MCAIRLAIDS, INC. v. KIMBERLY-CLARK CORP., NO. 13-2044

Decided: June 25, 2014

The Fourth Circuit held that a genuine issue of material fact existed for the jury to determine whether McAirlaids’ pixel pattern on absorbent pads was functional or merely an ornamental device.

McAirlaids, Inc., patented its manufacturing process for making absorbent pads, but it also registered its pixel pattern, which involved a repeating pattern of dots that fused the absorbent materials together, as trade dress with the U.S. Patent and Trademark Office.  McAirlaids initiated a suit against Kimberly-Clark Corp. after Kimberly-Clark began using a similar dot pattern on its absorbent bed mats, which are manufactured in a different way than McAirlaids’ pads.  The district court granted summary judgment to Kimberly-Clark on the issue of whether McAirlaids’ pixel pattern was functional, and thus not protectable as trade dress.

The Fourth Circuit emphasized that summary judgment is only appropriate when there is no genuine issue of material fact.  In this case, the Court addressed the issue of whether the pixel pattern used in the bonding process by McAirlaids for its absorbent pads was functional.  Functionality is generally a question for a jury.  In re Becton, Dickinson & Co., 675 F.3d 1368, 1372 (Fed. Cir. 2012); Clicks Billiards, Inc. v. Sixshooters, Inc., 251 F.3d 1252, 1258 (9th Cir. 2001).  Trademark law indefinitely protects designs that link a product with its manufacturer, TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, 28 (2001); whereas, patent law protects new product designs, or functions, for a limited time, Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 164 (1995).  The functionality doctrine promotes competition by preventing trademark law, which protects competition by protecting a firm’s reputation, from impeding competition by allowing the inventor to monopolize a useful product design or function.  Qualitex, 514 U.S. at 164.  The functionality doctrine has been incorporated into the Lanham Act.  15 U.S.C. § 1052(e).  Proof of a design element’s functionality is a complete defense in trademark-infringement cases.  Shakespeare Co. v. Silstar Corp. of Am., 9 F.3d 1091, 1102 (4th Cir. 1993).

The Fourth Circuit distinguished this case from TrafFix, where the U.S. Supreme Court reasoned that the design feature in question was “the reason the device works” and determined that the product design was functional based on evidence of other utility patents and evidence of the product designs functionality.  Id. at 33–34.   First, the burden of proof was different because in TrafFix the design element was not registered as a trade dress.  Additionally, the defending party had to show that the design element was nonfunctional under the Lanham Act.  15 U.S.C. § 1125(a)(3).  However, in this case, the design element was registered as a trade dress, which serves as prima facie evidence that the design element was nonfunctional.  15 U.S.C. § 1057(b); Christian Louboutin S.A. v. Yves Saint Laurent Am. Holdings, 696 F.3d 206, 224 (2d Cir. 2012).  The Court reasoned that this prima facie evidence caused a burden shifting effect, which required the challenging party to prove that the trade dress was invalid by a preponderance of the evidence.  Second, in TrafFix, the design element was protected under utility patents.  In this case, however, the Court noted that the process of manufacturing the absorbent pads was protected by patent, but the pixel design element was not.  “[T]he pattern is not the ‘central advance’ of any utility patent” as it was in TrafFix.  The Court determined that the patents were evidence of the pixel design element’s functionality, but they were not the “strong evidence” of the patents found in TrafFix.  Thus, the Fourth Circuit found that TrafFix was inapplicable to the facts in this case.

Next, the Fourth Circuit addressed the weight given to the facts in this case by the district court, holding that McAirlaids presented sufficient evidence to demonstrate a genuine issue of material fact regarding the functionality of the design element.  Reviewing the evidence in the light most favorable to McAirlaids as the nonmoving party, the Court assessed the design element’s functionality based on four factors: (1) the existence of utility patents; (2) advertising focusing on the utilitarian advantages of a design; (3) the availability of “functionally equivalent designs[;]” and (4) the effect of the design on manufacturing.  Valu Engineering, Inc. v. Rexnord Corp., 278 F.3d 1268, 1274 (Fed. Cir. 2002) (citing In re Morton-Norwich Prods., Inc., 671 F.2d 1332, 1340-41 (C.C.P.A. 1982)).  The Court reviewed the testimony of McAirlaids officials, who stated that the pixel pattern was picked for aesthetic reasons, and at evidence of a marketing campaign that described the “unique bonding pattern” as increasing absorbency.  Testimony also indicated that other patterns could have been chosen, though these patterns must fall within certain sizing and spacing specifications to be effective.  Ultimately, the Fourth Circuit reasoned that a jury would be the most appropriate way to decide the issue because determining the functionality of design element requires credibility determinations and the weighing of evidence.

Full Opinion

Verona Sheleena Rios

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