TrafFix Devices Inc. v. Marketing Displays Inc. – Oral Argument – November 29, 2000

Media for TrafFix Devices Inc. v. Marketing Displays Inc.

Audio Transcription for Opinion Announcement – March 20, 2001 in TrafFix Devices Inc. v. Marketing Displays Inc.

del

William H. Rehnquist:

We’ll hear argument now in Number 99-1571, Traffix Devices, Inc. v. Marketing Displays, Inc.–

Mr. Roberts.

John G. Roberts, Jr.:

Thank you, Mr. Chief Justice, and may it please the Court:

The president and founder of Marketing Displays, Incorporated, MDI, invented a new type of sign stand, one with a dual-spring design that allowed the stand to resist the wind.

MDI patented that invention and, for the term of its patents, MDI labeled its sign stands as patent-protected to warn of copiers, touted in its trade literature the benefit of its, quote, patented dual-spring design, end quote, and when another company, Windproof, tried to market a copy of MDI’s patented stand, MDI sued it for patent infringement and won.

But then MDI’s patents expired, as under the Constitution all patents eventually must.

Sometime thereafter, Traffix Devices, the petitioner, copied MDI’s stand, added some improvements of its own, and marketed a competing version.

No longer armed with its patents, MDI tried a new tack to exclude competition.

It claimed that the configuration of its stand, the same dual-spring design that it had touted as patent-protected during the term of the patents, was protected as trade dress and could not be copied.

Sandra Day O’Connor:

Mr. Roberts, how do we determine what the patent covers?

Does it… I mean, I can look at it, but I’m still not sure.

I think in the record, in the material here, we have a copy.

Does it include in this case the legs and the whole structure, or just the dual spring, and how do we normally determine what the patent covers?

John G. Roberts, Jr.:

Well, in this case, of course, it’s easy to determine that the patent covers this particular sign stand because MDI labeled that sign stand as patent-protected.

Sandra Day O’Connor:

The whole thing?

John G. Roberts, Jr.:

The whole sign stand, yes.

Sandra Day O’Connor:

Legs, spring, and all?

John G. Roberts, Jr.:

And all, but in its trade literature, for example, it focused on the dual-spring design.

That is what makes the invention work.

That’s what allows it to resist the wind, and it said, this is our patented dual-spring design and, of course, it not only labeled the stands but in its trade literature, and in the Windproof case it sued when somebody made an exact replica, the same replica that Traffix Devices–

Anthony M. Kennedy:

So under your view of the case, if the legs that the patentee had had a very special color, like the John Deere green or something, that could be copied after the patent ran?

Because I notice–

John G. Roberts, Jr.:

–Well–

Anthony M. Kennedy:

–in the pictures the legs were orange in your client’s stand and aluminum in the other.

John G. Roberts, Jr.:

–Well, incidental ornamentation that is not part of what the patent protects does not give rise to the right to copy.

There should be an exact symmetry.

Whatever the patent had protected as part of the patent bargain, the public has the right to copy.

Now, the color of the legs probably would not have been claimed in the patent, and wouldn’t have been part of the invention, and therefore it would not give rise to a right to copy that color.

Ruth Bader Ginsburg:

In any event, they’re different in this… if I’m looking at the right diagrams the… your client has a different… has the orange color.

John G. Roberts, Jr.:

Well, it depends on which stand is involved.

John G. Roberts, Jr.:

The steel stand is one color and the aluminum stand is another, but in terms of what they claimed in the patent as… the part that makes the invention work, it’s not the legs that made this invention.

It’s not the sign.

It is the dual-spring design.

That’s what they said was patented.

When they marketed this, when they had the exclusive right to do so, they focused on that in their trade literature, said this is our patented dual-spring design, and that is the same claim they now raise in their trade dress assertion.

Ruth Bader Ginsburg:

But Mr. Roberts, didn’t the court of appeals say, at least as I understood it to say, okay, the dual springs Traffix could have, but you have to devise some kind of other stand, curved legs, or a double stand.

I thought that’s–

John G. Roberts, Jr.:

It said we… it said we basically had to design around their stand.

Now, if they said, you could use three springs or four springs, I guess it would never end, five springs, or you could put a little skirt around the springs so people wouldn’t see them, or, as Your Honor points out, if you’re going to use the springs you have to change something else so it doesn’t look like it.

But that’s not what this Court’s cases have held.

What the Court has said, Singer and Kellogg and Sears, is that the public has the right to copy the patented invention in precisely the form in which it was practiced, and that’s critically important.

The idea of designing around what had previously been patented is a significant hindrance to competition, and this case is a good example.

When we copied the sign we added an important improvement of our own, the step-and-drop leg.

Under MDI’s stand you have to bend over and pull the pins out.

Under ours, you just step and the legs come out.

Now, if the rule were the rule that the respondents are arguing for, we would have had to add that new improvement to some different sign stand, but the right to copy attaches to the product as it was practiced during the term of the patent.

We don’t have to design around their superior stand… that’s why it succeeded in getting the patent… to add improvements of our own.

Sandra Day O’Connor:

–Does it depend in part on how we define functionality under the trade dress inquiry?

John G. Roberts, Jr.:

We think there is a freestanding right to copy from an expired patent, that it doesn’t depend upon what functionality is.

Sandra Day O’Connor:

And you think that there can never be a trade dress protection in some aspect of an expired patented item?

John G. Roberts, Jr.:

If the item was simply incidental ornamentation… one of their amici used the example, if you’re patenting a chair and the drawing shows a purple bow.

Well, we don’t think there’s a right to copy the purple bow, because the purple bow is not covered.

That’s not the invention.

Sandra Day O’Connor:

So there could be a trade dress in an expired patented item.

John G. Roberts, Jr.:

In the item itself, yes, but not in the subject of the patent.

Sandra Day O’Connor:

And I suppose that depends on how we define functionality, in a sense.

John G. Roberts, Jr.:

Functionality I think leads to the same place that we come to from looking at patent law, if you define functionality as it has traditionally been defined, as turning on usefulness.

If functional… if functional means useful, then our case comes out the same way, because you have to be useful to get a patent, and if it’s been the subject of a patent, the feature has been useful, therefore it’s functional, therefore it’s not eligible for trade dress protection.

Anthony M. Kennedy:

Justice O’Connor’s question suggests this to me.

You’re arguing for the rule that you maintain here so that you will not have to litigate functionality.

