Traffix Devices, Inc. v. Marketing Displays, Inc.

532 U.S. 23 (2001)

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Nature of the Case

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Facts

Sarkisian obtained two utility patents for a mechanism built upon two springs (the dual-spring design) to keep outdoor signs upright despite adverse wind conditions. Those patents are now expired. Marketing Displays, Inc. (P), established a successful business in the manufacture and sale of sign stands incorporating the patented feature and claims that its road signs were recognizable to buyers and users because the dual-spring design was visible near the base of the sign. After the patents expired, TrafFix Devices, Inc., (D) sold sign stands with a visible spring mechanism that looked like P's. D merely reversed engineered P's product and produced the exact same sign and to make matters worse, used the name WindBuster while P's product was called Windmaster. P sued under the Trademark Act of 1964 (Lanham Act) for trademark infringement (based on the similar names), trade dress infringement (based on the copied dual-spring design) and unfair competition. D counterclaimed on antitrust theories. P prevailed on its trademark claim for the confusing similarity of names and was held not liable on the antitrust counterclaim. The District Court ruled against P on its trade dress claim. It held that 'no reasonable trier of fact could determine that P has established secondary meaning' in its alleged trade dress. Consumers did not associate the look of the dual-spring design with P. The District Court also determined that the dual-spring design was functional. Based on this finding of functionality, secondary meaning becomes irrelevant because there can be no trade dress protection in something that is functional. Summary judgment was entered against P on its trade dress claims. The court held that the burden was on P to prove that its trade dress was nonfunctional. The Court of Appeals for the Sixth Circuit reversed. The Court of Appeals suggested the District Court committed legal error by looking only to the dual-spring design when evaluating P's trade dress. The Court of Appeals explained that 'if D or another competitor chooses to use P's dual-spring design, then it will have to find some other way to set its sign apart to avoid infringing P's trade dress.' The court reasoned that exclusive use of a feature must `put competitors at a significant non-reputation-related disadvantage' before trade dress protection is denied on functionality grounds. Qualitex Co. v. Jacobson Products Co., 514 U. S. 159, 165 (1995). The Court of Appeals took note of a split among Courts of Appeals in various other Circuits on the issue whether the existence of an expired utility patent forecloses the possibility of the patentee's claiming trade dress protection in the product's design. The Supreme Court granted certiorari.