Finally, Flexco contended that CAI's fastener that had a "flat-bottomed trapezoid-shaped notch" worked as efficiently as Flexco's concave bevelled scallop. In reply to this, the Court expounded that once functionality has been established, considering evidences of alternative designs is redundant. Thus, Flexco's belt fastener trade dress was considered to be invalid since it served a functional purpose.
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