John G. Roberts, Jr.:

Exactly, and functionality–

Anthony M. Kennedy:

But why isn’t functionality sufficient protection, particularly in this case?

John G. Roberts, Jr.:

–Functionality is sufficient if functionality means useful, but if functionality means, as the lower court said in this case, something for which there is a competitive need, or for which there are not available alternatives, and there’s a multi-factor balancing test to determine so-called legal functionality–

Sandra Day O’Connor:

Well, I guess the court, the Sixth Circuit pulled that out of Qualitex’ opinion.

John G. Roberts, Jr.:

–Well, we–

Sandra Day O’Connor:

The competitive need.

John G. Roberts, Jr.:

–I don’t think Qualitex opined on the exact definition of functionality in this case, or it was misread by the lower court.

The definition in Qualitex had a very important connector there.

It said, a useful product feature, or, and then it went on to talk about competitive need, so–

Sandra Day O’Connor:

So as far as you’re concerned, if it’s useful, then it’s functional?

John G. Roberts, Jr.:

–Period, without regard to competitive need, available alternatives… MDI’s position is, look, you can make a sign that stands up to the wind that’s just as good as our sign stand, so don’t make it the way we made it, but the patent, the expired patent gives us the right to copy–

David H. Souter:

Well, it gives you… this… I think my question is related to Justice O’Connor’s, and this is a problem that I have in understanding, and maybe you can help me.

You have a right to copy the invention.

Does it follow that you have a right to copy the configuration that that invention took in the hands of the patent holder?

John G. Roberts, Jr.:

–I think Justice Brandeis’ opinion in Kellogg answers that.

Kellogg did not have to show that there was no way to make or sell shredded wheat other than in the pillow-shaped biscuit form that Nabisco had made famous when it had its patent.

It was enough that that was the form in which Nabisco had practiced its patent.

Kellogg therefore could copy it, even though they could have made shredded wheat some other way, and that’s important precisely because of the purpose of the patent bargain to promote competition.

As I said, why… if we have an improvement to this sign stand, the step-and-drop legs, why should we have to add it only to a very different sign stand?

It’s the commercially proven version that the public has the right to copy.

That is important to enhance competition.

To require people, if they’re going to make improvements, to design around the form that the public had become accustomed to, would inhibit competition, and–

Ruth Bader Ginsburg:

If we were dealing, Mr. Roberts, with just the patent law, that would be one thing and, as I understand it, although it’s confusing, the word useful is a patent term of art and functionality is a trade dress term of art, but you’re trying now to equate these two terms in answer to questions that you’ve had as one and the same, but they have different purposes, as I understand it, in the patent law, the idea of useful, trade dress, the idea of functionality.

You recite the old cases like Kellogg.

It’s been argued that on the trade dress side the law has evolved since those old cases, and it’s now, trade dress gets more protection.

John G. Roberts, Jr.:

–Yes.

You’re dealing with what is in the trade dress area essentially judge-made law, and it has expanded in various ways, and functionality… it doesn’t interfere with the patent bargain if functionality means a broad range of other things, but so long as it is also satisfied completely by a demonstration that it is a useful product feature.

There may be other limitations on a trade dress claim going to competitive need, available alternatives, any of the various multi-factor tests, but if functionality is going to serve the purpose of demarking the regime of trademark and trade dress and patent law, it must be satisfied by a showing that it is a useful product feature and in our case that’s significant, because you can’t get a utility patent as MDI had, without showing that it’s a useful product feature, so the fact that they had a utility patent, that it covered the dual-spring design, should be enough to establish functionality and therefore should be enough to reject their trade dress claim.

David H. Souter:

Do you agree that at least one basis on which we could decide this case would simply be on the basis of how expensive a concept of configuration trade dress we want, because if we take your position, configuration trade dress is going to be, at least in formally patented matters, a pretty narrow concept, and if we’re going to have coherence within the concept of configuration trade dress, we’re going to have to make it equally narrow.

I mean, we can’t have different functionality tests, I presume, and if on the other hand we find good reason to think configuration trade dress is desirable, then we’re going to go the other way with a different concept of functionality, I suppose.

John G. Roberts, Jr.:

I think it is the expansion of the concept of configuration trade dress that has given rise to this issue and the problem.

If you go back to where trademark was limited to marks on the product, of course, the product could be patented, the trademark is fine.

If you even then go the next step, and you’re talking about trade dress and packaging, again, so long as it’s distinct from the product, there’s no interference with patent.

But when you start saying that the configuration of the product itself is entitled to protection as trade dress, you bump right into the patent law, because the key to the patent bargain is, if you’re going to control a useful product feature, as the Court said in Qualitex, that’s the regime of patent law, and it’s no answer to say, well, we’re protected by patent law and when the patent expires we’re protected under trade dress law, because that takes away the public’s half of the patent bargain.

We’re giving exclusive right to an inventor for a term of years on the condition that he or she disclose what the invention is, and that the public obtains a right to copy it when the patent expires.

So yes, I mean, it is the expansion of product configuration trade dress that has given rise to this problem, and I would at least suggest that the Court should not get on board with that expansion without waiting for Congress to say something about it, particularly given the fact that it so directly impinges upon the central patent bargain underlying the patent system.

John Paul Stevens:

Of course, Mr. Roberts, you rely heavily on the patent in this case, and that’s the question presented.

You’ve presented only that narrow question.

But I take it you would argue even if there had been no patent issued in this case, no patent application, that this was nevertheless functional?

John G. Roberts, Jr.:

Certainly, yes, and–

John Paul Stevens:

The fact of the patent really is just evidentiary support for the ultimate conclusion that this is a functional feature.

John G. Roberts, Jr.:

–Well, it gives rise to an important distinction.

In other words, having been covered by the patent, another producer knows that when it comes off patent he can copy it, and that’s how it worked in this case.

Traffix Devices knew… they were in the business… this was a patented sign stand, they couldn’t make it, it comes off patent, they can make it.

Now, if they at that point had to… instead, if respondent’s position were adopted, they had to go to their lawyer and say, is this legally functional, their lawyer would tell them, well, it depends.

There are six factors in this circuit, there are eight factors in the other circuit.

We’ve got to get expert economic testimony.

It depends on consumer surveys.

By that time the producer says, forget it, it’s not worth the candle, I’ll go make something else, and competition suffers.

Stephen G. Breyer:

The difficulty, I guess is, would you make the test absolute, because if you make it absolute, you know, you’re going to get into huge litigation about whether this thing in the patent was or it was not an essential element, and then somebody will say, oh yeah, I guess I did include it as one of the specifications in the patent, but it really wasn’t that important.

I mean, should you make it absolute never, or should you allow somebody to defend on the ground that, look, it wasn’t that crucial to the patent, and everybody’s come to identify it, and please let me make an exception here, and then they give some fabulous reasons.

Should it be absolute, or leave them a little bit of a loophole?

John G. Roberts, Jr.:

Well, you know, a little bit of a loophole suddenly expands, particularly when you have a multi–

Stephen G. Breyer:

But it goes both ways, because if you allow no loophole you’re going to get the same kind of arguments about whether it was or was not an essential part of a patent.

John G. Roberts, Jr.:

–Well, of course, in this case it’s easy.

The key to the invention–

Stephen G. Breyer:

In this case it may be easy, but the question is, what about the rule?

John G. Roberts, Jr.:

–and producers all the time compete all the time in the confines of patents.

They have to look at a patent and decide, can I make a competing product or not, so it’s not a new inquiry, and in the typical case such as this, where you have a product coming off patent, you will have the conduct of the patentee, which will illuminate exactly what he thought was covered.

Here, we not only have the labeling and the trade literature, we have the Windproof litigation.

John G. Roberts, Jr.:

Someone made the exact same sign here and he said, a-ha, that infringes my patent.

Well, if it did infringe his patent, and the Ninth Circuit concluded it did, then the public has a right to copy.

I’d like to reserve–

Ruth Bader Ginsburg:

Wasn’t the exact same sign… I thought one of the points that was made was that in the patent infringement case, that sign didn’t look as much like the Market Display signs–

John G. Roberts, Jr.:

–Yes.

The patent displays what they call a business sign, with two springs far apart.

The Traffix sign, the one at issue in Windproof and at issue here, the springs are closely together.

MDI argued successfully that made no difference, that the two closely spaced springs were covered by the patent to the same extent as the farther apart springs.

Thank you, Your Honor.

William H. Rehnquist:

–Very well, Mr. Roberts.

Mr. Wallace, we’ll hear from you.

Lawrence G. Wallace:

Thank you, Mr. Chief Justice, and may it please the Court:

Our brief is built on the premise that the functionality doctrine, the traditional functionality doctrine of trademark law is what makes trademark protection of trade dress and other symbolic elements consistent with this Court’s patent law jurisprudence, as synthesized and reaffirmed as recently as the Bonito Boats case, but I think part of the reason the two laws harmonize is because the use of functionality doctrine is to limit the scope of protection of the device.

Its traditional function was to bar the holder of a patent or other utilitarian device, even if nonpatented, from withdrawing that device from the public domain when there’s no longer the protection of the patent as trade… withdrawing it from the public domain as trade dress because people have a right to practice and use as the building blocks for further innovation whatever devices are in the public domain that are utilitarian in nature, including their overall configuration, but there is still protection against confusing similarity through requirements of labeling, packaging, avoiding palming off and other misrepresentations.

Functionality really goes to the scope of protection, and limits the scope of protection available under trademark law by preventing someone from monopolizing and withdrawing from the public domain utilitarian features or the entire utilitarian device in the absence of valid patent protection.

That is the domain of patent law, and one must qualify for a patent and have a valid patent in order to have a legal monopoly that withdraws, that prevents others from using the device, but there… as I say, these other protections are still available as well as the ability to exclude ornamental or incidental features.

That is what to us harmonizes the two statutory schemes.

The traditional understanding of functionality was not an artificial concept.

It was the ordinary meaning of the word.

What enables the device to function is what is functional.

That was reflected in a very terse quotation we have in a footnote on page 17 of our brief by Representative Lanham himself, when someone raised concerns about whether the trademark law might result in compromising of the public’s right to use useful inventions, and he said–

Ruth Bader Ginsburg:

Mr. Wallace, may I ask if you would answer the question that Justice Stevens posed to Mr. Roberts in the same way?

That is, the definition you’re now giving us as functional sounds like you would come out the same way on this alleged trade dress infringement, even if there had never been any patent in the picture, because this sign, all the ingredients are functional.

There’s no purple bow on it.

Lawrence G. Wallace:

–That is absolutely correct.

We would come out the same way as we were… I think this Court’s decision in Bonito Boats is an example of that, because there was no patent shown in the record, as the court noted, of the boat hull that they said could not be copied.

Anthony M. Kennedy:

So your position is the utilitarian feature of the patent is a conclusive presumption in a trade dress suit where functionality would otherwise be at issue?

Lawrence G. Wallace:

With regard to the scope of protection, that others cannot be excluded from using something utilitarian.

As we compressed our brief down to our allotted 30 pages we carefully preserved a quotation on page 11 that you can see at the top of the page from the 1917, or 1911, excuse me, Seventh Circuit decision because it states the common sense of it.

If you have utilitarian features that didn’t even meet the standard for getting a patent, they should not be given a perpetual monopoly in contrast to what was then the 17-year monopoly that you could get if you met the criteria for patentability.

Lawrence G. Wallace:

The other protections available against confusing similarity make the need for a right to exclude imitation of trade dress relatively unimportant compared to the policies this Court has reiterated at least since 1896 in the Singer case about the need for utilitarian features to be used as building blocks and to be in the public domain except for the limited period of time in which they are protected by a valid and unexpired patent, and we understand this Court’s decision in Qualitex to mean much the same thing.

The difficulty has arisen because an alternative test of functionality has also become appropriate as the scope of trademark protection has extended to matters that don’t have utilitarian features to them.

We point particularly to the protection of color as an example, where there is relevance to looking at competitive need in… we give an example in our brief of an orange-colored can of soda.

There were other amicus submissions in the Qualitex case in which people were making claims that raised issues that went quite beyond what was involved in the press pad that was at issue in Qualitex.

One of them, for example, involved orange-colored sprinkler system piping.

Well, it raised other questions.

I don’t say the result would necessarily be different but one would have to examine whether a competitor who wanted to compete for replacing a portion of the piping would be disadvantaged if he couldn’t match the color of it.

It was a different case from the Federal Circuit’s Corning, Owens-Corning case involving the pink-colored insulation, because that goes behind the wall and people don’t see it.

The orange coloring in some contexts connotes danger, and perhaps there is marketing significance to that.

But the mistake that I think some of the courts of appeals have made, including the Sixth Circuit in this case, is to say that that is now the exclusive approach, and you wind up with multi-factored tests that don’t really give an adequate guidance to what the law is.

A very good example is found on page 17 of the light green amicus brief filed by the International Trademark Association in this case, in which they speak approvingly of various multi-factored tests that the courts of appeals have adopted in this area, which leaves open what this Court in its salutary opinion in Wal-Mart v. Samara Brothers referred to as the plausible threat of litigation which can discourage competitors and become an impediment to the benefits that consumers would get from competition, and to have tests of this kind applied to displace the traditional approach to functionality would be very detrimental to competitors for the very reasons the Court has recognized in the cases synthesized in the Bonito Boats opinion.

Antonin Scalia:

Mr. Wallace, I’m not sure what your proposal is, that we use the simple test for what, for useful features–

Lawrence G. Wallace:

That–

Antonin Scalia:

–whether or not they are patented, and the more complex test for… for what?

Lawrence G. Wallace:

–Both… either test can show that something is functional, whichever one suits the needs of the particular factual situation.

William H. Rehnquist:

Thank you, Mr. Wallace.

Mr. Artz, we’ll hear from you.

John A. Artz:

Mr. Chief Justice, and may it please the Court:

This Court granted certiorari due to a conflict between regional courts of appeals on one issue, and that is whether or not the visual image and appearance of a product… with a product whose operation and performance was covered by a utility patent, can still be protected as trade dress under section 43(a) of the Lanham Act.

The imposition of any per se rule, whether the Government’s rule or Traffix rule, which says it cannot be protected in my opinion is unnecessary, unjustified, and unworkable.

It’s unnecessary because there are already adequate rules in place, the trade dress rules and functionality that have been referred to already.

It’s unjustified because it would cause harm to the public’s right not to be confused or deceived.

Those are paramount in trade dress and trademark cases under the Lanham Act.

That’s a touchstone of the Lanham Act.

It would also–

Sandra Day O’Connor:

It’s a touchstone of patent law that an expired patent can be copied, so we really do have to make the two doctrines mesh well.

John A. Artz:

–Yes.

Sandra Day O’Connor:

And the concern we have is with this expanded competitive need test that some of the lower courts have begun employing, and I am quite interested to know how you think the two doctrines can fit neatly together, because in an ideal world a trade dress could not cover something that was covered by a patent that’s now expired.

John A. Artz:

Well, Justice O’Connor, the mediating factor between the two is the functionality test, in my opinion.

There’s… you’ve got the patent laws, you’ve got the trademark laws and the Lanham Act, two federal laws–

Sandra Day O’Connor:

And it’s possible that some of the courts have lowered the bar too much on the functionality inquiry.

I mean, I think that’s what we need to look at.

John A. Artz:

–Well, in the Qualitex case, the Qualitex gave a specific definition of functionality, and remember now, in 1998-1999, Congress made some amendments to the trademark act, or Lanham Act, and in this they specifically mentioned functionality several times.

They added it to the fact that you can’t have functional trademarks… you can’t have trademark that’s functional but if it’s nonfunctional you can, and they knew about the Vornado case at that time because it was decided in 1995, and that’s the Tenth Circuit, and there’s a lot of flurry of activity in the intellectual property bar because of that, so all that was before Congress when it amended it, and Congress did not go to any per se test at that time, and so you’ve got two Federal laws here, and under the Morton case and the Ruckelshaus case which are cited.

William H. Rehnquist:

Is there evidence, Mr. Artz, that Congress affirmatively approved the Tenth Circuit case?

John A. Artz:

No, they did not.

I mean, because they… what they… they actually… the legislative history mentions the fact that their patent expiration, and people might be trying to get trademark protection after the expiration of the patent, and then they go on to add functionality.

William H. Rehnquist:

Well, I… you… I thought part of your argument was that the Tenth Circuit had decided this case in 1995 and it was quote, before, close quote, Congress at the time it made the amendments.

What is the purport of that?

John A. Artz:

Well, what I’m saying is, in 1995 that Vornado case was there, and in 1998 Congress amended the trademark act.

Now, there’s no legislative history that I can see that actually mentioned the Vornado case.

I’m saying that it probably–

William H. Rehnquist:

But you’re not… you’re arguing, I hope, something more than post hoc ergo propter hoc.

John A. Artz:

–Yes.

Yes, I am, Your Honor.

Stephen G. Breyer:

Would you go back to Justice O’Connor, which I thought was the key question, and I didn’t–

John A. Artz:

Yes.

Stephen G. Breyer:

–hear the answer.

I mean, I know Qualitex.

I’m surprised not at your reading, because that’s your job, but I’m pretty surprised at the Tenth Circuit, the court, which… I learned you read the whole case, what the context is not just a sentence taken out of context, so I obviously thought that Qualitex was about a doctrine called aesthetic functionality.

I thought, on page 165 where the court quotes the tradition, what’s in quotes, the definition, a product feature is functional if it is essential to the use or purpose of this article, all in quotes, or if it affects the cost or quality of the article, okay, end of the matter.

Now it adds, because that’s what happens to be relevant to aesthetic functionality, that is, if exclusive use of the feature would put competitors at a significant nonreputational disadvantage.

That last clause is relevant to what happens to be the subject of this case, called aesthetic functionality.

John A. Artz:

Yes, Your Honor.

Stephen G. Breyer:

Two pages later, in case that wasn’t clear, the case quotes Restatement Third about aesthetic functionality and says, in respect to aesthetic functionality, i.e., color, quote, the ultimate test is whether the recognition of trademark rights would significantly hinder competition, all right.

John A. Artz:

Yes.

Stephen G. Breyer:

But nothing in the case–

John A. Artz:

No.

Stephen G. Breyer:

–purports to change any earlier test in respect to anything else–

John A. Artz:

Well, that’s–

Stephen G. Breyer:

–or even change anything there, so as I read the case that seemed to be its reading, which would say in this case, which isn’t about aesthetic functionality, we apply what is the traditional test.

John A. Artz:

–Well, every case which has actually looked at functionality actually has come up with the result that the Sixth Circuit did, the Seventh Circuit did–

Stephen G. Breyer:

Maybe, but I thought the place you look for a test is in the Supreme Court opinions, and in the Supreme Court opinions, Qualitex quotes the traditional test.

It didn’t make it up.

John A. Artz:

–That’s correct.

Stephen G. Breyer:

It said, in general terms a product feature is functional if it is essential to the use or purpose of this article, or it affects the cost or quality of the article.

That’s all in quotes.

The rest is explanation as applied here.

So if we take that as the test, why isn’t that the test?

John A. Artz:

Well, the Supreme Court goes on in the Qualitex case and says, that is… that is, if exclusive use of the feature would put competitors at a significant nonreputational related disadvantage.

Stephen G. Breyer:

Well, that was my question.

My question was as to that add-on, doesn’t that have to do with an explanation of the test as relevant to the issue before the Court in Qualitex–

John A. Artz:

I think that–

Stephen G. Breyer:

–namely, aesthetic functionality, which is an aspect of quality I think people could argue about.

John A. Artz:

–I think that is the test, Your Honor, whether or not–

Stephen G. Breyer:

The test in the case of aesthetic functionality?

John A. Artz:

–Yes.

Stephen G. Breyer:

Fine.

Is this a case of aesthetic functionality?

John A. Artz:

I believe it is, yes.

Stephen G. Breyer:

Aesthetic?

It involves color?

John A. Artz:

It involves how things look, the appearance, visual–

Stephen G. Breyer:

Everything in design involves how things look.

John A. Artz:

–Okay.

Stephen G. Breyer:

I mean, that’s–

John A. Artz:

Well, it’s aesthetic in that sense, but it’s not… it doesn’t involve color, no, it does not.

It’s not like the color that was allowed in the Qualitex case, but I think that is the test.

Ruth Bader Ginsburg:

–It involves size and shape, and this discussion about Qualitex and aesthetic functionality doesn’t get into what effect the patents, if any, has on functionality, and in your view does the patent… your having had a patent, building up goodwill, free, over 20 years, nobody can compete with that, so if you’ve got secondary meaning it’s because you have been able to keep everybody off.

We’ve been dealing with cases in your discussion where there was no patent in the picture.

Ruth Bader Ginsburg:

How should the fact that there was a patent bear on the inquiry that was made in cases where there was no patent?

John A. Artz:

Justice Ginsburg, I think that the case, Midwest case by the Federal Circuit, the Thomas & Betts case of the Seventh Circuit, our case, Sixth Circuit, and the Sunbeam case, Fifth Circuit, all apply the proper test.

There are different forms of intellectual property laws, or IP laws, as I call them, you’ve got five different basically Federal laws on intellectual property, patents, copyrights, trademarks, trade dress, unfair competition.

They’re all separate and distinct.

The fact that you have a patent on something, that is different than whether or not you can have a trade dress on something.

Patent would be relevant in the sense that under this commercial necessity test, if there’s only one way to make that product, that was look and appearance, then it’s functional, and so in that sense the functionality test would apply and the patent, if it says something about the functionality, that would be relevant to the functionality test in the trade dress area, but they’re separate and distinct, and they always have.

Design patents, for example–

Antonin Scalia:

They may be separate and distinct, but they bear upon one another, and there seems to be something horribly unfair about allowing someone who has acquired a secondary meaning in the trade dress only because of the patent… let’s say the shape of a Coca-Cola bottle.

I mean, you know, if that wasn’t patented, somebody else could have come out with the same shape bottle as soon as it… you know, as soon as the first ones came off the line they could say, gee, that’s a nice-looking bottle, and they could have copied it, but you couldn’t copy it because it was patented, and therefore, by reason of the patent, for 17 years Coca-Cola acquires a secondary meaning.

Anyone who sees that bottle would say, it’s Coca-Cola.

Then, when the patent expires, Coca-Cola in effect extends the patent by parlaying what was the design patent into what is now trade dress protection, because they say, well, gee, everybody knows that that’s a Coca-Cola bottle, but the only reason they know is because you’ve been given a monopoly for 17 years, and it doesn’t seem right to enable you to extend that monopoly indefinitely.

The only reason you acquired the secondary meaning was because of the patent.

That’s unlike other companies that get secondary meanings without a patent.

Doesn’t there seem any incompatibility with the patent law to you?

John A. Artz:

–No, I don’t think it’s unfair at all, Your Honor.

I think they’re separate and distinct.

I agree that perhaps, if you have this 17-year monopoly on this patent, that might help you on the trade dress area with respect to secondary meaning, but then, of course, just as we found here, the functionality test, the fact that you had a patent on it actually hurts you.

It might be a wash between those two.

The trade dress has three separate and distinct tests.

You have to show it’s distinctive… in other words, it has secondary meaning… and the public recognizes it as something which comes from a certain source.

It’s a source identifier.

However, trademark law has been amended, which specifically says you have that burden of proof if it’s unregistered.

You have to show it’s nonfunctional.

Under the Qualitex case in my opinion you have to show whether it’s competitive necessity, then you’ve got to show whether there’s a likelihood of confusion.

You may have a product that looks exactly the same as yours, but if you can’t show there’s a likelihood of confusion, you don’t win.

You need all three of those tests in the trade dress area.

Ruth Bader Ginsburg:

There’s a problem–

Antonin Scalia:

–Well, it’s the second that we’re arguing about, I think.

I think it’s the second, when you have to show that it’s functional, and I find it hard to think that it’s not functional when you have a patent on it.

You only give patents to things that are functional.

John A. Artz:

I think functionality, Your Honor, legal functionality is really a misnomer, like I believe in the Wal-Mart case the secondary meaning was looked at as being a misnomer.

It was really acquired meaning, acquired meaning afterwards.

Legal functionality really is a misnomer.

Every product has a function.

The Coke bottle has a function, obviously.

It’s useful, has a purpose.

It’s got a flat bottom so it doesn’t tip over.

It’s got a narrow waist so you can grab it, a narrow spout so you can drink it easier, it’s clear so you can see it.

Those are all functional, useful, purposeful.

Stephen G. Breyer:

Aesthetic functionality isn’t conceivably in this case.

They’re the ones that argue functionality, not you.

They’re the ones that say that the product is functional.

They’re not saying that the functionality of your product arises from the way it looks.

They’re not saying, like color, it warns people that the boat’s black.

They’re saying that the functionality of the product is that the springs prevent it from twisting in the wind.

Now, that isn’t a claim of aesthetic functionality, and I don’t see how you could even closely claim that it is.

John A. Artz:

Well, I think the functionality test that’s been developed in Qualitex applies to any type of trade dress–

Stephen G. Breyer:

Ah, wait.

I thought what you said is, you agreed with me before that Qualitex is talking about aesthetic functionality, that we apply the normal test without that little add-on, but we apply Restatement Three, the aesthetic functionality test, which is the add-on, where they make the claim that the reason this product is functional is because of the way it looks, i.e., the pipes are painted orange as a warning, which is not their claim in this case.

Am I… now, where am I wrong in that?

John A. Artz:

–I think the test that’s set forth in Qualitex that Your Honor says is for just aesthetic functionality applies in every functionality test.

I think that’s the difference.

Stephen G. Breyer:

So then the pages written at 169 and 170, and trying to explain just what we’re driving at are sort of beside the point.

John A. Artz:

Yes.

It says in general terms a product feature is functional and cannot serve if, and then you say it’s essential to use or purpose.

I mean, that’s broad and ambiguous.

Everything has a use or purpose, and then you say, if it affects the cost or quality.

Virtually everything affects the cost or quality, so it seems to me the only objective test you have here, because it relates to competitors and consumers, is whether or not it puts competitors at a significant disadvantage in the marketplace.

Ruth Bader Ginsburg:

Can we apply that test, because I’m having a little trouble connecting to the real world and the device before us and these multi-factor tests and even what you’ve just been saying.

Tell me what it is in your formerly patented device that Traffix can copy now that the patent has expired.

Ruth Bader Ginsburg:

Can it make a sign with those two coil springs adjacent to each other?

John A. Artz:

Yes, it can, Your Honor.

Ruth Bader Ginsburg:

If you could describe to me what it can copy and what it must change I would have a more secure handle on what your case is.

John A. Artz:

Our trade dress, Your Honor, it’s really a combination of five features.

It’s got your X-shaped legs, a narrow base, a pair of upright vertical coil springs, an upright attached to that, as well as this diamond-shaped sign above it, and I have a model of it that actually shows what it is here.

This is in the record before the court of appeals.

Now, they could change any one of those.

They could keep the coil springs if they change some other configuration to make it look different, to give it a visual… different visual appearance.

Like, right now, even the vice president and their technical expert say that when they see a sign like this one driving along the road, they know it comes from Marketing Displays.

They know it’s a Windmaster.

Ruth Bader Ginsburg:

But there aren’t that many things to adjust.

I mean, one of the things about Qualitex and the green/gold you could have tan/silver, any number of combinations that would serve that purpose, but for that road sign that’s not going to blow in the wind you have to have those springs, and you have to have some kind of base, and there aren’t that many variations.

Antonin Scalia:

And the law requires the shape of the sign.

I mean, in many States that shape of a sign indicates a certain type of warning, so what’s left?

There’s nothing left but the legs, and–

John A. Artz:

You have–

Antonin Scalia:

–And your friend over there says that they changed the legs.

They did change the legs.

John A. Artz:

–Now–

Antonin Scalia:

Somebody who sees their legs say, gee, it has the… what do you call them… step-down legs, or whatever it is, so the one thing it seemed to me that they could have changed, they did change.

John A. Artz:

–No, they kept the same visual appearance and image, Your Honor.

This was what the patent covered with a product such as this.

They could have gone to something like this, with a wide base, a pair of springs way apart, they could have gone to straight legs like this, they could have gone to an upright like this, rather than this, and attached the sign to it.

This is what the patent covered.

This is what was shown in the patent.

This is only found to infringe, under the doctrine of equivalents, which took several years and several thousands of dollars for MDI to prove it, and that’s the problem with a per se test.

Ruth Bader Ginsburg:

Because that one in your right hand probably works better.

John A. Artz:

I think so.

[Laughter]

Ruth Bader Ginsburg:

Yes, and that’s why they wanted to copy it, and not something that worked less well.

John A. Artz:

Well, the thing here is a competitive necessity test.

I think it’s important, because there are really, like, eight competitors in this marketplace, MDI, Traffix, and six others.

Six others all came up with sign stands which looked different.

They have different spring mechanisms in particular.

There’s flat springs, horizontal spring, there’s a torsion spring, and so Traffix said, I had to copy MDI’s, yet all the other competitors made their own design.

They came up with sign stands which look different.

They have different visual appearance.

So there are seven types of sign stands out there, MDI’s, six others, and then Traffix’.

John Paul Stevens:

You know, I have to confess that I’m… I find it a little difficult to imagine that most motorists are looking at what… the legs of the sign instead of the message on the sign.

[Laughter]

I find it hard to believe that people really identify with two legs or three.

I don’t have the slightest idea how many legs there were on most of the signs I’ve looked at when I was driving along.

Anthony M. Kennedy:

I’ve been looking in the last week.

It’s very interesting.

[Laughter]

Antonin Scalia:

I gather you don’t care about the motorists.

You just care about the highway purchasing departments.

John A. Artz:

That’s it, yes.

Antonin Scalia:

Right?

John A. Artz:

It does… confusion as to the purchaser, who the relevant purchasers–

Antonin Scalia:

You couldn’t care less about the motorists.

You just want to sell the signs.

[Laughter]

Stephen G. Breyer:

Could I ask you a question about the patent part?

I’d like to ask you about the patent part, and will you assume for purpose of this that Qualitex is about color, which is a matter that doesn’t easily fit within the terms, you know, purpose, use, cost or quality, and suppose here we’re dealing with something that does easily fit within those terms, all right, so keep Qualitex out of it.

Now, assuming that that’s so, what would be wrong… and they come in and they say, look, these springs are part of the function.

They’re part of the function.

They’re essential to the use, these springs, in this way.

Now, should there be an absolute presumption that if you one day said… I’m not saying what you did say, but we’ll assume this.

If you one day said in the patent application, I have a great idea here, and my idea is to have two springs just like this, and then later on, when it’s expired, they say, that was the heart of it.

Stephen G. Breyer:

It was useful.

Should the fact that you said that one day in the patent be the end of the matter, nobody ever looks further?

There is a… what the Government said here is where as an expired utility patent discloses that the feature alleges trade dress contributes to the operation of the formerly patented device, the feature must be considered function.

Now, that’s the Government’s suggestion.

John A. Artz:

–Okay.

Stephen G. Breyer:

All right.

Now, you can of course argue that wasn’t essential, et cetera, but my problem’s a general one, leaving this case out of it.

Should that be the test?

John A. Artz:

No, it should not be the test.

Stephen G. Breyer:

Because?

John A. Artz:

Because I think what you say in the patent could be relevant, and the patent obviously is going to be put into every trade dress case, and that is one of the reasons I think that trade dress tests, that their absolute test is unworkable, because in every trademark case now what you’re going to have is, a defendant’s going to run out and scour the 5 million expired patents, find one which has a claim which may read on this trade dress, accused trade dress and say, a-ha, it’s dedicated to the public on this other, somebody else’s patent.

See, one of the things that–

Anthony M. Kennedy:

It would seem to me that would be, even under your rule, a… well, maybe not under your, but under the Government’s rule, quite an appropriate thing to do, to show that there is functionality that the patent office has recognized.

John A. Artz:

–Well, again I don’t want you to confuse legal functionality with something that’s useful in purpose, because legal functionality is different.

It’s a legal test.

It means, as in the Qualitex case, I believe, or it means what is competitive necessity to use it, and just now, recently, in the 1998-1999, Congress made amendments to the Lanham Act and it did not go for an absolute test.

It did not go for a test for use or purpose.

What it did, it just said, if it’s… you know, burden of proof of functionality is going to be on the party saying it’s nonfunctional.

Antonin Scalia:

Mr. Artz–

John A. Artz:

Yes.

Antonin Scalia:

–I hadn’t realized it, you are not complaining about their use of the double spring feature.

That’s not the complaint.

You said they could have–

John A. Artz:

No.

Antonin Scalia:

–used the double springs if they had put them separate–

John A. Artz:

Yes.

Antonin Scalia:

–separately and apart.

John A. Artz:

–possibly, in a bit different visual image and appearance, Your Honor.

Antonin Scalia:

And the double springs next to each other was not part of your original patent application–

John A. Artz:

No, it was not.

Antonin Scalia:

–that they were originally apart.

John A. Artz:

That’s right.

Antonin Scalia:

So the issue, really, is simply the functionality of putting the springs close together.

Now, what if putting the springs close together… it would have nothing to do with the patent, but what if putting the springs close together makes the sign more stable?

John A. Artz:

Actually, technically it would make it less stable.

It would make it easier, more easy to twist.

Antonin Scalia:

Okay, but if it made it more stable, then you would acknowledge that they could copy even that feature, the unpatented feature?

John A. Artz:

No.

They have an improvement in performance that they say is more stable, but it doesn’t mean that they can still copy it if it’s part of our trade dress.

There’s a… the… our trade dress has a number of features, as I mentioned before.

It’s not just the coil springs.

They could use coil springs close together as long as they change the base, or change the legs, or change something which gave it a different visual appearance to the public.

One of the touchstones here of the trademark Lanham Act is to prevent confusion of the public, the public buying this.

You don’t want to confuse or deceive the public, which this does–

Sandra Day O’Connor:

Well, the public isn’t buying it.

It’s highway departments that are buying it.

The public isn’t buying this sign, is it?

John A. Artz:

–That’s the relevant public for this purpose, Your Honor, yes.

Sandra Day O’Connor:

Yeah, it’s the highway department purchasers.

John A. Artz:

That’s correct.

Sandra Day O’Connor:

And doesn’t the State typically regulate the shape of the sign, as Justice Scalia asked you?

John A. Artz:

Yes.

Sandra Day O’Connor:

I mean, diamond shape indicates a certain kind of warning, does it not?

John A. Artz:

Correct.

Sandra Day O’Connor:

So they can use that shape and color, presumably.

That’s necessary.

John A. Artz:

Yes, I agree, Your Honor.

Sandra Day O’Connor:

So what are we arguing about, the legs?

John A. Artz:

The… yes, legs, the shape, the base, and the springs, and then the upright.

It’s a single upright, too.

John A. Artz:

This doesn’t have the single upright because it’s a small model.

William H. Rehnquist:

Well, what is the base, after you get through with the legs, and the upright, and the springs?

John A. Artz:

Uh-huh.

William H. Rehnquist:

I mean, could you… you indicate, what are we arguing about, the legs and the base.

John A. Artz:

There’s no… I don’t think there’s any doubt that these have a different visual appearance.

One has a wide base, one has a narrow base, one has straight legs, one has X-shaped legs.

William H. Rehnquist:

So when you say base, that really is another way of saying the legs?

John A. Artz:

No, it’s what the legs are attached to.

It would be this… this part in between the legs, and here are the bases.

It’s what the legs are connected to.

Sandra Day O’Connor:

But obviously you’re holding up one that’s a rectangle, so it makes sense to have the posts on either side, as opposed to the diamond shape, where it makes sense to have it in the middle.

I mean, you’re not showing us an equivalent-shaped sign.

John A. Artz:

Well, this, under the doctrine of equivalents, this was held to be an infringement.

But right, individual appearance, I think they are different, and so from a trade dress standpoint these are two different products.

Antonin Scalia:

Well, you’re willing to fight out the… I gather you’re willing to fight out the functionality battle as to whether putting the two springs right next to each other instead of apart is a functional matter.

You’re willing… are you willing to combat on that ground?

John A. Artz:

Well, I… whether it’s useful, has a purpose, I mean, if that’s functionality–

Antonin Scalia:

Whether it’s functional within the meaning of the trade dress restriction.

John A. Artz:

–Well then the answer, I agree… I think is no, because is there a competitive necessity to have them together?

The answer is no.

Antonin Scalia:

Okay, but you would agree that that inquiry would be addressed to the spacing of the springs.

John A. Artz:

Only–

Antonin Scalia:

Even if we think that the use of double springs is automatically no basis for giving you trade dress protection, since you had patented the double springs, you hadn’t patented whether they were close together or far apart and so whether putting them close together, as your opponent did, is a violation of trade dress protection would depend upon whether putting them close together is functional within the meaning of trade dress law, right?

John A. Artz:

–It’s whether or not their whole visual appearance, of a combination of five features, is functional in the competitive necessity test.

That’s why–

John Paul Stevens:

I thought you a minute ago acknowledged that if the two springs were closer together it would be less wind-resistant than otherwise, which seems to me demonstrates it has some functional significance whether they’re close or not.

If one is a… better resistant to the wind than the other, doesn’t… isn’t that functional, isn’t that enough to prove functionality?

John A. Artz:

–Not the legal functionality test–

John Paul Stevens:

Not under all these tests, but why shouldn’t it be enough?

The Government argues that the competitive need is a sufficient proof but not a necessary proof of it as a defense to the trade dress argument.

John A. Artz:

–Well, the problem you have, Your Honor, is that tests… either the Government’s test or Traffix’ test is going to be unworkable, because you could have company A that makes this product, or comes up with this idea, company B. Company A gets a patent on it, goes 17 years.

Company B doesn’t get a patent, and gets trade dress protection on it, and yet company A for some reason doesn’t sue them, but when this patent expires, that means all the trade dress that company B has developed over all those years is shot.

It’s out the window, because it happens to be the subject of a patent.

See, that’s a problem with this per se test that they’re saying.

Stephen G. Breyer:

I don’t… I thought as a factual matter that there are five features in your patent, including the legs, all the other things of appearance, but the district court found that there are a lot of other competitors that have every one of those features, so it’s not unique but for the spaced-apart coil springs, so that all were… is that true?

John A. Artz:

That’s true.

Stephen G. Breyer:

All right, so all we’re talking about… and then I thought also as a factual matter that somebody before the patent expired used those two spaced-apart springs in that narrow configuration that your finger’s on right now.

John A. Artz:

Uh-huh.

Stephen G. Breyer:

And you sued them, and it was found in your claim, in your view, those spaced-apart that much, not wide apart, violated your patent, and you won.

John A. Artz:

Well, the patent covered some other things other than that.

They had to have initial compression along the coils of the spring.

They also had to meet a certain geometric relationship with the center of gravity–

Stephen G. Breyer:

But they didn’t get out of it… they didn’t get out of your patent, because the springs were close together rather than being far apart.

John A. Artz:

–Well, that’s the doctrine of equivalents, and–

Stephen G. Breyer:

Yeah.

John A. Artz:

–one language of the claim which calls for spaced-apart springs, and then we–

Stephen G. Breyer:

That’s right.

John A. Artz:

–It was equivalent from a patent standpoint whether two springs together were the equivalent of two springs spaced apart.

Stephen G. Breyer:

That’s right, so I–

John A. Artz:

That was that issue.

Stephen G. Breyer:

–Yeah.

John A. Artz:

That’s only one of several issues in that patent case, and the fact that the others happened to use this coil spring, they used the other parts, that shows you that you can change one or two parts of this particular trade dress and comes up… have something that looks completely different.

In that case, the competitors made a flat spring, they had a horizontal spring, they put two springs at 45-degree angles, you could change the legs, you could change the upright… all of those might give a different visual impression.

That’s what the Sixth Circuit said.

See, the district court in this case concentrated on just the two springs, and the Sixth Circuit said that was not proper because it’s the overall appearance, visual, visual and image of the product which really controls.

You can’t look at one–

Antonin Scalia:

But it seems to me if the different spacing is the functional… is a functional equivalent for patent law, then it seems to me that the spacing of the spring is part of your patent protection.

John A. Artz:

–All right.

Antonin Scalia:

As well as the nature of the springs, and so the square stand is no different for purposes of the issue in this case than the diamond-shaped stand.

John A. Artz:

As long as you don’t confuse the patent law with the trade dress law, Your Honor, two separate and distinct, but from a patent law standpoint you’re right, but not from the trade dress standpoint.

John A. Artz:

There’s another… right now we’re looking at the public domain, and the difference is where it comes from.

If it comes from a patent, it’s given special recognition.

You can’t use it for the trade dress, but if it doesn’t, then you can use it.

Now, that to me is not a real consistent… not a real consistent argument.

You also have the fact that as… where do you look at the trade dress and this functionality, look at one patent, look at two patents, what if there are several patents that show it.

You know, what if you don’t even own the patents?

What if we were just a licensee and asserted it?

What if you didn’t own it?

Would that make a difference, or if a third party owns the patent.

There are several things, questions we raise at the back of our brief that Traffix and the Government really can’t answer.

They really do admit that if someone is the subject matter of one patent by one person, and it expires, somebody else’s trade dress will expire.

I mean, right now we also have a situation where they’re trying to get special protection for utility patents, which is different than, for example, for design patents.

Or, talk about something being nonfunctional, design patenting in which having this right, as you mentioned before, of an exclusive period of 14 years develop secondary meaning.

There’s no question whatsoever that courts do allow parties to get trade dress protection in such a matter of design patents, and there you’ve got this secondary meaning over 14 years in which you’ve used it exclusively, and that goes to the look and appearance of the product, but there’s no problem with having trade dress protection afterwards because it isn’t functional, so why should utility patents be treated any differently?

And as I said initially, there are different areas of intellectual property law, you have different standards, different tests, different remedies.

You know, in trade dress law you have… in trademark law you have much different remedies to protect the public and consumers.

Here–

William H. Rehnquist:

Thank you, Mr. Artz.

John A. Artz:

–Thank you, Your Honor.

William H. Rehnquist:

Mr. Roberts, you have 2 minutes remaining.

John G. Roberts, Jr.:

There was until this morning no dispute that moving the springs closer together was functional.

If you look at petition appendix page 54a, there is the explanation from MDI’s chief engineer that doing so makes the sign more compact and weighs less, very important if you’re ferrying these things up and down the highway, and also makes it less expensive to manufacture.

As far as the two different sign stands, the diamond one with the closely spaced springs, joint appendix page 236, MDI said that those signs, even though the other one was depicted in their patent, that the closely spaced springs were, quote, slavish copies from the standpoint of function of the sign stand described and claimed in the Sartesian patents.

Third, that is the form in which they practiced their patent, the closely spaced springs.

Kellogg, Singer, Sears, that line of cases gives Traffix Devices and any member of the public the right to copy the patent in the form in which it was practiced.

That is critically important to maintain competition.

Whether you begin with patent law and the right to copy from an expired patent, or trade dress law and the definition of functionality that focuses on usefulness, is it a useful product figure, you come to the same point.

Traffix Devices had the right to copy the MDI sign stand when it came off patent, and it did so.

It did so in the way Bonito Boats explains enhances competition, imitation and refinement through imitation by adding an improvement of its own that made a more competitive product better for highway safety departments.

Thank you, Your Honor.

William H. Rehnquist:

Thank you, Mr. Roberts.

The case is submitted.